BRIDGE LOAN FINANCING AGREEMENT
EXHIBIT 10.1
THIS
BRIDGE LOAN FINANCING AGREEMENT (“Agreement”) is dated this 28th
of May, 2008, by and between Sona Mobile Holdings Corp., a
Delaware Corporation, (the “Company”) and Xxxxx Xxxxxxx and Xxxxxxxx Xxxx,
husband and wife, New York, New York (the “Investor”).
WHEREAS,
the Investor is willing to lend the Company up to One million Dollars
($1,000,000) pursuant to the terms of this Agreement and by one or two
installments under unsecured promissory notes that would be convertible into a
subsequent financing by the Company, all as more particularly described in
substantially the form of a Bridge Loan Note attached hereto as Exhibit A (the
“Note”); and
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in consideration of the premises and the
mutual agreements, representations and warranties, provisions and covenants
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. LOAN.
Subject to the terms and conditions set forth herein, the Investor shall loan to
the Company up to One Million Dollars ($1,000,000) (the “Loan”) in one or more
installments.
2. NOTE.
The terms of the Loan shall be set forth in and evidenced by one or more
unsecured Bridge Loan Notes in substantially the form attached hereto as Exhibit
A in the aggregate amount of One Million Dollars ($1,000,000), payable to the
order of the Investor or its assignees.
3. MUTUAL
DELIVERABLES. Upon the delivery by the Investor of the loan proceeds
from time to time, as provided in Section 1 above, the Company shall deliver to
the Investor the Notes. Upon the delivery of the first proceeds, the
Company will further deliver an executed counterpart of this
Agreement.
4. GUARANTEED
CLOSING SUBJECT TO PENDING TRANSACTION. Subject to the conditions set
forth below, on June 16, 2008 or within three (3) days of June 16, 2008, or at
such other time and place as the Company and the Investor mutually agree (the
“Guaranteed Closing” and the “Guaranteed Closing Date”), the Investor shall fund
Four Hundred Seventy One Thousand and Seven Hundred and Fifty Dollars ($471,750)
from the Downpayment due to Investor from the Contract of Sale –Condominium Unit
dated May 19, 2008 between Investor and Xxxx X. and Xxxxx X.
Xxxxx. Pursuant to the terms of the Contract of Sale –Condominium
Unit, the Investor represents and warrants that the Downpayment is held by
Investor’s lawyer and is to be released to Investor within three days of June
16, 2008, even if the sale does not occur. Under the terms of this
Agreement, Investor hereby instructs their lawyer to release the Downpayment
directly to the Company by cashier’s check or wire transfer of immediately
available funds (to an account designated by the Company). In turn, Company
shall deliver to the Investor: (i) an executed counterpart of this Agreement;
and (ii) an Investor’s original Note in the amount of Four Hundred Seventy One
Thousand and Seven Hundred and Fifty Dollars ($471,750) in substantially the
same form as Exhibit A. In the event the Downpayment is not released
to Investor due to extraordinary circumstances, then such Guaranteed Closing
will occur at the time of such release. After such Guaranteed
Closing, any subsequent closing may occur by delivery by Investor
of subsequent
funds to
the Company by cashier’s check or wire transfer of immediately available funds
(to an account designated by the Company).
5. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the
Investor that:
(a) The
Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation. The Company
has the corporate power and authority to enter into this Agreement and the Notes
and to perform its obligations hereunder and thereunder. The execution and
delivery by the Company of this Agreement and the Notes and the consummation by
the Company of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement and the Notes have been duly executed and delivered by the Company and
constitute valid and binding obligations of the Company enforceable against it
in accordance with their respective terms, subject to the effects of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and to the application of equitable
principles in any proceeding (legal or equitable).
(b) The
execution, delivery and performance by the Company of this Agreement and the
Notes and the consummation of the transactions contemplated hereby and thereby
do not and will not breach or constitute a default under any applicable law or
regulation or of any agreement, judgment, order, decree or other instrument
binding on the Company which breach or default could reasonably be expected to
have a material adverse effect on the Company.
(c) The
Company is in material compliance with all applicable laws, regulations,
judgments, decrees and orders material to the conduct of its
business.
(d) There
is no pending, or to the knowledge of the Company, threatened, judicial,
administrative or arbitral action, claim, suit, proceeding or investigation
which might affect the validity or enforceability of this Agreement or the Notes
or which involves the Company and which if adversely determined, could
reasonably be expected to have a material adverse effect on the
Company.
(e) No
consent or approval of, or exemption by, or filing with, any party or
governmental or public body or authority is required in connection with the
execution, delivery and performance under this Agreement or the Notes the taking
of any action contemplated hereunder or thereunder.
(f) The
execution, delivery and performance of this Agreement by the Company and the
Notes to be delivered hereunder and the consummation of the transactions
contemplated hereby and thereby will not: (i) violate any provision of the
Company’s articles of incorporation or bylaws, (ii) violate, conflict with or
result in the breach of any of the terms of, result in a material modification
of the effect of, otherwise, give any other contracting party the right to
terminate, or constitute (or with notice or lapse of time or both constitute) a
default under, any contract or other agreement to which the Company is a party
or by or to which the Company or any of the Company’s assets or properties may
be bound or subject, (iii) violate any order, judgment, injunction, award or
decree of any court, arbitrator or governmental or regulatory body by which the
Company, or the assets or properties of the Company are bound, (iv) to the
Company’s knowledge, violate any statute, law or regulation.
(g) The
Company represents that it intends to use the proceeds of the Loan primarily for
the operations of its business and primarily for working capital.
(h) The
Company is current in its filing obligations under the Securities Act of 1934,
as amended (the “1934 Act”), including without limitation as to its filings of
Annual Reports on Form 10-K (or 10-KSB, as applicable) and Quarterly Reports on
Form 10-Q (or 10-QSB, as applicable)(collectively, the “Public
Reports”). The Public Reports do not contain any untrue statement of
a material fact or omit to state any fact necessary to make any statement
therein not misleading. The financial statements included within the
Public Reports for the fiscal year ended December 31, 2007, and for the fiscal
year ended December 31, 2006 (the “Financial Statements”), have been prepared in
accordance with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods indicated. The Financial
Statements fairly present, in all material respects, the financial condition and
operating results of the Company as of the dates, and for the periods, indicated
therein.
6. REPRESENTATIONS
AND WARRANTIES OF THE INVESTOR. The Investor hereby represents and warrants to
the Company that:
(a) Investor
has full power and authority to enter into this Agreement and such agreement
constitutes the valid and legally binding obligation of Investor, enforceable in
accordance with its terms.
(b) The
execution, delivery and performance by the Investor of this Agreement and the
Notes and the consummation of the transactions contemplated hereby and thereby
do not and will not breach or constitute a default under any applicable law or
regulation or of any agreement, judgment, order, decree or other instrument
binding on the Investor.
(c) There
is no pending, or to the knowledge of the Investor, threatened, judicial,
administrative or arbitral action, claim, suit, proceeding or investigation
which might affect the validity or enforceability of this Agreement or the
Notes.
(d) No
consent or approval of, or exemption by, or filing with, any party of
governmental or public body or authority is required in connection with the
execution, delivery and performance under this Agreement or the Notes or the
taking of any action contemplated hereunder or thereunder.
(e) The
Investor has prior substantial investment experience, including investment in
non-listed and non-registered securities and has had the opportunity to engage
the services of an investment advisor, attorney or accountant to read all of the
documents furnished or made available by the Company to the Investor in
connection with this investment and to evaluate the merits and risks of this
investment.
(f) Investor
is an “accredited investor” within the meaning of the Securities and Exchange
Commission (“SEC”) Rule 501 of Regulation D, as presently in effect; by virtue
of falling within one or more of the following: (a) a natural person whose
individual net worth (or joint net worth with his spouse) at the time of
purchase exceeds $1,000,000; or (b) a natural person who had individual income
in excess of $200,000 or joint income with his spouse in excess of $300,000 in
each of the two most recent years and reasonably expects to have individual
income in excess of $200,000 or joint income with his spouse in excess of
$300,000 in the current year; (c) an executive officer or director of the
Company; or (d) an entity in which all of the equity owners thereof are natural
persons whom are “accredited” by virtue of falling within one or more of the
foregoing categories.
