Director Nominees
Exhibit 10.8
THIS AGREEMENT is made as of
the 27th day of December, 2007
AMONG:
MARINE PARK HOLDINGS, INC., a
corporation formed pursuant to the laws of the State of Delaware and having an
office for business at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(“Marine Park”)
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AND:
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NEWCARDIO, INC. , a company
formed pursuant to the laws of the State of Delaware and having an office for
business located at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx 00000
("NewCardio")
AND:
the
holders of NewCardio equity, each of whom are set forth on the signature page of
this Agreement (the “NewCardio Shareholders”)
WHEREAS:
A. The NewCardio
Shareholders own such number of (i) shares of common stock, $0.0001 par value
(“NewCardio Common Shares”), (ii) shares of preferred stock, $0.0001 par value
(“NewCardio Preferred Shares”), (iii) debt obligations convertible into shares
of common stock, $0.0001 par value (“NewCardio Convertible Debt”), and (iv)
options and/or warrants convertible into shares of common stock, $0.0001 par
value (“NewCardio Convertible Securities”) as set forth on Exhibit “A” annexed
hereto, collectively being 100% of the presently issued and outstanding
NewCardio equity on a fully converted basis;
B. Marine Park is a
reporting company whose common stock is quoted on the Over-the-Counter Bulletin
Board; and
C. The respective
Boards of Directors of Marine Park and NewCardio deem it advisable and in the
best interests of Marine Park and NewCardio that NewCardio become a wholly-owned
subsidiary of Marine Park (the “Acquisition”) pursuant to this
Agreement.
NOW THEREFORE THIS AGREEMENT
WITNESSETH THAT in consideration of the premises and the mutual
covenants, agreements, representations and warranties contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE
1
DEFINITIONS
AND INTERPRETATION
Definitions
1.1
In this Agreement the following terms will have the following
meanings:
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(a)
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“
Acquisition ”
means the Acquisition, at the Closing, of NewCardio by Marine Park
pursuant to this Agreement;
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(b)
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“
Acquisition Shares
” means the Marine Park Common Shares, set forth on Exhibit “A,” to be
issued to the NewCardio Shareholders at Closing pursuant to the terms of
the Acquisition;
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(c)
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(d)
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“
Closing ” means
the completion, on the Closing Date, of the transactions contemplated
hereby in accordance with Article 9
hereof;
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(e)
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“
Closing Date ”
means the day on which all conditions precedent to the completion of the
transaction as contemplated hereby have been satisfied or waived, but in
any event no later than January 5,
2008;
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(f)
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“
Marine Park Accounts
Payable and Liabilities ” means all accounts payable and
liabilities of Marine Park, on a consolidated basis, due and owing or
otherwise constituting a binding obligation of Marine Park and its
subsidiaries (other than a Marine Park Material Contract) as of September
30, 2007 as set forth is Schedule “A”
hereto;
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(g)
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“
Marine Park Accounts
Receivable ” means all accounts receivable and other debts owing to
Marine Park, on a consolidated basis, as of September 30, 2007 as set
forth in Schedule “B” hereto;
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(h)
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“
Marine Park Assets
” means the undertaking and all the property and assets of the Marine Park
Business of every kind and description wheresoever situated including,
without limitation, Marine Park Equipment, Marine Park Inventory, Marine
Park Material Contracts, Marine Park Accounts Receivable, Marine Park
Cash, Marine Park Intangible Assets and Marine Park Goodwill, and all
credit cards, charge cards and banking cards issued to Marine
Park;
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(i)
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“
Marine Park Bank
Accounts ” means all of the bank accounts, lock boxes and safety
deposit boxes of Marine Park and its subsidiaries or relating to the
Marine Park Business as set forth in Schedule “C”
hereto;
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(j)
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“
Marine Park
Business ” means all aspects of any business conducted by Marine
Park and its subsidiaries;
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(k)
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“
Marine Park Cash ”
means all cash on hand or on deposit to the credit of Marine Park and its
subsidiaries on the Closing Date;
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(l)
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“
Marine Park Common
Shares ” means the shares of common stock in the capital of Marine
Park;
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(m)
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“
Marine Park Debt to
Related Parties ” means the debts owed by Marine Park to any
affiliate, director or officer of Marine Park as described in Schedule “D”
hereto;
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(n)
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“
Marine Park
Equipment ” means all machinery, equipment, furniture, and
furnishings used in the Marine Park Business, including, without
limitation, the items more particularly described in Schedule “E”
hereto;
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(o)
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“
Marine Park Financial
Statements ” means, collectively, the audited consolidated
financial statements of Marine Park for the fiscal year ended December 31,
2006, together with the unqualified auditors' report thereon, and the
unaudited consolidated financial statements of Marine Park for the three
month period ended September 30, 2007, true copies of which are attached
as Schedule “F” hereto;
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(p)
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“
Marine Park
Goodwill” means the goodwill of the Marine Park Business including
the right to all corporate, operating and trade names associated with the
Marine Park Business, or any variations of such names as part of or in
connection with the Marine Park Business, all books and records and other
information relating to the Marine Park Business, all necessary licenses
and authorizations and any other rights used in connection with the Marine
Park Business;
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(q)
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“
Marine Park Insurance
Policies ” means the public liability insurance and insurance
against loss or damage to the Marine Park Assets and the Marine Park
Business as described in Schedule “G”
hereto;
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(r)
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“
Marine Park Intangible
Assets " means all of the intangible assets of Marine Park and its
subsidiaries, including, without limitation, Marine Park Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual and
industrial property of Marine Park and its
subsidiaries;
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(s)
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“
Marine Park
Inventory ” means all inventory and supplies of the Marine Park
Business as of September 30, 2007, as set forth in Schedule “H” hereto;
and
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(t)
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“
Marine Park Material
Contracts ” means the burden and benefit of and the right, title
and interest of Marine Park and its subsidiaries in, to and under all
trade and non-trade contracts, engagements or commitments, whether written
or oral, to which Marine Park or its subsidiaries are entitled whereunder
Marine Park or its subsidiaries are obligated to pay or entitled to
receive the sum of $10,000 or more including, without limitation, any
pension plans, profit sharing plans, bonus plans, loan agreements,
security agreements, indemnities and guarantees, any agreements with
employees, lessees, licensees, managers, accountants, suppliers, agents,
distributors, officers, directors, attorneys or others which cannot be
terminated without liability on not more than one month's notice, and
those contracts listed in Schedule “I”
hereto.
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(u)
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“
NewCardio Accounts
Payable and Liabilities ” means all accounts payable and
liabilities of NewCardio, due and owing or otherwise constituting a
binding obligation of NewCardio (other than a NewCardio Material Contract)
as of September 30, 2007 as set forth in Schedule “J”
hereto;
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(v)
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“
NewCardio Accounts
Receivable ” means all accounts receivable and other debts owing to
NewCardio, as of September 30, 2007 as set forth in Schedule “K”
hereto;
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(w)
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“
NewCardio Assets “
means the undertaking and all the property and assets of the NewCardio
Business of every kind and description wheresoever situated including,
without limitation, NewCardio Equipment, NewCardio Inventory, NewCardio
Material Contracts, NewCardio Accounts Receivable, NewCardio Cash,
NewCardio Intangible Assets and NewCardio Goodwill, and all credit cards,
charge cards and banking cards issued to
NewCardio;
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(x)
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“
NewCardio Bank
Accounts ” means all of the bank accounts, lock boxes and safety
deposit boxes of NewCardio or relating to the NewCardio Business as set
forth in Schedule “L” hereto;
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(y)
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“
NewCardio Bridge
Warrants ” shall mean any warrant to purchase or otherwise acquire
shares of capital stock of NewCardio issued in connection with a NewCardio
financing transaction upon NewCardio’s consummation of such financing
event;
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(z)
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“
NewCardio Business
” means all aspects of the business conducted by
NewCardio;
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(aa)
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“
NewCardio Cash ”
means all cash on hand or on deposit to the credit of NewCardio on the
Closing Date;
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(bb)
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“
NewCardio Common
Warrants ” shall mean warrants to purchase or otherwise acquire
NewCardio Shares, which were issued in connection with NewCardio’s Series
A-2 Preferred Stock financing;
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(cc)
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“
NewCardio Debt to Related
Parties ” means the debts owed by NewCardio and its subsidiaries to
the NewCardio Shareholders or to any family member thereof, or to any
affiliate, director or officer of NewCardio or the NewCardio Shareholders
as described in Schedule “M”;
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(dd)
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“
NewCardio
Equipment ” means all machinery, equipment, furniture, and
furnishings used in the NewCardio Business, including, without limitation,
the items more particularly described in Schedule “N”
hereto;
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(ee)
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“
NewCardio Financial
Statements ” means collectively, the audited financial statements
of NewCardio for the two fiscal years ended December 31, 2006, together
with the unqualified auditors' report thereon, and the unaudited
consolidated financial statements of NewCardio for the nine month period
ended September 30, 2007, true copies of which are attached as Schedule
“O” hereto;
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(ff)
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“
NewCardio Goodwill
” means the goodwill of the NewCardio Business together with the exclusive
right of Marine Park to represent itself as carrying on the NewCardio
Business in succession of NewCardio subject to the terms hereof, and the
right to use any words indicating that the NewCardio Business is so
carried on including the right to use the name "NewCardio” or “NewCardio
International" or any variation thereof as part of the name of or in
connection with the NewCardio Business or any part thereof carried on or
to be carried on by NewCardio, the right to all corporate, operating and
trade names associated with the NewCardio Business, or any variations of
such names as part of or in connection with the NewCardio Business, all
telephone listings and telephone advertising contracts, all lists of
customers, books and records and other information relating to the
NewCardio Business, all necessary licenses and authorizations and any
other rights used in connection with the NewCardio
Business;
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(gg)
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“
NewCardio Insurance
Policies ” means the public liability insurance and insurance
against loss or damage to NewCardio Assets and the NewCardio Business as
described in Schedule “P” hereto;
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(hh)
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“
NewCardio Intangible
Assets ” means all of the intangible assets of NewCardio,
including, without limitation, NewCardio Goodwill, all trademarks, logos,
copyrights, designs, and other intellectual and industrial property of
NewCardio and its subsidiaries;
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(ii)
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“
NewCardio
Inventory ” means all inventory and supplies of the NewCardio
Business as of September 30, 2007 as set forth in Schedule “Q”
hereto;
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(jj)
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“
NewCardio Material
Contracts ” means the burden and benefit of and the right, title
and interest of NewCardio in, to and under all trade and non-trade
contracts, engagements or commitments, whether written or oral, to which
NewCardio is entitled in connection with the NewCardio Business whereunder
NewCardio is obligated to pay or entitled to receive the sum of $10,000 or
more including, without limitation, any pension plans, profit sharing
plans, bonus plans, loan agreements, security agreements, indemnities and
guarantees, any agreements with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, officers, directors,
attorneys or others which cannot be terminated without liability on not
more than one month's notice, and those contracts listed in Schedule “R”
hereto;
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(kk)
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“NewCardio Option ”
shall mean any option to purchase or otherwise acquire NewCardio Shares
(whether or not vested) outstanding under any NewCardio Option
Plan;
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(ll)
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“NewCardio Option Plan”
shall mean (i) NewCardio’s 2004 Equity Incentive Plan and (ii) any other
compensatory option plans or contracts of NewCardio, including option
plans or contracts assumed by the NewCardio pursuant to a merger or
acquisition;
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(mm)
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“
NewCardio Related Party
Debts ” means the debts owed by the NewCardio Shareholders or by
any family member thereof, or by any affiliate, director or officer of
NewCardio or the NewCardio Shareholders, to NewCardio as described in
Schedule “S”;
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(nn)
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“
NewCardio Shares ”
means all of the issued and outstanding shares of common stock, $0.0001
par value, of NewCardio, whether or not certificates have been issues with
respect to such shares, and shares of common stock issuable upon
conversion and/or exercise of all NewCardio Preferred Shares and NewCardio
Convertible Debt;
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(oo)
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“
NewCardio Warrants
” shall mean the NewCardio Common Warrants and the NewCardio Bridge
Warrants;
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(pp)
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“
Place of Closing ”
means the offices of Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, or such other
place as Marine Park and NewCardio may mutually agree upon;
and
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(qq)
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“
Return to Treasury
Agreement ” means the Return to Treasury Agreement to be entered
into on the Closing Date between Marine Park and Harborview Master Fund
L.P. and Diverse Trading Ltd. in the form attached hereto as Exhibit
“B.”
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Any other
terms defined within the text of this Agreement will have the meanings so
ascribed to them.
Captions
and Section Numbers
1.2
The headings and section references in this Agreement are for convenience
of reference only and do not form a part of this Agreement and are not intended
to interpret, define or limit the scope, extent or intent of this Agreement or
any provision thereof.
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Section
References and Schedules
1.3
Any reference to a particular “Article”, “section”, “paragraph”, “clause”
or other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement.
