AMENDMENT AGREEMENT
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THIS AMENDMENT AGREEMENT is entered into as of November ___, 2005 by and
among Able Energy, Inc., a Delaware corporation, having a principal place of
business at 000 Xxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the "COMPANY") and
each of the other parties set forth on the signature page herein (each a
"HOLDER" and collectively, the "HOLDERS").
WHEREAS, the Company previously entered into a Securities Purchase
Agreement dated July 12, 2005 (the "AGREEMENT") whereby the Company issued and
sold to each Holder securities of the Company consisting of Variable Rate
Convertible Debentures in the aggregate principal sum of $2,500,000
(individually, each a "DEBENTURE" and, collectively, the "DEBENTURES").
WHEREAS, the parties hereto intend to amend the Debentures to reflect an
amendment to the principal redemption and interest payment obligations of the
Company.
WHEREAS, the parties hereto intend to terminate Section 4.17 of the
Agreement and in lieu thereof to issue to the Holders a new callable common
stock purchase warrant.
NOW THEREFORE, for and in consideration of the above recitals, the
parties to this Amendment hereby agree as follows:
1. All initially capitalized, undefined terms used herein
shall have the meanings ascribed to such terms in the Agreement,
Debentures and the other agreements entered into in connection
therewith.
2. The Maturity Date of the Debentures shall be amended
from July 12, 2007 to August 12, 2007.
3. The definition of "MONTHLY REDEMPTION DATE" in the
Debentures shall be deleted in its entirety and be replaced with the
following for all purposes:
"MONTHLY REDEMPTION DATE" MEANS THE 1ST OF EACH MONTH,
COMMENCING ON THE EARLIER OF (A) THE 1ST OF THE MONTH
IMMEDIATELY FOLLOWING THE EFFECTIVE DATE AND (B) JANUARY 1, 2006
AND ENDING UPON THE FULL REDEMPTION OF THIS DEBENTURE.
4. The parties agree that Section 2(a) of the Debentures is
deleted in its entirety and is replaced with the following, which shall
be substituted as Section 2(a) of the Debentures for all purposes (it
being understood that for illustration purposes only, the changes to
this Section 2(a) of the Debenture are highlighted in yellow below):
"Section 2 INTEREST"
A) PAYMENT OF INTEREST IN CASH OR KIND. THE COMPANY SHALL
PAY INTEREST TO THE HOLDER ON THE AGGREGATE UNCONVERTED
AND THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS DEBENTURE
AT THE RATE PER ANNUM EQUAL TO LIBOR FOR THE
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APPLICABLE INTEREST PERIOD PLUS 4.0% OR SUCH LESSER RATE
AS SHALL BE THE HIGHEST RATE PERMITTED BY APPLICABLE
LAW, PAYABLE QUARTERLY ON APRIL 1, JULY 1, OCTOBER 1 AND
JANUARY 1, BEGINNING ON JANUARY 1, 2006, ON EACH MONTHLY
REDEMPTION DATE (AS TO THAT PRINCIPAL AMOUNT THEN BEING
REDEEMED), ON EACH CONVERSION DATE (AS TO THAT PRINCIPAL
AMOUNT THEN BEING CONVERTED), ON EACH OPTIONAL
REDEMPTION DATE (AS TO THAT PRINCIPAL AMOUNT THEN BEING
REDEEMED) AND ON THE MATURITY DATE (EXCEPT THAT, IF ANY
SUCH DATE IS NOT A BUSINESS DAY, THEN SUCH PAYMENT SHALL
BE DUE ON THE NEXT SUCCEEDING BUSINESS DAY) (EACH SUCH
DATE, AN "INTEREST PAYMENT DATE"), IN CASH OR SHARES OF
COMMON STOCK AT THE INTEREST CONVERSION RATE, OR A
COMBINATION THEREOF (THE AMOUNT TO BE PAID IN SHARES,
THE "INTEREST SHARE AMOUNT"); PROVIDED, HOWEVER, THAT
(I) PAYMENT IN SHARES OF COMMON STOCK MAY ONLY OCCUR IF
DURING THE 20 TRADING DAYS IMMEDIATELY PRIOR TO THE
APPLICABLE INTEREST PAYMENT DATE (THE "INTEREST NOTICE
PERIOD") AND THROUGH AND INCLUDING THE DATE SUCH SHARES
OF COMMON STOCK ARE ISSUED TO THE HOLDER ALL OF THE
EQUITY CONDITIONS, UNLESS WAIVED BY THE HOLDER IN
WRITING, HAVE BEEN MET AND THE COMPANY SHALL HAVE GIVEN
THE HOLDER NOTICE IN ACCORDANCE WITH THE NOTICE
REQUIREMENTS SET FORTH BELOW AND (II) AS TO SUCH
INTEREST PAYMENT DATE, PRIOR TO SUCH INTEREST NOTICE
PERIOD (BUT NOT MORE 5 TRADING DAYS PRIOR TO THE
COMMENCEMENT OF THE INTEREST NOTICE PERIOD), THE COMPANY
SHALL HAVE DELIVERED TO THE HOLDER'S ACCOUNT WITH THE
DEPOSITORY TRUST COMPANY A NUMBER OF SHARES OF COMMON
STOCK TO BE APPLIED AGAINST SUCH INTEREST SHARE AMOUNT
EQUAL TO THE QUOTIENT OF (X) THE APPLICABLE INTEREST
SHARE AMOUNT DIVIDED BY (Y) THE THEN CONVERSION PRICE
(THE "INTEREST CONVERSION SHARES").
5. Any rights by the Holders relating to any defaults,
breaches, insufficiencies or failures of the Company solely to render
payments or amounts which may have otherwise been due and payable under
the Debentures but for this Amendment are and were, as of the date of
such defaults, waived by the Holders.
6. Section 4.17 of the Agreement is hereby deleted and of
no further force or effect.
7. The Company shall issue to each Holder four common stock
purchase warrants (the "NEW WARRANTS") as follows and which, except as
specifically set forth below, shall be in the form the Warrants:
a. for each $100,000 principal amount of Debenture
purchased pursuant to the Agreement, a warrant to
purchase up to 114,000 shares of Common Stock, subject
to adjustment therein, with an exercise price equal to
$7.50, subject to adjustment therein, and which shall
include no Put Provision (as defined below in Section
8);
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b. for each $100,000 principal amount of Debenture
purchased pursuant to the Agreement, a warrant to
purchase up to 24,000 shares of Common Stock, subject to
adjustment therein, with an exercise price equal to
$7.50, subject to adjustment therein, and which shall
include a Put Provision with a Threshold Price (as
defined below in Section 8) equal to $8.50, subject to
adjustment therein;
c. for each $100,000 principal amount of Debenture
purchased pursuant to the Agreement, a warrant to
purchase up to 24,000 shares of Common Stock, subject to
adjustment therein, with an exercise price equal to
$7.50, subject to adjustment therein, and which shall
include a Put Provision with a Threshold Price equal to
$9.50, subject to adjustment therein;
d. for each $100,000 principal amount of Debenture
purchased pursuant to the Agreement, a warrant to
