Item 1.01 Entry into a Material Definitive Agreement.
The information included in Item 2.03 and Item 3.03 below is incorporated into this Item 1.01 by this reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off- Balance Sheet Arrangement of a Registrant.
Securities Purchase Agreements
The SOK Note, the SOK Warrant, the SOK Securities Purchase Agreement and the SOK Registration Rights Agreement contain terms and conditions substantially identical to that of the Investor Note, the Investor Warrant, the Investor Securities Purchase Agreement and the Investor Registration Rights Agreement (as defined below), respectively, which are described in greater detail below.
In addition to the Investor Convertible Notes Offering and the SOK Convertible Notes Offering, the Company may enter into one or more additional Securities Purchase Agreements (collectively, the "Affiliate Securities Purchase Agreements") with certain affiliates of the Company and certain persons with whom the Company has a pre-existing relationship (the "Affiliates") pursuant to which the Company may issue and sell (i) one or more senior convertible notes, in an original principal amount of up to
Except for the maturity date of the Affiliate Notes and the expiration date of the Affiliate Warrants, the Affiliate Notes, the Affiliate Warrants, the Affiliate Securities Purchase Agreements and the registration rights agreement(s) to be entered into between the Company and the Affiliates, relating to the Affiliate Conversion Shares and Affiliate Warrant Shares, will have terms and conditions identical to that of the Investor Note, the Investor Warrant, the Investor Securities Purchase Agreement and the Investor Registration Rights Agreement (as defined below), respectively, which are described in greater detail below.
The Investor Security Purchase Agreement and the SOK Security Purchase Agreement are collectively referred to herein as the "Security Purchase Agreements." The Investor Note and the SOK Note are collectively referred to herein as the "Notes." The Investor Warrant and the SOK Warrant are collectively referred to herein as the "Warrants."
The Notes mature on
Item 3.03 Material Modification of Rights of Security Holders.
· a waiver of the Company's obligation under Section 6.12 of the Preferred Stock
SPA to not enter into any contract, transaction or arrangement or issue any security or instrument that provides for forward pricing of shares of Common Stock (the "Forward Pricing Transaction Restriction") with respect to the Convertible Notes Offering and, following a Qualified Public Offering (as defined below), a waiver of the Forward Pricing Transaction Restriction for any subsequent offering of securities by the Company;
· a consent to the inclusion of the registration of the Additional Shares on a
registration statement or registration statements of the Company to be filed under the Securities Act of 1933, as amended, pursuant to Section 10 of the Preferred Stock SPA (the "Registration Statement"), covering the "
Registrable Securities" as defined under the Preferred Stock SPA (the " Preferred Stockholders Registrable Securities");
· a consent to further extend the Filing Deadline and the Effectiveness Deadline
(each as defined in the Certificate of Designation) pursuant to Section 10.1 of the Preferred Stock SPA such that the deadlines for the filing and effectiveness of the Registration Statement shall be the same as the applicable deadlines for the Convertible Notes Offering;
· an agreement by the Preferred Stockholders to a 90-day lock-up beginning from
the date of closing of an underwritten public offering of the Common Stock with gross offering proceeds of at least
$6.0 millionand the concurrent listing of the Common Stock on a national securities exchange (a "Qualified Public Offering") (the "Purchaser Lock-Up"); and
· a consent to automatically convert all outstanding shares of Preferred Stock
upon a Qualified Public Offering pursuant to the Certificate of Designation as
described further below.
In consideration of the waiver and consents provided by the Preferred Stockholders, the Company agreed:
· to issue additional shares of Common Stock to the Preferred Stockholders (A)
automatically upon the closing of a Qualified Public Offering, to the extent that (i) the Qualified Public Offering closes within six (6) months of the first closing of the Convertible Notes Offering ("Qualified Public Offering Deadline") and (ii) 70% of the public offering price per share of the Common Stock in the Qualified Public Offering (the "QPO Discount Price") is less than the Conversion Price floor contained in Section 7(e)(i) of the Certificate of Designation (the "Conversion Price Floor"), or (B) if a Qualified Public Offering has not been consummated by the Qualified Public Offering Deadline, upon the Preferred Stockholders' conversion of their shares of Preferred Stock to the extent that 70% of the volume weighted average price of the Common Stock on the principal Trading Market (as defined in the Certificate of Designation) of the Common Stock during the ten Trading Days (as defined in the Certificate of Designation) immediately preceding the Qualified Public Offering Deadline (the "Non-QPO Discount Price") is less than the Conversion Price Floor;
· to provide the Preferred Stockholders with the right to participate in the
Affiliate Convertible Notes Offering pro rata up to an aggregate of
$500,000based on their respective interests in the Preferred Stock; and
· to pay reasonable attorneys' fees and expenses of the Preferred Stockholders in
connection with certain transactions as described further in the waiver and consent of, and notice to, holder of preferred stock (the "Waiver and Consent").
The foregoing description of the Waiver and Consent does not purport to be complete, and is qualified in its entirety by reference to the form of such document filed as Exhibit 4.4 and incorporated herein by reference.
Item 8.01 Other Events.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description/Exhibit
4.1 Form of Senior Convertible Note
4.2 Form of Warrant
4.3 Form of Registration Rights Agreement
4.4 Form Waiver and Consent of, and Notice to, Holder of Preferred Stock of the
10.1 Form of Securities Purchase Agreement
99.1 Press Release, dated
of the Securities