EXHIBIT 99.4
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ADDITIONAL ISSUANCE AGREEMENT
This Amendment Agreement ("Amendment"), dated February 1, 2006, is made
(i) that certain Securities Purchase Agreement ("Purchase Agreement") dated as
of December 28, 2005 by and between ▇▇▇▇▇▇.▇▇▇, Inc. (the "Company") and Bushido
Capital Master Fund, LP ("Bushido" or "Purchaser") for the purchase of the
Company's 6% Secured Convertible Debenture (the "Debenture") and the Common
Stock Purchase Warrants issued to Bushido in connection therewith (the
"Warrant"). CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN THAT ARE
DEFINED IN THE PURCHASE AGREEMENT SHALL HAVE THE MEANINGS GIVEN SUCH TERMS IN
THE PURCHASE AGREEMENT.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Issuance of Additional Debentures and Warrants; Payoff and Waiver.
(a) Issuance. The Company hereby agrees to issue against
payment to Bushido (a) a debenture of the Company with a principal amount of
$375,884.38 which debenture shall be in the form of, and on the same terms and
conditions as, the Debentures (the "New Debenture"), (b) a warrant to purchase
up to 176,887 shares of Common Stock, which warrant shall be in the form of, and
on the same terms and conditions as, the Long Term Warrants, and (c) a warrant
to purchase up to 176,887 shares of Common Stock, which warrant shall be in the
form of, and on the same terms and conditions as, the Short Term Warrants of the
Company (the warrants issued in clauses (b) and (c) collectively referred to as
the "New Warrants"). The total purchase price for the purchase of the New
Debenture and the New Warrants is $375,884.38 (the "New Subscription Amount").
Within 3 Trading Days of the date hereof, the Company shall deliver the New
Debentures, New Warrants and opinion of counsel required pursuant to Section 5
to Bushido and Bushido shall wire the New Subscription Amount to the wire
instructions attached hereto as Annex A.
(b) Payoff and Waiver. All of the New Subscription Amount
shall be used to payoff existing Indebtedness as set forth on Annex B attached
hereto which, along with the required conversions referenced therein, shall
result in the payment in full of such Indebtedness. Upon payoff of the
Indebtedness set forth on Annex B attached hereto, the Indebtedness required to
be paid off pursuant to Section 8(a)(xii) of the Debenture as set forth on
Schedule 3.1(g) of the Purchase Agreement under the heading "Indebtedness to be
converted into common Stock on or prior to January 15, 2006 at or above $0.67
per share (subject to adjustment for reverse and forward stock splits and the
like)" that has not been paid off or converted is as set forth on Annex C
attached hereto and, subject to the Company's representation that all such
Indebtedness is paid off in full and binding pay-off letters and releases have
been obtained to evidence such pay-offs, Bushido and the other Purchasers waive
any past, present or future default arising from the failure to convert the debt
by reason of Section 8(a)(xii) of the Debenture, which is hereby deleted.
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2. Documents. The rights and obligations of Bushido and of the Company
with respect to the New Debenture, the New Warrants and the shares of Common
Stock issuable under the New Debentures and New Warrants (the "Additional
Underlying Shares") shall be identical in all respects to the rights and
obligations of Bushido and of the Company with respect to the Debentures, the
Warrants and the Underlying Shares issued and issuable pursuant to the Purchase
Agreement. Any rights of Bushido or covenants of the Company which are dependant
on Bushido holding securities of the Company or which are determined in
magnitude by Bushido's purchase of securities pursuant to the Purchase Agreement
shall be deemed to include any securities purchased or issuable hereunder. The
Purchase Agreement is hereby amended so that the term "Debentures" includes the
New Debenture issued hereunder and "Underlying Shares" includes the Additional
Underlying Shares. Additionally, the Registration Rights Agreement entered into
in connection with the Purchase Agreement is hereby amended so that the term
"Registrable Securities" includes in the calculation thereof the Additional
Underlying Shares.
3. Representations and Warranties of the Company. Each Company hereby
makes to each Purchaser the following representations and warranties:
(a) Authorization; Enforcement. Each Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery
of this Agreement by such Company and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of such Company and no further action is
required by such Company, its board of directors or its stockholders
in connection therewith other than in connection with the Required
Approvals. This Agreement has been duly executed by such Company and,
when delivered in accordance with the terms hereof will constitute the
valid and binding obligation of such Company enforceable against such
Company in accordance with its terms except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
(b) No Conflicts. The execution, delivery and performance of this
Agreement by such Company and the consummation by such Company of the
transactions contemplated hereby do not and will not: (i) conflict
with or violate any provision of such Company's certificate or
articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien (except as contemplated by
the Security Documents) upon any of the properties or assets of such
Company, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or
both) of, any material agreement, credit
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facility, debt or other material instrument (evidencing Company debt or
otherwise) or other material understanding to which such Company is a
party or by which any property or asset of such Company is bound or
affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental
authority to which such Company is subject (including federal and state
securities laws and regulations), or by which any property or asset of
such Company is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse Effect.
