AMENDMENT AGREEMENT
EXHIBIT
10.51
Execution
Copy
This
Amendment Agreement (this “Agreement”), dated as of
June 26, 2007, is entered into by and among ZAP, a California corporation (the
“Company”), and each of the entities whose names
appear on the signature pages hereof (each, an
“Investor” and, collectively, the
“Investors”). Capitalized terms used
in
this Agreement and not otherwise defined have the respective meanings ascribed
thereto in the Securities Purchase Agreement (as defined below).
R
E C I T A L S:
WHEREAS,
the Company and certain Investors are parties to that certain Securities
Purchase Agreement, dated as of December 5, 2006 (the
“Securities Purchase
Agreement”), pursuant to which the Company issued 8% Senior
Convertible Notes (the “Original Notes”) and Warrants
(the “Original Warrants”) to such
Investors;
WHEREAS,
the Company and the Investors
are parties to that certain Purchase and Amendment Agreement, dated as of
February 20, 2007 (the “Purchase and Amendment
Agreement”), pursuant to which the Company issued additional 8%
Senior Convertible Notes (the “Additional Notes” and,
collectively with the Original Notes, the “Notes”) and
additional Warrants (the “Additional Warrants” and,
collectively with the Original Warrants, the
“Warrants”) to the Investors;
WHEREAS,
on January 2, 2007, the Company sold shares of Common Stock for per share
consideration less than the Conversion Price (as defined in the Notes) and
the
Exercise Price (as defined in the Warrants) in effect on such date, and as
a
result of such issuance, the Investors are entitled to certain adjustments
to
their Notes and Warrants;
WHEREAS,
the Company is required to make certain payments of principal on the Notes
on
June 1, 2007 and July 1, 2007, and the Company has requested that the Investors
defer such payment obligations until August 1, 2007;
WHEREAS,
the Company and the Investors
are parties to that certain Registration Rights Agreement, dated as of December
5, 2006, as amended by the Purchase and Amendment Agreement (the
“Registration Rights Agreement”), pursuant to which
the Company is (i) obligated to register 200% of the shares of the Common Stock
issuable upon conversion in full of the Notes and exercise in full of the
Warrants, and (ii) prohibited from including any other securities of the Company
in any such registration;
WHEREAS,
(i) the Company has certain registration obligations under the Registration
Rights Agreement and the Company has requested that the Investors defer such
registration obligations, (ii) the aggregate accrued and unpaid liquidated
damages for the Company’s delay in performing such registration obligations as
of the Filing Deadline (as defined below) is
approximately
$113,000, and (iii) the Company has requested that the Investors: (x)
accept an aggregate of 141,750 shares of restricted Common Stock in lieu of
cash
as payment for such liquidated damages, subject to adjustment as set forth
in
Section 4.1 below, (y) reduce the initial number of
shares of Common Stock required to be registered under the Registration Rights
Agreement to the sum of (A) 141,750 and (B) 130% of the total number of shares
of Common Stock issuable under (1) the Notes, (2) the Warrants, and (3) the
warrants issuable under this Agreement, and (z) permit the Company to include
certain additional specified securities in any registration statement filed
by
the Company in connection with its registration obligations under the
Registration Rights Agreement; and
WHEREAS,
in order to induce the
Investors to agree to the Company’s requests described in the foregoing
recitals, the Company has offered to issue and deliver to the Investors, for
no
additional consideration, an aggregate of 200,000 additional warrants having
a
per share exercise price of $1.10 and a term of five years.
A
G R E E M E N T:
NOW,
THEREFORE, in consideration of the
foregoing and subject to the terms and conditions herein contained, the parties
hereto agree as follows:
1. CERTAIN
ADJUSTMENTS TO NOTES AND WARRANTS.
The
Company hereby agrees and confirms
that:
(a) The
Conversion Price in effect as of the date hereof for each Note is $0.727
(subject to adjustments as provided in the Notes).
(b) The
Floor Price (as defined in the Notes) in effect as of the date hereof for each
Note is $0.682 (subject to adjustments as provided in the Notes).
(c) The
Exercise Price in effect as of the date hereof for each Original Warrant is
$0.80 (subject to adjustments as provided in the Warrants).
