EXCHANGE AGREEMENT
This
Exchange Agreement (“Agreement”) is made as of May 14, 2008 by and among Diet
Coffee, Inc., a Delaware corporation (the “Company”), and Interstellar Holdings,
LLC (the “Investor”).
RECITALS
A. From
September 30, 2007 through November 16, 2007, Xxxxx Xxxxxxxxxx invested an
aggregate of $112,000 in the Company, and the Company agreed to repay these
amounts upon demand at an interest rate of ten percent (10%) per annum. Due
to
mistake, inadvertence, and neglect, the Company did not prepare written demand
notes evidencing this indebtedness in writing. On November 30, 2007, Xx.
Xxxxxxxxxx has assigned all right, title, and interest in the right to repayment
of this indebtedness to the Investor. A schedule of these investments is set
forth on Exhibit A hereto.
B. From
October 1, 2007 through November 15, 2007, the Investor invested an aggregate
of
$35,000 in the Company, and the Company agreed to repay these amounts upon
demand at an interest rate of ten percent (10%) per annum. Due to mistake,
inadvertence, and neglect, the Company did not prepare written demand notes
evidencing this indebtedness in writing. A schedule of these investments is
set
forth on Exhibit B hereto.
C. As
of the
date hereof, the principal balance on these evidences of indebtedness (the
“Evidences of Indebtedness”) is $147,000.00 and the accrued interest is
$8,786.85.
D. The
Company and the Investor desire to exchange these Evidences of Indebtedness
for
two new promissory notes (the “Notes”) in
the
aggregate principal amount of $155,786.85, the forms of which are attached
hereto as Exhibits C and D, respectively, on the terms and subject to the
conditions set forth herein.
AGREEMENT
It
is
agreed as follows:
| 1. |
EXCHANGE
OF SECURITIES.
|
1.1 Exchange
of Securities.
In
reliance upon the representations and warranties of the Company and the Investor
contained herein and subject to the terms and conditions set forth herein,
the
Investor agrees to sell, assign, transfer and deliver to the Company, and the
Company agrees to purchase from the Investor, the Evidences of Indebtedness
in
exchange for the issuance of the Notes by the Company to the Investor, in the
principal amounts set forth on Exhibits C and D, respectively.
1
1.2 Deliveries
by Company. Concurrently
with the execution of this Agreement, or as soon thereafter as practicable,
the
Company will deliver the Notes to the Investor, in the principal amounts set
forth on Exhibits C and D, respectively.
1.3 Deliveries
by Investor.
By
execution of this Agreement, the Investor hereby assigns and transfers to the
Company all of the Investor’s right, title and interest in and to the evidences
of indebtedness. From time to time after the effective date of this Agreement,
and without further consideration, the Investor will execute and deliver such
other instruments of transfer and take such other actions as the Company may
reasonably request in order to facilitate the transfer to the Company of the
securities intended to be transferred hereunder.
|
2.
|
COVENANTS.
|
2.1 Taxes.
The
issuance of certificates for shares of Common Stock on conversion of the
principal amount and interest outstanding under the Notes shall be made without
charge to the Payee for any documentary stamp or similar taxes that may be
payable in respect of the issue or delivery of such certificate.
2.2 Holding
Period.
The
Company agrees and stipulates that, for purposes of Rule 144 of the Securities
Act of 1933, as amended (the “Securities Act”), the Notes, and any shares issued
upon conversion of the Notes, are deemed to have been acquired by the Investor
on the original investment dates set forth on Exhibits A and B, respectively,
and as specified on the face page of the Notes, pursuant to Rule 144(d)(3)(ii)
of the Securities Act.
| 3. |
REPRESENTATIONS
AND WARRANTIES OF THE
COMPANY.
|
The
Company represents and warrants that the following statements are true and
correct in all material respects as of the date hereof, except as expressly
qualified or modified herein.
3.1 Organization
and Good Standing.
The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware and has full corporate power and
authority to enter into and perform its obligations under this Agreement, and
to
own its properties and to carry on its business as presently conducted and
as proposed
to be conducted.
3.2 Validity
of Transactions.
