AMENDMENT AND WAIVER AGREEMENT
EXHIBIT
10.1
This
Amendment and Waiver Agreement (this “Agreement”), is made and entered
into as of November 23, 2007, by and between Titanium Group Limited, a
corporation organized under the laws of the British Virgin Islands (the
“Company”) Crescent International Ltd. (“Crescent”), Chestnut
Ridge Partners, LP (“Chestnut Ridge”) and Whalehaven Capital Fund Limited
(“Whalehaven”, each, a “Holder”, and collectively, Crescent,
Chestnut Ridge and Whalehaven, the “Holders”).
WHEREAS,
the Company and the Holders are parties to that certain Securities Purchase
Agreement (the “Purchase Agreement”), dated April 3, 2007, pursuant to
which the Company issued to the Holders its Series A 8% Senior Convertible
Debentures due, subject to the terms therein, April 3, 2010 (the
“Debentures”) with an aggregate principal amount among all Holders of
$1,450,000, of which $1,450,000 in principal currently remains outstanding,
and
warrants to purchase Common Stock (the “Warrants”);
WHEREAS,
certain events of default have occurred pursuant to the Debentures as set forth
on Schedule A attached hereto and are continuing to occur related to the
Debentures (“Existing Defaults”) and as a result of such defaults, the
Holders are entitled, among other things, to enforce their rights and remedies
against the Company, including without limitation, acceleration and immediately
demand payment in full of all obligations under the Debentures; and
WHEREAS,
the Company and the Holders have agreed to (i) reduce the conversion price
of
the Debentures from $0.30 per share to $0.20 per share, subject to further
adjustment therein, (ii) waive the Existing Defaults, (iii) waive any
anti-dilution adjustment in the Warrants triggered by the foregoing reduction
in
the Conversion Price, and (iv) waive any liquidated damages that have accrued
pursuant to Section 2(b)(iv) of the Registration Rights Agreement;
and
WHEREAS,
capitalized terms used herein, but not otherwise defined, shall have the
meanings ascribed to such terms as set forth in the Purchase Agreement;
and
NOW,
THEREFORE, in consideration of the terms and conditions contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:
1. Incorporation
of Preliminary Statements and Acknowledgement. The preliminary
statements set forth above by this reference hereto are hereby incorporated
into
this Agreement. Without limiting the foregoing, the Company hereby
acknowledges that the Existing Defaults have occurred and are continuing under
the terms of the Debentures and, notwithstanding anything to the contrary in
this Agreement, the Purchase Agreement, the Debentures or any of the other
Transaction Documents, the Company acknowledges and agrees that upon a breach
of
this Agreement by the Company, such breach shall be an Event of Default under
the Debentures and each Holder has the right to immediately enforce payment
of
all of the Obligations and, in connection therewith, without further notice,
to
enforce its liens on, and security interests in, the Collateral (as defined
under the Security Agreement).
2. Payment
of Interest and Waiver of Existing Defaults. The Company agrees
to issue a total of 477,366 shares of its common stock as payment of interest
due July 1, 2007 and October 1, 2007 and any late fees thereon. The
Holders agree to forever waive their rights and remedies against the Company,
including without limitation, acceleration of the Debentures, solely in
connection with, and as they relate to, the prior occurrence of the Existing
Defaults. Notwithstanding anything herein to the contrary, this
waiver is limited only to the Existing Defaults and any future Events of
Default, including a breach of this Agreement, shall not be deemed waived
hereunder.
3. Reduction
of Conversion Price. In consideration for the foregoing release
by the Holders, the Company agrees to reduce the Conversion Price from $0.30
per
share to $0.20 per share, subject to further adjustment as set forth in the
Debenture.
4. Amendment
to Debentures. Section 4(b) of the Debentures is hereby deleted
in its entirety and replaced with the following:
“Conversion
Price. The conversion price in effect on any Conversion Date
shall be equal to $0.20, subject to adjustment herein (the “Conversion
Price”).”
5. Waiver
of Anti-dilution Adjustment to the Warrants. The Holders hereby
waive any adjustment to the exercise price of the Warrants resulting from the
reduction to the Conversion Price as set forth in Sections 3 and 4 of this
Agreement. This waiver is limited only as to any anti-dilution adjustment
triggered as a result of this Agreement and any anti-dilution adjustment to
the
exercise price of the Warrant triggered by any future event, including, but
not
limited to, a further reduction of the Conversion Price, shall not be deemed
waived hereunder.
