EXECUTION VERSION
WAIVER AND AMENDMENT AGREEMENT
This WAIVER AND AMENDMENT AGREEMENT (this "WAIVER AND AMENDMENT ")
dated as of December ___, 2004, is entered into among TechAlt, Inc., a Nevada
corporation (f.k.a. Dendo Global Corp.) (the "COMPANY "), and the several
undersigned investors in the Company (each, individually, an "INVESTOR",
collectively, the "INVESTORS ").
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of
August 24, 2004 (the "SECURITIES PURCHASE AGREEMENT "), by and among the Company
and the Investors, the Company sold to the Investors (i) 500,000 shares of the
Company's Series A Convertible Preferred Stock, par value $0.001 per share (the
"SERIES A PREFERRED"), (ii) warrants to purchase 1,000,000 shares of the
Company's common stock, par value $0.001 per share ("COMMON STOCK"), (iii)
Additional Investment Rights to purchase 3,500,000 additional shares of Series A
Preferred, and (iv) additional warrants to purchase 7,000,000 shares of Common
Stock (together (i) through (iv), the "OFFERING "). Capitalized terms used
herein and not otherwise defined shall have the meaning ascribed to them in the
Securities Purchase Agreement; WHEREAS, in connection with the settlement (the
"SETTLEMENT ") of certain litigation instituted by Xxxx Xxxxxxx and Services By
Designwise, Ltd., an Illinois corporation (collectively, "MASANEK"), the Company
and Masanek intend to enter into a (i) Settlement Agreement, (ii) Sales
Agreement, (iii) Consulting Agreement, (iv) Right of First Refusal Agreement,
(v) Warrant, (vi) Secured Convertible Promissory Note, (vii) Registration Rights
Agreement, and (viii) Agreement and Plan of Merger among the Company, Technology
Alternatives, Inc., TechAlt Acquisitions, Inc., Xxxxx X. Xxxxxxx and Xxxx
Xxxxxxx (the "MERGER"), of which true and complete copies have been delivered to
the Investors on or prior to the date hereof (collectively, the "MASANEK
SETTLEMENT DOCUMENTS"). Further, and also in connection with the Settlement, the
Company intends to enter into an Agreement to Rescind Intellectual Property
License Agreement with Technology Alternatives, Inc., of which a true and
complete copy has been delivered to the Investors on or prior to the date hereof
(the "RESCISSION AGREEMENT," and, together with the Masanek Settlement
Documents, the "SETTLEMENT DOCUMENTS ");
WHEREAS, in connection with completing the settlement and the
Settlement Documents, the Company has requested, and subject to the terms and
conditions of this Waiver and Amendment, the Investors have agreed to waive
certain provisio ns of the Transaction Documents (as defined in the Securities
Purchase Agreement) described below; and
WHEREAS, in order to facilitate the settlement and the consummation of
the transactions contemplated by the Settlement Documents, the parties hereto
further agree to amend certain provisions of the Transaction Documents as
described below.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions; References; Interpretation. Unless specifically defined
herein, each term used herein (including in the Recitals hereof) which is
defined in the Transaction Documents shall have the meaning assigned to such
term in the Transaction Documents.
2. Waivers. The Investors hereby waive compliance by the Company with the
following sections of the following agreements only as those provisions relate
to the Settlement Documents and the consummation of the transactions
contemplated thereby:
(a) Securities Purchase Agreement. (i) The provisions of Section 4(l)
of the Securities Purchase Agreement pertaining to Fundamental Transactions are
hereby waived only to the extent such provisions would apply to the Merger,
pursuant to which more than 50% of the shares of the Company will be acquired by
Xxxxx X. Xxxxxxx (4,867,440), Xxxx Xxxxxxx (4,676,560) and Xxxxxx Investment
Advisors, LLC (500,000) (collectively, the "MERGER SHARES")(1), in accordance
with the Masanek Settlement Documents; (ii) the provisions of Section 4(o) of
the Securities Purchase Agreement pertaining to the Additional Issuances of
Securities are hereby waived only to the extent such provisions would apply to
the issuance (A) by the Company to Masanek, in accordance with the terms of the
Masanek Settlement Documents, of (i) a Warrant to purchase 750,000 shares of
common stock at an exercise price of $1.00 per share, (ii) the Merger Shares,
(iii) a Secured Convertible Promissory Note in the principal amount of
$1,150,000, convertible into shares of common stock at the conversion price of
$1.00 per share, and (B) of Series A Preferred Stock and Warrants contemplated
to be offered to certain individual investors (the "OUTSIDE INVESTORS ") not
originally a party to the Transaction Documents (the "OUTSIDE INVESTOR
SECURITIES"), on the same terms and conditions as the Series A Preferred Stock
and Warrants offered pursuant to the Transaction Documents, which aggregate of
amount of investment by the Outside Investors shall not exceed $820,000 (i.e.,
820,000 shares of Series A Preferred Stock and Warrants to purchase 1,640,000
shares of common stock with an exercise price of $1.00 per share) (the
securities described in (ii)(A) and the Outside Investor Securities,
collectively the "WAIVED SECURITIES"), and (iii) the provisions of Section 5(b)
of the Securities Purchase Agreement requiring that the Company give no
instructions to the Transfer Agent other than the Irrevocable Transfer Agent
Instructions (as defined therein) are hereby waived only to the extent such
provisions would apply to the irrevocable transfer agent instructions to be
given by the Company to its transfer agent regarding the issuance of the Outside
Investor Securities.
