WAIVER AND AMENDMENT
THIS WAIVER AND AMENDMENT ("Waiver") is made and entered into as of this
12th day of June, 2006, by and among Swiss Medica, Inc., a Delaware corporation
(the "Company"), and Xxxxxxxxxx Equity Partners, L.P. ("Holder"). Capitalized
terms used herein and undefined shall have the meanings set forth in that
certain Secured Convertible Debenture (defined in the Recitals below).
RECITALS:
WHEREAS, reference is made to that certain Secured Convertible Debenture
dated as of April 11, 2006 (the "Debenture"), by and among the Company and the
Holder;
WHEREAS, the fourth full paragraph of page two of the Debenture restricts
the Company from issuing or selling its common stock ("Shares") or any right to
acquire common stock for consideration less than $0.20 per Share or from
entering into any security instrument granting the holder a security interest in
the assets of the Company without the consent of the Holder ("Equity Sale and
Security Interest Restriction");
WHEREAS, the Company previously issued two promissory notes to Double U
Master Fund, LP, totaling $810,000, one in June and another in December 2005,
and now wishes to exchange these notes for newly-issued promissory notes, both
to mature on December 20, 2006. Whereas, these notes may be converted into
Shares ("Double U Debt Restructuring") should they not be paid out upon renewal
after December 20, 2006, based upon a 25% discount to market of the share price
for the prior five day average;
WHEREAS, Section 2(a) of the Investor Registration Rights Agreement
between the Company and Holder dated April 11, 2006 ("Registration Rights
Agreement") requires that the Company file a registration statement for the
resale by Holder five times that number of Shares issuable upon conversion of
the Debentures based on a conversion price of 80% of the lowest bid price during
the five days immediately preceding the conversion date;
WHEREAS, the number of Shares required to be registered under Section 2(a)
of the Registration Rights Agreement exceeds the number of the Company's
authorized but unissued Shares, and thus may not be registered;
WHEREAS, the Company and Holder wish to amend the Registration Rights
Agreement to ensure that the number of Shares registered does not exceed the
number of the Company's authorized but unissued Shares.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
agreements herein contained and for other good and valuable consideration, the
parties hereto agree as follows:
1. WAIVER.
(a) The Holder agree to waive the Equity Sale and Security Interest
Restriction contained in the fourth full paragraph of the Debenture as it
applies to the Double U Debt Restructuring.
(b) Except as expressly set forth herein, this Waiver shall not be deemed
to be a waiver, amendment or modification of any provisions of the Debenture or
of any right, power or remedy of the Holder, or constitute a waiver of any
provision of the Debenture (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
Holders reserve all rights, remedies, powers, or privileges.
2. AMENDMENT. The first sentence of Section 2(a) of the Registration
Rights Agreement shall be amended in its entirety to read:
"Subject to the terms and conditions of this Agreement, the Company
shall prepare and file, no later than sixty (60) days from the date
of the First Closing (the "Scheduled Filing Deadline"), with the SEC
a registration statement on Form S-1 or SB-2 (or, if the Company is
then eligible, on Form S-3) under the Securities Act (the "Initial
Registration Statement") for the resale by the Investors of the
Registrable Securities, which includes 75,000,000 shares of Common
Stock to be issued upon conversion of the Convertible Debentures and
two million (2,000,000) Warrant Shares."
3. CONFLICTS. Except as expressly set forth in this Waiver, the terms and
provisions of the Debenture and the Registration Rights Agreement shall continue
unmodified and in full force and effect. In the event of any conflict between
this Waiver and the Debenture or the Registration Rights Agreement, this Waiver
shall control.
4. GOVERNING LAW. This Waiver shall be governed and construed under the
laws of the State of New Jersey, and shall be binding on and shall inure to the
benefit of the parties and their respective successors and permitted assigns.
5. COUNTERPARTS. This Waiver may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Waiver and
Amendment as of the date first set forth above.
COMPANY:
Swiss Medica, Inc.
By: /s/ Xxxxxxxxx Xxxxxxx
---------------------
Xxxxxxxxx Xxxxxxx, Chief Executive Officer
HOLDER:
Xxxxxxxxxx Equity Partners Ltd.
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/ Xxxxxx X. Press
-------------------
Xxxxxx X. Press, Portfolio Manager
