EXHIBIT 10.11
AMENDMENT NO. 1 TO THE SECURITIES PURCHASE AGREEMENT,
DATED DECEMBER 22, 2004, BY AND AMONG CIROND CORPORATION
AND THE PURCHASERS SIGNATORY THERETO
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AMENDMENT NO. 1 TO THE SECURITIES PURCHASE
AGREEMENT, DATED DECEMBER 22, 2004, BY AND AMONG CIROND
CORPORATION AND THE PURCHASERS SIGNATORY THERETO
This Amendment No. 1 ("AMENDMENT") is made to that certain Securities
Purchase Agreement (and where applicable below, the other agreements entered
into in connection therewith) ("PURCHASE AGREEMENT") dated as of December 22,
2004, by and among Cirond Corporation (the "COMPANY") and the purchaser
signatory thereto (collectively, the "PURCHASERS") for the purchase of the
Company's Series B 5% Convertible Preferred Stock (the "PREFERRED STOCK"), the
Common Stock Purchase Warrants issued to the Purchasers (the "WARRANTS") and the
Additional Investment Rights granted to the Purchasers. Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Purchase Agreement.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. ADJUSTMENT TO CONVERSION PRICE. Section 6(b) of the
Certificate of Designation is hereby amended and restated as follows:
"CONVERSION PRICE. The conversion price for the Preferred Stock shall
equal $0.25 (the "Conversion Price"), subject to adjustment herein." On
the Trading Day immediately following the date hereof the Company shall
file an amendment to the Certificate of Designation pursuant to the
Nevada Revised Statutes. The adjustment to the Conversion Price shall
be honored by the Company immediately and automatically and without any
further action required by any party.
2. ADJUSTMENT TO EXERCISE PRICE. Section 2(b) of the Warrants
is hereby amended and restated as follows: "Exercise Price. The
exercise price of each share of Common Stock under this Warrant shall
be $0.30, subject to adjustment hereunder (the "EXERCISE PRICE"). The
adjustment to the Exercise Price shall be honored by the Company
immediately and automatically and without any further action required
by any party.
3. TERMINATION OF ADDITIONAL INVESTMENT RIGHTS. The Additional
Investment Rights, and all rights and obligations of the parties in
connection with the Additional Investment Rights, are hereby terminated
and of no further force or effect.
4. AMENDMENT TO PROHIBITION ON SUBSEQUENT TRANSACTIONS. The
first sentence of Section 4.14 of the Purchase Agreement shall be
amended and restated as follows: "SUBSEQUENT TRANSACTIONS. From the
date hereof until after the Effective Date, neither the Company nor any
Subsidiary shall issue any Common Stock Equivalent or indebtedness for
borrowed monies, which Common Stock Equivalent or indebtedness is
secured by any lien on any of the assets of the Company.
5. ELIMINATION OF PROHIBITION ON REVERSE STOCK SPLITS. Section
4.1(f) prohibiting the Company from undertaking a reverse or forward
stock split without the consent of the Purchasers is hereby deleted in
its entirety and of no further force or effect.
6. ELIMINATION OF FULL RATCHET ANTI-DILUTION PROVISIONS. Section
7(b) of the Certificate of Designation granting the Purchasers full
ratchet anti-dilution protection to the Conversion Price with respect
to any future Dilutive Issuances and Section 3(b) of the Warrants
granting the Purchasers full ratchet anti-dilution protection to the
Exercise Price with respect to any future Dilutive Issuances are hereby
terminated and deemed by the parties to have no further force or
effect.
7. REGISTRATION OBLIGATIONS. The definition of "FILING DATE" in
the Registration Rights Agreement is hereby amended to be 15 days from
the date hereof and the definition of "Effectiveness Date" is hereby
amended to be 90 days from the date hereof. In addition, the Triggering
Event described in Section 9(a)(i) of the Certificate of Designation is
hereby amended to be the failure of a Conversion Shares Registration
Statement to be declared effective by the Commission on or prior to the
120th day from the date hereof.
8. FILING OF FORM 8-K. Within 1 Trading Day of the date hereof,
the Company shall file a Current Report on Form 8-K disclosing the
material terms of this Amendment and attaching this Amendment as an
exhibit thereto.
9. EFFECT ON TRANSACTION DOCUMENTS. Except as expressly set
forth herein, all of the terms and conditions of the Purchase
Agreement, the Certificate of Designation, the Registration Rights
Agreement and the Warrants shall continue in full force and effect
after the execution of this Amendment, and shall not be in any way
changed, modified or superseded by the terms set forth herein and the
provisions of this Amendment, if not expressly set forth herein, shall
otherwise be subject to the provisions of the Purchase Agreement.
10. INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under this Amendment are several and not
joint with the obligations of any other Purchaser, and no Purchaser
shall be responsible in any way for the performance of the obligations
of any other Purchaser under this Amendment. Nothing contained herein
or in this Amendment, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create
a presumption that the Purchasers are in any way acting in concert or
as a group with respect to such obligations or the transactions
contemplated by this Amendment. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without
limitation the rights arising out of this Amendment, and it shall not
be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. Each Purchaser has been
represented by its own separate legal counsel in their review and
negotiation of this Amendment. For reasons of administrative
convenience only, Purchasers and their respective counsel have chosen
to communicate with the Company through FW. FW does not represent all
of the Purchasers but only The Bluegrass Growth Fund LP and The
Bluegrass Growth Fund Ltd. The Company has elected to provide all
Purchasers with the same terms under this Amendment for the convenience
of the Company and not because it was required or requested to do so by
the Purchasers.
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11. DEFINITIONS. CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN
HAVE THE MEANINGS GIVEN TO SUCH TERMS IN THE PURCHASE AGREEMENT, THE
PREFERRED STOCK AND THE WARRANTS.
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Executed as of July ___, 2005 by the undersigned duly authorized
representatives of the Company and Purchasers:
CIROND CORPORATION
By:
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Name:
Title:
Name of Purchaser:
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SIGNATURE OF AUTHORIZED SIGNATORY OF PURCHASER:
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Name of Authorized Signatory:
--------------------------------
Title of Authorized Signatory:
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