(g) This
Agreement is made with Investor in reliance upon Investor’s representation to
the Company, which by Investor’s execution of this Agreement, Investor hereby
confirms, that the Notes to be received by Investor will be acquired for
investment for Investor’s own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that Investor has no
present intention of selling, granting any participation in or otherwise
distributing the same. By executing this Agreement, Investor further
represents that Investor does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Notes.
(h) Investor
understands that the Notes it is purchasing are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such Notes may be resold without
registration under the 1933 Act only in certain limited
circumstances. In the absence of an effective registration statement
covering the Notes, or an available exemption from registration under the 1933
Act, the Notes must be held indefinitely. Investor represents that it
is familiar with SEC Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the 1933 Act, including without
limitation the Rule 144 condition that current information about the Company be
available to the public.
(i) Without
in any way limiting the representations set forth above, Investor shall not make
any disposition of all or any portion of the Notes unless and until Investor
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a detailed statement of the circumstances surrounding
the proposed disposition, and if requested by the Company, the Investor shall
have furnished the Company with an opinion of counsel, reasonably satisfactory
to the Company, that such disposition will not require registration of the Note,
under the 1933 Act or any applicable state securities laws.
(j) Investor
has reviewed with Investor’s own tax advisors the federal, state and local tax
consequences of this investment, where applicable, and the transactions
contemplated by this Agreement. Investor is relying solely on such advisors and
not on any statements or representations of the Company (except the
representations and statements of the Company set forth in this Agreement) or
any of its agents and understands that Investor (and not the Company) shall be
responsible for Investor’s own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement, except where such
liability arises as a result of a failure of a representation of the Company set
forth in this Agreement to be true or a breach by the Company of a covenant of
the Company set forth in this Agreement.
(k) Investor
acknowledges that it has had the opportunity to review this Agreement, the
exhibits and the schedules attached hereto and the transactions contemplated by
this Agreement with Investor’s own legal counsel. Investor is relying
solely on its legal counsel and not on any statements or representations of the
Company or any of the Company’s agents for legal advice with respect to this
investment or the transactions contemplated by this Agreement.
7. MISCELLANEOUS.
(a) Successors
and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than
the parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
(b) Governing
Law. This Agreement and the Notes shall be governed by and construed
in accordance with the laws of the State of New York. Each of the parties
consents to the jurisdiction of the federal courts whose districts encompass any
part of the City of New York or the state courts of the State of New York
sitting 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.
(c) Titles
and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
(d) Notices. All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified, (b)
when sent by confirmed telex or facsimile if sent during normal business hours
of the recipient; if not, then on the next business day, (c) five (5) business
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the signature page or
exhibit pages hereof or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.
(e) Finder’s
Fees. Each party represents that it neither is nor will be
obligated for any finders’ fee or commission in connection with this
transaction. The Investor, severally and not jointly, shall indemnify
and hold harmless the Company from any liability for any commission or
compensation in the nature of a finders’ fee (and the costs and expenses of
defending against such liability or asserted liability) for which Investor or
any of its officers, partners, employees or representatives is
responsible. The Company shall indemnify and hold harmless each
Investor from any liability for any commission or compensation in the nature of
a finders’ fee (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers, employees
or representatives is responsible.
(f) Amendments
and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon the
Investor, and each future holder of the Notes and the Company, provided that no
such amendment shall be binding on a holder that does not consent thereto to the
extent such amendment treats such party substantially differently than any party
that does consent thereto.
(g) Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
(h) Entire
Agreement. This Agreement and the documents referred to herein
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein.
(i) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
(j) Interpretation. Unless
the context of this Agreement clearly requires otherwise, (a) references to the
plural include the singular, the singular the plural, the part the whole, (b)
references to any gender include all genders, (c) “including” has the inclusive
meaning frequently identified with the phrase “but not limited to” and (d)
references to “hereunder” or “herein” relate to this Agreement.