(d) The
total number of shares of Common Stock for which each Investor’s Original
Warrant is exercisable as of the date hereof is set forth opposite each
Investor’s name on Exhibit A (subject to adjustments
as provided in the Warrants).
2.
NEW WARRANTS.
Concurrently
with the execution and delivery of this Agreement, the Company shall execute
and
deliver to each Investor, for no additional consideration, a warrant in the
form
attached hereto as Exhibit B (each, a “New
Warrant” and collectively, the “New
Warrants”) exercisable into the number of shares of Common Stock
set forth opposite such Investor’s name on Exhibit
A. The term “Warrants” as used in the Registration
Rights Agreement and the Notes shall be deemed to include the New
Warrants. The provisions of Section 2.5 of the Securities
2
Purchase
Agreement relating to the removal of restrictive legends shall apply to any
certificates representing shares of Common Stock into which the New Warrants
are
exercisable.
3.
DEFERRAL OF PRINCIPAL PAYMENTS ON THE NOTES.
3.1 The
definition of “Scheduled Principal Payment Date” as set forth in Section 1 of
each of the Notes is hereby amended and restated in its entirety to read as
follows:
“‘Scheduled
Principal Payment Date’ means the first day of each calendar
month, with the first Scheduled Principal Payment Date occurring on August
1,
2007, provided, that if any of such days in any year is not a Business
Day, then the Scheduled Principal Payment Date shall be the Business Day
immediately following such date.”
3.2 For
the sole purpose of the Scheduled Principal Payment Date occurring on August
1,
2007, and notwithstanding Section 2(a)(iii) of each of the Notes, each Investor
hereby consents to the Company’s exercise of the Principal Stock Option (as
defined in the Notes) so long as (A) clauses (ii) through (v) of the Equity
Conditions (as defined in the Notes) have been satisfied in full on such
Scheduled Principal Payment Date and each of the ten (10) Trading Days
immediately preceding such date (it being understood that neither (x) the
deferral of principal payments on the Notes described in Section
3 of this Agreement, (y) the deferral of registration obligations
described in Section 4.1 of this Agreement, nor (z)
the January 2, 2007 issuance of Common Stock that resulted in the adjustments
described in Section 1 of this Agreement, shall cause
the clause (v) of the Equity Conditions in the Notes not to have been satisfied)
and (B) the registration statement covering the number of Registrable Securities
as required by the Registration Rights Agreement and this Agreement shall have
been declared effective for at least one Trading Day preceding such Scheduled
Principal Payment Date and be available to the Investors.
3.3 For
the sole purpose of the Scheduled Principal Payment Date occurring on August
1,
2007, and notwithstanding Section 2(a)(iv) of each of the Notes, each Investor
hereby agrees that a Principal Stock Option may be exercised by the Company
so
long as a Principal Stock Option Notice is delivered to each Investor on or
before July 31, 2007.
3.4 The
Company acknowledges and agrees that the failure by the Company to make a
Principal Payment (as defined in the Notes) on August 1, 2007 will constitute
an
immediate “Event of Default” under each Note (without notice or any other action
by the Investor holding such Note).
4.
REGISTRATION RIGHTS AGREEMENT.
4.1 Payment
of Accrued Liquidated Damages. Each Investor hereby agrees to
accept, in consideration of granting the Company the right to defer its
registration obligations under the Registration Rights Agreement, in lieu of
a
cash payment of its pro rata share of liquidated damages in an amount of
approximately $113,000, the number of shares of restricted Common Stock set
forth opposite its name on Exhibit A (the
“Registration Default Shares”). The
3
Company
shall deliver to each Investor a certificate representing the Registration
Default Shares issuable to such Investor within three (3) Business Days
following the execution of this Agreement. In the event the
registration statement required to be filed by the Company pursuant to the
Registration Rights Agreement is filed prior to the Filing Deadline, each
Investor shall, upon the request of the Company, exchange the certificate
representing its Registration Default Shares for a new certificate representing
a number of shares of restricted Common Stock (the “New Default
Shares”) equal to its pro rata share of liquidated damages
calculated as of the actual filing date of the registration statement divided
by $0.80. The provisions of Section 2.5 of the Securities
Purchase Agreement relating to the removal of restrictive legends shall apply
to
the certificates representing the Registration Default Shares and the New
Default Shares. Notwithstanding the foregoing, it shall be a
Registration Default (and additional liquidated damages shall begin to accrue
as
provided in Section 2(d) of the Registration Rights Agreement) if the Company
fails to timely meet the Filing Deadline (as amended herein).
