CONSENT, WAIVER AND AMENDMENT
THIS CONSENT, WAIVER AND AMENDMENT
(this “Agreement”), dated as of January 28,
2009, is entered into by and among Celsia Technologies, Inc., a Nevada
corporation (the “Company”),
and the persons identified as “Holders” on the signature pages hereto (the
“Holders”). Defined
terms not otherwise defined herein shall have the meanings set forth in the
Existing Purchase Agreement (as defined below).
WHEREAS, pursuant to a
Securities Purchase Agreement, dated May 25, 2007 (the “Existing
Purchase Agreement”), among the Company and the Holders, the Holders were
issued an aggregate of $8,897,783 in principal amount of 8% Secured Convertible
Debentures due May 25, 2010, as amended on March 26, 2008 (the “Existing
Debentures”) and were issued warrants (the “Existing
Warrants”)
exercisable for shares of Common Stock of the Company.
WHEREAS, pursuant to a
Securities Purchase Agreement dated on or about the date hereof in the form
attached as Exhibit
A hereto (the “New
Purchase Agreement”) among the Company and the purchasers identified on
the signature pages thereto (collectively, the “New
Investors”), the New Investors will be purchasing debentures (the “New
Debentures”)
together with warrants exercisable for shares of common stock for an
aggregate purchase price of up to $2,000,000 (the offer and sale of such
debentures and warrants pursuant to the New Purchase Agreement are hereafter
referred to as the “New
Financing”).
WHEREAS, the Company desires
to obtain acknowledgements, waivers and consents from the Holders with respect
to certain provisions and other matters contained in the Transaction Documents
(as defined herein) to ensure the consummation of the New Financing any other
transactions related thereto.
NOW THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each Holder hereby agrees as follows:
1. Waivers.
(a) Subject
to the terms and conditions hereunder, each Holder hereby waives the
restrictions set forth in Sections 7(a) and 7(b) of the Existing Debentures with
respect to the issuance of the New Debentures and granting the New Investors a
lien pursuant to the security agreement attached as an exhibit to the New
Purchase Agreement. Further, subject to the terms and conditions
hereunder, to the extent required under the Existing Purchase Agreement, each
Holder signatory hereto hereby consents to the New Financing.
(b) Subject
to the terms and conditions herein, each Holder hereby waives any and all rights
such holder was granted under the Security Agreement and the Existing
Debentures, including, without limitation, pursuant to Section 8 of the Security
Agreement and Section 8 of the Existing Debentures, to exercise any rights or
remedies conferred upon such holder thereunder solely in connection the
Company’s relocation of its engineering and pilot line facilities and the
Collateral incidental thereto (the “Transferred
Assets”) from Korea to Taiwan.
(c) Notwithstanding
anything to the contrary contained in any of the Transaction Documents, each
undersigned Holder hereby consents to the Company and Celsia Technologies
Taiwan, Inc. entering into and delivering the trust
agreement with Chinatrust Commercial Bank attached hereto as Exhibit B (the “Trust
Agreement”), for the purpose of securing the obligations of the Company
to the undersigned with respect to the Transferred Assets pursuant to the
Security Documents and the Debentures.
(d) Each
undersigned Holder hereby acknowledges that Midsummer Ventures, L.P., a limited
partnership organized and existing under the laws of Bermuda (“Midsummer”),
acting on behalf of and for the benefit of the undersigned is hereby
authorized to send the payments due and payable to the undersigned as
contemplated by Section 5.1.1 of the Trust Agreement to the bank account set
forth in the wire instructions on the signature page hereto. Further,
the undersigned hereby designates Midsummer as collateral agent under the Trust
Agreement, and acknowledges and agrees that Midsummer’s rights, responsibilities
and immunities as collateral agent thereunder shall be as set forth in Annex B to the
Security Agreement.
(e) Each
Holder hereby waives any and all rights such Holder was granted under Section
4.13(b) of the Existing Purchase Agreement, to receive the Pre-Notice (as
defined in the Existing Purchase Agreement) from the Company in connection with
New Financing.
2. Certain
Amendments.
