AMENDMENT AGREEMENT NO. 1, dated as of October 29, 2004 (the "Amendment
Agreement"), to Securities Purchase Agreement, dated as of May 19, 2004 (the
"Original Securities Purchase Agreement") and the Transaction Agreements
referred to therein, between SATELLITE ENTERPRISES CORP. (the "Company") and the
Buyers named at the foot of this Amendment (or their respective predecessors in
interest) (each, "Buyer" and any two or more of them, "Buyers").
Reference is made to the Original Securities Purchase Agreement.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Original Securities Purchase Agreement or the relevant
Transaction Agreement, as the context may require.
Reference is made to the provisions of Annex V to the Original Securities
Purchase Agreement. A dispute has arisen among the parties as to whether the
Company fulfilled certain of the Company's Obligations by the Final Issue Date.
The parties have determined to settle such dispute in accordance with the terms
of this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. The Transaction Agreements are hereby amended as provided in the
following provisions of this Amendment. Except to the extent specified below (or
to the extent the subject of the amendments below are inconsistent with such
amendments), all terms of the Transaction Agreements remain in full force and
effect.
2. The transactions reflected by the Transaction Agreements (the
"Transactions") are hereby modified to reflect the following terms:
(a) The number of Purchased Shares and the Purchase Price specified for
each Buyer shall be reduced to 80% of the number or amount specified for such
Buyer in the Original Securities Purchase Agreement (such reduced number of
shares, the "Adjusted Purchased Shares" and such reduced amount, the "Adjusted
Purchase Price"). As a result, the Total Purchase Price applicable to the
Purchased Shares of all Buyers shall be US$2,000,000 (the "Adjusted Total
Purchase Price"). The Company represents and acknowledges that the purchase
price for the Adjusted Purchased Shares was paid on the original Closing Date of
the Transactions and the shares representing such Adjusted Purchased Shares were
originally included in stock certificates (the "Original Certificates") dated on
or about August 24, 2004, each of which was issued for a number of shares in
excess of the Adjusted Purchased Shares for the relevant Buyer.
(b) (i) Each Buyer agrees to lend to the Company an amount (the "Loan
Amount") equal to 20% of the Purchase Price specified on the Buyer's signature
page to the Original Securities Purchase Agreement. The aggregate Loan Amount of
all Buyers is US$500,000 (the "Total Loan Amount").
(ii) The obligation to repay the loan of the relevant Loan Amount
from the Buyer shall be evidenced by the Company's issuance of one or more
Convertible Debentures to the Buyer in such principal amount (the Convertible
Debentures issued to the Buyer, the "Debentures"). Each Debenture (i) shall
provide for a conversion price (the "Conversion Price"), which shall initially
be equal to US$0.23 (the "Fixed Conversion Price"), which price may be adjusted
from time to as provided in the Debenture or in the other Transaction
Agreements, and (ii) shall have the terms and conditions of, and be
substantially in the form attached hereto as, ANNEX A-2. The loan to be made by
the Buyer and the issuance of the Debentures to the Buyer are sometimes referred
to herein and in the other Transaction Agreements as the purchase and sale of
the Debentures.
(iii) The funds for the Total Loan Amount are currently held as part
of the Reserved Escrow Funds by the Agent under the terms of the Pledge
Agreement. Such funds will be released as provided below in this Amendment.
(iv) The shares of Common Stock issuable on conversion of the
Debentures are referred to as "Conversion Shares." The term "Issue Date
Conversion Shares" means the number of shares of Common Stock equal to (x) the
Loan Amount for the relevant Buyer, divided by (y) the Conversion Price in
effect on the original date of issuance of the relevant Debenture.
(c) The aggregate amount of the Adjusted Purchase Price and the Loan
Amount for each Buyer is equal to the original Purchase Price for such Buyer.
The aggregate of the Adjusted Total Purchase Price and the Total Loan Amount
shall be US$2,500,000. Except as otherwise specified in this Amendment, all
references in the Transaction Agreements to the Buyer's Purchase Price or the
Total Purchase Price shall be deemed to refer to the respective amounts referred
in the preceding sentences of this subparagraph (c).
(d) In some contexts in the Transaction Agreements,
(i) the term "Purchased Shares" shall be deemed to refer to the
Adjusted Purchased Shares and the Debentures;
(ii) the term "Securities" shall be deemed to refer to the Adjusted
Purchased Shares, the Debentures, the Conversion Shares, the
Warrants, the Warrant Shares, and, if relevant, the Option Shares;
(iii) the term "Shares" shall be deemed to refer to the shares of
Common Stock representing any or all of the Purchased Shares, the
Conversion Shares, the Warrant Shares and the Option Shares.
(e) The Warrants issued to each Buyer remain unchanged by the terms of
this Amendment.
(f) The term "Transaction Agreements" is amended to include, (i) all other
items previously included in such definition, each as amended hereby, (ii) this
Amendment, (iii) the Debentures and (iv) all ancillary documents referred to in
those agreements and documents. Each of the Transaction Agreements is deemed to
refer to the original of such agreement or document, as the same may be amended
by this Amendment.
(g) Additional specific amendments to one or more of the Transaction
Agreements are referred to below and in ANNEX A-1 attached hereto, the terms of
which are incorporated herein by reference.
(h) All terms defined in this Amendment or in any document or instrument
contemplated by this Agreement are deemed incorporated by reference to each
relevant Transaction Agreement, as amended hereby.
(i) Each Buyer's execution and delivery of this Amendment shall constitute
such Buyer's consent and direction, as may be relevant, for the Escrow Agent or
the Agent to take action consistent with the purposes and intent of this
Amendment.
3. The closing of the transactions contemplated by this Amendment (the
"Amendment Closing") shall take place at the offices of the Escrow Agent no
later than five (5) Trading Days after the Escrow Agent has received executed
copies of this Amendment from all of the Buyers. The date on which the Amendment
Closing occurs is referred to as the "Amendment Closing Date." On the Amendment
Closing Date:
(a) The Company will execute and deliver to the Escrow Agent the Debenture
for each Buyer;
(b) The Company will deliver to the Escrow Agent one or more duly and
validly issued stock certificates representing the Adjusted Purchased Shares for
each Buyer; and
(c) The Escrow Agent shall return the Original Certificates to the Company
(acting through Company Counsel, as defined in the Registration Rights
Agreement).
4. Effective upon Amendment Closing, the parties have agreed to the
release or certain items of the Collateral (as defined in the Pledge Agreement)
and the distribution of the Reserved Escrow Funds (as defined in the Joint
Escrow Instructions) under the terms of the Joint Escrow Instructions, Annex V
and the Pledge Agreement as provided below in this Section 4. Such provisions
shall apply notwithstanding anything to the contrary in any of the other
Transaction Agreements, provided that the Amendment Closing has occurred.
Capitalized terms used in this Section 4 and not otherwise defined herein shall
have the meanings ascribed to them in the Joint Escrow Instruction or the Pledge
Agreement, as the context may require.
(a) Each Secured Party hereby (i) releases the Guarantor from its
obligations under the Guarantee and the Pledge Agreement and (ii) releases such
Secured Party's security interest in the Pledged Shares under the Pledge
Agreement. In furtherance of the foregoing, the Security Agent is authorized to
return the Pledged Shares to the Pledgor by delivering them to Xxxx Xxxx, Esq.
of Company Counsel.
(b) The Reserved Escrow Funds is $529,500, of which the Total Purchase
Price Reserve is $500,000. Each Secured Party hereby releases its security
interest in the Reserved Escrow Funds in excess of the Total Purchase Price
Reserve. Such excess, totaling $29,500, shall be returned to the Escrow Agent to
be held under the terms of the Joint Escrow Instructions and distributed in
accordance with the provisions of Sections 1(d)(II), (III)(i), (IV) and (V)
thereof.
(c) The Total Purchase Price Reserve will be released as follows:
(i) upon receipt of proof (as that term is used in the Joint Escrow
Instructions) of the filing of the Registration Statement (in form
contemplated by the Registration Rights Agreement, as amended by
this Amendment) within ten (10) Trading Days of the Amendment Date,
(x) the Secured Parties' security interest in the Total Purchase
Price Reserve will be released, (y) the Total Purchase Price Reserve
will be returned to the Escrow Agent to be held under the terms of
the Joint Escrow Instructions, and (z) the Escrow Agent will as
promptly as possible thereafter (1) release to or upon the order of
the Escrow Agent, the amount of $10,000, as the legal and escrow fee
relating to this Amendment, and (2) release the balance of the Total
Purchase Price Reserve in accordance with the provisions of clauses
(ii) and (iv) of Section 1(d)(III) of the Joint Escrow
Instructions;1 or
(ii) if receipt of proof of the filing of the Registration Statement
Registration Statement (in form contemplated by the Registration
Rights Agreement, as amended by this Amendment) within ten (10)
Trading Days of the Amendment Date is not received, the Security
Agent will (1) release to or upon the order of the Escrow Agent, out
of the Total Purchase Price Reserve, the amount of $10,000, as the
legal and escrow fee relating to this Amendment, and (2) release to
each Buyer, such Buyer's Allocable Share of the balance of the Total
Purchase Price Reserve, which will be applied as follows: (1) first,
to the accrued Periodic Amounts contemplated by Section 2(b) of the
Registration Rights Agreement (determined without regard to the any
amendments thereto which are conditioned on the timely of the
Registration Statement as provided in Annex A-1 hereto) through the
date of such release, and (2) the balance in reduction of the
principal of the Buyer's Debenture.2
5. Each Buyer represents and warrants to the Company with respect to the
Debentures and the transactions contemplated by this Amendment as follows: Each
of the representations Each of the representations in Section 3 of the Original
Securities Purchase Agreement is hereby restated as if set forth herein in full;
provided, however, that any defined terms used in such representations shall be
deemed to refer to such term as amended by this Amendment.
--------
1No amounts are released pursuant to clauses (i) or (iii) of this Section.
0Xxx Xxxxxxxxx shall remaining outstanding and enforceable in accordance with
its terms with respect to the reduced principal balance thereof.
6. The Company represents and warrants to each Buyer with respect to the
Debentures and the transactions contemplated by this Amendment as of the
Amendment Closing Date , as follows:
(a) Each of the representations in Section 3 of the Original Securities
Purchase Agreement is hereby restated as if set forth herein in full (but
without regard to any exceptions included in Annex V to the Original Securities
Purchase Agreement), except as otherwise provided in ANNEX A-4 attached hereto;
provided, however, that any defined terms used in such representations shall be
deemed to refer to such term as amended by this Amendment. In furtherance of the
foregoing, it is expressly understood by the Company that such representations
shall apply to the Debentures and the Conversions Shares.
(b) As of the Amendment Closing Date, the Shares shall have been duly
authorized by all necessary corporate action on the part of the Company, and,
when issued on or before the Amendment Closing Date or upon conversion of the
Debentures or exercise of the Warrants or pursuant to other relevant provisions
of the Transaction Agreements, in each case in accordance with their respective
terms, will be duly and validly issued, fully paid and non-assessable and will
not subject the Holder thereof to personal liability by reason of being such
Holder.