4.2 Amendments
to the Registration Rights Agreement.
(a) The
term “Registrable Securities” as defined in the Registration Rights Agreement
shall be deemed to include all of the Common Stock for which the New Warrants
are exercisable and all of the Registration Default Shares issuable to the
Investors hereunder.
(b) The
definition of “Filing Deadline” as set forth in Section 1 of the Registration
Rights Agreement is hereby amended and restated in its entirety to read as
follows:
“‘Filing
Deadline’ means July 9, 2007.”
(c) The
definition of “Registration Deadline” as set forth in Section 1 of the
Registration Rights Agreement is hereby amended and restated in its entirety
to
read as follows:
“‘Registration
Deadline’ means the earlier of (i) ninety (90) days after the date
on which the Registration Statement required to be filed pursuant to
Section 2(a) of this Agreement is filed with the
Commission and (ii) October 8, 2007.”
(d) The
first sentence of Section 2(a) of the Registration Rights Agreement is hereby
amended and restated in its entirety to read as follows:
“On
or
before the Filing Deadline, the Company shall prepare and file with the
Commission a Registration Statement on Form SB-2 as a “shelf” registration
statement under Rule 415 covering the resale of a number of shares of
Registrable Securities equal to the sum of (i) 141,750 and (ii) one hundred
thirty percent (130%) of the number of shares of Common Stock issuable upon
conversion in full of the Notes and exercise in full of the Warrants and the
New
Warrants (such number to be determined without regard to any restriction on
such
conversion or exercise).”
(e) The
last sentence of Section 2(f) of the Registration Rights Agreement is hereby
amended and restated to read in its entirety as follows:
4
“In
no event shall the Company include
any securities other than Registrable Securities and the securities disclosed
on
Schedule 3(e) to the Amendment Agreement, dated as of June 26, 2007, by and
among the Company and the Investors named therein, on any Registration Statement
filed by the Company on behalf of the Holders pursuant to the terms
hereof.”
5.
AMENDMENTS TO THE ORIGINAL AND ADDITIONAL
WARRANTS.
5.1 The
first sentence of Section 2 of each of the Warrants is hereby amended and
restated in its entirety to read as follows:
“Upon
receipt of an Exercise Notice pursuant to Section 1 of
this Warrant, the Company shall, (A) in the case of a Cash Exercise (as defined
below) no later than the close of business on the later to occur of (i) the
sixth (6th) Business Day following the Exercise Date set forth in such Exercise
Notice and (ii) the third (3rd) Business Day following the date on which the
Company has received payment of the Exercise Price, (B) in the case of a
Cashless Exercise (as defined below), no later than the close of business on
the
sixth (6th) Business Day following the Exercise Date set forth in such Exercise
Notice, and (C) with respect to Warrant Shares that are the subject of a Dispute
Procedure, the close of business on the sixth (6th) Business Day following
the
determination made pursuant to Section 1(b) of this
Warrant (each of the dates specified in the foregoing clauses
(A), (B) or
(C) being
referred to as a “Delivery
Date”), issue and deliver or cause to be delivered to the Holder
the number of Warrant Shares as shall be determined as provided
herein.”
5.2 Section
3(b) of each of the Warrants is hereby amended and restated in its entirety
to
read as follows:
“In
addition to its rights under Section 3(a) of this
Warrant, the Holder shall have the right to pursue any other equitable remedy
available to it, including, without limitation, a decree of specific performance
and/or injunctive relief.”
5.3 The
following definition shall apply to the term “Market Price” as it is used in
each of the Warrants:
“Market
Price” means, the VWAP as of the Exercise Date (or if the Exercise
Date is not a Trading Day, then the VWAP immediately preceding such Exercise
Date).
5.4 Section
6 of each of the Warrants is hereby amended with the addition of a new
Section(g) that reads as follows:
“(g) Duration
of Obligations. The provisions of this Section
6 shall terminate upon the earlier of the Expiration Date and
the
exercise in full of this Warrant.”
