EXCHANGE AGREEMENT
Exhibit
10.2
This
Exchange Agreement (this “Agreement”)
is
dated as of February __, 2006, by and among SP Holding Corporation, a Delaware
corporation (the “Company”),
and
the holders of shares of the Company’s promissory notes whose signatures appear
on the signature page attached hereto (the “Holders”).
Recitals:
WHEREAS,
the Holders currently hold promissory notes of the Company in an aggregate
principal amount plus accrued interest of $__________ (the “Notes”)
issued
to the Holders on the dates and in the amounts set forth on Exhibit
A
attached
hereto; and
WHEREAS,
subject to the terms and conditions set forth herein, the Company desires to
cancel the Notes and the Holders are willing to exchange the Notes for an
aggregate of ____________ shares of Series A Convertible Preferred Stock of
the
Company, par value $.001 per share and stated value $9,000 per share (the
“Series
A Preferred Shares”),
convertible into shares of the Company’s common stock, par value $.001 per
share. The designation, rights, preferences and other terms and provisions
of
the Company’s Series A Convertible Preferred Stock are set forth in the
Certificate of Designation of the Relative Rights and Preferences of the Series
A Convertible Preferred Stock (the “Certificate
of Designation”)
attached hereto as Exhibit
B.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby agreed and acknowledged, the parties hereby agree as
follows:
AGREEMENT:
1. Securities
Exchange.
(a) In
consideration of and in express reliance upon the representations, warranties,
covenants, terms and conditions of this Agreement, each Holder agrees to deliver
to the Company the Notes in exchange for the Series A Preferred Shares and
the
Company agrees to issue and deliver the Series A Preferred Shares to the Holders
in exchange for the Notes.
(b) The
closing under this Agreement (the “Closing”)
shall
take place at the offices of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 upon the satisfaction of each of
the
conditions set forth in Sections 4 and 5 hereof (the “Closing
Date”).
(c) At
the
Closing, the Company shall issue to the Holders an aggregate of __________
Series A Preferred Shares
as set
forth on Exhibit
A
hereto
and the Holders shall deliver to the Company for cancellation the Notes. The
Series A Preferred Shares are sometimes referred to herein as the
“Securities”.
2. Representations,
Warranties and Covenants of the Holders.
Each
of
the Holders hereby makes the following representations and warranties to the
Company, and
covenants
for the benefit of the Company, with respect solely to itself and not with
respect to any other Holder:
(a) If
a
Holder is an entity, such Holder is a corporation, limited liability company
or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.
(b) This
Agreement has been duly authorized, validly executed and delivered by each
Holder and is a valid and binding agreement and obligation of each Holder
enforceable against such Holder in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy
or
other laws affecting the enforcement of creditors’ rights generally, and each
Holder has full power and authority to execute and deliver the Agreement and
the
other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.
(c) Each
Holder understands that the Securities are being offered and sold to it in
reliance on specific provisions of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of each Holder set
forth herein for purposes of qualifying for exemptions from registration under
the Securities Act of 1933, as amended (the “Securities
Act”)
and
applicable state securities laws.
(d) Each
Holder is an “accredited investor” as defined under Rule 501 of Regulation D
promulgated under the Securities Act.
(e) Each
Holder is and will be acquiring the Securities for such Holder’s own account,
and not with a view to any resale or distribution in whole or in part, in
violation of the Securities Act or any applicable securities laws.
(f) The
offer
and sale of the Securities is intended to be exempt from registration under
the
Securities Act, by virtue of Section 3(a)(9) and/or 4(2) thereof. Each Holder
understands that the Securities purchased hereunder have not been registered
under the Securities Act and that none of the Securities can be sold or
transferred unless they are first registered under the Securities Act and such
state and other securities laws as may be applicable or the Company receives
an
opinion of counsel reasonably acceptable to the Company that an exemption from
registration under the Securities Act is available (and then the Securities
may
be sold or transferred only in compliance with such exemption and all applicable
state and other securities laws).
3. Representations,
Warranties and Covenants of the Company.
The
Company represents and warrants to each Holder, and covenants for the benefit
of
each Holder, as follows:
(a) The
Company has been duly incorporated and is validly existing and in good standing
under the laws of the state of Delaware, with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
currently conducted, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such
registration
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or
qualification, except where the failure to register or qualify would not have
a
Material Adverse Effect. For purposes of this Agreement, “Material
Adverse Effect”
shall
mean any material adverse effect on the business, operations, properties,
prospects, or financial condition of the Company and its subsidiaries and/or
any
condition, circumstance, or situation that would prohibit or otherwise
materially interfere with the ability of the Company to perform any of its
obligations under this Agreement in any material respect.
(b) The
Securities have been duly authorized by all necessary corporate action and,
when
paid for or issued in accordance with the terms hereof, the Securities shall
be
validly issued and outstanding, fully paid and nonassessable, free and clear
of
all liens, encumbrances and rights of refusal of any kind.
(c) This
Agreement has been duly authorized, validly executed and delivered on behalf
of
the Company and is a valid and binding agreement and obligation of the Company
enforceable against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy
or
other laws affecting the enforcement of creditors’ rights generally, and the
Company has full power and authority to execute and deliver the Agreement and
the other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.
(d) The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement by the Company, will not (i)
conflict with or result in a breach of or a default under any of the terms
or
provisions of, (A) the Company’s restated certificate of incorporation or
by-laws, or (B) of any material provision of any indenture, mortgage, deed
of
trust or other material agreement or instrument to which the Company is a party
or by which it or any of its material properties or assets is bound, (ii) result
in a violation of any provision of any law, statute, rule, regulation, or any
existing applicable decree, judgment or order by any court, Federal or state
regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company, or any of its material properties or assets
or
(iii) result in the creation or imposition of any material lien, charge or
encumbrance upon any material property or assets of the Company or any of its
subsidiaries pursuant to the terms of any agreement or instrument to which
any
of them is a party or by which any of them may be bound or to which any of
their
property or any of them is subject except in the case of clauses (i)(B), (ii)
or
(iii) for any such conflicts, breaches, or defaults or any liens, charges,
or
encumbrances which would not have a Material Adverse Effect.
(e) The
delivery and issuance of the Securities in accordance with the terms of and
in
reliance on the accuracy of each Holder’s representations and warranties set
forth in this Agreement will be exempt from the registration requirements of
the
Securities Act.
(f) No
consent, approval or authorization of or designation, declaration or filing
with
any governmental authority on the part of the Company is required in connection
with the valid execution and delivery of this Agreement or the offer, sale
or
issuance of the Securities or the consummation of any other transaction
contemplated by this Agreement.
(g) The
Company has complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and delivery of the
Securities
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hereunder.
Neither the Company nor anyone acting on its behalf, directly or indirectly,
has
or will sell, offer to sell or solicit offers to buy any of the Securities,
or
similar securities to, or solicit offers with respect thereto from, or enter
into any preliminary conversations or negotiations relating thereto with, any
person, or has taken or will take any action so as to bring the issuance and
sale of any of the Securities under the registration provisions of the
Securities Act and applicable state securities laws. Neither the Company nor
any
of its affiliates, nor any person acting on its or their behalf, has engaged
in
any form of general solicitation or general advertising (within the meaning
of
Regulation D under the Securities Act) in connection with the offer or sale
of
any of the Securities.
(h) The
Company represents that it has not paid, and shall not pay, any commissions
or
other remuneration, directly or indirectly, to the Holder or to any third party
for the solicitation of the exchange of the Notes for the Series A Preferred
Shares pursuant to this Agreement.
4. Conditions
Precedent to the Obligation of the Company to Issue the
Securities.
The
obligation hereunder of the Company to issue and deliver the Securities to
each
Holder is subject to the satisfaction or waiver, at or before the Closing Date,
of each of the conditions set forth below. These conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion.
(a) Each
Holder shall have executed and delivered this Agreement.
(b) Each
Holder shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this Agreement to
be
performed, satisfied or complied with by such Holder at or prior to the Closing
Date.
(c) Each
Holder shall have delivered the original Notes to the Company.
(d) The
representations and warranties of each Holder shall be true and correct in
all
material respects as of the date when made and as of the Closing Date as though
made at that time, except for representations and warranties that are expressly
made as of a particular date, which shall be true and correct in all material
respects as of such date.
5. Conditions
Precedent to the Obligation of the Holders to Accept the
Securities.
The
obligation hereunder of each Holder to accept the Securities is subject to
the
satisfaction or waiver, at or before the Closing Date, of each of the conditions
set forth below. These conditions are for each Holder’s sole benefit and may be
waived by each Holder at any time in its sole discretion.
(a) The
Company shall have executed and delivered this Agreement.
(b) The
Certificate of Designation shall have been filed with the Secretary of State
of
Delaware.
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(c) The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Agreement to
be
performed, satisfied or complied with by the Company at or prior to the Closing
Date.
(d) Each
of
the representations and warranties of the Company shall be true and correct
in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that speak
as of a particular date, which shall be true and correct in all material
respects as of such date.
(e) No
statute, regulation, executive order, decree, ruling or injunction shall have
been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any
of
the transactions contemplated by this Agreement at or prior to the Closing
Date.
(f) As
of the
Closing Date, no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, shall be pending against
or
affecting the Company, or any of its properties, which questions the validity
of
the Agreement or the transactions contemplated thereby or any action taken
or to
be taken pursuant thereto. As of the Closing Date, no action, suit, claim or
proceeding before or by any court or governmental agency or body, domestic
or
foreign, shall be pending against or affecting the Company, or any of its
properties, which, if adversely determined, is reasonably likely to result
in a
Material Adverse Effect.
6. Governing
Law; Consent to Jurisdiction.
This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of New York without giving effect conflicts of law principles that
would result in the application of the substantive laws of another jurisdiction.
Each of the parties consents to the exclusive jurisdiction of the Federal courts
whose districts encompass any part of the County of New York located in the
City
of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on
forum non conveniens,
to the
bringing of any such proceeding in such jurisdictions. Each party waives its
right to a trial by jury. Each party to this Agreement irrevocably consents
to
the service of process in any such proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to such party at its address
set forth herein. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
7. Notices.
All
notices and other communications provided for or permitted hereunder shall
be
made in writing by hand delivery, express overnight courier, registered first
class mail, or telecopier (provided that any notice sent by telecopier shall
be
confirmed by other means pursuant to this Section 11), initially to the address
set forth below, and thereafter at such other address, notice of which is given
in accordance with the provisions of this Section.
(a) if
to the
Company:
5
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SP
Holding Corporation
0000
Xxxxxx Xxxxx
Xxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxx
Xxxxxxxxxx
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
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(b) if
to the
Holders:
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At
the
address of such Holder set forth on Exhibit
A
to
this Agreement.
|
All
such
notices and communications shall be deemed to have been duly given: when
delivered by hand, if personally delivered; when receipt is acknowledged, if
telecopied; or when actually received or refused if sent by other
means.
8. Entire
Agreement.
This
Agreement constitutes the entire understanding and agreement of the parties
with
respect to the subject matter hereof and supersedes all prior and/or
contemporaneous oral or written proposals or agreements relating thereto all
of
which are merged herein. This Agreement may not be amended or any provision
hereof waived in whole or in part, except by a written amendment signed by
both
of the parties.
9. Counterparts.
This
Agreement may be executed by facsimile signature and in counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF, this Agreement was duly executed on the date first written
above.
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SP
HOLDING CORPORATION
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By:______________________________________
Name:
Title:
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HOLDER:
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By:_____________________________________
Name:
Title:
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HOLDER:
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By:_____________________________________
Name:
Title:
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HOLDER:
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By:_____________________________________
Name:
Title:
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EXHIBIT
A
8
EXHIBIT
B
Certificate
of Designation
9
