EXHIBIT 10.3
NOTE PARTICIPATION PURCHASE AGREEMENT
This AGREEMENT dated May 29, 2009, by and among ______________
("Seller"), and each of his successors or assigns (________); Infinity Capital
Group, Inc. a Maryland corporation (the "Company") and The Pennsylvania Avenue
Fund (referred to herein as the "Purchaser").
WHEREAS, the Purchaser wishes to purchase a participation in a certain
promissory note as set forth on Schedule 1 hereto which were issued by the
Company in the amounts set forth on Schedule 1, and which has the current
outstanding principal balance set forth on Schedule 1 hereof "Note"); and
WHEREAS, ("Seller") is a bona fide owner and holder of the Note as set
forth on Schedule 1 hereto and wishes to sell a participation in such Note to
the Purchaser on the terms and subject to the conditions set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto to agree as
follows:
1. In exchange for the sum of Twenty Five Thousand and no/100 United
States Dollars (US$25,000.00) (the "Purchase Price"), Seller, upon irrevocable
receipt of the Purchase Price, hereby sell, assign, and transfer to Purchaser,
without recourse or warranty except as hereafter stated, the following:
(a) A participation in the Note of an amount of $25,000 as set forth on
Schedule 1 hereto (the "Participation Note"); and;
(b) (i) Seller's pro rata portion of any and all security interests and
liens and related property subject thereto from time to time securing
payment by obligors under the Participation Note, (ii) Seller's pro
rata portion of all guaranties, indemnities and warranties, and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of any indebtedness arising in
connection with the Participation Note, each of (b)(i) and (b)(ii) as
evidenced by that certain (iii) Security Agreement dated May 29, 2009
attached hereto as Exhibit A (as amended, modified or supplemented
from time to time, the "Security Agreement"), and (iv) the Stock
Pledge Agreement dated May 29, 2009, attached hereto as Exhibit B (as
amended, modified or supplemented from time to time, the "Stock Pledge
Agreement").
(c) Seller hereby acknowledges Purchaser's right to elect to convert any
portion of its Participation Note into the Company's Common stock @
$.40 per share, until paid.
2. The closing of the transaction described herein (the "Closing")
shall be completed on or before June __, 2009 (the "Closing Date"). Purchaser
and Seller shall exchange documents required hereby for this transaction.
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3. Each of the parties hereto, respectively, as to itself, individually
and on its own behalf, hereby represents and warrants to each other party hereto
as follows:
(a) Good Standing and Qualification. It has been duly
incorporated and is validly existing in good standing under the law of its
incorporation jurisdiction, has the corporate power and authority to own and
operate its properties and assets and to carry on its business as currently
conducted and as presently proposed to be conducted, is duly qualified to do
business and is in good standing as a foreign corporation in all jurisdictions
in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in
which failure to do so would not have a material adverse effect on it or on its
business.
(b) Due Authorization. All corporate action on the part of its
board of directors, members, partners, stockholders or similar governing body
necessary for the authorization, execution, delivery of, and the performance of
its obligations hereunder has been taken or will be taken prior to the Closing.
This Agreement constitutes a valid and legally binding obligation, enforceable
in accordance with its terms, except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights generally and (ii)
the effect of rules of law governing the availability of equitable remedies.
4. The Purchaser hereby represents and warrants to each other party
hereto that:
(a) Purchase for Own Account. The Note will be acquired for
investment for the Purchaser's own account, not as a nominee or agent, and not
with a view to the public resale or distribution thereof within the meaning of
the Securities Act of 1933, as amended (the "Securities Act"), and Purchaser has
no present intention of selling, granting any participation in, or otherwise
distributing, the same.
(b) No Solicitation. At no time was the Purchaser presented
with or solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Note.
(c) Disclosure of Information. Purchaser has received or has
had full access to all the information it considers necessary or appropriate to
make an informed investment decision with respect to the Note. Purchaser further
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Note and to obtain
additional information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify any
information furnished to Purchaser or to which Purchaser had access.
(d) Investment Experience. Purchaser understands that the
purchase of the Note involves substantial risk. Purchaser has experience as an
investor in securities of companies in the development stage and acknowledges
that Purchaser is able to lend for itself, can bear the economic risk of
Purchaser's investment in the Note and has such knowledge and experience in
financial or business matters that Purchaser is capable of evaluating the merits
and risks of this investment in the Note and protecting the Purchaser's own
interests in connection with this investment in the Note .
