AGREEMENT
Exhibit
10.1
This agreement (this “Agreement”) is
dated as of November 4, 2008 and made and entered into by the Companies (as
defined below) and the undersigned Purchasers (as defined
below). Reference is made to the Securities Purchase Agreement (the
“Purchase
Agreement”) dated April 27, 2006 by and among a21, Inc. (“a21”), its wholly
owned subsidiary SuperStock, Inc. (together with a21 and Artselect, Inc., the
“Company”), the
purchasers set forth on Exhibit A to the Purchase Agreement (the “Purchasers”) and AHAB
International LTD/AHAB Partners LP (“AHAB”), as agent for itself and the
Purchasers. Pursuant to the terms of the Secured Convertible Term Notes
(the “Notes”)
issued pursuant to the Purchase Agreement, a quarterly interest payment on the
Notes was due on October 1, 2008 (the “Interest Payment
Date”). Capitalized terms used herein, but not otherwise
defined shall have the meanings ascribed to them in the Notes.
Article
1. Terms.
The
undersigned hereby agree as follows:
1.1 Issuance of Interest
Shares.
1.1.1 In lieu
of making the Interest Payment Date quarterly interest payment in cash, the
Company may pay the amounts due on the Interest Payment Date in shares of a21’s
common stock at a per share price of $0.006 (or 33,517,805 shares of a21’s
common stock) (collectively, the “Interest Shares”).
1.1.2 Issuance
of the Interest Shares, pro rata to the Purchasers (based upon the amount of
principal and interest outstanding on such Notes) as detailed in Exhibit A to this
Agreement shall be considered payment in full of any and all amounts due on the
Interest Payment Date, pursuant to the terms of the Purchase Agreement and the
Notes and any other agreements entered into in connection with the Purchase
Agreement and the Notes. No Purchaser shall receive or shall be entitled to
receive consideration other than such Purchaser’s pro rata share of the Interest
Shares for payment of the quarterly interest payment due on the Interest Payment
Date.
1.1.3 The
undersigned Purchasers, on behalf of themselves and all of the other Purchasers,
hereby waive receipt of any payment due to the Purchasers on the Interest
Payment Date other than as described in this Agreement, as well as any other
Event of Default that may have occurred prior to the Interest Payment Date and
may or may not be continuing.
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Article
2. Company Representations and
Warranties
The
Company, as of the date hereof, hereby represents and warrants to the Purchasers
as follows:
2.1 Organization, Good Standing
and Qualification. Each of the Company and each of its
Subsidiaries is a corporation, partnership, company or limited liability
company, as the case may be, duly organized and validly existing under the laws
of its jurisdiction of organization. Each of the Company and each of
its Subsidiaries has the corporate, limited liability company or partnership, as
the case may be, power and authority to operate its business and to own and
operate its properties and assets and, insofar as it is or shall be a party
thereto, to (1) execute and deliver this Agreement and all other documents,
instruments and agreements entered into in connection with the transactions
contemplated hereby; (2) issue the Shares, (3) carry out the provisions of this
Agreement, and (4) carry on its business as presently
conducted. Each of the Company and each of its Subsidiaries is duly
and is authorized to do business and is in good standing as a foreign
corporation, partnership or limited liability company, as the case may be, in
all jurisdictions in which the nature or location 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 has not, or could not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the business, assets, liabilities or financial condition of
the Company and its Subsidiaries, taken as a whole (a “Material Adverse
Effect”).
2.2 Capitalization.
2.2.1 The
authorized capital stock of a21, as of the date hereof consists of 200,100,000
shares, of which 200,000,000 are shares of Common Stock, par value $0.001 per
share, 88,883,587 shares of which are issued and outstanding as of the date
hereof, and 100,000 are shares of preferred stock, par value $0.001 per share of
which no shares of preferred stock are issued and outstanding. The
authorized, issued and outstanding capital stock of each Subsidiary of the
Company is set forth on Schedule
2.2.1.
2.2.2 The
rights, preferences, privileges and restrictions of the shares of the Common
Stock are as stated in a21’s Certificate of Incorporation (the
“Charter”). The Interest Shares shall be certificated, have been duly
authorized, validly issued, fully paid and nonassessable, were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities and any rights of third parties and will be free of any encumbrances;
provided, however, that the Interest Shares may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein or as
otherwise required by such laws at the time a transfer is
proposed.
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2.3 Authorization; Binding
Obligations. All corporate, partnership or limited liability
company, as the case may be, action on the part of the Company and each of its
Subsidiaries (including their respective officers, directors and stockholders)
necessary for the authorization of this Agreement, the performance of all
obligations of the Company and its Subsidiaries hereunder and the authorization,
sale, issuance and delivery of the Interest Shares has been
taken. This Agreement, when executed and delivered and to the extent
it is a party thereto, will be valid and binding obligations of each of the
Company and each of its Subsidiaries, enforceable against each such person or
entity in accordance with their terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors’ rights; and general principles
of equity that restrict the availability of equitable or legal
remedies.
