Exhibit 10.18
EXCHANGE AGREEMENT
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This Exchange Agreement ("AGREEMENT") is entered into this 29th day of
March, 2005 by and between Interactive Brand Development, Inc., a Delaware
corporation (the "COMPANY") and XTV Investments LLC, a Delaware limited
liability company (the "XTVI").
1. The Company hereby agrees to issue and deliver to XTVI: (a) Four
Million (4,000,000) shares (the "SERIES H SHARES") of its Series H Convertible
Preferred Stock (the "SERIES H STOCK"), which shall be convertible into _____
million (__,000,000) shares (the "CONVERSION SHARES") of the Company's Common
Stock (the "COMMON STOCK") in accordance with the formula set forth in the
Certificate of Determination further described below and (b) its promissory note
(the "NOTE") in the original principal amount of One Million Dollars
($1,000,000) in the form attached hereto as Exhibit "A". The rights, preferences
and privileges of the Series H Shares are as set forth in the Certificate of
Determination of Series H Preferred Stock as filed with the Secretary of State
of the State of Delaware.
2. In consideration of the issuance to XTVI of the Series H Shares and
the Note, XTVI hereby assigns and transfers to the Company (i) Six Thousand Two
Hundred Fifty (6,250) Shares of the Common Stock of XTV, Inc., a Nevada
corporation ("XTV") which were issued to XTVI pursuant to that certain
Settlement Agreement dated March 16, 2005 by and among XTV and XTVI among others
(the "SETTLEMENT AGREEMENT"), (ii) Two Thousand Eighty-Three Shares of the
Common Stock of XTV which were issued to XTVI pursuant to that certain Escrow
and Marketing Agreement dated March 16, 2005 by and between XTV and XTVI (the
"MARKETING AGREEMENT") and, and subject to, (iii) all of XTVI's rights and
obligations under the Settlement Agreement and the Marketing Agreement all of
which obligations the Company hereby expressly assumes.
3. This Agreement shall be binding upon and shall inure to the benefit
of the Company and XTVI and their respective successors and assigns,
and may be executed in counterparts, and as so executed shall
constitute one and the same agreement.
4. Subject to a 15 day due diligence period.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Exchange
Agreement this 29th day of March, 2005.
Interactive Brand Development, Inc.
a Delaware corporation
By: /s/ C. Xxxx Xxxxxxx, Xx.
Name: Xxxx Xxxxxxx, Xx.
Ttle: President
XTV Investments LLC
a Delaware limited liability company
By: /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
its manager
EXHIBIT A
Series H Convertible Preferred Stock
The Series H Convertible Preferred Stock, 4,000 shares authorized, $100 stated
par value
Powers, preferred rights, qualifications, limitations and restrictions:
o Dividends: Ten percent (10%) per year. If converted prior to
anniversary, dividends will accrue to conversion date. Dividends may
be paid in cash or in common stock at the option of the Company.
o Redemption and Conversion: The Series H Convertible Preferred Stock
shall be redeemed five years after original issue for __,000,000
million shares of IBD common stock. At the option of the holder,
each share of Series H Convertible Preferred stock may be converted
at any time after original issue at the stated value, plus all
accumulated and unpaid dividends. The common shares underlying
Series H are subject to piggyback registration rights on the first
registration statement filed by the Company subsequent to the
issuance of Series H.
o Limitations: The Series H Preferred shares are secured by the XTV,
Inc. shares owned by the Company. Upon dissolution, liquidation or
winding up of the Corporation, the holders of the Series H
Convertible Preferred Stock shall be entitled to receive, before any
distribution is made to the holders of shares of common stock of the
Corporation, the stated value of $100 per share plus accumulated but
unpaid dividends as secured by the XTV stock the Company owns and no
more. In the event the amount available to pay the holders of Series
D Convertible Preferred Stock, Series E Convertible Preferred Stock,
Series F Convertible Preferred Stock, Series G convertible Preferred
Stock and Series H convertible Preferred Stock, shall be
insufficient to permit the payment to such Holders of the full
preferential amounts due to the holder of such series of Preferred
Stock then the amount legally available for distribution shall be
distributed among the Holders of Series D , Series E, Series F,
Series G, and Series H pro rata, based on the respective liquidation
amounts to which the holders of each such series are entitled.
o Voting: The holders of the Series H Convertible Preferred Stock are
entitled to vote the shares of Preferred as if they were converted
to common under the terms and conditions herein. Votes may be cast
on any and all issues voted on by the holders of the Company's
common stock The 4,000 shares of Series H Preferred represent
40,000,000 shares of common stock, with each share of common stock
representing one vote.
