EXCHANGE AGREEMENT
Exhibit
10.7
This
Exchange Agreement (this “Agreement”) is made
and entered into as of September 3, 2010 by and between Access to Money,
Inc., a Delaware corporation (“Issuer”), and Cadence
Special Holdings II, LLC, a
Delaware limited liability company (“Holder”).
Recitals
WHEREAS,
Issuer previously entered into (a) the Common Stock Purchase Warrant, dated as
of February 8, 2008 (the “February Warrant”),
pursuant to which LC Capital Master Fund, Ltd., a
Cayman Island exempted company (“LC Capital”), is
entitled to purchase 2,500,000 shares of common stock, $.001 par value per
share, of Issuer (the “Common Stock”), (b)
the Common Stock Purchase Warrant, dated as of April 18, 2008 (the “Original April
Warrant”), pursuant to which to LC Capital was entitled to purchase
12,500,000 shares of Common Stock, and (c) the Securities Purchase Agreement,
dated as of April 18, 2008 (as the same may be amended, modified or supplemented
in accordance with is terms, the “Purchase Agreement”),
among Issuer, LC Capital, and Xxxxx, Xxxxxx & Co., LLC (“Xxxxx Xxxxxx”), as
administrative and collateral agent thereunder, pursuant to which Issuer
executed and delivered promissory notes dated as of April 18, 2008 in the
aggregate principal amount of $11,000,000 (the “Notes”);
WHEREAS,
on May 30, 2008, LC Capital assigned to Holder the right to purchase 1,250,000
shares of Common Stock under the Original April Warrant, and $1,100,000
principal amount of the Notes (the “Exchanged Notes” and
the balance the Notes, the “LC Note”) and in
connection with such assignment, Issuer replaced the Original April Warrant and
entered into (x) the Common Stock Purchase Warrant, dated as of April 18, 2008
(the “Restated April
Warrant”), pursuant to which LC Capital is entitled to purchase
11,250,000 shares of Common Stock, and (y) the Common Stock Purchase Warrant,
dated as of April 18, 2008 (the “Exchanged Warrants”), pursuant to
which Cadence is entitled to purchase 1,250,000 shares of Common
Stock;
WHEREAS,
upon the terms and subject to the conditions hereof, including that no
commission or other remuneration has been paid or given directly or indirectly
for such exchange, Holder and Issuer wish to exchange the Exchanged Warrants and
Exchanged Notes for 886,364 shares of Common Stock;
WHEREAS,
the shares of Common Stock issued and exchanged hereunder are being issued
without registration under the Securities Act of 1933, as amended (the “Securities Act”), in
reliance on the exemption provided by Section 3(a)(9) of the Securities
Act;
WHEREAS,
the parties hereto desire to make certain representations, warranties, covenants
and other agreements in connection with the transactions contemplated
hereby.
NOW,
THEREFORE, in consideration of the covenants, promises and representations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE
I
EXCHANGE
OF SECURITIES
Section
1.1. Exchange of
Securities Upon
the terms and subject to the conditions of this Agreement, at the Closing,
(a) Holder will convey, assign, transfer and deliver to Issuer, and Issuer
will receive from Holder, the Exchanged Warrants and Exchanged Notes, free and
clear of all encumbrances, and (b) Issuer will convey, assign, transfer and
deliver to Holder, and Holder will receive from Issuer, 886,364 shares of
Common Stock, free and clear of all encumbrances.