2.4 No Conflict, Breach,
Violation or Default. The execution, delivery and performance of and
compliance with this Agreement, and the issuance of the Interest Shares by the
Company pursuant hereto, will not, with or without the passage of time or giving
of notice, result in any such material violation, or be in conflict with or
constitute a default under (a) the Charter or Bylaws of the Company or any
Subsidiary, (b) any statute, rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over the
Company, any Subsidiary or any of their respective assets or properties or (c)
any such term or provision, or result in the creation of any Encumbrance upon
any of the properties or assets of the Company or any of its Subsidiaries or the
suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to the Company, its business or
operations or any of its assets or properties.
2.5 Consents. The
execution, delivery and performance by the Company of this Agreement and the
issuance the Interest Shares require no consent of, action by or in respect of,
or filing with, any person, governmental body, agency, or official other than
filings that have been made pursuant to applicable state securities laws and
post-sale filings pursuant to applicable state and federal securities laws which
the Company undertakes to file within the applicable time periods.
2.6 Brokers and
Finders. No Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company or any Subsidiary for any commission, fee or other
compensation.
2.7 Equal Treatment of
Purchasers. The Company is not bound by any agreement,
arrangement or understanding with any Purchaser that relates to interest
payments due on the Interest Payment Date that any Purchaser could reasonably
conclude resulted in any one Purchaser being treated differently than any other
Purchaser, with respect to such payment.
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Article
3. Miscellaneous
3.1 Effective
Time. This Agreement shall be effective upon execution by the
Company, Xxxxxx Xxxxxxx & Co. Incorporated, AHAB International LTD, AHAB
Partners LP and Starvest Partners, LP.
3.2 Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be considered to be an original and all of which
taken together shall constitute one and the same instrument. Delivery
by telecopier of an executed counterpart of a signature page to this Agreement
shall be effective as delivery of an original executed counterpart of this
Agreement.
3.3 Governing Law, Jurisdiction
and Waiver of Jury Trial.
3.3.1 THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
3.3.2 THE
PARTIES HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY, ON THE ONE HAND, AND
THE PURCHASERS, ON THE OTHER HAND, PERTAINING TO THIS AGREEMENT OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS AGREEMENT; PROVIDED, THAT THE PURCHASERS AND
THE COMPANY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD
BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW
YORK. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS.
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3.3.3 THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE
ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
PURCHASERS AND/OR THE COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT, ANY OTHER RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR
THERETO.
[Signatures
Follow]
NY742347.3
204772-10013
PURCHASERS:
XXXXXX
XXXXXXX & CO. INCORPORATED
By:
Name:
Title:
STARVEST
PARTNERS, L.P.
By: StarVest
Associates, LLC, its General Partner
By:
Name:
Title:
AHAB
International LTD
By: Ahab
Capital Management, Inc., its Investment Advisor
By:
Name: Xxxxxxxx
Xxxxxx
Title: President
AHAB
Partners LP
By: Pequod
LLC, its General Partner
By:
Name: Xxxxxxxx
Xxxxxx
Title: Managing
Member
Xxxx X.
Xxxxxxxx
[Additional
Signatures Follow]
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204772-10013
Xxxxxx X.
Xxxxxx
COHANZICK
CREDIT OPPORTUNITIES MASTER FUNDS, LTD.
By: Xxxxx
X. Xxxxxxx
By:
Name: Xxxxx
X. Xxxxxxx
Title: Agent
XXXXXXXX,
SILVER & CO., L.P.
By: Xxxxxxx
Xxxxxx Securities, Inc., its General Partner
By:
Name:
Title:
Xxxxx X.
Xxxx
Xxxxxxx
Xxxxxxx
XXXXXXXX,
L.P.
By: Xxxxxxxx
Capital Management, Inc., its General Partner
By:
Name:
Title:
[Additional
Signatures Follow]
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COMPANIES:
By:
Name: R.
XxXxxxx Xxxxxxx
Title: Chief
Financial Officer
SUPERSTOCK,
INC.
By:
Name: R.
XxXxxxx Xxxxxxx
Title: Chief
Financial Officer
ARTSELECT,
INC.
By:
Name: R.
XxXxxxx Xxxxxxx
Title: Chief
Financial Officer
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EXHIBIT
A
This
exhibit details the number of shares of a21 common stock to be issued to each of
the Purchasers as payment in lieu of cash for interest due as of October 1,
2008, as specified in Section 1 of the Agreement dated as of November 4,
2008.
Purchaser
|
Number of Shares
|
|||
Xxxxxx
Xxxxxxx & Co. Incorporated
|
10,812,195 | |||
StarVest
Partners, L.P.
|
6,487,317 | |||
Xxxxxxxx
L.P.
|
4,324,878 | |||
Xxxx
X. Xxxxxxxx
|
3,243,658 | |||
Cohanzick
Credit Opportunities Master Funds LTD
|
2,703,049 | |||
AHAB
International LTD
|
2,378,683 | |||
AHAB
Partners L.P.
|
1,946,195 | |||
LCA
Capital Partners, Inc.
|
756,854 | |||
Xxxxxxxx,
Silver & Company
|
324,366 | |||
Vertical
Capital
|
324,366 | |||
Vertical
Capital
|
216,244 | |||
Total:
|
33,517,805 |