DEBENTURE SUBSCRIPTION AGREEMENT California News Tech
California
News Tech, a Nevada corporation (hereinafter the “Company”) and DNB Capital
Management, Inc., (hereinafter the “Subscriber”) agree as follows:
WHEREAS:
A.
The
Company desires to issue a Debenture of the Company in the principal amount
of
$100,000 together with interest at the rate of 18% per annum and such other
terms and conditions as are contained in the form attached hereto as Exhibit
A
(hereinafter the “Debenture”); and
B.
Subscriber desires to acquire the Debenture.
NOW,
THEREFORE,
for and
in consideration of the premises and the mutual covenants hereinafter set-forth,
the parties hereto do hereby agree as follows:
SUBSCRIPTION
1.1 Subject
to the terms and conditions hereinafter set forth and those set forth in
the
Debenture, the Subscriber hereby subscribes for and agrees to purchase from
the
Company, and the Company agrees to sell to Subscriber, the Debenture. Upon
execution by both the Company and Subscriber, this subscription shall be
irrevocable.
1.2 Closing.
The closing of the transactions contemplated herein (the “Closing”) shall occur
on December 15, 2006, or at such other time and place as the parties may
agree
(the “Closing Date”), provided that all of the Closing conditions set forth in
sections 1.3 and 1.4 shall have occurred.
1.3 Closing
Deliveries. Together with an executed counterpart of this Agreement, the
following items shall be delivered by the parties at the Closing:
| (A) |
Subscriber
shall deliver to the Company or its order the sum of One Hundred
Thousand
Dollars ($100,000) (the “Purchase
Price”);
|
| (B) |
Subscriber
shall deliver to the Company, if requested by the Company, a fully
executed written release in a form reasonably acceptable to the Company
which shall unconditionally release any successor, subsidiary or
spun-off
entity from the Company from any obligation under the Debenture;
and
|
| (C) |
The
Company shall deliver to Subscriber an original Debenture in the
form
attached hereto as Exhibit A; and
|
| (D) |
The
Company shall deliver to Subscriber such other documents and instruments
as are reasonably necessary to consummate the transactions contemplated
hereby and to establish the Company’s satisfaction of the Conditions to
Closing set forth at section 1.4, below.
|
1.4 The
following shall be conditions of Closing:
| (A) |
The
Subscriber has tendered the Purchase
Price;
|
| (B) |
The
Company has delivered the items specified in section 1.3(C) and
(D);
|
| (C) |
The
Company has divested itself of all operations and assets, whether
by
spinoff, sale or abandonment;
|
| (D) |
The
Company has paid, transferred to Media Sentiment, Inc. or otherwise
resolved to the satisfaction of Subscriber all its debts and claims,
including without limitation, contractual claims, stock appreciation
rights, trade debt, promissory notes, unpaid salary and wages, employment
agreements, consulting agreements, federal, state and local taxes,
professional, audit and legal fees, and has secured the unconditional
written release of the Company by and from any creditors or persons
to
whom the Company owes ongoing or future obligations, for example
and not
by way of limitation, subscribers to the Companies products or services,
website hosting companies, employees, consultants, brokers, or
landlords;
|
| (E) |
With
the sole exception of the Company’s common stock, the Company shall have
used its commercially best efforts to retire or cancel all outstanding
equity securities or claims against equity securities of the Company
of
every nature and kind whatsoever, including without limitation preferred
stock, convertible debt, options, warrants, etc. whether vested or
unvested;
|
| (F) |
The
Company shall have obtained shareholder approval, by majority vote
of a
quorum of shareholders at a duly noticed and held annual or special
meeting of shareholders, of each of the
following:
|
| a. |
A
one for ten reverse stock split of the Company’s common
stock;
|
| b. |
An
increase in the number of authorized shares of common stock to One
Hundred
Million shares (100,000,000); and
|
| c. |
A
resolution to grant the Company’s Board the authority to amend the
Company’s Articles of Incorporation for the sole purpose of changing the
name of the Company to an exact name to be later determined by the
Company’s board of directors.
|
REPRESENTATIONS
AND WARRANTIES BY SUBSCRIBER
2.1 Subscriber
hereby severally represents and warrants to the Company the
following:
| (A) |
Subscriber
recognizes that the purchase of the Debenture subscribed to herein
involves a high degree of risk;
|
| (B) |
an
investment in the Company is highly speculative and only investors
who can
afford the loss of their entire investment should consider investing
in
the Company and the Debenture;
|
| (C) |
Subscriber
has such knowledge and experience in finance, securities, investments,
and
other business matters so as to be able to protect its interests
in
connection with this transaction;
|
| (D) |
Subscriber
acknowledges that no market for the Debenture presently exists and
none
may develop in the future and accordingly Subscriber may not be able
to
liquidate its investment;
|
| (E) |
Subscriber
hereby acknowledges that this offering of the Debenture has not been
reviewed by the United States Securities and Exchange Commission
("SEC")
and that the Shares are being issued by the Company pursuant to an
exemption from registration provided by Section 4(2) of the Securities
Act
of 1933 and that the Debenture will contain a restrictive legend
as
reflected on Exhibit A and that, should the Debenture be converted,
the
resulting stock certificate evidencing the shares of common stock
in the
Company to be received by Subscriber thereafter will contain a legend
in
substantially the following form:
|
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933 (THE “ACT”). THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT
TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
| (F) |
Subscriber
is not aware of any advertisement of the
Debenture.
|
REPRESENTATIONS
BY THE COMPANY
3.1
The
Company represents and warrants to the Subscriber that:
| (A) |
The
Company is a corporation duly organized, existing and in good standing
under the laws of the State of Nevada and has the corporate power
to
conduct the business which it conducts and proposes to
conduct.
|
| (B) |
Upon
issue, the Debenture will be a valid and binding obligation of the
Company, enforceable according to its
terms.
|
| (C) |
Upon
conversion, the resulting shares of common stock of the Company will
be
duly and validly issued, fully paid and non-assessable common shares
in
the capital of the Company.
|
ADDITIONAL
TERMS OF SUBSCRIPTION
4.1 Notwithstanding
the place where this Subscription Agreement may be executed by any of the
parties hereto, the parties expressly agree that all the terms and provisions
hereof shall be construed in accordance with and governed by the laws of
the
State of Nevada.
4.2
The
parties agree to execute and deliver all such further documents, agreements
and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Subscription
Agreement.
Accepted
and Agreed this 30th day of October, 2006
|
COMPANY
/s/
Xxxxxx
Xxxx
By:
XXXXXX XXXX
Its:
PRESIDENT
|
SUBSCRIBER
/s/
Xxxxx Xxxxx
By:
XXXXX XXXXX
Its:
PRESIDENT
|
|
|
|
DNB
Capital Management, Inc.
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