NOTE PURCHASE AGREEMENT
This
Note
Purchase Agreement, dated as of June 11, 2007, (this “Agreement”)
is
entered into by and among Radial Energy Inc., a Nevada corporation (the
“Company”),
and
Coach Capital LLC (“Investor”).
This
Agreement amends and restates in full that certain Loan Agreement, dated as
of
May 24, 2007, by and between the Company and Investor (the “Prior
Loan Agreement”),
effective upon the execution of this Agreement by the parties
hereto.
RECITALS
A. On
the
terms and subject to the conditions set forth herein, Investor is willing to
purchase from the Company, and the Company is willing to sell to Investor,
convertible promissory notes in the aggregate principal amount of
$1,400,000.
B. Capitalized
terms not otherwise defined herein shall have the meaning set forth in the
form
of Note (as defined below) attached hereto as Exhibit A.
AGREEMENT
NOW
THEREFORE, in consideration of the foregoing, and the representations,
warranties, and conditions set forth below, the parties hereto, intending to
be
legally bound, hereby agree as follows:
1. The
Notes.
(a) Issuance
of Notes.
The
Company agrees to issue and sell to Investor, and, subject to all of the terms
and conditions hereof, Investor agrees to purchase convertible promissory notes
in substantially the form of Exhibit A
hereto
(each, a “Note,”
and
collectively, the “Notes”)
in the
aggregate principal amount of $1,400,000 (the “Purchase
Price”).
(b) Delivery.
The
sale and purchase of the Notes shall take place in two separate closings (each,
a “Closing”)
to be
held at such place and time as the Company and Investor may determine (each,
a
“Closing
Date”).
At
the initial Closing (the “Initial
Closing”),
the
Company will deliver to Investor a Note in the principal amount of $1,200,000
to
be purchased by such Investor, against receipt by the Company of $1,200,000
of
the Purchase Price, and at the second Closing (the “Second
Closing”),
the
Company will deliver to Investor a Note in the principal amount of $200,000.
The
Notes will be registered in Investor’s name in the Company’s
records.
(c) Commitment
and Structuring Fee.
The
Company agrees to pay to Investor a commitment and structuring fee equal to
$210,000. The commitment and structuring shall be payable in installments of
$7,500 beginning on the last business day of each month commencing on September,
2007 and continuing until the time all of the fee have been paid in full. Upon
the full payment of all of the Notes issued pursuant to this Agreement by the
Company, any remaining balance of the commitment and restructuring fee shall
become immediately due and payable. Notwithstanding the foregoing, the Company
shall have the option to pay all or any of the commitment and structuring fee
at
any time in advance of the foregoing schedule.
(d) Piggyback
Registration Rights.
If the
Company shall determine to register any of its securities either for its own
account or the account of a security holder or holders, other than a
registration relating solely to employee benefit plans, a registration relating
to the offer and sale of debt securities, a registration relating to a corporate
reorganization or other Rule 145 transaction, or a registration on any
registration form that does not permit secondary sales, the Company will: (i)
promptly give written notice of the proposed registration to Investor; and
(ii)
use its commercially reasonable efforts to include in such registration any
of
the common stock that have been issued to Investor from the conversion of any
Note as specified in a written request or requests made by
Investor.
2. Representations
and Warranties of the Company.
The
Company represents and warrants to Investor that:
(a) Due
Incorporation, Qualification, etc.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation.
(b) Authority.
The
execution, delivery and performance by the Company of each Transaction Document
to be executed by the Company and the consummation of the transactions
contemplated thereby (i) are within the power of the Company and
(ii) have been duly authorized by all necessary actions on the part of the
Company.
(c) Enforceability.
Each
Transaction Document executed, or to be executed, by the Company has been,
or
will be, duly executed and delivered by the Company and constitutes, or will
constitute, a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally and general principles
of equity.
3. Representations
and Warranties of Investor.
Investor
represents and warrants to the Company upon the acquisition of each Note as
follows:
(a) Binding
Obligation.
Investor has full legal capacity, power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. Each of this Agreement
and each Note issued to Investor is a valid and binding obligation of the
Investor, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally and general principles
of equity.
