Exhibit 4.1
MODIFICATION AGREEMENT
----------------------
THIS MODIFICATION AGREEMENT made as of the 26th day of June, 2000 by
and among ALTAIR INTERNATIONAL INC., an Ontario corporation (the "Company"), and
XXXXXXXX LLC, a Cayman Islands limited liability company ("Purchaser").
W I T N E S S E T H:
--------------------
WHEREAS, the parties hereto have previously executed and delivered the
Transaction Documents, as more particularly defined in the Securities Purchase
Agreement dated March 31, 2000 (a copy of which has been filed with the
Securities and Exchange Commission as an Exhibit to the Company's Form 8-K dated
April 7, 2000); and
WHEREAS, the parties have agreed to modify certain terms and provisions
of the Securities Purchase Agreement.
NOW , THEREFORE, it is agreed by and between the parties as follows:
1. Sections 2.4, 2.5 and 2.6 of the Securities Purchase Agreement are
hereby amended to read as follows:
1
"2.4 Second Repricing Period. The "Second Repricing Period" shall
commence on the day immediately following the First Repricing Period
and end thirty (30) days thereafter. If the lowest average Closing Bid
Price for any ten (10) (not necessarily consecutive) Business Days
during the Second Repricing Period (the "Second Repricing Price"), is
not equal to or greater than 120% of the Initial Closing Price, then up
to one-fourth (1/4) of the Initial Shares, and any Shares not repriced
during a prior Repricing Period, (such number of Shares shall be
determined by Purchaser and reported to the Company within ten (10)
days following the conclusion of the Second Repricing Period) shall be
repriced, (the "Second Repriced Shares"). The Company shall issue to
Purchaser the number of additional Shares as determined according to
the following formula:
((1.20 x Initial Closing Price) - Second Repricing Price) x (#
of the Second Repriced Shares) / Second Repricing Price."
"2.5 Third Repricing Period. (a) The "Third Repricing Period" shall
commence on the day immediately following the Second Repricing Period
and end thirty (30) days thereafter. If the lowest average Closing Bid
Price for any ten (10) (not necessarily consecutive) Business Days
during the Third Repricing Period (the "Third Repricing Price"), is not
equal to or greater than 125% of the Initial Closing Price, up to
one-fourth (1/4) of the Initial Shares, and any Shares not repriced
during a prior Repricing Period (such number of Shares shall be
determined by Purchaser and reported to the Company within ten (10)
days following the conclusion of the Third Repricing Period), shall be
repriced (the "Third Repriced Shares"). The Company shall issue to
Purchaser the number of additional Shares as determined according to
the following formula:
((1.25 x Initial Closing Price) - Third Repricing Price) x (#
of the Third Repriced Shares) / Third Repricing Price."
2
"2.6 Fourth Repricing Period. (a) The "Fourth Repricing Period" shall
commence on the day immediately following the Third Repricing Period
and end one hundred twenty (120) days thereafter. If the lowest average
Closing Bid for any ten (10) (not necessarily consecutive) Business
Days during one or more thirty (30) consecutive day periods as selected
by Purchaser, after the commencement of the Fourth Repricing Period is
not equal to or greater than 130% of the Initial Closing Price, all of
the Initial Shares not repriced during a prior Repricing Period, shall
be repriced (the "Fourth Repriced Shares"). Such number of Shares shall
be determined by Purchaser and reported to the Company within ten (10)
days following the conclusion of the relevant period. The Company shall
issue to Purchaser the number of additional Shares as determined
according to the following formula:
((1.30 x Initial Closing Price) - Fourth Repricing Price) x (#
of the Fourth Repriced Shares) / Fourth Repricing Price.
There may be more than one Repricing during the Fourth Repricing
Period."