This
Agreement, and each document executed and delivered by the Company in connection
with the transactions contemplated by this Agreement, including this Agreement,
have been duly authorized, executed and delivered by the Company and is each
the
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, except as limited by applicable bankruptcy, insolvency
reorganization and moratorium laws and other laws affecting enforcement of
creditor’s rights generally and by general principles of equity.
3.3 Valid
Issuance of Conversion Shares.
The
shares of Common Stock that may be issued under the Notes (the “Conversion
Shares”), when issued and delivered in accordance with the terms thereof for the
consideration expressed therein, will be duly and validly issued, fully paid
and
nonassessable and free of restrictions on transfer, other than restrictions
on
transfer under this Agreement, the Notes, and under applicable federal and
state
securities laws, will be free of all other liens and adverse claims.
2
3.4 No
Violation.
The
execution, delivery and performance of this Agreement has been duly authorized
by the Company’s Board of Directors and will not violate any law or any order of
any court or government agency applicable to the Company, as the case may be,
or
the Articles of Incorporation or Bylaws of the Company, and will not result
in
any breach of or default under, or, except as expressly provided herein, result
in the creation of any encumbrance upon any of the assets of the Company
pursuant to the terms of any agreement or instrument by which the Company or
any
of its assets may be bound. No approval of or filing with any governmental
authority is required for the Company to enter into, execute or perform this
Agreement.
3.5 Securities
Law Compliance.
The
offer, issue, sale and delivery of the Notes, and upon conversion of the Notes,
the Conversion Shares, will constitute exempted transactions under the
Securities Act, and registration of the any of the Conversion Shares under
the
Securities Act is not required.
3.6 Resales
Under Rule 144.
With a
view to making available to the Investor the benefits of Rule 144 promulgated
under the 1933 Act (“Rule 144”) and any other rule or regulation of the SEC that
may at any time permit the Investor to sell Conversion Shares to the public
without registration, the Company will do all of the following:
3.7.1 use
its
commercial best efforts to make and keep public information available, as those
terms are understood and defined in Rule 144;
3.7.2 take
such
action, including compliance with the reporting requirements of section 13
or
15(d) of the 1934 Act, as is necessary to enable the Investor to utilize Rule
144;
3.7.3 file
with
the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act; and
3.7.4 furnish
to the Investor, so long as the Investor owns any Conversion Shares, forthwith
upon written request:
(1) a
written
statement by the Company as to its compliance with the reporting requirements
of
Rule 144, the 1933 Act and the 1934 Act (at any time after it has become subject
to such reporting requirements);
(2) a
copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company;
3
(3) an
opinion of the Company’s counsel that the Conversion Shares may be resold in the
absence of an effective registration thereof under the Securities Act pursuant
to Rule 144; and
(4) such
other documents as may be reasonably requested in availing the Investor of
any
rule or regulation of the SEC that permits the selling of any such Conversion
Shares without registration or pursuant to such form.
| 4. |
REPRESENTATIONS
AND WARRANTIES OF THE
INVESTOR.
|
The
Investor
hereby represents, warrants, and covenants with the Company as
follows:
4.3 Restricted
Securities.
4.3.1 The
Investor has been advised that neither the Notes nor the Conversion Shares
have
been registered under the Securities Act or any other applicable
securities laws.
The
Investor acknowledges that the Notes and the Conversion Shares may be issued
as
“restricted securities” as defined by Rule 144 promulgated pursuant to the
Securities Act. Neither the Notes nor the Conversion Shares may be resold in
the
absence of an effective registration thereof under the Securities Act and
applicable state securities laws unless, in the opinion of the Company’s
counsel, an applicable exemption from registration is available.
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE
SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING
JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
4
| 5. |
MISCELLANEOUS.
|
5.1 Governing
Law.
This
Agreement shall be governed by and construed under the laws of the State of
Connecticut.
5.2 Successors
and Assigns.
Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of, and be binding upon, the successors, assigns, heirs, executors,
and
administrators of the parties hereto.
5.3 Entire
Agreement.
