1
EXHIBIT 10 TO FORM 8-K
2
HOMECOM COMMUNICATIONS, INC.
Suite 100, Building ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
Atlanta, Georgia 30305
April 8, 1998
VIA FACSIMILE NO. 718/437-2928
& FIRST CLASS MAIL
Eurofactors International Inc.
▇▇▇▇▇▇▇▇▇ Finance
FTS Worldwide Corporation
COLBO (collectively, the "Purchasers")
c/o Granite Securities, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Acquisition by the Purchasers of 5% Convertible Debentures of
HomeCom Communications, Inc. (the "Company") in an aggregate
original principal amount of $1.7 Million (the "Convertible
Debentures")
Gentlemen:
This letter agreement ("Agreement") amends that certain 5% Convertible
Debenture Purchase Agreement ("Purchase Agreement "), dated as of September 19,
1997 and as amended, between the Purchasers and the Company as set forth herein.
This Agreement also confirms the understanding of the parties hereto today with
respect to the Company's honoring of certain Conversion Notices in connection
with the sale of the Convertible Debentures to the Purchasers and the Purchasers
agreement to certain conversion limitations, all as more fully described below.
As used herein, the term "Transaction Documents" means the Purchase
Agreement, that certain Convertible Debenture attached to the Purchase Agreement
as Exhibit A, certain Convertible Debenture Escrow Agreement attached to the
Purchase Agreement as Exhibit B, that certain Registration Rights Agreement
attached to the Purchase Agreement as Exhibit C. Any terms not defined herein
shall have the meanings defined in the Transaction Documents.
3
I. AMENDMENT TO PURCHASE AGREEMENT. The parties hereto agree to amend the
Purchase Agreement in accordance with the follow:
1. Conversion Price. The definition of "Conversion Price" set
forth in Section 1 of the Purchase Agreement is amended to be
and read as follows:
" "Conversion Price" means an amount equal to the lessor of
(a) a twenty-five (25%) percent discount from the average
closing bid price of the Common Stock as reported by NASDAQ or
on other securities exchanges or markets on which the Common
Stock is listed for the previous three (3) trading days ending
on the day before the Conversion Date, or (b) 2 5/8."
2. Restrictions on Conversion of Debenture. The Purchasers agree
that not to convert any portion of the Remaining Debentures
held by each of them for a period of thirty (30) days from the
date hereof and thereafter not to convert more than 25% of the
Remaining Debentures held by each of them in any thirty (30)
day period thereafter (the "Gating Restrictions"). However, in
the event that the closing bid price of the Common Stock as
reported by NASDAQ or on other securities exchanges or markets
on which the Common Stock is listed for the previous five (5)
trading days is $3.50 or greater, the foregoing Gating
Restrictions shall not apply as long as the closing bid price
for the previous five (5) trading days is $3.50 or greater. In
addition, if the Common Stock is not traded on the NASDAQ
SmallCap Market or the electronic bulletin board, the
foregoing Gating Restrictions shall no longer apply. As used
herein "Remaining Debentures" shall mean those Debentures
described in Exhibit "A" attached hereto.
II. AMENDMENT TO DEBENTURE. The parties hereto agree to amend the Debenture in
accordance with the following:
1. Section 7 - Events of Default. Subparagraph (f) shall be
amended and restated as follows:
"The Issuer's Common Stock is delisted from trading on NASDAQ
SmallCap Market or the electronic bulletin board unless it is
thereupon admitted to trading on a national stock exchange."
III. DELIVERY OF SHARES OF COMMON STOCK SUBJECT TO CONVERSION
NOTICE. Assuming that this Agreement is duly executed and delivered by all
parties as of the date hereof, in the interest of settlement and compromise
without admitting liability, the Company agrees to issue instructions to its
transfer agent to honor the conversion notices of the Purchasers as attached as
Exhibit "B hereto (the "Conversion Notices") and to instruct the transfer agent
as of the date hereof to (i) issue such shares of Common Stock to the Purchasers
in the amounts set forth in the Conversion Notices (the "Conversion Shares") and
(ii) to give instructions to DWAC the Conversion Shares with an effective date
as of the date hereof.
4
IV. MISCELLANEOUS
1. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
2. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of such counterparts shall together constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the fax
signatures of all of the parties reflected hereon as the signatories. This
Agreement may be executed and delivered by fax (telecopier); any original
signatures that are initially delivered by fax shall be physically delivered
with reasonable promptness thereafter.