Section
1.2. Closing The
closing of the transactions contemplated by this Agreement (the “Closing”) will take
place at such time and place as Issuer and Holder mutually agree after all
conditions set forth in Article IV have been
satisfied or waived (other than those conditions that are to be satisfied at the
Closing). The date on which the Closing actually occurs will be referred to as
the “Closing
Date”, and the Closing will for all purposes be deemed effective as of
12:01 a.m., New York City time, on the Closing Date.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF HOLDER
As of the
date hereof and as of the Closing Date, Holder represents and warrants to Issuer
as follows:
Section
2.1. Ownership of Exchanged
Warrants and Exchanged Notes Holder
is the sole record and beneficial owner of the Exchanged Warrants and Exchanged
Notes. Neither the Exchanged Warrants nor the Exchanged Notes are not
subject to any encumbrances, other than those contained in the Exchanged
Warrants or Exchanged Notes , as applicable, or under applicable federal and
state securities laws, and Holder has not granted any rights to purchase the
Exchanged Warrants or Exchanged Notes to any other person or
entity. Holder has the sole right to transfer the Exchanged Warrants
and Exchanged Notes to Issuer.
Section
2.2. Organization of
Holder Holder
is duly formed, validly existing and in good standing under the laws of its
jurisdiction of organization and has all necessary power and authority to
conduct its business in the manner in which its business is currently being
conducted.
Section
2.3. Authority;
Non-Contravention
(a) Holder
has all requisite power and authority to execute, deliver and perform its
obligations under this Agreement. This Agreement has been duly and validly
authorized, executed and delivered by Holder and constitutes the valid and
legally binding obligation of Holder, enforceable in accordance with its terms
and conditions, subject to bankruptcy, insolvency, fraudulent transfer,
moratorium or similar laws relating to or affecting creditors’ rights generally
and to general principles of equity.
2
(b) The
execution, delivery and performance of this Agreement by Holder and the
consummation of the transactions contemplated hereby will not (i) conflict
with or result in a material breach or violation of any of the terms or
provisions of, impose any lien, charge or encumbrance upon any material property
or assets of Holder, or constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement, license or other material agreement or
instrument to which Holder is a party or by which Holder is bound or to which
any of the material property or assets of Holder is subject, (ii) result in
any violation of the provisions of the governing instruments of Holder or
(iii) result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
Holder or any of its properties or assets, except where such violation will not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), results of operations, stockholders’ equity,
properties or business of Issuer and its subsidiaries taken as a
whole.
(c) No
consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body having jurisdiction over Holder or any
of its properties or assets is required for the execution, delivery and
performance of this Agreement by Holder or the consummation of the transactions
contemplated hereby.
Section
2.4. Restrictive
Legend Holder
acknowledges that the Common Stock to be issued and exchanged by Issuer to
Holder hereunder has not been registered under the Securities Act and therefore
cannot be sold unless subsequently registered under the Securities Act or an
exemption from such registration is available in the opinion of counsel
reasonably acceptable to Issuer. Holder acknowledges that the certificate
representing the Common Stock to be issued and exchanged by Issuer to Holder
hereunder will bear the following legend:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER
SAID ACT IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO ISSUER.
Section
2.5. Accredited
Investor. Holder is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D under the
Securities Act.
Section
2.6. Investment
Intent. The Common Stock to be issued and exchanged by Issuer
to Holder is being acquired for the Holder’s own account for investment purposes
only, not as a nominee or agent and not with a view to the resale or
distribution of any part thereof, and Holder has no present intention of
selling, granting any participation in or otherwise distributing the
same. By executing this Agreement, Holder further represents that
Holder does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such person or third
person with respect to any of the Common Stock to be issued and exchanged by
Issuer to Holder.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF ISSUER
As of the
date hereof and as of the Closing Date, Issuer represents and warrants to Holder
as follows:
3
Section
3.1. Organization of
Issuer Issuer
has been duly incorporated and is validly existing and in good standing as a
corporation under the laws of its jurisdiction of incorporation, with all
corporate power and authority necessary to conduct the business in which it is
engaged and Issuer is duly qualified or licensed to do business and in good
standing as a foreign corporation in each jurisdiction in which its ownership or
lease of its properties or assets or the conduct of its businesses requires such
qualification or license, except where the failure to be so qualified or be so
licensed or in good standing would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), results of
operations, stockholders’ equity, properties or business of Issuer and its
subsidiaries taken as a whole.
