EXCHANGE AGREEMENT
Exhibit
10.1
This
Exchange Agreement (this “Agreement”) is
entered into as of May 28, 2009, by and among SkyPeople Fruit Juice, Inc., a
Florida corporation (the “Company”), Xxxxxx
Partners L.P., a Delaware limited partnership (“Xxxxxx”) and Eos
Holdings LLC, a Delaware limited liability company (“Eos” and together with
Xxxxxx, the “Investors”). Each of the parties named in the foregoing
sentence is sometimes referred to herein individually as a “Party” and
collectively with all of the other parties named in the foregoing sentence as
the “Parties.”
PRELIMINARY
STATEMENTS
A. On
February 25, 2008, the Company entered into a Series B Convertible Preferred
Stock Purchase Agreement (the “Stock Purchase
Agreement”) with the Investors pursuant to which the Company issued to
the Investors (i) 2,833,333 shares of a newly designated Series B Convertible
Preferred Stock of the Company, par value $0.001 per share (“Series B Stock”) and
(ii) warrants to purchase an aggregate of 7,000,000 shares of the Company’s
Common Stock (the “February 2008
Warrants”), in consideration for a cash payment to the Company in the
aggregate amount of $3,400,000 (the “Purchase Price”). The
February 2008 Warrants are currently immediately exercisable at a price of $3.00
per share at any time until February 24, 2013. Under the Stock Purchase
Agreement, the Company also deposited 2,000,000 shares of Series B Stock into an
escrow account which is being held by an escrow agent as make good shares in the
event the Company’s consolidated pre-tax income and pre-tax income per share, on
a fully-diluted basis, for the years ended December 31, 2007, 2008 or 2009, are
less than certain target numbers set forth in the Stock Purchase
Agreement.
B. In connection with the
Stock Purchase Agreement, on February 26, 2008, the Company entered into a
Registration Rights Agreement with the Investors (the “Registration Rights
Agreement”),
pursuant to which the Company agreed to prepare and file one or more
registration statements to register for resale the shares of the Common Stock of
the Company issuable upon conversion of the Series B Stock and upon exercise of
the February 2008 Warrants.
C. Under the terms of the
Registration Rights Agreement the Company was required, among other things,
to:
(1) prepare
and file with the Securities and Exchange Commission (the “SEC”) prior to March
26, 2008 an initial registration statement covering the resale of the shares of
the Common Stock of the Company issuable upon conversion of the Series B Stock
and upon exercise of the February 2008 Warrants issued to the Investors under
the Stock Purchase Agreement; and
(2)
use its commercially reasonable best efforts to have an
initial registration statement declared effective by the SEC within
120 days following the filing date.
D. The Company filed
with the SEC the initial registration statement on March 26, 2008. Therefore,
the Company was required to have the registration statement declared effective
by the SEC by July 24, 2008 (within 120 days after the initial filing date of
March 26, 2008). The registration statement was declared effective by the SEC on
February 5, 2009. Therefore, an aggregate of $255,605 in liquidated damages is
due to the Investors pursuant to the Registration Rights
Agreement.
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E.
Subject to the terms and conditions of this Agreement, the Parties desire that
the Company issue to the Investors a reduced number of new warrants (the “New Warrants”) to
purchase the Company’s Common Stock (New Warrants to purchase an aggregate of
5,500,000 shares at an exercise price of $1.70 per share and New Warrants to
purchase an aggregate of 1,000,000 shares at an exercise price of $1.70 per
share (with the exercise price of such 1,000,000 New Warrants only to increase
to $3.00 per share if such New Warrants shall remain unexercised on the later of
(y) 120 days after the date of issuance of such warrants or (z) 30 days after
the Securities and Exchange Commission declares effective a registration
statement covering the resale of the shares of the Company’s Common Stock
issuable upon exercise of such warrants (such later date is hereinafter referred
to as the “Warrant
Exercise Price Increase Date”)) in consideration for (i) the delivery by
the Investors to the Company for cancellation of all of the February 2008
Warrants, (ii) the release of the Company by the Investors of all
liability for damages, including any and all liquidated damages, penalties and
interest thereon, relating to any breach or breaches of any obligation of the
Company under the Registration Rights Agreement from the date of execution of
such agreement through the date of such release and (iii) the waiver
by the Investors of any right to receive any Make Good Escrow Stock
solely as a result of, and to the extent that, such Make Good Escrow Stock would
be deliverable to the Investors because Pre-Tax Income Per Share for the
Company’s fiscal year ending December 31, 2009 (for purposes of determining
whether the Company has achieved its Target Number for such fiscal year) is
reduced as a result of any reduction in net income available to common
stockholders for such fiscal year and/or an increase in the weighted average
number of shares of Common Stock outstanding during the period due to the
issuance and delivery to the Investors of New Warrants in exchange for the
February 2008 Warrants.
