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EXHIBIT 10.14
WENTWORTH LLC
XXXXXXXXX XXXXXX
XXXX XXX XXXX
XXXXX XXXXXX, XXXXXX XXXXXXX
December 29, 1999
ESAT, Inc.
Bldg. G
00000 Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: President
Re: ESAT, Inc. (the "Company")
Gentlemen:
Reference is made to the Securities Purchase Agreement (the
"Purchase Agreement"), of even date hereof, between the Company and the
undersigned (the "Purchasers").
During the one year period following the Effective Date, the
Purchasers additionally commit, subject to and upon the terms and conditions
hereof, to purchase from the Company, and the Company shall sell to the
Purchasers shares of Common Stock (the "Additional Shares") for an aggregate
purchase price of up to $20,000,000 at a price equal to 90% of the five lowest
closing bid prices of the Common Stock (not necessarily consecutive) for the ten
(10) trading days prior to each Additional Financing Notice.
The commitment of the Purchasers set forth in this letter is
subject to the terms, conditions and qualifications set forth below:
1. Additional Documentation. In order to effectuate a purchase
and sale of the Additional Shares, prior to their issuance, the Company and the
Purchasers shall enter into the following agreements: (a) a securities purchase
agreement (the "Additional Purchase Agreement") setting forth the terms and
conditions of the purchase and sale, and (b) a registration rights agreement
identical to the Registration Rights Agreement (the "Additional Registration
Rights Agreement", and together with the Additional Purchase Agreement,
collectively the "Additional Transaction Documents"). The Purchasers shall
prepare the Additional Transaction Documents, which shall be in form mutatis
mutandis to the initial Transaction Documents.
2. The Additional Closing. (i) The Company shall have the right
to deliver one or more written notices to the Purchaser (the "Additional
Financing Notice") requiring such party to
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buy the Additional Shares for an aggregate purchase price of $20,000,000 (the
"Additional Purchase Price"), but not to exceed $2,000,000.00 per Additional
Financing Notice. The Company agrees to deliver one or more Additional Financing
Notices for a minimum of $2,500,000. An Additional Financing Notice may be
delivered no earlier than fifteen (15) Trading Days following the Effective Date
or the prior Additional Financing Notice. The closing of the purchase and sale
of the Additional Securities (the "Additional Closing") shall take place at the
offices of Xxxxxxx & Xxxxxx, Esqs., Xxxxx 0000, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000 on the fifth (5th) Business Day after the Additional Financing Notice is
received by the Purchasers or the Company, as the case may be, or on such other
date as otherwise agreed to by the parties hereto; provided, however, that in no
case shall the Additional Closing take place unless and until all of the
conditions listed in Section ___ of this letter and the Additional Purchase
Agreement shall have been satisfied by the Company or waived by the Purchasers.
The date of the Additional Closing is hereinafter referred to as the "Additional
Closing Date." Notwithstanding anything to the contrary contained in this
letter, each Purchaser may designate an Affiliate thereof to acquire all or any
portion of the Additional Securities.
(ii) At the Additional Closing, the parties shall deliver
or shall cause to be delivered the following: (a) the Company shall deliver to
(x) each Purchaser or its designated Affiliate, (1) the number of Additional
Shares registered in the name of such Purchaser or its designated Affiliate,
representing the shares of Common Stock to be issued and sold to such Purchaser
at the Additional Closing; (2) a legal opinion in form and substance acceptable
to the Purchasers, and (3) executed Additional Transaction Documents and the
Transfer Agent Instructions relating to the Additional Securities, and (4) a
five (5) year transferable divisible warrant in the form of the Transaction
Documents to purchase shares equal to 15% of the Additional Financing Notice
with an exercise price equal to 125% of the average of the closing bid prices
for the five day trading period immediately preceding the Additional Closing
Date with provisions for cashless exercise at the Purchaser's option and with
"piggy back" registration rights, (y) to Xxxxxxx & Prager, Esqs., $12,500 at the
First Additional Closing and $2,500 at each Additional Closing thereof, as
reimbursement of the legal fees and expenses incurred by the Purchasers to
prepare the Additional Transaction Documents, which amount shall be deducted by
the Purchasers from the amount due to the Company for the Additional Securities
and shall be paid directly to Xxxxxxx & Xxxxxx, Esqs., (z) the fees of Xxxxxxx &
Associates; and (b) each Purchaser shall deliver to the Company (1) its pro rata
portion of the Additional Purchase Price, in United States dollars in
immediately available funds by wire transfer to an account designated in writing
by the Company for such purpose prior to the Additional Closing Date and (2) the
executed Additional Transaction Documents.
3. Conditions precedent to the Additional Closing.
Notwithstanding anything to the contrary contained in this letter, the
commitment of a Purchaser to acquire the Additional Securities is subject to the
satisfaction or waiver by the Purchasers of each of the following conditions:
(a) Closing of Initial Shares and Initial Warrants. The Closing
shall have occurred;
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(b) Performance by the Company. The Company shall have performed,
satisfied and complied with all covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by the
Company between the Closing Date and the Additional Closing Date and no Event
(as defined in the Registration Rights Agreement ) shall have occurred;
(c) Underlying Shares Registration Statement. The Additional
Shares Registration Statement shall have been declared effective under the
Securities Act by the Commission and shall have remained effective at all times,
not subject to any actual or threatened stop order or subject to any actual or
threatened suspension at any time prior to the Additional Closing Date;
(d) Shares of Common Stock. The Company shall have duly reserved
the number of shares of Common Stock as required by the Additional Transaction
Documents;
(e) Closing Threshold. For the fifteen (15) Trading Days
immediately preceding both the Additional Financing Notice and the Additional
Closing Date, the weighted dollar trading volume of the Common Stock, based on
the Closing Bid Price on the Principal Market, shall be at least 1,250% of the
amount of the Additional Financing Notice and the average of the Per Share
Market Value for such fifteen (15) Trading Day period shall be greater than
$3.00.
(f) Deliveries pursuant to Additional Transaction Documents. At
the Additional Closing, the Company shall deliver the Additional Securities and
executed Additional Transaction Documents relating to the Additional Securities
in the forms contemplated by this letter.
(g) Restriction on Additional Financing. [T/B/D] Restriction on
Future Financing. (i) The Company covenants and agrees that it will not, without
the prior written consent of the Purchaser, enter into any subsequent or further
offer or sale of Common Stock or securities convertible into Common Stock
(collectively, "New Common Stock") with any third party on any date which is
thirty (30) days prior or subsequent to any Additional Closing Date.
(ii) The provisions of subparagraph (g)(i) will not apply
to (w) Common Stock issued pursuant to an exemption from registration under the
Securities Act of 1933; (x) an underwritten public offering of shares of Common
Stock or Preferred Stock; (y) an offering of convertible Preferred Stock at
market or above; or (z) the issuance of securities (other than for cash) in
connection with an acquisition, merger, consolidation, sale of assets,
disposition or the exchange of the capital stock for assets, stock or other
joint venture interests.
4. Governing Law. This letter shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.
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5. Execution. This letter may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
Please indicate your agreement with the foregoing by executing a
countersigned copy of this letter and returning the same to our attention,
whereupon effective immediately thereafter this letter shall become a legally
valid and binding agreement between the Purchasers and the Company.
We look forward to our continuing relationship.
Sincerely,
WENTWORTH LLC
By:_______________________
Name:
Title:
Agreed and accepted
December 29, 1999
ESAT, INC.
By: _______________________
Name:
Title:
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