5
6.
AMENDMENT TO THE NOTES.
Section
4 of each of the Notes is
hereby amended with the addition of a new Section(g) that reads as
follows:
“(g) Duration
of Obligations. The provisions of this Section
4 shall terminate upon the satisfaction of all payment and other
obligations of the Company under this Note.”
7.
REPRESENTATIONS AND WARRANTIES OF EACH
INVESTOR.
Each
Investor hereby severally and not
jointly represents and warrants to the Company as of the date
hereof:
7.1 Organization. Such
Investor is duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its incorporation or organization.
7.2 Authorization. Such
Investor has the requisite corporate power and authority to execute, deliver
and
perform this Agreement.
7.3 Enforceability. This
Agreement constitutes such Investor’s valid and legally binding obligation,
enforceable in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws of general application relating to or affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity.
7.4 No
Conflicts. The execution, delivery and performance of this
Agreement does not and will not conflict in any material respect with any laws
applicable to such Investor or any of the organizational documents of such
Investor.
7.5 Accredited
Investor. Such Investor (i) is an “accredited investor” as that
term is defined in Rule 501 of Regulation D and (ii) is acquiring the securities
being issued under this Agreement solely for its own account and not with a
present view to the public resale or distribution of all or any part thereof,
except pursuant to sales that are registered under, or exempt from the
registration requirements of, the Securities Act and/or sales registered under
the Securities Act; provided, however, that in making such
representation, such Investor does not agree to hold such securities for any
minimum or specific term and reserves the right to sell, transfer or otherwise
dispose of such securities at any time in accordance with the provisions of
this
Agreement, the other Transaction Documents and with Federal and state securities
laws applicable to such sale, transfer or disposition.
7.6 Limitations
on Disposition. Such Investor acknowledges that, except as
provided in the Registration Rights Agreement, in this Agreement and in the
other Transaction Documents, the securities being issued under this Agreement
have not been and are not being registered under the Securities Act and may
not
be transferred or resold without registration under the Securities Act or unless
pursuant to an exemption therefrom.
6
7.7 Reliance
on Exemptions. Such Investor understands that the securities
being issued under this Agreement are being issued in reliance upon specific
exemptions from the registration requirements of U.S. federal and state
securities laws and that the Company is relying upon the truth and accuracy
of
the representations and warranties of such Investor set forth in this
Section 7 in order to determine the availability of
such exemptions and the eligibility of such Investor to acquire such
securities.
8.
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.
The
Company hereby represents and
warrants to each Investor as of the hereof:
8.1 Organization. The
Company is duly organized, validly existing and in good standing under the
laws
of the State of California.
8.2 Authorization. The
Company has the requisite corporate power and authority to execute, deliver
and
perform this Agreement and the New Warrants. All corporate action on
the part of the Company by its officers, directors and shareholders necessary
for the authorization, execution and delivery of, and the performance by the
Company of its obligations under this Agreement and the New Warrants has been
taken, and no further consent or authorization of any other party is
required.
8.3 Enforceability. This
Agreement and the New Warrants constitute the Company’s valid and legally
binding obligation, enforceable in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general application relating to or affecting
the enforcement of creditors’ rights generally and (ii) general principles of
equity.
8.4 No
Conflicts. The execution, delivery and performance of this
Agreement and the New Warrants, and the consummation of the transactions
contemplated hereby and thereby, will not result in any violation of any
provisions of any of the Company’s organizational documents or in a default
under any provision of any instrument or contract to which the Company is a
party or by which any of its assets are bound, or in violation of any provision
of any Governmental Requirement applicable to the Company or be in conflict
with
or constitute, with or without the passage of time and giving of notice, either
a default under any such provision, instrument or contract or an event which
results in the creation of any Lien upon any assets of any of the Company or
the
triggering of any preemptive or anti-dilution rights (including without
limitation pursuant to any “reset” or similar provisions) or rights of first
refusal or first offer.
