EXCHANGE OFFER AGREEMENT
This
Exchange Offer Agreement, dated as of July 20, 2010 (this “Agreement”), is
entered into by and between Thwapr, Inc., a Nevada corporation (the “Company”), and each
of the undersigned holders (each a “Stockholder”,
collectively, the “Stockholders”) of
Common Stock of the Company, par value $0.0001 per share (the “Common
Stock”).
RECITALS
WHEREAS,
the Stockholders currently hold shares of the Company’s Common
Stock;
WHEREAS,
the Company and the Stockholders desire to conduct a share exchange pursuant to
Section 3(a)(9) of the Securities Act of 1933, as amended (the “Act”), pursuant to
which the Stockholders will exchange the number of issued and outstanding shares
of Common Stock set forth next to their respective names in Exhibit A for shares
of preferred stock, par value $0.0001 per share (the “Series A Preferred
Stock”) that will be convertible into shares of Common
Stock;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, each Stockholder and the Company agree as follows:
1. Exchange of Common Stock for
Series A Preferred Stock. The Stockholders hereby agree to
exchange the number of shares of Common Stock of the Company set forth next to
their respective names in Exhibit A, for shares
of Series A Preferred Stock of the Company at a ratio of one (1) share of Series
A Preferred Stock for three (3) shares of Common Stock, with such rights and
designations of the Series A Preferred Stock evidenced by the Certificate of
Designation attached hereto as Exhibit B (the “Certificate of
Designation”) in the respective amounts listed on Exhibit A. The
Company shall not be required to issue or deliver any fractional shares of
Series A Preferred Stock. Any fractional shares of Series A Preferred
Stock resulting from the exchange of the Common Stock shall be rounded upward to
the nearest whole number. Each Stockholder agrees to surrender to the
Company such Stockholder’s original stock certificate(s) representing the shares
of Common Stock being exchanged for shares of Series A Preferred Stock pursuant
to this Agreement within five (5) days of the date of this
Agreement. Upon surrender by each Stockholder of such Stockholder’s
original Common Stock certificate(s) for cancellation, the Company shall issue
to such Stockholder a new certificate evidencing the number of shares of Series
A Preferred Stock next to each such Stockholder’s name in Exhibit
A.
2. Conversion of Series A
Preferred Stock. The shares of Series A Preferred Stock held
by each Stockholder are convertible into shares of Common Stock at a ratio of
three (3) shares of Common Stock for each one (1) share of Series A Preferred
Stock (subject to adjustments as set forth in the Certificate of Designation),
at the option of such Stockholder or upon certain events as set forth in the
Certificate of Designation.
3. Representations and
Warranties of the Stockholders. Each Stockholder represents
and warrants to the Company as follows:
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a.
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Stockholder
is the beneficial and record holder of the number of shares of Common
Stock set forth next to such Stockholder’s name on Exhibit
A.
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b.
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Stockholder
has not transferred, assigned, pledged or hypothecated, in whole or in
part, such Stockholder’s shares of Common Stock or granted any interest
therein or thereto.
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c.
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Stockholder
understands that the Series A Preferred Stock is not presently
registered.
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d.
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Stockholder
acknowledges that the Series A Preferred Stock must be held indefinitely
unless such Series A Preferred Stock is converted into shares of Common
Stock pursuant to the terms of the Certificate of Designation and such
shares of Common Stock are subsequently registered under the Act or unless
an exemption from such registration is
available.
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e.
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Stockholder
acknowledges that such Stockholder has had the opportunity to ask
questions of, and receive answers from the Company or any person acting on
Stockholder’s behalf concerning the Company and its business and to obtain
any additional information, to the extent possessed by the Company (or to
the extent it could have been acquired by the Company without unreasonable
effort or expense) necessary to verify the accuracy of the information
received by Stockholder. In connection therewith, Stockholder acknowledges
that Stockholder has had the opportunity to discuss the Company’s
business, management and financial affairs with the Company’s management
or any person acting on its behalf. Each Stockholder has received and
reviewed this Agreement, and all the information, both written and oral,
that such Stockholder desires. Without limiting the generality of the
foregoing, Stockholder has been furnished with or has had the opportunity
to acquire, and to review, all information, both written and oral, that
such Stockholder desires with respect to the Company’s business,
management, financial affairs and prospects. In determining whether to
enter into this Agreement, Stockholder has relied solely on such
Stockholder’s own knowledge and understanding of the Company and its
business based upon such Stockholder’s own due diligence investigations
and the information furnished pursuant to this paragraph. Stockholder
understands that no person has been authorized to give any information or
to make any representations which were not furnished pursuant to this
paragraph and Stockholder has not relied on any other representations or
information.
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f.
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Stockholder
has all requisite legal and other power and authority to execute and
deliver this Agreement and to carry out and perform Stockholder’s
obligations under the terms of this Agreement. This Agreement constitutes
a valid and legally binding obligation of Stockholder, enforceable in
accordance with its terms, and subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of
law governing specific performance, injunctive relief or other general
principals of equity, whether such enforcement is considered in a
proceeding in equity or law.
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g.
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Stockholder
has carefully considered and has discussed with Stockholder’s professional
legal, tax, accounting and financial advisors, to the extent Stockholder
has deemed necessary, the suitability of this investment and the
transactions contemplated by this Agreement for Stockholder’s particular
federal, state, local and foreign tax and financial situation and has
determined that this investment and the transactions contemplated by this
Agreement are a suitable investment for Stockholder. Stockholder relies
solely on such advisors and not on any statements or representations of
the Company or any of its agents. Stockholder understands that Stockholder
(and not the Company) shall be responsible for Stockholder’s own tax
liability that may arise as a result of this investment or the
transactions contemplated by this
Agreement.
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h.
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There
are no actions, suits, proceedings or investigations pending against
the Stockholder or Stockholder’s properties before any court or
governmental agency (nor, to Stockholder’s knowledge, is there any threat
thereof) which would impair in any way Stockholder’s ability to enter into
and fully perform Stockholder’s commitments and obligations under this
Agreement or the transactions contemplated
hereby.
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i.
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The
execution, delivery and performance of and compliance with this Agreement,
and the issuance of the Series A Preferred Stock will not result in any
material violation of, or conflict with, or constitute a material default
under, any of Stockholder’s articles of incorporation, bylaws, articles of
organization/formation or limited liability company operating agreement,
if applicable, or any of Stockholder’s material agreements nor result in
the creation of any mortgage, pledge, lien, encumbrance or charge against
any of Stockholder’s assets or properties or the Series A Preferred
Stock.
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j.
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Stockholder
recognizes that no federal, state or foreign agency has recommended or
endorsed the purchase of the Series A Preferred
Stock.
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k.
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In
addition, the certificates representing the Series A Preferred Stock or
Common Stock issuable upon conversion of the Series A Preferred Stock, and
any and all securities issued in replacement thereof or in exchange
therefor, shall bear such legend as may be required by the securities laws
of the jurisdiction in which Stockholder
resides.
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1.
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Stockholder
acknowledges that Stockholder has such knowledge and experience in
financial and business matters that such Stockholder is capable of
evaluating the merits and risks of an investment in the Series A Preferred
Stock and the Common Stock issuable upon conversion of the Series A
Preferred Stock and of making an informed investment
decision.
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4. Representations and
Warranties of the Company. The Company represents and warrants
to Stockholders as follows:
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a.
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The
Company is duly organized and validly exists as a corporation in good
standing under the laws of the State of
Nevada.
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b.
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The
Company has all requisite corporate power and authority to enter into,
deliver and perform this Agreement.
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c.
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All
necessary corporate action has been duly and validly taken by the Company
to authorize the execution, delivery and performance of this Agreement by
the Company, and the issuance of the Series A Preferred Stock by the
Company pursuant to this Agreement. This Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company enforceable against
the Company in accordance with the terms of this Agreement, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally and by general principles of equity,
whether considered in a proceeding in equity of
law.
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5. Covenants of the
Company. The Company agrees to take all necessary action to
amend the Company’s Articles of Incorporation, including obtaining the requisite
stockholders’ approval for such amendment, no later than twelve (12) months from
the date of this Agreement, to provide that the Board of Directors may designate
the voting power of the Preferred Stock, if any, regardless of the equivalent
voting ratio to Common Stock. Upon the effective date of such
amendment of the Articles of Incorporation, as provided in the Certificate of
Designation, each share of Series A Preferred Stock shall be entitled to vote
the equivalent of three (3) shares of Common Stock (as adjusted for any stock
splits, reclassification or similar events).
6. Prohibition of Pledge, Sale
or Transfer.
a.
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The
pledge, sale, offer to sell, contract to sell, assignment, pledge,
hypothecation, encumbrance or other transfer, direct or indirect, of the
shares of Series A Preferred Stock and the shares of Common Stock issuable
upon conversion of such Series A Preferred Stock (collectively, the “Capital
Stock”), including (i) the use of the Capital Stock as collateral
for any borrowing, or (ii) the granting of purchase options to any other
person or entity, shall be prohibited until the earlier to occur of (x)
July 20, 2012; or (y) the occurrence of a Change in Control, as defined in
the Certificate of Designation; provided, however, that a transfer by a
Stockholder, (certified by the Stockholder to the Company that such
transfer is for estate planning purposes), to (A) an immediate family
member; or (B) a trust, corporation, limited partnership or limited
liability company created by a Stockholder and in which the beneficial
interest of such trust and/or equity ownership of any such entity is for
the principal benefit of the Stockholder and/or the Stockholder’s
immediate family, shall be permitted. To the extent of any permitted
transfer, such transferred shares of Capital Stock shall be taken by the
transferee subject to this Agreement, and shall be subject to the
provisions set forth in the Certificate of
Designation.