(k) Independent
Nature of Investor’s Obligations. The obligations of Investor are
several and not joint with the obligations of any other Investor
IN
WITNESS WHEREOF, the parties have executed this Bridge Loan
Financing Agreement as of the date first written above.
By: /s/ XXXXXXX XXXXXXX
Name: Xxxxxxx
Xxxxxxx
Title: Chief Financial
Officer
INVESTOR:
By: /s/ XXXXX XXXXXXX
Xxxxx
Xxxxxxx
By: /s/ XXXXXXXX XXXX
Xxxxxxxx
Xxxx
Exhibit A to Bridge Loan
Financing Agreement
THIS NOTE
HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THE NOTE MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE
HARBOR THEREFROM.
| No. ___________ |
US
$_____________
|
BRIDGE
LOAN NOTE
THIS
Note is one of a duly authorized issue of up to $1,000,000 of Sona Mobile
Holdings Corp, a corporation organized and existing under the laws of the State
of Delaware (the "Company") designated as its 8% Unsecured Notes.
FOR
VALUE RECEIVED, the Company promises to pay to Xxxxx Xxxxxxx and Xxxxxxxx Xxxx,
husband and wife, New York, New York, the registered holders hereof (the
“Holder”), the principal sum of ________________________________ Dollars (US
$___________) on ______________, and to pay interest on the principal sum
outstanding from time to time in
arrears
within ninety (90) days from the date of this Note (the "Maturity Date"), at the
rate of 8% per annum accruing from the date of initial issuance of this Note
(the "Issue Date").
Accrual
of interest shall commence on the first such business day to occur after the
date hereof and shall continue until payment in full of the principal sum has
been made or duly provided for. The principal of, and interest on, this Note are
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts, at the
address last appearing on the Note Register of the Company as designated
in
writing
by the Holder from time to time. The Company will pay the principal of and
interest upon this Note on the Maturity Date, less any amounts required by law
to be deducted, to the registered holder of this Note as of the tenth day prior
to the Maturity Date and addressed to such holder at the last address appearing
on the Note Register. The forwarding of such check shall constitute a payment of
principal and interest hereunder and shall satisfy and discharge the liability
for principal and interest on this Note to the extent of the sum represented by
such check plus any amounts so deducted.
This
Note is subject to the following additional provisions:
1. This
Note is exchangeable for an aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same. No
service charge will be made for such registration or transfer or
exchange.
Exhibit A to Bridge Loan
Financing Agreement
2. The
Company shall be entitled to withhold from all payments of principal of, and
interest on, this Note any amounts required to be withheld under the applicable
provisions of the United States income tax laws or other applicable laws at the
time of such payments, and Holder shall execute and deliver all required
documentation in connection therewith.
3. This
Note has been issued subject to investment representations of the original
purchaser hereof and may be transferred or exchanged only in compliance with the
Securities Act of 1933, as amended (the "Act"), and other applicable state and
foreign securities laws. In the event of any proposed transfer of this Note, the
Company may require, prior to issuance of a new Note in the name of such other
person, that it receive reasonable transfer documentation including legal
opinions that the issuance of the Note in such other name does not and will not
cause a violation of the Act or any applicable state or foreign securities laws.
Prior to due presentment for transfer of this Note, the Company and any agent of
the Company may treat the person in whose name this Note is duly registered on
the Company's Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note
be overdue, and neither the Company nor any such agent shall be affected by
notice to the contrary.
4. Subject
to the terms of the Bridge Loan Financing Agreement dated as of _____ __, 2008
(the "Agreement"), between the Company and the Holder (or the Holder's
predecessor in interest), no provision of this Note shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Note at the time, place, and rate, and in
the coin or currency, herein prescribed. This Note is a direct obligation of the
Company.
5. The
Company may, at its option, pay all or a portion of the outstanding principal
and accrued interest due pursuant to the Note at any time before maturity
without notice to the Holder and without penalty.
6. No
recourse shall be had for the payment of the principal of, or the interest on,
this Note, or for any claim based hereon, or otherwise in respect hereof,
against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
7.