NOW, THEREFORE, in consideration of the
foregoing and the mutual promises and covenants herein contained, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
1. Simultaneously
with the execution of this Agreement:
(a) Xxxxxx shall deliver to
the Company for cancellation the original signed certificate evidencing February
2008 Warrants to purchase an aggregate of 6,794,118 shares of Common Stock and
Eos shall deliver to the Company the original signed certificate evidencing
February 2008 Warrants to purchase an aggregate of 205,882 shares of Common
Stock, together, in each case with a signed Assignment of the Warrants to the
Company in the form attached hereto as Exhibit A (the “Warrant
Assignment”).
(b) Each of the Investors shall sign
and deliver to the Company a Release and Waiver in the form attached hereto as
Exhibit B (the “Release and
Waiver”).
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(c) The
Company shall sign and deliver to (i) Xxxxxx, (A) a certificate for New Warrants
to purchase an aggregate of 5,338,236 shares of the Company’s Common Stock at an
exercise price of $1.70 per share and (B) a certificate for New Warrants to
purchase an aggregate of 970,588 shares of the Company’s Common Stock at an
exercise price of $1.70 per share (such exercise price (but not the exercise
price of the New Warrants referred to in Section 1(c)(i)(A)) to increase to
$3.00 per share if such New Warrants shall remain unexercised on the Warrant
Exercise Price Increase Date) registered in the name of Xxxxxx, which
certificates shall be in the forms attached hereto as Exhibits C-1 and C-2,
respectively, and (ii) Eos, (A) a certificate for New Warrants to
purchase an aggregate of 161,764 shares of the Company’s Common Stock at an
exercise price of $1.70 per share and (B) a certificate for New Warrants to
purchase an aggregate of 29,412 shares of the Company’s Common Stock at an
exercise price of $1.70 per share (such exercise price to increase to $3.00 per
share if such New Warrants shall remain unexercised on the Warrant Exercise
Price Increase Date) registered in the name of Eos, which certificates shall be
in the form attached hereto as Exhibit C-3 and C-4, respectively (each of the
warrant certificates referred to in this Section 1(c) is hereinafter referred to
individually as a “New
Warrant Certificate” and such certificates are hereinafter referred to
collectively as the “New Warrant
Certificates”). As an example of how the exercise price of the New
Warrants shall reset on the Warrant Exercise Price Increase Date, if Xxxxxx has
exercised New Warrants to purchase an aggregate of 3,000,000 shares of the
Company’s Common Stock on or before the Warrant Exercise Price Increase Date and
has not transferred any New Warrants and no events occur between the date of
issuance of the New Warrants and the Warrant Exercise Price Increase Date which
would cause an anti-dilution adjustment in the exercise price of the New
Warrants, then on such date, Xxxxxx shall hold (y) New Warrants to purchase
970,588 shares of the Company’s Common Stock at an exercise price of $3.00 per
share and (z) New Warrants to purchase an aggregate of 2,338,236 shares of the
Company’s Common Stock at an exercise price of $1.70 per share.
