EXHIBIT 10.3
NOTEHOLDER PREFERRED SHARE EXCHANGE AGREEMENT
Dated for reference the 30th day of December, 2002
AMONG:
ECLIPSE ENTERTAINMENT GROUP, INC.
of 00000 Xxxxxx Xxxx.,
Xxxxxx Xxxx, XX 00000
("ECLE")
ANCIENT WARRIORS LLC
of 0000X Xxxxxxxx Xxxx.,
Xxx Xxxxxxx, XX 00000
("AW")
ECLIPSE RELEASING, INC.
of 00000 Xxxxxx Xxxx.,
Xxxxxx Xxxx, XX 00000
("ECR")
(collectively the "Companies")
AND
XXXXXX XXXXXX
of 00000 X.X. 00xx Xxxxxx,
Xxxxxxxx, XX 00000
XXXXXX X. ANGEL
of 0000 Xxxxxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, XX 00000
XXXXXXX X. XXXXXXXX
of 0000 00xx Xxx. XX,
Xxxxxxxx, XX. 00000
XXXXXX XXXXXXX
of 00000 000xx Xxx. XX,
Xxxxxxx, XX 00000
XXXX XXXXX
of 0 Xxxxx Xxxxxx Xxxx,
Xxxxxxxxxx, XX 00000
XXXXXX X. XXXXXXX
of 0000 - 0xx Xxxxxx X.,
Xxxxxxx, XX 00000
WESTERN PACIFIC FUNDING CORP.
00000 000xx Xxx. XX
Xxxxxxx, XX 00000
XXXXXX XX XXXXXX
of 00000 XX 00xx Xx.
Xxxxxxxx, XX 00000
XXXXXXX X. XXXX
of 00000 X.X. 00xx Xx.,
Xxxxxxxx, XX 00000
XXXXXX XXXXXXX
of 0000X Xxxxxxxx Xxxx.,
Xxx Xxxxxxx, XX 00000
XXXX XXXXX
of 0000 Xxxxxx Xxxxx,
Xxxxxxxx, XX Xxxxxx X0X 0X0
XXXXX XXXXXX
of 00000 XX 0xx Xxxxxx,
Xxxxxxxx, XX 00000
(the "noteholder" or collectively the "noteholders")
WHEREAS:
A. Eclipse Entertainment Group, Inc. is a public company engaged in the
business of media and entertainment.
X. XXXX has two subsidiaries Eclipse Releasing, Inc., a 100% owned
subsidiary and Ancient Warriors LLC., a 75% owned subsidiary.
X. XXXX, ECR and AW have received funding through various diverse funding
instruments and agreements from a group of investors (the "noteholder"
or collectively the "noteholders").
X. XXXX, ECR and AW wish to determine the appropriate payout structure to
the noteholders and to obtain sufficient additional funding to
aggressively pursue the sales of the movie, Ancient Warriors (the
"Movie") and to determine and organize a more viable strategy and
business focus for ECLE.
X. XXXX, ECR, AW and the Noteholders wish to agree on a reorganization
structure to allow the parties to maximize the return from their
investments and maximize the return to shareholders.
Now therefore this agreement witnesseth that in consideration of one dollar and
other good and valuable consideration the parties hereto agree as follows:
1. ECLE agrees to transfer all right title and interest, which they currently
hold in and to the Movie to ECR.
2. ECR agrees to authorize and create Ancient Warriors Series A to F Preferred
Shares having the terms and conditions set out in Schedule A hereto.
3. The Noteholders agree to cancel their notes and any outstanding interest
accruing thereunder in exchange for the appropriate number and series of
Ancient Warriors Series A to F Preferred Shares pursuant to Schedule B
4. The parties hereto agree that the noteholder priority list attached hereto
as Schedule B sets out the order in which each Ancient Warriors Preferred
Share shall be redeemed from the proceeds from the sale of Movie and the
number and series of Preferred Shares to be issued to each noteholder. More
specifically, the proceeds from the Movie shall first be used to redeem
Ancient Warriors Series A Preferred Shares of the Ancient Warriors
Preferred Share Priority List, and upon redemption in full of all the
Ancient Warriors Series A Preferred Shares, the proceeds shall then be
applied to the redemption of the next highest series of Ancient Warriors
Preferred Shares in alphabetical order.
5. The parties agree that should more than one Shareholder be included in a
Series of Preferred Shares, then each Share in that Series shall be
redeemed by ECR on a pro rata basis.
6. As a bonus for agreeing to cancel their existing notes and exchange them
for Ancient Warriors Preferred Shares each Ancient Warriors Preferred Share
shall provide the holder thereof with an irrevocable option, at the
Preferred Shareholders request, to exchange all or any portion of their
Preferred Shares for a predetermined number of ECLE common shares at the
rates and subject to the terms set out in Schedule A
7. The failure of any noteholders to execute this document shall not
invalidate the agreement entered into between the noteholders executing the
agreement and the Companies contained herein. Any noteholder who chooses
not to execute this agreement will not be able to rely upon or receive any
of the benefits accruing hereunder.
MISCELLANEOUS
8. All of the representations, warranties, covenants and agreements of each of
the parties hereto shall survive the Closing.
9. The parties shall indemnify and save the Companies and their officers,
directors and employees, from any and all actions taken or results achieved
in furtherance of this agreement, whether arising out of or in connection
with any breach of any representation, warranty, covenant, agreement or
condition of that party contained herein, or not.
11. All notices and other communications required or permitted by this
Agreement to be given or made by any party to the other shall be given or
made in writing and be delivered by hand or double registered mail or
conveyed by telex or facsimile transmission to the parties at the following
addresses and numbers and to the attention of the following persons:
(a) if to any of the parties As above.
or to such other addresses, numbers, or persons as the parties may give
each other notice of from time to time. Proof of delivery or transmission
in such manner shall constitute proof of receipt.
14. Time shall be of the essence hereof.
15. This Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior contracts, agreements and understandings between
the parties. There are no representations, warranties, collateral
agreements or conditions affecting this transaction other than as are
expressed or referred to herein in writing.
16. This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada. The courts of Nevada shall have sole
jurisdiction to hear and determine all manner of disputes and claims
arising out of or in any way connected with the construction, breach or
alleged, threatened or anticipated breach of this Agreement and determine
all questions as to the validity, existence or enforceability hereof.
17. This Agreement shall enure to the benefit of and be binding upon the
respective heirs, successors and assigns of the parties hereto.
18. Should any provision or provisions or conditions of this Agreement be void
or not enforceable, it or they shall be considered separate and severable
from this Agreement and its remaining provisions and conditions shall
remain in force and be binding upon the parties hereto as though the said
provision or provisions or conditions had never been included.
19. The Schedules (if any) attached to this Agreement are incorporated by
reference as fully as though contained in the body hereof. Wherever any
term or condition, expressed or implied, of such Schedules conflicts or is
at variance with any term or condition of this Agreement, such term or
condition of this Agreement shall prevail.
20. This Agreement and any certificate or other writing delivered in connection
herewith may be executed in any number of counterparts and any party hereto
may execute any counterpart, each of which when executed and delivered will
be deemed to be an original and all of which counterparts of this Agreement
or such other writing as the case may be, taken together will be deemed to
be one and the same instrument. The execution of this Agreement or any
other writing party hereto will not become effective until all counterparts
hereof have been executed by all the parties hereto.
Executed and agreed to by direct signature or execution of counterpart copy
hereof;
---------------------------
ECLIPSE ENTERTAINMENT GROUP, INC.
--------------------------- ------------------------------
ANCIENT WARRIORS, LLC. ECLIPSE RELEASING, INC.