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b.
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In
the event of any stock dividend, stock split, recapitalization, or other
change affecting the Company’s outstanding Common Stock effected without
receipt of consideration, then any new, substituted, or additional
securities distributed to the Stockholder with respect to the Capital
Stock shall be immediately subject to the provisions of this
Section 6, to the same extent the Capital Stock is at such time
covered by such provisions.
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c.
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Any
purported transfer of any of the Capital Stock that is not in accordance
with this Agreement shall be null and void, and shall not operate to
transfer any right, title or interest in such Capital Stock to the
purported transferee. The Stockholder agrees that the Company shall not
cause or permit the transfer of any Capital Stock to be made on its books
unless the transfer is permitted by this Agreement and has been made in
accordance with its terms.
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7. Miscellaneous.
a.
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Stockholder
agrees not to transfer or assign this Agreement or any of Stockholder’s
interest herein and further agrees that the transfer or assignment of the
Series A Preferred Stock acquired pursuant hereto shall be made only in
accordance with all applicable laws, including such transfers to the
Stockholder’s legal heirs and assigns. All statements, representations,
warranties, covenants and agreements in this Agreement shall be binding on
the parties hereto and shall inure to the benefit of the respective
successors and permitted assigns of each party
hereto.
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b.
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Stockholder
has read and has accurately completed this entire Agreement including all
Exhibits attached hereto.
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c.
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This
Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and may be amended only by a written
execution by all parties.
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d.
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Stockholder
acknowledges that Stockholder has been advised to consult with such
Stockholder’s own attorney regarding this Agreement and Stockholder has
done so to the extent that Stockholder deems
appropriate.
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e.
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This
Agreement shall be enforced, governed and construed in all respects in
accordance with the laws of the State of Nevada, as such laws are applied
by the Nevada courts to agreements entered into and to be performed in
Nevada by and between residents of Nevada, and shall be binding upon each
Stockholder, each Stockholder’s heirs, estate, legal representatives,
successors and assigns and shall inure to the benefit of the Company, its
successors and assigns.
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f.
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If
any provision of this Agreement is held to be invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be
deemed modified to conform with such statute or rule of law. Any provision
hereof that may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provisions
hereof.
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g.
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All
pronouns and any variations thereof used herein shall be deemed to refer
to the masculine, feminine, singular or plural, as identity of the person
or persons may require.
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h.
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This
Agreement may be executed in counterparts and by facsimile, each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument.
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of this page intentionally left blank.]
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IN
WITNESS WHEREOF, the parties have caused this Exchange Offer Agreement to be
executed and delivered by their duly authorized representatives as of the date
first written above.
THWAPR,
INC.
a
Nevada corporation
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By: |
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Name: |
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Title: |
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STOCKHOLDERS:
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SNK Trust | |||||
By: |
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Xxxx
Xxxxxxx, Its Trustee
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By: | |||||
Xxxxx Xxxxxxxxx | |||||
By: | |||||
Xxxxx Xxxx | |||||
M. & X. Xxxxxxxxx LLC | |||||
By: | |||||
Xxxxxxxx Xxxxxxxxx | |||||
By: | |||||
Xxxxx Xxxxxxxxx |
7
EXHIBIT
A
STOCKHOLDERS
Name
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Address
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Number
of
Shares of Common
Stock
Held Prior to Exchange |
Number
of
Shares of Series A Preferred Stock Held After the Exchange |
SNK
Trust
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2nd
Floor, International Bazaar,
XX
Xxx X-0000,
Xxx
Xxxxxx, Xxxxxx
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102,613,500
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34,204,500
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Xxxxx
Xxxxxxxxx
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000
Xxxxxx Xx., 00X
Xxx
Xxxx, Xxx Xxxx 00000
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11,571,426
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3,857,142
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Xxxxx
Xxxx
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0000
Xxxxxxxx Xxxx
Xxx
Xxxxxx, XX 00000
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11,571,426
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3,857,142
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M.
& X. Xxxxxxxxx LLC
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000
Xxxxxx Xxxxx
Xxxxxxx
Xxxxxxxxx, XX 00000
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11,571,417
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3,857,139
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Xxxxx
Xxxxxxxxx
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00000
Xxxxxxx Xxxxxx, #000
Xxxxxxx
Xxxxxxxxx, XX 00000
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3,857,139
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1,285,713
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