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(e) Accredited Investor Status. Purchaser is familiar with the
definition of, and qualifies as, an "accredited investor" within the meaning of
Regulation D promulgated under the Securities Act.
(f) Restricted Securities. Purchaser understands that the Note
is characterized as a "restricted security" under the Securities Act and Rule
144 promulgated thereunder ("Rule 144") since they were acquired by the Seller
from the Company in a transaction not involving a public offering, and that
under the Securities Act and applicable regulations thereunder, the Note may be
resold without registration under the Securities Act only in certain limited
circumstances. Purchaser further understands that the Company is under no
obligation to register the Note and the Company has no present plans to do so.
Furthermore, Purchaser is familiar with Rule 144 and understands the limitations
imposed thereby and by the Securities Act on resale of the Note without such
registration. Purchaser understands that, whether or not the Note may be resold
in the future without registration under the Securities Act, no public market
now exists for the Note and that it is uncertain whether a public market will
ever exist for the Note.
5. Seller hereby represents and warrants to each other party here
-to that:
(a) Upon performance hereunder by Purchaser, Seller waive any
breaches, defaults or accelerations in existence on the date hereof under the
Note, the Security Agreement, the Stock Pledge Agreement, or any other document
or agreement between Seller or either of them and the Company (collectively, the
"Related Documents").
(b) Reserved.
(c) Subject in each case to the Subordination Agreement, each
party hereto agrees to notify the other in advance prior to taking any action to
seize any collateral or exercise any right it may have with respect to any
collateral, and to cooperate with the other to liquidate collateral as required
or permitted in the Related Documents.
6. The Company hereby represents and warrants to each other party
hereto that:
(a) The Note and the Related Documents are, and upon the
Closing shall be and constitute the valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms as to Purchaser
as assignee of Seller with respect to the Note and the Related Documents, except
as may be limited by (i) applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies.
(b) Immediately after the Closing, the Company shall file at
its expense with all applicable authorities, any and all assignments and other
documents and things necessary to reflect Seller's assignment of its security
interest as to the Note to Purchaser.
7. Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of New Jersey, without reference to
principles of conflict of laws or choice of laws. Venue shall be had in a state
court of New Jersey, and no other place without the express prior written
consent of all parties.
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8. Counterparts; Facsimile Signatures. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Agreement
may be executed and delivered to the Escrow Agent by facsimile, or by email to
the Escrow Agent in portable document format (pdf) and delivery of the signature
page by such method will be deemed to have the same effect as if the original
signature had been delivered to the other parties.
9. Headings; Interpretation. In this Agreement, (i) the meaning of
defined terms shall be equally applicable to both the singular and plural forms
of the terms defined; (ii) the captions and headings are used only for
convenience and are not to be considered in construing or interpreting this
Agreement and (iii) the words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation." All references in this
Agreement to sections, paragraphs, exhibits and schedules shall, unless
otherwise provided, refer to sections and paragraphs hereof and exhibits and
schedules attached hereto, all of which exhibits and schedules arc incorporated
herein by this reference.
10. Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
11. Entire Agreement. This Agreement, together with all exhibits and
schedules hereto, constitute the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersede any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
12. Further Assurances. From and after the date of this Agreement, upon
the written request of any party hereto made to any other party hereto, each
party hereto shall execute and deliver such other and further instruments,
documents or other writings as may be reasonably necessary or desirable to
confirm and carry out and to effectuate fully the intent and purposes of this
Agreement. Any such execution and delivery shall in any event be made within
three (3) business days after such written request is made.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
INVESTOR
By:
By:________________________________________
Name:______________________________________
Title:_____________________________________
INFINITY CAPITAL GROUP, INC.
By:________________________________________
Name:______________________________________
Title:_____________________________________
THE PENNSYLVANIA AVENUE FUND
By:
By:________________________________________
Name:______________________________________
Title:_____________________________________
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Schedule 1
Principle Balance as of May 29, 2009 $125,000
Remaining Term Note Principal after Stock payment
Principal Balance $25,000
Approximate % 20%
Seller
Balance $100,000
Retained 80%
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