AMENDMENT
AMENDMENT
THIS AMENDMENT is dated as of
December ___, 2008 (this “Amendment”), by and
among Emerald Dairy Inc., a Nevada
corporation (the “Company”), and the
investors set forth on the signature page hereto (each, an “Investor,” and
collectively, the “Investors”).
RECITALS:
A. In
June 2008, the Company conducted a private offering of up to a maximum of (a)
$3,000,000 of its 8% promissory notes, due on December 31, 2008 (the “Original Notes”) and
(b) three-year warrants to purchase 300,000 shares of its Common Stock, at an
exercise price of $2.61 per share (the “Original Warrants”),
pursuant to the terms and conditions of a Securities Purchase Agreement (the
“Purchase
Agreement”).
B. As
of June 12, 2008, one Investor purchased, for a purchase price of $1,500,000, an
Original Note in the principal amount of $1,500,000, and Original Warrants to
purchase 150,000 shares of the Company’s Common Stock.
C. On
June 20, 2008, one additional Investor purchased, for a purchase price of
$750,000, an Original Note in the principal amount of $750,000, and Original
Warrants to purchase 75,000 shares of the Company’s Common Stock.
D. The
parties desire to amend the Purchase Agreement, Original Notes and Original
Warrants (collectively, the “Transaction
Documents”), in order to, inter alia, modify the terms and conditions
thereof upon the terms and subject to the conditions set forth in this Amendment
and the Exhibits hereto.
NOW, THEREFORE, in
consideration of the premises and the other mutual covenants contained herein,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Accuracy
of Recitals; Definitions. Each of the Company and the
Investors acknowledges and agrees that the foregoing Recitals are true and
accurate and are incorporated herein by reference. Capitalized terms
used and not otherwise defined herein are used as defined in the Transaction
Documents.
2. Amendments
to the Original Notes.
2.1 Upon
satisfaction of the conditions set forth in Section 4 below, the Original Notes
shall be amended so that:
(a) the
Maturity Date of each Original Note is extended from December 31, 2008 to December 31, 2009;
and
(b) as
of December 31, 2008, the Initial Interest Rate of the Original Notes of 8% per
annum is increased to 10% per annum (the “Increased Interest
Rate”), which Increased Interest Rate shall continue until the Amended
and Restated Notes (as defined below) become due and payable, whether at
maturity or upon acceleration or by prepayment or otherwise.
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2.2 The Company shall issue and deliver, or cause to be
delivered, to each Investor, against delivery by such Investor of his or its
Original Note, marked “canceled”, a duly executed Amended and Restated Note
reflecting the changes set forth in Section 2.1 above, in the form of Amended
and Restated Note attached hereto as Exhibit A (the “Amended and Restated
Notes”).
3. Amendments
to the Original Warrants.
3.1 Upon
satisfaction of the conditions set forth in Section 4 below, the Original
Warrants shall be amended so that:
(a) The
Expiration Date of the Original Warrants is extended from the third anniversary
of their original issue date to the fifth anniversary of their original issue
date; and
(b) The
Warrant Price of the Original Warrants is reduced from $2.61 to
$1.63.
3.2 The Company shall issue and deliver, or cause to be
delivered, to each Investor, against delivery by such Investor of his or its
Original Warrant, marked “canceled,” a duly executed Amended and Restated
Warrant reflecting the changes set forth in Section 3.1 above, in the form of
Amended and Restated Warrant attached hereto as Exhibit B (the “Amended and Restated
Warrants”)
4. Conditions
Precedent. The effectiveness
of this Amendment is subject to satisfaction of each of the following conditions
precedent:
4.1 The
representations and warranties made by the Company in this Amendment are
accurate in all respects.
4.2 No
Event of Default shall be in existence under the Original Notes.
4.3 No
Material Adverse Effect has occurred since the date of filing of the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
2008.
4.4 No
suit, proceeding or action has been commenced against or involving the Company
which, if successful, would result in a Material Adverse Effect.
4.5 Each
Investor shall have received the following documents and other items from the
Company, duly executed by an authorized representative of the Company, as
necessary:
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(a) An
executed original of this Amendment.
(b) An
executed original Amended and Restated Note.
(c) An
executed original Amended and Restated Warrant.
(d) Evidence
that the execution, delivery and performance of this Amendment by the Company
has been duly authorized by all necessary corporate action.
4.7 The
Company shall have received the following documents and other items from each
Investor, duly executed by an authorized representative of such Investor, as
applicable:
(a) An
executed original of this Amendment.
(b) The
Original Note, marked “canceled”.
(c) The
Original Warrant, marked “canceled”.
(d) Evidence
that the execution, delivery and performance of this Amendment by the Investor
has been duly authorized by all necessary corporate action.