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(1) Pursuant to the terms of the Rescission Agreement, the 10,044,000 shares of
the Company's common stock issued pursuant to the Intellectual Property License
Agreement between the Company and Technology Alternatives, Inc. (the " LICENSE
AGREEMENT") will be cancelled. 10,044,000 shares will then be issued pursuant to
the Agreement and Plan of Merger among the Company, Technology Alternatives,
Inc., TechAlt Acquisitions, Inc., Xxxxx X. Xxxxxxx and Xxxx Xxxxxxx (" MERGER
AGREEMENT"). Accordingly, there will be no dilution to the Investors on account
of the Merger Shares and post-Merger the Company will have 12,000,000 shares of
common stock issued and outstanding, the same amount of shares issued and
outstanding immediately following the License Agreement and immediately prior to
the execution of the Transaction Documents.
(b) Registration Rights Agreement. The provisions of Section 2(b)
of the Registration Rights Agreement pertaining to the inclusion of securities
other than Registrable Securities on any Registration Statement are hereby
waived to only permit registration of (i) 130% of the 6,576,560 shares of the
common stock of the Company being issued to Masanek, (ii) 130% of the 3,280,000
shares of Common Stock which may be issued to the Outside Investors and (iii)
2,880,000 shares of Common Stock which may be issued to Sunrise Securities Corp.
and/or Sunrise Financial Group, Inc.
(c) The Warrants and Additional Warrants. (i) Sections 2(a) of the
Warrants and Additional Warrants pertaining to Adjustments upon issuance of
Common Stock are hereby waived only so far as those provisions relate to the
issuance of the Waived Securities, and (ii) Section 4(b) of the Warrants and
Additional Warrants pertaining to Fundamental Transactions are hereby waived
only so far as those provisions relate to the Merger.
(d) Additional Investment Rights. Section 2(b) of the Additional
Investment Right is hereby waived only insofar as those provisions relate to the
Merger.
(e) Lock-Up Agreement. The restrictions in clauses (1) and (2) of
the second paragraph of the Lock-Up Agreement dated August 18, 2004 (the
"LOCK-UP AGREEMENT "), among Xxxxx X. Xxxxxxx and the Investors are hereby
waived only insofar as these restrictions would prohibit the cancellation in
connectio n with the Rescission Agreement of shares of common stock owned by
Xxxxx X. Xxxxxxx.
(f) Certificate of Designations, Preferences and Rights of the
Series A Convertible Preferred Stock, as filed with the State of Delaware on
August 23, 2004, 2004 (the "CERTIFICATE "). (i) Section 2(e)(i) of the
Certificate is hereby waived only insofar as that provision relates to the
issuances of the Waived Securities; and (ii) Section 2(e)(iv)(C) of the
Certificate is hereby waived only to the extent such section would require
Notice of a Fundamental Transaction in connection with the Merger.
3. Waivers Regarding Adjustments Unrelated to the Settlement Documents.
The Investors hereby waive compliance by the Company with the following section
of the following agreements only as that provision relates to the shares of
common stock, warrants and options to be issued to Sunrise Securities Corp. or
Sunrise Financial Group, Inc. (collectively, "SUNRISE") pursuant to the
Financial Advisory and Investment Banking Agreement and Public Relations
Retainer Agreement with the Company.