purchase up to 24,000 shares of Common Stock, subject to
adjustment therein, with an exercise price equal to
$7.50, subject to adjustment therein, and which shall
include a Put Provision with a Threshold Price equal to
$10.50, subject to adjustment therein; and
e. for each $100,000 principal amount of Debenture
purchased pursuant to the Agreement, a warrant to
purchase up to 24,000 shares of Common Stock, subject to
adjustment therein, with an exercise price equal to
$7.50, subject to adjustment therein, and which shall
include a Put Provision with a Threshold Price equal to
$11.50, subject to adjustment therein
8. The New Warrants (other than as required by Section 7(a)
above) shall include the following provision (the "PUT
PROVISION") as Section 2(f) therein:
"2(F) PUT PROVISION. SUBJECT TO THE PROVISIONS OF
SECTION 2(D) AND THIS SECTION 2(F), IF, AFTER THE EFFECTIVE DATE
(I) THE VWAP FOR EACH OF 5 CONSECUTIVE TRADING DAYS (THE
"MEASUREMENT PERIOD", WHICH 5 TRADING DAY PERIOD SHALL NOT HAVE
COMMENCED UNTIL AFTER THE EFFECTIVE DATE) EXCEEDS $[INSERT FROM
SECTION 7 AS APPLICABLE] (SUBJECT TO ADJUSTMENT FOR REVERSE AND
FORWARD STOCK SPLITS, STOCK DIVIDENDS, STOCK COMBINATIONS AND
OTHER SIMILAR TRANSACTIONS OF THE COMMON STOCK THAT OCCUR AFTER
THE INITIAL EXERCISE DATE) (THE "THRESHOLD PRICE"), THEN THE
COMPANY MAY, WITHIN ONE TRADING DAY OF THE END OF ANY
MEASUREMENT PERIOD, BY DELIVERY OF WRITTEN NOTICE TO THE HOLDER,
REQUIRE THE HOLDER TO EXERCISE ALL OR ANY PORTION OF THIS
WARRANT FOR WHICH A NOTICE OF EXERCISE HAS NOT YET BEEN
DELIVERED (SUCH RIGHT, A "PUT"). TO EXERCISE THIS RIGHT, THE
COMPANY MUST DELIVER TO THE HOLDER AN IRREVOCABLE WRITTEN NOTICE
(A "PUT NOTICE"), INDICATING THEREIN THE PORTION OF UNEXERCISED
PORTION OF THIS WARRANT TO WHICH SUCH NOTICE APPLIES. IF THE
CONDITIONS SET FORTH BELOW FOR SUCH PUT ARE SATISFIED FROM THE
PERIOD FROM THE DATE OF THE PUT NOTICE THROUGH AND INCLUDING THE
PUT DATE (AS DEFINED BELOW), THEN ANY PORTION OF THIS WARRANT
SUBJECT TO SUCH PUT NOTICE FOR WHICH A NOTICE OF EXERCISE SHALL
NOT HAVE BEEN RECEIVED BY THE PUT DATE SHALL BE DEEMED EXERCISED
AT 6:30 P.M. (NEW YORK CITY TIME) ON THE TENTH
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TRADING DAY AFTER THE DATE THE PUT NOTICE IS RECEIVED BY THE
HOLDER (SUCH DATE, THE "PUT DATE"). ANY UNEXERCISED PORTION OF
THIS WARRANT TO WHICH THE PUT NOTICE DOES NOT PERTAIN WILL BE
UNAFFECTED BY SUCH PUT NOTICE. IN FURTHERANCE THEREOF, THE
COMPANY COVENANTS AND AGREES THAT IT WILL HONOR ALL NOTICES OF
EXERCISE WITH RESPECT TO WARRANT SHARES SUBJECT TO A PUT NOTICE
THAT ARE TENDERED THROUGH 6:30 P.M. (NEW YORK CITY TIME) ON THE
PUT DATE. THE PARTIES AGREE THAT ANY NOTICE OF EXERCISE
DELIVERED FOLLOWING A PUT NOTICE SHALL FIRST REDUCE TO ZERO THE
NUMBER OF WARRANT SHARES SUBJECT TO SUCH PUT NOTICE PRIOR TO
REDUCING THE REMAINING WARRANT SHARES AVAILABLE FOR PURCHASE
UNDER THIS WARRANT. FOR EXAMPLE, IF (X) THIS WARRANT THEN
PERMITS THE HOLDER TO ACQUIRE 100 WARRANT SHARES, (Y) A PUT
NOTICE PERTAINS TO 75 WARRANT SHARES, AND (Z) PRIOR TO 6:30 P.M.
(NEW YORK CITY TIME) ON THE PUT DATE THE HOLDER TENDERS A NOTICE
OF EXERCISE IN RESPECT OF 50 WARRANT SHARES, THEN (1) ON THE PUT
DATE THE RIGHT UNDER THIS WARRANT TO ACQUIRE 25 WARRANT SHARES
WILL BE AUTOMATICALLY CANCELLED, (2) THE COMPANY, IN THE TIME
AND MANNER REQUIRED UNDER THIS WARRANT, WILL HAVE ISSUED AND
DELIVERED TO THE HOLDER 50 WARRANT SHARES IN RESPECT OF THE
EXERCISES FOLLOWING RECEIPT OF THE PUT NOTICE, AND (3) THE
HOLDER MAY, UNTIL THE TERMINATION DATE, EXERCISE THIS WARRANT
FOR 25 WARRANT SHARES (SUBJECT TO ADJUSTMENT AS HEREIN PROVIDED
AND SUBJECT TO SUBSEQUENT PUT NOTICES). SUBJECT AGAIN TO THE
PROVISIONS OF THIS SECTION 2(F), THE COMPANY MAY DELIVER
SUBSEQUENT PUT NOTICES FOR ANY PORTION OF THIS WARRANT FOR WHICH
THE HOLDER SHALL NOT HAVE DELIVERED A NOTICE OF EXERCISE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
WARRANT, THE COMPANY MAY NOT DELIVER A PUT NOTICE OR REQUIRE THE
CANCELLATION OF THIS WARRANT (AND ANY PUT NOTICE WILL BE VOID),
UNLESS, FROM THE BEGINNING OF THE 5 CONSECUTIVE TRADING DAYS
USED TO DETERMINE WHETHER THE COMMON STOCK HAS ACHIEVED THE
THRESHOLD PRICE THROUGH THE PUT DATE, (I) THE COMPANY SHALL HAVE
HONORED IN ACCORDANCE WITH THE TERMS OF THIS WARRANT ALL NOTICES
OF EXERCISE DELIVERED BY 6:30 P.M. (NEW YORK CITY TIME) ON THE
PUT DATE, (I) A MATERIAL ADVERSE EFFECT (AS DEFINED IN THE
PURCHASE AGREEMENT) HAS NOT OCCURRED DURING THE PERIOD FROM THE
CLOSING DATE TO THE PUT DATE, (II) THE EQUITY CONDITIONS (AS
DEFINED IN THE DEBENTURES) ARE SATISFIED, (III) THE REGISTRATION
STATEMENT SHALL BE EFFECTIVE AS TO ALL WARRANT SHARES AND THE
PROSPECTUS THEREUNDER AVAILABLE FOR USE BY THE HOLDER FOR THE
RESALE OF ALL SUCH WARRANT SHARES, (IV) THE WARRANT SHARES SHALL
BE LISTED OR QUOTED FOR TRADING ON THE TRADING MARKET, (V) THERE
IS A SUFFICIENT NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FOR
ISSUANCE OF ALL SECURITIES UNDER THE TRANSACTION DOCUMENTS
INCLUDING THE WARRANT SHARES, AND (IV) THE ISSUANCE OF THE
SHARES SHALL BE IN ACCORDANCE WITH SECTION 2(D) HEREIN.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT
SHALL THE COMPANY EXERCISE ITS RIGHT TO CALL THIS WARRANT OR ANY
OTHER WARRANTS OF THE SAME SERIES ISSUED PURSUANT TO THE
PURCHASE AGREEMENT, AS AMENDED, TO THE EXTENT THAT, IN THE
AGGREGATE AMONG ALL SUCH WARRANTS, INCLUDING THIS WARRANT, IN
EXCESS OF 600,000 SHARES OF COMMON STOCK, SUBJECT TO ADJUSTMENT
HEREUNDER, ARE SUBJECT TO A CALL IN ANY 30 CONSECUTIVE DAY
PERIOD, EXCEPT THAT FOR ANY ONE 30 CONSECUTIVE DAY PERIOD DURING
THE EXERCISE PERIOD SUCH LIMIT MAY BE INCREASED, AT THE OPTION
OF THE COMPANY UPON 30 DAYS' PRIOR WRITTEN NOTICE TO THE
HOLDER,, BY 100,000 SHARES OF COMMON STOCK, SUBJECT TO
ADJUSTMENT HEREUNDER. THE COMPANY'S RIGHT TO CALL
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THIS WARRANT SHALL BE EXERCISED RATABLY AMONG ALL OF THE HOLDERS
OF THE WARRANTS ISSUED PURSUANT TO THE PURCHASE AGREEMENT, AS
AMENDED, BASED ON EACH SUCH HOLDER'S INITIAL PURCHASE OF
DEBENTURES ."
