DEBT CONVERSION AGREEMENT
Exhibit
10.10
This
Debt Conversion Agreement made as
of this __ day of November, 2007 between MEDEFILE INTERNATIONAL, INC., a Nevada
corporation (the “Company”) having a principal place of business at 000 Xxxxx
Xxxxxx Xxxx, Xxxxx Xxxxxx, XX 00000 and the parties who have executed this
agreement (individually a “Creditor” and collectively the
“Creditors”).
WHEREAS,
the Company is obligated to
each Creditor in the principal amount set forth on the signature page hereto
(the “Obligation”) and the aggregate amount of the principal portion of the
Obligations due to the Creditors is $3,042,379;
WHEREAS,
the Creditor hereby
acknowledges that the Company is proposing to raise capital via a private
placement (the “Private Placement”);
WHEREAS,
in order to assist the Company
in completing the Private Placement, the Creditor is willing to release the
Company from its obligation to pay the Obligations upon the terms and conditions
set forth herein.
NOW
THEREFORE, in consideration of the
terms, conditions and agreements contained in this Agreement, the parties agree
as follows:
1. ISSUANCE
OF SECURITIES.
(a) Immediately
prior to the closing of the Private Placement, the Creditor hereby agrees that
it will convert Two Million One Hundred Thousand dollars ($2,100,000) of the
Obligation into shares of the Company’s common stock (the “Converted Shares”).
The conversion price for the portion of the Obligation to be converted shall
be
$0.15 per share. In addition, the Company agrees to issue and deliver to the
Creditor, Eight Million Four Hundred Thousand (8,400,000) three-year warrants
to
purchase an aggregate of Eight Million Four Hundred Thousand (8,400,000) shares
of the Company’s common stock (the “Underlying Shares”) exercisable at $0.60 per
share (the “Warrants”). The Company agrees to issue and deliver the
shares to Creditor at the address set forth on the signature page of this
Agreement.
(b) The
certificate(s) representing the Converted Shares and the Underlying Shares
(collectively the “Securities”) to be issued will bear a legend substantially in
the following form:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
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2. CREDITOR’S
REPRESENTATIONS AND WARRANTIES.
The
Creditor hereby acknowledges,
represents and warrants to, and agrees with, the Company as
follows:
(a) The
Creditor is acquiring the Securities for its own account as principal, for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalization thereof, in whole or in part, and no other person has
a
direct or indirect beneficial interest in such Securities.
(b) The
Creditor acknowledges its understanding that the issuance of the Securities
is
intended to be exempt from registration under the Act by virtue of Section
4(2)
of the Securities Act of 1933, as amended (the “Act”) and the provisions of
Regulation D thereunder.
(c) The
Creditor has the financial ability to bear the economic risk of his investment,
has adequate means for providing for his current needs and personal
contingencies and has no need for liquidity with respect to his investment
in
the Company.
(d) The
Creditor is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D under the Act (17 C.F.R. 230.501(a)) or is not a U.S. Person as
defined under Regulation S.
(e) The
Creditor has made an independent investigation of the Company’s business, been
provided an opportunity to obtain additional information concerning the Company
Creditor deems necessary to make an investment decision and all other
information to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense.
(f) The
Creditor represents, warrants and agrees that it will not sell or otherwise
transfer the Securities unless registered under the Act or in reliance upon
an
exemption therefrom, and fully understands and agrees that it must
bear the economic risk of its purchase for an indefinite period of time because,
among other reasons, the Securities or underlying securities have not been
registered under the Act or under the securities laws of certain states and,
therefore, cannot be resold, pledged, assigned or otherwise disposed of unless
they are subsequently registered under the Act and under the applicable
securities laws of such states or an exemption from such registration
is available. The Creditor also understands that the Company is under no
obligation to register the Securities on his behalf or to assist the Creditor
in
complying with any exemption from registration under the Act. The Creditor
further understands that sales or transfers of the Securities or underlying
securities are restricted by the provisions of state securities
laws.
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(g) The
Creditor has not transferred or assigned an interest in the Obligations to
any
third party.
(h) The
foregoing representations, warranties and agreements shall survive the delivery
of the Securities under this Agreement.
3. COMPANY
REPRESENTATIONS AND WARRANTIES.
The
Company hereby acknowledges,
represents and warrants to, and agrees with the Creditor as
follows:
(a) The
Company has been duly organized, is validly existing and is in good standing
under the laws of the State of Nevada. The Company has full corporate power
and
authority to enter into this Agreement and this Agreement has been duly and
validly authorized, executed and delivered by the Company and is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforcement may be limited by the United States
Bankruptcy Code and laws effecting creditors rights, generally.
(b) Subject
to the performance by the Creditor of its obligations under this Agreement
and
the accuracy of the representations and warranties of the Creditor, the offering
and sale of the shares will be exempt from the registration requirements of
the
Act.
(c) The
execution and delivery by the Company of, and the performance by the Company
of
its obligations under this Agreement in accordance with the terms of this
Agreement will not contravene any provision of applicable law or the charter
documents of the Company or any agreement or other instrument binding upon
the
Company, or any judgment, order or decree of any governmental body, agency
or
court having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this Agreement in accordance with the terms of this Agreement.
4. RELEASE.
Upon
issuance of the Securities to the
Creditor in consideration for the conversion of a portion of the Obligation,
the
Creditor agrees to release and forever discharge the Company of and from all
and
all manner of actions, suits, debts, sums of money, contracts, agreements,
claims and demands at law or in equity, that Creditor had, or may have arising
from the portion of Obligation that is converted.
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5. MISCELLANEOUS.
(a) Modification. Neither
this Agreement nor any provisions hereof shall be modified, discharged or
terminated except by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
(b) Notices. Any
notice, demand or other communication which any party hereto may be required,
or
may elect, to give to anyone interested hereunder shall be sufficiently given
if
(a) deposited, postage prepaid, in a United States mail letter box, registered
or certified mail, return receipt requested, addressed to such address as
may be given herein, or (b) delivered personally at such address.
(c) Counterparts. This
Agreement may be executed through the use of separate signature pages or in
any
number of counterparts, and each of such counterparts shall, for all purposes,
constitute one agreement binding on all the parties, notwithstanding that
all parties are not signatories to the same
counterpart.
(d) Binding
Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and
assigns. If the undersigned is more than one person, the obligation
of the Investor shall be joint and several, and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made
by
and be binding upon each such person and his heirs, executors, administrators
and successors.
(e) Entire
Agreement. This instrument contains the entire agreement of
the parties, and there are no representations, covenants or other agreements
except as stated or referred to herein.
(f) Applicable
Law. This Agreement shall be governed and construed under
the laws of the State of New York.
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IN
WITNESS WHEREOF, the Company and
Creditors have caused this Agreement to be executed and delivered by their
respective officers, thereunto duly authorized
| MEDEFILE INTERNATIONAL, INC. | |||
|
|
By:
|
/s/ Xxxxxx Xxxxxx | |
| Xxxxxx Xxxxxx, CEO | |||
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR CREDITOR FOLLOWS]
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[CREDITOR
SIGNATURE PAGE TO MEDEFILE DEBT CONVERSION AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Debt Conversion Agreement
to
be duly executed by their respective authorized signatories as of the date
first
indicated above.
Name
of
Creditor: Vantage
Group
Signature
of Authorized Signatory of Creditor: /s/ Xxxx Xxxxxx
Name
of
Authorized Signatory: Xxxxxx Xxxxxx
Title
of
Authorized Signatory: Chairman and Chief Executive Officer
Email
Address of
Creditor:________________________________________________
Address
for Notice of Creditor:
Address
for Delivery of Securities for Creditor (if not same as above):
Amount
of
Obligations:
Principal: $3,042,379
Interest:
$150,088
Total:
$3,192,467
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