2. Section 8.3 and 8.4 of the Securities Purchase Agreement are hereby
amended to read as follows:
"8.3 First Right. The Company shall not, directly or indirectly,
without the prior written consent of Purchaser, offer, sell, grant any
option to purchase, or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition) any of its
Common Stock or securities convertible into Common Stock at a price
that is less than the market price of the Common Stock at the time of
issuance of such security or investment (a "Subsequent Financing") for
a period of three hundred and sixty (360) days after the Effective
3
Date, or the redemption of all the Shares, whichever first occurs,
except (i) the granting of options or warrants to employees, officers,
directors and consultants, and the issuance of shares upon exercise of
options granted, under any stock option plan heretofore or hereinafter
duly adopted by the Company, (ii) shares issued upon exercise of any
currently outstanding warrants or options and upon conversion of any
currently outstanding convertible debenture, in each case disclosed in
Section 4.4 or Schedule 4.4, (iii) securities issued in connection with
the capitalization or creation of a joint venture with a strategic
partner, (iv) shares issued to pay part or all of the purchase price
for the acquisition by the Company of a person (which, for purposes of
this clause (iv), shall not include an individual or group of
individuals), (v) the offering of shares of Common Stock at a price
equal to the then-prevailing market, not exceeding 10% of the prior
week's trading volume; and (vi) shares issued in a bona fide public
offering by the Company of its securities, unless (A) the Company
delivers to Purchaser a written notice (the "Subsequent Financing
Notice") of its intention to effect such Subsequent Financing, which
Subsequent Financing Notice shall describe in reasonable detail the
proposed terms of such Subsequent Financing, the amount of proceeds
intended to be raised thereunder, the person with whom such Subsequent
Financing shall be effected, and attached to which shall be a term
sheet or similar document relating thereto and (B) Purchaser shall not
have notified the Company by 5:00 p.m. (New York time) on the tenth
(10th) Business Day after its receipt of the Subsequent Financing
Notice of its willingness to provide, subject to completion of mutually
acceptable documentation, financing to the Company on substantially the
terms set forth in the Subsequent Financing Notice. If Purchaser shall
fail to notify the Company of its intention to enter into such
negotiations within such time period, then the Company may effect the
Subsequent Financing substantially upon the terms and to the persons
(or affiliates of such persons) set forth in the Subsequent Financing
Notice; provided that the Company shall provide Purchaser with a second
Subsequent Financing Notice, and Purchaser shall again have the right
of first refusal set forth above in this Section 8.3, if the Subsequent
Financing subject to the initial Subsequent Financing Notice shall not
have been consummated for any reason on the terms set forth in such
Subsequent Financing Notice within sixty (60) Business Days after the
date of the initial Subsequent Financing Notice with the person (or an
affiliate of such person) identified in the Subsequent Financing
Notice. The rights granted to Purchaser in this Section 8.3 are not
subject to any prior right of first refusal given to any other person
except as disclosed on Schedule 4.4.
4
8.4 Certain Agreements. (a) The Company covenants and agrees that it
will not, without the prior written consent of Purchaser, enter into
any subsequent or further offer or sale of Common Stock or securities
convertible into Common Stock with any third party until the date which
is one hundred eighty (180) days after the Effective Date, unless all
of the Initial Shares and Additional Shares held by the Investor have
been redeemed by the Company.
(b) The provisions of Sections 8.3 and 8.4(a) will not apply to: (u)
the grant of any option, warrant or other right to acquire shares of
the Common Stock (including the exercise or conversion of any such
option, warrant or right) granted to employees, officers, directors and
consultants of the Company; (v) Common Stock issued pursuant to an
exemption from registration under the Securities Act, provided the
holder thereof is required to hold such Common Stock for at least one
year from the date of issuance; (w) an underwritten public offering of
shares of Common Stock; (x) the offering of shares of Common Stock at a
price equal to the then-prevailing market, not exceeding 10% of the
prior week's trading volume; (y) shares issued upon exercise of any
currently outstanding warrants or options and upon conversion of any
currently outstanding convertible debenture, in each case disclosed in
Section 4.4 or Schedule 4.4, (z) the issuance of securities (other than
for cash) in connection with a merger, consolidation, sale of assets,
disposition or the exchange of the capital stock for assets, stock or
other joint venture interests; and provided further, that such
securities would not be included in the Registration Statement relating
to the Initial Shares and a registration statement in respect of such
stock shall not be filed prior to sixty (60) days after the Effective
Date."
3. Except as specifically set forth herein, nothing contained herein
shall in any way be deemed to effect or modify the representations,
warranties, rights and obligations of the respective parties as set
forth in the Transaction Documents.
5
4. As hereby modified and amended, the Transaction Documents remain in
full force and effect.
5. The Company undertakes, within ten (10) Business Days, to file any
necessary amendment to the Registration Statement currently filed with
the Securities and Exchange Commission in respect of the resale of the
Shares.
WHEREFORE, the parties have executed this agreement as of the date
first above written.
ALTAIR INTERNATIONAL, INC.
By: ________________________________
Name: ________________________
Title: _________________________
XXXXXXXX LLC
By: _________________________________
Name: _________________________
Title: _________________________
