Exhibit 10.3
RESTRUCTURE AGREEMENT
This RESTRUCTURE AGREEMENT (this "Agreement"), dated as of June 15, 2003,
is entered into by and among Americana Publishing, Inc., a Colorado corporation
("Company"), Advantage Fund I, LLC, ("Advantage").
W I T N E S S E T H
WHEREAS, on or about April 1, 2002, the investors named on Schedule 1
hereto (the "Original Investors") made several loans to the Company in the
principal aggregate amount of Two Hundred Forty Thousand Dollars ($240,000) in
the individual amounts set forth on Schedule 1 hereto (the "Loans");
WHEREAS, in connection with the Loans, the Company caused to be issued to
the Original Investors warrants to purchase shares of the Company's Common
Stock, including certain "Class A Warrants," certain "Class B Warrants" and
other warrants (collectively, the "Warrants");
WHEREAS, the Loans and Warrants are evidenced by certain documents,
including as follows: 12% Senior Secured Convertible Debenture and Warrant
Purchase Agreements, Note and Warrant Purchase Agreements, Convertible
Promissory Notes (the "Promissory Notes"), 12% Senior Secured Convertible
Debentures (the "Debentures"), the Warrants, and certain Registration Rights
Agreements (collectively, the "Financing Documents");
WHEREAS, Advantage has purchased all right and title to the Loans and the
Warrants from the Original Investors, and has obtained assignments from the
Original Investors as to the Loans, the Warrants, and the Financing Documents,
pursuant to certain purchase agreements entered into by and between Advantage
and the Original Investors (collectively, the "Assignment Agreements");
WHEREAS, Company and Advantage have agreed to enter into this Restructure
Agreement to acknowledge the Assignment Agreements, to amend the terms of the
Loans, and exercise and/or cancel certain Warrants;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, it is agreed as follows:
A. REPLACEMENT OF FINANCING DOCUMENTS
1. Replacement Debenture. All documents evidencing the Loans are hereby
cancelled, superseded and replaced in their entirety by the Debenture attached
hereto as Exhibit A (the "Replacement Debenture"). As of June 15, 2003, the
parties agree there is a compromised amount of $97,195 owing in accrued
interest, penalties, fees, liquidated damages and other costs and expenses
incurred and/or accrued. Accordingly, the principal amount of the Replacement
Debenture reflects the original principal amount of the Loans of $240,000 and a
recapitalization of the foregoing compromised amount, for a total new principle
amount of $337,195.
2. Replacement Registration Rights Agreement. All documents evidencing
rights of registration are hereby cancelled, superseded and replaced in their
entirety by the Registration Rights Agreement attached hereto as Exhibit B (the
"Replacement Registration Rights Agreement").
3. Financing Documents. As a result of the foregoing, and pursuant to the
terms and conditions of this Agreement, the Financing Documents, and each of
them, are hereby cancelled and rescinded in their entirety, and replaced
entirely and exclusively by this Agreement and the Exhibits hereto.
B. WARRANTS
1. Class A Warrants. Advantage hereby elects to exercise that number of
Class A Warrants pursuant to a cashless exercise pursuant to Section 4 of the
Class A Warrants resulting in a net election in the amount of 22,142,848 shares
of restricted Common Stock of Company (the "Shares"), and the Company hereby
agrees to deliver a certificate representing the Shares at the Closing (defined
below).
2. Subscription of Shares. In connection with the foregoing warrant
exercise and purchase of the Shares, Advantage hereby makes the following
representations and warranties to Company:
2.1. Advantage is an "accredited investor" within the meaning of
Regulation D under the Securities Act of 1933 (the "Securities Act"). The
undersigned 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 exercise of the Class A Warrants and acquisition of the
Shares. Advantage has had an opportunity to ask questions and receive
answers from the Company regarding the Company's business, management and
financial affairs and the terms and conditions of the Warrant 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 the undersigned or to
which the undersigned had access.
2.2. Advantage has substantial experience in evaluating and investing
in securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has
the capacity to protect its own interests. Advantage understands it must
bear the economic risk of this investment until the Shares are sold
pursuant to (i) an effective registration statement under the Securities
Act, or (ii) an exemption from registration becomes available.
2.3. Advantage is exercising the Class A Warrants for its own account
and for investment only, and not as a nominee or agent and not with a view
towards or for resale in connection with distribution of the Shares.
2.4. Advantage represents that by reason of its, or of its
management's, business and financial experience, it has the capacity to
evaluate the merits and risks of its investment in the Company and to
protect its own interests in connection with the exercise of the Class A
Warrants and acquisition of the Shares.
3. Cancellation of All Other Warrants. In consideration of the foregoing,
Advantage hereby cancels, voids and rescinds any and all Class A Warrants not
otherwise exercised pursuant to paragraph B.2 above, all Class B Warrants, and
any and all other warrants granted or issued to the Original Investors or
Advantage.
