Attached files
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| 8-K - Bohai Pharmaceuticals Group, Inc. | v189938_8k.htm |
AMENDMENT
AND AGREEMENT
This
AMENDMENT AND AGREEMENT
(this “Agreement”) is
entered into effective for all purposes as of June 30, 2010 by and between Bohai
Pharmaceuticals Group, Inc., a Nevada corporation (the “Company”), and Euro Pacific
Capital, Inc. (the “Investor
Representative”).
WHEREAS, on January 5, 2010,
the Company consummated a $12,000,000 financing (the “Offering”) with certain
accredited investors (the “Investors”) whereby the
Company issued 6,000,000 units at $2.00 per unit, with each unit consisting of a
$2.00 principal amount, two year convertible note (collectively, the “Notes”) and a three year
common stock purchase warrant to purchase one share of the Company’s common
stock, par value $0.001 per share (the “Common Stock”) at $2.40 per
share, subject to certain conditions (collectively, the “Warrants”);
WHEREAS, on January 5, 2010,
the Company issued an aggregate of 600,000 common stock purchase warrants,
containing terms identical to the Warrants, to the placement agents for the
Offering or their affiliates (the “Agent Warrants”);
WHEREAS, pursuant to Section
2.8 of that certain Securities Purchase Agreement, dated January 5, 2010,
between the Company and the Investors (the “SPA”), each Investor duly
appointed the Investor Representative as such Investor’s true and lawful agent
and attorney-in-fact to, among other matters, waive any terms and conditions of
the Notes and Warrants and to be such Investor’s exclusive representative with
respect to any matter, suit, claim, action or proceeding arising with respect to
any transaction contemplated by the Notes and the Warrants (the “Power of Attorney”);
and
WHEREAS, the Company and the
Investor Representative, exercising the Power of Attorney on behalf of the
Investors, desire to amend certain provisions of the Notes and Warrants and also
to amend the terms of the Agent Warrants on the terms set forth
herein.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and pursuant to the applicable provisions of the SPA, the
Notes and the Warrants, the parties hereby amend the Notes, Warrants and Agent
Warrants and otherwise agree as follows:
1. Amendments. The
Investor Representative and the Company hereby amend the Notes, Warrants and
Agent Warrants as follows:
(a) Section
5(c) of the Notes (Adjustments to Conversion
Price) is hereby deleted in its entirety and is and shall be of no
further force and effect.
(b) Section
9 of the Warrants (Certain Adjustments to
Exercise Price) is hereby deleted in its entirety and is and shall be of
no further force and effect.
(c) Section
9 of the Agent Warrants (Certain Adjustments to
Exercise Price) is hereby deleted in its entirety and is and shall be of
no further force and effect.
(d) A
new Section 5(f) is hereby added to the Notes, as follows:
“(f) No Net Cash
Settlement. In no event will any Holder of this Note be
entitled to receive a net-cash settlement in lieu of physical settlement in
shares of Common Stock or other securities of the Company, regardless of whether
any of such Holder’s Shares are registered pursuant to an effective registration
statement.”
(e) A
new Section 9(d) is hereby added to the Warrants, as follows:
“(d) No Net Cash
Settlement. In no event will any Holder of this Warrant be
entitled to receive a net-cash settlement in lieu of physical settlement in
shares of Common Stock or other securities of the Company, regardless of whether
any of such Holder’s Warrant Shares are registered pursuant to an effective
registration statement.”
(f) A
new Section 9(d) is hereby added to the Agent Warrants, as follows:
“(d) No Net Cash
Settlement. In no event will any Holder of this Warrant be
entitled to receive a net-cash settlement in lieu of physical settlement in
shares of Common Stock or other securities of the Company, regardless of whether
any of such Holder’s Warrant Shares are registered pursuant to an effective
registration statement.”
2. Agreements. In
consideration of the amendments to the Notes, Warrants and Agent implemented
hereby, the Company hereby agrees as follows:
(a) Until
the Covenant Expiration Date (as defined below), and except for Excluded
Issuances (as defined below), the Company shall not issue any shares of Common
Stock, or any securities convertible into or exchangeable or exercisable for,
directly or indirectly, shares of Common Stock at a price per share of less than
$2.20 per share.
(b) Until
the Covenant Expiration Date, and except for Permitted Transfers (as defined
below), no: (i) officer of the Company, (ii) director of the Company or (iii)
stockholder of the Company holding in excess of 5% of the outstanding shares of
Common Stock that is affiliated with any officer or director of the Company
shall sell, assign, transfer or otherwise dispose of any shares of Common Stock,
or any securities convertible into or exchangeable or exercisable for, directly
or indirectly, shares of Common Stock at a price per share of less than $2.20
per share.
(c) As
used herein, the term “Covenant
Expiration Date” means the earlier of: (i) January 5, 2013 or (ii) the
date on which, collectively with any prior conversions or exercises of Notes and
Warrants, 75% of the principal face value of the Notes in the aggregate have
been converted into shares of Common Stock and Warrants
representing, in the aggregate, 75% of the aggregate shares of Common Stock
underlying the Warrants have been exercised. For the avoidance of
doubt, the exercise or non-exercise of the Agent Warrants shall not effect the
determination of the Covenant Expiration Date.
(d) As
used herein, the term “Excluded
Issuances” means securities of the Company (including shares of Common
Stock) issued in connection with: (i) a merger, acquisition or consolidation of
or by the Company or its affiliates, (ii) a bona fide joint venture, strategic
license or similar business partnering arrangements of the Company or its
affiliates, (iii) any bona fide stock or option compensation plan, agreement or
arrangement with officers, directors, employees or consultants of the Company or
its affiliates; and (iv) any share split, share dividend, recapitalization or
similar transaction by the Company for which adjustment to the conversion price
of the Notes or the exercise price of the Warrants is made pursuant to the terms
of the Notes and the Warrants; provided, however, in each
case that the any transaction or arrangement described in this Section 2(d)
shall not be primarily for the purpose of raising capital from person or entity
whose primary business is investing in securities.
(e) As
used herein, the term “Permitted Transfers” means
transfers or gifts during the lifetime of the applicable person or, on death, by
will or intestacy to the applicable person’s immediate family or to a trust, the
beneficiaries of which are exclusively the applicable person and/or a member or
members of the applicable person’s immediate family.
3. Ratification. Except
as expressly amended by this Agreement, the terms and conditions of the Notes,
Warrants and Agent Warrants are hereby confirmed and shall remain in full force
and effect without impairment or modification.
4. Power of
Attorney. The Investor Representative represents and warrants
that: (a) the Power of Attorney is in full force and effect as of the date
hereof; (b) it has, pursuant to the Power of Attorney, the full power and
authority to enter into this Agreement and to bind each of the Investors to the
terms and conditions hereof; and (c) has received no notice regarding and is not
otherwise aware that any Investor has revoked or modified, or sought or desires
to revoke or modify, the Power of Attorney with respect to such Investor or any
Investor. The Investor Representative agrees to indemnify and hold
harmless the Company and its directors, officers, employees and agents from and
against any and all losses, claims, damages, liabilities and expenses (including
without limitation reasonable attorney fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof)
to which such persons may become subject as a result of any breach of the
representation contained in this Section 4, and will reimburse any such persons
for all such amounts as they are incurred by such persons.
5. Conflict. In
the event of any conflict between any Note, Warrant or Agent Warrant and this
Agreement, the terms of this Agreement shall govern.
6. Binding
Effect. The parties acknowledge and agree that this Agreement
complies with all of the applicable terms and conditions of the Notes and
Warrants that are necessary to effect an amendment to the Notes and Warrants and
therefore, upon the execution and delivery hereof by the parties, this Agreement
shall have such binding effect.
7. Governing Law;
Venue. All questions concerning the construction, validity,
enforcement and interpretation of the this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New
York. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
New York for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of this Agreement), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by
law. EACH PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS,
DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
8. Counterparts. This
Agreement may be executed in any number of counterparts, in PDF format or by
facsimile, each of which shall be deemed to be an original, and all of which
taken together shall constitute one and the same instrument.
[Signature
Page Follows]
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered on
their behalf as of the date first above written.
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BOHAI
PHARMACEUTICALS GROUP, INC.
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By:
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/s/ Hongwei Qu
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Name: Hongwei
Qu
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Title: President
and CEO
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EURO PACIFIC CAPITAL,
INC., as Investor Representative
and
on behalf of the Agent Warrant holders
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By:
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/s/ Gordon McBean
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Name: Gordon
McBean
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Title: Head
of Capital Markets
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Acknowledged
and Agreed with respect to its Agent Warrants:
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CHARDAN
CAPITAL MARKETS, LLC
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By:
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/s/ George Kaufman
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Name: George
Kaufman
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Title:
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