EXHIBIT 10.5
AMENDMENT NO. 1 TO
COMMON STOCK PURCHASE AGREEMENT, REGISTRATION RIGHTS
AGREEMENT AND ESCROW AGREEMENT
AMENDMENT NO. 1, dated as of November 2, 2004 (this "Amendment"), by
and among Newport International Group, Inc., a Delaware corporation (the
"Company"), and the purchasers listed on the signature pages hereto, to (i) the
Common Stock Purchase Agreement (the "Purchase Agreement") dated as of August
27, 2004 by and between the Company and the purchaser listed therein (the
"Purchaser"); (ii) the Registration Rights Agreement (the "Registration Rights
Agreement") dated as of August 27, 2004 by and between the Company and the
Purchaser; and (iii) the Escrow Agreement (the "Escrow Agreement") dated as of
August 27, 2004 by and among the Company, the Purchaser and Jenkens & Xxxxxxxxx
Xxxxxx Xxxxxx LLP, as escrow agent. Capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in the Purchase Agreement.
W I T N E S S E T H :
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WHEREAS, the Purchase Agreement provides for the issuance and sale of
shares of Common Stock and Warrants by the Company to the Purchaser;
WHEREAS, the parties now wish to amend the Purchase Agreement to
reflect, among other things, a $2,925,000 investment by an additional purchaser
(the "Additional Purchaser") and a $325,000 investment by the Purchaser as set
forth in this Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereby agree as follows:
Section 1. Amendments to the Purchase Agreement.
1.1. Exhibit A to the Purchase Agreement is hereby amended with respect
to the Final Closing by adding the following information with respect to the
Additional Purchaser's name, address, number of shares of Common Stock and
Warrants purchased and the dollar amount of the investment:
First Capital Holdings International, Inc. Final Closing:
00 XxXxxxxx Xxxxxx -------------
Wickhams Cay 1 Shares: 2,250,000
Roadtown Price Per Share: $1.60
Tortola, British Virgin Islands Warrants: 281,250
Attention: Xxxxx Xxxxxxxxxx
1.2. Exhibit A to the Purchase Agreement is hereby amended with respect
to the Final Closing by adding the following information with respect to the
Purchaser's shares of Common Stock and Warrants purchased and the dollar amount
of the investment:
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Xxxxxxxx Xxxx Inc. Final Closing:
European Administration: -------------
0 Xxxxxx Xxxxxx Shares: 250,000
X.X. Xxx 00000 Price Per Share: $1.60
3305 Limassol Warrants: 31,250
Cyprus
+ 357 2533 9274
Kontaktperson: Xxxxxxxx Magistrate
1.3. The Additional Purchaser shall be deemed a Purchaser for any and
all purposes under the Purchase Agreement and shall be subject to all of the
obligations and receive all of the rights and benefits under the Purchase
Agreement.
1.4. Article VI of the Purchase Agreement is hereby amended by
inserting the following Sections 6.2, 6.3 and 6.4:
6.2 Put Option with Respect to Final Closing. Commencing on
the date that is eight (8) months following the Effective Date (as
defined in Section 3.13 hereof) and for a period of three (3) years
thereafter (the "Final Closing Option Period"), the Purchaser shall
have the Put Option to cause the Company to purchase all or a portion
of the Shares purchased pursuant to the Final Closing at a price of
$1.00 per share (the "Final Closing Put Option Price") in the event
that the average price per share of the Common Stock is less than $1.00
for the Exercise Period during the Final Closing Option Period. If the
Purchaser elects to exercise its Put Option with respect to all or a
portion of the Shares purchased pursuant to the Final Closing during
the Final Closing Option Period, the Purchaser shall provide a Put
Option Notice to the Company within five (5) trading days of the end of
the applicable Exercise Period specifying the number of Shares
purchased pursuant to the Final Closing that are subject to such Put
Option. Upon the Company's receipt of the Put Option Notice, the
Company shall pay the Final Closing Put Option Price to the Purchaser
with respect to the Shares purchased pursuant to the Final Closing
subject to the Put Option Notice within ten (10) trading days of
receipt of the Put Option Notice. In the event that the Company fails
to honor any Put Option Notice or does not deliver the Final Closing
Put Option Price to the Purchaser within such ten (10) trading day
period upon the Purchaser's exercise of the Put Option, the Company
shall issue to the Purchaser a convertible promissory note in the
principal amount equal to the number of Shares purchased pursuant to
the Final Closing subject to the Put Option Notice multiplied by the
Final Closing Put Option Price. The convertible promissory note shall
have a conversion price equal to eighty-five percent (85%) of the
average of the closing bid prices of the Common Stock for the ten (10)
trading days prior to conversion. The shares of Common Stock issuable
upon conversion of the convertible promissory note shall have demand
registration rights.