(b) Securities
Law Compliance.
Investor has been advised that the Notes and the underlying securities have
not
been registered under the Securities Act, or any state securities laws and,
therefore, cannot be resold unless they are registered under the Securities
Act
and applicable state securities laws or unless an exemption from such
registration requirements is available. Such Investor is aware that the Company
is under no obligation to effect any such registration with respect to the
Notes
or the underlying securities. Such Investor has not been formed solely for
the
purpose of making this investment and is purchasing the Notes hereunder for
its
own account for investment, not as a nominee or agent, and not with a view
to,
or for resale in connection with, the distribution thereof. Investor has such
knowledge and experience in financial and business matters that Investor is
capable of evaluating the merits and risks of such investment, is able to incur
a complete loss of such investment and is able to bear the economic risk of
such
investment for an indefinite period of time. Investor is an accredited investor
as such term is defined in Rule 501 of Regulation D under the
Securities Act.
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(c) Access
to Information.
Investor acknowledges that the Company has given Investor access to the
corporate records and accounts of the Company and to all information in its
possession relating to the Company, has made its officers and representatives
available for interview by Investor, and has furnished Investor with all
documents and other information required for Investor to make an informed
decision with respect to the purchase of the Notes.
4. Conditions
to Closing of the Investor.
Investor’s obligations at the Closing are subject to the fulfillment, on or
prior to the Closing Date, of all of the following conditions, any of which
may
be waived in whole or in part by Investor:
(a) Representations
and Warranties.
The
representations and warranties made by the Company in Section 2
hereof
shall have been true and correct when made, and shall be true and correct on
the
Closing Date.
(b) Governmental
Approvals and Filings.
Except
for any notices required
or
permitted to be filed after the Closing Date with certain federal and state
securities commissions, the Company shall have obtained all governmental
approvals required in connection with the lawful sale and issuance of the
Note.
(c) Legal
Requirements.
At the
Closing, the sale and issuance by the Company, and the purchase by Investor,
of
the Note shall be legally permitted by all laws and regulations to which
Investor or the Company are subject.
(d) Proceedings
and Documents.
All
corporate and other proceedings in connection with the transactions contemplated
at the Closing and all documents and instruments incident to such transactions
shall be reasonably satisfactory in substance and form to Investor.
(e) Transaction
Documents.
The
Company shall have duly executed and delivered to Investor this
Agreement and the Note.
5. Conditions
to Obligations of the Company.
The
Company’s obligation to issue and sell the Note at the Closing is subject to the
fulfillment, on or prior to the Closing Date, of the following conditions,
any
of which may be waived in whole or in part by the Company:
(a) Representations
and Warranties.
The
representations and warranties made by Investor in Section 3
hereof
shall be true and correct when made, and shall be true and correct on the
Closing Date.
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(b) Governmental
Approvals and Filings.
Except
for any notices required or permitted to be filed after the Closing Date with
certain federal and state securities commissions, the Company shall have
obtained all governmental approvals required in connection with the lawful
sale
and issuance of the Note.
(c) Legal
Requirements.
At the
Closing, the sale and issuance by the Company, and the purchase by Investor,
of
the Note shall be legally permitted by all laws and regulations to which
Investor or the Company are subject.
(d) Purchase
Price.
Investor shall have delivered to the Company the Purchase Price in respect
of
the Note.
(e) Original
Notes.
With
respect to the Initial Closing only, the Company shall have the original notes
issued to Investor in the aggregate principal amount of $1,200,000 pursuant
to
the Prior Loan Agreement in its possession for cancellation.
6. Miscellaneous.
(a) Waivers
and Amendments.
Any
provision of this Agreement may be amended, waived or modified only upon the
written consent of the Company and Investor.
(b) Governing
Law.
This
Agreement and all actions arising out of or in connection with this Agreement
shall be governed by and construed in accordance with the laws of the State
of
Nevada, without regard to the conflicts of law provisions of the State of Nevada
or of any other state.
(c) Survival.
The
representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Agreement.