6. Waiver
of Liquidated Damages under Registration Rights Agreement. Each Holder
hereby waives all liquidated damages which have accrued prior to the date hereof
and which would otherwise have been payable by the Company to such Holder under
and in accordance with Section 2(b)(iv) of the Registration Rights
Agreement.
7. Conditions
Precedent. The respective waivers and obligations of the Holders hereunder
are subject to the following conditions being met:
i. the
accuracy in all material respects of the representations and warranties of
the
Company contained herein;
ii. all
obligations, covenants and agreements of the Company required to be performed
hereunder shall have been performed;
iii. all
parties to the Purchase Agreement and holders of the Debentures and Warrants
shall have agreed to the terms and conditions of this Agreement and each party
has executed this Agreement; and
iv. there
shall have been no Material Adverse Effect with respect to the Company since
the
date hereof.
8. Representations
and Warranties of the Company. The Company hereby makes to the
Holders the following representations and warranties:
i. Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by
this
Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby
have
been duly authorized by all necessary action on the part of the Company and
no
further action is required by the Company, its board of directors or its
stockholders in connection therewith. This Agreement has been duly
executed by the Company and, when delivered in accordance with the terms hereof
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may
be
limited by applicable law.
ii. No
Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse
of
time or both would become a default) under, result in the creation of any Lien
(except as contemplated by the Security Documents) upon any of the properties
or
assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any material agreement, credit facility, debt or
other material instrument (evidencing a Company or Subsidiary debt or otherwise)
or other material understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) conflict with or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction
of
any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not have
or
reasonably be expected to result in a Material Adverse Effect.
iii. Equal
Consideration. Except as set forth in this Agreement, no
consideration has been offered or paid to any person to amend or consent to
a
waiver, modification, forbearance or otherwise of any provision of any of the
Transaction Documents.
iv. Certification. Other
than the Existing Defaults, no Event of Default and no event which, with the
giving of notice or passage of time (or both), would constitute an Event of
Default under the Debentures has occurred or is continuing.
9. Representations
and Warranties of the Holders. Each Holder, severally and not
jointly, represents and warrants as of the date hereof to the Company as
follows:
i. Authority. The
execution, delivery and performance by such Holder of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate or similar action on the part of such Holder. This
Agreement has been duly executed by such Holder, and when delivered by such
Holder in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Holder, enforceable against it in accordance
with its terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
10. Effect
on Transaction Documents. Subject to the waivers and
amendments provided herein, all of the terms and conditions of the Transaction
Documents 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, including but not limited to, any other obligations
the
Company may have to the Holders under the Transaction Documents. Except as
expressly set forth herein, this Agreement shall not be deemed to be a
waiver, amendment or modification of any provisions of the Transaction Documents
or of any right, power or remedy of the Holders, or constitute a waiver of
any
provision of the Transaction Documents (except to the extent herein set forth),
or any other document, instrument and/or agreement executed or delivered in
connection therewith, in each case whether arising before or after the date
hereof or as a result of performance hereunder or thereunder. The Holders
reserve all rights, remedies, powers, or privileges available under the
Transaction Documents, at law or otherwise. This Agreement shall not
constitute a novation or satisfaction and accord of the Transaction Documents
or
any other document, instrument and/or agreement executed or delivered in
connection therewith.