(a) The
exercise price of the Existing Warrants held by each Holder that invests in the
New Financing (each, a “Participating
Holder”) in an amount equal to the lesser of $250,000 or the individual
amounts set forth on Schedule A hereto
(but not the exercise price of Existing Warrants held by Holders that do not
participate in the New Financing (each, a “Non-Participating
Holder”) is hereby amended and reduced to $0.10 per share, and the
aggregate number of shares of Common Stock underlying such warrants is hereby
increased in the individual amounts set forth on Schedule A hereto,
each subject to further adjustment therein.
(b) The
date in the definition of “Maturity Date” in the first sentence of the second
paragraph of the Existing Debentures which reads “May 25, 2010” is hereby
amended and replaced with “December 31, 2010”.
(c) The
conversion price of the Existing Debentures held by each Participating Holder
(but not the conversion price of the Existing Debentures held by a
Non-Participating Holder) is hereby amended and reduced to $0.10, subject to
further adjustment therein.
(d) The
definition of “Change of Control Redemption Amount” in Section 1 of the Existing
Debentures held by each Participating Holder is hereby amended and replaced in
its entirety with the following:
““Change of Control Redemption
Amount” shall equal the sum of (i) 400% of the then outstanding principal
amount of this Debenture, plus all accrued and unpaid interest thereon, plus
(ii) all other amounts, costs, expenses and liquidated damages due in respect of
this Debenture.”
2
(e) The
definitions of “Permitted Indebtedness” and “Permitted Lien” in Section 1 of the
Existing Debentures held by each Participating Holder and each Non-Participating
Holder is hereby amended to add the following as new clauses (c) and (d),
respectively:
“and (c) indebtedness evidenced
by those certain Original Issue Discount Secured Convertible Debentures issued
by the Company on or about January 28, 2009 (the “New
Debentures”).”
“and (d) Liens granted to the
holders of the New Debentures pursuant to that certain Security Agreement dated
January 28, 2009 among the Company, its Subsidiaries and the secured parties
signatory thereto (the “New Security
Agreement”).”
(f) Section
2(a) of the Existing Debentures held by each Participating Holder is hereby
amended and replaced in its entirety with the following:
““Payment of Interest in Cash
or Kind. The Company shall pay interest to the Holder on the aggregate
unconverted and then outstanding principal amount of this Debenture at the rate
of 8% per annum (increasing to
a rate of 12% per annum effective on January 28, 2009), payable quarterly
on January 1, April 1, July 1 and October 1, beginning on January 1, 2008, on
each Optional Redemption Date (as to that principal amount then being redeemed),
on each Conversion Date (as to that principal amount then being converted), and
on the Maturity Date (each such date, an “Interest Payment
Date”) (if any Interest Payment Date is not a Business Day, then the
applicable payment shall be due on the next succeeding Business Day), in cash or
duly authorized, validly issued, fully paid and non-assessable shares of Common
Stock at the Interest Conversion Rate (the dollar amount to be paid in shares,
the “Interest Share
Amount”) or a combination thereof; provided, however, that payment
in shares of Common Stock may only occur if (i) all of the Equity Conditions
have been met (unless waived by the Holder in writing) during the 20 Trading
Days immediately prior to the applicable Interest Payment Date (the
“Interest Notice
Period”) and through and including the date such shares of Common Stock
are issued to the Holder and (ii) the Company shall have given the Holder notice
in accordance with the notice requirements set forth below.”
(g) The
following is added as new Section 9(m) of the Existing Debentures held by the
Participating Holders and the Non-Participating Holders:
“Notwithstanding anything to the
contrary contained in the Purchase Agreement or the Security Agreement, by its
acceptance of this Debenture, the Holder acknowledges and agrees that the
holders of the New Debentures have a valid security interest in the Collateral
(as defined in the Security Agreement) and the security interests granted under
the Security Agreement and the New Security Agreement shall be pari-passu with
each other.”
3
(h) The
following is added as new clauses (d) and (e) of the definition of “Exempt
Issuance” in the Existing Purchase Agreement:
“and (d) the issuance of
debentures, warrants, and shares of Common Stock upon the conversion and
exercise thereof, pursuant to that certain Securities Purchase Agreement dated
January 28, 2009 among the Company and the investors signatory thereto (provided
that such securities are not amended to increase the number of such securities
or to decrease the exercise, exchange or conversion price of such securities)
and (e) the issuance of shares of Common Stock upon conversion or exercise, as
applicable, of the Debentures and Warrants held by “Participating Holders” (as
defined in the consent, waiver and amendment agreement referred to in this
clause) at the amended conversion and exercise prices set forth in that certain
Consent, Waiver and Amendment Agreement dated January 28, 2009 among the Company
and the investors signatory thereto.”