3. This Agreement shall become effective on the date the Company has
received an executed counterpart of this Agreement from each of the Purchasers.
4. Neither the execution of this Agreement nor anything herein
contained is intended to be, nor shall be construed to be, an admission by the
Company or its officers and directors, First Granite Securities, Inc. or the
Purchasers of any liability to the other, now, in the past or in the future, or
an admission of the existence of facts upon which liability could be based. This
Agreement is contractual and it has been entered into to compromise disputed
claims and to avoid the uncertainty and expense of further litigation.
5. This Agreement shall constitute the full and complete agreement
between the parties concerning its subject matter and fully supersedes any and
all other prior agreements or understandings between the parties regarding the
subject matter thereto. This Agreement shall not be modified or amended except
by written instrument signed by all of the parties hereto.
Very truly yours,
HomeCom Communications, Inc.
By: _______________________________
▇▇▇▇▇▇ ▇▇▇, President
[SIGNATURES CONTINUED ON NEXT PAGE]
5
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Accepted and agreed to by the undersigned
Purchasers:
Eurofactors International Inc.
By: ________________________________
Print Name: __________________________
Print Title: ___________________________
Attest: ______________________________
Print Name: _________________________
Signed, sealed and delivered in the presence of :
______________________________________
Notary Public
My commission expires: _______________
[NOTARIAL SEAL]
6
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Accepted and agreed to by the undersigned
Purchasers:
▇▇▇▇▇▇▇▇▇ Finance
By: ________________________________
Print Name: __________________________
Print Title: ___________________________
Attest: ______________________________
Print Name: _________________________
Signed, sealed and delivered in the presence of :
_____________________________________
Notary Public
My commission expires: _______________
[NOTARIAL SEAL]
7
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Accepted and agreed to by the undersigned
Purchasers:
FTS Worldwide Corporation
By: ________________________________
Print Name: __________________________
Print Title: ___________________________
Attest: ______________________________
Print Name: _________________________
Signed, sealed and delivered in the presence of :
________________________________
Notary Public
My commission expires: _______________
[NOTARIAL SEAL]
8
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Accepted and agreed to by the undersigned
Purchasers:
COLBO
By: ________________________________
Print Name: __________________________
Print Title: ___________________________
Attest: ______________________________
Print Name: _________________________
Signed, sealed and delivered in the presence of :
___________________________________
Notary Public
My commission expires: _______________
[NOTARIAL SEAL]
9
HOMECOM COMMUNICATIONS, INC.
Suite 100, Building ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
Atlanta, Georgia 30305
April 8, 1998
VIA FACSIMILE NO. 718/437-2928
& FIRST CLASS MAIL
First Granite Securities, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Acquisition by the Purchasers of 5% Convertible Debentures of
HomeCom Communications, Inc. (the "Company") in an aggregate
original principal amount of $1.7 Million (the "Convertible
Debentures")
Gentlemen:
This letter agreement ("Agreement") amends that certain 5% Convertible
Debenture Purchase Agreement ("Purchase Agreement "), dated as of September 19,
1997 and as amended, between the Purchasers and the Company as set forth herein.
This Agreement also confirms the understanding of the parties hereto today with
respect to the reset by the Company of certain warrants issued in connection
with the sale of the Convertible Debentures to the Purchasers and the Purchasers
agreement to certain conversion limitations, all as more fully described below.
The effectiveness of this letter agreement is expressly contingent upon the
execution today by the Purchasers, First Granite Securities, Inc. ("FGS") and
the Company of that certain letter agreement relating to the honoring of certain
Conversion Notices and certain conversion limitations by the Purchasers, dated
of even date herewith.
As used herein, the term "Transaction Documents" means the Purchase
Agreement, that certain Convertible Debenture attached to the Purchase Agreement
as Exhibit A, certain Convertible Debenture Escrow Agreement attached to the
Purchase Agreement as Exhibit B, that certain Registration Rights Agreement
attached to the Purchase Agreement as Exhibit C. Any terms not defined herein
shall have the meanings defined in the Transaction Documents.
I. RESET OF EXERCISE PRICE OF WARRANTS. In the event that the Company
agrees to adjust the exercise price of the warrants issued to investors in
connection with the $2,000,000 issuance of the Series A Preferred Stock on or
about January 1998 to an exercise price below $5.00 per share (the "Reduced
Exercise Price") the Company agrees to amend the exercise price of any
unexercised warrants to the Reduced Exercise Price which were issued in
connection with the Purchase Agreement as long as the Purchasers are holders of
Debentures at the time of the effectiveness of the Reduced Exercise Price.