(c) The number of shares issuable upon conversion of the Debentures, or
upon exercise of the Warrants or pursuant to the other terms of the Transaction
Agreements may have a dilutive effect on the ownership interests of the other
shareholders (and Persons having the right to become shareholders) of the
Company. The Company's executive officers and directors have studied and fully
understand the nature of the Securities sold pursuant to the Original Securities
Purchase Agreement and pursuant to this Amendment and recognize that they have
such a potential dilutive effect. The board of directors of the Company has
concluded, in its good faith business judgment, that such issuance is in the
best interests of the Company. The Company specifically acknowledges that its
obligation to issue the Conversion Shares upon conversion of the Debentures, the
Warrant Shares upon exercise of the Warrants, the Additional Shares as provided
in the Original Securities Purchase Agreement or the Payment Shares as provided
in the Registration Rights Agreement, each as amended by this Amendment, is
binding upon the Company and enforceable regardless of the dilution such
issuance may have on the ownership interests of other shareholders of the
Company, and the Company will honor such obligations, including honoring every
Notice of Conversion (as contemplated by the Debentures), every Notice of
Exercise (as contemplated by the Warrants), every demand for Additional Shares
(as contemplated by the Securities Purchase Agreement), every demand for Payment
Shares (as contemplated by the Registration Rights Agreement), unless the
Company is subject to an injunction (which injunction was not sought by the
Company) prohibiting the Company from doing so.
(d) The Company confirms that all statements of the Company contained
herein shall survive acceptance of this Amendment by the Buyer. The Company
agrees that, if any events occur or circumstances exist prior to the Amendment
Closing Date which would make any of the Company's representations, warranties,
agreements or other information set forth herein materially untrue or materially
inaccurate as of such date, the Company shall immediately notify the Buyer and
the Escrow Agent in writing prior to such date of such fact, specifying which
representation, warranty or covenant is affected and the reasons therefor.
7. The Buyer understands that, in addition to the actions referred to in
Section 3 hereof, the Company's obligation to consummate the Amendment Closing
on the Amendment Closing Date is conditioned upon:
(a) The execution and delivery of this Agreement by all of the
Buyers on or before the Amendment Closing Date;
(b) On such Amendment Closing Date, each of the Transaction
Agreements executed by the Buyer on or before such date shall be in full force
and effect and the Buyer shall not be in default thereunder;
(c) The accuracy on such Amendment Closing Date of the
representations and warranties of the Buyer contained in this Amendment, each as
if made on such date, and the performance by the Buyer on or before such date of
all covenants and agreements of the Buyer required to be performed on or before
such date; and
(d) There shall not be in effect any law, rule or regulation
prohibiting or restricting the amendment transactions contemplated hereby, or
requiring any consent or approval which shall not have been obtained.
8. The Company understands that, in addition to the actions referred to in
Section 3 hereof, the Buyer's obligation to consummate the Amendment Closing on
the Amendment Closing Date is conditioned upon:
(a) The execution and delivery of this Amendment and the other
Transaction Agreements contemplated hereby by the Company on or before the
Amendment Closing Date;
(b) On such Amendment Closing Date, each of the Transaction
Agreements executed by the Company on or before such date shall be in full force
and effect and the Company shall not be in default thereunder;
(c) The accuracy in all material respects on such Amendment Closing
Date of the representations and warranties of the Company contained in this
Amendment, each as if made on such date, and the performance by the Company on
or before such date of all covenants and agreements of the Company required to
be performed on or before such date;
(d) On such Amendment Closing Date, the Buyer shall have received an
opinion of counsel for the Company, dated such Amendment Closing Date, in form,
scope and substance reasonably satisfactory to the Buyer, substantially to the
effect set forth in ANNEX A-3 attached hereto;
(e) There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained; and
(f) From and after the date hereof to and including the Amendment
Closing Date, each of the following conditions will remain in effect: (i) the
trading of the Common Stock shall not have been suspended by the SEC or on the
Principal Trading Market; (ii) trading in securities generally on the Principal
Trading Market shall not have been suspended or limited; and (iii) no minimum
prices shall have been established for securities traded on the Principal
Trading Market.
9. The provisions of Sections 8 through 14 of the Original Securities
Purchase Agreement are incorporated herein by reference and apply to the
execution of this Amendment.
10. Except to the extent expressly contemplated hereby or necessary to
give effect to the amendments contemplated hereby, all other terms and
conditions of each of the original Transaction Agreements remains in full force
and effect.
[Balance of page intentionally left blank]
IN WITNESS WHEREOF, each Buyer and the Company has caused this Amendment
to be duly executed on its behalf (if an entity, by one of its officers
thereunto duly authorized) as of the date first above written.