$.50 Warrants
The $.50 Warrants
Powers, preferred rights, qualifications, limitations and restrictions:
o Exercise: The $.50 Warrants may be exercised in whole or in part at
the election of the Holder at any time prior to 4 p.m. on the fifth
anniversary of the original issuance. One warrant shall be exercised
for one share of IBD common stock. At the fifth anniversary, all
unexercised warrants shall expire, along with all rights and
obligations of the Parties thereto. The holder may elect to exercise
the Warrants by surrendering the properly endorsed Warrant
Certificate to the Company, with a signed and dated notice to
exercise, accompanied by payment of $.50 per share to be converted.
Alternately, the Holder may surrender the Warrant Certificate to the
Company and receive in exchange the number of shares of the
Company's common stock as would equal the number to be issued if the
Holder had paid the $.50 per share, less the $.50 per share. For
example, if the average closing price of IBD common stock is $1.00,
and Holder exercises 100,000 warrants, he may pay $50,000 to receive
100,000 shares, or he may elect a cashless exercise and receive
50,000 shares. The average closing price shall be calculated by
adding together and dividing by five the closing price on the five
trading days prior to the date of the notice to exercise submitted
to the Company by the Holder.
o Limitations: Upon dissolution, liquidation or winding up of the
Corporation, any unexercised $.50 Warrants shall expire, and the
Holders thereto shall not be entitled to receive any payment or
distribution to be made by the Company to the Holders of other
classes of securities.
o Voting: The holders of the $.50 Warrants shall have no voting
rights.
$1,000,000 March 31, 2005
PROMISSORY NOTE
(Unsecured)
FOR VALUE RECEIVED, Interactive Brand Development, Inc., a Delaware
corporation ("MAKER") hereby promises to pay PHSL World Wide, Inc., a Florida
corporation, or order ("HOLDER") at 421 No. Rodeo Ave., Penthouse No. 4, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000, or at such other place as Holder may from time to time
designate in writing, the principal sum of One Million Dollars ($1,000,000),
with interest at the prime or reference rate of interest quoted from time to
time in the Western Edition of the Wall Street Journal, all principal and
accrued interest payable on or before March, 2010 (the MATURITY DATE). Principal
and interest payable in lawful money of the United States of America. The Note
may be paid at anytime prior to the Maturity Date without penalty or premium.
Interest on the Note shall be calculated on the basis of a 365/366 day year on
actual days elapsed. If this Note is not paid in full on or before the Maturity
Date, the principal amount hereof and all accrued interest shall bear interest
at twelve percent (12%) per annum.
Maker and all endorsers, guarantors and sureties consent to: (a) any
renewal, extension or modification (whether one or more) of the terms of the
Note, or of any other document or instrument executed in connection therewith,
including, without limitation, the terms or time of payment under this Note; (b)
the granting of any other indulgences to Maker and (c) the taking or releasing
of other or additional parties primarily or contingently liable hereunder. Any
such renewal, extension, modification, release, surrender, exchange or
substitution may be made without notice to Maker or to any endorser, guarantor
or surety hereof, and without affecting the liability of said parties hereunder.
If this Note is now, or hereinafter shall be, signed by more than one
party or person, it shall be the joint and several obligation of such parties or
persons (including, without limitation, all makers, endorsers, guarantors and
sureties), and shall be binding upon such parties and upon their respective
successors and assigns. In the event of legal action to enforce this Note, the
prevailing party shall be entitled to recover reasonable attorneys fees and
court costs.
This Note may not be changed, modified, amended or terminated orally, but
only in writing executed by the Holder hereof. This Note shall be governed by
and construed under the laws of the State of California. Maker agrees to execute
such other and further documents and instruments to further evidence or carry
out any of the provisions of this Note as are reasonably requested by Holder.
INTERACTIVE BRAND DEVELOPMENT, INC.
a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: CEO