8.5 Valid
Issuance. The New Warrants have been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement, will be
duly and validly issued, free and clear of any Liens imposed by or through
the
Company. The Registration Default Shares have been duly authorized
and reserved for issuance, and will be duly and validly issued, fully paid
and
nonassessable, free and clear of any Liens imposed by or through the
Company. The shares of Common Stock into which the New Warrants are
exercisable have been duly authorized and reserved for issuance and, when issued
and delivered in accordance with the terms of the New Warrants, will be duly
and
validly issued, fully paid and nonassessable, free and clear of any Liens
imposed by or through the Company.
7
9.
MISCELLANEOUS.
9.1 Severability. In
the event that any provision of this Agreement becomes or is declared by a
court
of competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision;
provided that in such case the parties shall negotiate in good faith to
replace such provision with a new provision which is not illegal, unenforceable
or void, as long as such new provision does not materially change the economic
benefits of this Agreement to the parties.
9.2 Successors
and Assigns. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. An Investor may assign its rights and
obligations hereunder, as long as, as a condition precedent to such transfer,
the transferee executes an acknowledgment agreeing to be bound by the applicable
provisions of this Agreement, in which case the term “Investor” shall be deemed
to refer to such transferee as though such transferee were an original signatory
hereto. The Company may not assign its rights or obligations under
this Agreement.
9.3 No
Reliance. Each party acknowledges that (i) it has such knowledge
in business and financial matters as to be fully capable of evaluating this
Agreement and the transactions contemplated hereby and thereby, (ii) it is
not
relying on any advice or representation of any other party in connection with
entering into this Agreement or such transactions (other than the
representations made in this Agreement), (iii) it has not received from any
other party any assurance or guarantee as to the merits (whether legal,
regulatory, tax, financial or otherwise) of entering into this Agreement or
the
performance of its obligations hereunder and thereunder, and (iv) it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisors to the extent that it has deemed necessary, and has
entered into this Agreement based on its own independent judgment and, if
applicable, on the advice of such advisors, and not on any view (whether written
or oral) expressed by any other party.
9.4 Independent
Nature of Investors’ Obligations and Rights. The obligations of
each Investor hereunder are several and not joint with the obligations of the
other Investors hereunder, and no Investor shall be responsible in any way
for
the performance of the obligations of any other Investor hereunder. The Company
acknowledges and agrees that nothing contained herein and no action taken by
any
Investor pursuant hereto or thereto, shall be deemed to constitute the Investors
as a partnership, an association, a joint venture or any other kind of entity,
or a “group” as described in Section 13(d) of the Exchange Act of 1934, as
amended, or create a presumption that the Investors are in any way acting in
concert with respect to such obligations or the transactions contemplated by
this Agreement. Each Investor has been represented by its own
separate counsel in connection with the transactions contemplated hereby, shall
be entitled to protect and enforce its rights, including without limitation
rights arising out of this Agreement, individually, and shall not be required
to
join any other Investor as an additional party in any proceeding for such
purpose.
8
9.5 Injunctive
Relief. The Company acknowledges and agrees that a breach by it
of its obligations hereunder will cause irreparable harm to each Investor and
that the remedy or remedies at law for any such breach will be inadequate and
agrees, in the event of any such breach, in addition to all other available
remedies, such Investor shall be entitled to an injunction restraining any
breach and requiring immediate and specific performance of such obligations
without the necessity of showing economic loss or the posting of any
bond.
9.6 Governing
Law; Jurisdiction; Waiver of Jury Trial. (a) This
Agreement shall be governed by and construed under the laws of the State of
California applicable to contracts made and to be performed entirely within
the
State of California. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City and County
of
San Diego for the adjudication of any dispute hereunder or any other Transaction
Document or in connection herewith or therewith or with any transaction
contemplated hereby or thereby, and hereby irrevocably waives, and agrees not
to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in
any
such suit, action or proceeding by mailing a copy thereof to such party at
the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.
(b)
EACH PARTY TO THIS AGREEMENT
ACKNOWLEDGES AND AGREES THAT ANY DISPUTE OR CONTROVERSY THAT MAY ARISE UNDER
THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY
IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO
THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT OR
THE
OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
9.7 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, and all of which together shall constitute one and the
same
instrument. This Agreement may be executed and delivered by facsimile
transmission.
9.8 Headings. The
headings used in this Agreement are used for convenience only and are not to
be
considered in construing or interpreting this Agreement.
9.9 Notices. Any
notice, demand or request required or permitted to be given by the Company
or
the Investor pursuant to the terms of this Agreement shall be in writing and
shall be deemed delivered (i) when delivered personally or by verifiable
facsimile transmission, unless such delivery is made on a day that is not a
Business Day, in which case such delivery will be deemed to be made on the
next
succeeding Business Day, (ii) on the next Business Day after timely delivery
to
an overnight courier and (iii) on the Business Day actually received if
9
deposited
in the U.S. mail (certified or registered mail, return receipt requested,
postage prepaid), addressed as follows:
If
to the
Company:
000
Xxxxxx Xxxxxx
Xxxxx
Xxxx,
Xxxxxxxxxx 00000
Attn: Chief
Financial
Officer
Tel: (000) 000-0000
Fax: (000)
000-0000
with
a copy (which shall not constitute
notice) to:
Xxxxxxx
Xxxxxxxxx Xxxxx LLP
Suite
1900
000
Xxxxxxxx Xxxxx
Xxxxxxx,
XX 00000
Attn: Xxxxxxx
X. Xxxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
and
if to
any Investor, to such address for such Investor as set forth opposite such
Investor’s name on Exhibit A, or as shall be
designated by such Investor in writing to the Company in accordance with this
Section 9.9.
9.10 Entire
Agreement; Amendments. This Agreement, the New Warrants and the
Transaction Documents constitute the entire agreement between the parties with
regard to the subject matter hereof and thereof, superseding all prior
agreements or understandings, whether written or oral, between or among the
parties. Except as expressly provided herein, neither this Agreement
nor any term hereof may be amended or waived except pursuant to a written
instrument executed by the Company and the holders of at least two-thirds (2/3)
of the Registrable Securities then outstanding (without regard to any limitation
on conversion or exercise).
9.11 Fees
and Expenses. The Company and each Investor shall pay all costs
and expenses that it incurs in connection with the negotiation, execution,
delivery and performance of this Agreement or the other Transaction Documents,
provided, however, that that the Company shall, concurrently with the
execution of this Agreement, pay Gemini Strategies, LLC up to $5,000 in
immediately available funds as reimbursement for its out-of-pocket expenses
(including without limitation legal fees and expenses) incurred or to be
incurred by it in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement and the New Warrants.
[Signature
Pages to Follow]
10
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
By: /s/
Xxxxxx X. Schneider____________
Name:
Xxxxxx X.
Xxxxxxxxx
Title:
Chief Executive
Officer
11
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
GEMINI
MASTER FUND, LTD.
By: Gemini
Strategies, LLC
By: /s/
Xxxxxx X. Winters_________________
Name: Xxxxxx
X.
Xxxxxxx
Title: President
of
the Investment Manager
12
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
GREY
K
FUND, LP
By: RNK
Capital LLC
By: /s/
Xxxxxx
Xxxxxx
Name: Xxxxxx
Xxxxxx
Title: Managing
Member
13
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
GREY
K
OFFSHORE FUND, LTD.
By: RNK
Capital LLC
By:
/s/ Xxxxxx
Xxxxxx
Name: Xxxxxx
Xxxxxx
Title: Managing
Member
14
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
GREY
K
OFFSHORE LEVERAGED FUND, LTD.
By: RNK
Capital LLC
By:
/s/ Xxxxxx
Xxxxxx
Name: Xxxxxx
Xxxxxx
Title: Xxxxxx
Xxxxxx
15
Exhibit
A to the
SCHEDULE
OF INVESTORS
Purchaser
|
Address
|
Original
Warrants
|
New
Warrants
|
Registration
Default Shares
|
Legal
Representative’s
Address
|
Gemini
Master Fund, Ltd.
|
c/o
Gemini Strategies, LLC
12000
Xx Xxxxxx Xxxx Xxxxx 000
Xxx
Xxxxx, XX
00000-0000
Xttn: Xxxxxx
Xxxxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
|
396,000
|
111,111
|
78,750
|
Xxxxxx
Song LLP
700
Xxxxx Xxxxxx
00xx
Xxxxx
XX,
XX 00000
Xxxxx
X. Song
Tel: 000-000-0000
Fax: 000-000-0000
|
Grey
K Fund, LP
|
c/o
RNK Capital LLC
520
Xxxxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx, XX 00000
Xttn: Xxxxxx
Xxxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
|
53,421
|
22,230
|
15,755
|
|
Grey
K Offshore Fund, Ltd.
