Exhibit 10.9 - Debt Exchange Agreement with Vicis Capital Master Fund dated
July 8, 2006.
DEBT EXCHANGE AGREEMENT
This Debt Exchange Agreement (the "Agreement") dated as of July 8,
2005 is by and between Medical Media Television, Inc. f/k/a PetCARE Television
Network, Inc., a Florida corporation (the "Company"), having a principal place
of business at 0000 Xxxxxxxx Xxxx, Xxxxx X, Xxxxx, Xxxxxxx 00000 and Vicis
Capital Master Fund (the "Lender") having an address at 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
WHEREAS, the Company has determined to enter into a restructuring of
its capital stock and outstanding indebtedness (the "Restructuring");
WHEREAS, the Lender is the holder of those Subordinated Convertible
Promissory Notes set forth on Schedule 1.2 attached hereto (the "Subordinated
Notes");
WHEREAS, pursuant to the Restructuring, the Lender has agreed to tender
its Subordinated Notes in exchange for, and the Company desires to accept such
tender and issue in exchange, shares of Series B Zero Coupon Preferred Stock, on
the terms and conditions set forth in this Agreement and, as additional
consideration, the Company desires to issue certain warrants to the Lender to
purchase shares of its common stock, par value $.0005 (the "Common Stock").
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
THE EXCHANGE
Section 1.1 Authorization of Series B Zero Coupon Preferred Stock. The
Company has authorized, or shall authorize prior to the Closing, the issue and
sale, in accordance herewith, of Two million five hundred fifty-one thousand
nine hundred eighteen (2,551,918) shares of its Series B Zero Coupon Preferred
Stock, no par value per share (the "Series B Preferred Stock"), which Series B
Preferred Stock shall be issued pursuant to, and shall have the rights,
privileges and preferences set forth in, the Certificate of Designations for the
Series B Zero Coupon Preferred Stock in the form of Exhibit A attached hereto
(the "Certificate of Designations").
Section 1.2 Transfer and Exchange. Subject to and in accordance with
the terms and conditions of this Agreement, at the Closing (as hereinafter
defined), the Lender shall tender and deliver each of the Subordinated Notes set
forth on Schedule 1.2 to the Company for cancellation, and the Company shall
issue and deliver to the Lender (a) the number of shares of Series B Preferred
Stock set forth opposite the Lender's name on Schedule 1.2 (the "Exchanged
Shares") and (b) the Warrants described in Section 1.3 below.
Section 1.3 Issuance of Warrants. On the terms and conditions of this
Agreement, at the Closing, the Company shall issue, transfer and deliver to the
Lender the number of warrants to purchase shares of Common Stock set forth
opposite the Lender's name on Schedule 1.2 (the "Warrants"). The Warrants shall
be in the form of Exhibit B attached hereto (the "Warrant Certificate").
Section 1.4 Deliveries at Closing. At the Closing (a) the Company shall
deliver to the Lender (i) one or more certificates representing the Exchanged
Shares registered in the Lender's name (or its nominee), duly authorized, free
and clear of all liens and restrictions of any kind (except for those imposed by
the applicable Certificate of Designations and applicable securities laws), and
(ii) one or more Warrant Certificates representing the Warrants and (b) the
Lender shall deliver or cause to be delivered to the Company the Subordinated
Notes held by the Lender together with all documents necessary to validly and
duly tender, assign and convey such Subordinated Notes to the Company for
cancellation thereof.
Section 1.5 Closing. The closing of the transactions described in this
Agreement shall take place at the offices of Xxxx Xxxx, P.A. 000 X. Xxxxxxxx
Xxxxxx, Xxxxx, Xxxxxxx 00000 at 2:00 p.m., E.S.T., on July 8, 2005, or on such
other business day thereafter as may be agreed to by the Company and the Lender
(such closing, the "Closing" and such date and time, the "Closing Date").