This
Agreement and the Exhibits hereto and thereto, and the other documents delivered
pursuant hereto and thereto, constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof and no party
shall be liable or bound to any other party in any manner by any
representations, warranties, covenants, or agreements except as specifically
set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
5.4 Severability.
In case
any provision of this Agreement shall be invalid, illegal, or unenforceable,
it
shall to the extent practicable, be modified so as to make it valid, legal
and
enforceable and to retain as nearly as practicable the intent of the parties,
and the validity, legality, and enforceability of the remaining provisions
shall
not in any way be affected or impaired thereby.
5.5 Amendment
and Waiver.
Except
as otherwise provided herein, any term of this Agreement may be amended, and
the
observance of any term of this Agreement may be waived (either generally or
in a
particular instance, either retroactively or prospectively, and either for
a
specified period of time or indefinitely), with the written consent of the
Company and the Investor. Any amendment or waiver effected in accordance with
this Section shall be binding upon each future holder of any security purchased
under this Agreement (including securities into which such securities have
been
converted) and the Company.
5.6 Notices.
All
notices and other communications required or permitted hereunder shall be in
writing and shall be effective when delivered personally, or sent by telex
or
telecopier (with receipt confirmed), provided that a copy is mailed by
registered mail, return receipt requested, or when received by the addressee,
if
sent by Express Mail, Federal Express or other express delivery service (receipt
requested) in each case to the appropriate address set forth below:
| If to the Company: |
Diet
Coffee, Inc.
000
Xxxxx Xxxxxx
Xxxxxx,
XX 00000
|
5
| If to the Investor: |
Interstellar
Holdings, LLC
0000
Xxxxxxx Xxxx
Xxxxxxxxx
XX, 00000
|
5.7 Titles
and Subtitles.
The
titles of the paragraphs and subparagraphs of this Agreement are for convenience
of reference only and are not to be considered in construing this
Agreement.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
|
COMPANY
|
||
| DIET COFFEE, INC. | ||
| |
|
|
| By: | ||
|
Xxxx
X. Xxxxx,
President
|
||
|
INVESTOR
|
||
| INTERSTELLAR HOLDINGS, LLC | ||
| |
|
|
| By: | ||
|
Xxxxxxx
Xxxxx,
Manager
|
||
6
EXHIBIT
A
XXXXXXXXXX
DEMAND LOANS
(assigned
to Interstellar Holdings on November 30, 2007)
|
Date
|
Amount
|
Accrued
Interest
|
|||||
|
9/30/2007
|
$
|
50,000.00
|
$
|
3,109.59
|
|||
|
9/30/2007
|
$
|
7,500.00
|
$
|
466.44
|
|||
|
10/1/2007
|
$
|
25,000.00
|
$
|
1,547.95
|
|||
|
10/5/2007
|
$
|
10,000.00
|
$
|
608.22
|
|||
|
10/5/2007
|
$
|
10,000.00
|
$
|
608.22
|
|||
|
10/10/2007
|
$
|
5,000.00
|
$
|
297.26
|
|||
|
10/15/2007
|
$
|
7,500.00
|
$
|
435.62
|
|||
|
10/16/2007
|
|
$
|
6,000.00
|
$
|
346.85
|
||
|
10/20/2007
|
$
|
2,500.00
|
$
|
141.78
|
|||
|
10/21/2007
|
$
|
3,500.00
|
$
|
197.53
|
|||
|
10/21/2007
|
$
|
2,500.00
|
$
|
141.10
|
|||
|
11/16/2007
|
$
|
7,500.00
|
$
|
369.86
|
|||
|
$
|
112,000.00
|
$
|
6,722.47
|
||||
A-1
EXHIBIT
B
INTERSTELLAR
DEMAND LOANS
|
Date
|
Amount
|
Accrued
Interest
|
|||||
|
10/1/2007
|
$
|
25,000.00
|
$
|
1,547.95
|
|||
|
10/31/2007
|
$
|
5,000.00
|
$
|
268.49
|
|||
|
11/15/2007
|
$
|
5,000.00
|
$
|
247.95
|
|||
|
$
|
35,000.00
|
$
|
2,064.38
|
||||
B-1
EXHIBIT
C
CONVERTIBLE
PROMISSORY NOTE
C-1
EXHIBIT
D
DEMAND
PROMISSORY NOTE
D-1
