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EXHIBIT 10.18
KING LLC
C/O CITCO TRUSTEES (CAYMAN) LIMITED COMMERCIAL CENTRE
P.O. BOX 31106 SMB
GRAND CAYMAN, CAYMAN ISLANDS
BRITISH WEST INDIES
July 30, 1999
Information Architects Corporation
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: President
Re: Information Architects Corporation (the "Company")
Gentlemen:
King LLC, a limited liability company organized under the
laws of the Cayman Islands (the "Purchaser") shall commit, subject to and upon
the terms and conditions hereof, to purchase from the Company, and the Company
shall sell to the Purchaser shares of Common Stock (the "Shares") for an
aggregate purchase price of $5,000,000, at a price equal to 85% of the two
lowest closing bid prices of the Common Stock (not necessarily consecutive) for
the ten (10) trading days prior to each Closing.
The commitment of the Purchaser set forth in this letter is
subject to the terms, conditions and qualifications set forth below:
1. Documentation. In order to effectuate a purchase and
sale of the Shares, prior to their issuance, the Company and the Purchaser
shall enter into the following agreements: (a) a securities purchase agreement
(the "Purchase Agreement") and (b) a registration rights agreement (the
"Registration Rights Agreement", and together with the Purchase Agreement,
collectively the "Transaction Documents"). The Purchaser shall prepare the
Transaction Documents.
2. The Closing. (i) The Company shall have the right to
deliver one or more written notices to the Purchaser (the "Financing Notice")
requiring the party to buy the Shares for an aggregate purchase price of
$5,000,000 (the "Purchase Price"), and not to exceed the amount per Financing,
equal to 15% of the sum of the weighted daily volume for the 15 trading days
prior to the delivery of the Financing Notice, as determined in accordance with
Exhibit A attached hereto. A Financing Notice may be delivered no earlier than
fifteen (15) Trading Days following the Effective Date or the prior Financing
Notice. The closing of the purchase and sale of the Securities (the "Closing")
shall take place at the offices of Xxxxxxx & Xxxxxx, Esqs., 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, on or before the fifth (5th) Business Day after the
Financing Notice is received by the Purchaser or the Company, as the case may
be, or on such other date as otherwise agreed to by the parties hereto;
provided, however, that in no case shall the Closing take place unless and
until all of the conditions listed in Section 3 of this letter shall have been
satisfied by the Company or waived by the Purchasers. The date of the Closing
is hereinafter referred to as the "Closing Date." Notwithstanding anything to
the contrary contained in this letter, the Purchaser may designate an Affiliate
thereof to acquire all or any portion of the Securities.
(ii) At the Closing, the parties shall deliver or shall
cause to be delivered the following: (a) the Company shall deliver to (x) the
Purchaser or its designated Affiliate, (1) the number of Shares, registered in
the name of such Purchaser or its designated Affiliate, representing the shares
of Common Stock to be issued and sold to such Purchaser at the Closing; (2) a
legal opinion in form and substance acceptable to the Purchasers, and (3)
executed Transaction Documents and the Transfer Agent Instructions relating to
the Securities, and (y) Xxxxxxx &
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Prager, Esqs., one half of one percent (.5%) of the Purchase Price of the
Debentures as reimbursement of the legal fees and expenses incurred by the
Purchasers to prepare the Transaction Documents, which amount shall be deducted
by the Purchasers from the amount due to the Company for the Securities and
shall be paid directly to Xxxxxxx & Xxxxxx, Esqs., and (b) the Purchaser shall
deliver to the Company (1) its pro rata portion of the Purchase Price, in
United States dollars in immediately available funds by wire transfer to an
account designated in writing by the Company for such purpose prior to the
Closing Date and (2) the executed Transaction Documents.
3. Conditions precedent to the Additional Closing.
Notwithstanding anything to the contrary contained in this letter, the
commitment of a Purchaser to purchase acquire the Securities is subject to the
satisfaction or waiver by the Purchaser of customary conditions to be contained
in the Purchase Agreement, including each of the following conditions:
a. Underlying Shares Registration Statement. A
registration statement covering the Shares (the "Registration Statement") shall
have been declared effective under the Securities Act by the Commission and
shall have remained effective at all times, not subject to any actual or
threatened stop order or subject to any actual or threatened suspension at any
time prior to the Closing Date;
b. No Suspensions of Trading in Common Stock. The trading
in the Common Stock shall not have been suspended by the Commission or on the
NASDAQ at any time since the Closing Date;
c. Listing of Common Stock. The Common Stock shall have
been at all times since the Closing Date listed for trading on the NASDAQ;
d. Closing Threshold. For the thirty (30) Trading Days
immediately preceding the Closing Date, the average daily trading volume of the
Common Stock on the NASDAQ shall be at least 50,000 shares and the average of
the Per Share Market Value for such 30 Trading Day period shall be greater than
$1;
e. Shareholder Approval. No approval of the shareholders
of the Company shall be required under the rules of the Nasdaq Stock Market or
such other exchange or trading facility or which the Common Stock is the traded
or listed for trading in Common Stock; and
4. Governing Law. This letter shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.
5. Execution. This letter may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature page were an original thereof.
Please indicate your agreement with the foregoing by executing a
countersigned copy of this letter and returning the same to our attention.
Sincerely,
KING LLC
By:
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Name:
Title:
Xxxxxx and accepted
July __, 1999
INFORMATION ARCHITECTS CORP.
By:
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Name:
Title:
