AMENDMENT TO PROMISSORY NOTES
AMENDMENT
TO PROMISSORY NOTES
This
Amendment to Promissory Notes (the “Amendment”) is made as of
November 13, 2010 (the “Effective Date”) by and
between American Xxxxx-Xxxxxx, Inc., a Nevada corporation (the “Company”), and Xxxx X. Xxxxxxx
(the “Holder”), and
amends that certain Secured Convertible Promissory Note, dated August 13, 2009,
between the Company and the Holder (the “First Note”), and that certain
Secured Convertible Promissory Note, dated September 15, 2009, between the
Company and the Holder (the “Second Note”, and together
with the First Note, the “Prior
Notes”).
RECITALS
WHEREAS, the Company and the
Holder are parties to those certain Prior Notes, pursuant to which the Company
has agreed to pay certain amounts to the Holder and pursuant to which the Holder
has the option to convert the Prior Notes into shares of common stock of the
Company.
WHEREAS, the Company and the
Holder each desire to extend the term of the Prior Notes and to reduce the
conversion price of the Prior Notes and to otherwise modify the Prior Notes as
provided herein.
NOW THEREFORE, in
consideration of the promises and covenants contained herein, the sufficiency of
which is hereby acknowledged, the parties agree as follows:
AGREEMENT
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1.
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Extension of Repayment
Date.
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1.1
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The
Company and the Holder each agrees that the last sentence of the
introductory paragraph of the First Note is hereby amended and restated to
read in its entirety as set forth
below:
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“Any
remaining principal and interest hereof will be payable at the principal office
of the Company or by mail to the registered address of the Holder on or before
August 13, 2011 (the “Repayment
Date”) except that no payment will be required to the extent that such
principal and interest are or have been paid or converted pursuant to the terms
hereof or under the Agreement.”
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1.2
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The
Company and the Holder each agrees that the last sentence of the
introductory paragraph of the Second Note is hereby amended and restated
to read in its entirety as set forth
below:
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“Any
remaining principal and interest hereof will be payable at the principal office
of the Company or by mail to the registered address of the Holder on or before
September 15, 2011 (the “Repayment Date”) except that
no payment will be required to the extent that such principal and interest are
or have been paid or converted pursuant to the terms hereof or under the
Agreement.”
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2.
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Reduction of Conversion
Price.
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2.1
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The
Company and the Holder each agrees that Section 2.2 of the First Note is
hereby amended and restated to read in its entirety as set forth
below:
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“At any
time prior to the Repayment Date, Holder at its option and upon prior written
notice to the Company, may convert in whole or in part, the outstanding
Principal and accrued but unpaid interest thereon (the “Debt”) into shares of common
stock of the Company based on a per share conversion price of the lower of (i)
$0.25, or (ii) a twenty five percent (25%) discount to the average closing
trading price (as reported by Bloomberg) of a share of Company common stock
during the five (5) trading days prior to the conversion date (the
“Conversion Price”);
provided, however, the number of shares of Company common
stock that may be acquired by Holder upon any conversion of the Debt shall be
limited to the extent necessary to ensure that, following such exercise, the
total number of shares of Company common stock then beneficially owned by Holder
and his affiliates and any other persons whose beneficial ownership of Company
common stock would be aggregated with the Holder’s for purposes of Section 13(d)
of the Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Company common stock (including for such purpose the
shares of Company common stock issuable upon such conversion). For
such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, Holder
may waive such limitation on conversion contained in this Section
2.2 or increase or decrease
such limitation percentage to any other percentage as specified in a written
notice to the Company.”
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2.2
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The
Company and the Holder each agrees that Section 2.2 of the Second Note is
hereby amended and restated to read in its entirety as set forth
below:
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“At any
time prior to the Repayment Date, Holder at its option and upon prior written
notice to the Company, may convert in whole or in part, the outstanding
Principal and accrued but unpaid interest thereon (the “Debt”) into shares of common
stock of the Company based on a per share conversion price of the lower of (i)
$0.25, or (ii) a twenty five percent (25%) discount to the average closing
trading price (as reported by Bloomberg) of a share of Company common stock
during the five (5) trading days prior to the conversion date (the
“Conversion Price”);
provided, however, the number of shares of Company common
stock that may be acquired by Holder upon any conversion of the Debt shall be
limited to the extent necessary to ensure that, following such exercise, the
total number of shares of Company common stock then beneficially owned by Holder
and his affiliates and any other persons whose beneficial ownership of Company
common stock would be aggregated with the Holder’s for purposes of Section 13(d)
of the Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Company common stock (including for such purpose the
shares of Company common stock issuable upon such conversion). For
such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, Holder
may waive such limitation on conversion contained in this Section
2.2 or increase or decrease such limitation
percentage to any other percentage as specified in a written notice to the
Company.”
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3.
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Effect on Prior
Notes. This Amendment shall be effective on the
Effective Date. Except as set forth in this Amendment, the
Prior Notes shall remain in full force and effect in accordance with their
original terms and conditions.
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4.
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5.
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Counterparts. This
Amendment may be signed in counterparts, each of which when taken together
shall constitute one fully executed
document.
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[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties have executed and delivered this Amendment as of the date and year first
written above.
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COMPANY:
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HOLDER:
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American
Xxxxx-Xxxxxx, Inc.
a
Nevada corporation
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By:
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/s/ Xxxxxx XxXxxxxx
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/s/ Xxxx X. Xxxxxxx
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Xxxxxx
XxXxxxxx
Chief
Executive Officer
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Xxxx
X.
Xxxxxxx
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