The Schedules to this Agreement are as follows:
Information
concerning Marine Park
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Schedule
“A”
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Marine
Park Accounts Payable and Liabilities
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Schedule
“B”
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Marine
Park Accounts Receivable
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Schedule
“C”
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Marine
Park Bank Accounts
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Schedule
“D”
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Marine
Park Debts to Related Parties
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Schedule
“E”
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Marine
Park Equipment
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Schedule
“F”
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Marine
Park Financial Statements
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Schedule
“G”
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Marine
Park Insurance Policies
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Schedule
“H”
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Marine
Park Inventory
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Schedule
“I”
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Marine
Park Material Contracts
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Information
concerning NewCardio
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Schedule
“J”
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NewCardio
Accounts Payable and Liabilities
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Schedule
“K”
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NewCardio
Accounts Receivable
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Schedule
“L”
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NewCardio
Bank Accounts
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Schedule
“M”
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NewCardio
Debts to Related Parties
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Schedule
“N”
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NewCardio
Equipment
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Schedule
“O”
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NewCardio
Financial Statements
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Schedule
“P”
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NewCardio
Insurance Policies
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Schedule
“Q”
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NewCardio
Inventory
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Schedule
“R”
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NewCardio
Material Contracts
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Schedule
“S”
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NewCardio
Related Party Debts
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Exhibits
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Exhibit
“A”
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Share
Exchange Structure
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Exhibit
“B”
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Return
to Treasury Agreement
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Exhibit
“C”
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Director
Nominees
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Exhibit
“D”
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Certificate
of Designation
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Exhibit
“E”
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Form
of Legal Opinion
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Severability
of Clauses
1.4
If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
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ARTICLE
2
THE
ACQUISITION
Sale
of Shares
2.1
The NewCardio Shareholders hereby agree to sell to Marine Park the
NewCardio Shares in exchange for the Acquisition Shares on the Closing Date and
to transfer to Marine Park on the Closing Date a 100% undivided interest in and
to the NewCardio Shares free from all liens, mortgages, charges, pledges,
encumbrances or other burdens with all rights now or thereafter attached
thereto.
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2.2
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Treatment of NewCardio
Options .
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(a)
At the Closing, by virtue of the transactions contemplated hereunder and
without any action on the part of the holders of any shares of NewCardio
Options, each NewCardio Option that is issued and outstanding immediately prior
to the Closing Date, whether or not then exercisable, will be assumed by Marine
Park and converted automatically into an option to purchase Marine Park Common
Shares (“ Assumed
Options ”) as set forth below. Each Assumed Option will continue to have,
and be subject to, the same terms and conditions set forth in the NewCardio
Option Plan and the agreements evidencing the grant thereof immediately prior to
the Closing Date, including provisions with respect to vesting and the number of
whole shares they shall be exercisable for of Marine Park Common Shares . It is
the intention of the parties that each Assumed Option that qualified as an
incentive stock option (as defined in Section 422 of the Code) shall continue to
so qualify, to the maximum extent permissible, following the Closing
Date.
(b)
Promptly following the Closing Date, Marine Park shall issue to each
holder of a NewCardio Option that was assumed by Marine Park pursuant to Section
2.2(a) a document evidencing the assumption of such NewCardio Option by Marine
Park.
(c)
Following the Closing Date, Marine Park will be able to grant stock
awards, to the extent permissible by applicable Law and regulations, under the
terms of the NewCardio Option Plan or the terms of another plan adopted by
Marine Park to issue the reserved but unissued NewCardio Shares under such
NewCardio Option Plan and the shares that would otherwise return to the
NewCardio Option Plan pursuant to Section 4(b) thereof (which provides that
NewCardio Shares subject to unexercised portions of any award granted thereunder
that expires or otherwise terminates will return and may be used for awards to
be granted under the NewCardio Option Plan), except that (i) NewCardio Shares
covered by such awards will be shares of Marine Park Common Shares and (ii) all
references to a number of NewCardio Shares will be changed to reference Marine
Park Common Shares. Notwithstanding the foregoing, neither NewCardio, nor any
NewCardio Stockholder, nor any holder of a NewCardio Option, makes any
representation or warranty or shall have any obligation or any liability
whatsoever, including without limitation any indemnification obligation under
this Agreement, or be required to take any action with respect to or arising out
of this Section 2.2(c).
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2.3
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Treatment of NewCardio
Warrants .
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(a)
At the Closing, by virtue of the transactions contemplated hereunder and
without any action on the part of the holders of any shares of NewCardio
Warrants, each NewCardio Warrant that is issued and outstanding immediately
prior to the Closing Date will be assumed by Marine Park and converted
automatically into a warrant to purchase a number of shares of Marine Park
Common Shares as set forth in the agreements evidencing such NewCardio Warrant
at the exercise price set forth in the agreements evidencing such NewCardio
Warrant.
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(b)
Promptly following the Closing Date, Marine Park shall issue to each
holder of a NewCardio Warrant that was assumed by Marine Park pursuant to
Section 2.3(a)
a document
evidencing the assumption of such NewCardio Warrant by Marine Park.
2.4
Treatment of Restricted
Stock Grants . Notwithstanding anything herein to the contrary, each
NewCardio Shareholder who originally purchased NewCardio Shares pursuant to a
restricted stock purchase agreement or other agreement, in any case outside the
NewCardio Option Plan, which provides for the release or vesting of such
NewCardio Shares over the course of time, and as of the Closing Date, all or any
portion of the Acquisition Shares exchange therewith shall remain subject to
release or vesting pursuant to such agreement, and such NewCardio Shareholder
agrees that the portion of Acquisition Shares remaining subject to release or
vesting as of the Closing Date shall continue to remain subject to release or
vesting upon and following the Closing Date subject to the terms and conditions
set forth in the agreement through which such NewCardio Shares were originally
issued. At the Closing, by virtue of the transactions contemplated hereunder and
without any action on the part of the holders of any such NewCardio Shares,
Marine Park shall assume all of NewCardio’s rights and obligations under such
agreements with respect to the release or vesting of such Acquisition Shares
upon and following the Closing Date.
2.5
Treatment of NewCardio
Preferred Shares and NewCardio Convertible Debt . On the Closing Date, by
virtue of the sale to Marine Park of the NewCardio Shares in exchange for the
Acquisition Shares, the NewCardio Shareholders who previously held NewCardio
Preferred Shares and/or NewCardio Convertible Debt hereby confirm the conversion
thereof and agree that such NewCardio Preferred Shares and/or NewCardio
Convertible Debt shall automatically be cancelled and extinguished, without any
action on the part of the holder thereof, in exchange for the right to receive
the Acquisition Shares at the Closing. All such NewCardio Preferred Shares
and/or NewCardio Convertible Debt shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each holder
thereof shall cease to have any rights with respect thereto, except the right to
receive the Acquisition Shares paid in consideration therefor upon the surrender
of such in accordance with this Agreement. Furthermore, the NewCardio
Shareholders hereby waive any requirement or obligation of NewCardio to provided
any notice or take any other actions with respect to the conversion of the
NewCardio Preferred Shares and/or NewCardio Convertible Debt.
Allocation
of Consideration
2.6
The Acquisition Shares shall be allocated to the NewCardio Shareholders
on the basis of one Acquisition Share for each one NewCardio Share held by a
NewCardio Shareholder as set forth in Schedule 2.2 attached hereto.
Adherence
with Applicable Securities Laws
2.7
The NewCardio Shareholders agree that they are acquiring the Acquisition
Shares for investment purposes and will not offer, sell or otherwise transfer,
pledge or hypothecate any of the Acquisition Shares issued to them (other than
pursuant to an effective Registration Statement under the Securities Act of 1933 , as
amended) directly or indirectly unless:
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(a)
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the
sale is to Marine Park;
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(b)
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the
sale is made pursuant to the exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144 thereunder;
or
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(c)
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the
Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act of 1933, as
amended, or any applicable United States state laws and regulations
governing the offer and sale of securities, and the vendor has furnished
to Marine Park an opinion of counsel to that effect or such other written
opinion as may be reasonably required by Marine
Park.
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The
NewCardio Shareholders acknowledge that the certificates representing the
Acquisition Shares shall bear the following legend:
NO SALE,
OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL
BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE TO
SAID SHARES.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
OF
MARINE PARK
Representations
and Warranties
3.1
Marine Park hereby represents and warrants in all material respects to
NewCardio and the NewCardio Shareholders, with the intent that NewCardio and the
NewCardio Shareholders will rely thereon in entering into this Agreement and in
approving and completing the transactions contemplated hereby,
that:
Marine
Park - Corporate Status and Capacity
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(a)
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Incorporation .
Marine Park is a corporation duly incorporated and validly subsisting
under the laws of the State of Delaware and in good standing with the
office of the Secretary of State for the State of
Delaware;
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(b)
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Carrying on
Business . Marine Park conducts the business described in its
filings with the Securities and Exchange Commission and does not conduct
any other business. Marine Park is duly authorized to carry on such
business in the State of New York. The nature of the Marine Park Business
does not require Marine Park to register or otherwise be qualified to
carry on business in any other
jurisdictions;
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(c)
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Corporate
Capacity . Marine Park has the corporate power, capacity and
authority to own the Marine Park Assets and to enter into and complete
this Agreement;
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(d)
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Reporting Status;
Listing . Marine Park is required to file current reports with the
Securities and Exchange Commission pursuant to section 15(d) of the
Securities Exchange Act of 1934, Marine Park filed a registeration
statement under the Securities Act of 1933 and are quoted on the
Over-the-Counter Bulletin Board, and all reports required to be filed by
Marine Park with the Securities and Exchange Commission or NASD have been
filed;
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Marine
Park - Capitalization
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(e)
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Authorized
Capital . The authorized capital of Marine Park consists of
99,000,000 Marine Park Common Shares, $0.001 par value and 1,000,000
shares of preferred stock, $0.001 par value, of which 10,940,000 Marine
Park Common Shares, and no shares of preferred stock are presently issued
and outstanding;
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(f)
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No Option, Warrant or
Other Right . No person, firm or corporation has any agreement,
option, warrant, preemptive right or any other right capable of becoming
an agreement, option, warrant or right for the acquisition of Marine Park
Common Shares or for the purchase, subscription or issuance of any of the
unissued shares in the capital of Marine
Park;
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Marine
Park - Records and Financial
Statements
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(g)
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Charter
Documents . The charter documents of Marine Park and its
subsidiaries have not been altered since the incorporation of each,
respectively, except as filed in the record books of Marine Park or its
subsidiaries, as the case may be;
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(h)
|
Corporate Minute
Books . The corporate minute books of Marine Park and its
subsidiaries are complete and each of the minutes contained therein
accurately reflect the actions that were taken at a duly called and held
meeting or by consent without a meeting. All actions by Marine Park and
its subsidiaries which required director or shareholder approval are
reflected on the corporate minute books of Marine Park and its
subsidiaries. Marine Park and its subsidiaries are not in violation or
breach of, or in default with respect to, any term of their respective
Certificates of Incorporation (or other charter documents) or
by-laws.
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|
(i)
|
Marine Park Financial
Statements . The Marine Park Financial Statements present fairly,
in all material respects, the assets and liabilities (whether accrued,
absolute, contingent or otherwise) of Marine Park, on a consolidated
basis, as of the respective dates thereof, and the sales and earnings of
the Marine Park Business during the periods covered thereby, in all
material respects and have been prepared in substantial accordance with
generally accepted accounting principles consistently
applied;
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|
(j)
|
Marine Park Accounts
Payable and Liabilities . There are no material liabilities,
contingent or otherwise, of Marine Park or its subsidiaries which are not
disclosed in Schedule “A” hereto or reflected in the Marine Park Financial
Statements except those incurred in the ordinary course of business since
the date of the said schedule and the Marine Park Financial Statements,
and neither Marine Park nor its subsidiaries have guaranteed or agreed to
guarantee any debt, liability or other obligation of any person, firm or
corporation. Without limiting the generality of the foregoing, all
accounts payable and liabilities of Marine Park as of September 30, 2007,
are described in Schedule “A”
hereto;
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|
(k)
|
Marine Park Accounts
Receivable . All the Marine Park Accounts Receivable result from
bona fide business transactions and services actually rendered without, to
the knowledge and belief of Marine Park, any claim by the obligor for
set-off or counterclaim. Without limiting the generality of the foregoing,
all accounts receivable of Marine Park as of September 30, 2007, are
described in Schedule “B” hereto;
|
|
(l)
|
Marine Park Bank
Accounts . All of the Marine Park Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule “C” hereto;
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- 10
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|
|
|
|
(m)
|
No Debt to Related
Parties . Except as disclosed in Schedule “D” hereto, neither
Marine Park nor any of its subsidiaries is, and on Closing will not be,
indebted to any affiliate, director or officer of Marine Park except
accounts payable on account of bona fide business transactions of Marine
Park incurred in normal course of the Marine Park Business, including
employment agreements, none of which are more than 30 days in
arrears;
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|
(n)
|
No Related Party Debt
to Marine Park . No director or officer or affiliate of Marine Park
is now indebted to or under any financial obligation to Marine Park or any
subsidiary on any account whatsoever, except for advances on account of
travel and other expenses not exceeding $1,000 in
total;
|
|
(o)
|
No Dividends .
No dividends or other distributions on any shares in the capital of Marine
Park have been made, declared or authorized since the date of Marine Park
Financial Statements;
|
|
(p)
|
No Payments .
