MODIFICATION AND CONSENT AGREEMENT
Exhibit
10.17
This
Modification and Consent Agreement is made as of the ____ day of May, 2010
(“Agreement”)
among China Yongxin Pharmaceuticals Inc. (formerly Digital Learning
Management Corporation, Nutradyne Group, Inc. and FreePCSQuote), a
Delaware corporation (the “Company”), the signatories
hereto who are subscribers (“Prior Subscribers”) under
certain Subscription Agreements and additional transaction agreements with the
Company dated January 22, 2010 and March 4, 2010 (“Subscription Agreements”) and as
amended pursuant to the Joinder Agreement dated March 4, 2010 and the
subscribers to the Third Closing (as defined below) (each a “Third Closing Subscriber” and
collectively the “Third Closing
Subscribers”) (collectively Prior Subscribers and Third Closing
Subscribers are “Subscribers”).
WHEREAS, on January 25, 2010
(the “First Closing”)
and March 4, 2010 (the “Second
Closing”), the Company consummated private placements of its
convertible notes and warrants with Subscribers pursuant to Transaction
Documents (as defined in the Subscription Agreement) and Joinder
Agreement for total consideration of $825,000.
WHEREAS, the Company is
contemplating raising an additional $250,000 (the “Purchase Price”) by issuing
its convertible notes and warrants in a third closing (“Third Closing”) to the Third
Closing Subscribers, with terms similar to the notes and warrants issued in the
First Closing and Second Closing.
WHEREAS, each of the Third
Closing Subscribers was an investor in either the First Closing or the Second
Closing, and each of them are parties to the Transaction Documents in the
foregoing closings.
For good
and valuable mutual consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. Unless
otherwise defined herein, all capitalized terms shall have the meanings ascribed
to them in the Transaction Documents and Joinder Agreement.
2. The
undersigned consent to the Third Closing and to the amendment of all Schedules,
Exhibits and documents including but not limited to the Security Agreement,
Subsidiary Guaranty and Lockup Agreements to include the Third Closing and
authorize the Collateral Agent to make additional filings at the discretion of
the Collateral Agent to memorialize the security interest to be granted, pari
pasu among Subscribers including investors in the Third Closing.
3. Annexed
hereto is an Amended and
Restated Schedule A to the Security Agreement and Collateral Agent
Agreement which includes the Third Closing. Also annexed hereto is an
Amended and Restated Subsidiary Guaranty (Exhibit A), an Amended and Restated
Form of Lockup Agreement (Exhibit B) and Escrow Agreement (Exhibit C) to be
executed by the parties hereto, in connection with the Third
Closing.
4. The
Third Closing shall take effect upon the date that the Purchase Price of not
less than $250,000 is transmitted by wire transfer or otherwise credited to or
for the benefit of the Company, and the Notes and Warrants are issued to the
Third Closing Subscribers in connection therewith (the “Third Closing Date”), upon
satisfaction of all conditions to Closing set forth in the Transaction Documents
and in this Agreement. The amount of the Purchase Price and all
documents to be delivered hereunder will be deposited and held with the Escrow
Agent pursuant to the Escrow Agreement and released pursuant to the Escrow
Agreement. The Notes and Warrants to be delivered on the Third
Closing are included in the definition of “Securities” in the
Subscription Agreements.
5. All
the representations, warranties and undertakings made by the Company contained
in the Transaction Documents as of the First Closing and Second Closing dates
are hereby made by the Company to the Third Closing Subscribers, as if such
representations, warranties and undertakings were made and given on the Third
Closing Date.
6. All
the representations, warranties and undertakings made by the Subscribers
contained in the Transaction Documents as of the First Closing and Second
Closing dates are hereby made by the Third Closing Subscribers as of the Third
Closing Date, as if such representations, warranties and undertakings were also
made and given on the Third Closing Date.
7. The
Third Closing Subscribers will execute a Subscription Agreement, this Agreement
and the Escrow Agreement, and deliver the signatures to the Escrow Agent to be
held pursuant to the Escrow Agreement.
8. All
of the covenants and conditions set forth in the Subscription Agreements are
hereby adopted and renewed by the Company as of and for the Third Closing
Date.
9. All
of the covenants and conditions set forth in the Subscription Agreements are
hereby adopted and renewed by the Third Closing Subscribers as of and for the
Third Closing Date.
10. On
or before the Third Closing Date, the Company will deliver to the Third Closing
Subscribers the Notes and Warrants issued as of the Third Closing Date in the
amounts set forth on the Amended and Restated Schedule A hereto in connection
with the Purchase Price which the Third Closing Subscribers will deposit with
the Escrow Agent on or before the Third Closing Date.
11. The
Maturity Date of the Notes to be issued on the Third Closing Date will be the
same as the Maturity Date of the Notes issued on the Closing Date.
12. The
Warrants to be issued on the Third Closing Date will be identical to the
Warrants issued on the Closing Date except as to the Issue Date as defined in
the Common Stock Purchase Warrant.