4. Proxy. Advantage hereby grants an irrevocable proxy to Xxxxxx Xxxxxx for
a period of 270 days from the date of this Agreement with respect to the Shares.
5. Indemnity. All original Warrants, Debentures and Promissory Notes will
be promptly surrendered to the Company. Advantage hereby agrees to indemnify and
hold harmless Company from and against any and all claims asserted by or on
behalf of the Original Investors regarding the Warrants and the Loans.
C. REGISTRATION RIGHTS
1. Advantage expressly authorizes and instructs the Company to withdraw the
Form SB-2 Registration Statement filed on July 16, 2002, with the Securities and
Exchange Commission, and waives and releases Company of any liability related to
or arising under any previously existing Registration Rights Agreement.
2. Company and Advantage shall enter into the Replacement Registration
Rights Agreement.
D. REPRESENTATIONS AND WARRANTIES OF ADVANTAGE
Advantage hereby represents and warrants to Company that:
1. The execution, delivery, and performance of this Agreement is within its
company powers, and has been duly authorized by all necessary company action.
2. Advantage owns all right and title to the Financing Documents, including
specifically the Loans and Warrants, and has full authority to enter into terms,
conditions, waivers, and amendments set forth in this Agreement, and in the
attached Exhibits.
E. CONDITIONS TO CLOSING
The satisfaction of each of the following shall constitute conditions
precedent to the effectiveness of this Agreement and each and every provision
hereof:
1. The representations and warranties in this Agreement shall be true and
correct in all respects on and as of the date hereof.
2. This Agreement shall have been duly executed by Company and Advantage,
and copies of such signatures shall have been provided to one another.
3. Company shall have received all original Class A Warrants, all original
Class B warrants, and all other such warrants issued to the Original Investors
as may be in the possession, custody or control of Advantage.
4. Closing. Upon confirmation of the foregoing conditions to closing, the
Company shall as soon as practicable thereafter issue or cause its transfer
agent to issue certificates representing the Shares with the appropriate
restrictive legends.
F. MISCELLANEOUS.
1. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to its conflicts-of-laws
principles (other than any provisions thereof validating the choice of the laws
of the State of New York as the governing law).
2. The recitals set forth at the beginning of this Agreement are
incorporated herein and made a part hereof. This Agreement, and the terms and
provisions hereof (including, without limitation, the recitals), constitute the
entire agreement between the Company and Advantage pertaining to the subject
matter hereof and supersedes any and all prior or contemporaneous amendments
relating to the subject matter hereof. Under no circumstances shall prior drafts
of this Agreement be utilized in interpreting the rights or obligations of the
parties hereunder or the transactions contemplated hereby. This Agreement has
been prepared jointly by the parties hereto and any uncertainty or ambiguity
existing herein shall not be interpreted against either party, but according to
the application of rules of interpretation of contracts, if such an uncertainty
or ambiguity exists. To the extent any terms or provisions of this Agreement
conflict with those of the Replacement Debenture or the Replacement Registration
Rights Agreement, the terms and provisions of this Agreement shall control.
3. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart.
Delivery of an executed counterpart of this Agreement by telefacsimile shall be
equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile also shall deliver an original executed counterpart of this
Agreement, but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.
4. Company's address for the purpose of delivery of notices is as follows:
Attn: Xxxxxx Xxxxxx
Americana Publishing, Inc.
000 Xxx Xxxxx XX, Xxxxx 000X
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
With a copy to:
Attn: Xxxxxxx Xxxxx, Esq.
Xxxxxxxxxx & Xxxxx LLP
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Advantage's address for the purpose of delivery of notices is as follows:
Xxx Xxxxx, President
Knightsbridge Capital
2999 NE 191st Street, Xxxxxxxxx Xxx
X. Xxxxx Xxxxx, Xxxxxxx 00000
5. This Agreement cannot be altered, amended, changed or modified in any
respect or particular unless each such alteration, amendment, change or
modification shall have been agreed to by each of the parties and reduced to
writing in its entirety and signed and delivered by each party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date first written above.
AMERICANA PUBLISHING, INC.
By:
Xxxxxx Xxxxxx, President
ADVANTAGE FUND I, LLC
By:
Xxxxxx Press, President
SCHEDULE 1
ORIGINAL INVESTORS
Name Principal Amount
Gulf Coast Advisors, Ltd. $25,000
BG Holdings, LLC $75,000
Karim Amiryani $20,000
Tel-Pro Marketing, Inc. $20,000
Xxxxxxx X. Xxxxxx $10,000
Xxxxxxx X. Xxxxxx, CPA, Defined Benefit Pension Plan $15,000
Xxxxxx X. Xxxx $5,000
Vestcom, Ltd. $35,000
Stranco Investments, Ltd. $35,000
Total $240,000
EXHIBIT A
REPLACEMENT DEBENTURE
EXHIBIT B
REPLACEMENT REGISTRATION RIGHTS AGREEMENT
