NOTE CONVERSION AGREEMENT
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED
FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
This
Note
Conversion Agreement (the “Agreement”) is made and entered into as of the date
set forth on the signature page by and among Xxxxxxxxxxxxx.xxx, Inc., a Nevada
corporation (the “Company”), and ODC Partners LLC, a Delaware LLC (“ODC”) with
reference to the following facts:
RECITALS
WHEREAS,
on July
1, 2003, ODC entered into a Revolving Convertible Credit Facility with the
Company to lend the Company up to $100,000 during the credit period (the
“Loan”);
WHEREAS,
Company
and ODC wish to provide for the terms and conditions pursuant to which the
Loan
may be converted to common stock of the Company at the rate of $.01 per
share;
NOW THEREFORE, in
consideration of the mutual covenants and promises contained herein, and for
valuable consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, the parties to this Agreement (collectively “parties” and
individually a “party”) agree as follows:
CONVERSION
AGREEMENT
1. Conversion
of Notes.
The
Company and ODC hereby agree that ODC shall convert $100,000 of principal and
interest into shares of the Company’s common stock at a price per share of one
cent ($.01) (the “Conversion Shares”). The parties agree that the Company shall
owe no additional amounts under the Loan.
2. Closing.
At the
Closing, ODC shall deliver the Notice of Conversion and the Loan to the Company
and the Company shall deliver a copy of the stock certificate representing
the
Conversion Shares to ODC. All promissory notes or other instruments evidencing
borrowings under the Revolving Credit Facility will be submitted to the
Company.
MISCELLANEOUS
PROVISIONS
3. Transfer.
If the
Holder wished to transfer any of the Conversion Shares to any transferee(s),
then upon delivery of the stock certificate representing the Conversion Shares
and a completed assignment of stock power certificate, the Company shall cause
its transfer agent to issue a new stock certificate within 2 days of receipt
to
such transferee(s).
4. Investor
Representations and Warranties and Covenants.
The
Holder represents, warrants and covenants to the Company as
follows:
a. No
Registration.
Such
Holder understands that the Note, and the Conversion Shares have not been,
and
will not be, registered under the Securities Act of 1933, as amended (the
“Securities
Act”)
by
reason of a specific exemption from the registration provisions of the
Securities Act, the availability of which depends upon, among other things,
the
bona fide nature of the investment intent and the accuracy of such Holder’s
representations as expressed herein or otherwise made pursuant
hereto.
b. Investment
Intent.
Such
Holder has acquired the Note, and is acquiring the Conversion Shares, for
investment for its own account, not as a nominee or agent.
c. Investment
Experience.
Such
Holder has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to the Company and
acknowledges that such Holder can protect its own interests. Such Holder has
such knowledge and experience in financial and business matters so that such
Holder is capable of evaluating the merits and risks of its investment in the
Company.
d. Speculative
Nature of Investment.
Such
Holder understands and acknowledges that the Company has a limited financial
and
operating history and that an investment in the Company is highly speculative
and involves substantial risks. Such Holder can bear the economic risk of such
Holder’s investment and is able, without impairing such Holder’s financial
condition, to hold the Conversion Shares for an indefinite period of time and
to
suffer a complete loss of such Holder’s investment.
e. Access
to Data.
The
Holder and its advisors, if any, have been furnished with or have been given
access to all materials relating to the business, finances and operations of
the
Company and any reasonably requested materials requested by the Holder, The
Holder and its advisors, if any, have been afforded the opportunity to ask
questions of the Company and its management and have rceived complete and
satisfactory answers to any such inquiries. Without limiting the generality
of
the foregoing, the Holder has had the opportunity to obtain and to review the
Company’s filings available on the XXXXX web site of the Securities and Exchange
Commission ().
f. Accredited
Investor.
The
Holder is an “accredited investor’ within the meaning of Regulation D, Rule
501(a), promulgated by the Securities and Exchange Commission under the
Securities Act and shall submit to the Company such further assurances of such
status as may be reasonably requested by the Company.
g. Brokers
or Finders.
Such
Holder has not engaged any brokers, finders or agents, and the Company has
not,
and will not, incur, directly or indirectly, as a result of any action taken
by
Holder, any liability for brokerage or finders’ fees or agents’ commissions or
any similar charges in connection with this Conversion Agreement and the
transactions related hereto.
h. Tax
Advisors.
Such
Holder has reviewed with its own tax advisors the U.S. federal, state, local
and
foreign tax consequences of this investment and the transactions contemplated
by
this Conversion Agreement. With respect to such matters, such Holder relies
solely on such advisors and not on any statements or representations of the
Company or any of its agents, written or oral. The Holder understands that
it
(and not the Company) shall be responsible for its own tax liability that may
arise as a result of this investment or the transactions contemplated by this
Conversion Agreement.
i. Legends.
