EXHIBIT 10.5
AMENDED AND RESTATED AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (the "Agreement" or "Warrant
Antidilution Agreement") is entered into as of July 11, 2001, by and among
COLLEGE BOUND STUDENT ALLIANCE, INC., a corporation duly organized and
existing under the laws of the State of Nevada (the "Company") and Xxxxxx
Private Equity, LLC (hereinafter referred to as "Xxxxxx") and amends and
restates the Agreement between the parties dated on or about May 25, 2000.
RECITALS:
WHEREAS, pursuant to the Company's offering ("Equity Line") of up to
Thirty Million Dollars ($30,000,000), excluding any funds paid upon exercise
of the Warrants, of Common Stock of the Company pursuant to that certain
Amended and Restated Investment Agreement (the "Investment Agreement") between
the Company and Xxxxxx dated on or about July 11, 2001, the Company has agreed
to sell and Xxxxxx has agreed to purchase, from time to time as provided in
the Investment Agreement, shares of the Company's Common Stock for a maximum
aggregate offering amount of Thirty Million Dollars ($30,000,000); and
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed, among other things, to issue to Xxxxxx Commitment Warrants, as
defined in the Investment Agreement, to purchase a number of shares of Common
Stock, exercisable for five (5) years from their respective dates of issuance.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in Agreement and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Issuance of Commitment Warrants. As compensation for entering into the
Equity Line, Xxxxxx received Commitment Warrants (as defined in the Investment
Agreement) exercisable into an aggregate of 489,500 shares of the Company's
Common Stock, in the forms attached hereto as Composite Exhibit A (the
"Commitment Warrants").
2. Issuance of Additional Warrants. On each six month anniversary of the
date of issuance of the Commitment Warrants (each, a "Six Month Anniversary
Date") continuing throughout the term of the Commitment Warrant, the Company
shall issue to the Investor additional warrants (the "Additional Warrants"),
to purchase a number of shares of Common Stock, if necessary, such that the
sum of the number of Commitment Warrants and the number of Additional Warrants
issued to Investor shall equal at least "Y%" of the number of fully diluted
shares of Common Stock of the Company on such Six Month Anniversary Date (not
including any shares issued or issuable to Xxxxxx and not including any
options that are not yet vested), where "Y" shall equal 1.75% for the first
Six Month Anniversary Date, and shall be reduced by 0.3% for each Six Month
Anniversary Date beginning on and following the second Six Month Anniversary
Date. The Additional Warrants shall be in the form of Exhibit A hereto, and
shall initially be exerciseable at the same price as the Commitment Warrants
(as most recently reset), shall have the same reset provisions as the
Commitment Warrants (which resets shall occur on each six month anniversary of
the date of issuance of the applicable Additional Warrant throughout the term
of the applicable Additional Warrant), shall have piggyback registration
rights and shall have a 5-year term.
3. Opinion of Counsel. Concurrently with the issuance and delivery of the
Commitment Opinion (as defined in the Investment Agreement) to the Investor,
or on the date that is six (6) months after the date of this Agreement,
whichever is sooner, the Company shall deliver to the Investor an Opinion of
Counsel (signed by the Company's independent counsel) covering the issuance of
the Commitment Warrants and the Additional Warrants, if any Additional
Warrants have been issued by such date, and the issuance and resale of the
Common Stock issuable upon exercise of the Warrants and the Additional
Warrants, if any Additional Warrants have been issued by such date.
4. Change in Corporate Entity. The Company shall not, at any time after
the date hereof, enter into any merger, consolidation or corporate
reorganization of the Company with or into, or transfer all or substantially
all of the assets of the Company to, another entity unless the resulting
successor or acquiring entity in such transaction, if not the Company (the
"Surviving Entity"), (i) has Common Stock listed for trading on Nasdaq or on
another national stock exchange and is a Reporting Issuer, (ii) assumes by
written instrument the Company's obligations with respect to this Warrant
Antidilution Agreement and the Additional Warrants, including but not limited
to the obligations to deliver to the Investor shares of Common Stock and/or
securities that Investor is entitled to receive pursuant to this Investment
Agreement and upon exercise of the Additional Warrants and agrees by written
instrument to reissue, in the name of the Surviving Entity, any Additional
Warrants (each in the same terms, including but not limited to the same reset
provisions, as the Commitment Warrants originally issued or required to be
issued by the Company) that are outstanding immediately prior to such
transaction, making appropriate proportional adjustments to the number of
shares represented by such Warrants and the exercise prices of such Warrants
to accurately reflect the exchange represented by the transaction.
Notwithstanding the above, the Company may enter into a merger or corporate
reorganization where the surviving entity in such transaction is not a
Reporting Issuer if and only if the Company first (i) terminates the
Investment Agreement and pays the Termination Fee (as defined in the
Investment Agreement) to the Holder in full, and (ii) redeems the Commitment
Warrants from the Holder by paying to the Holder an amount of cash as
described in Section 7.2 of the Investment Agreement.
5. Termination of Investment Agreement. Notwithstanding any Termination
or Automatic Termination (as each is defined in the Investment Agreement) of
the Investment Agreement, this Agreement, including but not limited to the
Company's obligation to issue Additional Warrants, shall remain in full force
and effect throughout the term of the Commitment Warrants, and may not be
terminated.
6. Arbitration; Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia applicable to
agreements made in and wholly to be performed in that jurisdiction, except for
matters arising under the Act or the Securities Exchange Act of 1934, which
matters shall be construed and interpreted in accordance with such laws. Any
controversy or claim arising out of or related to the Transaction Documents or
the breach thereof, shall be settled by binding arbitration in Atlanta,
Georgia in accordance with the Expedited Procedures (Rules 53-57) of the
Commercial Arbitration Rules of the American Arbitration Association ("AAA").
A proceeding shall be commenced upon written demand by Company or any Investor
to the other. The arbitrator(s) shall enter a judgment by default against any
party, which fails or refuses to appear in any properly noticed arbitration
proceeding. The proceeding shall be conducted by one (1) arbitrator, unless
the amount alleged to be in dispute exceeds two hundred fifty thousand dollars
($250,000), in which case three (3) arbitrators shall preside. The
arbitrator(s) will be chosen by the parties from a list provided by the AAA,
and if they are unable to agree within ten (10) days, the AAA shall select the
arbitrator(s). The arbitrators must be experts in securities law and
financial transactions. The arbitrators shall assess costs and expenses of
the arbitration, including all attorneys' and experts' fees, as the
arbitrators believe is appropriate in light of the merits of the parties'
respective positions in the issues in dispute. Each party submits irrevocably
to the jurisdiction of any state court sitting in Atlanta, Georgia or to the
United States District Court sitting in Georgia for purposes of enforcement of
any discovery order, judgment or award in connection with such arbitration.
The award of the arbitrator(s) shall be final and binding upon the parties and
may be enforced in any court having jurisdiction. The arbitration shall be
held in such place as set by the arbitrator(s) in accordance with Rule 55.
Although the parties, as expressed above, agree that all claims,
including claims that are equitable in nature, for example specific
performance, shall initially be prosecuted in the binding arbitration
procedure outlined above, if the arbitration panel dismisses or otherwise
fails to entertain any or all of the equitable claims asserted by reason of
the fact that it lacks jurisdiction, power and/or authority to consider such
claims and/or direct the remedy requested, then, in only that event, will the
parties have the right to initiate litigation respecting such equitable claims
or remedies. The forum for such equitable relief shall be in either a state
or federal court sitting in Atlanta, Georgia. Each party waives any right to
a trial by jury, assuming such right exists in an equitable proceeding, and
irrevocably submits to the jurisdiction of said Georgia court. Georgia law
shall govern both the proceeding as well as the interpretation and
construction of this Agreement and the transaction as a whole.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 11th day of July, 2001.
SUBSCRIBER:
COLLEGE BOUND STUDENT ALLIANCE, INC. XXXXXX PRIVATE EQUITY, LLC.
By: ________________________________ By: _________________________________
Xxxxxx X. Xxxxx, CEO Xxxx X. Xxxxxx, Manager
College Bound Student Alliance, Inc. 000 Xxxxxxxx Xxxxxx Xxxxxxx
333 South Xxxxxxx Parkway, Ste. 100 Suite 300
Lakewood, CO 80226 Xxxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
