Item 1.01. Entry into a Material Definitive Agreement.
On
The Note matures eighteen (18) months from its issuance date of
"Nasdaq Minimum Price" means the lower of: (i) the closing price of the Company's common stock on the trading day immediately preceding the date the value of the Company's common stock is measured; or (ii) the average closing price of the Company's common stock for the five (5) trading days immediately preceding the date the value of the Company's common stock is measured.
"Equity Conditions Failure" means that any of the following conditions has not
been satisfied on any given Redemption Date: (a) with respect to the applicable
date of determination, all of the shares being used to redeem the Note would be
freely tradable pursuant to an effective registration statement, under Rule 144
or without the need for registration under any applicable federal or state
securities laws (in each case, disregarding any limitation on conversion of this
Note); (b) the applicable Redemption Shares would be eligible for immediate
resale by the Investor; (c) no trigger event/event of default (as further
described in the Note) shall have occurred or be continuing under the Note; (d)
the average and median daily dollar trading volume of the Company's common stock
on its principal market for the previous twenty (20) trading days is greater
than
The Company may elect to prepay all or any portion of the outstanding balance on
the Note on or before the date that is one hundred five (105) days from the
issuance date without penalty. If the Company prepays all or any portion of the
outstanding balance on the Note on or after the date that is one hundred five
(105) days from the issuance date, it shall pay to Investor 110% of the portion
of the outstanding balance of the Note the Company elects to prepay; provided
however, if the Company repays the Note in full on the
If prior to the
The following are trigger events under this Note (each, a "Trigger Event"): (a)
the Company fails to pay any principal, interest, fees, charges, or any other
amount when due and payable hereunder; (b) a receiver, trustee or other similar
official shall be appointed over the Company or a material part of its assets
and such appointment shall remain uncontested for twenty (20) days or shall not
be dismissed or discharged within sixty (60) days; (c) the Company becomes
insolvent or generally fails to pay, or admits in writing its inability to pay,
its debts as they become due, subject to applicable grace periods, if any; (d)
the Company makes a general assignment for the benefit of creditors; (e) the
Company files a petition for relief under any bankruptcy, insolvency or similar
law (domestic or foreign); (f) an involuntary bankruptcy proceeding is commenced
or filed against the Company; (g) the occurrence of a fundamental transaction as
described in the Note without the Investor's prior written consent; (h) the
Company fails to timely establish and maintain the requires com stock share
reserve; (i) any money judgment, writ or similar process is entered or filed
against the Company or any subsidiary of the Company or any of its property or
other assets for more than
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At any time following the occurrence of any Trigger Event, the Investor, at its option, increase the outstanding balance of the Note by applying the Trigger Effect (subject to the limitation set forth below).
"Trigger Effect" means multiplying the outstanding balance of the Note as of the date the applicable Trigger Event occurred by (a) fifteen percent (15%) for each occurrence of any Major Trigger Event, or (b) five percent (5%) for each occurrence of any Minor Trigger Event, and then adding the resulting product to the outstanding balance of the Note as of the date the applicable Trigger Event occurred, with the sum of the foregoing then becoming the outstanding balance under the Note as of the date the applicable Trigger Event occurred; provided that the Trigger Effect may only be applied three (3) times hereunder with respect to Major Trigger Events and three (3) times hereunder with respect to Minor Trigger Events; and provided further that the Trigger Effect shall not apply to any Trigger Event pursuant to clause (m) of the definition of Trigger Event.
"Major Trigger Event" means any Trigger Event occurring under clauses (a) - (l) of the definition of Trigger Event.
"Minor Trigger Event" means any Trigger Event that is not a Major Trigger Event.
At any time following the occurrence of a Trigger Event, (i) the Investor may, at its option, send written notice to the Company demanding that the Company cure the Trigger Event within five (5) trading days. If the Company fails to cure the Trigger Event within the required five (5) Trading Day cure period, the Trigger Event will automatically become an event of default hereunder (each, an "Event of Default") and (ii) Investor will have the right to convert all or any portion of the outstanding balance of the Note into the Company's common stock at the common stock redemption price.
At any time and from time to time following the occurrence of any Event of Default, the Investor may accelerate this Note by written notice to the Company, with the outstanding balance of the Note becoming immediately due and payable in cash at the Mandatory Default Amount. Notwithstanding the foregoing, upon the occurrence of any Trigger Event described in clauses (b) - (f) of Section 4.1, an Event of Default will be deemed to have occurred and the outstanding balance of the Note as of the date of the occurrence of such Trigger Event shall become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice required by the Investor for the Trigger Event to become an Event of Default. At any time following the occurrence of any Event of Default, upon written notice given by the Investor to the Company, interest shall accrue on the outstanding balance of the Note beginning on the date the applicable Event of Default occurred at an interest rate equal to the lesser of eighteen percent (18%) per annum or the maximum rate permitted under applicable law.
The foregoing summary does not purport to be complete and is qualified in its entirety by the Securities Purchase Agreement and the Note, copies of which is attached hereto as Exhibit 10.1 and 10.2, respectively and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Securities Purchase Agreement dated
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