FIRST AMENDMENT TO WARRANT AGREEMENT
FIRST
AMENDMENT TO
This
First Amendment to Warrant Agreement (this “Amendment”)
is
entered into as of July [ _ ], 2007 by and between Southridge Technology
Group,
Inc., a Delaware corporation (“Pubco”)
that
will acquire all of the issued and outstanding capital stock of RxElite Holdings
Inc., a Delaware corporation (“RxElite”)
and
succeed to the business of RxElite as its sole line of business (on a combined,
post-acquisition basis, Pubco, and its subsidiary, RxElite, are collectively
referred to as “Seller”),
and
the Warrant Holder (as defined below). This Amendment amends that Warrant
Agreement (the “Warrant”),
dated
as of January 19, 2007 by and among RxElite and the Warrant Holder (as defined
therein). Capitalized terms not otherwise defined herein shall have the meanings
given in the Warrant.
RECITALS
WHEREAS,
RxElite
previously issued the Warrant to the Warrant Holder pursuant to the Stock
Purchase Agreement (the “Agreement”),
dated
as of January 19, 2007 by and among the Company and the persons and entities
listed on Exhibit
A
thereto;
WHEREAS,
certain
purchasers acquired from RxElite common stock and warrants to purchase shares
of
the common stock in a subsequent private offering of securities pursuant
to
certain Stock Purchase Agreements each dated as of July [ _ ], 2007 (the
“New
Purchase Agreements”);
WHEREAS,
the
Warrant Holder and RxElite wish to amend the Warrant to provide substantially
the same terms to the Warrant Holder as are contained in the warrants to
purchase common stock issued pursuant to the New Purchase Agreements effective
with and conditioned upon the acquisition referred to above such that Pubco
shall assume all obligations and rights of RxElite hereunder; and
WHEREAS,
Section
10.1 of the Warrant provides that it may be amended with the written consent
of
each party thereto.
NOW,
THEREFORE, in
consideration of the foregoing and of the mutual promises and covenants set
forth herein, the parties agree as follows:
1. PAR
VALUE.
Each
reference to the par value per share of the Company’s Common Stock contained in
the Warrant is hereby deleted.
2. AMENDMENT
OF SECTION 1.
Section
1 of the Warrant is hereby deleted and replaced in its entirety by the
following:
1. Warrant;
Call.
(a) The
Company hereby grants to the Warrant Holder, subject to the terms set forth
herein, the right to purchase at any time during the term commencing on the
date
that the Company has amended its certificate of incorporation to increase
its
authorized capital to permit the exercise of all of the Warrants (the
“Commencement Date”) and ending at 5:30 p.m., New York time, on the second (2nd)
anniversary of the Commencement Date hereof (the “Expiration Date”) __________
shares of Common Stock (the “Shares”), at an initial exercise price of US $0.85
per share, subject to adjustment as provided in Section 3 hereof (as in effect
from time to time, the “Exercise Price”).
(b) Notwithstanding
anything herein to the contrary, if after the Commencement Date, the closing
bid
price of the Common Stock equals or exceeds US $2.20 per share for 20
consecutive trading days, which period shall have commenced only after the
Commencement Date (such period the “Threshold Period”), the Company may, within
2 trading days after the end of any such Threshold Period, deliver a written
notice to the Warrant Holder (a “Forced Exercise Notice”) to cause the Warrant
Holder to exercise this Warrant in its entirety within five trading days
(such
fifth trading day, the “Forced Exercise Date”), after which date this Warrant
shall immediately expire and be of no further force and effect, provided,
however, that the Registration Statement (as defined in the Registration
Rights
Agreement) must have been continuously effective during the Threshold Period.
The Company may not deliver a Forced Exercise Notice, and any Forced Exercise
Notice delivered by the Company shall not be effective, unless the Registration
Statement covering the resale of the Shares remains effective on each trading
day occurring during the applicable Threshold Period through and including
the
Forced Exercise Date.
3. AMENDMENT
OF SECTION 3.2.
The last
sentence of Section 3.2 of the Warrant is hereby deleted in its
entirety.
4. NEW
SECTION 3.4.
New
Section 3.4 of the Warrant is hereby inserted and reads in its entirety as
follows:
Adjustment
Upon Issuance of Common Stock.
