AMENDMENT NO. 1 TO CONVERTIBLE NOTE PURCHASE AGREEMENT AND SECURITY AGREEMENT
Exhibit
10.35
AMENDMENT
NO. 1 TO
CONVERTIBLE NOTE PURCHASE
AGREEMENT
AND SECURITY
AGREEMENT
This
Amendment No. 1 to Convertible Note Purchase Agreement and Security Agreement is
entered into as of July 4, 2008 (this “Amendment”), by and between PureDepth,
Inc. (the “Company”) and K One W One Limited (the “Purchaser”).
RECITALS
WHEREAS,
the Company and the Purchaser are parties to that certain Convertible Note
Purchase Agreement dated as of February 4, 2008 (the “Purchase Agreement”) and
to that certain Security Agreement dated as of February 4, 2008 (the “Security
Agreement’). The parties desire to amend each of the Purchase
Agreement and the Security Agreement in accordance with the terms of this
Amendment.
NOW,
THEREFORE, the parties agree as follows:
1.
Section 1(a) of the Purchase Agreement is hereby amended and restated in
its entirety to read as follows:
“(a) Issuance of
Note(s). In reliance upon the representations, warranties and
covenants of the parties set forth herein, the Company agrees to issue, sell and
deliver to the Purchaser, and the Purchaser agrees to purchase from the Company,
one or more Notes in an aggregate principal amount of up to the US$3,400,000
(the “Authorized Principal”), or such greater amount as the Board of Directors
of the Company and Purchaser shall approve in writing. The purchase
price for the Note(s) shall be payable in immediately available
funds.
2.
Section 1(b) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
“(b) Terms of the
Note. The terms and conditions of the Note(s) issued prior to
June 30, 2008 are set forth in the form of Note attached as Exhibit B
hereto. The terms and conditions of the Note(s) issued on or
following June 30, 2008 are set forth in the form of Note attached as Exhibit D
hereto. Capitalized terms not otherwise defined herein shall have the
meaning set forth in Exhibit B attached hereto.”
3.
Section 3(c) of the Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
“(c) Additional
Funding. On or after the date of the Initial Closing, the
Company may sell and issue, and the Purchaser in its sole discretion may
purchase, additional Notes hereunder for an aggregate principal amount of up to
the balance of the Authorized Principal not previously issued pursuant to the
Initial Note.”
4.
The Schedule of Exceptions set forth on Exhibit A to the
Purchase Agreement is hereby modified and updated as follows:
“Section 4 (e). A
former employee of the Company filed an action with the California Labor
Commission, claiming penalties pursuant to Labor Code Section 203 for one (1)
work day at the rate of $458.31 per day, claiming that Plaintiff was discharged
on July 16, 2007, pursuant to Labor Code Section 201, but the payment for the 1
day was not received until November 6,
2007. At hearing in March 2008 a
settlement of $2,756 was agreed and subsequently paid, and all claims
discharged.”
5.
The first paragraph of the Recitals section of the Security
Agreement is hereby amended and restated in its entirety to read as
follows:
“WHEREAS,
pursuant to a convertible note purchase agreement ("Note Purchase Agreement"),
of even date herewith, Debtor will issue to the Purchaser one or more secured
convertible promissory notes (individually a "Note," collectively the "Notes")
in an aggregate principal amount up to the Authorized Principal (as defined in
the Note Purchase Agreement), and the parties wish to enter into this Agreement
(along with the entry into the NZ Security Documents by the Debtor's
subsidiaries) to secure Debtor's obligations under the Note(s).”
6.
Unless otherwise defined, all initially
capitalized terms in this Amendment shall be as defined in the Purchase
Agreement or Security Agreement being amended hereby, as
applicable. Each of the Purchase Agreement and the Security
Agreement, as amended hereby, shall be and remain in full force and effect in
accordance with its respective terms and hereby is ratified and confirmed in all
respects. Except as expressly set forth herein, the execution,
delivery, and performance of this Amendment shall not operate as a waiver of, or
as an amendment of, any right, power, or remedy of Purchaser under the Purchase
Agreement or Security Agreement, as in effect prior to the date
hereof.
7.
This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
[Signature
page follows]
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IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.
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By: _____________________________________
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Name:
___________________________________
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Title: ____________________________________
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K
ONE W ONE LIMITED
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By: _____________________________________
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Name:
___________________________________
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Title: ____________________________________
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EXHIBIT
D
THIS NOTE
AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF SUCH SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.
CONVERTIBLE PROMISSORY
NOTE
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US$[____].00
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___________,
▇▇▇▇
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▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
FOR VALUE
RECEIVED, PureDepth, Inc., a Delaware corporation, (the “Company”), promises to
pay to K One W One Limited (the “Holder”), or its registered assigns, the
principal sum of US$____________, or such lesser amount as shall then equal the
outstanding principal amount hereof, together with interest on the unpaid
principal balance at a rate equal to eight percent (8%) per
annum. Interest shall begin to accrue on October 4,
2008. The interest rate shall be computed on the basis of the actual
number of days elapsed and a year of 365 days. All unpaid principal,
together with the balance of unpaid and accrued interest and other amounts
payable hereunder, if not converted pursuant to Section 4(a) below, or converted
into Common Stock of the Company pursuant to Section 4(c) below prior to or on
February 4, 2009 (the “Maturity Date”), shall be payable in cash on the
Maturity Date. This Note is issued pursuant to that Convertible Note
Purchase Agreement dated February 4, 2008, as amended from time to time (the
“Agreement”). Capitalized terms not otherwise defined herein shall
have the meanings given to them in the Agreement.
The
following is a statement of the rights of the Holder and the conditions to which
this Note is subject, and to which the Holder hereof, by the acceptance of this
Note, agrees:
1. Definitions. As
used in this Note, the following capitalized terms have the following
meanings:
(a) “Instruments” means
the class or series of investment instruments of the Company sold in the
Qualified Financing (as defined below).
(b) “Qualified Financing”
shall have the definition set forth in the Agreement.
2. Prepayment. This
Note may be prepaid in cash, in whole or in part, at any time by the Company
with the prior written consent of Holder. Any such prepayment will be
applied first to the payment of expenses due under this Note, second to interest
accrued on this Note and third, if the amount of prepayment exceeds the amount
of all such expenses and accrued interest, to the payment of principal of this
Note.
3. Security. The
Obligations due under the Note are secured by (a) a security agreement dated as
of the date of the Agreement, as amended from time to time, and executed by
Company (the “Security Agreement”), (b) a general security agreement
dated as of the date of the Agreement, executed by PureDepth Limited ("PDL"),
the Company's directly wholly-owned subsidiary (the “PDL General Security
Agreement”), (c) a general security agreement dated as of the date of the
Agreement, executed by PureDepth Incorporated Limited ("PDIL"), the Company's
indirectly wholly-owned subsidiary (the "PDIL General Security Agreement"), and
(d) a deed of guarantee and indemnity dated as of the date of the Agreement,
executed by PDL and PDIL (the “Deed of Guarantee" and, together with the PDL
General Security Agreement and the PDIL General Security Agreement, the "NZ
Security Documents”), each in favor, and for the benefit, of the Holder of this
Note. Additional rights of the Holder are set forth in the Security
Agreement and the NZ Security Documents.
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4. Conversion.
(a) Conversion upon Qualified
Financing. Upon a closing (the “Closing”) of a Qualified
Financing, all of the principal and accrued interest then outstanding on the
Note automatically shall be converted into Instruments at the Closing of the
Qualified Financing. The price per investment instrument for the conversion
shall be an amount equal to ninety-five percent (95%) of the price per share of
the Instruments sold in the Qualified Financing (the “Conversion Price upon
Qualified Financing”).
(b) Notice Regarding Qualified
Financing; Definitive Agreements. Written notice shall be
delivered to the Holder of this Note notifying the Holder of the terms and
conditions of the Qualified Financing, the Conversion Price upon Qualified
Financing, the principal and accrued interest then outstanding on the Note, the
date on which any such conversion will occur and calling upon such Holder, to
surrender to the Company, in the manner and at the place designated, the Note.
Notwithstanding the foregoing, upon the Closing of the Qualified Financing, the
principal and accrued interest then outstanding under the Note shall be
automatically converted into Instruments issued pursuant to the Qualified
Financing without any action by the Holder. Notwithstanding the
foregoing, the Company shall have no obligation to issue the Instruments to be
issued upon such automatic conversion until and unless the Holder has executed
and delivered to the Company the agreements prepared in connection with the
Qualified Financing, which such condition may be waived by the Company in its
sole discretion.
