EXHIBIT 1.1
AMENDMENT NO. 1
TO
STRUCTURED EQUITY LINE FLEXIBLE FINANCING-SM- AGREEMENT
THIS AMENDMENT NO. 1 to STRUCTURED EQUITY LINE FLEXIBLE
FINANCING-SM- AGREEMENT ("Amendment") is dated as of September 29, 1999
between Cripple Creek Securities, LLC (the "Investor"), and Cygnus, Inc., a
corporation organized and existing under the laws of the State of Delaware
(the "Company"). Capitalized terms not defined herein shall have the meanings
assigned to them in that certain Structured Equity Line Flexible
Financing-SM- Agreement dated as of June 30, 1999 (the "Agreement"), between
the Company and the Investor.
W I T N E S S E T H :
WHEREAS, the Company and the Investor entered into the
Agreement, pursuant to which the Company may issue to the Investor, and the
Investor shall purchase from the Company, from time to time as provided
therein, shares of the Company's common stock, par value $0.001 per share
(the "Common Stock"), for a maximum aggregate Purchase Price of $30,000,000
(the "Maximum Offering Amount"); and
WHEREAS, the Company and the Investor desire to amend the
Agreement as provided herein, and to set forth certain terms with respect to
the issuance and sale by the Company to the Investor of shares of Common
Stock for the Supplemental Investment Amount (as defined below).
NOW, THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
AGREEMENT
Section 1.1 The definition of the term "Investment Period" contained
in Section 1.1 of the Agreement is hereby amended and restated in its
entirety as follows:
""INVESTMENT PERIOD" shall mean each successive one-month period
commencing on (a) in the case of the first Investment Period, the first
Trading Day of the calendar month following the end of the Supplemental
Investment Period, PROVIDED that the first Investment Period may start
as of a different date upon the mutual written consent of the Company
and Investor, and (b) in the of subsequent Investment Periods,
commencing on the first Trading Day subsequent to the expiration of the
immediately preceding Investment Period."
Section 1.2 Section 1.1 of the Agreement is hereby amended to include the
additional definitions as follows:
""Supplemental Investment Amount" shall mean $4,000,000."
""Supplemental Investment Date" shall mean such date as the Company
and the Investor shall mutually agree."
""Supplemental Investment Period" shall mean the period commencing
on the Supplemental Investment Date and ending on the earlier of (a) the date
the Investor has delivered to the Company Investor Notices pursuant to
Section 2.1(a)(ii) for an aggregate Purchase Price equal to the Supplemental
Investment Amount, and (b) the 110th Trading Day after the Supplemental
Investment Date."
""Supplemental Investment Purchase Price" shall mean the average of
the closing bid price per share of the Common Stock for the ten (10) Trading
Days prior to the Supplemental Investment Date."
Section 1.3 Section 2.1(a) of the Agreement is hereby redesignated
as "Section 2.1(a)(i) INITIAL INVESTMENT", and Section 2.1 of the Agreement
is hereby amended to include the additional new Section 2.1(a)(ii) as follows:
"2.1(a)(ii) SUPPLEMENTAL INVESTMENT. On the Supplemental Investment
Date, the Company shall deliver against payment by the Investor of $4,000,000
by federal fund wire transfer or transfer of New York Clearing House Funds to
the Company's account, the number of shares of Common Stock (rounded down to
the nearest whole share) determined by dividing the Supplemental Investment
Amount by the Supplemental Investment Purchase Price. During the Supplemental
Investment Period, the Investor shall deliver to the Company Investor Notices
as if the Investor were obligated during the Supplemental Investment Period
to purchase shares of Common Stock for an aggregate Purchase Price equal to
the Supplemental Investment Amount; PROVIDED, HOWEVER, that in no event may
the Investor deliver, without the written consent of the Company, an Investor
Notice during such Supplemental Investment Period with respect to a dollar
amount, which, together with the aggregate dollar amount covered by Investor
Notices previously delivered, would exceed the greater of (i) $3,000,000, or
(ii) 8% of the average daily Value of Open Market Trading of the Common Stock
on the Principal Market for all prior Trading Days in the Supplemental
Investment Period. In the event that the amount determined pursuant to clause
(ii) is less than $4,000,000 at the end of the Supplemental Investment
Period, the Supplemental Investment Period shall be extended (and no other
Investment Period shall commence) until ten (10) Trading Days after the
amount determined pursuant to clause (ii) is at least $4,000,000. If the
aggregate number of shares of Common Stock the Investor would have received
pursuant to all Investor Notices delivered pursuant to this paragraph is
greater than the number of shares of Common Stock the Investor received on
the Supplemental Investment Date, then the Company shall deliver to the
Investor within two (2) days after the end of the Supplemental Investment
Period that number of shares of Common Stock equal to such difference."
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ARTICLE II
CONDITIONS TO CLOSING ADDITIONAL INVESTMENT
Section 2.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY
TO ISSUE AND SELL COMMON Stock. The obligation of the Company to issue and
sell Common Stock to the Investor as contemplated hereby is subject to the
satisfaction, as of the Supplemental Purchase Date (as if the Supplemental
Purchase Date were a Closing Date for purposes of the Agreement), of each of
the conditions set forth in Section 3.1 of the Agreement.
Section 2.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTOR
TO PURCHASE COMMON STOCK. The obligation of the Investor to purchase Common
Stock as contemplated hereby is subject to the satisfaction, as of the
Supplemental Purchase Date (as if the Supplemental Purchase Date were a
Closing Date for purposes of the Agreement), of each of the conditions,
obligations and deliveries set forth in Section 3.2 of the Agreement,
including but not limited to the comfort letter required pursuant to Section
3.2(i) thereof.
ARTICLE III
MISCELLANEOUS
Section 3.1 NO THIRD PARTY BENEFICIARIES. This Amendment is intended
for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
Section 3.2 GOVERNING LAW. This Amendment shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York without regard to such state's principles of conflict of laws.
Section 3.3 EXECUTION. This Amendment may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
Section 3.4 Except as amended hereby, the Agreement shall remain
unchanged and in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
1 to Structured Equity Line Flexible Financing-SM- Agreement to be duly
executed by their respective authorized officers as of the date hereof.
CRIPPLE CREEK SECURITIES, LLC CYGNUS, INC.
By: /S/ XXXXXX X. XXXXXXX By: /S/ XXXXX X. XXXXXXX
-------------------------- ----------------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Principal Title: Senior Vice President, Finance
Chief Financial Officer
