EXHIBIT 10.54
TSET, INC.
000 XXXXX XXXXX XXXXXX, XXX 000,
XXXX XXXXXX, XXXXXX 00000
Fusion Capital Fund II, LLC November 13, 2001
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, Xxxxxxxx 00000
RE: TSET, INC.
Gentlemen:
This letter is being delivered to confirm our understanding with
respect to certain matters under that certain Common Stock Purchase Agreement,
dated as of June 19, 2001 (the "Purchase Agreement"), by and between TSET, INC.,
a Nevada corporation (the "Company") and FUSION CAPITAL FUND II, LLC ("Fusion"),
with respect to the purchase by Fusion of up to $10,000,000 of common stock of
the Company. All capitalized terms used in this letter that are not defined in
this letter shall have the meanings set forth in the Purchase Agreement. The
Company and Fusion agree as follows:
1. ADVANCE OF FUNDS BY FUSION.
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After receipt of 1,000,000 Advance Shares (as hereafter defined) by
Fusion, Fusion shall make a cash advance of $150,000 to the Company (the
"Initial Advance"). Fusion may, in its sole discretion, make additional cash
advances to the Company (each a "Future Advance") from time to time as an
advance against purchases under the Purchase Agreement in amounts agreed to by
Fusion and the Company. The outstanding balance of the Initial Advance and any
Future Advances (the "Prepaid Amount") will be reduced by the Purchase Amount of
any purchases of Common Stock made by Fusion under the Purchase Agreement.
Immediately after the execution hereof, the Company shall deliver
1,000,000 shares of Common Stock ("Advance Shares") that are freely tradable
under the 1933 Act. Advance Shares shall be held by Fusion in trust until Fusion
deems from time to time the Advance Shares to be Purchase Shares as a result of,
and to the extent of, Fusion's purchase of Common Stock under the Purchase
Agreement. At such time as Fusion deems any Advance Shares to be Purchase Shares
as a result of, and to the extent of, Fusion's purchase of Common Stock under
the Purchase Agreement, such shares of Common Stock shall be validly issued,
fully paid and non-assessable and Fusion shall be for all legal and equitable
purposes the true and lawful owner thereof. Within three (3) Trading Days of a
request by Fusion to the Company, the Company shall deliver to Fusion additional
Advance Shares to replace and replenish any Advance Shares which have become
Purchase Shares as a result of, and to the extent of, Fusion's purchase of
Common Stock under the Purchase Agreement so that the number Advance Shares may
be up to 1,000,000 shares at any given time as determined by Fusion.
The Company may at any time repay all or any portion of the Prepaid
Amount upon three (3) Trading Days prior written notice to Fusion during which
time Fusion shall be entitled to purchase shares of Common Stock under the
Purchase Agreement. At any time that the Prepaid Amount is greater than $0.00,
(i) the Company shall not suspend any purchases by Fusion or terminate the
Purchase Agreement, (ii) the amount of the Daily Base Amount shall be $0.00,
(iii) Fusion shall have the right to purchase Common Stock at any time with a
Purchase Amount up to the then outstanding Prepaid Amount, and (iv) the Floor
Price shall be such amount as determined by Fusion.
2. ADDITIONAL AMENDMENTS TO PURCHASE AGREEMENT.
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Section 1(d)(iii) of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
"(iii) PURCHASE PRICE FLOOR. The Buyer shall not have any obligation to
purchase any Purchase Shares under this Agreement in the event that the Purchase
Price for any purchases of Purchase Shares would be less than the Floor Price."
Section 10(g) of the Purchase Agreement is hereby amended and restated
in its entirety as follows: "(g) "Floor Price" shall mean $.25."
Section 10(k)(iii) of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
"(iii) In the event that the Commencement shall not have occurred on or
before November 30, 2001, due to the failure to satisfy the conditions set forth
in Sections 6 and 7 above with respect to the Commencement (and the nonbreaching
party's failure to waive such unsatisfied condition(s)), the nonbreaching party
shall have the option to terminate this Agreement at the close of business on
such date or thereafter without liability of any party to any other party."
TSET, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
ACKNOWLEDGED AND AGREED:
FUSION CAPITAL FUND II, LLC
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
A Managing Member