(a) Securities Purchase Agreement. The provisions of Section 4(o)
of the Securities Purchase Agreement pertaining to the Additional Issuances of
Securities are hereby waived only to the extent such provisions would apply to
the issuance to Sunrise of (i) 840,000 shares of common stock and warrants to
purchase 800,000 shares of common stock (exercise price of $.50 per share)
pursuant to the Financial Advisory and Investment Banking Agreement, and (ii)
240,000 shares of common stock and options to purchase 1,000,000 shares of
common stock (exercise price of (a) $.50 per share on options to purchase
500,000 shares of common stock and (b) $1.00 per share on options to purchase
500,000 shares of common stock) pursuant to the Public Relations Retainer
Agreement (collectively, the "SUNRISE SECURITIES").
(b) The Warrants and Additional Warrants. Sections 2(a) of the
Warrants and Additional Warrants pertaining to Adjustments upon issuance of
Common Stock are hereby waived only so far as those provisions relate to the
issuances of the Sunrise Securities. (c) The Certificate. Section 2(e)(i) of the
Certificate is hereby waived only insofar as that provision relates to the
issuances of the Sunrise Securities.
4. Amendments.
(a) Securities Purchase Agreement.
(i) Section 4(g) of the Securities Purchase Agreement is
hereby amended by deleting from the last sentence thereof the amount of $10,000
and substituting in lieu thereof the amount of $47,750.
(ii) Section 7(b) of the Securities Purchase Agreement is
hereby amended by replacing the opinion of the Xxxx Law Group, PLLC (the "XXXX
LAW GROUP") referenced as Exhibit G thereto, with the opinion of the Xxxx Law
Group in the form attached hereto as Exhibit A.
(iii) Section 7(j) is hereby amended by deleting such
paragraph in its entirety, and substituting in lieu thereof, the following:
"The Company shall have consummated the Agreement and Plan of
Merger and Reorganization among the Company, Technology
Alternatives, Inc., Xxxxx X. Xxxxxxx and Xxxx Xxxxxxx in
accordance with the terms and conditions of the Agreement and
Plan of Merger and Reorganization attached hereto as Exhibit
B. "
5. Representations and Warranties. The Company hereby represents and
warrants to the Investors as follows:
(a) This Waiver and Amendment constitutes the legal, valid and
binding obligations of the Company, enforceable against it in accordance with
its terms.
(b) The Company is entering into this Waiver and Amendment on the
basis of its own investigation and for its own reasons, without reliance upon
the Investors or any other person.
(c) The Company's obligations under the Transaction Documents are
not subject to any defense, counterclaim, set-off, right of recoupment,
abatement or other claim.
6. Miscellaneous.
(a) The Company acknowledges and agrees that the execution and
delivery by the Investors of this Waiver and Amendment shall not be deemed (i) a
waiver of any provision of any Transaction Document by any Investor except as
explicitly set forth herein, or (ii) to create a course of dealing or an
obligation to execute similar waivers or amendments under the same or similar
circumstances in the future.
(b) This Waiver and Amendment shall be binding upon and inure to
the benefit of the parties (i) hereto, and (ii) to the Transaction Documents,
and their respective successors and assigns.
(c) This Waiver and Amendment shall be governed by and construed
in accordance with the law of the State of New York, provided that the Investors
shall retain all rights arising under Federal law.
(d) This Waiver and Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt of a facsimile transmitted document purportedly bearing the
signature of a Investor or the Company shall bind such Investor or the Company,
respectively, with the same force and effect as the delivery of a hard copy
original.
(e) The amendments described herein shall become effective, and
shall be deemed to be effective as of the date hereof. Except as otherwise
expressly modified herein, the Transaction Documents sha ll remain unchanged and
is in full force and effect.
(f) If any term or provision of this Waiver and Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Waiver and
Amendment.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be duly executed and delivered in New York, NY by their proper and
duly authorized officers as of the day and year first above written.
THE COMPANY:
TECHALT, INC.
By:
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Name:
Title:
THE INVESTORS:
Smithfield Fiduciary, LLC
By:
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Name: Xxxx X. Chill
Title: Authorized Signatory
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Xxxxx Xxxxxxxx
Cherokee Holdings II, LLC
By:
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Name: Xxxxx X. Xxxxx
Title: Secretary and Treasurer
Cranshire Capital, LP
By: DOWNSVIEW CAPITAL, The General Partner
By:
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Name: Xxxxxxxx Xxxxx
Title: President
Crestview Capital Master, LLC
By:
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Name: Xxxxxxx Xxxxx
Title:
DKR SoundShore Oasis Holding Fund, Ltd.
By:
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Name: Xxxxx Xxxxxxxx
Title:
Iroquois Capital, LP
By:
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Name: Xxxxxxx Chill
Title:
