CONVERTIBLE NOTE PURCHASE AGREEMENT
Exhibit
10.36
This
Convertible Note Purchase Agreement dated as of this 6th day of August, 2007
between Accountabilities, Inc., a Delaware corporation (the “Company”) and North
Atlantic Resources LTD, Inc. (the “Buyer”);
WHEREAS,
the Buyer wishes to purchase, and the Company wishes to sell, a 10% Convertible
Note in the principal amount of $250,000;
NOW,
THEREFORE, the parties hereto hereby agree as follows:
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1.
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Purchase and Sale of
Note. The Company hereby sells to Buyer, and hereby
purchases from Buyer a Ten Percent Convertible Promissory Note in the
principal amount of $250,000 in the form annexed hereto as Exhibit A (the
“Note”).
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2.
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Purchase
Price. The purchase price for the Note shall be Two
Hundred Fifty Thousand Dollars
($250,000).
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3.
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Delivery of Purchased
Note; Payment of Purchase Price. Upon the execution of
this Agreement by the Company and Buyer, the Company shall deliver to
Buyer, an executed Note, and Buyer shall deliver the Purchase Price by
wire transfer to an account designated by the
Company.
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4.
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Agreement to Issue
Additional Shares. The Company agrees that in the event
that the Note is not paid or converted in full by February 16, 2008, the
Company shall issue to Buyer fifty thousand (50,000) shares of Common
Stock (the “Additional Shares”) for each thirty (30) day period that the
Note has not been paid or converted in full after February 16, 2008
(prorated for any partial period of less than thirty (30)
days).
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5.
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Buyer
Representations. The Buyer hereby represents and
warrants to the Company as follows:
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(a)
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The
Buyer has the requisite power and authority to enter into and perform each
of this Agreement.
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(b)
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The
execution and delivery of each of this Agreement by the Buyer, and the
consummation by it of the transactions contemplated hereby and thereby,
have been duly authorized by all requisite action and no further consent
or authorization on the part of Buyer is
required.
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(c)
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This
Agreement has been duly executed and delivered by
Buyer.
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(d)
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This
Agreement constitutes a valid and binding obligation of the Buyer
enforceable against the Buyer in accordance with its terms, except as such
enforceability may be limited by general principals of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws
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relating
to, or affecting generally the enforcement of creditors rights and
remedies.
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(e)
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Buyer
understands that neither the Note, the Additional Shares nor the
securities into which the Note is convertible (such securities into which
the Note is convertible hereinafter referred to as the “Conversion
Securities”) have not been registered under the Securities Act of 1933, as
amended (the “1933 Act”), or the laws of any
state.
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(f)
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The
Buyer is purchasing the Note and will acquire any Conversion Securities or
Additional Shares for his own account for investment only and not with a
view towards the public sale or distribution thereof and not with a view
to or for sale in connection with any distribution
thereof.
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(g)
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Buyer
is (i) an "accredited investor" as that term is defined in Rule 501 of the
General Rules and Regulations under the 1933 Act, and (ii) experienced in
making investments of the kind described in this Agreement and the related
documents, (iii) able, by reason of the business and financial experience
of its officers (if an entity) and professional advisors to protect its
own interests in connection with the transactions described in this
Agreement, and the related documents, and (iv) able to afford the entire
loss of its investment in the Purchased
Securities.
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(h)
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All
subsequent offers and sales of the Note, the Conversion Securities and
Additional Shares by Buyer shall be made pursuant to registration of the
shares under the 1933 Act or pursuant to an exemption from
registration.
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(i)
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Buyer
understands that the Note is being offered and sold, and the Conversion
Securities are being offered, to him in reliance on specific exemptions
from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and
accuracy of, and Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings set forth herein in order
to determine the availability of such exemptions and the eligibility of
Buyer to acquire the Note and to receive an offer of the Conversion
Securities. Buyer has relied solely upon the advice of his
legal counsel as to the effect of federal and state securities laws on the
transactions subject to this
Agreement.
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(j)
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The
Buyer understands that its investment in the Note and the Conversion
Securities involves a high degree of
risk.
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(k)
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The
Buyer understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the Note or Conversion
Securities.
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6.
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Representations of the
Company. The Company hereby represents and warrants to
the Buyer as of the date of this Agreement as
follows:
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2
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(a)
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The
Company has the requisite corporate power and authority to enter into and
perform this Agreement.
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(b)
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The
execution and delivery of each of this Agreement by the Company, and the
consummation by it of the transactions contemplated hereby and thereby,
have been duly authorized by all requisite corporate action and no further
consent or authorization on the part of the Company is
required.
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(c)
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This
Agreement has been duly executed and delivered by the
Company.
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(d)
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This
Agreement constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by general principals of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally the enforcement of
creditors rights and remedies.
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7.
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Piggyback Registration
Rights.
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(a)
If the Company (or any successor company or parent or affiliate of any
successor company) proposes to file a registration statement under the
Securities Act with respect to an offering of equity securities (A) for
the Company’s own account or (B) for the account of any of the holders of
its equity securities, then the Company shall give written notice of such
proposed filing to the undersigned as soon as practicable (but in no event
less than ten (10) days before the anticipated filing date), and such
notice shall offer the undersigned the opportunity to register such number
of shares of Conversion Securities, and ,if applicable, Additional Shares
(collectively, the Registrable Securities)as the undersigned may request
on the same terms and conditions as the Company’s or the holders of equity
securities included in such registration statement (a “Piggyback
Registration”). If the undersigned desires to have his
Registrable Securities included in such registration statement, the
undersigned shall so advise the Company in writing (stating the number of
shares of Common Stock desired to be registered) within five (5) days
after the date of such notice from the Company. The Undersigned
shall have the right to withdraw such request for inclusion of Registrable
Securities in any registration statement pursuant to this section by
giving written notice to the Company of such withdrawal prior to the
effective date of the registration statement. Subject to
Section 6(b) below, the Company shall include in such registration
statement all such Registrable Securities requested to be included
therein; provided, however, that
the Company may at any time withdraw or cease proceeding with any such
registration if it shall at the same time withdraw or cease proceeding
with the registration of all other securities originally proposed to be
registered.
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(b)
If the registration relates to an underwritten public offering and in the
good faith judgment of the managing underwriter the inclusion of all of
the Conversion Securities requested to be registered under this Section 7
would adversely affect the marketing
of
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the
shares for which the registration statement was to be filed, the number of
Registrable Securities otherwise to be included in the underwritten public
offering may be reduced pro rata (by number of shares requested to be
registered) among the undersigned and any other holders of securities requesting
registration. If the undersigned proposes to distribute its
Conversion Securities through such underwriting the undersigned shall (together
with the Company) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected by the Company.
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8.
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Governing
Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
governed by and construed and enforced in accordance with the internal
laws of the State of Delaware, without regard to the principals of
conflicts of law thereof. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in
the State of New Jersey, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or
discussed herein (whether against a named party to this Agreement or any
of their affiliates, agents, officers, directors or employees), and hereby
irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is
improper.
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9.
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Counterparts. This
Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same Agreement and shall become
effective when counterparts have been signed by each party and delivered
to the other party. Any signature delivered via facsimile shall
have the effect of the original of such
signature.
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10.
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Survival. The
representations and warranties of the parties to this Agreement shall
survive the closing of this
Agreement.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
| Accountabilities, Inc. | |||
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By:
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/s/ Xxxxxxx XxxXxxxxxx | |
| Name: Xxxxxxx XxxXxxxxxx | |||
| Title: Chief Financial Officer | |||
| North Atlantic Resources, LTD. | |||
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By:
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/s/ Xxxxxxx Xxxxxxxxx | |
| Name: Xxxxxxx Xxxxxxxxx | |||
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Exhibit
A
Form
of 10% Convertible Note
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