(c) Conversion on Maturity
Date. On the Maturity Date, all of the principal and accrued
interest then outstanding on the Note automatically shall be immediately due and
payable in cash, provided that, at Holder’s sole option, all of the principal
and accrued interest then outstanding on the Note may be converted into Common
Stock of the Company. The price per share of Common Stock for any
such conversion shall be equal to an amount equal to ninety-five
percent (95%) of the lower of (i) the average of the daily VWAP (the
volume-weighted average price) of the Company’s Common
Stock over a period of ten (10) trading days prior to the Issuance Date (as
defined below) of this Note, as quoted on the OTCBB, or (ii) the average of the
daily VWAP (the volume-weighted average price) of the Company’s Common
Stock over a period of ten (10) trading days prior to the Maturity Date, as
quoted on the OTCBB (the “Conversion Price upon Maturity Date”).
(d) Notice Regarding Maturity
Date; Definitive Agreements. In the event that Holder elects
to convert the principal and accrued interest then outstanding under the Note
pursuant to Section 4(c) above, written notice shall be delivered to the Company
prior to the Maturity Date notifying the Company of such election, and the
Company shall provide Holder a written notice on the Maturity Date providing the
terms of conversion of the Note, including without limitation the Conversion
Price upon Maturity Date, the principal and accrued interest then outstanding on
the Note, and notice to surrender to the Company, in the manner and at the place
designated, the Note. Notwithstanding the foregoing, the Company shall have no
obligation to issue the Common Stock to be issued upon such conversion until and
unless the Holder has executed and delivered to the Company the agreements
prepared in connection with the conversion, including delivery of the Note (all
of which agreements shall be reasonably acceptable in form and substance to
Holder), which such condition may be waived by the Company in its sole
discretion.
(e) Mechanics and Effect of
Conversion. Upon the conversion of all of the principal and
accrued interest outstanding under this Note pursuant to Section 4(a) or 4(c)
above, in lieu of the Company issuing any fractional Instruments or fractional
shares of Common Stock to the Holder, the Company shall pay to the Holder the
amount of outstanding principal that is not so converted. Upon full
conversion of this Note, the Company shall be forever released from all its
obligations and liabilities under this Note.
5. Successors and
Assigns. Subject to the restrictions on transfer described in
Section 7 below, the rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
6. Waiver and
Amendment. Any provision of this Note may be amended, waived
or modified upon the written consent of the Company and the
Holder. Any amendment or waiver effected in accordance with this
Section 6 shall be binding upon the Company, the Holder and each transferee of a
Note.
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7. Transfer of this
Note. This Note may not be transferred in violation of any
restrictive legend set forth hereon. Each new Note issued upon
transfer of this Note shall bear such a restrictive legend as to the applicable
restrictions on transferability in order to ensure compliance with the
Securities Act of 1933, as amended (the “Act”), unless in the opinion of counsel
for the Company such legend is not required in order to ensure compliance with
the Act. The Company may issue stop transfer instructions to its
transfer agent in connection with such restrictions. Prior to
presentation of this Note for registration of transfer, the Company shall treat
the registered holder hereof as the owner and holder of this Note for the
purpose of receiving all payments of principal and interest hereon and for all
other purposes whatsoever, whether or not this Note shall be overdue and the
Company shall not be affected by notice to the contrary.
8. Assignment by
Company. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company, without the prior written consent of the
Holder.
9. Treatment of
Note. To the extent permitted by generally accepted accounting
principles, the Company will treat, account and report the Note as debt and not
equity for accounting purposes and with respect to any returns filed with
federal, state or local tax authorities.
10. Notices. Any
notice, request or other communication required or permitted hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
or mailed by registered or certified mail, postage prepaid, or by recognized
overnight courier or personal delivery at the respective addresses of the
parties as set forth in the records maintained by the
Company. Any party hereto may by notice so given change its address
for future notice hereunder. Notice shall conclusively be deemed to
have been given when received.
11. Payment. Payment
shall be made in lawful tender of the United States.
12. Expenses;
Waivers. If action is instituted to collect this Note, the
Company promises to pay all costs and expenses, including, without limitation,
reasonable attorneys’ fees and costs, incurred in connection with such
action. The Company hereby waives notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor and all other
notices or demands relative to this instrument.
13. Governing
Law. This Note and all actions arising out of or in connection
with this Note shall be governed by and construed in accordance with the laws of
the State of California, without regard to the conflicts of law provisions of
the State of California or of any other state.
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[REMAINDER
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[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the Company has caused this Note to be issued as of the date
first written above (the “Issuance Date”).
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By:_______________________________
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Name:_____________________________
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Its:_______________________________
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AGREED
AND ACKNOWLEDGED:
“HOLDER”
K One W
One Limited
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By:______________________________
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Name:____________________________
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Its:______________________________
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SIGNATURE
PAGE TO CONVERTIBLE PROMISSORY NOTE
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