MEMORANDUM OF UNDERSTANDING
EXHIBIT 10.21
THIS
MEMORANDUM OF UNDERSTANDING (this “Memorandum”)
is entered into as of April 29, 2008 and memorializes the parties’ understanding
regarding that certain Securities Purchase Agreement entered into as of June 29,
2007, as amended (the “Purchase
Agreement”), by and between Energy King, Inc., formerly Buckeye Ventures,
Inc. (the “Company”),
and Trafalgar Capital Specialized Investment Fund, Luxembourg (the “Buyer”)
and the Transaction Documents as defined in the Purchase Agreement.
RECITALS
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A.
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Pursuant
to the Purchase Agreement and Transaction Documents, the Company sold an
aggregate of $5,000,000 in secured convertible debentures to the Buyer to
be issued in several closings to be funded as follows: (i) $1,500,000 on
the first closing, (ii) $1,750,000 on the second closing, and (iii)
$1,750,000 on the third closing.
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B.
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The
Buyer deposited the $1,500,000 proceeds of the first closing in
escrow on June 29, 2007, and the proceeds were released from escrow to the
Company on October 2, 2007. On or around the date of the first
closing, the parties orally agreed to fix the conversion price at $0.1536
for the initial $1,500,000 in debentures and to leave the conversion price
for the remaining unissued $3,500,000 in debentures the same as provided
in the Purchase Agreement and Transaction Documents (the “Oral
Agreement”). The $0.1536 fixed conversion price is equal to 85% of
the lowest volume weighted average price (“VWAP”) of the Company’s common
stock during the ten trading days immediately preceding the first
closing.
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C.
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As
of the date of this Memorandum, the Buyer has not purchased, and the
Company has not issued, the remaining $3,500,000 in
debentures.
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D.
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Pursuant
to this Memorandum, the parties wish to reduce to the Oral Agreement to
writing to be effective as of the date of the Oral
Agreement.
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TERMS OF
AGREEMENT
Now,
therefore, for good and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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1.
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The
parties agree that the terms of the Purchase Agreement and Transaction
Documents are binding and enforceable against the
parties.
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2.
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The
conversion price for the initial $1,500,000 in debentures issued to the
Buyer under the Purchase Agreement and Transaction Documents shall be
fixed at $0.1536; provided, however, that the conversion price and related
conversion calculations for the remaining unissued $3,500,000 in
debentures shall remain exactly the same as provided in the Purchase
Agreement and Transaction
Documents.
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3.
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All
other terms of the Purchase Agreement and Transaction Documents shall
remain in force and unaltered.
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4.
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This
Memorandum shall be effective as of October 2, 2007 and may be executed as
of the same effective date in one or more counterparts, each of which
shall be deemed an original.
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[Signature Page
Follows]
IN WITNESS WHEREOF, the
parties hereto have caused this Memorandum of Understanding to be duly executed
by their respective authorized persons as of the date first set forth
above.
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COMPANY:
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| ENERGY KING, INC. | |
| (formerly Buckeye Ventures, Inc.) | |
| By: /s/ Xxxx X. Xxxxx | |
| Name: Xxxx X. Xxxxx | |
| Title: President and CEO | |
| BUYER: | |
|
TRAFALGAR CAPITAL SPECIALIZED
INVESTMENT FUND,
LUXEMBOURG
|
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| By: Trafalgar Capital Sarl | |
| Its: General Partner | |
| By: /s/ Xxxxxx Press | |
| Name: Xxxxxx Press | |
| Title: Director |
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