Exhibit 7.6
AMENDMENT NO. 1 TO
SECURITIES PURCHASE AGREEMENT
AMENDMENT NO. 1 (this "AMENDMENT") to the SECURITIES PURCHASE AGREEMENT,
dated as of January 1, 2006 (the "AGREEMENT"), by and between ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Partners, L.P., a Delaware limited partnership (the "PURCHASER"), and ▇▇▇▇▇▇▇
▇▇▇▇▇ Specialty Group, LLC, a Delaware limited liability company (the "SELLER").
A copy the Agreement is attached hereto as Exhibit A. All capitalized terms
used but not specifically defined herein shall have the meanings given to them
in the Agreement.
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller entered into the Agreement, whereby,
for valid consideration, the Seller sold to the Purchaser, and the Purchaser
purchased from the Seller, the Securities, subject to the terms provided
therein;
WHEREAS, it had been the intention of the non-member manager of the Seller
(the "NON-MEMBER MANAGER") to, pursuant to and in accordance with Section 4.4 of
the Operating Agreement of the Seller, distribute a portion of the Securities to
one of its members and to omit the same from the Securities subject to the
Agreement, and such portion of the Securities were sold to the Purchaser under
the Agreement by mutual mistake; and
WHEREAS, it had been the intention of both parties that the Purchaser
sell to the Seller, and the Seller purchase from the Purchaser, certain warrants
to purchase shares of Common Stock of the Company in the amounts, at the
exercise prices and expiring on the expiration dates as set forth on Schedule 1
hereto (the "ADDITIONAL WARRANTS"), and that the consideration for such sale to
be netted against the consideration for the sale of Securities from the Seller
to the Purchaser.
NOW, THEREFORE, in order to effectuate the Non-Member Manager's intention
to distribute a portion of the Securities to one of the Seller's members and to
omit the same from the Securities subject to the Agreement, and in order to
effectuate the parties' intention that the Purchaser convey the Additional
Warrants to the Seller, and in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. AMENDMENT. The Agreement is hereby amended as follows:
A. The term "SHARES" shall mean 4,385,500 shares of Common Stock.
B. The term "WARRANTS" shall mean currently exercisable warrants to
purchase up to 701,629 shares of Common Stock at an exercise price of $1.15 per
share and expiring on March 29, 2009, represented by Warrant Certificates
nos. W-8, W-59, W-64, W-65 and a portion of Warrant Certificate no. W-63. The
term "ADDITIONAL WARRANTS" shall mean currently exercisable warrants to purchase
up to 150,000 shares of Common Stock at an exercise price of $1.00 per share and
expiring on August 10, 2008, represented by a portion of Warrant Certificate
no. W-53, and currently exercisable warrants to purchase up to 27,000 shares of
Common Stock at an exercise price of $0.75 per share and expiring on May 31,
2010, represented by a portion of Warrant Certificate no. W-96.
C. Section 1.2 of the Agreement shall be amended and restated in its
entirety to read as follows:
"1.2 SALE AND PURCHASE OF ADDITIONAL WARRANTS. Purchaser
hereby sells to Seller, and Seller shall purchase from the
Purchaser, the Additional Warrants, for the Additional Warrant
Purchase Price defined in Section 1.3 below."
D. The following shall be inserted as a new Section 1.3 of the
Agreement:
1.3 PURCHASE PRICE. The purchase price for the Shares shall
be the cancellation by the Purchaser of $4,666,172.00 in current
indebtedness owed by the Seller to the Purchaser pursuant to that
certain grid note of the Seller, dated August 11, 1999 (the "GRID
NOTE"). The purchase price for the Warrants shall be the
cancellation by the Purchaser of $90,498.21 in current indebtedness
owed by the Seller to the Purchaser pursuant to the Grid Note, net
of $30,532.40 due to the Purchaser from the Seller as consideration
for the Additional Warrants (the "ADDITIONAL WARRANT PURCHASE
PRICE"), reflecting a net purchase price for the Warrants of
$59,965.81 and an aggregate net purchase price for the Shares and
the Warrants of $4,726,137.81 (the "PURCHASE PRICE").