(d) Successors
and Assigns.
Subject
to the restrictions on transfer described in Sections 6(e)
and 6(f) below,
the rights and obligations of the Company and Investor shall be binding upon
and
benefit the successors, assigns, heirs, administrators and transferees of the
parties.
(e) Registration,
Transfer and Replacement of the Notes.
The
Company will keep, at its principal executive office, books for the registration
and registration of transfer of the Note and any replacement notes. Prior to
presentation of any Note for registration of transfer, the Company shall treat
the Person in whose name such Note is registered as the owner and holder of
such
Note for all purposes whatsoever, whether or not such Note shall be overdue,
and
the Company shall not be affected by notice to the contrary. Subject to any
restrictions on or conditions to transfer set forth in any Note, the holder
of
any Note, at its option, may in person or by duly authorized attorney surrender
the same for exchange at the Company’s chief executive office, and promptly
thereafter and at the Company’s expense, except as provided below, receive in
exchange therefor one or more new Note(s), each in the principal requested
by
such holder, dated the date to which interest shall have been paid on the Note
so surrendered or, if no interest shall have yet been so paid, dated the date
of
the Note so surrendered and registered in the name of such Person or Persons
as
shall have been designated in writing by such holder or its attorney for the
same principal amount as the then unpaid principal amount of the Note so
surrendered. Upon receipt by the Company of evidence reasonably satisfactory
to
it of the ownership of and the loss, theft, destruction or mutilation of any
Note and (a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it; or (b) in the case of mutilation, upon
surrender thereof, the Company, at its expense, will execute and deliver in
lieu
thereof a new Note executed in the same manner as the Note being replaced,
in
the same principal amount as the unpaid principal amount of such Note and dated
the date to which interest shall have been paid on such Note or, if no interest
shall have yet been so paid, dated the date of such Note.
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(f) Assignment
by the Company.
The
rights, interests or obligations hereunder may not be assigned, by operation
of
law or otherwise, in whole or in part, by the Company without the prior written
consent of Investor.
(g) Entire
Agreement.
This
Agreement together with the other Transaction Documents constitute and contain
the entire agreement among the Company and Investors and supersede any and
all
prior agreements, negotiations, correspondence, understandings and
communications among the parties, whether written or oral, respecting the
subject matter hereof.
(h) Notices.
All
notices, requests, demands, consents, instructions or other communications
required or permitted hereunder shall in writing and faxed, mailed or delivered
to each party as follows: (i) if to Investor, at EPS-D (2016), X.X. Xxx
00-0000, Xxxxx, Xxxxxxx 00000, facsimile number (000) 000-0000, or at such
other
address as Investor shall have furnished the Company in writing, or (ii) if
to the Company, at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Two Xxxxx Xxxxxx Xxxxxxxx,
Xxxxxxx, Xxxxx 00000, facsimile number (000) 000-0000, or at such other address
or facsimile number as the Company shall have furnished to Investor in writing.
All such notices and communications will be deemed effectively given the earlier
of (i) when received, (ii) when delivered personally, (iii) one
business day after being delivered by facsimile (with receipt of appropriate
confirmation), (iv) one business day after being deposited with an
overnight courier service of recognized standing or (v) four days after
being deposited in the U.S. mail, first class with postage prepaid.
(i) Severability
of this Agreement.
If any
provision of this Agreement shall be judicially determined to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
(j) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
agreement. Facsimile copies of signed signature pages will be deemed binding
originals.
[Signature
Page Follows]
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The
parties have caused this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the date and year first written
above.
COMPANY:
RADIAL
ENERGY INC.
a
Nevada
corporation
By:
/s/ G. Xxxxx
Xxxxx
Name:
G.
Xxxxx Xxxxx
Title:
President, CEO and CFO
INVESTOR
COACH
CAPITAL LLC
By:
/s/ Xxxxxxx
Xxxxxxx
Name:
Xxxxxxx
Xxxxxxx
Title:
Secretary
[Signature
page for Note Purchase
Agreement]
Exhibit
A
FORM
OF CONVERTIBLE NOTE