No payments of any kind have been made or authorized since the date of the
Marine Park Financial Statements to or on behalf of officers, directors,
shareholders or employees of Marine Park or its subsidiaries or under any
management agreements with Marine Park or its subsidiaries, except
payments made in the ordinary course of business and at the regular rates
of salary or other remuneration payable to
them;
|
|
(q)
|
No Pension
Plans . There are no pension, profit sharing, group insurance or
similar plans or other deferred compensation plans affecting Marine
Park;
|
|
(r)
|
No Adverse
Events . Since the date of the Marine Park Financial
Statements
|
|
(i)
|
there
has not been any material adverse change in the consolidated financial
position or condition of Marine Park, its subsidiaries, its liabilities or
the Marine Park Assets or any damage, loss or other change in
circumstances materially affecting Marine Park, the Marine Park Business
or the Marine Park Assets or Marine Park’ right to carry on the Marine
Park Business, other than changes in the ordinary course of
business,
|
|
(ii)
|
there
has not been any damage, destruction, loss or other event (whether or not
covered by insurance) materially and adversely affecting Marine Park, its
subsidiaries, the Marine Park Business or the Marine Park
Assets,
|
|
(iii)
|
there
has not been any material increase in the compensation payable or to
become payable by Marine Park to any of Marine Park’ officers, employees
or agents or any bonus, payment or arrangement made to or with any of
them,
|
|
(iv)
|
the
Marine Park Business has been and continues to be carried on in the
ordinary course,
|
|
(v)
|
Marine
Park has not waived or surrendered any right of material
value,
|
|
(vi)
|
neither
Marine Park nor its subsidiaries have discharged or satisfied or paid any
lien or encumbrance or obligation or liability other than current
liabilities in the ordinary course of business,
and
|
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|
|
|
|
(vii)
|
no
capital expenditures in excess of $10,000 individually or $30,000 in total
have been authorized or made.
|
Marine
Park - Income Tax Matters
|
(s)
|
Tax Returns .
All tax returns and reports of Marine Park and its subsidiaries required
by law to be filed have been filed and are true, complete and correct, and
any taxes payable in accordance with any return filed by Marine Park and
its subsidiaries or in accordance with any notice of assessment or
reassessment issued by any taxing authority have been so
paid;
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|
(t)
|
Current Taxes .
Adequate provisions have been made for taxes payable for the current
period for which tax returns are not yet required to be filed and there
are no agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return by, or
payment of, any tax, governmental charge or deficiency by Marine Park or
its subsidiaries. Marine Park is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment including
aggressive treatment of income and expenses in filing earlier tax
returns;
|
Marine
Park - Applicable Laws and Legal Matters
|
(u)
|
Licenses .
Marine Park and its subsidiaries hold all licenses and permits as may be
requisite for carrying on the Marine Park Business in the manner in which
it has heretofore been carried on, which licenses and permits have been
maintained and continue to be in good standing except where the failure to
obtain or maintain such licenses or permits would not have a material
adverse effect on the Marine Park
Business;
|
|
(v)
|
Applicable Laws
. Neither Marine Park nor its subsidiaries have been charged with or
received notice of breach of any laws, ordinances, statutes, regulations,
by-laws, orders or decrees to which they are subject or which apply to
them the violation of which would have a material adverse effect on the
Marine Park Business, and neither Marine Park nor its subsidiaries are in
breach of any laws, ordinances, statutes, regulations, bylaws, orders or
decrees the contravention of which would result in a material adverse
impact on the Marine Park Business;
|
|
(w)
|
Pending or Threatened
Litigation . There is no material litigation or administrative or
governmental proceeding pending or threatened against or relating to
Marine Park, its subsidiaries, the Marine Park Business, or any of the
Marine Park Assets nor does Marine Park have any knowledge of any
deliberate act or omission of Marine Park or its subsidiaries that would
form any material basis for any such action or
proceeding;
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|
(x)
|
No Bankruptcy .
Neither Marine Park nor its subsidiaries have made any voluntary
assignment or proposal under applicable laws relating to insolvency and
bankruptcy and no bankruptcy petition has been filed or presented against
Marine Park or its subsidiaries and no order has been made or a resolution
passed for the winding-up, dissolution or liquidation of Marine Park or
its subsidiaries;
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|
(y)
|
Labor Matters .
Neither Marine Park nor its subsidiaries are party to any collective
agreement relating to the Marine Park Business with any labor union or
other association of employees and no part of the Marine Park Business has
been certified as a unit appropriate for collective bargaining or, to the
knowledge of Marine Park, has made any attempt in that
regard;
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- 12
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|
(z)
|
Finder's Fees .
Neither Marine Park nor its subsidiaries are party to any agreement which
provides for the payment of finder's fees, brokerage fees, commissions or
other fees or amounts which are or may become payable to any third party
in connection with the execution and delivery of this Agreement and the
transactions contemplated herein;
|
Execution
and Performance of Agreement
|
(aa)
|
Authorization and
Enforceability . The execution and delivery of this Agreement, and
the completion of the transactions contemplated hereby, have been duly and
validly authorized by all necessary corporate action on the part of Marine
Park;
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|
(bb)
|
No Violation or
Breach . The execution and performance of this Agreement will
not:
|
|
(i)
|
violate
the charter documents of Marine Park or result in any breach of, or
default under, any loan agreement, mortgage, deed of trust, or any other
agreement to which Marine Park or its subsidiaries are
party,
|
|
(ii)
|
give
any person any right to terminate or cancel any agreement including,
without limitation, the Marine Park Material Contracts, or any right or
rights enjoyed by Marine Park or its
subsidiaries,
|
|
(iii)
|
result
in any alteration of Marine Park’ or its subsidiaries’ obligations under
any agreement to which Marine Park or its subsidiaries are party
including, without limitation, the Marine Park Material
Contracts,
|
|
(iv)
|
result
in the creation or imposition of any lien, encumbrance or restriction of
any nature whatsoever in favor of a third party upon or against the Marine
Park Assets,
|
|
(v)
|
result
in the imposition of any tax liability to Marine Park or its subsidiaries
relating to the Marine Park Assets,
or
|
|
(vi)
|
violate
any court order or decree to which either Marine Park or its subsidiaries
are subject;
|
Marine
Park Assets - Ownership and Condition
|
(cc)
|
Business Assets
. The Marine Park Assets comprise all of the property and assets of the
Marine Park Business, and no other person, firm or corporation owns any
assets used by Marine Park or its subsidiaries in operating the Marine
Park Business, whether under a lease, rental agreement or other
arrangement, other than as disclosed in Schedules “E” or “H”
hereto;
|
|
(dd)
|
Title . Marine
Park or its subsidiaries are the legal and beneficial owner of the Marine
Park Assets, free and clear of all mortgages, liens, charges, pledges,
security interests, encumbrances or other claims whatsoever, save and
except as disclosed in Schedules “E” or “H”
hereto;
|
|
(ee)
|
No Option . No
person, firm or corporation has any agreement or option or a right capable
of becoming an agreement for the purchase of any of the Marine Park
Assets;
|
- 13
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(ff)
|
Marine Park Insurance
Policies . Marine Park and its subsidiaries maintain the public
liability insurance and insurance against loss or damage to the Marine
Park Assets and the Marine Park Business as described in Schedule “G”
hereto;
|
|
(gg)
|
Marine Park Material
Contracts . The Marine Park Material Contracts listed in Schedule
“I” constitute all of the material contracts of Marine Park and its
subsidiaries;
|
|
(hh)
|
No Default .
There has not been any default in any material obligation of Marine Park
or any other party to be performed under any of the Marine Park Material
Contracts, each of which is in good standing and in full force and effect
and unamended (except as disclosed in Schedule “I” hereto), and Marine
Park is not aware of any default in the obligations of any other party to
any of the Marine Park Material
Contracts;
|
|
(ii)
|
No Compensation on
Termination . There are no agreements, commitments or
understandings relating to severance pay or separation allowances on
termination of employment of any employee of Marine Park or its
subsidiaries. Neither Marine Park nor its subsidiaries are obliged to pay
benefits or share profits with any employee after termination of
employment except as required by
law;
|
Marine
Park Assets - Marine Park Equipment
|
(jj)
|
Marine Park
Equipment . The Marine Park Equipment has been maintained in a
manner consistent with that of a reasonably prudent owner and such
equipment is in good working
condition;
|
Marine
Park Assets - Marine Park Goodwill and Other Assets
|
(kk)
|
Marine Park
Goodwill . Marine Park and its subsidiaries do not carry on the
Marine Park Business under any other business or trade names. Marine Park
does not have any knowledge of any infringement by Marine Park or its
subsidiaries of any patent, trademarks, copyright or trade
secret;
|
Marine
Park Business
|
(ll)
|
Maintenance of
Business . Since the date of the Marine Park Financial Statements,
Marine Park and its subsidiaries have not entered into any material
agreement or commitment except in the ordinary course and except as
disclosed herein;
|
|
(mm)
|
Subsidiaries .
Marine Park does not own any subsidiaries and does not otherwise own,
directly or indirectly, any shares or interest in any other corporation,
partnership, joint venture or firm;
and
|
Marine
Park - Acquisition Shares
|
(nn)
|
Acquisition
Shares . The Acquisition Shares when delivered to the NewCardio
Shareholders pursuant to the Acquisition shall be validly issued and
outstanding as fully paid and non-assessable shares and the Acquisition
Shares shall be transferable upon the books of Marine Park, in all cases
subject to the provisions and restrictions of all applicable securities
laws.
|
- 14
-
Non-Merger
and Survival
3.2
The representations and warranties of Marine Park contained herein will
be true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by NewCardio or the
NewCardio Shareholders, the representations and warranties of Marine Park shall
survive the Closing.
Indemnity
3.3
Marine Park agrees to indemnify and save harmless NewCardio and the
NewCardio Shareholders from and against any and all claims, demands, actions,
suits, proceedings, assessments, judgments, damages, costs, losses and expenses,
including any payment made in good faith in settlement of any claim (subject to
the right of Marine Park to defend any such claim), resulting from the breach by
it of any representation or warranty made under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by Marine Park to NewCardio or the NewCardio
Shareholders hereunder.
ARTICLE
4
COVENANTS
OF MARINE PARK
Covenants
4.1
Marine Park covenants and agrees with NewCardio and the NewCardio
Shareholders that it will:
|
(a)
|
Conduct of
Business . Until the Closing, conduct the Marine Park Business
diligently and in the ordinary course consistent with the manner in which
the Marine Park Business generally has been operated up to the date of
execution of this Agreement;
|
|
(b)
|
Preservation of
Business . Until the Closing, use its best efforts to preserve the
Marine Park Business and the Marine Park Assets and, without limitation,
preserve for NewCardio Marine Park’s and its subsidiaries’ relationships
with any third party having business relations with
them;
|
|
(c)
|
Access . Until
the Closing, give NewCardio, the NewCardio Shareholders, and their
representatives full access to all of the properties, books, contracts,
commitments and records of Marine Park, and furnish to NewCardio, the
NewCardio Shareholders and their representatives all such information as
they may reasonably request; and
|
|
(d)
|
Procure
Consents . Until the Closing, take all reasonable steps required to
obtain, prior to Closing, any and all third party consents required to
permit the Acquisition and to preserve and maintain the Marine Park Assets
notwithstanding the change in control of NewCardio arising from the
Acquisition.
|
Authorization
4.2
Marine Park hereby agrees to authorize and direct any and all federal,
state, municipal, foreign and international governments and regulatory
authorities having jurisdiction respecting Marine Park and its subsidiaries to
release any and all information in their possession respecting Marine Park and
its subsidiaries to the NewCardio Shareholders. Marine Park shall promptly
execute and deliver to the NewCardio Shareholders any and all consents to the
release of information and specific authorizations which the NewCardio
Shareholders reasonably requires to gain access to any and all such
information.
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-
Survival
4.3
The covenants set forth in this Article shall survive the Closing for the
benefit of NewCardio and the NewCardio Shareholders.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF
NEWCARDIO
AND THE NEWCARDIO SHAREHOLDERS
Representations
and Warranties
5.1
NewCardio and the NewCardio Shareholders hereby represent and warrant in
all material respects to Marine Park, with the intent that it will rely thereon
in entering into this Agreement and in approving and completing the transactions
contemplated hereby, that:
NewCardio
- Company Status and Capacity
|
(a)
|
Formation .
NewCardio is a corporation duly incorporated and validly subsisting under
the laws of the State of Delaware and in good standing with the office of
the Secretary of State for the State of
Delaware;
|
|
(b)
|
Carrying on
Business . NewCardio carries on the NewCardio Business primarily in
the State of California and does not carry on any material business
activity in any other jurisdiction. The nature of the NewCardio Business
does not require NewCardio to register or otherwise be qualified to carry
on business in any other
jurisdiction;
|
|
(c)
|
Legal Capacity
. NewCardio has the legal power, capacity and authority to own NewCardio
Assets, to carry on the Business of NewCardio and to enter into and
complete this Agreement;
|
NewCardio
- Capitalization
|
(d)
|
Authorized
Capital . The authorized capital of NewCardio consists of
40,000,000 shares of common stock, $0.0001 par
value;
|
|
(e)
|
Ownership of NewCardio
Common Shares . The issued and outstanding shares of NewCardio
common stock will on Closing consist of 10,507,300 shares of common stock,
$0.001 par value, (being the NewCardio Common Shares), which shares on
Closing shall be validly issued and outstanding as fully paid and
non-assessable shares. The NewCardio Shareholders at Closing will be the
registered and beneficial owners of the NewCardio Common Shares. The
NewCardio Common Shares owned by the NewCardio Shareholders will on
Closing be free and clear of any and all liens, charges, pledges,
encumbrances, restrictions on transfer and adverse claims
whatsoever;
|
|
(f)
|
Ownership of NewCardio
Preferred Shares . The issued and outstanding shares of NewCardio
preferred stock will on Closing consist of 7,155,206 shares of preferred
stock, $0.001 par value, (being the NewCardio Preferred Shares), which
shares on Closing shall be validly issued and outstanding as fully paid
and non-assessable shares. The NewCardio Shareholders at Closing will be
the registered and beneficial owners of the NewCardio Preferred Shares.