5. Transaction
Documents in Full Force and Effect as Amended. Except as
specifically amended hereby, the Transaction Documents shall remain in full
force and effect and hereby are ratified and confirmed as so
amended. This Amendment shall not constitute a novation, satisfaction
and accord, cure, release and/or satisfaction of the Transaction Documents, but
shall constitute an amendment thereof. The parties hereto agree to be
bound by the terms and conditions of the Transaction Documents as amended by
this Amendment, as though such terms and conditions were set forth herein and
therein in full. Each reference in the Transaction Documents or any
other document or instrument to any Transaction Documents, or words of similar
import shall mean and be a reference to the Transaction Documents as amended
hereby.
6. Representations. The Company
hereby represents and warrants to the Investors as follows: (a) it is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (b) the execution, delivery and performance by it
of this Amendment are within its powers, have been duly authorized, and do not
contravene (i) its articles of incorporation, bylaws or other organizational
documents, or (ii) any applicable law, statute, regulation, ordinance, tariff or
order; (c) no consent, license, permit, approval or authorization of, or
registration, filing or declaration with any governmental authority or other
person is required in connection with the execution, delivery, performance,
validity or enforceability of this Amendment by or against it; (d) this
Amendment has been duly executed and delivered by it; (e) this Amendment
constitutes its legal, valid and binding obligations enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally or by general principles of equity; (f) to the best of its knowledge, it is in compliance with all covenants and
agreements in the Transaction Documents and it is not in default under the
Transaction Documents, and no Event of Default exists, has occurred and is
continuing or would result by the execution, delivery or performance of this
Amendment; and (g) the representations and warranties contained in the
Transaction Documents are true and correct in all material respects as of the
date hereof as if made on the date hereof.
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7. Miscellaneous.
7.1 The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
be deemed to be an amendment or
modification of, or operate as a waiver of, any provision of the
Transaction Documents, or any right, power or remedy of the Investors, nor
constitute a waiver of any provision of the Transaction Documents, or any other
document, instrument and/or agreement executed or delivered in connection
therewith or of any Event of Default under any of the foregoing, in each case
whether arising before or after the date hereof or as a result of performance
hereunder or thereunder. This Amendment shall not preclude the future
exercise of any right, remedy, power or privilege available to the parties
whether under the Transaction Documents,
at law, or otherwise.
7.2 This
Amendment may be executed in any number of counterparts (including by
facsimile), and by the different parties hereto or thereto on the same or
separate counterparts, each of which shall be deemed to be an original
instrument but all of which together shall constitute one and the same
agreement. Each party agrees that it will be bound by its own
facsimile signature and that it accepts the facsimile signature of
each other party. The descriptive headings of the various sections of this
Amendment are inserted for convenience of reference only and shall not be deemed
to affect the meaning or construction
of any of the provisions hereof or thereof. Whenever the context and
construction so require, all words herein in the singular number herein shall be
deemed to have been used in the plural, and vice
versa, and the masculine gender shall
include the feminine and neuter and the neuter shall include the masculine and
feminine.
7.3 This
Amendment may not be changed, amended, restated, waived, supplemented,
discharged, canceled, terminated or otherwise modified
orally or by any course of dealing or in any manner other
than as provided in the applicable Transaction Documents. This
Amendment shall be considered part of the Transaction Documents for all purposes
under the Transaction Documents. In the event of any inconsistency
between this Amendment and any of the other Transaction Documents, the terms of
this Amendment shall control.
7.4 This
Amendment, the Amended and Restated Notes, the Amended and Restated Warrants and
the Transaction Documents constitute the final, entire agreement and
understanding between the parties with respect to the subject matter hereof and
thereof and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements between the parties, and shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto and
thereto. There are no unwritten oral agreements between the parties
with respect to the subject matter hereof and thereof. If any
provision of this Amendment is adjudicated to be invalid under applicable laws
or regulations, such provision shall be inapplicable to the extent of such
invalidity without affecting the validity or enforceability of the remainder of
this Amendment which shall be given effect so far as possible.
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7.5 THIS
AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW
PROVISIONS SET FORTH IN THE TRANSACTION DOCUMENTS, AS AMENDED BY THIS
AMENDMENT.
7.7 Each
party shall execute and deliver such other documents, certificates and/or
instruments and
take such other actions as reasonably requested by the other party in
order more effectively to consummate the transactions contemplated
hereby.
[SIGNATURES
APPEAR ON THE NEXT PAGES]
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IN
WITNESS WHEREOF,
the parties have caused this Amendment to be executed under seal
by their respective
officers thereunder duly authorized, as of the date first above
written.
| COMPANY: | |||
| EMERALD DAIRY INC. | |||
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By:
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| Name: | |||
| Title: | |||
| INVESTORS: | |||
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By:
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| Name: | |||
| Title: | |||
EXHIBIT
A
(Form of
Amended and Restated Note)
EXHIBIT
B
(Form of
Amended and Restated Warrant)