--------------------------- ------------------------------
XXXXXX XXXXXX XXXXXX X. ANGEL
--------------------------- ------------------------------
XXXXXXX X. XXXXXXXX XXXXXX XXXXXXX
--------------------------- ------------------------------
XXXX XXXXX XXXXXX X. XXXXXXX
--------------------------- ------------------------------
WESTERN PACIFIC FUNDING CORP. XXXXXX XX XXXXXX
--------------------------- ------------------------------
XXXXXXX X. XXXX XXXXXX XXXXXXX
--------------------------- ------------------------------
XXXX XXXXX XXXXX XXXXXX
SCHEDULE "A"
The Directors of Eclipse Releasing Inc. (herein the "Company") have resolved to
create six series of Preferred Shares to be described as follows:
"Ancient Warriors Series A Preferred Shares"
"Ancient Warriors Series B Preferred Shares"
"Ancient Warriors Series C Preferred Shares"
"Ancient Warriors Series D Preferred Shares"
"Ancient Warriors Series E Preferred Shares"
"Ancient Warriors Series F Preferred Shares"
The special rights and restrictions attaching to each Series of Ancient
Warriors Preferred Shares are as follows
i) the Ancient Warriors Preferred Shares of all series shall have
attached thereto a par value of one dollar ($1.00) which shall be the
amount paid up with respect to each share;
ii) the Ancient Warriors Preferred Shares shall be issued on a dollar for
dollar basis in exchange for the notes and interest accruing
thereunder which have been issued against the Movie;
iii)
iv) the Ancient Warriors Preferred Shares of all series shall be non
voting;
v) the Ancient Warriors Preferred Shares shall be redeemable and shall be
redeemed by the Company from any and all the revenue received by the
Company from the Movie. The Ancient Warriors Preferred Shares shall be
redeemed by the Company in the following order:
Ancient Warriors Series A Preferred Shares, and upon complete redemption of this series, then the
Ancient Warriors Series B Preferred Shares, and upon complete redemption of this series, then the
Ancient Warriors Series C Preferred Shares, and upon complete redemption of this series, then the
Ancient Warriors Series D Preferred Shares, and upon complete redemption of this series, then the
Ancient Warriors Series E Preferred Shares, and upon complete redemption of this series, then the
Ancient Warriors Series F Preferred Shares;
vi) Any Ancient Warrior Preferred Share converted to common shares of ECLE
shall be issued pursuant to such terms and conditions as are required
by any Regulatory Authorities having jurisdiction over such
transaction;
vii) the Ancient Warrior Preferred Shares shall rank in priority to the ECR
common shares as to dividends;
viii) the holders of the Ancient Warrior Preferred Shares shall be
entitled, on the distribution of assets of the Company or on the
liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary, or on any other distribution of assets of
the Company among its members for the purpose of winding up its
affairs, to receive, before any distribution shall be made to holders
of the common shares or any other shares of the Company ranking junior
to the Ancient Warrior Preferred Shares with respect to repayment of
capital, (if any) the amount paid up with respect to each preferred
share held by them, together with all declared and unpaid
non-cumulative dividends (if any and if preferential) thereon. After
payment to holders of Ancient Warrior Preferred Shares of the amounts
so payable to them, they shall not be entitled to share in any further
distribution of the property or assets of the Company except as
specifically provided in the special rights and restrictions attached
to any particular series.
SCHEDULE B
INTEREST PAYABLE
(THRU DEC 31, ANCIENT WARRIOR
CATEGORY INVESTOR NAME AMOUNT PAID FROM 2002) PREFERRED SHARES
-------- ------------- ------ --------- ----- ----------------
A XXX XXXXXX 30,000 ECLE 30,000 Series A
XXX XXXXX 10,000 ECLE 10,000 Series A
WESTERN PACIFIC FUNDING 10,000 ECLE 10,000 Series A
XXXX XXXXX 40,000 ECLE 40,000 Series A
XXXX XXXX 2,500 ECLE 2,500 Series A
B XXX XXXXXX 300,000 ECLE 42,375.00 342,375 Series B
XXX XXXXX 50,000 ECR 1,875.00 51,875 Series B
C WESTERN PACIFIC FUNDING 100,000 ECLE/AW 13,812.50 113,813 Series C
XXXX XXXXX 100,000 ECLE 18,000.00 118,000 Series C
XXX XXXXX 50,000 ECLE/AW 6,093.75 56,094 Series C
XXXX XXXX 25,000 ECLE/AW 3,270.31 28,270 Series C
D XXXX XXXXXXXX 50,000 AW 6,750.00 56,750 Series D
FRANCO GROUP 300,000 AW 60,000.00 360,000 Series D
XXXXX XXXXXX 100,000 ECLE 16,000.00 116,000 Series D
XXXX XXXXX 300,000 ECLE 49,500.00 349,500 Series D
E XXX XXXXXXX 120,000 ECLE 18,150.00 138,150 Series E
XXXX XXXXXXXX 120,000 ECLE 18,150.00 138,150 Series E
XXXXX XXXXXXX 120,000 ECLE 18,150.00 138,150 Series E
XXXXX XXXXXX 200,000 ECLE 32,000.00 232,000 Series E
F XXXX XXXXX 115,000 ECLE 37,566.67 152,567 Series F
XXXXX XXXXXX 660,128 ECLE 105,620.48 765,748 Series X
X XXXXXX GROUP 400,000 AW 0.00 400,000 Series G
--------- ----------
TOTAL 3,202,628 447,313.71
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