LENDERS
[List]
COMPANY
SATELLITE ENTERPRISES CORP.
By: _______________________________
Name and Title: ___________________
The terms of the above Amendment are acknowledged by the following parties:
PLEDGOR:
MEDIA FINANCE EN SUISSE HOLDINGS GMBH
By: _______________________________
Name and Title: ___________________
ESCROW AGENT:
XXXXXXX & PRAGER LLP
By:
SECURITY AGENT:
XXXXXXX & XXXXXX LLP
By:
ANNEX A-1
TO
AMENDMENT AGREEMENT
SPECIFIC AMENDMENT PROVISIONS
SECURITIES PURCHASE AGREEMENT
SECTION 4(G)
(a) The term "Final Lock Up Date" is amended to mean the later of (i) the
earlier of the Proceeds Date or the Trading Threshold Date or (ii) the Scheduled
Date (as such terms are defined below).
(b) The term "Proceeds Date" means, with respect to each Buyer without
regard to any Other Buyer, the date when the Buyer has received, in the
aggregate, proceeds from the sale of the Adjusted Purchased Shares3 equal to the
Buyer's Allocable Share of US$1,500,000. The parties acknowledge that the
achievement of a Proceeds Date for any Buyer does not affect the determination
of whether an Other Buyer has achieved a Proceeds Date.
(c) The term "Trading Threshold Date" means the Trading Day on which each
and all (and not less than all) of the following conditions is true:
(i) the Closing Price for each Trading Day during the Half Year
Period (as defined below) is US$0.40 or more; and
(ii) the aggregate trading volume during the same Half Year Period
is at least 65 million shares.
(d) The term "Half Year Period" means, as of any Trading Day, the
preceding six (6) month period; provided, however, that (i) the first day of any
Half Year Period shall not commence prior to the Effective Date and (ii) such
period shall not include the Trading Days, if any, during which sale of
Registrable Securities was suspended such period.
(e) The term "Scheduled Date" means the date which is 18 months after the
Effective Date, but not counting for such purposes the days, if any, during
which sale of Registrable Securities was suspended after the Effective Date.
(f) The following references in Section 4(g) are amended as provided
below:
(i) "Securities" or "Purchased Securities" shall be deemed to refer
to the Purchased Shares (as defined in this Amendment);
-----------------
3 To the exclusion of any other shares, including, but not limited to, Warrant
Shares, Conversion Shares, Option Shares or Payment Shares
(ii) "Per Share Purchase Price"4 shall be deemed to refer to the Per
Share Purchase Price and to the Conversion Price, each as then in
effect after taking into account any prior adjustments, or to either
of them, as the case may be;
(ii) Clause (i)(B)(1) shall be amended to read as follows:
"(1) the Per Share Purchase Price shall be adjusted to an amount
(the "Adjusted Per Share Purchase Price") equal to the lower of (x)
the lowest fixed purchase price of any shares of the New Common
Stock contemplated in the New Transaction or (y) the lowest
conversion price which would be applicable under the terms of the
New Transaction; and the Conversion Price for the Unconverted
Debentures (as defined in the Debentures) shall be adjusted to an
amount (the "Adjusted Conversion Price") equal to the Adjusted Per
Share Purchase Price;"
(iii) In Clause (i)(C), references to (X) "Purchase Price" in clause
(x) shall refer to the Adjusted Purchase Price and (Y) "Purchased
Shares" shall refer to the Adjusted Purchased Shares5.
SECTION 4(H)
(a) The term "Purchased Shares" means the Adjusted Purchased Shares and
the Issue Date Conversion Shares.
