REPURCHASE RIGHTS AGREEMENT
Exhibit
10.3
THIS
REPURCHASE RIGHTS AGREEMENT (the
“Agreement”) is effective as of the 17th day of January 2008, by and between
WinSonic Digital Media Group, Ltd., a Nevada corporation (“WinSonic”), and
Xxxxxxxx Xxxxxx, a California resident (“Xxxxxx”).
W
I T N E S S E T H:
WHEREAS,
pursuant to that
certain Settlement Agreement and General Release Agreement (the “Settlement
Agreement”) of even date herewith, WinSonic has issued an aggregate of 1,996,521
restricted shares (the “Settlement Shares”) of WinSonic’s common stock, par
value $0.001 per share (the “Common Stock”);
WHEREAS,
the parties desire to
set forth certain understandings regarding the grant by Xxxxxx to WinSonic
of
certain repurchase rights with respect to WinSonic’s Common Stock;
WHEREAS,
it
is a condition to
the effectiveness of the Settlement Agreement that the parties enter into this
Agreement;
NOW,
THEREFORE, in
consideration of the mutual promises, representations, agreements and warranties
contained herein and in the Settlement Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1.
Repurchase Rights
Regarding Common Stock.
a.
Subject to Section 1(b) below, WinSonic shall have the right to repurchase
(the
“Repurchase Right”) that number of shares of Common Stock (in whole, but not in
part) set forth next to each period and during each of the periods specified
below (each, a “Repurchase Period”), for a purchase price of 60% of the Share
Price as set forth in the Settlement Agreement per share (the
“Repurchase Price”), in accordance with the terms and conditions specified
herein (for the avoidance of doubt, the Repurchase Price is a fixed amount
which
is the same amount used to calculate the number of Settlement Shares issued
pursuant to the Settlement Agreement, and regardless of the actual trading
price
of the Common Stock at the time any Repurchase Right is exercised or forfeited
which Repurchase Price shall henceforth only be adjusted, if at all, to account
for
stock splits, reverse stock splits or other corporate actions having a similar
effect, e.g., if the
split shall be 1 new share for 2 old shares, then the Repurchase Price would
be
doubled.):
|
Period
|
Number
of
Shares
|
|
a. From
the date hereof through February 15, 2008
|
51,547
|
|
b. From
February 16, 2008 through March 15, 2008
|
51,547
|
|
c. From
March 16, 2008 through April 15, 2008
|
85,911
|
|
d. From
April 16, 2008 through May 30, 2008*
|
1,807,516
|
|
*
This Repurchase Period may be extended for an additional thirty (30)
days
if WinSonic makes a cash payment to Xxxxxx of $15,000 no later than
May
30, 2008 along with a notice of intention to extend the last payment
due
date.
|
b.
If during any Repurchase Period, WinSonic is in possession of any material,
nonpublic information that prevents it from exercising its Repurchase Rights,
the applicable Repurchase Period shall be extended until such time as such
material, nonpublic information shall have been publicly disclosed; providedthat,
in no event
will any Repurchase Period be extended for more than fifteen (15)
days. WinSonic agrees promptly, within forty-eight (48) hours of
becoming aware of same, to notify Xxxxxx if it anticipates the need for any
such
extension.
2.
Repurchase
Procedures.
a.
Before WinSonic shall be entitled to exercise its Repurchase Rights, WinSonic
shall give written notice to Xxxxxx, in substantially the form attached hereto
as Exhibit A
(the “Repurchase Notice”), at least five business days prior to the effective
date of each such repurchase (the “Repurchase Date”). WinSonic’s failure to
provide a Repurchase Notice on or prior to the fifth business day preceding
the
expiration of the applicable monthly repurchase period specified in Section
1
above (as adjusted) shall, at the election of Xxxxxx in her sole discretion,
constitute an irrevocable waiver of WinSonic’s Repurchase Right with respect to
the number of shares otherwise subject to such Repurchase Right, and Xxxxxx
shall have no further obligation to provide such shares to
WinSonic.
b.
Following delivery of a Repurchase Notice pursuant to Section 2(a) hereof,
(i)
Xxxxxx shall tender to WinSonic’s counsel, a stock certificate or certificates
for the number of shares of Common Stock specified in the Repurchase Notice
to
Winsonic on or prior to the Repurchase Date and (ii) promptly upon receipt
of
such stock certificate(s) by WinSonic’s counsel, who shall hold such
certificate(s) until receipt of the Repurchase Price has been confirmed in
writing by Xxxxxx, WinSonic shall pay to Xxxxxx the Repurchase Price for such
Common Stock by transfer of immediately available funds to a bank account
designated by Xxxxxx. Failure by WinSonic to initiate payment within
three (3) business days of receipt of such certificate by WinSonic’s counsel
shall, at the election of Xxxxxx be deemed an irrevocable waiver of the
Repurchase Right with respect to such certificate(s) delivered to WinSonic’s
counsel, and upon written notice to WinSonic and WinSonic’s counsel, WinSonic’s
counsel shall promptly return such certificate(s) to Xxxxxx.
x.