The Holder of the Note, by acceptance hereof, agrees that this Note is being
acquired for investment and that such Holder will not offer, sell or otherwise
dispose of this Note except under circumstances which will not result in a
violation of the Act or any applicable state Blue Sky or foreign laws or similar
laws relating to the sale of securities.
8. This Note shall be
governed by and construed in accordance with the laws of the State of New York.
Each of the parties consents to the jurisdiction of the federal courts whose
districts encompass any part of the City of New York or the state courts of the
State of New
Exhibit A to Bridge Loan
Financing Agreement
York
sitting 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 coveniens, to the bringing
of any such proceeding in such jurisdictions.
9.
The following shall constitute an "Event of Default":
a. The
Company shall default in the payment of principal or interest on this Note and
same shall continue for a period of five (5) days; or
b. Any
of the representations or warranties made by the Company herein, in the
Agreement, or in any certificate or financial or other written statements
heretofore or hereafter furnished by the Company in connection with the
execution and delivery of this Note or the Agreement shall be false or
misleading in any material respect at the time made; or
c. The
Company shall fail to perform or observe, in any material respect, any other
covenant, term, provision, condition, agreement or obligation of this Note (as
defined in the Agreement, which term includes this Note) and such failure shall
continue uncured for a period of thirty (30) days after written notice from the
Holder of such failure; or
d. The
Company shall fail to perform or observe, in any material respect, any covenant,
term, provision, condition, agreement or obligation of the Company under the
Agreement, and such failure shall continue uncured for a period of thirty (30)
days after written notice from the Holder of such failure; or
e. The
Company shall (1) admit in writing its inability to pay its debts generally as
they mature; (2) make an assignment for the benefit of creditors or commence
proceedings for its dissolution; or (3) apply for or consent to the appointment
of a trustee, liquidator or receiver for its or for a substantial part of its
property or business; or
f. A
trustee, liquidator or receiver shall be appointed for the Company or for a
substantial part of its property or business without its consent and shall not
be discharged within ninety (90) days after such appointment; or
g. Any
governmental agency or any court of competent jurisdiction at the instance of
any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Company and shall not be
dismissed within ninety (90) days thereafter; or
h. Bankruptcy,
reorganization, insolvency or liquidation proceedings or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Company and, if instituted against the Company,
shall not
Exhibit A to Bridge Loan
Financing Agreement
be
dismissed within ninety (90) days after such institution or the Company shall by
any action or answer approve of, consent to, or acquiesce in any such
proceedings or admit the material allegations of, or default in answering a
petition filed in any such proceeding; or
i. The
Company shall have its Common Stock suspended or delisted from an exchange or
over-the-counter market from trading for in excess of two trading
days.
Then, or
at any time thereafter, and in each and every such case, unless such Event of
Default shall have been waived in writing by the Holder (which waiver shall not
be deemed to be a waiver of any subsequent default) at the option of the Holder
and in the Holder's sole discretion, the Holder may consider the Redemption
Amount of this Note immediately due and payable within five (5) days of notice,
without presentment, demand, protest or notice of any kinds, all of which are
hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may immediately
enforce any and all of the Holder's rights and remedies provided herein or any
other rights or remedies afforded by law.
10. Nothing
contained in this Note shall be construed as conferring upon the Holder the
right to vote or to receive dividends or to consent or receive notice as a
shareholder in respect of any meeting of shareholders or any rights whatsoever
as a shareholder of the Company, unless and to the extent converted in
accordance with the terms hereof.
11. The
obligation of the Company for payment of principal, interest and all other sums
hereunder is unsecured by the Company and subordinated to the 8.0% Senior
Unsecured Convertible Debentures (the “2007 Notes”) of the Company.
12. Subject
to the Act or any applicable state Blue Sky or foreign laws or similar laws
relating to the sale of securities, nothing contained in this Note shall
restrict the Holder from subsequently converting this Note into a subsequent
financing to be entered into between the Company and a third party.
IN
WITNESS WHEREOF, the Company has caused this instrument to be duly
executed
by an officer thereunto duly authorized.
Dated:
________________, 2008
By: ___________________________________
Name:
___________________________________
Title: ___________________________________