SECTION 4(I)
(a) This section is amended in its entirety to read as follows:
I. AVAILABLE SHARES. The Company shall have at all times authorized
and reserved for issuance, free from preemptive rights, a number of
shares (the "Minimum Available Shares") at least equal to (x) one
hundred twenty percent (120%) of (1) the number of shares issuable
upon the conversion of all Unconverted Debentures then held by all
Holders (whether or not such Debentures were originally issued to
the Holder, the Buyer or any other party) plus (2) the numbers or
shares issuable upon the exercise of all outstanding Warrants then
held by all Holders (in each case, whether such Warrants were
originally issued to the Holder, the Buyer or to any other party)
and (y) one hundred percent (100%) of the Option Shares. For the
purposes of such calculations, the Company should assume that all
Debentures and Warrants were then issued and exercisable, in each
case without regard to any restrictions which might limit any
Holder's right to convert any of the Debentures or to exercise any
of the Warrants held by any Holder.
-----------
4 In some places this phrase was incorrectly typed as "Purchase Price Per
Share". In all such cases it should read "Per Share Purchase Price"
5 See fn 1 above.
REGISTRATION RIGHTS AGREEMENT
SECTION 1
The following terms are amended in their entirety or added in their
entirety to this Section:
"Held Shares Value" means the sum of
(x) with respect to the Purchased Shares, the amount equal to (i) the
number shares of Adjusted Purchased Shares still held by the Holder,
multiplied by (ii) the Per Share Purchase Price and
(y) with respect to the Debentures, the sum of (I) the principal amount of
the Unconverted Debentures, plus (II) for shares of Common Stock acquired
by the Investor upon a conversion of the Debentures within the thirty (30)
days preceding the Restricted Sale Date, but not yet sold by the Investor,
the principal amount of the Debentures converted into such Conversion
Shares; provided, however, that if the Investor effected more than one
such conversion during such thirty (30) day period and sold less than all
of such shares, the sold shares shall be deemed to be derived first from
the conversions in the sequence of such conversions (that is, for example,
until the number of shares from the first of such conversions have been
sold, all shares shall be deemed to be from the first conversion;
thereafter, from the second conversion until all such shares are sold).
"Investor" means the Initial Investor and any permitted transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof and who holds Purchased Shares, Debentures,
Conversion Shares, Warrants or Warrant Shares.
"Purchase Price" or "Purchase Price for all Purchased Shares" means the
sum of the Purchase Price for all Adjusted Purchased Shares plus the principal
amount of the Debentures.
"Required Filing Date" means the Required Filing Date or, if the amendment
to the first sentence of Section 2(a)(i) referred to in the Amendment is
applicable, the Adjusted Required Filing Date.
"Registrable Securities" means, collectively, the Purchased Shares, the
Conversion Shares, the Warrant Shares, the Additional Shares, the Payment Shares
and, to the extent purchased prior to the filing of the Registration Statement,
the Option Shares.
SECTION 2(A)(I)
(a) Subject to the conditions referred to below, the first sentence shall
be amended to read as follows:
"The Company shall cause Company Counsel to prepare and file with the SEC,
no later than seven (7) Trading Days after the Amendment Date (the
"Adjusted Required Filing Date"), a Registration Statement registering for
resale by the Investor a sufficient number of shares of Common Stock for
the Initial Investors to sell the Registrable Securities."
This amendment shall apply if, and only if, the Registration Statement, in form
consistent with the provisions of the Registration Rights Agreement is filed
with the SEC within ten (10) Trading Days after the Amendment Date; if
otherwise, the amendment to this sentence shall not apply and its original terms
shall apply.
(b) The sentence beginning "The `Initial Number of Shares to Be
Registered' is a number ..." is amended to read in its entirety as follows:
The "Initial Number of Shares to Be Registered" is a number of shares of
Common Stock which is at least equal to the sum of (x) one hundred fifty
percent (150%) of the sum of (i) the number of Adjusted Purchased Shares,
(ii) the number of shares into which the Debentures would be convertible
at the time of filing of such Registration Statement (assuming for such
purposes that all Debentures had been issued, had been eligible to be
converted, and had been converted, into Conversion Shares in accordance
with their terms, whether or not such issuance, eligibility or conversion
had in fact occurred as of such date), plus (iii) the number of Warrant
Shares covered by the Warrants (assuming for such purposes that all the
Warrants had been issued, had been eligible to be exercised and had been
exercised for the issuance of Warrant Shares in accordance with their
terms, whether or not such issuance, eligibility or exercise had in fact
occurred as of such date) and (y) one hundred percent (100%) of the number
of Option Shares, if any, purchased prior the initial filing of the
Registration Statement.