Section 1.6 Cancellation of Subordinated Notes. Upon receipt from the
Lender of the Subordinated Notes in accordance with Section 1.4 hereof, the
Company shall cancel each such Subordinated Note immediately. The Company and
the Lender agree that upon such cancellation of such Subordinated Notes: (a) the
obligations of the Company to pay the principal of, interest on or redemption
premium and otherwise in respect of, such Subordinated Notes surrendered by the
Lender to the Company shall terminate; (b) the obligations of the Company to pay
any interest remaining unpaid in respect of the Subordinated Notes shall
terminate, and such interest shall be deemed to have formed a portion of the
consideration given for the purchase of the Series B Preferred Stock by the
Lender; (c) all obligations of the Lender pursuant to the Subordinated Notes
shall terminate; and (d) all obligations of the Company in respect of the
cancelled Subordinated Notes shall terminate.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 2.1 Organization and Authority. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida. The Company has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. All necessary action, corporate or otherwise, required to
have been taken by or on behalf of the Company by applicable law, its charter
documents or otherwise to authorize (a) the approval, execution and delivery on
behalf of the Company of this Agreement and the agreements, certificates and
other documents contemplated hereby, including, without limitation, the
issuance, sale and delivery of the Exchanged Shares and the Warrants and (b) the
performance by the Company of its obligations under this Agreement, including,
without limitation, the issuance, sale and delivery of the Exchanged Shares and
the Warrants, and the consummation of the transactions contemplated by this
Agreement hereof has been taken, other than the filing of the Certificate of
Designations, which filing shall occur prior to Closing. This Agreement and the
Warrant Certificates issued at the Closing constitute valid and binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms, except (x) as the same may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws of general application
relating to or affecting creditors' rights and (y) for the limitations imposed
by general principles of equity.
Section 2.2 The Exchanged Shares. Upon delivery to the Lender at the
Closing of certificates representing the Exchanged Shares, and upon receipt by
the Company of the Subordinated Notes in exchange therefor, (a) good and valid
title to such Exchanged Shares will pass to the Lender, free and clear of all
liens and restrictions of any kind (except for those imposed by the Certificate
of Designations and applicable securities laws) and (b) the Exchanged Shares
will be duly authorized and validly issued, fully paid and nonassessable. The
sale of the Exchanged Shares pursuant to this Agreement is the only sale of
Series B Preferred Stock contemplated by the Company; provided, however, the
Lender expressly acknowledges that simultaneous with the execution of this
Agreement, Xxxx Xxxxxxx shall exchange that certain Convertible Promissory Note
dated June 10, 2003 in the original principal amount of $50,000 for shares of
the Company's Series B Preferred Stock.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE LENDER
Section 3.1 Investment Representation. The Exchanged Shares and
Warrants are being acquired for the Lender's own account, for investment and not
with a view to, or for resale in connection with, a distribution or public
offering thereof within the meaning of the Securities Act or applicable state
securities laws.
Section 3.2 Transfer Restrictions under Securities Laws. The Lender
understands that none of the Exchanged Shares, Warrants or Common Stock issuable
upon exercise of the Warrants have been registered under the Securities Act of
1933, as amended (the "Securities Act"), or qualified under any state securities
laws. The Lender understands that the resale of the Exchanged Shares, Warrants
or Common Stock issuable upon exercise of the Warrants may be restricted
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act and registered under any state securities law or is exempt from
such registration. Certificates representing the Exchanged Shares (the
"Securities") shall be endorsed with the following legend, and any other legends
required by applicable securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE
"RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE
ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
DISTRIBUTED EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT, OR (II) IN COMPLIANCE WITH RULE
144 OR (III) OTHERWISE PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE ACT.
The Company may instruct its transfer agent not to register the transfer of the
Securities, unless the conditions specified in the foregoing legend are
satisfied. The Warrants shall be endorsed with legends substantially in the form
set forth in the Warrant Certificates.
Section 3.3 Accredited Investor Status. The Lender is an "Accredited
Investor" as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. The Lender is able to bear the economic risk of acquiring
the Exchanged Shares and Warrants pursuant to the terms of this Agreement,
including a complete loss of the Lender's investment in the Exchanged Shares and
Warrants.
Section 3.4 Organization and Authority. The Lender is a company,
corporation or a partnership duly incorporated, organized, or formed, as the
case may be, validly existing and in good standing under the laws of the state
of its incorporation, organization or formation. The Lender has all requisite
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. All necessary action, corporate or otherwise,
required to have been taken by or on behalf of the Lender by applicable law, its
charter documents or otherwise to authorize (a) the approval, execution and
delivery on behalf of it of this Agreement and (b) the performance by it of
obligations under this Agreement and the agreements, certificates and other
documents contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby has been taken. This Agreement constitutes a
valid and binding agreement of the Lender, enforceable against it in accordance
with its terms.
