Monthly Redemption from Modification and Amendment Agreement
THIS MODIFICATION AND AMENDMENT AGREEMENT ("Agreement") is made effective this 1st day of September, 2010 (the "Execution Date"), by and among NXT Nutritionals Holdings, Inc., a Delaware corporation (the "Company"), and each of the investors set forth on the signature page hereto (individually, an "Investor" and collectively, the "Investors"). Parties to this Agreement are individually referred to as the "Party," and collectively referred to as the "Parties." Capitalized terms used herein but not otherwise defined shall the meanings ascribed to them in the Transaction Documents (defined below).
Monthly Redemption. On each Monthly Redemption Date, the Company shall redeem the Monthly Redemption Amount (the "Monthly Redemption"). The Monthly Redemption Amount payable on each Monthly Redemption Date shall be paid in cash; provided, however, as to any Monthly Redemption and upon twenty (20) Trading Days' prior written irrevocable notice (the "Monthly Redemption Notice"), in lieu of a cash redemption payment the Company may elect to pay all or part of a Monthly Redemption Amount in Conversion Shares based on a conversion price equal to the lesser of (i) the then Conversion Price and (ii) 85% of the average of the VWAPs for the 20 consecutive Trading Days ending on the Trading Day immediately prior to the applicable Monthly Redemption Date (subject to adjustment for any stock dividend, stock split, stock combination or other similar event affecting the Common Stock during such 20 Trading Day period) (the "Monthly Redemption Price" and such 20 Trading Day period, the "Monthly Redemption Period"); provided, however, that if such Monthly Redemption Price is less than $0.40, subject to adjustment for any stock dividend, stock split, stock combination or other similar event affecting the Common Stock, the Company shall obtain the Holder's prior written consent to pay the Monthly Redemption Amount in Conversion Shares; provided, further, that the Company may not pay the Monthly Redemption Amount in Conversion Shares unless (y) from the date the Holder receives the duly delivered Monthly Redemption Notice through and until the date such Monthly Redemption is paid in full, the Equity Conditions have been satisfied, unless waived in writing by the Holder, and (z) as to such Monthly Redemption, prior to such Monthly Redemption Date (but not more than 5 Trading Days prior to the commencement of the Monthly Redemption Period), the Company shall have delivered to the Holder's account with The Depository Trust Company a number of Conversion Shares to be applied against such Monthly Redemption Amount equal to the quotient of (x) the applicable Monthly Redemption Amount divided by (y) the lesser of (A) the Conversion Price and (B) 85% of the average of the VWAPs for the 20 consecutive Trading Days ending on the 3rd Trading Day immediately prior to the applicable date of the Monthly Redemption Notice (the "Pre-Redemption Conversion Shares"). The Holder may convert, pursuant to Section 4(a), any Principal Amount of this Note subject to a Monthly Redemption at any time prior to the date that the Monthly Redemption Amount plus