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EXHIBIT 10.26
AMENDMENT NO. 1
TO
SECURITIES PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT is entered into as
of the 29th day of August 2000 (the "Amendment") by and among the Investors
signatory hereto (each an "Investor" and together the "Investors") and
Interactive Telesis Inc., a Delaware corporation (the "Company").
WHEREAS, the parties entered into that certain Securities Purchase
Agreement dated June 12, 2000 (the "Agreement"), pursuant to which the Company
agreed to issue and sell to the Investors, and the Investors agreed to purchase
from the Company up to $4,500,000 of the Company's Common Stock and to receive
in connection therewith certain Repricing Rights (as defined below) and warrants
to purchase shares of the Company's Common Stock; and
WHEREAS, the parties desire herein to amend the Agreement to provide
that the Registrable Securities issued or issuable in connection with the Second
and Third Closings shall be covered by separate Registration Statements for each
Closing and that the Registration Statement already filed with the SEC should be
amended to cover only the Registrable Securities issued or issuable in
connection with the Initial Closing.
WHEREAS, the parties desire to amend the Agreement and the original
Registration Rights Agreement to give effect to these changes and to clarify
that the Purchase Price applicable to the securities issued at each Closing is
determined based on the market price of the Company's Common Stock prior to the
filing of the applicable Registration Statement covering those securities.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Amendment, the parties hereto agree as follows:
The definitions of the following terms contained in Article I of the
Agreement have been amended and restated in their entirety as follows:
"EFFECTIVE DATE" shall mean the date on which the SEC first declares effective a
Registration Statement registering the resale of the Registrable Securities
applicable to a particular Closing as set forth in the Registration Rights
Agreement.
"REGISTRATION RIGHTS AGREEMENTS" shall mean the agreements regarding the filing
of each of the Registration Statements for the resale of the Registrable
Securities applicable to each particular Closing, entered into between the
Company and the Investors as of the Initial Closing Date in the form annexed
hereto as Exhibit D, as amended.
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"REGISTRATION STATEMENT" shall mean one or more registration statements on Form
S-3 (if use of such form is then available to the Company pursuant to the rules
of the SEC and, if not, on such other form promulgated by the SEC for which the
Company then qualifies and which counsel for the Company shall deem appropriate,
and which form shall be available for the resale by the Investors of the
Registrable Securities to be registered thereunder in accordance with the
provisions of this Agreement, the Registration Rights Agreement and in
accordance with the intended method of distribution of such securities), for the
registration of the resale by the Investors of the Registrable Securities under
the Securities Act.
"REPURCHASE EVENT" means any one of the following events:
(1) For any period of five consecutive trading days commencing
on or after the Closing Date there shall be no closing bid price of the
Common Stock on the Principal Market;
(2) The Common Stock ceases to be listed for trading on any of
the NYSE, the AMEX, the Nasdaq, the Nasdaq SmallCap or the OTC;
(3) The Company fails to file a Registration Statement within 60
days after the applicable Closing Date;
(4) A Registration Statement is not effective within 180 days
after the applicable Closing Date;
(5) After any Effective Date, the inability for 30 or more days
(whether or not consecutive) of any holder of Securities covered by such
Registration Statement to sell such Securities pursuant to the
Registration Statement for any reason (unless such inability to sell
arises solely for reasons within the control of the holder or because of
the death or incapacity of the holder);
(6) The Company shall fail or default in the timely performance
of any obligation (A) to issue Repricing Shares as and when required by
Section 2.2, (B) to comply with Section 9.3 regarding the removal of
restrictive legends and stop transfer restrictions with respect to the
Securities or (C) under the Transaction Documents;
(7) Any consolidation or merger of the Company with or into
another entity (other than a merger or consolidation of a subsidiary of
the Company into the Company or a wholly-owned subsidiary of the
Company) where the common stock of such surviving company is not listed
for trading on the NYSE, the AMEX, the Nasdaq, the Nasdaq SmallCap or
the OTC, or any sale or other transfer of all or substantially all of
the assets of the Company;
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(8) The Company amends its Certificate of Incorporation or
Bylaws, without the consent of the Investors, which amendment materially
and adversely affects the rights of any holder of the Securities; or
(9) Termination of Don Cameron as Chief Executive Officer of the
Company (including a change or diminution of his duties as such),
whether by resignation, termination, death, disability or otherwise.
"SECOND CLOSING DATE" shall mean the date, if any, that is forty-five days after
the Effective Date of the original Registration Statement required to be filed
hereunder or, if such date is not a trading day, the first trading day
thereafter; provided, however, if the conditions to the Second Closing are not
satisfied or waived on or before 150 days after the Initial Closing Date, the
Investors shall have no obligation to purchase and the Company shall have no
obligation to sell the Securities on such date.
"THIRD CLOSING DATE" shall mean the date, if any, that is three months after the
Effective Date of the original Registration Statement required to be filed
hereunder or, if such date is not a trading day, the first trading day
thereafter; provided, however, if the conditions to the Third Closing are not
satisfied or waived on or before 180 days after the Initial Closing Date, the
Investors shall have no obligation to purchase and the Company shall have no
obligation to sell the Securities on such date.
Section 2.1 (e)(i) of the Agreement shall be amended and restated in its
entirety as follows:
(e) In addition to the conditions to Closing set forth in Section
2.1(c) above, each Investor's obligation hereunder to purchase the
Securities to be purchased by it on the Second Closing Date and on the
Third Closing Date shall be subject to the satisfaction, on or before
such Closing Date, of each of the following additional conditions,
provided that these conditions are for the Investor's sole benefit and
may be waived by it at any time in its sole discretion by providing the
Company with prior written notice thereof:
(i) all prior Registration Statements required to be filed
hereunder shall have been filed and the original Registration
Statement shall be effective on such Closing Date;
Sections 2.2(a) and 2.2(c) of the Agreement shall be amended and restated in its
entirety as follows:
(a) Repricing Rights. Subject to the provisions of Sections
2.2(g) and 2.2(h) below, at any time or times after the sooner of the
Effective Date relating to the original Registration Statement required
to be filed hereunder or the date 120
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days following the Initial Closing Date, the Investor shall be entitled
to exercise any whole number of Repricing Rights for fully paid and
nonassessable Repricing Shares in accordance with Section 2.2(c), at the
Repricing Rate. The Company shall not issue any fraction of a share of
Common Stock upon any exercise of Repricing Rights. All Repricing Shares
(including fractions thereof) issuable upon exercise of more than one
Repricing Right by a holder thereof shall be aggregated for purposes of
determining whether the exercise would result in the issuance of a
fraction of a share of Common Stock. If, after the aforementioned
aggregation, the issuance would result in the issuance of a fraction of
a share of Common Stock, such fraction of a share of Common Stock shall
be rounded up or down to the nearest whole share.
(c) Mechanics of Exercise of Repricing Rights. The Investor may
exercise such Repricing Rights at any time on or after the sooner of the
Effective Date relating to the original Registration Statement required
to be filed hereunder or the date 120 days following the Initial Closing
Date (and before the termination date set forth in Section 2.2(h)
hereof) in accordance with the following terms:
Section 9.3 of the Agreement shall be amended and restated in its entirety as
follows:
Section 9.3. No Other Legend or Stock Transfer Restrictions. No
legend other than the one specified in Section 9.1 has been or shall be
placed on the share certificates representing the Registrable Securities
and no instructions or "stop transfer orders," "stock transfer
restrictions," or other restrictions have been or shall be given to the
Company's transfer agent with respect thereto other than as expressly
set forth in this Article IX. After the Effective Date applicable to a
particular group of Securities, upon request of the Investor the Company
will substitute certificates without restrictive legend for certificates
for any Common Shares, Repricing Shares or Warrant Shares issued prior
to such Effective Date which bear restrictive legends and remove any
stop-transfer restriction relating thereto promptly, but in no event
later than three trading days after request for removal.
Section 13.11 of the Agreement shall be amended and restated in its entirety as
follows:
Section 13.11. Termination. If the Initial Closing shall not
have occurred on or before fifteen (15) business days from the date
hereof (or if the Second or Third Closings shall not have occurred on or
before 150 and 180 days, respectively, from the date hereof) due to the
Company's or an Investor's failure to satisfy the conditions set forth
in Article II above (and the nonbreaching party's failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option
to terminate this Agreement with respect to such breaching party at the
close of business on such date without liability of any party to any
other party; provided, however, that if this Agreement is terminated
pursuant to this Section
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13.11, the Company shall remain obligated to reimburse the non-breaching
Investors for the expenses described in Section 13.8 above.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 1 to Securities Purchase Agreement to be executed by the undersigned,
thereunto duly authorized, as of the date first set forth above.
COMPANY:
INTERACTIVE TELESIS INC.
By: /s/ Donald E. Cameron
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Name: Donald E. Cameron, President
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INVESTORS:
Address: BH Capital Investments, L.P.
175 Bloor Street East, 7th Floor, South Tower By: HB and Co., Inc. its General
Partner
Toronto, Ontario Canada M4W 3R8
Fax: 416-929-5314
By: /s/ Henry Brachfeld,
Total Common Stock to be purchased at: ---------------------------------
Initial Closing: $ 1,250,000 Name: Henry Brachfeld
Second Closing: $ 500,000 Authorized Signatory
Third Closing: $ 500,000
Address: Excalibur Limited Partnership
33 Prince Arthur Avenue By: Excalibur Capital Management, Inc.
Toronto, Ontario, Canada M5R 1B2 its General Partner
Fax: 416-964-8868
Total Common Stock to be purchased at: By: /s/ William Hechter, by Henry
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Initial Closing: $ 1,250,000 Brachfield, his attorney-in-fact
Name: William Hechter, President
Second Closing: $ 500,000
Third Closing: $ 500,000
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