The NewCardio Preferred Shares owned by the NewCardio Shareholders will on
Closing be free and clear of any and all liens, charges, pledges,
encumbrances, restrictions on transfer and adverse claims
whatsoever;
|
- 16
-
|
(g)
|
Options, Warrants or
Other Rights . Except for the NewCardio Convertible Securities and
the NewCardio Convertible Debt, no person, firm or corporation has any
agreement, option, warrant, preemptive right or any other right capable of
becoming an agreement, option, warrant or right for the acquisition of
NewCardio Common Shares held by the NewCardio Shareholders or for the
purchase, subscription or issuance of any of the unissued shares in the
capital of NewCardio. The NewCardio Shareholders at Closing will be the
registered and beneficial owners of the NewCardio Convertible Securities
and the NewCardio Convertible Debt. The NewCardio Convertible Securities
and the NewCardio Convertible Debt owned by the NewCardio Shareholders
will on Closing be free and clear of any and all liens, charges, pledges,
encumbrances, restrictions on transfer and adverse claims
whatsoever;
|
|
(h)
|
No Restrictions
. There are no restrictions on the transfer, sale or other disposition of
NewCardio Shares contained in the charter documents of NewCardio or under
any agreement;
|
NewCardio
- Records and Financial Statements
|
(i)
|
Charter
Documents . The charter documents of NewCardio have not been
altered since its formation date, except as filed in the record books of
NewCardio;
|
|
(j)
|
Minute Books .
The minute books of NewCardio are complete and each of the minutes
contained therein accurately reflect the actions that were taken at a duly
called and held meeting or by consent without a meeting. All actions by
NewCardio which required director or shareholder approval are reflected on
the corporate minute books of NewCardio. NewCardio is not in violation or
breach of, or in default with respect to, any term of its Certificate of
Incorporation (or other charter documents) or
by-laws.
|
|
(k)
|
NewCardio Financial
Statements . The NewCardio Financial Statements present fairly, in
all material respects, the assets and liabilities (whether accrued,
absolute, contingent or otherwise) of NewCardio as of the date thereof,
and the sales and earnings of the NewCardio Business during the periods
covered thereby, in all material respects, and have been prepared in
substantial accordance with generally accepted accounting principles
consistently applied;
|
|
(l)
|
NewCardio Accounts
Payable and Liabilities . There are no material liabilities,
contingent or otherwise, of NewCardio which are not disclosed in Schedule
“J” hereto or reflected in the NewCardio Financial Statements except those
incurred in the ordinary course of business since the date of the said
schedule and the NewCardio Financial Statements, and NewCardio has not
guaranteed or agreed to guarantee any debt, liability or other obligation
of any person, firm or corporation. Without limiting the generality of the
foregoing, all accounts payable and liabilities of NewCardio as of
September 30, 2007 are described in Schedule “J”
hereto;
|
|
(m)
|
NewCardio Accounts
Receivable . All the NewCardio Accounts Receivable result from bona
fide business transactions and services actually rendered without, to the
knowledge and belief of the NewCardio Shareholders, any claim by the
obligor for set-off or counterclaim. Without limiting the generality of
the foregoing, all accounts receivable of NewCardio as of September 30,
2007, are described in Schedule “K”
hereto;
|
- 17
-
|
(n)
|
NewCardio Bank
Accounts . All of the NewCardio Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule “L” hereto;
|
|
(o)
|
No Debt to Related
Parties . Except as disclosed in Schedule “M” hereto, NewCardio is
not and on Closing will not be, indebted to the NewCardio Shareholders nor
to any family member thereof, nor to any affiliate, director or officer of
NewCardio or the NewCardio Shareholders except accounts payable on account
of bona fide business transactions of NewCardio incurred in normal course
of NewCardio Business, including employment agreements with the NewCardio
Shareholders, none of which are more than 30 days in
arrears;
|
|
(p)
|
No Related Party Debt
to NewCardio . Except as set forth on Schedule ”M” hereto, no
NewCardio Shareholder nor any director, officer or affiliate of NewCardio
is now indebted to or under any financial obligation to NewCardio on any
account whatsoever, except for advances on account of travel and other
expenses not exceeding $5,000 in
total;
|
|
(q)
|
No Dividends .
No dividends or other distributions on any shares in the capital of
NewCardio have been made, declared or authorized since the date of the
NewCardio Financial Statements;
|
|
(r)
|
No Payments .
No payments of any kind have been made or authorized since the date of the
NewCardio Financial Statements to or on behalf of the NewCardio
Shareholders or to or on behalf of officers, directors, shareholders or
employees of NewCardio or under any management agreements with NewCardio,
except payments made in the ordinary course of business and at the regular
rates of salary or other remuneration payable to
them;
|
|
(s)
|
No Pension
Plans . There are no pension, profit sharing, group insurance or
similar plans or other deferred compensation plans affecting NewCardio,
except as set forth in the NewCardio Financial
Statements;
|
|
(t)
|
No Adverse
Events . Since the date of the NewCardio Financial
Statements:
|
|
(i)
|
there
has not been any material adverse change in the consolidated financial
position or condition of NewCardio, its liabilities or the NewCardio
Assets or any damage, loss or other change in circumstances materially
affecting NewCardio, the NewCardio Business or the NewCardio Assets or
NewCardio’s right to carry on the NewCardio Business, other than changes
in the ordinary course of business,
|
|
(ii)
|
there
has not been any damage, destruction, loss or other event (whether or not
covered by insurance) materially and adversely affecting NewCardio, the
NewCardio Business or the NewCardio
Assets,
|
|
(iii)
|
there
has not been any material increase in the compensation payable or to
become payable by NewCardio to the NewCardio Shareholders or to any of
NewCardio's officers, employees or agents or any bonus, payment or
arrangement made to or with any of
them,
|
- 18
-
|
(iv)
|
the
NewCardio Business has been and continues to be carried on in the ordinary
course,
|
|
(v)
|
NewCardio
has not waived or surrendered any right of material
value,
|
|
(vi)
|
NewCardio
has not discharged or satisfied or paid any lien or encumbrance or
obligation or liability other than current liabilities in the ordinary
course of business, and
|
|
(vii)
|
no
capital expenditures in excess of $10,000 individually or $30,000 in total
have been authorized or made;
|
NewCardio
- Income Tax Matters
|
(u)
|
Tax Returns .
All tax returns and reports of NewCardio required by law to be filed have
been filed and are true, complete and correct, and any taxes payable in
accordance with any return filed by NewCardio or in accordance with any
notice of assessment or reassessment issued by any taxing authority have
been so paid;
|
|
(v)
|
Current Taxes .
Adequate provisions have been made for taxes payable for the current
period for which tax returns are not yet required to be filed and there
are no agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return by, or
payment of, any tax, governmental charge or deficiency by NewCardio.
NewCardio is not aware of any contingent tax liabilities or any grounds
which would prompt a reassessment including aggressive treatment of income
and expenses in filing earlier tax
returns;
|
|
|
NewCardio
- Applicable Laws and Legal Matters
|
|
(w)
|
Licenses .
NewCardio holds all licenses and permits as may be requisite for carrying
on the NewCardio Business in the manner in which it has heretofore been
carried on, which licenses and permits have been maintained and continue
to be in good standing except where the failure to obtain or maintain such
licenses or permits would not have a material adverse effect on the
NewCardio Business;
|
|
(x)
|
Applicable Laws
. NewCardio has not been charged with or received notice of breach of any
laws, ordinances, statutes, regulations, by-laws, orders or decrees to
which they are subject or which applies to them the violation of which
would have a material adverse effect on the NewCardio Business, and, to
the knowledge of the NewCardio Shareholders, NewCardio is not in breach of
any laws, ordinances, statutes, regulations, by-laws, orders or decrees
the contravention of which would result in a material adverse impact on
the NewCardio Business;
|
|
(y)
|
Pending or Threatened
Litigation . There is no material litigation or administrative or
governmental proceeding pending or threatened against or relating to
NewCardio, the NewCardio Business, or any of the NewCardio Assets, nor do
the NewCardio Shareholders have any knowledge of any deliberate act or
omission of NewCardio that would form any material basis for any such
action or proceeding;
|
|
(z)
|
No Bankruptcy .
NewCardio has not made any voluntary assignment or proposal under
applicable laws relating to insolvency and bankruptcy and no bankruptcy
petition has been filed or presented against NewCardio and no order has
been made or a resolution passed for the winding-up, dissolution or
liquidation of NewCardio;
|
- 19
-
|
(aa)
|
Labor Matters .
NewCardio is not party to any collective agreement relating to the
NewCardio Business with any labor union or other association of employees
and no part of the NewCardio Business has been certified as a unit
appropriate for collective bargaining or, to the knowledge of the
NewCardio Shareholders, has made any attempt in that
regard;
|
|
(bb)
|
Finder's Fees .
NewCardio is not a party to any agreement which provides for the payment
of finder's fees, brokerage fees, commissions or other fees or amounts
which are or may become payable to any third party in connection with the
execution and delivery of this Agreement and the transactions contemplated
herein;
|
Execution
and Performance of Agreement
|
(cc)
|
Authorization and
Enforceability . The execution and delivery of this Agreement, and
the completion of the transactions contemplated hereby, have been duly and
validly authorized by all necessary corporate action on the part of
NewCardio;
|
|
(dd)
|
No Violation or
Breach . The execution and performance of this Agreement will
not
|
|
(i)
|
violate
the charter documents of NewCardio or result in any breach of, or default
under, any loan agreement, mortgage, deed of trust, or any other agreement
to which NewCardio is a party,
|
|
(ii)
|
give
any person any right to terminate or cancel any agreement including,
without limitation, NewCardio Material Contracts, or any right or rights
enjoyed by NewCardio,
|
|
(iii)
|
result
in any alteration of NewCardio's obligations under any agreement to which
NewCardio is a party including, without limitation, the NewCardio Material
Contracts,
|
|
(iv)
|
result
in the creation or imposition of any lien, encumbrance or restriction of
any nature whatsoever in favor of a third party upon or against the
NewCardio Assets,
|
|
(v)
|
result
in the imposition of any tax liability to NewCardio relating to NewCardio
Assets or the NewCardio Shares, or
|
|
(vi)
|
violate
any court order or decree to which either NewCardio is
subject;
|
NewCardio
Assets - Ownership and Condition
|
(ee)
|
Business Assets
. The NewCardio Assets, comprise all of the property and assets of the
NewCardio Business, and neither the NewCardio Shareholders nor any other
person, firm or corporation owns any assets used by NewCardio in operating
the NewCardio Business, whether under a lease, rental agreement or other
arrangement, other than as disclosed in Schedules “N” or “Q”
hereto;
|
|
(ff)
|
Title .
NewCardio is the legal and beneficial owner of the NewCardio Assets, free
and clear of all mortgages, liens, charges, pledges, security interests,
encumbrances or other claims whatsoever, save and except as disclosed in
Schedules “N” or “Q” hereto;
|
- 20
-
|
|
|
|
(gg)
|
No Option . No
person, firm or corporation has any agreement or option or a right capable
of becoming an agreement for the purchase of any of the NewCardio
Assets;
|
|
(hh)
|
NewCardio Insurance
Policies . NewCardio maintains the public liability insurance and
insurance against loss or damage to the NewCardio Assets and the NewCardio
Business as described in Schedule “P”
hereto;
|
|
(ii)
|
NewCardio Material
Contracts . The NewCardio Material Contracts listed in Schedule “R”
constitute all of the material contracts of
NewCardio;
|
|
(jj)
|
No Default .
There has not been any default in any material obligation of NewCardio or
any other party to be performed under any of NewCardio Material Contracts,
each of which is in good standing and in full force and effect and
unamended (except as disclosed in Schedule “R”), and NewCardio is not
aware of any default in the obligations of any other party to any of the
NewCardio Material Contracts;
|
|
(kk)
|
No Compensation on
Termination . There are no agreements, commitments or
understandings relating to severance pay or separation allowances on
termination of employment of any employee of NewCardio. NewCardio is not
obliged to pay benefits or share profits with any employee after
termination of employment except as required by
law;
|
NewCardio
Assets - NewCardio Equipment
|
(ll)
|
NewCardio
Equipment . The NewCardio Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such equipment is
in good working condition;
|
NewCardio
Assets - NewCardio Goodwill and Other Assets
|
(mm)
|
NewCardio
Goodwill . NewCardio carries on the NewCardio Business only under
the name " NewCardio Technologies, Inc. " and variations thereof and under
no other business or trade names. The NewCardio Shareholders do not have
any knowledge of any infringement by NewCardio of any patent, trademark,
copyright or trade secret;
|
|
|
The
Business of NewCardio
|
|
(nn)
|
Maintenance of
Business . Since the date of the NewCardio Financial Statements,
the NewCardio Business has been carried on in the ordinary course and
NewCardio has not entered into any material agreement or commitment except
in the ordinary course; and
|
|
(oo)
|
Subsidiaries .
NewCardio does not own any subsidiaries and does not otherwise own,
directly or indirectly, any shares or interest in any other corporation,
partnership, joint venture or firm and NewCardio does not own any
subsidiary and does not otherwise own, directly or indirectly, any shares
or interest in any other corporation, partnership, joint venture or
firm.
|
- 21
-
|
|
|
|
|
NewCardio
Shareholder Representations and
Warranties
|
|
(pp)
|
Investment
Intent . The Acquisition Shares are being acquired hereunder by the
NewCardio Shareholders for investment purposes only, for their own
account, not as a nominee or agent and not with a view to the distribution
thereof. The NewCardio Shareholders have no present intention to sell or
otherwise dispose of the Acquisition Shares and they will not do so except
in compliance with the provisions of the Securities Act of 1933, as
amended, and applicable law. The NewCardio Shareholders understand that
the Acquisition Shares which may be acquired hereunder must be held by
them indefinitely unless a subsequent disposition or transfer of any of
said shares is registered under the Securities Act of 1933, as amended, or
is exempt from registration therefrom. The NewCardio Shareholders further
understand that the exemption from registration afforded by Rule 144 (the
provisions of which are known to such Seller) promulgated under the
Securities Act of 1933, as amended, depends on the satisfaction of various
conditions, and that, if and when applicable, Rule 144 may afford the
basis for sales only in limited
amounts.
|
|
(qq)
|
Investment Experience;
Suitability . The NewCardio Shareholders are each sophisticated
investors familiar with the type of risks inherent in the acquisition of
securities such as the Acquisition Shares and the NewCardio Shareholders’
financial position is such that the NewCardio Shareholders can afford to
retain the shares of Acquisition Shares for an indefinite period of time
without realizing any direct or indirect cash return on its
investment.
|
|
(rr)
|
Accreditation .
The NewCardio Shareholders are each an “accredited investor” within the
meaning of Rule 501(a) of Regulation D promulgated under the Securities
Act of 1933, as amended. The NewCardio Shareholders understand that the
Acquisition Shares are being offered to them in reliance upon specific
exemptions from the registration requirements of United States federal and
state securities laws and that Marine Park is relying upon the truth and
accuracy of, and the NewCardio Shareholders’ compliance with, the
representations, warranties, agreements, acknowledgments and
understandings of the NewCardio Shareholders set forth herein in order to
determine the availability of such exemptions and the eligibility of the
NewCardio Shareholders to acquire the Acquisition
Shares.
|
Non-Merger
and Survival
5.2
The representations and warranties of NewCardio contained herein will be
true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by Marine Park, the
representations and warranties of NewCardio shall survive the
Closing.
- 22
-
Indemnity
5.3
NewCardio and the NewCardio Shareholders agree to indemnify and save
harmless Marine Park from and against any and all claims, demands, actions,
suits, proceedings, assessments, judgments, damages, costs, losses and expenses,
including any payment made in good faith in settlement of any claim
(collectively, the “Claims”) (subject to the right of the NewCardio Shareholders
to defend any such claim), resulting from the breach by any of them of any
representation or warranty of such party made under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by NewCardio or the NewCardio Shareholders to
Marine Park hereunder; provided, however, the NewCardio Shareholders shall not
be required to indemnify Marine Park for any such Claims in excess of the value
of the NewCardio Shares.
ARTICLE
6
COVENANTS
OF NEWCARDIO AND
THE
NEWCARDIO SHAREHOLDERS
Covenants
6.1
NewCardio and the NewCardio Shareholders covenant and agree with Marine
Park that they will:
|
(a)
|
Conduct of
Business . Until the Closing, conduct the NewCardio Business
diligently and in the ordinary course consistent with the manner in which
the NewCardio Business generally has been operated up to the date of
execution of this Agreement;
|
|
(b)
|
Preservation of
Business . Until the Closing, use their best efforts to preserve
the NewCardio Business and the NewCardio Assets and, without limitation,
preserve for Marine Park NewCardio’s relationships with their suppliers,
customers and others having business relations with
them;
|
|
(c)
|
Access . Until
the Closing, give Marine Park and its representatives full access to all
of the properties, books, contracts, commitments and records of NewCardio
relating to NewCardio, the NewCardio Business and the NewCardio Assets,
and furnish to Marine Park and its representatives all such information as
they may reasonably request; and
|
|
(d)
|
Procure
Consents . Until the Closing, take all reasonable steps required to
obtain, prior to Closing, any and all third party consents required to
permit the Acquisition and to preserve and maintain the NewCardio Assets,
including the NewCardio Material Contracts, notwithstanding the change in
control of NewCardio arising from the
Acquisition.
|
Authorization
6.2
NewCardio hereby agrees to authorize and direct any and all federal,
state, municipal, foreign and international governments and regulatory
authorities having jurisdiction respecting NewCardio to release any and all
information in their possession respecting NewCardio to Marine Park. NewCardio
shall promptly execute and deliver to Marine Park any and all consents to the
release of information and specific authorizations which Marine Park reasonably
require to gain access to any and all such information.
- 23
-
Survival
6.3
The covenants set forth in this Article shall survive the Closing for the
benefit of Marine Park.
ARTICLE
7
CONDITIONS
PRECEDENT
Conditions
Precedent in favor of Marine Park
7.1
Marine Park’s obligations to carry out the transactions contemplated
hereby are subject to the fulfillment of each of the following conditions
precedent on or before the Closing:
|
(a)
|
all
documents or copies of documents required to be executed and delivered to
Marine Park hereunder will have been so executed and
delivered;
|
|
(b)
|
all
of the terms, covenants and conditions of this Agreement to be complied
with or performed by NewCardio or the NewCardio Shareholders at or prior
to the Closing will have been complied with or
performed;
|
|
(c)
|
title
to the NewCardio Shares held by the NewCardio Shareholders will be free
and clear of all mortgages, liens, charges, pledges, security interests,
encumbrances or other claims whatsoever, save and except as disclosed
herein, and the NewCardio Shares shall be duly transferred to Marine
Park;
|
|
(d)
|
subject
to Article 8 hereof, there will not have
occurred
|
|
(i)
|
any
material adverse change in the financial position or condition of
NewCardio, its liabilities or the NewCardio Assets or any damage, loss or
other change in circumstances materially and adversely affecting
NewCardio, the NewCardio Business or the NewCardio Assets or NewCardio's
right to carry on the NewCardio Business, other than changes in the
ordinary course of business, none of which has been materially adverse,
or
|
|
(ii)
|
any
damage, destruction, loss or other event, including changes to any laws or
statutes applicable to NewCardio or the NewCardio Business (whether or not
covered by insurance) materially and adversely affecting NewCardio, the
NewCardio Business or the NewCardio
Assets;
|
|
(e)
|
the
transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof,
if any; and
|
|
(f)
|
the
transactions contemplated hereby shall have been approved by the board of
directors of NewCardio.
|
Waiver
by Marine Park
7.2
The conditions precedent set out in the preceding section are inserted
for the exclusive benefit of Marine Park and any such condition may be waived in
whole or in part by Marine Park at or prior to the Closing by delivering to
NewCardio a written waiver to that effect signed by Marine Park. In the event
that the conditions precedent set out in the preceding section are not satisfied
on or before the Closing, Marine Park shall be released from all obligations
under this Agreement.
- 24
-
Conditions
Precedent in Favor of NewCardio and the NewCardio Shareholders
7.3
The obligations of NewCardio and the NewCardio Shareholders to carry out
the transactions contemplated hereby are subject to the fulfillment of each of
the following conditions precedent on or before the Closing:
|
(a)
|
all
documents or copies of documents required to be executed and delivered to
NewCardio under Section 9 will have been so executed and
delivered;
|
|
(b)
|
all
of the terms, covenants and conditions of this Agreement to be complied
with or performed by Marine Park at or prior to the Closing will have been
complied with or performed;
|
|
(c)
|
Marine
Park will have delivered the Acquisition Shares to be issued pursuant to
the terms of the Acquisition to NewCardio at the Closing and the
Acquisition Shares will be registered on the books of Marine Park in the
name of the holder of NewCardio Shares at the time of
Closing;
|
|
(d)
|
title
to the Acquisition Shares will be free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims
whatsoever;
|
|
(e)
|
subject
to Article 8 hereof, there will not have
occurred
|
|
(i)
|
any
material adverse change in the financial position or condition of Marine
Park, its subsidiaries, their liabilities or the Marine Park Assets or any
damage, loss or other change in circumstances materially and adversely
affecting Marine Park, the Marine Park Business or the Marine Park Assets
or Marine Park’ right to carry on the Marine Park Business, other than
changes in the ordinary course of business, none of which has been
materially adverse, or
|
|
(ii)
|
any
damage, destruction, loss or other event, including changes to any laws or
statutes applicable to Marine Park or the Marine Park Business (whether or
not covered by insurance) materially and adversely affecting Marine Park,
its subsidiaries, the Marine Park Business or the Marine Park
Assets;
|
|
(f)
|
the
transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof,
if any;
|
|
(g)
|
the
transactions contemplated hereby shall have been approved by the board of
directors of Marine Park;
|
|
(g)
|
each
of the directors and officers of Marine Park shall have resigned as
directors and/or officers of Marine
Park;
|
|
(h)
|
the
nominees of the NewCardio Shareholders, set forth on Exhibit “C,” annexed
hereto, shall have been appointed as members of the board of directors of
Marine Park.
|
- 25
-
Waiver
by NewCardio and the NewCardio Shareholders
7.4
The conditions precedent set out in the preceding section are inserted
for the exclusive benefit of NewCardio and the NewCardio Shareholders and any
such condition may be waived in whole or in part by NewCardio or the NewCardio
Shareholders at or prior to the Closing by delivering to Marine Park a written
waiver to that effect signed by NewCardio and the NewCardio Shareholders. In the
event that the conditions precedent set out in the preceding section are not
satisfied on or before the Closing, NewCardio and the NewCardio Shareholders
shall be released from all obligations under this Agreement.
Nature
of Conditions Precedent
7.5
The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $10.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favor of the other party or parties set forth in this
Article.
Termination
7.6
Notwithstanding any provision herein to the contrary, if the Closing does
not occur on or before January 5, 2008 (the “Termination Date”), this Agreement
will be at an end and will have no further force or effect, unless otherwise
agreed upon by the parties in writing.
Confidentiality
7.7
Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from NewCardio and Marine
Park and the contents thereof confidential and not utilize nor reveal or release
same, provided, however, that Marine Park will be required to issue a news
release regarding the execution and consummation of this Agreement and file a
Current Report on Form 8-K with the Securities and Exchange Commission
respecting the proposed Acquisition contemplated hereby together with such other
documents as are required to maintain the currency of Marine Park’s filings with
the Securities and Exchange Commission.
ARTICLE
8
RISK
Material
Change in the Business of NewCardio
8.1
If any material loss or damage to the NewCardio Business occurs prior to
Closing and such loss or damage, in Marine Park' reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, Marine Park shall,
within two (2) days following any such loss or damage, by notice in writing to
NewCardio, at its option, either:
|
(a)
|
terminate
this Agreement, in which case no party will be under any further
obligation to any other party; or
|
|
(b)
|
elect
to complete the Acquisition and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the proceeds
of all insurance covering such loss or damage will, as a condition
precedent to Marine Park' obligations to carry out the transactions
contemplated hereby, be vested in NewCardio or otherwise adequately
secured to the satisfaction of Marine Park on or before the Closing
Date.
|
- 26
-
Material
Change in the Marine Park Business
8.2
If any material loss or damage to the Marine Park Business occurs prior
to Closing and such loss or damage, in NewCardio's reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, NewCardio shall,
within two (2) days following any such loss or damage, by notice in writing to
Marine Park, at its option, either:
|
(a)
|
terminate
this Agreement, in which case no party will be under any further
obligation to any other party; or
|
|
(b)
|
elect
to complete the Acquisition and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the proceeds
of all insurance covering such loss or damage will, as a condition
precedent to NewCardio's obligations to carry out the transactions
contemplated hereby, be vested in Marine Park or otherwise adequately
secured to the satisfaction of NewCardio on or before the Closing
Date.
|
ARTICLE
9
CLOSING
Closing
9.1
The Acquisition and the other transactions contemplated by this Agreement
will be closed at the Place of Closing on Closing Date in accordance with the
closing procedure set out in this Article.
Documents
to be Delivered by NewCardio
9.2
On or before the Closing, NewCardio and the NewCardio Shareholders will
deliver or cause to be delivered to Marine Park:
|
(a)
|
the
original or certified copies of the charter documents of NewCardio,
including amendments thereof, and all corporate records documents and
instruments of NewCardio, the corporate seal of NewCardio and all books
and accounts of NewCardio;
|
|
(b)
|
all
reasonable consents or approvals required to be obtained by NewCardio for
the purposes of completing the Acquisition and preserving and maintaining
the interests of NewCardio under any and all NewCardio Material Contracts
and in relation to NewCardio
Assets;
|
|
(c)
|
certified
copies of such resolutions of the directors of NewCardio as are required
to be passed to authorize the execution, delivery and implementation of
this Agreement;
|
|
(d)
|
an
acknowledgement from NewCardio of the satisfaction of the conditions
precedent set forth in section 7.3
hereof;
|
|
(e)
|
the
certificates or other evidence of ownership of the NewCardio Shares,
together with such other documents or instruments required to effect
transfer of ownership of the NewCardio Shares to Marine
Park;
|
- 27
-
|
(f)
|
declaration
of acceptance by nominees of the NewCardio Shareholders set forth on
Exhibit “C” of being elected as members of the board of directors of
Marine Park, and
|
|
(g)
|
such
other documents as Marine Park may reasonably require to give effect to
the terms and intention of this
Agreement.
|
Documents
to be Delivered by Marine Park
9.3
On or before the Closing, Marine Park shall deliver or cause to be
delivered to NewCardio and the NewCardio Shareholders:
|
(a)
|
share
certificates representing the Acquisition Shares duly registered in the
names of the holders of shares of NewCardio Common
Stock;
|
|
(b)
|
certified
copies of such resolutions of the directors of Marine Park as are required
to be passed to authorize the execution, delivery and implementation of
this Agreement;
|
|
(c)
|
a
certified copy of a resolution of the directors of Marine Park dated as of
the Closing Date appointing the nominees of the NewCardio Shareholders set
forth on Exhibit “C” to the board of directors of Marine
Park;
|
|
(d)
|
resignations
of all of the officers and directors of Marine Park as of the Closing
Date;
|
|
(e)
|
an
acknowledgement from Marine Park of the satisfaction of the conditions
precedent set forth in section 7.1
hereof;
|
|
(f)
|
certificate
of incorporation and good standing certificate of Marine
Park;
|
|
(g)
|
the
Return to Treasury Agreements, duly executed by Marine Park and Harborview
Master Fund L.P. and Diverse Trading Ltd., along with all applicable share
certificates of Marine Park and any other documents required
thereunder;
|
|
(h)
|
the
Certificate of Designation, duly filed with the Secretary of State of
Delaware by Marine Park;
|
|
(i)
|
a
legal opinion of counsel to Marine Park, in substantially the form of
Exhibit “E” attached hereto; and
|
|
(j)
|
such
other documents as NewCardio may reasonably require to give effect to the
terms and intention of this
Agreement.
|
ARTICLE
10
POST-CLOSING
MATTERS
Forthwith
after the Closing, Marine Park, NewCardio and the NewCardio Shareholders, as the
case may be, agree to use all their best efforts to:
|
(a)
|
file
a Form 8-K with the Securities and Exchange Commission disclosing the
terms of this Agreement within 4 days of the Closing which includes the
audited financial statements of NewCardio as well as pro forma financial
information of NewCardio and Marine Park as required by Item 310 of
Regulation SB as promulgated by the Securities and Exchange Commission;
and
|
- 28
-
|
|
|
|
(b)
|
change
the name of Marine Park to such other name as determined by the board of
directors of Marine Park.
|
ARTICLE
11
GENERAL
PROVISIONS
Arbitration
11.1
The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by negotiation
in good faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in the City of New York, New
York.
Notice
11.2
Any notice required or permitted to be given by any party will be deemed
to be given when in writing and delivered to the address for notice of the
intended recipient by personal delivery, prepaid single certified or registered
mail, or telecopier. Any notice delivered by mail shall be deemed to have been
received on the fourth business day after and excluding the date of mailing,
except in the event of a disruption in regular postal service in which event
such notice shall be deemed to be delivered on the actual date of receipt. Any
notice delivered personally or by telecopier shall be deemed to have been
received on the actual date of delivery.
Addresses
for Service
11.3
The address for service of notice of each of the parties hereto is as
follows:
|
(a)
|
Marine
Park:
|
850 Xxxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxx,
Xxx Xxxx 00000
Xxtention:
Xxxxx Xxxxxxxxx
Telephone
no. (000) 000-0000
Facsimile
no.
With a
copy to:
Xxxxxx
& Jaclin, LLP
195 Xxxxx
0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxx Xxxxxx 00000
Xxtn:
Xxxxx X. Xxxxxx, Esq.
Telephone
no. (000) 000-0000
Facsimile
no. (000) 000-0000
|
(b)
|
NewCardio
or the NewCardio Shareholders:
|
2033
Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx,
Xxxxxxxxxx 00000
Xxtention:
Telephone
no.
Facsimile
no.
- 29
-
With a
copy to:
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
1065
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Xxtn:
Xxxx Xxxx, Esq.
Phone:
(000) 000-0000
Telecopier:
(000) 000-0000
Change
of Address
11.4
Any party may, by notice to the other parties change its address for
notice to some other address in North America and will so change its address for
notice whenever the existing address or notice ceases to be adequate for
delivery by hand. A post office box may not be used as an address for
service.
Further
Assurances
11.5
Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
Time
of the Essence
11.6
Time is expressly declared to be the essence of this
Agreement.
Entire
Agreement
11.7
The provisions contained herein constitute the entire agreement among
NewCardio, the NewCardio Shareholders and Marine Park respecting the subject
matter hereof and supersede all previous communications, representations and
agreements, whether verbal or written, among NewCardio, the NewCardio
Shareholders and Marine Park with respect to the subject matter
hereof.
Enurement
11.8
This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
Assignment
11.9
This Agreement is not assignable without the prior written consent of the
parties hereto.
Counterparts
11.10
This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
- 30
-
Applicable
Law
11.11
This Agreement shall be enforced, governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely within such state, without regard to the principles of
conflict of laws The parties hereto hereby submit to the exclusive jurisdiction
of the United States federal courts located in New York, New York with respect
to any dispute arising under this Agreement, the agreements entered into in
connection herewith or the transactions contemplated hereby or thereby. All
parties irrevocably waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding. All parties further agree that service
of process upon a party mailed by first class mail shall be deemed in every
respect effective service of process upon the party in any such suit or
proceeding. Nothing herein shall affect either party’s right to serve process in
any other manner permitted by law. All parties agree that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
The party which does not prevail in any dispute arising under this Agreement
shall be responsible for all fees and expenses, including attorneys’ fees,
incurred by the prevailing party in connection with such dispute.
[Remainder
of page intentionally left blank.]
- 31
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| MARINE PARK HOLDINGS, INC. | |
|
/s/
Xxxxx Xxxxxxxxx
|
|
|
Xxxxx
Xxxxxxxxx
|
|
|
President,
Chief Executive Officer and
|
|
|
Chief
Financial Officer
|
|
|
By:
|
/s/
Xxxxxxxxx Xxxxxx
|
|
President
and Chief Executive Officer
|
|
[Signature
page to Share Exchange Agreement]
Exhibit
A
|
Name
|
NewCardio
Shares
|
Marine
Park
Shares
|
||
RETURN
TO TREASURY AGREEMENT
THIS AGREEMENT is made as of
the ___ day of December , 2007
BETWEEN:
MARINE PARK HOLDINGS, INC., a
corporation formed pursuant to the laws of the State of Delaware and having an
office for business at 850 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(xxe “Company”)
|
|
AND:
|
HARBORVIEW MASTER FUND L.P. ,
a British Virgin Islands limited partnership and having an office for business
at 850 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (xxe
“Shareholder”).
|
|
WHEREAS:
|
A. The Shareholder is
the registered and beneficial owner of 9,830,600 shares of the Company’s common
stock.
B. The Company has
entered into a Share Exchange Agreement with NewCardio, Inc., a Delaware
corporation, and certain other parties (the “Merger Agreement”).
C. As a condition to
the aforementioned Merger Agreement, the Shareholder has agreed to return Nine
Million Three Hundred Twenty Five Thousand (9,325,000) shares of the Company’s
common stock (the “Surrendered Shares”) held by them to the treasury of the
Company for the sole purpose of the Company retiring the Surrendered
Shares.
NOW THEREFORE THIS AGREEMENT
WITNESSETH THAT in consideration of the premises and sum of $1.00 now
paid by the Company to the Shareholder, the receipt and sufficiency whereof is
hereby acknowledged, the parties hereto hereby agree as follows:
Surrender
of Shares
1.
The Shareholder hereby surrenders to the Company the Surrendered Shares by
delivering to the Company herewith a share certificate or certificates
representing the Shares, duly endorsed for transfer in blank, The Company hereby
acknowledges receipt from the Shareholder of the certificates for the sole
purpose of retiring the Surrendered Shares.
Retirement
of Shares
2.
The Company agrees, subject to section 3 hereof, to forthwith after the closing
of the Merger Agreement to retire the Surrendered Shares pursuant to §243 of the
Delaware General Corporation Law.
Condition
Precedent
3.
Notwithstanding any other provision herein, in the event that the transactions
contemplated by the Merger Agreement do not close on or before the deadline set
forth is said Merger Agreement, this Agreement shall terminate and the Company
shall forthwith return to the Shareholder the certificates representing the
Surrendered Shares.
Representations
and Warranties
4.
The Shareholder represents and warrants to the Company that it is the owner of
the Surrendered Shares and that it has good and marketable title to the
Surrendered Shares and that the Surrendered Shares are free and clear of all
liens, security interests or pledges of any kind whatsoever.
General
5.
Each of the parties will execute and deliver such further and other documents
and do and perform such further and other acts as any other party may reasonably
require to carry out and give effect to the terms and intention of this
Agreement.
6.
Time is expressly declared to be the essence of this Agreement.
7.
The provisions contained herein constitute the entire agreement among the
Company and the Shareholder respecting the subject matter hereof and supersede
all previous communications, representations and agreements, whether verbal or
written, among the Company and the Shareholder with respect to the subject
matter hereof.
8.
This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
9.
This Agreement is not assignable without the prior written consent of the
parties hereto.
10.
This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
IN WITNESS WHEREOF the parties
have executed this Agreement effective as of the day and year first above
written.
|
MARINE
PARK HOLDINGS, INC.
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDER:
|
|
|
HARBORVIEW
MASTER FUND L.P.
|
|
|
By:
|
|
RETURN
TO TREASURY AGREEMENT
THIS AGREEMENT is made as of
the ___ day of December , 2007
BETWEEN:
MARINE PARK HOLDINGS, INC., a
corporation formed pursuant to the laws of the State of Delaware and having an
office for business at 850 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(xxe “Company”)
|
|
AND:
|
DIVERSE TRADING LTD. , a
British Virgin Islands corporation and having an office for business at
_________________________ (the “Shareholder”).
|
|
WHEREAS:
|
A. The Shareholder is
the registered and beneficial owner of 1,000,000 shares of the Company’s common
stock.
B. The Company has
entered into a Share Exchange Agreement with NewCardio, Inc., a Delaware
corporation, and certain other parties (the “Merger Agreement”).
C. As a condition to
the aforementioned Merger Agreement, the Shareholder has agreed to return Sixty
Thousand Fifteen (60,015) shares of the Company’s common stock (the “Surrendered
Shares”) held by them to the treasury of the Company for the sole purpose of the
Company retiring the Surrendered Shares.
NOW THEREFORE THIS AGREEMENT
WITNESSETH THAT in consideration of the premises and sum of $1.00 now
paid by the Company to the Shareholder, the receipt and sufficiency whereof is
hereby acknowledged, the parties hereto hereby agree as follows:
Surrender
of Shares
1.
The Shareholder hereby surrenders to the Company the Surrendered Shares by
delivering to the Company herewith a share certificate or certificates
representing the Shares, duly endorsed for transfer in blank, The Company hereby
acknowledges receipt from the Shareholder of the certificates for the sole
purpose of retiring the Surrendered Shares.
Retirement
of Shares
2.
The Company agrees, subject to section 3 hereof, to forthwith after the closing
of the Merger Agreement to retire the Surrendered Shares pursuant to §243 of the
Delaware General Corporation Law and to deliver to the Shareholder a balance
Certificate free of restrictive legends. .
Condition
Precedent
3.
Notwithstanding any other provision herein, in the event that the transactions
contemplated by the Merger Agreement do not close on or before the deadline set
forth is said Merger Agreement, this Agreement shall terminate and the Company
shall forthwith return to the Shareholder the certificates representing the
Surrendered Shares.
Representations
and Warranties
4.
The Shareholder represents and warrants to the Company that it is the owner of
the Surrendered Shares and that it has good and marketable title to the
Surrendered Shares and that the Surrendered Shares are free and clear of all
liens, security interests or pledges of any kind whatsoever.
General
5.
Each of the parties will execute and deliver such further and other documents
and do and perform such further and other acts as any other party may reasonably
require to carry out and give effect to the terms and intention of this
Agreement.
6.
Time is expressly declared to be the essence of this Agreement.
7.
The provisions contained herein constitute the entire agreement among the
Company and the Shareholder respecting the subject matter hereof and supersede
all previous communications, representations and agreements, whether verbal or
written, among the Company and the Shareholder with respect to the subject
matter hereof.
8.
This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
9.
This Agreement is not assignable without the prior written consent of the
parties hereto.
IN WITNESS WHEREOF the parties
have executed this Agreement effective as of the day and year first above
written.
|
MARINE
PARK HOLDINGS, INC.
|
||
|
By:
|
|
|
|
|
||
|
|
||
|
|
||
|
SHAREHOLDER:
|
||
|
DIVERSE
TRADING LTD.
|
||
|
By:
|
||
- 2
-
Exhibit
C
Director
Nominees
|
·
|
Xxxxxxxxx
Xxxxxx
|
|
·
|
Xxxxxx
Xxxxx – Chairman of the Board
|
Officer
Nominees
|
·
|
Xxxxxxxxx
Xxxxxx - President, Chief Executive Officer and
Secretary
|
Exhibit
D
MARINE
PARK HOLDINGS, INC.
CERTIFICATE
OF DESIGNATION OF PREFERENCES,
RIGHTS
AND LIMITATIONS
OF
SERIES
A 10% CONVERTIBLE PREFERRED STOCK
PURSUANT
TO SECTION 151 OF THE
DELAWARE
GENERAL CORPORATION LAW
The
undersigned, __________ and ____________, do hereby certify that:
1. They
are the President and Secretary, respectively, of Marine Park Holdings, Inc., a
Delaware corporation (the “Corporation”).
2. The
Corporation is authorized to issue 1,000,000 shares of preferred stock, none of
which have been issued.
