CONSENT AND WAIVER
THIS
CONSENT AND WAIVER AGREEMENT (this “Agreement”),
dated
as
of August 12, 2008 is entered into by and among Adrenalina, a Nevada corporation
(the “Company”),
and
the persons identified as “Holders” on the signature pages hereto (the
“Holders”).
Defined terms not otherwise defined herein shall have the meanings set forth
in
both of the Purchase Agreements (as defined below).
WHEREAS,
pursuant
to Securities Purchase Agreements, dated November 29, 2007 and February 28,
2008, (each, a “Purchase
Agreement”,
and
collectively, the “Purchase
Agreements”),
among
the Company and the Holders, the Holders purchased from the Company 5% Senior
Secured Convertible Debentures (the “Debentures”)
and
Warrants (the “Warrants”)
to
purchase shares of Common Stock.; and
WHEREAS,
the
parties desire to waive and amend certain provisions under the Transaction
Documents (as defined in both of the Purchase Agreements).
NOW
THEREFORE,
for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each Holder hereby agrees as follows:
1. Subject
to the terms and conditions hereunder, each Holder hereby waives the Event
of
Default under the Debentures due to the Company’s failure to have the Initial
Registration Statement(s) (as defined in the Registration Rights Agreements)
declared effective within 180 days of the Closing Date and (ii) the Company’s
failure to timely pay liquidated damages (and late fees thereon) pursuant to
Section 2(b) of the Registration Rights Agreements.
2. Subject
to the terms and conditions hereof, in lieu of the cash payment of accrued
but
unpaid liquidated damages plus any late fees thereon under Section 2(b) of
the
Registration Rights Agreements, in full satisfaction of such liquidated damages
and late fees, each Holder agrees to accept, and the Company agrees to pay,
on
or prior to the date hereof, the consideration set forth on Schedule
A
hereto.
3. As
a
result of the changes made to Rule 144 promulgated under the Securities Act
of
1933, as amended (the “Securities
Act”)
which
are effective February 15, 2008, other than as to a number of shares of Common
Stock issuable upon conversion of the Debentures, in the aggregate, and pro-rata
among all of the Holders, equal to one-third of the number of issued and
outstanding shares of Common Stock that are held by non-affiliates of the
Company on the day immediately prior to the date the Company files its next
amendment to the Registration Statement, the Company's obligations, pursuant
to
the Registration Rights Agreements (as defined in the Purchase Agreements),
to
register the shares of Common Stock issuable upon conversion and/or exercise
of
the Debentures and Warrants, including shares of Common Stock issued in lieu
of
accrued and unpaid interest thereon (collectively, the “144
Eligible Securities”),
are
hereby suspended, so long as the
Company is in compliance with the current public information requirement under
Rule 144 and the
Holder may sell the 144 Eligible Securities without any restriction or
limitation under Rule 144 as of any date after October 26, 2008. Notwithstanding
anything in the Transaction Documents to the contrary, in connection with the
foregoing, the Company hereby covenants and agrees that at any time during
the
period commencing on the date hereof and ending at such time that all of the
Underlying Shares can be sold without the requirement that adequate public
information with respect to the Company be available as set forth in Rule
144(c)(1) and otherwise without restriction or limitation pursuant to Rule
144,
if the Company shall fail for any reason to satisfy the current public
information requirement under Rule 144(c)(1) (any such failure being referred
to
as a “Public
Information Failure”
and
the
Business Day immediately following the date the applicable report giving rise
to
the Public Information Failure was due to be filed being referred to as the
“Public
Information Failure Date”),
then,
as partial relief for the damages to the Holder by reason of any such delay
in
or reduction of its ability to sell the Underlying Shares (which remedy shall
not be exclusive of any other remedies available at law or in equity), the
Company shall pay to each such holder an amount in cash equal to two percent
(2.0%) of the aggregate purchase price paid by such holder under each of the
Purchase Agreement for any Securities then held by such holder on the Public
Information Failure Date and on every thirtieth day (pro rated for periods
totaling less than thirty days) thereafter until the earlier of (y) the date
such Public Information Failure is cured and (z) such date that the public
information requirement set forth in Rule 144(c)(1) is no longer required
pursuant to Rule 144. The foregoing payments to which a holder shall be entitled
are referred to herein as “Public
Information Failure Payments.”
