EXHIBIT 10.25
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DEBT CONVERSION AGREEMENT
This Debt Conversion Agreement made as of this 1st day of May, 2004
between XXXxxx.xxx, Inc., a Delaware corporation (the "Company") having a
principal place of business at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000 and
Morritt, Hock, Hamroff and Xxxxxxxx, LLP (the "Firm") and Xxxxxx X. Xxxxxxxx
("Xxxxxxxx") each having an address at 000 Xxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx
Xxxx, XX 00000. The Firm and Xxxxxxxx are each referred to herein as "Lender"
and are collectively referred to as the "Lenders."
WHEREAS, Xxxxxxxx has advanced funds of $38,000 to Company; and
WHEREAS, the Firm has provided services to the Company totaling
$112,534 (of which $82,534 was billed and unpaid at March 31, 2004); and
WHEREAS, Lenders are willing to release the Company from its obligation
to repay the Loan upon the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the terms, conditions and agreements
contained in this Agreement, the parties agree as follows:
1. Issuance of Securities.
(a) Lenders agree to accept 150,000 shares of the Company's
common stock in full satisfaction of the Company's obligation to repay the Loan.
The Company agrees to issue the shares to Lenders promptly following the
execution of this Agreement.
(b) The certificate, in due and proper form, representing the
shares will be registered in the name of the Firm and bear a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR
AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT".
2. Lender's Representations and Warranties.
Each of Xxxxxxxx and the Firm hereby acknowledges, represents and
warrants to, and agrees with, the Company as follows:
(a) The Lender is acquiring the shares for his own account as
principal, for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization
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thereof, in whole or in part, and no other person has a direct or indirect
beneficial interest in such shares.
(b) The Lender acknowledges its understanding that the
offering and sale of the shares is intended to be exempt from registration under
the Act by virtue of Section 4(2) of the Securities Act of 1933, as amended (the
"Act") and the provisions of Regulation D thereunder.
(c) The Lender has the financial ability to bear the economic
risk of his investment, has adequate means for providing for his current needs
and personal contingencies and has no need for liquidity with respect to his
investment in the Company.
(d) The Lender is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D under the Act (17 C.F.R. 230.501(a)).
(e) The Lender has made an independent investigation of the
Company's business, been provided an opportunity to obtain additional
information concerning the Company he deems necessary to make an investment
decision and all other information to the extent the Company possesses such
information or can acquire it without unreasonable effort or expense.
(f) The Lender represents, warrants and agrees that he will
not sell or otherwise transfer the shares unless registered under the Act or in
reliance upon an exemption therefrom, and fully understands and agrees that he
must bear the economic risk of his purchase for an indefinite period of time
because, among other reasons, the shares or underlying securities have not been
registered under the Act or under the securities laws of certain states and,
therefore, cannot be resold, pledged, assigned or otherwise disposed of unless
they are subsequently registered under the Act and under the applicable
securities laws of such states or an exemption from such registration is
available. The Lender also understands that the Company is under no obligation
to register the shares on his behalf or to assist the Lender in complying with
any exemption from registration under the Act. The Lender further understands
that sales or transfers of the shares or underlying securities are restricted by
the provisions of state securities laws.
(g) The foregoing representations, warranties and agreements
shall survive the delivery of the shares under the Agreement.
3. Company Representations and Warranties.
The Company hereby acknowledges, represents and warrants to, and agrees
with the Lenders as follows:
(a) The Company has been duly organized, is validly existing
and is in good standing under the laws of the State of Delaware. The Company has
full corporate power and authority to enter into this Agreement and this
Agreement has been duly and validly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company,
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enforceable against the Company in accordance with its terms, except as such
enforcement may be limited by the United States Bankruptcy Code and laws
effecting creditors rights, generally.
(b) Subject to the performance by the Lenders of its
obligations under this Agreement and the accuracy of the representations and
warranties of the Lender, the offering and sale of the shares will be exempt
from the registration requirements of the Act.
(c) The execution and delivery by the Company of, and the
performance by the Company of its obligations under this Agreement in accordance
with the terms of this Agreement will not contravene any provision of applicable
law or the charter documents of the Company or any agreement or other instrument
binding upon the Company, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement in accordance with the terms of this Agreement.
(d) The foregoing representations, warranties and agreements
shall survive the Closing.
4. Release.
Upon the delivery of the consideration to Lender set forth in Section 1
of this Agreement, the Lender releases and forever discharges the Company of and
from all and all manner of actions, suits, debts, sums of money, contracts,
agreements, claims and demands at law or in equity, that Lender had, or may have
arising from the Loan.
5. Miscellaneous.
(a) Modification. Neither this Agreement nor any provisions
hereof shall be modified, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
(b) Notices. Any notice, demand or other communication which
any party hereto may be required, or may elect, to give to anyone interested
hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a
United States mail letter box, registered or certified mail, return receipt
requested, addressed to such address as may be given herein, or (b) delivered
personally at such address.
(c) Counterparts. This Agreement may be executed through the
use of separate signature pages or in any number of counterparts, and each of
such counterparts shall, for all purposes, constitute one agreement binding on
all the parties, notwithstanding that all parties are not signatories to the
same counterpart.
(d) Binding Effect. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
assigns. If the undersigned is more than one
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person, the obligation of the Investor shall be joint and several, and the
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person and his
heirs, executors, administrators and successors.
(e) Entire Agreement. This instrument contains the entire
agreement of the parties, and there are no representations, covenants or other
agreements except as stated or referred to herein.
(f) Applicable Law. This Agreement shall be governed and
construed under the laws of the State of New York.
IN WITNESS WHEREOF, the Company and Lenders have caused this Agreement
to be executed and delivered by their respective officers, thereunto duly
authorized.
XXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, President
LENDERS
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Moritt, Hock, Hamroff &
Xxxxxxxx, LLP
By: Xxxx Xxxxxxx
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