(c) Issuance of the Additional Debentures. The Additional
Debentures and Additional Warrants are duly authorized and, upon the
execution of this Agreement by a Purchaser, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents. The Additional Underlying Shares,
when issued in accordance with the terms of the Additional Debentures
and Additional Warrants, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company. The
Company has reserved from its duly authorized capital stock a number
of shares of Common Stock for issuance of the Additional Underlying
Shares at least equal to the Required Minimum on the date hereof.
(d) Equal Consideration. Except as set forth in this Agreement,
no consideration has been offered or paid to any person to amend or
consent to a waiver, modification, forbearance or otherwise of any
provision of any of the Transaction Documents.
(e) Other Events of Default. As of the date of this Agreement, to
the knowledge of the Company, no Event of Default other than the
Existing Defaults exists that has not been waived.
(f) Affirmation of Prior Representations and Warranties. The
Company hereby represents and warrants to the Purchasers that its
representations and warranties listed in Section 3.1 of the Purchase
Agreement are true and correct as of the date hereof.
4. Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof to the Company as follows:
(a) Authority. The execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate or similar action on the
part of such Purchaser. This Agreement has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it
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in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
(b) Own Account. Such Purchaser understands that the Additional
Debentures and Additional Warrants are "restricted securities" and
have not been registered under the Securities Act or any applicable
state securities law and is acquiring the Additional Debenture and
Additional Warrants as principal for its own account and not with a
view to or for distributing or reselling such Additional Debentures or
Additional Warrants or any part thereof in violation of the Securities
Act or any applicable state securities law, has no present intention
of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no arrangement or
understanding with any other persons regarding the distribution of
such Additional Debentures and Additional Warrants (this
representation and warranty not limiting such Purchaser's right to
sell the Additional Underlying Shares pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws) in violation of the Securities Act or any applicable
state securities law. Such Purchaser is acquiring the Additional
Debentures and Additional Warrants hereunder in the ordinary course of
its business. Such Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute
any of the Additional Debentures, Additional Warrants or Additional
Underlying Shares.
(c) Purchaser Status. Such Purchaser is an "accredited investor"
as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act. Such Purchaser is not required to be registered as
a broker-dealer under Section 15 of the Exchange Act.
(d) General Solicitation. Such Purchaser is not purchasing the
Additional Debentures or Additional Warrants as a result of any
advertisement, article, notice or other communication regarding the
Additional Debentures or Additional Warrants published in any
newspaper, magazine or similar media or broadcast over television or
radio or presented at any seminar or any other general solicitation or
general advertisement.
(e) Affirmation of Prior Representations and Warranties. Such
Purchaser hereby represents and warrants to the Company that its
representations and warranties listed in Section 3.2 of the Purchase
Agreement are true and correct as of the date hereof.
5. Delivery of Opinion. Concurrently herewith, the Company shall
deliver to the Purchasers an opinion of outside counsel regarding this Agreement
and the issuanc
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e of the Additional Debentures and Additional Warrants in form and substance
reasonably acceptable to the Purchasers.
6. Public Disclosure. The Company shall, on the Trading Day following
the date of payment of the New Subscription Amount, issue a Current Report on
Form 8-K, reasonably acceptable to the Purchasers, disclosing the material terms
of the transactions contemplated hereby, and shall attach this Agreement
thereto. The Company shall consult with the Purchasers in issuing any other
press releases with respect to the transactions contemplated hereby.
7. Other Purchaser Consent. Each of the Purchasers hereby consents to
the execution by the Company of this Agreement and the issuance of the
Additional Debentures and Additional Warrants to Bushido.
8. Effect on Transaction Documents. Except as expressly set forth
above, all of the terms and conditions of the Transaction Documents shall
continue in full force and effect after the execution of this Agreement and
shall not be in any way changed, modified or superseded by the terms set forth
herein, including but not limited to, any other obligations the Company may have
to the Purchasers under the Transaction Documents. Notwithstanding the
foregoing, this Agreement shall be deemed for all purposes as an amendment to
any Transaction Document as required to serve the purposes hereof, and in the
event of any conflict between the terms and provisions of the Debentures, the
Registration Rights Agreement or any other Transaction Document, on the one
hand, and the terms and provisions of this Agreement, on the other hand, the
terms and provisions of this Agreement shall prevail.
9. Expenses. The Company agrees to pay to Purchasers upon demand any
and all reasonable out-of-pocket costs or expenses (including, without
limitation, reasonable legal fees and disbursements) incurred or sustained by
Purchasers, in connection with the preparation of this Agreement and related
matters.
10. Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and each
Purchaser.
11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be delivered as set forth
in the Purchase Agreement.
12. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Purchaser. The Company may not
assign (except by merger) its rights or obligations hereunder without the prior
written consent of all of the Purchasers of the then-outstanding Securities.
Each Purchaser may assign their
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respective rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.
13. Execution and Counterparts. This Agreement may be executed in two
or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or ".pdf" signature page were an original
thereof.
14. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.
15. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
16. Headings. The headings in this Agreement are for convenience only,
do not constitute a part of the Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
17. Independent Nature of Holders' Obligations and Rights. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of any other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each
Purchaser shall be entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
[SIGNATURE PAGE FOLLOWS]
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Executed as of February 1, 2006 by the undersigned duly authorized
representatives of the Company and Bushido:
▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
BUSHIDO CAPITAL MASTER FUND, LP
SIGNATURE OF AUTHORIZED SIGNATORY OF BUSHIDO: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name of Authorized Signatory: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title of Authorized Signatory: Managing Director
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As to Section 1(b) and Section 7 only:
GAMMA OPPORTUNITY CAPITAL PARTNERS, LP CLASS A
AUTHORIZED SIGNATORY FOR GAMMA CLASS A: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name of Authorized Signatory: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title of Authorized Signatory: President
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GAMMA OPPORTUNITY CAPITAL PARTNERS, LP CLASS B
AUTHORIZED SIGNATORY FOR GAMMA CLASS B: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name of Authorized Signatory: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title of Authorized Signatory: President
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ANNEX A
ACCOUNT NAME: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
ATTORNEY ESCROW ACCOUNT - ▇▇▇▇
BANK: Bank of New York
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
ACCOUNT NO.: 6902 089606
ABA NO.: ▇▇▇▇▇▇▇▇▇
PLEASE BE CERTAIN TO IDENTIFY THE TRANSACTION TO WHICH THE FUNDS RELATE AND THE
SENDER IN THE DETAILS OF PAYMENT FIELD.
FOR INTERNATIONAL WIRES, PLEASE USE SWIFT NUMBER ▇▇▇▇▇▇▇▇.
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ANNEX B
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1. Grid Note due October 15, 2005 and held by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ in the
aggregate amount of $51,912.13, $25,956.07 of which is being converted @
$0.67 per share and $25,956.07 of which is being paid from the proceeds of
the Additional Debentures.
2. 6% Convertible Note due October 15, 2005 held by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ in the
aggregate amount of $108,166.67, $54,083.33 of which is being converted @
$0.67 per share and $54,083.33 of which is being paid from the proceeds of
the Additional Debentures.
3. 6% Convertible Note due October 15, 2005 held by Stortford Holdings Limited
in the aggregate amount of $54,041.67, $27,020.83 of which is being
converted @ $0.67 per share and $27,020.83 of which is being paid from the
proceeds of the Additional Debentures
4. 10% Convertible Extendable Note due June 8, 2005 held by Bruges Realty
Corp. Charitable Remainder Trust U/A/D 5/31/01 in the aggregate amount of
$103,393.90, $51,696.95 of which is being converted @ $0.67 per share and
$51,696.95 of which is being paid from the proceeds of the Additional
Debentures.
5. 10% Convertible Extendable Note due June 8, 2005 held by Beaufort Ventures
Ltd. in the aggregate amount of $258,484.75, $129,242.38 of which is being
converted @ $0.67 per share and $129,242.38 of which is being paid from the
proceeds of the Additional Debentures.
6. 10% Convertible Extendable Note due June 8, 2005 held by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
in the aggregate amount of $20,678.78 which is being paid from the proceeds
of the Additional Debentures.
7. 10% Convertible Extendable Note due June 8, 2005 held by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in
the aggregate amount of $41,357.56 which is being paid from the proceeds of
the Additional Debentures.
8. 10% Convertible Extendable Note due June 8, 2005 held by ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ in the aggregate amount of $25,848.48 which is being paid from the
proceeds of the Additional Debentures.
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ANNEX C
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None.
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