2. The
Company shall file with the Securities and Exchange Commission (the “SEC”) a new
Registration Statement on Form S-1 (the “Registration
Statement”) and use its reasonable commercial efforts to facilitate the
effectiveness of the Registration Statement. The prospectus contained in the
Registration Statement shall cover all of the shares of the Common Stock of the
Company issuable upon exercise of all of the New Warrants (the “New Warrant
Shares”).
3. Before
or at the closing of the sale of New Warrant Shares pursuant to the Registration
Statement, the Investors shall exercise such of the New Warrants it desires to
exercise by delivery of a signed notice of exercise in form and substance
satisfactory to the Company.
4. No Third Party
Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the Parties and their respective successors
and permitted assigns.
5 Entire
Agreement. This Agreement constitutes the entire
agreement among the Parties and supersedes any prior understandings, agreements,
or representations by or among the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
6. Succession and
Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any
of his or its rights, interests, or obligations hereunder without the prior
written approval of the other Parties.
7. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument.
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8. Headings. The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
9. Notices. All notices, consents,
waivers and other communications under this Agreement must be in writing and
will be deemed given to a Party when (a) delivered to the appropriate
address by hand or by nationally recognized overnight courier service (costs
prepaid), (b) sent by facsimile or e-mail with confirmation of transmission
by the transmitting equipment, or (c) received or rejected by the
addressee, if sent by certified mail, return receipt requested; in each case to
the following addresses, facsimile numbers or e-mail addresses and marked to the
attention of the individual (by name or title) designated below (or to such
other address, facsimile number, e-mail address or individual as a party may
designate by notice to the other parties):
If to the
Company:
16F,
National Development Bank Tower
No. 2,
Gaoxin 1st. Road,
Xi’an, PRC
With
a copy (which shall not constitute notice) to:
Guzov Ofsink, LLC
000 Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx
Xxxx 00000
Attention: Xxxxxx X.
Xxxxxx
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
E-mail:
xxxxxxx@xxxxxxxxx.xxx
If to
Xxxxxx:
Xxxxxx
Partners L.P.
c/o
Barron Capital Advisors, LLC
000 Xxxxx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx Xxxxxx
E-mail:
xxx@xxxxxxxxxxxxxx.xxx and xxx@xxxxxxxxxxxxxx.xxx
Fax:
(000) 000-0000
If to
Eos:
Eos
Holdings LLC:
0000
Xxxxxxxx Xx
Xxx
Xxxxx, XX 00000
Attn: Xxx
X. Xxxxxx
E-mail:
xxxxxxx@xxxxxxxx.xxx
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10. Controlling Law;
Venue. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to choice of law provisions, statutes,
regulations or principles of this or any other jurisdiction. Each
Party hereby irrevocably submits to the exclusive jurisdiction (including
personal jurisdiction) of the state and federal courts of the State of New York
for any action, suit or proceeding arising in connection with this Agreement,
and agrees that any such action suit or proceeding shall be brought only in such
court (and waives any objection based on forum non conveniens or any other
jurisdiction to venue therein). Process in any Proceeding under this
Agreement may be served on any Party anywhere in the
world.
11. Amendments and
Waivers. No amendment of
any provision of this Agreement shall be valid unless the same shall be in
writing and signed by the Parties. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
12. Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction. Furthermore, in lieu of such invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be legal, valid and enforceable.
13. Expenses. Each Party shall bear
all costs and expenses incurred by it in connection with the Agreement and the
transactions contemplated hereby.
14. Construction. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise. The word “including” shall mean including without
limitation. The Parties intend that each representation, warranty,
and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
15. Incorporation of
Exhibits.
The Exhibits identified in this Agreement are incorporated herein by reference
and made a part hereof.
(Remainder
of page intentionally left blank)
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IN
WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of
the date first set forth above.
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By:
/s/ Yongke
Xue
Name:
Yongke
Xue
Title:
Chief Executive Officer
XXXXXX
PARTNERS L.P.
By:
/s/ Xxxxxx
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx Xxxxxx
Title:
Managing Partner
EOS
HOLDINGS, LLC
By:
/s Xxx
Xxxxxx
Name:
Xxx Xxxxxx
Title:
President
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