Xxxxxx shall cooperate with WinSonic and provide WinSonic with additional
documentation or information upon reasonable request in order to enable WinSonic
to exercise the Repurchase Right granted hereunder.
3.
Restrictions
on Settlement
Shares. Without the prior written consent of WinSonic, until
the expiration of the applicable Repurchase Period, Xxxxxx agrees not to,
directly or indirectly, offer, sell, contract to sell, pledge or otherwise
dispose of (or
2
enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by Xxxxxx or any affiliate of Xxxxxx or any person in privity with
the Xxxxxx or any affiliate of the Xxxxxx) any of the Settlement Shares subject
to repurchase by WinSonic in such Repurchase Period.
4.
Notices. Any
notice required to be delivered hereunder will be either delivered in person,
or
sent to the other Party by (a) postal mail, followed up immediately by email,
(b) facsimile (electronically confirmed and followed up immediately by postal
mail), or (c) electronic mail (followed up immediately by postal
mail). A notice is considered given when it is
delivered. For the purposes of this Agreement, the address of each
Party shall be:
| WINSONIC: | WinSonic Digital Media Group, Ltd. | ||
| 000 Xxxxxxxx Xxxxxx, Xxxxx 0000 | |||
| Xxxxxxx, XX 00000 | |||
| Attention: Xxxxxxx X. Xxxxxxx | |||
| Fax: (000) 000-0000 | |||
| Email: xxxxxxx@xxxxxxxx.xxx | |||
| with a copy to: | Paul, Hastings, Xxxxxxxx & Xxxxxx LLP | ||
| 000 Xxxxxxxxx Xxxxxx, X.X. | |||
| Xxxxx 0000 | |||
| Xxxxxxx, XX 00000 | |||
| Attention: K Xxxxxxx | |||
| Fax: (000) 000-000-0000 | |||
| Email: xxxxxxxx@xxxxxxxxxxxx.xxx | |||
| XXXXXX: | Xxxxxxxx Xxxxxx | ||
| 0000 Xxxx Xxxxxx | |||
| Xxxxx 0000 | |||
| Xxxxxx, XX 00000 | |||
| Fax: 000-000-0000 | |||
| Email: xxxxxxx@xxxxxxxxxxxxxxx.xxx | |||
| with a copy to: | Xxxxxxx X. Xxxxx, Esq. | ||
| XX Xxx 0000 | |||
| Xxxx, XX 00000 | |||
| Fax: 000-000-0000 | |||
| Email: xxx0000@xxx.xxx |
4. Counterparts. This
Agreement may be executed in counterparts, all of which shall be considered
one
and the same agreement, and shall become effective when all counterparts have
been signed by each of the parties and delivered to the other
parties. A signature delivered by facsimile shall constitute an
original.
3
5.
Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to principles
of conflicts of laws.
6.
Waivers and
Amendments. Any term or provision of this Agreement may be
waived at any time by the party that is entitled to the benefits thereof, and
any term or provision of this Agreement may be amended or supplemented at any
time by the mutual consent of the parties, provided that any waiver of any
term
or condition, or any amendment or supplementation of this Agreement, must be
in
writing. A waiver of any breach or failure to enforce any of the
terms or conditions of this Agreement shall not in any way affect, limit or
waive a party’s rights thereunder at any time to enforce strict compliance
thereafter with every term or condition of this Agreement.
7.
Entire
Agreement. This Agreement (including documents and instruments
referred to herein) together with the Settlement Agreement constitute the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them, with respect to the subject
matter hereof.
IN
WITNESS WHEREOF, the
undersigned have executed and delivered this Agreement on the date first written
above.
Xxxxxx:
/s/
Xxxxxxxx
Xxxxxx 1/17/08
Xxxxxxxx
Xxxxxx
Date
In
her individual
capacity
WinSonic:
|
|
WINSONIC
DIGITAL MEDIA GROUP, LTD.,
a Nevada corporation |
By:/s/
Xxxxxxx
Xxxxxxx 1/18/08
Name: Xxxxxxx
Xxxxxxx
Date
Title: Chairman
of the Board and CEO
4
Exhibit
A
Repurchase
Notice
Dated:
_______________________
TO:
Xxxxxxxx Xxxxxx
WinSonic
Digital Media Group, Ltd. (the
“Company”) hereby irrevocably elects to exercise its Repurchase Rights pursuant
to Section 1__ of that certain Repurchase Rights Agreement dated as of
________________, 2008 (the “Repurchase Agreement”) as further set forth
below:
| Shares of Common |
| Stock to be Repurchased: _________________________________ |
| Aggregate Purchase Price: _________________________________ |
| Repurchase Date: _________________________________________ |
The
Company hereby represents that the
exercise of the Repurchase Rights hereunder is in compliance with the applicable
provisions of the Nevada corporation law.
WINSONIC
DIGITAL MEDIA GROUP, LTD.,
a Nevada corporation
a Nevada corporation
By:____________________________
Name:
Title:
