CONVERSION AGREEMENT
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS
CONVERSION AGREEMENT (the “Agreement”), dated as of May
5, 2009 is made by
and between Sanswire Corp., a Delaware corporation (“Company”), and Rocky Mtn.
Advisors Corp, a Nevada corporation (“Consultant”).
WHEREAS,
the Company owes Consultant Fees in arrears representing the time period from
October 19, 2007 to April 9, 2009 for a total of $185,387.18 (the “Fees”); and
WHEREAS,
the Company and the Consultant wish to convert $185,387.18 of the Fees (the “Conversion Fees”) into Series
E Preferred Stock, par value $0.001 per
share (“Preferred Stock”), of the Company, which
rights and preferences are set forth in that certain Statement of Designation,
Powers, Preferences and Rights of Series E Preferred Stock attached hereto as
Exhibit
A;
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which the parties hereby acknowledge the parties agree as follows:
1. Conversion Fees. The
Company and Consultant hereby agree that Conversion Fees shall convert into
29,615 shares of the Company’s Preferred Stock (“Conversion
Shares”).
2. Closing. Closing
shall occur upon execution of this Agreement by both parties. Within
ten (10) business days of Closing, the Company shall deliver a certificate
representing the Conversion Shares to Consultant.
3. Further Assurances.
In connection with the Conversion Fees, the Consultant, by entering into this
Conversion Agreement, agrees to execute all agreements and other documents as
reasonably requested by the Company.
4. Consultant Representations
and Warranties and Covenants. The Consultant represents, warrants and
covenants to the Company as follows:
a. No Registration. The
Consultant understands that the Conversion Shares, nor the shares of common
stock issuable upon conversion of the Conversion Shares (the “Common Shares”) have not been,
and will not be, registered under the Securities Act of 1933, as amended (the
“Securities Act”) by
reason of a specific exemption from the registration provisions of the
Securities Act, the availability of which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of such Consultant’s
representations as expressed herein or otherwise made pursuant
hereto.
b. Investment Intent.
The Consultant is acquiring the Conversion Shares for investment for his own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any
distribution thereof, and such Consultant has no present intention of selling,
granting any participation in, or otherwise distributing the same. The
Consultant further represents that it will not violate the Securities Act and
does not have any contract, undertaking, agreement or arrangement with any
person or entity to sell, transfer or grant participation to such person or
entity or to any third person or entity with respect to the Conversion
Shares.
c. Investment
Experience. The Consultant has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to the Company and acknowledges that the Consultant can protect its own
interests. The Consultant has such knowledge and experience in financial and
business matters so that such Consultant is capable of evaluating the merits and
risks of its investment in the Company.
d. Speculative
Nature of Investment. Such Consultant understands and acknowledges that
the Company has a limited financial and operating history and that an
investment in the Company is highly speculative and involves substantial
risks. Such Consultant can bear the
economic risk of such Consultant’s investment and is able, without impairing
such Consultant’s financial condition, to hold the Conversion Shares for
an indefinite period of time and to suffer a complete loss of such Consultant’s
investment.
e. Accredited Investor.
The Consultant is an “accredited investor’ within the meaning of Regulation D,
Rule 50 1(a), promulgated by the Securities and Exchange Commission under the
Securities Act and shall submit to the Company such further assurances of such
status as may be reasonably requested by the Company.
f. Rule 144. The
Consultant acknowledges that the Conversion Shares must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from
such registration is available. The Consultant is aware of the provisions of
Rule 144 promulgated under the Securities Act which permit limited resale of
shares subject to the satisfaction of certain conditions. The
Consultant acknowledges that, in the event all of the requirements of Rule 144
are not met, registration under the Securities Act or an exemption from
registration will be required for any disposition of the Conversion Shares or
Common Shares. The Consultant understands that, although Rule 144 is not
exclusive, the Securities and Exchange Commission has expressed its opinion that
persons proposing to sell restricted securities received in a private offering
other than in a registered offering or pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales and that such persons and the brokers who
participate in the transactions do so at their own risk.
g. Authorization.
i.
Consultant has all requisite power and authority to execute and deliver this
Conversion Agreement, and to carry out and perform its obligations under the
terms hereof. All action on the part of the Consultant necessary for the
authorization, execution, delivery and performance of this Conversion Agreement,
and the performance of all of the Consultant’s obligations herein, has been
taken.
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ii. This
Conversion Agreement, when executed and delivered by the Consultant, will
constitute valid and legally binding obligations of the Consultant, enforceable
in accordance with its terms except: (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or
other equitable remedies or by general principles of equity.
iii. No
consent, approval, authorization, order, filing, registration or qualification
of or with any court, governmental authority or third person is required to be
obtained by the Consultant in connection with the execution and delivery of this
Conversion Agreement by the Consultant or the performance of the Consultant’s
obligations hereunder.
j Brokers or Finders.
The Consultant has not engaged any brokers, finders or agents, and the Company
has not, and will not, incur, directly or indirectly, as a result of any action
taken by the Consultant, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with this Conversion Agreement
and the transactions related hereto.
k Tax Advisors. The
Consultant has reviewed with its own tax advisors the U.S. federal, state, local
and foreign tax consequences of this investment and the transactions
contemplated by this Conversion Agreement. With respect to such matters, such
Consultant relies solely on such advisors and not on any statements or
representations of the Company or any of its agents, written or oral. The
Consultant understands that it (and not the Company) shall be responsible for
its own tax liability that may arise as a result of this investment or the
transactions contemplated by this Conversion Agreement.
l. Legends. The
Consultant understands and agrees that the certificates evidencing the
Conversion Shares and Interest Shares shall bear a legend in substantially the
form as follows (in addition to any legend required by any other applicable
agreement or under applicable state securities laws):
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”
5. Governing Law; Entire
Agreement; Counterparts. The interpretation of this Agreement
shall be governed by Florida law. This Agreement contains the entire
agreement of the parties, and there are no representations, covenants, or other
agreements except as stated or referred to herein. 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
modification, discharge, or termination is sought. 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.
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6. Arbitration. All claims or disputes relating in any way to the performance,
interpretation, validity, or breach of this Agreement shall be referred to final
and binding arbitration, before a panel of three arbitrators, under the
commercial arbitration rules of the American Arbitration Association (the “AAA”)
in Miami-Dade County, Florida, except as modified hereby. Each party shall
appoint an arbitrator and the third arbitrator shall be selected by the two
appointed arbitrators within twenty days, following the receipt of written
notice of arbitration, as prescribed by the AAA. In the event that both
appointed arbitrators are unable to select the third arbitrator within a period
twenty days, the AAA shall be permitted to submit an appointment. The
arbitrator’s award shall be in writing, made by a majority thereof, and include
findings of fact and conclusions of law. Judgment upon the award
rendered by the arbitrators shall be final, binding and conclusive upon the
parties and their respective administrators, executors, legal representatives,
heirs, successors and permitted assigns.
IN WITNESS
WHEREOF, the parties have caused this Agreement to be duly executed by their
respective officers thereonto duly authorized as of the day and year first above
written.
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By:
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/s/
Xxxxxxxx Xxxxxxxx
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Name:
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Xxxxxxxx
Xxxxxxxx
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Title:
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CEO
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ROCKY
MTN ADVISORS CORP.
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By:
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/s/
Xxxxxx Xxxxxxx
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Name:
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Xxxxxx
Xxxxxxx
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Title:
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President
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