CONVERSION AGREEMENT
Exhibit
10.1
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS
CONVERSION AGREEMENT, dated as of November 20, 2009 is made by and between
XXXXXXXXXX HOLDING CORPORATION, Inc., a Delaware corporation (“Company”), and
Southtech Solutions, Inc., a consultant of the Company
(“Consultant”).
WHEREAS,
the Company owes Consultant fees in arrears for a total of Forty Two Thousand Three Hundred
Seventy One Dollars and Thirty Five Cents ($42,371.35) (the “Fees”);
and
WHEREAS,
the Company and the Consultant wish to convert Twenty Thousand Dollars ($20,000)
of the Fees (the “Conversion Fees”) into Common Stock, par value $0.001 per
share (“Common
Stock”), of the Company;
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which the parties hereby acknowledge the parties agree as follows:
1. Conversion Fees. The
Company and Consultant hereby agree that Conversion Fees shall convert into
2,000,000 shares of Common Stock (“Conversion Shares”) to
Consultant.
2. Closing. At the
Closing, the Company shall deliver the Conversion Shares.
3. Further Assurances.
In connection with the Conversion Fees, the Consultant, by entering into this
Conversion Agreement, agrees to execute all agreements and other documents as
reasonably requested by the Company.
4. Investor Representations and
Warranties and Covenants. The Consultant represents, warrants and
covenants to the Company as follows:
a. No Registration. Such
Consultant understands that the Conversion Shares have not been, and will not
be, registered under the Securities Act of 1933, as amended (the “Securities Act”) by
reason of a specific exemption from the registration provisions of the
Securities Act, the availability of which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of such Consultant’s
representations as expressed herein or otherwise made pursuant
hereto.
b. Investment Intent.
Such Consultant is acquiring the Conversion Shares for investment for his own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any
distribution thereof, and such Consultant has no present intention of selling,
granting any participation in, or otherwise distributing the same. Such
Consultant further represents that it will not violate the Securities Act and
does not have any contract, undertaking, agreement or arrangement with any
person or entity to sell, transfer or grant participation to such person or
entity or to any third person or entity with respect to the Conversion
Shares.
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c. Investment
Experience. Such Consultant has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to the Company and acknowledges that such Consultant can protect its own
interests. Such Consultant has such knowledge and experience in financial and
business matters so that such Consultant is capable of evaluating the merits and
risks of its investment in the Company.
d. Speculative Nature of
Investment.
Such
Consultant understands and acknowledges that the Company has a limited financial
and operating history and that an investment in the Company is highly
speculative and involves substantial risks. Such Consultant can bear the
economic risk of such Consultant’s investment and is able, without impairing
such Consultant’s financial condition, to hold the Conversion Shares for an
indefinite period of time and to suffer a complete loss of such Consultant’s
investment.
e. Accredited Investor.
The Consultant is an “accredited investor’ within the meaning of Regulation D,
Rule 50 1(a), promulgated by the Securities and Exchange Commission under the
Securities Act and shall submit to the Company such further assurances of such
status as may be reasonably requested by the Company.
f. Rule 144. Such
Consultant acknowledges that the Conversion Shares must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from
such registration is available. Such Consultant is aware of the provisions of
Rule 144 promulgated under the Securities Act which permit limited resale of
shares subject to the satisfaction of certain conditions, including among other
things, the existence of a public market for the shares, the availability of
certain current public information about the Company, the resale occurring not
less than one year after a party has purchased and paid for the security to be
sold, the sale being effected through a “broker’s transaction” or in
transactions directly with a “market maker” and the number of shares being sold
during any three-month period not exceeding specified limitations. Such
Consultant acknowledges that, in the event all of the requirements of Rule 144
are not met, registration under the Securities Act or an exemption from
registration will be required for any disposition of the Conversion Shares such
Consultant understands that, although Rule 144 is not exclusive, the Securities
and Exchange Commission has expressed its opinion that persons proposing to sell
restricted securities received in a private offering other than in a registered
offering or pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales and that such persons and the brokers who participate in the transactions
do so at their own risk.
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g. Authorization.
i. Consultant has all requisite power
and authority to execute and deliver this Conversion Agreement, and to carry out
and perform its obligations under the terms hereof. All action on the part of
the Consultant necessary for the authorization, execution, delivery and
performance of this Conversion Agreement, and the performance of all of the
Consultant’s obligations herein, has been taken.
ii. This Conversion Agreement, when
executed and delivered by the Consultant, will constitute valid and legally
binding obligations of the Consultant, enforceable in accordance with its terms
except: (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies or by general principles of equity.
iii. No
consent, approval, authorization, order, filing, registration or qualification
of or with any court, governmental authority or third person is required to be
obtained by the Consultant in connection with the execution and delivery of this
Conversion Agreement by the Consultant or the performance of the Consultant’s
obligations hereunder.
j. Brokers or Finders.
Such Consultant has not engaged any brokers, finders or agents, and the Company
has not, and will not, incur, directly or indirectly, as a result of any action
taken by the Consultant, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with this Conversion Agreement
and the transactions related hereto.
k. Tax Advisors. Such
Consultant has reviewed with its own tax advisors the U.S. federal, state, local
and foreign tax consequences of this investment and the transactions
contemplated by this Conversion Agreement. With respect to such matters, such
Consultant relies solely on such advisors and not on any statements or
representations of the Company or any of its agents, written or oral. The
Consultant understands that it (and not the Company) shall be responsible for
its own tax liability that may arise as a result of this investment or the
transactions contemplated by this Conversion Agreement.
l. Legends. Such
Consultant understands and agrees that the certificates evidencing the
Conversion Shares and Interest Shares shall bear a legend in substantially the
form as follows (in addition to any legend required by any other applicable
agreement or under applicable state securities laws):
“THE
SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY
STATE, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED,
PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL
REGISTERED UNDER SUCH ACT AND/OR
APPLICABLE
STATE SECURITIES LAWS, OR UNLESS THE
COMPANY
HAS RECEIVED AN OPINION OF COUNSEL OR
OTHER
EVIDENCE, REASONABLY SATISFACTORY TO
THE
COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION
IS NOT REQUIRED.”
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereonto duly authorized as of the day
and year first above written.
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XXXXXXXXXX
HOLDING CORPORATION:
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By:
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/s/ Xxxxxx Xxxxx | |
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Xxxxxx
Xxxxx
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Chief
Executive Officer
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SOUTHTECH
SOLUTIONS, INC.:
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By:
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/s/ Xxxx Xxxxxxx | |
| Name: Xxxx Xxxxxxx | |||
| Title: CEO | |||
