Exhibit 10.23
InnovaCom, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
July 26, 2000
Jashell Investments
C/o Dr. Xx. Xxxxxxxx & Partner
Xxxxxxxxxxxx 00
XX-0000 Xxxxx, Xxxxxxxxxxxxx
Attn.: Xx. Xxxx Xxxxxxx
Re: Amendment to Common Stock Purchase Agreement
Gentlemen:
Reference is made to that certain Common Stock Purchase Agreement (the
"Purchase Agreement"), dated July 19, 2000, between InnovaCom, Inc. (the
"Company") and Jashell Investments (the "Purchaser"). In order to register for
resale the Common Stock to be purchased pursuant to the Purchase Agreement,
certain provisions of the Purchase Agreement must be deleted or revised.
In consideration of the mutual covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree to restate the following
section of the Purchase Agreement as follows:
Section 1.1 (g) "Purchase Price" shall mean with respect to Shares
(excluding Shares issued upon the exercise of Warrants), (i) seventy-seven
percent (79%) of the Average Daily Price on the date in question and
seventy-four percent (76%) of the Average Daily Price on any date for any
Draw Downs related to Special Activity, less $33,333 as to each of the
initial six Puts only, if any.
Section 5.2 (f) Warrants. The Purchaser shall receive (i) at the
Closing, a warrant certificate to purchase up to 100,000 shares of Common
Stock in the form of Exhibit E hereto (the "Initial Warrants") and (ii) as
to each Settlement Date, a warrant certificate to purchase up to a number
of shares of Common Stock equal to 50% of the number of shares of Common
Stock purchased by the Investor on such Settlement Date pursuant to this
Agreement in the form of Exhibit F (each a "Purchaser Warrant")(the
"Initial Warrant" and the "Purchaser Warrants" collectively referred to as
the "Warrants"). The Initial Warrant shall have a term from its date of
issuance of three years. The Purchaser Warrants shall each have a term from
their date of issuance of 22 Trading Days. The Strike Price of the Initial
Warrants shall be the VWAP on the Trading Day immediately prior to the
Closing Date using the HP function. The exercise price of the Purchaser
Warrants shall be the weighted average of the Purchase Prices of the Common
Stock purchased on the applicable Settlement Date. The Common Stock
underlying the Warrants will be registered in the Registration Statement.
"Warrant Shares" shall mean the shares of Common Stock issuable upon
exercise of the Warrants.
Section 5.3 Conditions Precedent to the Obligation of the Purchaser to
accept a Draw Down and Purchase the Shares. The obligation hereunder of the
Purchaser to accept a Draw Down request and to acquire and pay for the
Shares is subject to the satisfaction, at or before each Draw Down Exercise
Date, of each of the conditions set forth below.
Section 6.1 (b) Only one Draw Down shall be allowed in each Draw Down
Pricing Period. There shall be at least seven (7) Trading Days between Draw
Down Pricing Periods. The price per share paid by the Purchaser shall be
based on the Average Daily Price on each separate Trading Day during the
Draw Down Pricing Period. The number of shares of Common Stock purchased by
the Purchaser with respect to each Draw Down shall be determined on a daily
basis during each Draw Down Pricing Period and settled on, (i) as to the
1st to the 11th Trading Days after a Draw Down Pricing Period commences, on
the 13th Trading Day after a Draw Down Pricing Period commences and (ii) as
to the 12th to the 22nd Trading Days after a Draw Down Pricing Period
commences, the 24th Trading Day after a Draw Down Pricing Period. (each, a
"Settlement Date" or "Draw Down Exercise Date"). In connection with each
Draw Down Pricing Period, the Company may set an Average Daily Price below
which the Company will not sell any Shares (the "Threshold Price"). If the
Average Daily Price on any day within the Draw Down Pricing Period is less
than the Threshold Price, the Company shall not sell and the Purchaser
shall not be obligated to purchase the Shares otherwise to be purchased for
such day.
Section 6.1 (c) The minimum Draw Down shall be $250,000.