9. The definition of "DEBENTURES" set forth in Section 1.1
of the Agreement is hereby amended to include the terms of this
Amendment. The definition of "WARRANTS" set forth in Section 1.1 of the
Agreement is hereby amended to include the New Warrants. All provisions
in the transaction documents shall be deemed to apply to the New
Warrants including but not limited to, the Company's obligation to
register the Warrant Shares underlying the New Warrants as if issued at
the Closing and the obligation of the Company to list such Warrant
Shares on the Trading Market; PROVIDED, HOWEVER, the Company's
obligations to register the Warrant Shares issuable pursuant to the New
Warrants shall be subject to the following provisions: (a) as to the
Warrant Shares issuable upon exercise of the New Warrants issued
pursuant to Section 7(b), the "Filing Date" and the "Effective Date"
shall be the same as applies to the initial Registration Statement filed
pursuant to the Registration Rights Agreement; (b) as to the Warrant
Shares issuable upon exercise of the New Warrants issued pursuant to
Sections 7(c), 7(d) and 7(e), the "Filing Date" shall be the 5th Trading
Day following the Effective Date of the initial Registration Statement
filed pursuant to the Registration Rights Agreement and the "Effective
Date" shall be the 60th day following such Filing Date; and (c) as to
the Warrant Shares issuable upon exercise of the Warrants issued
pursuant to Section 7(a), the "Filing Date" shall be the 6 month
anniversary of the date hereof and the "Effective Date" shall be the
60th day following such Filing Date.
10. This Amendment may be executed in any number of
counterparts with the same effect as if all of the parties had signed
the same document. All counterparts shall be construed together and
shall constitute one and the same instrument
11. This Amendment and the rights and obligations of the
parties hereunder shall be construed in accordance with and governed
pursuant to the terms of the Agreement.
12. Within 2 Trading Days of the date hereof, the Company
shall file a Current Report on Form 8-K or on the Registration Statement
on Form S-1 registering for resale the Registrable Securities disclosing
the material terms of this Amendment and attaching this Amendment as an
exhibit thereto.
13. Except as expressly set forth herein, all of the terms
and conditions of the Agreement, the Debentures, the Registration Rights
Agreement and the Warrants shall continue in full force and effect after
the execution of this Amendment, and shall not be in any way changed,
modified or superseded by the terms set forth herein and the provisions
of this Amendment, if not expressly set forth herein, shall otherwise be
subject to the provisions of the Agreement.
14. The obligations of each Holder under this Amendment are
several and not joint with the obligations of any other Holder, and no
Holder shall be responsible in any
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way for the performance of the obligations of any other Holder under
this Amendment. Nothing contained herein or in this Amendment, and no
action taken by any Holder pursuant thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Amendment. Each
Holder shall be entitled to independently protect and enforce its
rights, including without limitation the rights arising out of this
Amendment, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose. Each
Holder has been represented by its own separate legal counsel in their
review and negotiation of this Amendment. For reasons of administrative
convenience only, Holders and their respective counsel have chosen to
communicate with the Company through FW. FW does not represent all of
the Holders but only Omicron Master Trust. The Company has elected to
provide all Holders with the same terms under this Amendment for the
convenience of the Company and not because it was required or requested
to do so by the Holders.
REMAINDER INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, each party has executed this Amendment as of the
date first written above.
ABLE ENERGY, INC.
By: _____________________________
Name:
Title:
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[SIGNATURE PAGE OF HOLDERS TO ABLE AMENDMENT]
Name of Holder: __________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF HOLDER: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
[SIGNATURE PAGES CONTINUE]
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