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INVESTMENT AGREEMENT/ PREFERRED STOCK PURCHASE
This Agreement is made this date, by and between TWIN FACES EAST
ENTERTAINMENT CORPORATION ("Company") and XXXXXXX XXXX, an individual
investor ("King") or collectively referred to as "The Parties".
WHEREAS, the Company is engaged in the business of development of
intellectual and entertainment properties and desires to accept a direct
investment into the Company by an individual investor,
WHEREAS, King desires to make a direct investment into the Company,
NOW THEREFORE IT IS AGREED AS FOLLOWS:
Section 1. Type of Transaction.
Direct cash investment as purchase of Preferred Stock in the
Company.
Section 2. Timing.
The "Effective Date" of this investment will be June 20th, 2003.
The Funding Date of this investment will be not later than October 1, 2003.
Section 3. Amount of Investment.
The amount of the investment is $4,000,000 (four million dollars).
Section 4. Investment Terms.
Within 30 days of the Funding Date of this agreement the Company
will issue one million (1,000,000) shares of Series C Preferred Stock, of the
Company. The stock will carry conversion rights to common on an annual basis
the first week of October each year commencing October 1, 2004 for a period
of 4 years according to a formula as defined herein.
Section 5. Conversion Rights.
The Preferred Stock shall be converted to Common Stock in the
Company on the dates following:
October 1, 2004, conversion of 250,000 shares Preferred Stock to Common
Stock,
October 1, 2005, conversion of 250,000 shares Preferred Stock to Common
Stock,
October 1, 2006, conversion of 250,000 shares Preferred Stock to Common
Stock,
October 1, 2007, conversion of 250,000 shares Preferred Stock to Common
Stock.
Section 6. Conversion Formula.
At the option of the Company, the stock shall be converted to
either:
Option 1- Average prior 30 days closing price on current quoted exchange
so that market value of the common issued is one million five hundred
thousand dollars. For example, if 30-day average quoted closing price is $1
per share on October 1, 2004, King would receive 1,500,000 shares of common
stock for his 250,000 shares of Preferred stock for a valuation conversion of
6 Common Shares for each Preferred Share.
Option 2- The stock may be converted at a conversion ratio of 2 Common
Shares for each Preferred share. For example, on October 1, 2003 the company
may convert the 250,000 shares of Preferred Stock to 500,000 shares for
Common Stock in the Company.
Section 7. Dividend.
The Company shall issue a 5% (five percent) cash dividend on the
principle amount of the unconverted Preferred Stock, payable in Common Stock
as follows:
October 1, 2004, $200,000 of Common Stock,
October 1, 2005, $120,000 of Common Stock,
October 1, 2006, $100,000 of Common Stock,
October 1, 2007, $50,000 of Common Stock.
Section 8. Common Stock Definition.
All stock to be issued is Common Stock in Twin Faces East
Entertainment Corporation (TFAC) restricted by Rule 144. All stock valued at
prior 30-day average closing price as quoted by OTCBB or current exchange
listing. All stock to be delivered within 15 days of due date.
The Company agrees to be fully bound hereunder until this stock shall be
fully converted. and waive demand, presentment and protest and all notices
thereto and further agrees to remain bound, notwithstanding any extension,
renewal, modification, waiver, or other indulgence by King or upon the
discharge or release of the Company, or upon the exchange, substitution, or
release of any collateral granted as security for this investment. No
modification or indulgence by King shall be binding unless in writing, and
any indulgence for one occasion shall not be an indulgence for any other or
future occasion. This investment shall be construed, governed, and enforced
in accordance with the laws of the State of Nevada. The Company hereby
executes this note as President and Chief Executive Officer of the Company.
Agreed to as stated:
/S/Xxxxxxx Xxxxxxxxx June 20, 2003
Xxxxxxx Xxxxxxxxx, President Date
Twin Faces East Entertainment
I hereby certify that I am an accredited investor and am aware of the
inherent risks and potential for loss of part or all of this investment.
Further I acknowledge that I am a key member of the Management Team of the
Company and am aware of and approve the budget uses of funds that have been
developed with my help and input.
/S/Xxxxxxx Xxxx June 20, 2003
Xxxxxxx Xxxx, Investor Date
