Exhibit 10.1
DEBT CONVERSION AGREEMENT
This Debt Conversion Agreement (the "Agreement") dated November 2, 2006, is
by and between, XA, Inc., a Nevada corporation (the "Company") and Xxxxx X.
Xxxx, Attorney at Law, an individual (the "Creditor").
W I T N E S S E T H:
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WHEREAS, the Company owes various amounts exceeding $15,000 to the Creditor
in consideration for legal services rendered to the Company (the "Outstanding
Debt");
WHEREAS, the Company desires to convert $15,000 of the Outstanding Debt
into (a) shares of newly issued restricted common stock of the Company, $0.001
par value per share at a rate of one (1) share of Common Stock for every $0.20
of outstanding debt (the "Common Stock" and the "Conversion Rate"); and (b)
grant warrants to purchase 75,000 shares of the Company's common stock at an
exercise price of $0.30 per share;
WHEREAS, the Creditor agrees to convert the Outstanding Debt into Common
Stock at the Conversion Rate;
WHEREAS, the Company and the Creditor desire to set forth in writing the
terms and conditions of their agreement and understanding concerning conversion
of the Outstanding Debt; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements, and considerations herein contained, the parties hereto agree as
follows:
1. Consideration. In consideration and in satisfaction of the forgiveness of
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$15,000 of the Outstanding Debt owed to the Creditor, the Company agrees to
issue the Creditor (a) an aggregate of 75,000 shares of Common Stock (one
share for every $0.20 of Outstanding Debt converted into shares of common
stock)(the "Shares"); and (b) grant warrants to purchase 75,000 shares of
the Company's common stock at an exercise price of $0.30 per share (the
"Warrant").
2. Form S-8 Registration. The Company agrees to register the Shares and the
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shares of common stock which the Warrant is exercisable for (the "Warrant
Shares") with the Securities and Exchange Commission (the "Commission") on
a Form S-8 Registration Statement within sixty (60) days of the date of
this Agreement first written above (collectively the "Registration").
3. Full Satisfaction. Creditor agrees that it is accepting the Shares and
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Warrants in full satisfaction of $15,000 of Outstanding Debt which is being
converted into Common Stock and that as such Creditor will no longer have
any rights of repayment against the Company as to the $15,000 of the
Outstanding Debt which is being converted into Shares and Warrants pursuant
to this Agreement, at such time as the Shares and Warrant have been issued
to Creditor and such Shares and Warrant Shares have been registered with
the Commission pursuant to Section 2 above.
4. Mutual Representations, Covenants and Warranties.
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(a) The parties have all requisite power and authority, corporate or
otherwise, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and thereby. The parties have duly
and validly executed and delivered this Agreement and will, on or
prior to the consummation of the transactions contemplated herein,
execute, such other documents as may be required hereunder and,
assuming the due authorization, execution and delivery of this
Agreement by the parties hereto and thereto, this Agreement
constitutes, the legal, valid and binding obligation of the parties
enforceable against each party in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and general equitable principles.
(b) The execution and delivery by the parties of this Agreement and
the consummation of the transactions contemplated hereby and thereby
do not and shall not, by the lapse of time, the giving of notice or
otherwise: (a) constitute a violation of any law; or (b) constitute a
breach or violation of any provision contained in the Articles of
Incorporation or Bylaws, or such other document(s) regarding
organization and/or management of the parties, if applicable; or (c)
constitute a breach of any provision contained in, or a default under,
any governmental approval, any writ, injunction, order, judgment or
decree of any governmental authority or any contract to which either
the Company or the Creditor is a party or by which either the Company
or the Creditor is bound or affected.
5. Tradability of Shares. The Shares and Warrants of the Company to be issued
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to the Creditor have not been registered under the 1933 Act, nor registered
under any state securities law, and will be "restricted securities" as that
term is defined in Rule 144 under the 1933 Act, until such time as the
Registration provided by Section 2 herein has been affected. Until such
time as the Registration is effective with the Commission, the securities
may not be offered for sale, sold or otherwise transferred except pursuant
to an effective registration statement under the 1933 Act, or pursuant to
an exemption from registration under the 1933 Act. The shares to be issued
to the Creditor will bear an appropriate restrictive legend to this effect
until such time as the Registration has been affected.
6. Ownership Limitation. The Creditor agrees that it will at no time
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beneficially own more than 9.99% of the Company's common stock as
determined under Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and that it will not exercise any shares
under the Warrant if such exercise would cause him to own more than 9.99%
of the Company's then outstanding common stock; provided however, that
Creditor shall be able to hold greater than 9.99% of the Company's common
stock if the Creditor provides the Company at least Sixty-One (61) days
prior written notice of such intent to hold more than 9.99% of the
Company's then outstanding common stock.
7. Miscellaneous.
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(a) Assignment. All of the terms, provisions and conditions of this
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Agreement shall be binding upon and shall inure to the benefit of and
be enforceable by the parties hereto and their respective successors
and permitted assigns.
(b) Applicable Law. This Agreement shall be construed in accordance
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with and governed by the laws of the State of Texas, excluding any
provision which would require the use of the laws of any other
jurisdiction.
(c) Entire Agreement, Amendments and Waivers. This Agreement
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constitutes the entire agreement of the parties regarding the subject
matter of the Agreement and expressly supersedes all prior and
contemporaneous understandings and commitments, whether written or
oral, with respect to the subject matter hereof. No variations,
modifications, changes or extensions of this Agreement or any other
terms hereof shall be binding upon any party hereto unless set forth
in a document duly executed by such party or an authorized agent or
such party.
(d) Section Headings. Section headings are for convenience only and
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shall not define or limit the provisions of this Agreement.
(e) Effect of Facsimile and Photocopied Signatures. This Agreement
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may be executed in several counterparts, each of which is an original.
It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other
counterparts. A copy of this Agreement signed by one party and faxed
to another party shall be deemed to have been executed and delivered
by the signing party as though an original. A photocopy of this
Agreement shall be effective as an original for all purposes.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
XA, INC.
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/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx,
Chief Executive Officer
"CREDITOR"
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/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, Attorney at Law
