FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
FIRST
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
THIS
FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT (this “Amendment”)
is
made and entered into effective as of the 12th
day of
November, 2008 by and among American Dairy, Inc., a corporation organized under
the laws of State of Utah (the “Company”),
and
the undersigned investors (individually, an “Investor”
and
collectively, the “Investors”). Capitalized
terms not otherwise defined herein shall have the meaning set forth in the
Agreement (as defined below).
W
I T
N E S S E T H
WHEREAS,
the Company and the Investors have entered into that certain Registration Rights
Agreement, dated as of October 2, 2006 (the “Agreement”);
and
WHEREAS,
the Parties have negotiated and agreed upon certain amendments to the Agreement
to be effective from and after the date of this Amendment, and wish to document
the same.
NOW,
THEREFORE, for and in consideration of the mutual promises of the Parties as
set
forth herein, and other valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged, the Parties agree as follows:
Article
1
Amendments
to the Agreement
1.1 Section
1
of the Agreement is amended as follows:
(a) The
definition of “Registrable
Securities”
shall
be deleted in its entirety and replaced with the following:
““Registrable
Securities”
means
the shares of the Company’s Common Stock issued or issuable upon (i) conversion
of the principal amount of the Notes (the “Principal
Conversion Shares”),
(ii)
conversion of interest payable on the Notes (the “Interest
Conversion Shares”,
and
together with the Principal Conversion Shares, the “Conversion
Shares”),
(iii)
exercise of the Investor Warrants (the “Warrant
Shares”),
and
(iv) the 216,639 shares of the Company’s Common Stock (the “Settlement
Shares”)
issued
by the Company and delivered to the Holders contemporaneously with execution
of
this Amendment in settlement and compromise of a claim of the Investors for
amounts due from the Company under Section 2(c) of this Agreement for the period
from October 1, 2007 through September 30, 2008, and any shares of capital
stock
issued or issuable as a dividend on or in exchange for or otherwise with respect
to any of the foregoing.”
(b) The
following definitions shall be added:
““Permitted
Holders”
means
Xx. Xxxx You-Bin, a resident of Beijing in the People’s Republic of China, and
his estate, spouse, ancestors and lineal descendants, the legal representatives
of any of the foregoing and the trustees of any bona fide trusts of which the
foregoing are the sole beneficiaries or the grantors, or any individual, entity
or association of which the foregoing beneficially owns, individually or
collectively with any of the foregoing, at least 30% of the total voting power
of the voting stock of such entity or association.”
““Qualifying
IPO”
means
a
public offering of Common Stock of the Company pursuant to an effective
registration statement under the 1933 Act that results in (i) at least 25%
of
the Company’s issued and outstanding share capital being publicly held by
individuals, entities and associations other than any affiliate of the Company
or the Permitted Holders, (ii) the product of (x) the number of shares of Common
Stock of the Company (including other securities of the Company that are
convertible into Common Stock of the Company, on an as-converted basis) and
(y)
the aggregate last sale price of the Company’s Common Stock on the securities
exchange on which it is listed on the date of listing in connection with the
Qualifying IPO, shall be at least $500,000,000 (unless such percentage in (i)
above or dollar amount in (ii) above be otherwise agreed by the holders of
a
majority in aggregate principal amount of the Notes then outstanding), (iii)
the
minimum number of holders of the Company’s Common Stock as required by the
securities exchange on which such Common Stock is listed in connection with
such
Qualifying IPO and (iv) listing of the Common Stock on the New York Stock
Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market or any other market consented to by the holders of a majority
in
aggregate principal amount of the Notes then outstanding.”
1.2 Section
2(a)(i) of the Agreement is amended by adding the following phrase after the
word “Warrants” in the third to last sentence of that section:
“,
and
the number of Settlement Shares.”
2
1.3 Section
2(c) of the Agreement is hereby deleted in its entirety and replaced with the
following language:
“Payments
by the Company.
The
Company shall use its best efforts to obtain effectiveness of the Registration
Statement as soon as practicable. If (i) the Registration Statement(s) covering
the Registrable Securities required to be filed by the Company pursuant to
Section 2(a) hereof is not filed by the Required Filing Date or any Demand
Filing Date, as applicable, or declared effective by the SEC one hundred and
twenty (120) days thereafter, or (ii) after the Registration Statement has
been
declared effective by the SEC, sales of all of the Registrable Securities cannot
be made pursuant to the Registration Statement, or (iii) the Common Stock is
not
listed or included for quotation on the Nasdaq Global Market (“Nasdaq”),
the
Nasdaq Capital Market (“Nasdaq
Capital”),
the
New York Stock Exchange (the “NYSE”),
the
NYSE Archipelago Exchange (“ArcaEx”),
or
the NYSE Euronext after being so listed or included for quotation, or (iv)
the
Common Stock ceases to be traded on the Over-the-Counter Bulletin Board (the
“OTC
BB”)
prior
to being listed or included for quotation on one of the aforementioned markets,
or (v) a Qualifying IPO has not occurred on or before June 30, 2009, then the
Company will pay to each holder of the Notes additional interest (“Additional
Interest”)
in an
amount equal to the then outstanding principal amount of the Notes held by
such
holder (“Outstanding
Principal Amount”)
multiplied by the Applicable Percentage (as defined below) times the sum of:
(i)
the number of months (prorated for partial months) after the Required Filing
Date or Demand Filing Date, as applicable, or the end of the aforementioned
one
hundred and twenty-day period and prior to the date the Registration Statement
is declared effective by the SEC; provided,
however,
that
there shall be excluded from such a period any delays which are solely
attributable to changes required by the Investors in the Registration Statement
with respect to information relating to the Investors, including, without
limitation, changes to the plan of distribution, or to the failure of the
Investors to conduct their review of the Registration Statement pursuant to
Section 3(h) below in a reasonably prompt manner; and (ii) the number of months
(prorated for partial months) that sales of all of the Registrable Securities
cannot be made pursuant to the Registration Statement after the Registration
Statement has been declared effective (including, without limitation, when
sales
cannot be made by reason of the Company’s failure to properly supplement or
amend the prospectus included therein in accordance with the terms of this
Agreement, but excluding any days during an Allowed Delay (as defined in Section
3(f)). The term “Applicable
Percentage”
means,
effective as of October 1, 2008, one hundredth (.01) with respect to the first
thirty (30) days of any calculation under clause (i) of the sentence in which
the term is used, and one hundredth (.01) for any other purpose. (For example,
if the Registration Statement becomes effective one (1) month after the end
of
such thirty-day period, the Company would pay $2,500 for each $250,000 of
Outstanding Principal Amount. If thereafter, sales could not be made pursuant
to
the Registration Statement for an additional period of one (1) month, the
Company would pay an additional $2,500 for each $250,000 of Outstanding
Principal Amount.) Such amounts shall be paid in cash in U.S. dollars and in
immediately available funds or, at each Investor’s option, in shares of Common
Stock priced at the Conversion Rate of the Notes, within five (5) days of the
last day of each month during which any such amounts are incurred
hereunder.”
3
1.4 Section
8
of the Agreement is deleted in its entirety and replaced with the following:
“Section
8. Additional
Covenants of the Company
(a) With
a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that
may
at any time permit the Investors to sell securities of the Company to the public
without registration (“Rule
144”),
the
Company agrees to:
(i) make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
(ii)
file
with
the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and
(iii)
furnish
to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
a
copy of the most recent annual or quarterly report of the Company and such
other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
(b) Until
all
the Registrable Securities have been resold or transferred by all the Investors
(other than to an affiliate of any Investor), the Company will (i) cause its
Common Stock to be continued to be registered under Section 12(b) or 12(g)
of
the 1934 Act, (ii) comply in all respects with its reporting and filing
obligations under the 1934 Act, (iii) comply with all reporting requirements
that are applicable to an issuer with a class of shares registered pursuant
to
Section 12(b) or 12(g) of the 1934 Act, as applicable, (iv) comply with all
requirements related to any registration statement filed pursuant to this
Agreement, and (v) not take any action or file any document (whether or not
permitted by the 1933 Act or the 1934 Act or the rules thereunder) that would
result in termination or suspension of such registration or termination or
suspension of its reporting and filing obligations under said acts.
(c) Upon
the
occurrence of and during the continuation of any breach or violation by the
Company of any of the covenants in this Section 8, the Company shall pay to
the
holders of the Notes additional interest at the rate of 1% per month payable
on
the last day of each month in United States Dollars in cash in immediately
available funds.
(d) Notwithstanding
the forgoing provisions of this Section 8, in no event will the aggregate
additional interest payable by the Company after October 1, 2008 pursuant to
Section 2(c) and Section 8(c) exceed 1% per month.”
4
Article
2
Miscellaneous
2.1 Counterparts;
Facsimile Signatures.
This
Amendment may be executed in two (2) or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. Any signature page of any such counterpart, or any electronic
facsimile thereof, may be attached or appended to any other counterpart to
complete a fully executed counterpart of this Amendment, and any telecopy or
other facsimile transmission of any signature of a Party shall be deemed an
original and shall bind such Party.
2.2 Nature
of Amendment.
This
Amendment contains the entire agreement of the Parties with respect to the
specific subject matter hereof and supersedes all prior written or oral
correspondence between the Parties and their representatives (including emails)
regarding the specific subject matter hereof.
2.3 Ratification
of Agreement.
Except
as expressly set forth in this Amendment, all other provisions of the Agreement
remain unchanged and in full force and effect.
2.4 Amendments.
No
amendment to the terms and conditions of this Amendment shall be valid and
binding on the Parties unless made in writing and signed by an authorized
representative of each of the Parties.
2.5 Waiver.
No
waiver of any provision of this Amendment, or breach hereof, shall be effective
unless it is in writing, signed by the Party waiving such
provision.
2.6 Governing
Law.
This
Amendment shall be interpreted in accordance with the substantive and procedural
laws of the State of New York, without regard to its choice of laws rules which
may dictate the application of the laws of another jurisdiction.
5
IN
WITNESS WHEREOF,
the
Company and the undersigned Investors have caused this Agreement to be duly
executed as of the date first above written.
| AMERICAN DAIRY, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxxx Xxxx | |
|
Name: Xxxxxxxx
Xxxx
Title:
Chief
Financial Officer
|
||
[The
signatures of the Investors begin on the next page]
| RFT INVESTMENT COMPANY, LLC | ||||
| By: | LOR, Inc., its Manager | |||
| By: | /s/ Xxxxxx X.Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Secretary/Treasurer | |||
(Signature
page to First Amendment to Registration Rights
Agreement)
| ST. XXXXX CAPITAL, L.L.C. | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxx | |
| Name: | Xxxxxx X. Xxxxxx | |
| Title: | Manager | |
(Signature
page to First Amendment to Registration Rights
Agreement)
| /s/ R. Xxxxxxx Xxxxxxx | ||
| R. XXXXXXX XXXXXXX | ||
(Signature
page to First Amendment to Registration Rights
Agreement)
| RCTLOR, LLC | ||||
| By: | LOR, Inc., its Manager | |||
| By: | /s/ Xxxxxx X.Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Secretary/Treasurer | |||
(Signature
page to First Amendment to Registration Rights
Agreement)
| XXXXX X. XXXXXXX | ||
| |
|
|
| By: | /s/ R. Xxxxxxx Xxxxxxx | |
| Name: | R. Xxxxxxx Xxxxxxx | |
| Title: | Attorney-in-fact | |
(Signature
page to First Amendment to Registration Rights
Agreement)
|
|
|
RRR
DECEMBER PARTNERSHIP, L.P.
|
||
| By: |
1994
RRR Voting Trust, its managing general
partner
|
|||
| By: | /s/ R. Xxxxxxx Xxxxxxx | |||
| Name: | R. Xxxxxxx Xxxxxxx | |||
| Title: | Trustee | |||
(Signature
page to First Amendment to Registration Rights
Agreement)
|
|
|
GWR
DECEMBER PARTNERSHIP, L.P.
|
||
| By: |
1994
GWR Voting Trust, its managing general
partner
|
|||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Trustee | |||
|
|
|
GIA
PARTNERS, L.P.
|
||
| By: |
GIA
Management Company, LLC, its general
partner
|
|||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | CEO | |||
(Signature
page to First Amendment to Registration Rights
Agreement)
| RADIC, L.L.C. | ||
| |
|
|
| By: | /s/ Xxxx X. Xxxxxxx | |
|
Name: Xxxx
X. Xxxxxxx
Title:
Manager
|
||
(Signature
page to First Amendment to Registration Rights
Agreement)
| XXXXXXX INVESTMENT FUND | ||
| |
|
|
| By: | /s/ R. Xxxxxxx Xxxxxxx | |
|
Name:
R.
Xxxxxxx Xxxxxxx
Title:
Partner
|
||
(Signature
page to First Amendment to Registration Rights
Agreement)
| THE O. XXXXX XXXXXXX FOUNDATION | ||
| |
|
|
| By: | /s/ R. Xxxxxxx Xxxxxxx | |
|
Name: R.
Xxxxxxx Xxxxxxx
Title:
Trustee
|
||
(Signature
page to First Amendment to Registration Rights
Agreement)
|
|
|
XXXX
& XXXXX CAPITAL QP, LLC, as successor
to Gullane Capital Partners Encore LLC
|
||
| By: |
Xxxx
&
Xxxxx
Capital Management, LLC, its
managing member
|
|||
| By: | /s/ Xxxxxxx Xxxxxxxxx Xxxx | |||
| Name: | Xxxxxxx Xxxxxxxxx Xxxx | |||
| Title: | Principal | |||
(Signature
page to First Amendment to Registration Rights
Agreement)
|
DISCOVERY
GLOBAL OPPORTUNITY
MASTER
FUND, LTD.
|
||
| |
|
|
| By: | /s/ Xxxxx Xxxxxx | |
| Name: | Xxxxx Xxxxxx | |
| Title: | Senior Vice President | |
(Signature
page to First Amendment to Registration Rights Agreement)
|
SWIFTWATER
AGGRESSIVE VALUE MASTER
FUND,
LTD.
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxx | |
| Name: | Xxxxx X. Xxxxxx | |
| Title: | Director | |
(Signature
page to First Amendment to Registration Rights
Agreement)