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Section 3.5 No Conflicts. Neither the execution and delivery of this
Agreement nor the consummation and performance of the transactions contemplated
hereby to be performed or satisfied on the part of the Lender is prevented,
limited by, conflicts with, or will result in, a breach of the terms,
conditions, or provisions of any agreement to which the Lender is a party or any
law, rule, regulation, or order of any court or government agency.
Section 3.6 Good Title to Subordinated Notes. The Lender is the lawful
owner of the Subordinated Notes set forth on Schedule 1.2 and the Lender has
good title thereto, free and clear of all liens, claims and encumbrances of any
kind.
ARTICLE 4
MISCELLANEOUS
Section 4.1 Binding Effect; Benefit. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
permitted successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto or their
respective permitted successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 4.2 Entire Agreement. This Agreement, the exhibits and
schedules hereto and any documents delivered by the parties in connection
herewith constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
(oral and written) among the parties with respect thereto.
Section 4.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without regard to
its rules of conflict of laws. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of Florida and of the United States of America located in the State
of Florida (the "Florida Courts") for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Florida Courts
and agrees not to plead or claim that such litigation brought in any Florida
Court has been brought in an inconvenient forum.
Section 4.4 Remedies; Specific Performance. The Company and the Lender
may take all steps necessary or advisable to protect and enforce their rights
hereunder, whether by action, suit or proceeding at law or in equity, for the
specific performance of any covenant, condition or agreement contained herein,
or in aid of the execution of any power herein granted, or for the enforcement
of any other appropriate legal or equitable remedy or otherwise as the Company
or the Lender shall deem necessary or advisable. No right or remedy hereunder
shall be exclusive of any other right, power or remedy, but shall be cumulative
and in addition to any other right or remedy hereunder or now or hereafter
existing by law or in equity and the exercise by a party hereto of any one or
more of such rights, powers or remedies shall not preclude the simultaneous
exercise of any or all of such other rights, powers or remedies. Any failure to
insist upon the strict performance of any provision hereof or to exercise any
option, right, power or remedy contained herein shall not constitute a waiver or
relinquishment thereof for the future.
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Section 4.5 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
Section 4.6 Headings. Headings of the Sections of this Agreement are
for the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
Section 4.7 Interpretation. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural persons shall include corporations and partnerships
and vice versa.
Section 4.8 Incorporation of Exhibits and Schedules. All exhibits and
schedules hereto are hereby incorporated herein and made a part hereof for all
purposes as if fully set forth herein.
Section 4.9 Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement.
Section 4.10 Attorneys' Fees and Court Actions. If a legal action is
initiated by any party to this Agreement against another, arising out of or
relating to the alleged performance or non-performance of any right or
obligation established hereunder, or any dispute concerning the same, any and
all fees, costs and expenses reasonably incurred by each prevailing party or its
legal counsel in investigating, preparing for, prosecuting, defending against,
or providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several obligation of, and shall be paid
or reimbursed by, the nonprevailing party.
IN WITNESS WHEREOF, the Company and Lender have caused this Agreement
to be executed and delivered by their respective officers, thereunto duly
authorized.
MEDICAL MEDIA TELEVISION, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, President and CEO
VICIS CAPITAL MASTER FUND
By: /s/ Xxxx Xxxxxxxx
--------------------------------------
Xxxx Xxxxxxxx, Member of Board of
Managers of Vicis Capital, LLC
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Schedule 1.2
Subordinated Notes
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Holder Date of Principal and Interest Shares of Series B Warrants to Purchase
Issuance/Original Balance Outstanding as Preferred Stock; Face shares of Common
Principal Amount of of July 8, 2005 Value Stock
Subordinated Note
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Victus Capital Master February 13, 2004
Fund $1,000,000 $1,100,000 1,100,000 825,000
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Victus Capital Master July 27, 2004
Fund $1,000,000 $1,189,589 1,189,589 892,192
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Vicis Capital March 11, 2005
Master Fund $250,000 $262,329 262,329 196,747
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