SECTION 2(A)(II)
Subject to the conditions referred to below, the section shall be amended
to read in its entirety as follows:
"(ii) The Company and Company Counsel will use their
reasonable best efforts to cause such Registration Statement to be
declared effective on a date (the "Initial Required Effective Date")
which is no later than the earlier of (Y) five (5) days after oral
or written notice by the SEC that it may be declared effective or
(Z) sixty (120) days after the Adjusted Required Filing Date."
This amendment shall apply if, and only if, the amendment to the first sentence
of Section 2(a)(i) referred to above is effective; if otherwise, the amendment
to this section shall not apply and its original terms shall apply.
SECTION 2(A)(III)(X)
The sentence beginning "The `Increased Number of Shares to Be Registered"'
is a number ..." is amended to read in its entirety as follows:
The "Increased Number of Shares to Be Registered" is a number of shares of
Common Stock which is at least equal to the sum of (I) one hundred fifty
percent (150%) of the sum of (A) the Adjusted Purchased Shares and
Additional Shares, if any, previously issued or currently issuable, (B)
the sum of the number of Conversion Shares previously issued plus the
number of shares into which the Unconverted Debentures would be
convertible at such time (assuming for such purposes that all Debentures
had been issued, had been eligible to be converted, and had been
converted, into Conversion Shares in accordance with their terms, whether
or not such issuance, eligibility or conversion had in fact occurred as of
such date), plus (C) the adjusted number of shares issued or still
issuable upon exercise of the Warrants (assuming for such purposes that
all the Warrants, including the Additional Warrants, had been issued, had
been eligible to be exercised and had been exercised for the issuance of
Warrant Shares in accordance with their terms, whether or not such
issuance, eligibility or exercise had in fact occurred as of such date),
plus (II) one hundred percent (100%) of the sum of (A) the number of
Payment Shares, if any, previously issued or currently issuable, and (B)
the number of Option Shares, if any, purchased prior the initial filing of
the Registration Statement
SECTION 2(B)(V)(A)
The section shall be amended to read in its entirety as follows:
"(A) at the option of the Company, exercisable in its discretion on
the date the Periodic Amount is due; provided, however, that the Company
may exercise this discretion if, but only if, the Effective Date is within
thirty (30) days after the Adjusted Initial Effective Date and the
Registration Statement covering the Payment Shares is then effective1; or
***
[fn]1 If the Investor requests payment of any accrued Periodic Amount on
any date which is earlier than thirty (30) days after the Adjusted Initial
Effective Date but prior to the Effective Date, and if, prior to the
payment thereof, the Investor does not elect to have such payment made in
shares as provided in clause (B) of this paragraph, the Company shall
either pay such amount to the Investor or deposit such amount in escrow
with the Company Counsel with a statement that it will issue shares to the
Investor pursuant to this clause (A) if the conditions provided herein are
met. If such amount is paid in escrow, it shall be held until such date or
the earlier issuance of shares pursuant to such election in accordance
with such terms. If the shares are not issued or issuable by such date,
the Company Counsel shall release the funds to the Investor. If the shares
are duly issued to the Investor, as confirmed by the Investor, the funds
held in escrow may be released to the Company.
SECTION 2(B)(IX)
This section is deleted in its entirety.
ANNEX A-2
TO
AMENDMENT AGREEMENT
FORM OF DEBENTURE
[TO BE PROVIDED]
ANNEX A-3
TO
AMENDMENT AGREEMENT
FORM OF COUNSEL'S OPINION
[TO BE PROVIDED]
ANNEX A-4
TO
AMENDMENT AGREEMENT
[Subject to modification by Company]
EXCEPTIONS TO REPRESENTATIONS
NONE