Public
Information Failure Payments shall be paid on the earlier of (I) the last day
of
the calendar month during which such Public Information Failure Payments are
incurred and (II) the third Business Day after the event or failure giving
rise
to the Public Information Failure Payments is cured. In the event the Company
fails to make Public Information Failure Payments in a timely manner, such
Public Information Failure Payments shall bear interest at the rate of 1.5%
per
month (prorated for partial months) until paid in full.
4. The
Company hereby agrees to cause its legal counsel to issue a legal opinion to
the
undersigned Holders and the Company’s Transfer Agent (a “144
Opinion”)
that
the 144 Eligible Securities may be sold pursuant to Rule 144 without volume
restrictions or manner of sale limitations as of October 26, 2008 and that
certificates representing the 144 Eligible Securities issuable upon conversion
of the Debentures, in lieu of cash payments of interest under the Debentures
or
a “cashless exercise” of the Warrants may be issued without a restrictive legend
as required pursuant to Section 4.1 of the Purchase Agreement. Further, after
October 26, 2008, the Company agrees to cause its legal counsel to keep a
current 144 Opinion on file with the Holders and the Company’s Transfer Agent at
all times while the Holders own Securities other than during a Public
Information Failure.
5. Except
as
expressly set forth above, all of the terms and conditions of the Transaction
Documents shall continue in full force and effect after the execution of this
Consent and Waiver and shall not be in any way changed, modified or superseded
by the terms set forth herein. Within four Trading Days of the date hereof,
the
Company shall issue a Current Report on Form 8-K, attaching this agreement.
The
waivers and amendments set forth herein shall not be effective unless and until
the Company and all Holders shall have agreed to the terms and conditions
hereunder and executed and delivered their signature page hereto. In addition,
the respective obligations, amendments, agreements and waivers of the Holders
hereunder are subject to the following conditions being met: (a) the accuracy
in
all material respects of the representations and warranties of the Company
contained herein and (b) the performance by the Company of all if its
obligations, covenants and agreements required to be performed
hereunder.
6. This
Agreement may be executed in two or more counterparts and by facsimile signature
or otherwise, and each of such counterparts shall be deemed an original and
all
of such counterparts together shall constitute one and the same
agreement.
7. The
Company has elected to provide all Holders with the same terms and form of
consent and waiver for the convenience of the Company and not because it was
required or requested to do so by the Holders. The obligations of each Holder
under this consent and waiver, and any Transaction Document are several and
not
joint with the obligations of any other Holder, and no Holder shall be
responsible in any way for the performance or non-performance of the obligations
of any other Holder under this consent and waiver or any Transaction Document.
Nothing contained herein or in any Transaction Document, and no action taken
by
any Holder pursuant thereto, shall be deemed to constitute the Holders as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Holders are in any way acting in concert or as
a
group with respect to such obligations or the transactions contemplated by
this
consent and waiver or the Transaction Documents. Each Holder shall be entitled
to independently protect and enforce its rights, including without limitation,
the rights arising out of this consent and waiver or out of the other
Transaction Documents, and it shall not be necessary for any other Holder to
be
joined as an additional party in any proceeding for such purpose. Each Holder
has been represented by its own separate legal counsel in their review and
negotiation of this consent and waiver and the Transaction Documents.
IN
WITNESS WHEREOF, this Consent and Waiver is executed as of the date first set
forth above.
| ADRENALINA | ||
| |
|
|
| By: | Xxxxxxx Xxxxxx | |
|
Title: President and COO |
||
[signature
page(s) of Holders to follow]
COUNTERPART
SIGNATURE PAGE
OF
HOLDER
TO AENA CONSENT AND WAIVER
| Name of Holder: Enable Capital Mangement | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxxx | |
|
Title: Principal |
||
SCHEDULE
A
PAYMENT
OF LIQUIDATED DAMAGES
|
Name
|
Accrued
but unpaid liquidated damages
|
Shares
to be issued
|
|||||
|
Enable
Growth Partners, LP
|
$
|
243,000
|
133,429
|
||||
|
Enable
Opportunity Partners, LP
|
$
|
27,000
|
14,825
|
||||
