AMENDMENT NO. 1 TO 8% SECURED DEBENTURE
Exhibit
10.1
AMENDMENT
NO. 1 TO 8% SECURED DEBENTURE
This AMENDMENT NO. 1 TO 8% SECURED
DEBENTURE (this “Amendment”) is made and entered into this 5th day of March,
2009 by and between China North East Petroleum Holdings Limited, a Nevada
corporation (the “Company”), and Lotusbox Investments Limited, an entity
organized under the laws of Singapore (“Lotusbox”). Capitalized terms
used herein but not defined herein shall have the meaning set forth for such
terms in the Debenture.
WHEREAS, the Company issued a 8%
Secured Debenture to Lotusbox on February 28, 2008 (the “Debenture”) pursuant to
the Securities Purchase Agreement by and between the Company and Lotusbox on
even date therewith.
WHEREAS, pursuant to Section 5(c) of
the Debenture, Lotusbox is entitled to require that the Company pay any portion
or all of the principal and accrued interest on the Debenture at anytime
following 10 days’ written notice to the Company in the event that the Company
fails to effect a listing on either the American Stock Exchange or NASDAQ for
the Common Stock by the date which is 12 months after the Original Issue Date of
the Debenture (the “Original Listing Deadline”).
WHEREAS,
the Company does not expect to effect a listing on the American Stock Exchange
or NASDAQ by the Original Listing Deadline.
WHEREAS, the Company and Lotusbox
desire to amend the Debenture on the terms set forth herein.
NOW, THEREFORE, in consideration of the
foregoing and the respective representations, covenants and agreements set forth
below, the parties agree as follows:
1. Extension of Company’s
Listing Obligation. Lotusbox hereby agrees to extend the
Original Listing Deadline until August 30, 2010 (the “Revised Listing Deadline”)
and agrees that until the date of the Revised Listing Deadline it will not
enforce its rights to demand payment on any portion of the principal and accrued
interest pursuant to Section 5(c) of the Debenture other than as set forth in
Section 2 of
this Amendment. For the avoidance of doubt, the parties agree and
acknowledge that all payments, fees and penalties set forth in the Debenture,
other than those set forth in Section 2(a) and Section 5(c), shall remain in
full force and effect.
2. Revision of Schedule of
Repayment. Section 2(a) of the Debenture shall be restated in
its entirety as follows:
(a) Principal
Payment. The principal amount of this Debenture shall be payable as
follows:
|
Repayment
Date
|
Repayment
Amount
|
|
August
28, 2008
|
$750,000
|
|
March
28, 2009
|
$1,250,000
|
|
June
28, 2009
|
$1,250,000
|
|
September
28, 2009
|
$1,250,000
|
|
December
28, 2009
|
$1,250,000
|
|
March
28, 2010
|
$1,875,000
|
|
August
28, 2010
|
$2,500,000
|
|
February
28, 2011
|
$2,500,000
|
|
August
28, 2011
|
$1,500,000
|
|
February
28, 2012
|
$875,000
|
|
Total
Principal Payment
|
$15,000,000
|
3. Issuance of
Warrants. The Company shall issue to Lotusbox warrants to
purchase: (a) 250,000 shares of Common Stock at a per share exercise price of
$2.00, and (b) 250,000 shares of Common Stock at a per share exercise price of
$2.35 (collectively, the “Warrants”). The term of the Warrants shall
be four years from the date of issuance. The Warrants shall be
substantially in the form attached hereto as Exhibit A.
4. Delivery of
Warrants. The Company shall cause a copy of the Warrants to be
delivered by facsimile to Lotusbox upon execution of this
Amendment. The originally executed Warrants shall be delivered by the
Company to Lotusbox no later than seven days following the execution of this
Amendment to:
Lotusbox
Investments Limited
x/x 000,
Xxxxx Xxxx Xxxxxx
#00-00/00
Xxxxxxxxx
000000
Attn: Xxxxx
The
2
5. Representations and
Warranties. The Company hereby makes the following
representations and warranties to Lotusbox:
(a) the representations and warranties
of the Company set forth in Section 3.1 of the Purchase Agreement are true and
correct in all respects as of the date of this Amendment, except as set forth on
Exhibit B
attached hereto;
(b) the Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by the Amendment and otherwise to carry out its obligations
hereunder. The execution and delivery of the Amendment by the Company
and the consummation by it of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, its board of directors or its
stockholders in connection therewith; and
(c) the Warrants are duly authorized
and, upon issuance, delivery and payment, will be legally binding obligations of
the Company. The shares of Common Stock issuable upon exercise of the
Warrants have been duly and validly authorized and reserved for issuance and
upon issuance, delivery and payment, will be validly issued, fully paid and
non-assessable.
6. Legal
Fees. The Company shall pay the legal fees incurred by
Lotusbox in connection with the transactions contemplated hereby, which shall
not exceed $5,000.
7. Additional Event of
Default. It shall be an
“Event of Default” pursuant to Section 7 of the Debenture if at any time after
the second anniversary of the date hereof, there is no effective registration
statement, or no current prospectus available for, the resale of the shares of
Common Stock issuable upon exercise of the Warrants. If such Event of
Default occurs, the Company shall reimburse Lotusbox for all fees and expenses
incurred by Lotusbox in connection with enforcing its rights and remedies under
the Purchase Agreement and the Debenture and under applicable law.
8. No Other Changes. Except as
amended hereby, all other terms of the Debenture shall remain unmodified and in
full force and effect.
[SIGNATURE
PAGE FOLLOWS]
3
IN WITNESS WHEREOF, the parties hereto
have executed and delivered this Amendment on the day and year first above
written.
|
China
North East Petroleum Holdings Limited
|
Lotusbox
Investments Limited
|
||||
|
By:
|
/s/
Xxxx Xxxxxxx
|
By:
|
/s/ Xxxxxx Xxxxxxx | ||
|
Xxxx
Xxxxxxx
|
Name:
Xxxxxx Xxxxxxx
|
||||
|
Chairman
and President
|
Title:
Director
|
||||
Exhibit
A
Form
of Warrant
Exhibit
B
Representations
and Warranties