If the
Company, at any time prior to the earlier of (i) the Effective Date or (ii)
the
one-year anniversary of the Closing Date (as defined in the Purchase Agreement),
shall sell or grant any option to purchase, or sell or grant any right to
reprice its securities, or otherwise dispose of or issue (or announce any
offer,
sale, grant or any option to purchase or other disposition) any Common Stock
or
securities convertible into Common Stock (collectively, the “Additional Shares”)
entitling any person to acquire shares of Common Stock, at an effective price
per share less than the then effective Exercise Price (such lower price,
the
“Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if
the holder of the Additional Shares so issued shall at any time, whether
by
operation of purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options or
rights
per share which are issued in connection with such issuance, be entitled
to
receive shares of Common Stock at an effective price per share which is less
than the then effective Exercise Price, such issuance shall be deemed to
have
occurred for less than the Exercise Price on such date of the Dilutive
Issuance), then the Exercise Price shall be reduced, concurrently with such
Dilutive Issuance, to a price (calculated to the nearest cent) determined
by
multiplying such Exercise Price by a fraction, (A) the numerator of which
shall
be (1) the number of shares of Common Stock outstanding immediately prior
to
such Dilutive Issuance plus (2) the number of shares of Common Stock which
the
aggregate consideration received or to be received by the Company for the
total
number of Additional Shares so issued would purchase at such Exercise Price;
and
(B) the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such Dilutive Issuance plus the number of
such
Additional Shares so issued. Such adjustment shall be made whenever such
Additional Shares are issued. Notwithstanding the foregoing, no adjustments
shall be made under this Section 3.4 in respect of an Exempt Issuance. “Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Company pursuant to any stock or
option
plan duly adopted for such purpose by a majority of the non-employee members
of
the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established, (b) securities exercisable
or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the Commencement Date, provided that such securities have
not
been amended since the Commencement Date to increase the number of such
securities or to decrease the exercise, exchange or conversion price of such
securities, (c) securities issued pursuant to acquisitions or strategic
transactions, including but not limited to joint ventures and other strategic
partnerships, approved by a majority of the disinterested directors of the
Company and (d) securities issued to a bank or other financial institution
in
connection with a loan transaction provided that the issuance of the securities
is not primarily for fundraising purposes and is approved by a majority of
the
disinterested directors of the Company.
5. AMENDMENT
OF SECTION 8.
Section
8 of the Warrant is hereby deleted and replaced in its entirety by the
following:
Rights
Applicable to the Warrant Shares.
The
parties hereby acknowledge and agree that the Shares are “Registrable
Securities” pursuant to the Registration Rights Agreement.
6. AMENDMENT
OF SECTION 10.1.
Section
10.1 of the Warrant is hereby deleted and replaced in its entirety by the
following:
Waivers
and Amendments.
This
Warrant or any provisions hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the Company and by Warrant
Holders holding a majority of the then outstanding Warrants issued in a series
of financings pursuant to the Agreement and the New Purchase
Agreements.
7. AMENDMENT
OF SECTION 10.2.
Section
10.2 of the Warrant is hereby amended such that all references to the “State of
Idaho” shall be replaced with the “State of New York” and all references to the
“City of Boise, Idaho” shall be replaced with the “City of New York, State of
New York.”
8. NO
OTHER AMENDMENT.
Except
as specifically amended by this Amendment, the Warrant shall continue in
full
force and effect. In the event of any conflict between the terms of this
Amendment and the Warrant, the terms of this Amendment shall govern and control.
9. GOVERNING
LAW. This
Amendment shall be governed by and construed under the laws of the State
of New
York as applied to agreements among New York residents entered into and to
be
performed entirely within New York.
10. COUNTERPARTS.
This
Amendment may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
11. SEVERABILITY.
If one
or more provisions of this Amendment are held to be unenforceable under
applicable law, such provision shall be excluded from this Amendment and
the
balance of the Amendment shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
12. ENTIRE
AGREEMENT.
This
Amendment, together with the Warrant (including the Appendices and Exhibits
thereto) and the other agreements executed pursuant hereto and thereto,
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.
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sd-381217
IN
WITNESS WHEREOF, the
parties have executed this First Amendment to Warrant Agreement as of the
date
first written above.
SELLER:
By:
___________________________________
Name:
_________________________________
Title:
__________________________________
WARRANT
HOLDER:
_______________________________________
(Name
of
Warrant Holder)
By:
____________________________________
Name:
__________________________________
Title:
___________________________________
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