Waiver of Application of Provisions Under Secured Convertible Debenture
Exhibit
10.1
Waiver
of Application of Provisions Under Secured Convertible Debenture
This
Waiver of Application of
Provisions Under Secured Convertible Debenture is made by and between and
IR Biosciences Holdings, Inc. (the “Company”) and YA Global
Investments, L.P. (“YA
Global”). (YA Global and the Company are sometimes referred to
as the “Parties”). All
capitalized terms not otherwise defined herein shall have the meanings as set
forth in the Securities Purchase Agreement dated January 3, 2008 between the
Parties, the Secured Convertible Debentures dated January 3, 2008 issued by the
Company to YA Global, the Secured Convertible Debentures dated June 12, 2008 and
documents related to the transactions contemplated thereby.
Recitals
A. The
Company closed a financing transaction with YA Global on or about January 3,
2008 through which the Company issued to YA Global a Secured Convertible
Debenture dated January 3, 2008 and subsequently a Secured Convertible Debenture
dated June 12, 2008 (collectively, the “Debenture”).
B. The
Company desires to amend its Certificate of Incorporation, as amended, to (i)
effect a one-for-ten reverse stock split of the Company’s shares of Common Stock
(the “Reverse Stock
Split”) and (ii) reduce the number of authorized shares of Common Stock
from 450,000,000 to 100,000,000 (the “Amendment”).
C. By
virtue of the Reverse Stock Split, any stockholders who would otherwise be
entitled to fractional shares of Common Stock will receive whole shares in lieu
of such fractional shares (the “Fractional
Shares”).
D. Section
8 of the Debenture prohibits the Company from amending its Certificate of
Incorporation or Bylaws or other charter documents so as to adversely affect any
rights of YA Global.
E. Section
5(a) of the Debenture provides, in part, that if the Company issues or sells, or
is deemed to have issued or sold, any shares of Common Stock, with certain
exceptions, at a price less than the Conversion Price then in effect for the
Debenture, then the Conversion Price is reduced as set forth in Section
5(a).
F. The
Parties desire to waive (i) the application of Section 8 of the Debenture with
regard to the Amendment and (ii) the application of Section 5(a) of the
Debenture with regard to the Fractional Shares.
Agreement
NOW
THEREFORE, in consideration of the mutual covenants and other valuable
consideration, the receipt of which is hereby acknowledged, the Company and YA
Global agree as follows:
1. YA
Global hereby forever waives and releases application of the provisions of
Section 8 of the Debenture solely with respect to the Amendment.
2. YA
Global agrees and consents to the Company taking all required action to make the
Amendment effective including but not limited to the execution of the Amendment
by the Company’s officers and the filing of the Amendment with the Delaware
Secretary of State.
3. YA
Global hereby forever waives and releases application of Section 5(a) solely
with respect to the Fractional Shares.
4. YA
Global agrees and consents to the issuance by the Company of whole shares of
Common Stock to stockholders who are entitled to Fractional Shares following the
Reverse Stock Split.
5. The
Company agrees to reduce the Conversion Price of the Debenture from $0.20 to
$0.17 (prior to the effectiveness of the Reverse Stock Split) and execute the
Debenture amendments attached hereto as Exhibit A documenting the
foregoing.
6. The
Company agrees to increase the Share Reserve to one hundred million shares
(100,000,000) prior to the effectiveness of the Reverse Stock
Split.
7. All
other provisions of the Debenture remain in full force and effect as
written.
IN
WITNESS WHEREOF, this Waiver of Application of Provisions Under Secured
Convertible Debenture is agreed to and accepted by the Parties this 23rd day of
July, 2008:
Company
IR
BioSciences Holdings, Inc.
By: /s/ Xxxxxxx X.
Xxxxxxx
Name: Xxxxxxx
X. Xxxxxxx
Title: President
and Chief Executive Officer
YA
Global
YA Global
Investments, L.P.
By: Yorkville
Advisors, LLC
Its: Investment
Advisor
By: /s/ Xxxxxx
Xxxxx
Name:
Xxxxxx
Xxxxx
Title: Managing
Member
Exhibit
A
Debenture
Amendment
AMENDMENT
NO. 1
to
THIS
AMENDMENT SHOULD BE ATTACHED TO THE
ORIGINAL
SECURED CONVERTIBLE DEBENTURE CERTIFICATES
This
Amendment No. 1 to the Secured Convertible Debenture (this "Amendment") dated
July 18, 2008 is issued in connection with those Secured Convertible Debenture
(No. IRBO-1-1 and IRBO-1-2) (collectively, the "Debenture")
originally issued on January 3, 2008 and June 12, 2008 respectively, by IR
Biosciences Holdings, Inc. (the "Company") to YA
Global Investments, L.P. (the "Holder"). Capitalized
terms used but not defined herein have the meaning given thereto in the
Debenture.
THIS CERTIFIES THAT, the
following amendments are hereby made to the Debenture:
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·
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The
term "Conversion Price" set forth in Section 4(a)(ii) shall be deleted and
replaced with the following:
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"Conversion Price"
means, as of any Conversion Date (as defined below) before the occurrence of any
Triggering Event, $0.17, subject to adjustment as provided herein (the "Fixed Conversion
Price"), and as of any Conversion Date following the occurrence of any
Triggering Event, the lower of (a) the Fixed Conversion Price or (b) eighty
percent (80%) of the lowest daily Volume Weighted Average Price during the
five (5) Trading Days immediately preceding the Conversion Date (the "Market Conversion
Price").
IN WITNESS WHEREOF, the
Company has caused this Amendment to be signed by its duly authorized
officer.
IR
BIOSCIENCES HOLDINGS , INC.
By: /s/ Xxxxxxx X.
Xxxxxxx
Name: Xxxxxxx
X. Xxxxxxx
Title: President
and Chief Executive Officer