The
Holder understands and agrees that the certificates evidencing the Conversion
Shares shall bear a legend in substantially the form as follows (in addition
to
any legend required by any other applicable agreement or under applicable state
securities laws):
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDERDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”
5. Company
Representations and Warranties and Covenants.
The
Company represents, warrants and covenants to the Holder as
follows:
| a. |
Authorization.
|
i. The
Company has all requisite power and authority to execute and deliver this
Conversion Agreement, and to carry out and perform its obligations under the
terms hereof. All action on the part of the Company necessary for the
authorization, execution, delivery and performance of this Conversion Agreement,
and the performance of all of the Company’s obligations herein, has been
taken.
|
|
ii.
This
Conversion
Agreement, when executed and delivered by the Company, will constitute
valid and legally binding obligations of the Company, enforceable in accordance
with its terms except: (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies or by general principles of equity.
iii. No
consent, approval, authorization, order, filing, registration or qualification
of or with any court, governmental authority or third person is required to
be
obtained by the Company in connection with the execution and delivery of this
Conversion Agreement by the Company or the performance of the Company’s
obligations hereunder.
b. The
Securities.
The
Conversion Shares upon issuance under this Agreement:
i. are,
or
will be, free and clear of any security interests, liens, claims or other
encumbrances, subject to restrictions upon transfer under the Securities Act,
and any applicable state securities laws;
ii. have
been, or will be, duly and validly authorized and on the date of issuance of
the
Conversion Shares, the Conversion Shares will be duly and validly issued, fully
paid and nonassessable;
iii. will
not
have been issued or sold in violation of any preemptive or other similar rights
of the holders of any securities of the Company; and
iv. will
not
subject the holders thereof to personal liability by reason of being such
holders.
c. Brokers
or Finders.
The
Company has not engaged any brokers, finders or agents, and Holder has not,
and
will not, incur, directly or indirectly, as a result of any action taken by
the
Company, any liability for brokerage or finders’ fees or agents’ commissions or
any similar charges in connection with this Conversion Agreement and the
transactions related hereto.
d. Reporting
Company. The
Company is a publicly-held company subject to reporting obligations pursuant
to
Section 13 of the 1934
Act
and has
a class of common shares registered pursuant to Section 12(g) of the 1934 Act.
Pursuant to the provisions of the Securities Exchange Act of 1934, as amended,
the Company has timely filed all reports and other materials required to be
filed thereunder with the Securities & Exchange Commission during the
preceding twelve months.
6. Binding
Agreement.
The
provisions of this Agreement will be binding upon and inure to the benefit
of
the heirs, executors, administrators, personal representatives, successors
in
interest and assigns to the respective parties to it.
7. Entire
Agreement.
This
Agreement memorializes and constitutes the entire agreement and understanding
among
the
parties regarding the subject matter hereof, and supersedes all prior
negotiations, proposed agreements and agreements, whether written or unwritten.
The parties acknowledge that no other party, nor any agent or attorney of any
other party, has made any promises, representations, or warranties whatsoever,
expressly or impliedly, which are not expressly contained in this Agreement,
and
the parties further acknowledge that they have not executed this Agreement
in
reliance upon any collateral promise, representation, warranty, or in reliance
upon any belief as to any fact or matter not expressly recited in this
Agreement.
8. Authorization.
The
parties shall hereafter execute all documents and do all that is necessary,
convenient or desirable in the reasonable opinion of the other party to effect
the provisions of this Agreement.
9. Counterparts.
For the
convenience of the parties, this Agreement may be executed by facsimile
signatures and in counterparts that shall together constitute the agreement
of
the parties as one and the same instrument. It is the intent of the parties
that
a copy of this Agreement signed by any party shall be fully enforceable against
that party.
10. Severability.
Should
any provision of this Agreement be declared or determined by any court to be
illegal or invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby and, in
lieu
of such illegal or invalid provision, there shall be added a provision as
similar in terms and amount to such illegal or invalid provision as may be
possible and, if such illegal or invalid provision cannot be so modified, then
it shall be deemed not to be a part of this Agreement.
[Signature
Page Follows]
IN
WITNESS WHEREOF the
parties have executed this Note Conversion Agreement as of August 8,
2006.
XXXXXXXXXXXXX.XXX,
INC.
By:
/s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx, President
ODC
PARTNERS, LLC
By:
/s/
Xxxxxx Xxxxx
Name: Xxxxxx
Xxxxx
Title:
