AGREEMENT
AGREEMENT
THIS
AGREEMENT
(this
“Agreement”) dated February 20 2007, is entered into between CORNELL
CAPITAL PARTNERS, LP
(the
“Purchaser”) and HEADLINERS
ENTERTAINMENT GROUP, INC.
(the
“Company”).
1. Purchase
and Sale.
Subject
to the terms and conditions set forth in this Agreement, the Buyer shall
purchase from the Company and the Company shall issue to the Buyer a Secured
Convertible Debenture in the form attached hereto as Exhibit A (the
“Debenture”)
in the
face amount of $35,000 for a purchase price of $35,000.
2. Closing.
The
closing of the issuance of the Debenture shall occur within 1 business day
of
the satisfaction of all conditions precedent set forth in Section 6 hereof
at
the offices of the Buyer (the “Closing”).
3. Closing
Procedure.
At the
Closing, the Company shall execute and deliver the Debenture and the Buyer
shall
pay the Purchase Price in accordance with the disbursement instructions set
forth on Schedule I attached hereto.
4. Representations
and Warranties of the Company. The
Company makes the following representations, warranties and agreements and
confirms the following understandings:
(a) Organization
and Qualification.
The
Company and its subsidiaries are corporations duly organized and validly
existing in good standing under the laws of the jurisdiction in which they
are
incorporated, and have the requisite corporate power to own their properties
and
to carry on their business as now being conducted. Each of the Company and
its
subsidiaries is duly qualified as a foreign corporation to do business and
is in
good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a
whole.
(b) SEC
Documents: Financial Statements.
Since
January 1, 2005, the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”)
(all
of the foregoing filed prior to the date hereof or amended after the date hereof
and all exhibits included therein and financial statements and schedules thereto
and documents incorporated by reference therein, being hereinafter referred
to
as the “SEC
Documents”).
As of
their respective dates, the financial statements of the Company disclosed in
the
SEC Documents (the “Financial
Statements”)
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such Financial
Statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and, fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case
of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Subscribers which
is
not included in the SEC Documents, including, without limitation, information
referred to in this Agreement, contains any untrue statement of a material
fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(c) 10(b)-5.
The SEC
Documents do not include any untrue statements of material fact, nor do they
omit to state any material fact required to be stated therein necessary to
make
the statements made, in light of the circumstances under which they were made,
not misleading.
(d) Legal
and Other Proceedings. Neither
the Company, nor any of its affiliates or its executive officers or directors
(in their capacity as executive officers or directors), is a party to any
pending or, to the best knowledge of the Company, threatened, or unasserted
but
considered by it to be probable of assertion, claim, action, suit,
investigation, arbitration or proceeding, or is subject to any order, judgment
or decree that is reasonably expected by management of the Company to have,
either individually or in the aggregate, a material adverse effect on the
condition (financial or otherwise), earnings or results of operations of the
Company. The Company is not, as of the date hereof, a party to or subject to
any
enforcement action instituted by, or any agreement or memorandum of
understanding with, any federal or state regulatory authority restricting its
operations or requiring that actions be taken, and no such regulatory authority
has threatened any such action, memorandum or order against the Company and
the
Company has not received any report of examination from any federal or state
regulatory agency which requires that the Company address any problem or take
any action which has not already been addressed or taken in a manner
satisfactory to the regulatory agency.
(e) Authorization;
Conflict; Valid and Binding Obligation. When
issued in accordance herewith, the Debenture will be duly and validly authorized
by all requisite corporate action of the Company. The Company has full right,
power and capacity to execute, deliver and perform its obligations under the
Debenture. No governmental license, permit or authorization and no registration
or filings with any court, governmental authority or regulatory agency is
required in connection with the Company's execution, delivery and/or performance
of the Debenture, other than any filings required by applicable federal and
state securities laws. The execution, delivery and performance of the Debenture,
the consummation of the transactions herein contemplated and the compliance
with
the terms of the Debenture by the Company will not violate or conflict with
any
provision of the Articles of Incorporation, as amended or By-laws of the
Company, or any agreement, instrument, law or regulation to which the Company
is
a party or by which the Company may be bound. The Debenture, upon execution
and
delivery by the Company, will represent the valid and binding obligation of
the
Company enforceable in accordance with its terms.
5. Use
of Proceeds. The
Company shall use the net proceeds of the Debenture to pay the amounts set
forth, to the persons or entities set forth, in Schedule II hereto. The Company
authorizes the Buyer to send the net proceeds directly to the payees as set
forth in Schedule II for the benefit of the Company.
6. Other
Agreements to Continue.
The
Company acknowledges that the documents set forth in Schedule III hereto shall
remain in full force and effect.
7. (RESERVED)
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the date written
above.
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BUYER:
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CORNELL
CAPITAL PARTNERS, LP
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By:
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Yorkville Advisors, LLC | |
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Its:
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Investment Manager | |
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By:
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/s/
Xxxx Xxxxxx
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Name:
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Xxxx Xxxxxx | |
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Title:
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Portfolio Manager | |
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COMPANY:
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HEADLINERS
ENTERTAINEMENT GROUP, INC.
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By:
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/s/
Xxxxx X. Xxxxxxx
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Name:
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Xxxxx X. Xxxxxxx | |
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Title:
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Chief Restructuring Officer | |
EXHIBIT
A
FORM
OF DEBENTURE
SCHEDULE
I
DISBURSEMENT
INSTRUCIONS
The
purchase price shall be disbursed in immediately available U.S. funds, payable
to the following parties:
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Gross
Proceeds:
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|||
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Gross
Proceeds from Cornell Capital Partners, LP
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$
35,000.00
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Disbursements:
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Xxxxxxxxx
Xxxx Xxxxx Xxxxxx & Company
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$
5,000
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Xxxxx
Xxxxxx
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$
7,500
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Xxxxxxx
Xxxxxxxxx
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$
5,000
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Xxxxx
X Xxxxxxx
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$
5,000
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Net
Proceeds:
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Net
Proceeds Payable to the Company:
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$
12,500
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REMAINDER
OF PAGE LEFT BLANK
SCHEDULE
II
AUTHORIZED
PAYEES
Proceeds
of the Debenture shall be used by the Company to pay the following persons
or
entities:
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NAME
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AMOUNT
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|||
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Xxxxxxxxx
Xxxx Xxxxx Xxxxxx & Company
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$
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5,000
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Xxxxx
Xxxxxx
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$
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7,500
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Xxxxxxx
Xxxxxxxxx
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$
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5,000
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Xxxxx
X Xxxxxxx
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$
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5,000
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REMAINDER
OF PAGE LEFT BLANK
SCHEDULE
III
CONTINUING
AGREEMENTS
REMAINDER
OF PAGE LEFT BLANK
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Cornell
Capital Partners, LP
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By:
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Yorkville Advisors, LLC | |||
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Its:
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General Partner | |||
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By:
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/s/
Xxxxx X. Xxxxxxx
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By:
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/s/
Xxxx Xxxxxx
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Name:
Xxxxx X. Xxxxxxx
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Name:
Xxxx Xxxxxx
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Its:
Chief Restructuring Officer
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Its:
Portfolio Manager
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