Section
3.2. Duly Issued
Shares The
shares of Common Stock to be issued and exchanged by Issuer to Holder hereunder
have been duly authorized and, upon delivery in accordance with this Agreement,
(a) will be validly issued, fully paid and non-assessable, and (b) will not be
subject to any encumbrances, other than those imposed by Holder or under
applicable federal and state securities laws.
Section
3.3. Authority;
Non-Contravention
(a) Issuer
has all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement. This Agreement has been duly
and validly (i) authorized by Issuer, including by the special committee of the
Issuer’s board of directors, and (ii) executed and delivered by
Issuer. This Agreement constitutes the valid and legally binding
obligation of Issuer, enforceable in accordance with its terms and conditions,
subject to bankruptcy, insolvency, fraudulent transfer, moratorium or similar
laws relating to or affecting creditors’ rights generally and to general
principles of equity.
(b) The
execution, delivery and performance of this Agreement by Issuer and the
consummation of the transactions contemplated hereby will not (i) conflict
with or result in a material breach or violation of any of the terms or
provisions of, impose any lien, charge or encumbrance upon any material property
or assets of Issuer, or constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement, license or other material agreement or
instrument to which Issuer or any of its subsidiaries is a party or by which
Issuer or any of its subsidiaries is bound or to which any of the material
property or assets of Issuer or any of its subsidiaries is subject,
(ii) result in any violation of the provisions of the governing instruments
of Issuer or any of its subsidiaries or (iii) result in any violation of
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over Issuer or any of its properties or assets,
except where such violation will not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), results of
operations, stockholders’ equity, properties or business of Issuer and its
subsidiaries taken as a whole.
(c) No
consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body having jurisdiction over Issuer or any
of its subsidiaries or any of their properties or assets is required for the
execution, delivery and performance of this Agreement by Issuer or the
consummation of the transactions contemplated hereby.
(d) The
issuance of the shares of Common Stock by Issuer to Holder pursuant to this
Agreement does not require registration under the Securities Act.
4
ARTICLE
IV
CLOSING
CONDITIONS
Section
4.1. Holder Conditions to
Closing. The obligation of Holder to effect the Closing and
consummate the transactions contemplated by this Agreement is subject to
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Issuer
will deliver to Holder or such other person as directed by Holder certificates
representing the shares of Common Stock for exchange of the Exchanged Warrants
and Exchanged Notes in accordance with Section 1.1;
(b) the
representations and warranties of Issuer set forth in Article III will be
true and correct in all material respects as of the Closing Date, it being
understood that, for purposes of determining the accuracy of representations and
warranties for the purpose of this Section 4.1(b), all
material adverse effect and materiality qualifications contained in such
representations and warranties will be disregarded;
(c) Issuer
will have performed or complied with, in all material respects, its covenants
and agreements contained in this Agreement that are required to be performed or
complied with on or prior to the Closing Date;
(d) Issuer
will have delivered to Holder a certificate executed as of the Closing Date by
an executive officer of Issuer to the effect that the conditions set forth in
Sections 4.1(b)
and (c) are
satisfied;
(e) there
will not be any judgment, order, decree, stipulation, injunction or charge, or
applicable law in any jurisdiction material to Issuer or Holder, in each case,
issued by any court of competent jurisdiction or any other governmental entity
in effect preventing consummation of the transactions contemplated by this
Agreement;
(f) the
financing transactions contemplated by that certain term sheet, dated as of May
7, 2010, between Issuer and Sovereign Bank will have been
consummated;
(g) LC
Capital will have agreed to the refinancing of the First Lien Term Loan (as
defined in the Term Sheet) as described in that certain Term Sheet, dated as of
August 31, 2010 (the “Term Sheet”), between
Issuer and Xxxxx Xxxxxx;
(h) LC
Capital will have entered into an agreement with Issuer for the exchange of the
February Warrant, the Restated April Warrant, and LC Note on terms substantially
similar to those contained in this Agreement; and
(i) all
potential tax matters related to the transactions contemplated by this Agreement
or the Term Sheet will have been resolved to the reasonable satisfaction of
Holder.