E. The following shall be inserted as new Sections 3.6 and 3.7 of the
Agreement:
3.6 INVESTMENT REPRESENTATIONS. The Seller is acquiring the
Additional Warrants for the Seller's own account, for investment and
not with a view to, or for resale in connection with, any
distribution of such Additional Warrants or any part thereof,
subject to any registration rights of such Additional Warrants.
3.7 INVESTMENT EXPERIENCE; ACCESS TO INFORMATION. The
Seller (i) is an "accredited investor" as that term is defined in
Rule 501(a) promulgated under the Securities Act, (ii) is able to
fend for itself in transactions of the type contemplated by this
Agreement, (iii) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of this investment, (iv) has the ability to bear the economic risks
of this investment and understands that it must bear such economic
risks for an indefinite period, (v) has been afforded the
opportunity to ask questions of, and to receive answers from, the
Company and to obtain any additional information, to the extent the
Company had such information or could have acquired it without
reasonable effort or expense, necessary for the Seller to make an
informed investment decision with respect to its purchase of the
Additional Warrants and (vi) acknowledges that the Additional
Warrants are "restricted securities" under the Securities Act.
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F. The following shall be inserted as new Sections 4.6 and 4.7 of the
Agreement:
4.6. OWNERSHIP. The Purchaser is the sole record holder and
beneficial owner of the Additional Warrants, and the Additional
Warrants are free and clear of all pledges and restrictions on
transfer, other than restrictions of general applicability under the
Securities Act and state securities laws. The Purchaser has not
granted any person any rights under and is not a party to (or has,
as of the date hereof, irrevocably waived all rights under) any
option, warrant, right, agreement or commitment providing for the
disposition or acquisition of any of the Additional Warrants (other
than this Agreement). The Purchaser is not a party to (or has, as
of the date hereof, irrevocably terminated) any voting trust, proxy
or other agreement or understanding with respect to the voting of
any of the Additional Warrants. The resale of such Additional
Warrants by the Purchaser as provided herein shall vest the Seller
with good and unencumbered title to such Additional Warrants.
4.7 INVESTMENT INTENT. The Purchaser acquired the
Additional Warrants for its own account, for investment and not with
a view to, or for resale in connection with, any distribution of
such Additional Warrants or any part thereof.
2. NO OTHER EFFECT. Except as expressly modified hereby, the Agreement shall
remain in full force and effect.
3. NONCONTRAVENTION. Each party hereto severally represents and warrants
that the execution and delivery by it of this Amendment and the performance by
it of its obligations under the Agreement, as amended hereby, do not and will
not (with or without the giving of notice or the passage of time) (a) contravene
or conflict with or constitute a violation of any provision of law applicable to
it or its properties, assets or activities, (b) result in the creation or
imposition of any lien upon any of its properties or assets or (c) constitute a
default or breach under or a violation of, or give rise to any right of
termination, cancellation or acceleration of, any of its organizational
documents or any material contract or agreement to which it is a party or by
which it is otherwise bound.
4. GOVERNING LAW/COUNTERPARTS. This Amendment shall be deemed to have been
made under, and shall be governed by, the laws of the State of New York
applicable to contracts entered into and to be performed solely within such
State. This Amendment may be executed in counterparts, each of which shall be
deemed an original and both of which shall constitute a single agreement.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date written below.
Dated: October 25, 2006
▇▇▇▇▇▇▇ ▇▇▇▇▇ SPECIALTY GROUP, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name:▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:Non-Member Manager
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ PARTNERS, L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name:▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:General Partner
SCHEDULE 1
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ADDITIONAL WARRANTS
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CERTIFICATE NUMBER AMOUNT EXERCISE PRICE EXPIRATION DATE
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W-53 150,000 $1.00 08/10/2008
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W-96 27,000 $0.75 05/31/2010
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