10
II. MISCELLANEOUS
1. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
2. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of such counterparts shall together constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the fax
signatures of all of the parties reflected hereon as the signatories. This
Agreement may be executed and delivered by fax (telecopier); any original
signatures that are initially delivered by fax shall be physically delivered
with reasonable promptness thereafter.
3. This Agreement shall become effective on the date the Company has
received an executed counterpart of this Agreement from FGS.
4. Neither the execution of this Agreement nor anything herein
contained is intended to be, nor shall be construed to be, an admission by the
Company or its officers and directors, First Granite Securities, Inc. or the
Purchasers of any liability to the other, now, in the past or in the future, or
an admission of the existence of facts upon which liability could be based. This
Agreement is contractual and it has been entered into to compromise disputed
claims and to avoid the uncertainty and expense of further litigation.
5. This Agreement shall constitute the full and complete agreement
between the parties concerning its subject matter and fully supersedes any and
all other prior agreements or understandings between the parties regarding the
subject matter thereto. This Agreement shall not be modified or amended except
by written instrument signed by all of the parties hereto.
Very truly yours,
HomeCom Communications, Inc.
By:
-------------------------------
▇▇▇▇▇▇ ▇▇▇, President
[SIGNATURES CONTINUED ON NEXT PAGE]
11
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Accepted and agreed to by the undersigned
Purchasers:
First Granite Securities, Inc.
By: ________________________________
Print Name: __________________________
Print Title: ___________________________
Attest: ______________________________
Print Name: _________________________
Signed, sealed and delivered in the presence of :
________________________________
Notary Public
My commission expires: _______________
[NOTARIAL SEAL]
12
HOMECOM COMMUNICATIONS, INC.
Suite 100, Building ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
Atlanta, Georgia 30305
April 17, 1998
VIA FACSIMILE NO. 718/437-2928
& FIRST CLASS MAIL
Sovereign Partners, L.P.
Dominion Capital Fund, Ltd. (collectively, the "Purchasers")
c/o ▇▇▇▇▇ ▇▇▇▇▇
Southridge Capital Management
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Acquisition by the Purchasers of Series A Convertible
Preferred Stock of HomeCom Communications, Inc. (the
"Company") in an aggregate original principal amount of $2.0
Million (the "Preferred Stock")
Gentlemen:
This letter agreement ("Agreement") amends that certain Purchase
Agreement ("Purchase Agreement "), dated on or about December 19, 1997, as
amended, between the Purchasers and the Company as set forth herein and
Certificate of Designations, Rights, Preferences, Qualifications, Limitations,
and Restrictions of Series A Convertible Preferred Stock ("Certificate of
Designations"). This Agreement also confirms the understanding of the parties
hereto today with respect to the Company's filing of an amended registration
statement with the Securities and Exchange Commission (the "SEC") in connection
with the sale of the Convertible Debentures to the Purchasers and the Purchasers
agreement to certain conversion limitations, all as more fully described below.
As used herein, the term "Transaction Documents" means the Purchase
Agreement, that certain Certificate of Designations, certain Joint Escrow
Agreement, that certain Registration Rights Agreement. Any terms not defined
herein shall have the meanings defined in the Transaction Documents.
I. AMENDMENT TO CERTIFICATE OF DESIGNATIONS. The parties hereto agree to
amend the Certificate of Designations in accordance with the following:
2. Section 4. VOTING RIGHTS. Shall be amended and restated as
follows;
The holders of Series A Preferred Stock shall have no voting
rights.
13
3. Section 5. CONVERSION. Shall be amended and restated as
follows:
"The holders of Series A Preferred Stock have conversion
rights as follows (the 'Conversion Rights'):
5.1 Right to Convert. Each share of Series A
Preferred Stock shall be convertible, at the option of the
holder thereof, in accordance with the Conversion Table set
forth in Section 5.2 hereof, at the office of the Corporation
or any transfer agent for the Series A Preferred Stock into a
number of shares of Common Stock equal to the quotient of (a)
the product of the number of shares of Series A Preferred
Stock being converted multiplied by $100 divided by (b) the
then-applicable Conversion Price. The Conversion Price shall
equal the lesser of: (i) 75% of the average Closing Price (as
defined below) for the five trading days ending on the day the
Company actually receives a Conversion Notice (as defined in
Section 5.3 hereof), or (ii) $3.50 per share (the "Fixed
Conversion Price"). However, if the Registration Statement (as
defined in the Registration Rights Agreement of even date
herewith) is not declared effective by the U.S. Securities and
Exchange Commission by May 16, 1998, then the Fixed Conversion
Price shall be $3.00 per share.