Section 6.1 (d)(i) If the Average Daily Price on a given Trading Day
is less than the Threshold Price, then the Draw Down will be reduced by
1/22nd and that day shall be withdrawn from the Draw Down Pricing Period;
and
Section 6.1 (d)(ii) If trading of the Common Stock on the Principal
Market is suspended for more than three (3) hours, in the aggregate, on any
Trading Day during the Draw Down Pricing Period, then the Purchaser may
elect to reduce the Draw Down by 1/22nd and that day shall be withdrawn
from the Draw Down Pricing Period; and
Section 6.1 (d)(iii) [INTENTIONALLY DELETED]
Section 6.1 (f) On or before each Settlement Date, the Shares
purchased by the Purchaser shall be delivered to The Depository Trust
Company ("DTC") on the Purchaser's behalf. Upon the Company delivering
whole shares of Common Stock to the Purchaser or its designees via DWAC by
1:00 pm EST, the Purchaser shall wire transfer immediately available funds
to the Company's designated account on the such day. Upon the Company
delivering whole shares of Common Stock to the Purchaser or its designees
via DWAC after 1:00 pm EST, the Purchaser shall wire transfer next day
available funds to the Company's designated account on such day. In the
event the Purchaser elects to use the Escrow Agent, the Shares shall be
credited by the Company to the DTC account designated by the Purchaser upon
receipt by the Escrow Agent of payment for the Draw Down into the Escrow
Agent's trust account as provided in the Escrow Agreement. The Escrow Agent
shall be directed to pay the purchase price to the Company, net of One
Thousand Five Hundred Dollars $1,500 as escrow expenses to the Escrow
Agent. The delivery of the Shares into the Purchaser's DTC account in
exchange for payment therefor shall be referred to herein as "Settlement".
Section 7.1 Term. The term of this Agreement shall be twenty-four (24)
months from the Effective Date.
Section 7.2 Termination. The Purchaser may terminate this Agreement
upon one (1) Trading Day's notice if (i) an event resulting in a Material
Adverse Effect has occurred, (ii) the Common Stock is de-listed from the
Principal Market unless such de-listing is in connection with the listing
of the Common Stock on the Nasdaq National Market, Nasdaq SmallCap Market,
the American Stock Exchange or the New York Stock Exchange, and (iii) the
Company files for protection from creditors under any applicable law.
In addition, Section 2.2 of Escrow Agreement shall be restated as follows:
Section 2.2 Each time the Purchaser shall purchase Shares pursuant to
a Draw Down, the Purchaser shall send the applicable purchase price of the
Draw Down Shares to the Escrow Agent, which shall advise the Company in
writing that it has received the purchase price for such Draw Down Shares.
The Company shall promptly, but no later than three (3) Trading Days after
receipt of such funding notice from the Escrow Agent, cause its transfer
agent to issue the Draw Down Shares to the Purchaser via DTC deposit to the
account specified by the Purchaser from time to time and deliver the
Purchaser Warrant to the Purchaser. Upon receipt of written confirmation
from the transfer agent or from the Purchaser that such Draw Down Shares
have been so deposited and shall within one (1) Trading Day wire the
Purchase Price of the Draw Down per the written instructions of the
Company, net of $1,500 as escrow expenses to the Escrow Agent.
Finally, the second paragraph of Section 3(a) of the Registration Rights
Agreement shall be restated as follows:
The Company shall use its best efforts to cause the Registration
Statement to become effective within five (5) days of SEC clearance and
will within said five (5) days request acceleration of effectiveness. The
Company will notify Purchaser of the effectiveness of the Registration
Statement within one Trading Day of such event.
Except as specifically amended by the terms of this letter, the Purchase
Agreement and its exhibits shall remain unmodified and in full force and effect,
and shall not be in any way changed, modified or superseded by the terms set
forth herein. All terms used but not defined in this letter shall have the
meanings set forth in the Purchase Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and shall become
effective when counterparts have been signed by each party and delivered to the
other parties hereto, it being understood that all parties need not sign the
same counterpart. Execution may be made by delivery by facsimile.
If the foregoing correctly sets forth our understanding and agreement,
please so indicate by signing where indicated below.
INNOVACOM, INC.
By: ______________________________
Xxxxx Xxxxxx, President & CEO
ACCEPTED AND AGREED TO:
JASHELL INVESTMENTS
By: _________________________________
Xxxx Xxxxxxx, Authorized Signatory