|
c/o
RNK Capital LLC
520
Xxxxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx, XX 00000
Xttn: Xxxxxx
Xxxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
|
144,580
|
55,252
|
39,160
|
|
Grey
K Offshore Leveraged Fund, Ltd.
|
c/o
RNK Capital LLC
520
Xxxxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx, XX 00000
Xttn: Xxxxxx
Xxxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
|
N/A
|
11,407
|
8,085
|
16
SCHEDULE
3(e) TO THE
Common
Stock
|
Warrants
|
|||||||
Issue
Date
|
Security
|
Type
|
Numbers
of Shares
|
Numbers
of Shares
|
10%
Dividend
|
Adj
No. Shares
|
Stockholders
|
Totals
|
10/20/2006
|
Warrants
|
$1.20
|
60,000
|
6,000
|
66,000
|
Diversified
Equity Funding, L.P.
|
||
1/2/2007
|
Warrants
|
$1.20
|
120,000
|
12,000
|
132,000
|
Diversified
Equity Funding, L.P.
|
198,000
|
|
10/20/2006
|
Warrants
|
$1.20
|
60,000
|
6,000
|
66,000
|
Diversified
Strategies Fund, LLC
|
66,000
|
|
10/20/2006
|
Warrants
|
$1.20
|
45,000
|
4,500
|
49,500
|
HES
Gift Trust
|
||
1/2/2007
|
Warrants
|
$1.20
|
15,000
|
1,500
|
16,500
|
HES
Gift Trust
|
||
1/2/2007
|
Warrants
|
$1.20
|
1,000,000
|
100,000
|
1,100,000
|
HES
Gift Trust
|
1,166,000
|
|
10/20/2006
|
Common
Stock
|
$1.00
|
110,000
|
11,000
|
121,000
|
Xxx
Xxxxxxxx
|
121,000
|
|
10/20/2006
|
Common
Stock
|
$1.00
|
100,000
|
10,000
|
110,000
|
Xxxxxxx
Xxxxxx
|
||
10/20/2006
|
Warrants
|
$1.20
|
30,000
|
3,000
|
33,000
|
Xxxxxxx
Xxxxxx
|
143,000
|
|
10/20/2006
|
Warrants
|
$1.20
|
30,000
|
3,000
|
33,000
|
Xxxxxxx
Xxxxxxxx
|
||
10/20/2006
|
Common
Stock
|
$1.00
|
100,000
|
10,000
|
110,000
|
Xxxxxxx
Xxxxxxxxx
|
143,000
|
|
10/20/2006
|
Warrants
|
$1.20
|
100,000
|
10,000
|
110,000
|
Xxxxxxx
Xxxxxxx
|
110,000
|
|
11/16/2004
|
Warrants
|
$1.20
|
1,000,000
|
100,000
|
1,100,000
|
The
Banks Group LLC
|
||
2/2/2007
|
Common
Stock
|
$0.92
|
217,391
|
21,739
|
239,130
|
The
Banks Group LLC
|
1,339,130
|
|
6/19/2006
|
Warrants
|
$1.75
|
1,000,000
|
100,000
|
1,100,000
|
Xxxxxx
Xxxxxxxx
|
1,100,000
|
|
10/20/2006
|
Warrants
|
$1.20
|
30,000
|
3,000
|
33,000
|
Xxxxx
Xxxxx
|
||
1/2/2007
|
Warrants
|
$1.20
|
15,000
|
1,500
|
16,500
|
Xxxxx
Xxxxx
|
49,500
|
|
10/20/2006
|
Warrants
|
$1.20
|
50,000
|
5,000
|
55,000
|
Xxxxxxx
Xxxxxxxxxx
|
55,000
|
|
527,391
|
3,555,000
|
408,239
|
4,490,630
|
4,490,630
|
||||
4,082,391
|
0
|
|||||||
52,739
|
355,500
|
|||||||
580,130
|
3,910,500
|
|||||||
4,490,630
|