Exhibit 10.1
DEBT CONVERSION AGREEMENT AND RELEASE
This Debt Conversion Agreement and Release (this "Agreement") is made
and entered into as of August 20, 2004 (the "Effective Date"), by and among MB
Software Corporation, a Texas corporation ("MBSC"), Wound Care Innovations, LLC,
a Nevada limited liability company (the "Company"), and H.E.B., LLC, a Nevada
limited liability company, and Xx. Xxxxxx X. Xxxxxxxx, members of the Company
(each a "Member" and collectively, the "Members").
BACKGROUND
A. The Members have made certain loans to the Company, the principal
thereof and accured, but unpaid, interest thereon is set forth in the attached
Exhibit A (the "Debt");
B. The Company is further indebted to the Members in the amounts set
forth in Exhibit A for certain services performed by the Members as consultants
to the Company (the "Consulting Fees");
C. The Company and MBSC, among others, are entering into a Agreement
and Plan of Merger dated even herewith (the "Merger Agreement"), pursuant to
which the Company will become a wholly owned subsidiary of MBS; and
D. As a condition to the closing of the Merger Agreement, MBSC has
required that the parties hereof enter into this Agreement.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Conversion of Debt. Upon effectiveness of the merger contemplated
under the Merger Agreement, and without any other action on the party of any of
the parties hereto, the Debt shall automatically be converted into the right to
receive an aggregate of 2,072,303 shares of MBSC's common stock, $.0001 par
value per share ("Common Stock"), in accordance with the allocations of shares
set forth in Exhibit A. In no event shall the Members be entitled to receive
interest on account of any shares of Common Stock due as a result of the
conversion of the Debt pursuant to this Section 1.
2. Conversion of Consulting Fees. Upon effectiveness of the merger
contemplated under the Merger Agreement, and without any other action on the
party of any of the parties hereto, the Consulting Fees shall automatically be
converted into the right to receive an aggregate of 500,000 shares of Common
Stock, in accordance with the allocations of shares set forth in Exhibit A. In
no event shall the Members be entitled to receive interest on account of any
shares of Common Stock due as a result of the conversion of the Consulting Fees
pursuant to this Section 2.
3. Representations of Members. Each of the Members, individually and
for himself only, represents and warrants to the Company and MBSC:
(a) That the Debt and the Consulting Fees are the only
obligations due and payable to such Member as of the Effective Date
(b) That such Member has been provided with, and is familiar
with, the financial and other information regarding the business and operations
of MBS that such Member deems necessary for evaluating the merits and risks of
the transactions contemplated by this Agreement and that such Member is
knowledgeable and experienced in financial and business matters and is capable
of evaluating the merits and risks of the transactions contemplated by this
Agreement.
(c) That such Member is acquiring the shares of Common Stock
for investment purposes and not with a view toward resale or distribution
thereof, and has no present intention of selling, granting any participation in,
or otherwise distributing the Common Stock.
(d) That such Member understands the shares of Common Stock
will be issued by MBS pursuant to an exemption from the registration
requirements of the Securities Act, and are characterized as "restricted
securities" under the Securities Act and may be resold without registration
under the Securities Act only in limited circumstances and that such member is
familiar with Rule 144 and understand the resale limitations imposed thereby on
the Common Stock.
4. Releases by Members. Each of the Members, individually and for
himself only, fully and forever release, discharge and acquit MBSC and the
Company and their respective officers, directors, stockholders, employees,
predecessors and successors in interest, assigns, attorneys and agents of each
of the foregoing from and against any and all claims, demands, obligations,
duties, liabilities, damages, expenses, indebtedness, debts, breaches of
contract or warranty, duty or relationship, acts, omissions, or liability of any
type, kind, nature, description or character whatsoever, whether now known or
unknown, whether liquidated or unliquidated, which arise out of or in connection
with the Debt or the Consulting Fees or any agreement or other arrangement
governing or related thereto.
5. Termination. If the Merger is not consummated on or before September
30, 2004, this Agreement shall be void, ab inito, and shall not effect the Debt
and Consulting Fees which will remain due and payable in accordance with the
terms thereof as if this Agreement were never in effect.
6. Entire Agreement. This Agreement contains the entire agreement of
the parties hereto and supersedes all prior agreements and understandings, oral
or written between the parties hereto. No modification or amendment of any of
the terms, conditions or provisions herein may be made otherwise than by written
agreement signed by the parties hereto.
7. Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed and enforced in accordance with the
laws of the State of Texas, without regard to its choice of laws principles.
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8. Parties Bound. This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the parties and
their respective heirs, personal representatives, successors and assigns.
9. Enforceability. If, for any reason, any provision contained in this
agreement should be held invalid in part by a court of competent jurisdiction,
then it is the intent of each of the parties hereto that the balance of this
Agreement be enforced to the fullest extent permitted by applicable law.
Accordingly, should a court of competent jurisdiction determine that the scope
of any covenant is too broad to be enforced as written, it is the intent of each
of the parties that the court should reform such covenant to such narrower scope
as it determines enforceable.
10. Other Obligations. Consultant represents and warrants that he has
not as of the execution of this Agreement assumed any obligations inconsistent
with those contained herein.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, but only one of which need be produced.
The parties have duly executed this Agreement as of the Effective Date.
MB SOFTWARE CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, President
WOUND CARE INVOCATIONS, LLC
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Manager
H.E.B., LLC
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, President
Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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EXHIBIT A
Outstanding Outstanding Shares of
Member Debt Consulting Fee Common Stock
------ ----------- -------------- ------------
H.E.B., LLC $803,357.00 $160,125 1,376,403
Xxxxxx X. Xxxxxxxx $647,255.00 $189,875 1,195,900
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