3. The
following resolutions were duly adopted by the board of directors of the
Corporation (the “Board of
Directors”):
WHEREAS,
the certificate of incorporation of the Corporation provides for a class of its
authorized stock known as preferred stock, comprised of 1,000,000 shares, $0.001
par value per share, issuable from time to time in one or more
series;
WHEREAS,
the Board of Directors is authorized to fix the dividend rights, dividend rate,
voting rights, conversion rights, rights and terms of redemption and liquidation
preferences of any wholly unissued series of preferred stock and the number of
shares constituting any series and the designation thereof, of any of them;
and
WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as
aforesaid, to fix the rights, preferences, restrictions and other matters
relating to a series of the preferred stock, which shall consist of, except as
otherwise set forth in the Purchase Agreement, up to 12,000 shares of the
preferred stock which the Corporation has the authority to issue, as
follows:
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for
the issuance of a series of preferred stock for cash or exchange of other
securities, rights or property and does hereby fix and determine the rights,
preferences, restrictions and other matters relating to such series of preferred
stock as follows:
1
TERMS
OF PREFERRED STOCK
Section
1. Definitions. Capitalized terms used and not
otherwise defined herein that are defined in the Purchase Agreement shall have
the meanings given such terms in the Purchase Agreement. For the purposes
hereof, the following terms shall have the following
meanings:
“Alternate
Consideration” shall have the meaning set forth in Section
7(e).
“Bankruptcy Event”
means any of the following events: (a) the Corporation or any Significant
Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof
commences a case or other proceeding under any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction relating to the Corporation or
any Significant Subsidiary thereof; (b) there is commenced against the
Corporation or any Significant Subsidiary thereof any such case or proceeding
that is not dismissed within 60 days after commencement; (c) the Corporation or
any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any
order of relief or other order approving any such case or proceeding is entered;
(d) the Corporation or any Significant Subsidiary thereof suffers any
appointment of any custodian or the like for it or any substantial part of its
property that is not discharged or stayed within 60 calendar days after such
appointment; (e) the Corporation or any Significant Subsidiary thereof makes a
general assignment for the benefit of creditors; (f) the Corporation or any
Significant Subsidiary thereof calls a meeting of its creditors with a view to
arranging a composition, adjustment or restructuring of its debts; or (g) the
Corporation or any Significant Subsidiary thereof, by any act or failure
to act, expressly indicates its consent to, approval of or acquiescence in any
of the foregoing or takes any corporate or other action for the purpose of
effecting any of the foregoing.
“Base Conversion
Price” shall have the meaning set forth in Section 7(b).
“Business Day” means
any day except Saturday, Sunday, any day which shall be a federal legal holiday
in the United States or any day on which banking institutions in the State of
New York are authorized or required by law or other governmental action to
close.
“Buy-In” shall have
the meaning set forth in Section 6(e)(iii).
2
“Change of Control
Transaction” means the occurrence after the date of the Merger (as
defined in the Purchase Agreement) and after giving effect to the issuance of
the Preferred Stock as provided in the Purchase Agreement of any of (i) an
acquisition after the date hereof by an individual, legal entity or “group” (as
described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital stock of the
Corporation, by contract or otherwise) of in excess of 33% of the voting
securities of the Corporation (other than by means of conversion or exercise of
Preferred Stock and the Securities issued together with the Preferred Stock), or
(ii) the Corporation merges into or consolidates with any other Person, or any
Person merges into or consolidates with the Corporation and, after giving effect
to such transaction, the stockholders of the Corporation immediately prior to
such transaction own less than 66% of the aggregate voting power of the
Corporation or the successor entity of such transaction, or (iii) the
Corporation sells or transfers all or substantially all of its assets to another
Person and the stockholders of the Corporation immediately prior to such
transaction own less than 66% of the aggregate voting power of the acquiring
entity immediately after the transaction, or (iv) a replacement at one time or
within a one year period of more than one-half of the members of the
Corporation’s board of directors which is not approved by a majority of those
individuals who are members of the board of directors on the date hereof (or by
those individuals who are serving as members of the board of directors on any
date whose nomination to the board of directors was approved by a majority of
the members of the board of directors who are members on the date hereof), or
(v) the execution by the Corporation of an agreement to which the Corporation is
a party or by which it is bound, providing for any of the events set forth in
clauses (i) through (iv) above.
“Closing Date” means
the Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto and all conditions precedent to (i)
each Holder’s obligations to pay the Subscription Amount and (ii) the
Corporation’s obligations to deliver the Securities have been satisfied or
waived.
“Commission” means the
Securities and Exchange Commission.
“Common Stock” means
the Corporation’s common stock, par value $0.001 per share, and stock of any
other class of securities into which such securities may hereafter be
reclassified or changed into.
“Common Stock
Equivalents” means any securities of the Corporation or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
“Conversion Amount”
means the sum of the Stated Value at issue.
“Conversion Date”
shall have the meaning set forth in Section 6(a).
“Conversion Price”
shall have the meaning set forth in Section 6(b).
“Conversion Shares”
means, collectively, the shares of Common Stock issuable upon conversion of the
shares of Preferred Stock in accordance with the terms hereof.
3
“Conversion Shares
Registration Statement” means a registration statement that registers the
resale of all Conversion Shares of the Holders, who shall be named as a “selling
stockholder” therein and meets the requirements of the Registration Rights
Agreement.
“Dilutive Issuance”
shall have the meaning set forth in Section 7(b).
“Dilutive Issuance
Notice” shall have the meaning set forth in Section 7(b).
“Dividend Payment
Date” shall have the meaning set forth in Section 3(a).
“Dividend Share
Amount” shall have the meaning set forth in Section 3(a).
“Effective Date” means
the date that the Conversion Shares Registration Statement is declared effective
by the Commission.
“Equity Conditions”
means, during the period in question, (i) the Corporation shall have duly
honored all conversions scheduled to occur or occurring by virtue of one or more
Notices of Conversion of the applicable Holder on or prior to the dates so
requested or required, if any, (ii) the Corporation shall have paid all
liquidated damages and other amounts owing to the applicable Holder in respect
of the Preferred Stock, (iii) there is an effective Conversion Shares
Registration Statement pursuant to which the Holders are permitted to utilize
the prospectus thereunder to resell all of the shares of Common Stock issuable
pursuant to conversion of the Preferred Stock (and the Corporation believes, in
good faith, that such effectiveness will continue uninterrupted for the
foreseeable future), (iv) the Common Stock is trading on a Trading Market and
all of the shares issuable upon conversion of the Preferred Stock are listed for
trading on such Trading Market (and the Corporation believes, in good faith,
that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (v) there is a sufficient number of authorized, but
unissued and otherwise unreserved, shares of Common Stock for the issuance of
all of the shares of Common Stock issuable pursuant to the Transaction
Documents, (vi) there is no existing Triggering Event or no existing event
which, with the passage of time or the giving of notice, would constitute a
Triggering Event, (vii) the issuance of the shares in question (or, in the case
of a Forced Conversion, the shares issuable upon conversion in full of the
Forced Conversion amount) to the applicable Holder would not violate the
limitations set forth in Section 6(c), (viii) there has been no public
announcement of a pending or proposed Fundamental Transaction or Change of
Control Transaction that has not been consummated, and (ix) the applicable
Holder is not in possession of any information provided by the Company that
constitutes, or may constitute, material non-public information.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
4
“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Corporation pursuant to the Employee Stock Option
Plan (as defined in the Purchase Agreement), (b) securities upon the exercise of
or conversion of any securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of the Purchase Agreement, provided that such
securities have not been amended since the date of the Purchase Agreement to
increase the number of such securities or to decrease the exercise or conversion
price of any such securities, and (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors,
provided that any such issuance shall only be to a Person which is, itself or
through its subsidiaries, an operating company in a business synergistic with
the business of the Corporation and shall provide to the Corporation additional
benefits in addition to the investment of funds, but shall not include a
transaction in which the Corporation is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities.
“Forced Conversion”
means a conversion of the Preferred Stock into Common Stock by the Company in
accordance with Section 8.
“Forced Conversion
Amount” means the sum of (i) the aggregate Stated Value then outstanding,
(ii) accrued but unpaid dividends and (iii) all liquidated damages and other
amounts due in respect of the Preferred Stock.
“Forced Conversion
Date” shall have the meaning set forth in Section 8.
“Forced Conversion
Notice” shall have the meaning set forth in Section 8.
“Forced Conversion Notice
Date” shall have the meaning set forth in Section 8.
“Fundamental
Transaction” shall have the meaning set forth in Section
7(e).
“Holder” shall have
the meaning given such term in Section 2.
“Junior Securities”
means the Common Stock and all other Common Stock Equivalents of the Corporation
other than those securities which are explicitly senior or pari passu to the
Preferred Stock in dividend rights or liquidation preference.
“Liquidation” shall
have the meaning set forth in Section 5.
“New York Courts”
shall have the meaning set forth in Section 11(d).
“Notice of Conversion”
shall have the meaning set forth in Section 6(a).
“Original Issue Date”
means the date of the first issuance of any shares of the Preferred Stock
regardless of the number of transfers of any particular shares of Preferred
Stock and regardless of the number of certificates which may be issued to
evidence such Preferred Stock.
5
“Permitted
Indebtedness” means (a) the Indebtedness existing on the Original Issue
Date and set forth on Schedule 3.1(aa)
attached to the Purchase Agreement and (b) lease obligations and purchase money
indebtedness of up to $100,000, in the aggregate, incurred in connection with
the acquisition of capital assets and lease obligations with respect to newly
acquired or leased assets.
“Permitted Lien” means
the individual and collective reference to the following: (a) Liens for taxes,
assessments and other governmental charges or levies not yet due or Liens for
taxes, assessments and other governmental charges or levies being contested in
good faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Corporation) have been established
in accordance with GAAP; (b) Liens imposed by law which were incurred in the
ordinary course of the Corporation’s business, such as carriers’, warehousemen’s
and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens
arising in the ordinary course of the Corporation’s business, and which (x) do
not individually or in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the operation of the
business of the Corporation and its consolidated Subsidiaries or (y) which are
being contested in good faith by appropriate proceedings, which proceedings have
the effect of preventing for the foreseeable future the forfeiture or sale of
the property or asset subject to such Lien; and (c) Liens incurred in connection
with Permitted Indebtedness under clause (b) thereunder, provided that such
Liens are not secured by assets of the Corporation or its Subsidiaries other
than the assets so acquired or leased.
“Preferred Stock”
shall have the meaning set forth in Section 2.
“Purchase Agreement”
means the Securities Purchase Agreement, dated as of the Original Issue Date, to
which the Corporation and the original Holders are parties, as amended, modified
or supplemented from time to time in accordance with its terms.
“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the date
of the Purchase Agreement, to which the Corporation and the original Holder are
parties, as amended, modified or supplemented from time to time in accordance
with its terms.
“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Share Delivery Date”
shall have the meaning set forth in Section 6(e).
“Stated Value” shall
have the meaning set forth in Section 2, as the same may be increased pursuant
to Section 3.
6
“Subscription Amount”
means, as to each Purchaser, the amount in United States Dollars and in
immediately available funds to be paid for the Preferred Stock purchased
pursuant to the Purchase Agreement as specified below such Purchaser’s name on
the signature page of the Purchase Agreement and next to the heading
“Subscription Amount.”
“Subsidiary” shall
have the meaning set forth in the Purchase Agreement.
“Trading Day” means a
day on which the New York Stock Exchange is open for business.
“Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.
“Transaction
Documents” shall have the meaning set forth in the Purchase
Agreement.
“Triggering Event”
shall have the meaning set forth in Section 9(a).
“Triggering Redemption
Amount” means, for each share of Preferred Stock, the sum of (i) the
greater of (A) 120% of the Stated Value and (B) the product of (a) the VWAP on
the Trading Day immediately preceding the date of the Triggering Event and (b)
the Stated Value divided by the then Conversion Price, (ii) all accrued but
unpaid dividends thereon and (iii) all liquidated damages and other costs,
expenses or amounts due in respect of the Preferred Stock.
“Triggering Redemption
Payment Date” shall have the meaning set forth in Section
9(b).
“VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted for trading as reported by Bloomberg Financial L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)); (b) if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
quoted for trading on the OTC Bulletin Board and if prices for the Common Stock
are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a
similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Holders and reasonably
acceptable to the Corporation, the fees and expenses of which shall be paid by
the Corporation.
7
Section
2. Designation,
Amount and Par Value. The
series of preferred stock shall be designated as its Series A 10% Convertible
Preferred Stock (the “Preferred
Stock”) and the number of
shares so designated shall be up to 12,000 (which shall not be subject to
increase without the written consent of all of the holders of the Preferred
Stock (each, a “Holder” and collectively, the “Holders”)). Each share of Preferred Stock
shall have a par value of $0.001 per share and a stated value equal to $1,000,
subject to increase set forth in Section 3(a) below (the “Stated
Value”).