13. On
or before the Third Closing Date, the Company will deliver to the Third Closing
Subscribers the legal opinion described in Section 6 of the Subscription
Agreement in relation to the Third Closing, Purchase Price, Notes, and Warrants
to be delivered on the Third Closing Date, which opinion will be substantively
identical to the legal opinion delivered in connection with the
Closing.
14. The
attorney for the Third Closing Subscribers will receive additional legal fees
from the Company of $10,000 which will be payable on the Closing Date out of the
Escrowed Payment (as defined in the Escrow Agreement). The
undersigned consent to the amendment of all Schedules, Exhibits and documents to
include the Purchase Price.
15. The
broker for the Third Closing Subscribers will receive an additional $20,000
which will be payable on the Closing Date out of the Escrowed Payment (as
described in the Escrow Agreement). The broker for the Third Closing
Subscribers will also be issued a broker’s warrant for the purchase of up to
37,500 shares of common stock, and will receive 4% of the proceeds from the
exercise of the investors’ Warrants (if any).
16. The
parties hereto agree to expeditiously proceed with the Third
Closing.
17. The
Company undertakes to make a public announcement on Form 8-K describing the
terms of this Agreement not later than the fourth business day after the Third
Closing Date.
18. Subject
to the modifications and amendments provided herein, the Transaction
Documents shall remain in full force and effect, including but not limited to
the accrual of interest and liquidated damages, if any. Except as
expressly set forth herein, this Agreement shall not be deemed to be a
waiver, amendment or modification of any provisions of the Transaction
Documents or of any right, power or remedy of the Subscribers, or
constitute a waiver of any provision of the Transaction Documents (except
to the extent herein set forth), or any other document, instrument and/or
agreement executed or delivered in connection therewith, in each case whether
arising before or after the date hereof or as a result of performance hereunder
or thereunder. Except as set forth herein, the Subscribers
reserve all rights, remedies, powers, or privileges available under
the Transaction Documents, at law or
otherwise. This Agreement shall not constitute a novation or
satisfaction and accord of the Transaction Documents or any other document,
instrument and/or agreement executed or delivered in connection
therewith.
19. The
obligations of each Subscriber hereunder are several and not joint with the
obligations of any other Subscribers hereunder, and no Subscriber shall be
responsible in any way for the performance of the obligations of any other
Subscriber hereunder. Nothing contained herein or in any other
agreement or document delivered at any closing, and no action taken by any
Subscriber pursuant hereto, shall be deemed to constitute the Subscribers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Subscribers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this
Agreement. Each Subscriber shall be entitled to protect and enforce
its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Subscriber to be joined
as an additional party in any proceeding for such purpose, except as otherwise
agreed by the Subscribers.
20. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of each of the parties; provided, however, that no
party may assign this Agreement or the obligations and rights of such party
hereunder without the prior written consent of the other parties hereto, except
as same is permitted under the Transaction Documents.
21. This
Agreement constitutes the entire agreement among the parties regarding the
subject matter herein, and supersedes all prior and contemporaneous agreements
and understandings of the parties in connection herewith. No changes,
modifications, terminations or waivers of any of the provisions hereof shall be
binding unless in writing and signed by all of the parties
thereto.
22. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined pursuant to the governing law provisions
of the Transaction Documents.
23. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party.
24. Each
of the undersigned states that he has read the foregoing Agreement and
understands and agrees to it.
25. This
Agreement 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 any
other party, it being understood that all parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or electronically, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same with the same force and effect as if such facsimile
signature were an original thereof.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned have executed and delivered this Agreement as
of the date first written above.
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“COMPANY”
CHINA
YONGXIN
PHARMACEUTICALS
INC.
a
Delaware corporation
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By:
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Name: Xxxxxxx
Xxx
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Title: Chief
Executive Officer
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ESCROW
AGENT:
GRUSHKO
& XXXXXXX, P.C.
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By:
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SUBSCRIBER
ACKNOWLEDGMENT
The
undersigned, in its capacity as a Subscriber, hereby acknowledges and agrees to
the Modification Agreement among the Company and the Third Closing
Subscribers.
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[Print
Name of Subscriber]
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[Signature]
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Name:
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Title:
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SCHEDULES
AND EXHIBITS
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Schedule
A:
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Amended
and Restated Schedule A (Schedule of
Investors)
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Exhibit
A:
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Amended
and Restated Subsidiary Guaranty
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Exhibit
B:
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Amended
and Restated Form of Lockup
Agreement
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Exhibit
C:
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Escrow
Agreement (Third Closing)
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Schedule
Schedule
prepared in accordance with Instruction 2 to Item 601 of Regulation
S-K
The
Modification and Consent Agreements dated May 3, 2010 are substantially
identical in all material respects except as to the subscribers.
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Subscribers
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Excalibur
Special Opportunities LP
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Xxxx
Xxxxxxxxxxx
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Fourth
Street Holdings, LP
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Xxxxxx
X. Xxxx
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Xxxxx
X. Xxxxxxx
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Xxxx
X. Xxxxxxx
Xx.
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