11. Release
of all Claims. THE COMPANY (FOR ITSELF AND ITS AFFILIATES) HEREBY
UNCONDITIONALLY RELEASES AND FOREVER DISCHARGES EACH HOLDER AND ITS RESPECTIVE
SUCCESSORS, ASSIGNS, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES, AFFILIATES,
ACCOUNTANTS, CONSULTANTS, CONTRACTORS, ADVISORS AND ATTORNEYS (COLLECTIVELY,
THE
“BENEFITED PARTIES”) FROM ALL CLAIMS (AS DEFINED BELOW) AND AGREES TO
INDEMNIFY THE BENEFITED PARTIES, AND HOLD THEM HARMLESS FROM ANY AND ALL CLAIMS,
LOSSES, CAUSES OF ACTION, COSTS AND EXPENSES OF EVERY KIND OR CHARACTER IN
CONNECTION WITH THE CLAIMS. AS USED IN THIS AGREEMENT, THE TERM
“CLAIMS” MEANS ANY AND ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTIONS, COSTS, EXPENSES AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, AT LAW
OR
IN EQUITY, ORIGINATING IN WHOLE OR IN PART, WHICH THE COMPANY, OR ANY OF ITS
AGENTS, EMPLOYEES OR AFFILIATES MAY NOW OR HEREAFTER HAVE OR CLAIM AGAINST
ANY
OF THE BENEFITED PARTIES AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE
OUT
OF CONTRACT, TORT, VIOLATION OF LAW OR OTHERWISE IN CONNECTION
WITH
ANY
OF THE TRANSACTION DOCUMENTS, INCLUDING ANY CONTRACTING FOR, CHARGING, TAKING,
RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE MAXIMUM RATE
ON
INTEREST CHARGEABLE UNDER APPLICABLE LAW AND ANY LOSS, COST OR DAMAGE, OF
ANY
KIND OR CHARACTER, ARISING OUT OF OR IN ANY WAY CONNECTED WITH OR IN ANY
WAY
RESULTING FROM THE ACTIONS OR OMISSIONS OF THE BENEFITED PARTIES, INCLUDING
ANY
BREACH OF FIDUCIARY DUTY, BREACH OF ANY DUTY OF GOOD FAITH OR FAIR DEALING,
UNDUE INFLUENCE, DURESS, ECONOMIC COERCION, CONFLICT OF INTEREST, NEGLIGENCE,
BAD FAITH, MALPRACTICE, VIOLATIONS OF THE RACKETEER INFLUENCED AND CORRUPT
ORGANIZATIONS ACT, INTENTIONAL OR NEGLIGENT INFLICTION OF MENTAL DISTRESS,
TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS, TORTIOUS INTERFERENCE WITH
CORPORATE GOVERNANCE OR PROSPECTIVE BUSINESS ADVANTAGE, BREACH OF CONTRACT,
DECEPTIVE TRADE PRACTICES, LIBEL, SLANDER, CONSPIRACY OR ANY CLAIM FOR
WRONGFULLY ACCELERATING ANY OBLIGATIONS OR WRONGFULLY ATTEMPTING TO FORECLOSE
ON
ANY COLLATERAL. THE COMPANY (FOR ITSELF AND ITS AFFILIATES) AGREES
THAT NONE OF THE BENEFITED PARTIES HAS FIDUCIARY OR SIMILAR OBLIGATIONS TO
THE
COMPANY OR ANY AGENTS, EMPLOYEES OR AFFILIATES OF THE COMPANY AND THAT THEIR
RELATIONSHIPS ARE STRICTLY THAT OF CREDITOR AND DEBTOR. THIS RELEASE
IS ACCEPTED BY THE HOLDERS PURSUANT TO THIS AGREEMENT AND SHALL NOT BE CONSTRUED
AS AN ADMISSION OF LIABILITY BY HOLDERS OR ANY OTHER BENEFITED
PARTY.
THE
COMPANY (FOR ITSELF AND ITS AFFILIATES) ACKNOWLEDGES THAT THE FOREGOING
PROVISIONS ARE INTENDED TO, AND THE TRANSACTION DOCUMENTS CONTAIN PROVISIONS
WHICH, RELEASE HOLDERS FROM LIABILITY AND/OR INDEMNIFY AND HOLD HARMLESS HOLDERS
FOR, AMONG OTHER THINGS, THE ORDINARY NEGLIGENCE OF HOLDERS. THE
COMPANY (FOR ITSELF AND ITS AFFILIATES) AGREES THAT THE RELEASE AND/OR INDEMNITY
PROVISIONS CONTAINED IN THESE DOCUMENTS ARE CAPTIONED TO CLEARLY IDENTIFY THE
RELEASE AND/OR INDEMNITY PROVISIONS AND, THEREFORE, ARE SO CONSPICUOUS THAT
THE
COMPANY AND ITS AFFILIATES HAVE FAIR NOTICE OF THE EXISTENCE AND CONTENTS OF
SUCH PROVISIONS.
12. Filing
of Form 8-K. On or before 9:30 am (NY time) on the Trading Day
immediately following the date hereof, the Company shall file a Current Report
on Form 8-K, reasonably acceptable to each Holder disclosing the material terms
of the transactions contemplated hereby, which shall include this Agreement
as
an attachment thereto.
13. Effectiveness. The
effectiveness of this Agreement shall be expressly conditioned upon all of
the
Holders of the Debentures and Warrants having executed this Agreement or an
agreement with substantially similar terms, including, but not limited to,
a
waiver of the Existing Defaults and a waiver of the anti-dilution adjustment
to
the exercise price of the Warrants. In the event the foregoing is not
delivered to the Holders, all of the consents, amendments and waivers of the
Holders contained herein shall be null and void.
14. Expenses. Except
as expressly set forth herein, each party shall pay the fees and expenses of
its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.
15. Amendments
and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless
the
same shall be in writing and signed by the Company and the Holders.
16. Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be delivered as set forth in the applicable
Transaction Document.
17. Successors
and Assigns. This Agreement shall inure to the benefit of and be binding
upon the successors and permitted assigns of each of the parties and shall
inure
to the benefit of the Holders. The Company may not assign (except by merger)
its
rights or obligations hereunder without the prior written consent of the
Holders. The Holders may assign their respective rights hereunder in
the manner and to the Persons as permitted under the applicable Transaction
Document.
18. Execution
and Counterparts. This Agreement 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 or by e-mail delivery of a
“.pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
19. Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Transaction Documents.
20. Severability.
If any term, provision, covenant or restriction of this Agreement is held by
a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
21. Headings.
The headings in this Agreement are for convenience only, do not constitute
a
part of the Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
22. Independent
Nature of Holders’ Obligations and Rights. The Company has
elected to provide all Holders with the same terms and form of amendment and
waiver 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 consent and waiver or any Transaction Document. Nothing
contained herein or in any Transaction Document, and no action taken by any
Holder pursuant 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
consent and waiver 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 consent and waiver or out of the
other Transaction Documents, and it shall not be necessary for any other Holder
to be jointed as an additional party in any proceeding for such purpose. Each
Holder has been represented by its own separate legal counsel in their review
and negotiation of this Agreement and the Transaction Documents.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment and Waiver
Agreement to be duly executed by their respective authorized signatories as
of
the date first indicated above.
| TITANIUM GROUP LIMITED | |||
|
|
By:
|
/s/ Kit Xxxxx Xx | |
| Ng Kit Chong | |||
| Chairman | |||
********************
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR HOLDER FOLLOWS]
[HOLDER’S
SIGNATURE PAGE TO TTNUF AMENDMENT AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be
duly
executed by their respective authorized signatories as of the date first
indicated above.
Name
of
Holder: Whalehaven Capital Fund
Limited
Signature
of Authorized Signatory of Holder: /s/ Xxxxx
Xxxxxxxx
Name
of
Authorized Signatory: Xxxxx
Xxxxxxx
Title
of
Authorized Signatory:
CFO
[SIGNATURE
PAGES CONTINUE]
[HOLDER’S
SIGNATURE PAGE TO TTNUF AMENDMENT AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to
be duly
executed by their respective authorized signatories as of the date first
indicated above.
Name
of
Holder: Crescent International
Ltd.
Signature
of Authorized Signatory of Holder: /s/ Maxi
Brezzi
Name
of
Authorized Signatory: Maxi
Brezzi
Title
of
Authorized Signatory: Authorized
Signatory
[SIGNATURE
PAGES CONTINUE]
[HOLDER’S
SIGNATURE PAGE TO TTNUF AMENDMENT AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to
be duly
executed by their respective authorized signatories as of the date first
indicated above.
Name
of
Holder: Chestnut Ridge Partners,
LP
Signature
of Authorized Signatory of Holder: /s/ Xxxxxxx
Xxxx
Name
of
Authorized Signatory: Xxxxxxx
Xxxx
Title
of
Authorized Signatory: Chief Financial
Officer
[SIGNATURE
PAGES CONTINUE]
SCHEDULE
A
Failure
to pay July 1, 2007 interest payment and late fees thereon
Failure
to pay October 1, 2007 interest payment and late fees thereon
Failure
to pay liquidated damages under Registration Rights Agreement
Registration
statement not declared effective within 180 days of Closing Date