6.3 Collateral for Company's Obligation to Honor a Put Option.
On or prior to the commencement of the Option Period, the Company shall
deposit all of its free trading shares of common stock (the "Xxxxxxx
Shares") of Xxxxxxx Park Investments ("Xxxxxxx") in the London Stock
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Exchange listed UK Investment Trust, Xxxxxxx Park Investment Trust PLC,
as collateral for the Company's ability to honor any Put Options
pursuant to Sections 6.1 and 6.2 hereof. In the event that the Company
does not honor a Put Option within ten (10) business days from the date
of the Put Option Notice, then the applicable amount of Xxxxxxx Shares
(based on the average of the closing bid prices of Xxxxxxx for the five
(5) trading days prior to the date such payment is due) covering the
amount of the Put Option shall promptly be released from the brokerage
account at Christows London ("Christows") held by the Company and
delivered to such Purchaser. In the event that there is not a
sufficient number of Xxxxxxx Shares to honor such Put Option, the
Company shall issue to the Purchaser a convertible promissory note in
the principal amount equal to the number of Shares or Shares purchased
pursuant to the Final Closing, as applicable, subject to the Put Option
Notice, multiplied by the Put Option Price or the Final Closing Put
Option Price, as applicable. The convertible promissory note shall have
a conversion price equal to eighty-five percent (85%) of the average of
the closing bid prices of the Common Stock for the ten (10) trading
days prior to conversion. The shares of Common Stock issuable upon
conversion of the convertible promissory note shall have demand
registration rights.
6.4 Miscellaneous Procedures.
(a) The Company shall provide Christows with written
instructions that the Company shall not at any time remove any assets
from Christows account without the consent of the Purchaser who
exercises its Put Option until such time as the Company maintains a
cash or cash equivalent balance equal to the amount to satisfy any Put
Options outstanding at such time (the "Minimum Cash Amount"). The
Purchaser who exercises its Put Option must provide proof of ownership
underlying the Put Option on a monthly basis. The Company shall not be
permitted to remove any assets from Christows account other than assets
valued in excess of the Minimum Cash Amount. Upon receipt by the
Company and Christows of a Put Option Notice and notice that the shares
of Common Stock have been delivered, the Company shall provide
Christows with prior written notice to transfer assets equal to the
Minimum Cash Amount.
(b) In the event that the Company does not honor a
Put Option within ten (10) business days from the date of the Put
Option Notice, the Company shall permit the Purchasers to sell in the
aggregate and on a pro rata basis up to fifty percent (50%) of the
Xxxxxxx Shares maintained in the Christows account as of the Final
Closing Date upon delivery of a signed written notice from the
applicable Purchaser to the Company stating the number of Xxxxxxx
Shares such Purchaser elects to sell and the price at which such
Xxxxxxx Shares will be sold, such price not to be less than $______
(the "Sale Notice"). Upon the Company's receipt of a Sale Notice in
accordance with this Section 6.4(b), the Company will promptly execute
instructions to the Christows account and use its best effort to
effectuate such sale. The Company shall not sell, transfer or otherwise
dispose of any of the Xxxxxxx Shares without the prior written consent
of the Purchasers.
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Section 2. Amendments to the Registration Rights Agreement.
2.1. The Additional Purchaser shall be deemed a Purchaser for any and
all purposes under the Registration Rights Agreement and shall be subject to all
of the obligations and receive all of the rights and benefits under the
Registration Rights Agreement.
Section 3. Amendments to the Escrow Agreement.
3.1. The Additional Purchaser shall be deemed an Investor (as defined
in the Escrow Agreement) for any and all purposes under the Escrow Agreement and
shall be subject to all of obligations and receive all of the rights and
benefits under the Escrow Agreement.
Section 4. Miscellaneous.
4.1. Limited Effect. Except as expressly amended and modified by this
Amendment, all of the terms and provisions of the Transaction Documents are and
shall continue to remain in full force and effect in accordance with the terms
thereof.
4.2. Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
4.3. Entire Agreement. This Amendment and the Transaction Documents
(including the exhibits referenced therein) constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company, the Purchaser and
the Additional Purchaser with respect to the subject matter hereof.
4.4. Governing law. This Amendment shall be governed by and construed
in accordance with the internal laws of the State of New York, without giving
effect to the conflicts of law principles that would result in the application
of the substantive law of another jurisdiction.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to Common Stock Purchase Agreement, Registration Rights Agreement and Escrow
Agreement to be duly executed and delivered by their respective authorized
officers as of the date first above written.
NEWPORT INTERNATIONAL GROUP, INC.
By: /s/ Cery Perle
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Name:
Title:
FIRST CAPITAL HOLDINGS INTERNATIONAL, INC.
By: /s/ First Capital Holdings International, Inc.
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Name:
Title:
XXXXXXXX XXXX INC.
By: /s/ Xxxxxxxx Xxxx Inc.
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Name:
Title:
JENKENS & XXXXXXXXX XXXXXX XXXXXX LLP,
as escrow agent
By: /s/ Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
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Name:
Title:
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