Section
4.2. Issuer Conditions to
Closing. The obligation of Issuer to effect the Closing and
consummate the transactions contemplated by this Agreement is subject to
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
5
(a) Holder
will deliver to Issuer certificates representing the Exchanged Warrants and
Exchanged Notes held by Holder, for exchange of the shares of Common Stock in
accordance with Section 1.1.
(b) the
representations and warranties of Holder set forth in Article II will be
true and correct in all material respects as of the Closing Date, it being
understood that, for purposes of determining the accuracy of representations and
warranties for the purpose of this Section 4.2(b), all
material adverse effect and materiality qualifications contained in such
representations and warranties will be disregarded;
(c) Holder
will have performed or complied with, in all material respects, its covenants
and agreements contained in this Agreement that are required to be performed or
complied with on or prior to the Closing Date;
(d) Holder
will have delivered to Issuer a certificate executed as of the Closing Date by
an executive officer of Holder to the effect that the conditions set forth in
Sections 4.2(b)
and (c) are
satisfied;
(e) there
will not be any judgment, order, decree, stipulation, injunction or charge, or
applicable law in any jurisdiction material to Issuer or Holder, in each case,
issued by any court of competent jurisdiction or any other governmental entity
in effect preventing consummation of the transactions contemplated by this
Agreement;
(f) the
financing transactions contemplated by that certain term sheet dated as of May
7, 2010, between Issuer and Sovereign Bank will have been consummated;
and
(g) the
refinancing of the First Lien Term Loan (as defined in the Term Sheet) as
described in the Term Sheet will have been consummated with Holder, Xxxxx Xxxxxx
and LC Capital.
ARTICLE
V
TERMINATION
Section
5.1. Termination This
Agreement may be terminated at any time before the Closing Date:
(a) by
mutual written agreement of Issuer and Holder; or
(b) by
written notice of either Issuer or Holder, if the transactions contemplated by
this Agreement have not been consummated on or prior to September 15, 2010 (such
date, the “Outside
Date”); provided, however, that the
right to terminate this Agreement under this Section 5.1(b) will
not be available to any party whose failure to fulfill any obligation under this
Agreement has been the principal cause of, or the principal factor resulting in,
the failure of the Closing to occur on or before the Outside Date.
6
Section
5.2. Effect of
Termination If
this Agreement is terminated by either Issuer or Holder pursuant to Section 5.1,
this Agreement will forthwith become void, and there will be no further
obligations with respect to the transactions contemplated by this Agreement on
the part of Issuer or Holder or their respective stockholders, directors,
officers, employees, agents or representatives; provided, however, that nothing
in this Section 5.2 will
relieve any party hereunder from liability for any breach of this Agreement;
provided further, that this
Section 5.2 and
Article VI of
this Agreement will survive any termination of this Agreement.
ARTICLE
VI
GENERAL
PROVISIONS
Section
6.1. Employment
Agreements. Not later than thirty (30) days after the Closing
Date, all employment agreements entered into by Issuer will be modified such
that all of the employment agreements have uniform incentive dates and annual
renewal terms that coincide with the calendar year-end.
Section
6.2. General Each
of the parties will use commercially reasonable efforts to take or cause to be
taken all actions and to do or cause to be done, as soon as possible, all things
necessary, proper or advisable (subject to any applicable laws) to consummate
the Closing and the other transactions contemplated by this
Agreement. In the event that at any time after the Closing Date any
further action is reasonably necessary to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
party may reasonably request, at the sole cost and expense of the requesting
party.
Section
6.3. Survival. (a)
The representations and warranties contained in Articles II and III will survive the
Closing and continue in full force and effect indefinitely, and (b) any
covenants or agreements contained in this Agreement, which by their terms have
any remaining obligation to be performed or observed following the occurrence of
the Closing will survive and continue in full force and effect until fully
performed or observed in accordance with their terms.