(i) Section
4.13(a) of the Existing Purchase Agreement is hereby amended in its entirety and
replaced with the following:
“(a) From
the date hereof until the date that the Debentures are no longer outstanding,
upon any issuance by the Company or any of its Subsidiaries of Common Stock or
Common Stock Equivalents (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to
an amount of the Subsequent Financing equal to the lesser of (i) the aggregate
principal amount of the Debentures then outstanding or (ii) 100% of the
Subsequent Financing less any amounts as to which the investor parties to that
certain securities purchase agreement dated January 28, 2009 among the Company
and such investors have exercised participation rights thereunder in respect of
such Subsequent Financing (the “Participation
Maximum”) on the same terms, conditions and price provided for in the
Subsequent Financing.
(j) The
reference to “70%” in Section 5.5 of the Existing Purchase Agreement, Sections 7
and 9(l) of the Existing Debentures, Section 6(f) of the Registration Rights
Agreement and Section 5(l) of the Existing Warrants is hereby amended and
replaced with “60%”.
3. The
foregoing waivers and amendments shall not be effective unless and until (i)
Holders of 70% or more of the principal amount of the Existing Debentures
outstanding shall have agreed to the terms and conditions hereunder and (ii) the
Company, its Subsidiaries and the Holders shall have executed and delivered the
intercreditor agreement in the form attached to the New Purchase Agreement. In
addition, the waivers set forth herein shall be null and void in the event the
New Financing is not consummated on or before January 31, 2009. Except as
expressly set forth above, all of the terms and conditions of the Transaction
Documents (as defined in the Existing Purchase Agreement) shall continue in full
force and effect after the execution of this Agreement and shall not be in any
way changed, modified or superseded by the terms set forth herein. The Company
and the undersigned Holder agree that execution and delivery of this Agreement
shall serve as the sole form of notice and irrevocable election by the Company
and such Holder of the waivers, consents and amendments contemplated hereby and
that no further action on the part of the Company or any other person is
required to effect such waiver and amendment except as set forth
herein.
4
4. The
Company hereby represents that following the execution and delivery of this
Agreement by the parties hereto, no Event of Default (as defined in the Existing
Debentures) has occurred and is continuing as of the date hereof. The
undersigned Holder hereby acknowledges that, without independent investigation,
it is not aware of any defaults in the Company’s obligations contained in any of
the Transaction Documents other than those which such Holder has previously
waived in consent agreements previously obtained by the Company or are
contemplated to be waived in connection with this Agreement (it being understood
that except as expressly set forth in this Agreement and in any prior written
waivers, nothing herein shall be construed as a waiver of any presently
existing, or past or future Events of Default).
5. This
Agreement may be executed in two or more counterparts and by facsimile signature
or otherwise, and each of such counterparts shall be deemed an original and all
of such counterparts together shall constitute one and the same
agreement.
6. The
Company has elected to provide all Holders with the same terms and form of
agreement for the convenience of the Company and not because it was required or
requested to do so by the Holders. The obligations of each Holder
under this Agreement, and any Transaction Document are several and not joint
with the obligations of any other Holder, and no Holder shall be responsible in
any way for the performance or non-performance of the obligations of any other
Holder under this Agreement or any Transaction Document. Nothing
contained herein or in any Transaction Document, and no action taken by any
Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Holders are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by this
Agreement or the Transaction Documents. Each Holder shall be entitled
to independently protect and enforce its rights, including without limitation,
the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose. Each Holder has
had the opportunity to be represented by its own separate legal counsel in their
review and negotiation of this Agreement and the Transaction
Documents. Xxxxxxx Xxxxxxxxx & Xxxxx LLP does not represent all
of the Holders but only Midsummer.
[Signature
pages follow]
5
IN
WITNESS WHEREOF, this Consent, Waiver and Amendment is executed as of the date
first set forth above.
|
|
|
|
By:
|
/s/ Xxxxx Xxxxxxxxx |
|
Name:
Xxxxx Xxxxxxxxx
|
|
|
Title:
CFO
|
|
[signature
page(s) of Holders to follow]
6
COUNTERPART
SIGNATURE PAGE
OF HOLDER
TO
|
Name of Holder:
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