5.2 Conversion Table. The Series A Preferred Stock
shall be convertible on a non-cumulative basis into shares of
Common Stock according to the following conversion table (the
'Conversion Table' or 'Gating Restrictions'): (i) the first
25% at any time within thirty (30) days after the effective
date (the 'Registration Effective Date') and thereafter no
more than 25% of the Series A Preferred Stock shall be
convertible on a non-cumulative basis into shares of Common
Stock during any thirty (30) day period thereafter. However,
in the event that the Closing Price of the Common Stock as
reported by NASDAQ or on other securities exchanges or markets
on which the Common Stock is listed for the previous five (5)
trading days is $3.50 or greater, the foregoing Gating
Restrictions shall not apply as long as the Closing Price for
the previous five (5) trading days is $3.50 or greater."
II. AMENDMENT TO REGISTRATION RIGHTS AGREEMENT. The parties hereto agree to
amend the Registration Rights Agreement in accordance with the following:
1. Section 2.(b) - REGISTRATION.
In the event that the Registration Statement is not declared
effective by May 15, 1998, then the Fixed Conversion Price as
defined in the Certificate of Designations shall be reduced to
$3.00 per share.
III. AMENDMENT TO SECURITIES PURCHASE AGREEMENT. The parties hereto agree to
amend the Securities Purchase Agreement in accordance with the following:
14
1. Section 4. shall be amended and restated as follows:
"K. HEDGING TRANSACTIONS. As long as there is no
Material Default by the Company which remains uncured by the
Company within thirty (30) days from the date written notice
is sent to the Company from the Holder (excepting such
material default by virtue of the failure of the Company to
register the shares of Common Stock with the U.S. Securities
Exchange Commission through and until June 30, 1998 pursuant
to the Registration Rights Agreement), the Buyer or its
affiliates shall not, directly or indirectly, engage in any
short or other hedging transaction, such as option writing,
equity swaps or other types of derivative transactions in the
Common Stock or other securities of the Company or acquire or
establish any"put equivalent position" within the meaning of
Rule 16a-1 promulgated under the 1934 Act. Material Default
shall mean (i) the failure of the Company to deliver, from
time to time, Common Stock pursuant to a valid Conversion
Notice within 30 days of the Delivery Date or (ii) a failure
of the Company to cause the Registration Statement to become
effective by June 30, 1998.
IV. MISCELLANEOUS
1. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
2. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of such counterparts shall together constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the fax
signatures of all of the parties reflected hereon as the signatories. This
Agreement may be executed and delivered by fax (telecopier); any original
signatures that are initially delivered by fax shall be physically delivered
with reasonable promptness thereafter.
3. This Agreement shall become effective on the date the Company has
received an executed counterpart of this Agreement from each of the Purchasers.
4. Neither the execution of this Agreement nor anything herein
contained is intended to be, nor shall be construed to be, an admission by the
Company or its officers and directors, The Malachi Group, Inc., or the
Purchasers of any liability to the other, now, in the past or in the future, or
an admission of the existence of facts upon which liability could be based. This
Agreement is contractual and it has been entered into to compromise disputed
claims and to avoid the uncertainty and expense of further litigation.
5. This Agreement shall constitute the full and complete agreement
between the parties concerning its subject matter and fully supersedes any and
all other prior agreements or understandings between the parties regarding the
subject matter thereto. This Agreement shall not be modified or amended except
by written instrument signed by all of the parties hereto.
15
Very truly yours,
HomeCom Communications, Inc.
By:
________________________________
▇▇▇▇▇▇ ▇▇▇, President
[SIGNATURES CONTINUED ON NEXT PAGE]
16
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Accepted and agreed to by the undersigned
Purchasers:
Sovereign Partners, L.P.
By: ________________________________
Print Name: __________________________
Print Title: ___________________________
Attest: ______________________________
Print Name: _________________________
Signed, sealed and delivered in the presence of :
________________________________
Notary Public
My commission expires: _______________
[NOTARIAL SEAL]
17
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Accepted and agreed to by the undersigned
Purchasers:
Dominion Capital Fund, Ltd.
By: ________________________________
Print Name: __________________________
Print Title: ___________________________
Attest: ______________________________
Print Name: _________________________
Signed, sealed and delivered in the presence of :
________________________________
Notary Public
My commission expires: _______________
[NOTARIAL SEAL]