Section
6.4. Registration
Rights. The shares of Common Stock to be issued by Issuer to
Holder hereunder shall be (a) entitled to registration rights and all other
rights as applicable to such shares in accordance with that certain Registration
Rights Agreement, dated as of February 8, 2008 (as the same may be amended,
modified or supplemented in accordance with is terms, the “Registration Rights
Agreement”), between Issuer and Holder, and (b) deemed to be Registrable
Shares (as defined in the Registration Rights Agreement) for all purposes under
the Registration Rights Agreement.
Section
6.5. Notices Any
notice, request, instruction or other communication to be given hereunder will
be in writing and delivered personally or sent by reputable, overnight courier
service (charges prepaid), or by facsimile, according to the instructions set
forth below. Such notices will be deemed given (a) at the time delivered by
hand, if personally delivered, (b) on the day of delivery if during normal
business hours (or on the following business day if not sent during normal
business hours), if sent by reputable, overnight courier service, and (c) at the
time when confirmation of successful transmission is received by the sending
facsimile machine, if sent by facsimile. Such notices, demands and
other communications will be sent to Issuer and Holder, as the case may be at
the addresses indicated below:
7
if to
Issuer:
0000
Xxxxx Xxxxxxx, XXX X000
Xxxxxx
Xxxx, Xxx Xxxxxx 00000
Facsimile: (000)
000-0000
Attention:
Xxxxxxx Xxxxx, CFO
with a
copy to (which will not constitute notice to Issuer):
Fox
Rothschild LLP
000 Xxxxx
Xxxxx
Xxxxxxxxxxxxx,
XX 00000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxxx, Esq.
if to
Holder:
Cadence
Special Holdings II, LLC
000
Xxxxxxx Xxx
Xxxxx
0X
Xxxxxxxx,
XX 00000
Facsimile:
Attention: Xxxx
Xxxxxxxxxx
with a
copy to (which will not constitute notice to Holder):
Facsimile:
Attention:
Section
6.6. Counterparts This
Agreement may be executed in any number of counterparts and each of such
counterparts will for all purposes be deemed to be an original, and all such
counterparts will together constitute but one and the same
instrument. Facsimiles or other electronic copies of signatures will
be deemed to be originals.
Section
6.7. Governing
Law This
Agreement will be deemed to be a contract made under the laws of the State of
New York and for all purposes will be governed by and construed in accordance
with the internal laws of said State. The parties hereto irrevocably
consent to the jurisdiction of the state and federal courts sitting in the City
of New York in connection with any action, suit or proceeding arising out of or
relating to this Agreement.
Section
6.8. Entire
Agreement This
Agreement constitutes the entire agreement of Issuer and Holder with respect to
the subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, between Issuer and Holder with respect to the subject
matter hereof.
8
Section
6.9. Amendment and
Waiver This
Agreement may be amended, modified or supplemented, and any of the provisions
hereof may be waived, provided that the same are in writing and signed by Issuer
and Holder.
Section
6.10. Assignment. Neither
this Agreement nor any of the rights, interests or obligations provided by this
Agreement will be assigned by either party (whether by operation of law or
otherwise) without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement will be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns.
[Signature
page follows]
9
IN
WITNESS WHEREOF, Issuer and Holder have caused this Agreement to be signed, all
as of the date first written above.
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By
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/s/ Xxxxxxx
Xxxxx
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Name:
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Xxxxxxx Xxxxx
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Title:
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CFO
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CADENCE
SPECIAL HOLDINGS II, LLC.
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By
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/s/ Xxxxxx X.
Xxxxxxxxxx
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Name:
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Xxxxxx X. Xxxxxxxxxx
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Title:
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Authorized
Signatory
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[Signature Page to Warrant Exchange
Agreement]