Section
3. Dividends.
a) Dividends in Cash or in
Kind. Holders shall be entitled to receive, and the Corporation shall
pay, cumulative dividends at the rate per share (as a percentage of the Stated
Value per share) of 10% per annum (subject to increase pursuant to Section
9(b)), payable quarterly
on January 1, April 1, July 1 and October 1, beginning on the first such date
after the Original Issue Date and on each Conversion Date (with respect only to
Preferred Stock being converted) (each such date, a “Dividend Payment
Date”) (if any Dividend Payment Date is not a Trading Day, the applicable
payment shall be due on the next succeeding Trading Day) in cash, or at the
Corporation’s option, in duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock as set forth in this Section 3(a), or a
combination thereof (the amount to be paid in shares of Common Stock, the “Dividend Share
Amount”). The form of dividend payments to each Holder shall be
determined in the following order of priority: (i) if funds are legally
available for the payment of dividends and the Equity Conditions have not been
met during the 20 consecutive Trading Days immediately prior to the applicable
Dividend Payment Date, in cash only; (ii) if funds are legally available for the
payment of dividends and the Equity Conditions have been met during the 20
consecutive Trading Days immediately prior to the applicable Dividend Payment
Date, at the sole election of the Corporation, in cash or shares of Common Stock
which shall be valued solely for such purpose (A) if not then effectively
registered for resale by the Holder, at 90% of the average of the VWAPs for the
20 consecutive Trading Days ending on the Trading Day that is immediately prior
to the Dividend Payment Date and (B) if then effectively registered for resale
by the Holder, at 100% of the average of the VWAPs for the 20 consecutive
Trading Days ending on the Trading Day that is immediately prior to the Dividend
Payment Date; (iii) if funds are not legally available for the payment of
dividends and the Equity Conditions have been met during the 20 consecutive
Trading Days immediately prior to the applicable Dividend Payment Date, in
shares of Common Stock which shall be valued solely for such purpose (A) if
not then effectively
registered for resale by the Holder, at 90% of the average of the VWAPs for the
20 consecutive Trading Days ending on the Trading Day that is immediately prior
to the Dividend Payment Date and (B) if then effectively registered for resale
by the Holder, at 100% of the average of the VWAPs for the 20 consecutive
Trading Days ending on the Trading Day that is immediately prior to the Dividend
Payment Date; and (iv) if funds are not legally available for the payment of
dividends and the Equity Conditions have not been met during the 20 consecutive
Trading Days immediately prior to the applicable Dividend Payment Date, then, at
the election of such Holder, (1) such dividends shall accrue to the next
Dividend Payment Date, (2) shall be accreted to, and increase, the outstanding
Stated Value, or (3) in shares of Common Stock which shall be valued solely for
such purpose (A) if not
then effectively registered for resale by the Holder, at 90% of the average of
the VWAPs for the 20 consecutive Trading Days ending on the Trading Day that is
immediately prior to the Dividend Payment Date and (B) if then effectively
registered for resale by the Holder, at 100% of the average of the VWAPs for the
20 consecutive Trading Days ending on the Trading Day that is immediately prior
to the Dividend Payment Date. The Holders shall have the same rights and
remedies with respect to the delivery of any such shares as if such shares were
being issued pursuant to Section 6. On the Closing Date, after giving effect to
the receipt by the Company of the proceeds from the sale of Preferred Stock
under the Purchase Agreement, the Corporation shall have notified the Holders
whether or not it may legally pay cash dividends as of the Closing Date. The
Corporation shall promptly notify the Holders at any time the Corporation shall
become able or unable, as the case may be, to legally pay cash dividends. If at
any time the Corporation has the right to pay dividends in cash or Common Stock,
the Corporation must provide the Holders with at least 20 Trading Days’ notice
of its election to pay a regularly scheduled dividend in Common Stock and
whether or not a registration statement
relating thereto is then effective (the Corporation may indicate in such notice
that the election contained in such notice shall continue for later periods
until revised by a subsequent notice). Dividends on the Preferred Stock shall be
calculated on the basis of a 360-day year, consisting of twelve 30 calendar day
periods, shall accrue daily commencing on the Original Issue Date, and shall be
deemed to accrue from such date whether or not earned or declared and whether or
not there are profits, surplus or other funds of the Corporation legally
available for the payment of dividends. Except as otherwise provided herein, if
at any time the Corporation pays dividends partially in cash and partially in
shares, then such payment shall be distributed ratably among the Holders based
upon the number of shares of Preferred Stock held by each Holder on such
Dividend Payment Date. Any dividends, whether paid in cash or shares of Common
Stock, that are not paid within three Trading Days following a Dividend Payment
Date shall continue to accrue and shall entail a late fee, which must be paid in
cash, at the rate of 18% per annum or the lesser rate permitted by applicable
law (such fees to accrue daily, from the Dividend Payment Date through and
including the date of payment). If at any time the Corporation delivers a notice
to the Holders of its election to pay the dividends in shares of Common Stock,
the Corporation shall timely file a prospectus supplement pursuant to Rule 424
disclosing such election.
8
b) So long as any Preferred Stock shall
remain outstanding, neither the Corporation nor any Subsidiary thereof shall
redeem, purchase or otherwise acquire directly or indirectly any Junior
Securities except as expressly permitted by Section 9(a)(ix). So long as any
Preferred Stock shall remain outstanding, neither the Corporation nor any
Subsidiary thereof shall directly or indirectly pay or declare any dividend or
make any distribution upon (other than a dividend or distribution described in
Section 6 or dividends due and paid in the ordinary course on preferred stock of
the Corporation at such times when the Corporation is in compliance with its
payment and other obligations hereunder), nor shall any distribution be made in
respect of, any Junior Securities as long as any dividends due on the Preferred
Stock remain unpaid, nor shall any monies be set aside for or applied to the
purchase or redemption (through a sinking fund or otherwise) of any Junior
Securities or shares pari passu with the Preferred
Stock.
9
c) The Corporation acknowledges and agrees
that the capital of the Corporation (as such term is used in Section 154 of the
Delaware General Corporation Law) in respect of the Preferred Stock and any
future issuances of the Corporation’s capital stock shall be equal to the
aggregate par value of such Preferred Stock or capital stock, as the case may
be, and that, on or after the date of the Purchase Agreement, it shall not
increase the capital of the Corporation with respect to any shares of the
Corporation’s capital stock issued and outstanding on such date. The Corporation
also acknowledges and agrees that it shall not create any special reserves under
Section 171 of the Delaware General Corporation Law without the prior written
consent of each Holder.
Section
4. Voting
Rights. Except as
otherwise provided herein or as otherwise required by law, the Preferred Stock
shall have no voting rights. However, as long as any shares of Preferred Stock
are outstanding, the Corporation shall not, without the affirmative vote of the
Holders of a majority of the then outstanding shares of the Preferred Stock, (a)
alter or change adversely the powers, preferences or rights given to the
Preferred Stock or alter or amend this Certificate of Designation, (b) authorize
or create any class of stock ranking as to dividends, redemption or distribution
of assets upon a Liquidation (as defined in Section 5) senior to or otherwise
pari passu with the Preferred Stock, (c) amend
its certificate of incorporation or other charter documents in any manner that
adversely affects any rights of the Holders, (d) increase the number of
authorized shares of Preferred Stock, or (e) enter into any agreement with
respect to any of the foregoing.
Section
5. Liquidation. Upon any liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to
receive out of the assets, whether capital or surplus, of the Corporation an
amount equal to 120% of the Stated Value, plus any accrued and unpaid dividends
thereon and any other fees or liquidated damages owing thereon, for each share
of Preferred Stock before any distribution or payment shall be made to the
holders of any Junior Securities, and if the assets of the Corporation shall be
insufficient to pay in full such amounts, then the entire assets to be
distributed to the Holders shall be ratably distributed among the Holders in
accordance with the respective amounts that would be payable on such shares if
all amounts payable thereon were paid in full. A Fundamental Transaction or
Change of Control Transaction shall not be deemed a Liquidation. The Corporation
shall mail written notice of any such Liquidation, not less than 45 days prior
to the payment date stated therein, to each Holder.
10
Section
6. Conversion.
a) Conversions at Option of
Holder. Each share of Preferred Stock shall be convertible, at any time
and from time to time from and after the Original Issue Date at the option of
the Holder thereof, into that number of shares of Common Stock (subject to the
limitations set forth in Section 6(c)) determined by dividing the Stated Value
of such share of Preferred Stock by the Conversion Price. Holders shall effect
conversions by providing the Corporation with the form of conversion notice
attached hereto as Annex A (a “Notice of
Conversion”). Each Notice of
Conversion shall specify the number of shares of Preferred Stock to be
converted, the number of shares of Preferred Stock owned prior to the conversion
at issue, the number of shares of Preferred Stock owned subsequent to the
conversion at issue and the date on which such conversion is to be effected,
which date may not be prior to the date the applicable Holder delivers by
facsimile such Notice of Conversion to the Corporation (such date, the “Conversion Date”). If
no Conversion Date is specified in a Notice of Conversion, the Conversion Date
shall be the date that such Notice of Conversion to the Corporation is deemed
delivered hereunder. The calculations and entries set forth in the Notice of
Conversion shall control in the absence of manifest or mathematical error. To
effect conversions of shares of Preferred Stock, a Holder shall not be required
to surrender the certificate(s) representing such shares of Preferred Stock to
the Corporation unless all of the shares of Preferred Stock represented thereby
are so converted, in which case such Holder shall deliver the certificate
representing such shares of Preferred Stock promptly following the Conversion
Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed
in accordance with the terms hereof shall be canceled and shall not be
reissued.
b) Conversion
Price. The conversion
price for the Preferred Stock shall equal $0.95, subject to adjustment herein (the
“Conversion
Price”).
11
c) Beneficial
Ownership Limitation. The Corporation shall not effect any
conversion of the Preferred Stock, and a Holder shall not have the right to
convert any portion of the Preferred Stock, to the extent that, after giving
effect to the conversion set forth on the applicable Notice of Conversion, such
Holder (together with such Holder’s Affiliates, and any other person or entity
acting as a group together with such Holder or any of such Holder’s Affiliates)
would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by such Holder and its Affiliates
shall include the number of shares of Common Stock issuable upon conversion of
the Preferred Stock with respect to which such determination is being made, but
shall exclude the number of shares of Common Stock which are issuable upon (A)
conversion of the remaining, unconverted Stated Value of Preferred Stock
beneficially owned by such Holder or any of its Affiliates and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Corporation subject to a limitation on conversion or exercise analogous to
the limitation contained herein (including the Warrants) beneficially owned by
such Holder or any of its Affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 6(c), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation
contained in this Section 6(c) applies, the determination of whether the
Preferred Stock is convertible (in relation to other securities owned by such
Holder together with any Affiliates) and of how many shares of Preferred Stock
are convertible shall be in the sole discretion of such Holder, and the
submission of a Notice of Conversion shall be deemed to be such Holder’s
determination of whether the shares of Preferred Stock may be converted (in
relation to other securities owned by such Holder together with any Affiliates)
and how many shares of the Preferred Stock are convertible, in each case subject
to the Beneficial Ownership Limitation. To ensure compliance with this
restriction, each Holder will be deemed to represent to the Corporation each
time it delivers a Notice of Conversion that such Notice of Conversion has not
violated the restrictions set forth in this paragraph and the Corporation shall
have no obligation to verify or confirm the accuracy of such determination. In
addition, a determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 6(c), in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as stated in the most recent
of the following: (A) the Corporation’s most recent periodic or annual filing
with the Securitites and Exchange Commission, as the case may be, (B) a more
recent public announcement by the Corporation or (C) a more recent notice by the
Corporation or the Corporation’s transfer agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral request of a
Holder, the Corporation shall within two Trading Days confirm orally and in
writing to such Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of
securities of the Corporation, including the Preferred Stock, by such Holder or
its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%
of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon conversion of
Preferred Stock held by the applicable Holder. A Holder, upon not less than 61
days’ prior notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 6(c) applicable to its Preferred
Stock. Any such increase or decrease will not be effective until the
61st day after such notice is delivered to
the Company and shall only apply to such Holder and no other Holder. The
provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 6(c) to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply
to a successor holder of Preferred Stock.
12
d) [RESERVED].
e) Mechanics of
Conversion
i. Delivery of
Certificate Upon Conversion. Not later than three Trading Days
after each Conversion Date (the “Share
Delivery Date”), the
Corporation shall deliver, or cause to be delivered, to the converting Holder
(A) a certificate or certificates which, on or after the Effective Date, shall
be free of restrictive legends and trading restrictions (other than those which
may then be required by the Purchase Agreement) representing the number of
Conversion Shares being acquired upon the conversion of shares of Preferred
Stock, and (B) a bank check in the amount of accrued and unpaid dividends (if
the Corporation has elected or is required to pay accrued dividends in cash). On
or after the Effective Date, the Corporation shall, upon request of such Holder,
use its best efforts to deliver any certificate or certificates required to be
delivered by the Corporation under this Section 6 electronically through the
Depository Trust Company or another established clearing corporation performing
similar functions. If in the case of any Notice of Conversion such certificate
or certificates are not delivered to or as directed by the applicable Holder by
the third Trading Day after the Conversion Date, the applicable Holder shall be
entitled to elect to rescind such Conversion Notice by written notice to the
Corporation at any time on or before its receipt of such certificate or
certificates, in which event the Corporation shall promptly return to such
Holder any original Preferred Stock certificate delivered to the Corporation and
such Holder shall promptly return to the Corporation any Common Stock
certificates representing the shares of Preferred Stock unsuccessfully tendered
for conversion to the Corporation.
13
ii. Obligation
Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue
and deliver the Conversion Shares upon conversion of Preferred Stock in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by a Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by such
Holder or any other Person of any obligation to the Corporation or any violation
or alleged violation of law by such Holder or any other person, and irrespective
of any other circumstance which might otherwise limit such obligation of the
Corporation to such Holder in connection with the issuance of such Conversion
Shares; provided, however, that such delivery shall not operate
as a waiver by the Corporation of any such action that the Corporation may have
against such Holder. In the event a Holder shall elect to convert any or all of
the Stated Value of its Preferred Stock, the Corporation may not refuse
conversion based on any claim that such Holder or any one associated or
affiliated with such Holder has been engaged in any violation of law, agreement
or for any other reason, unless an injunction from a court, on notice to Holder,
restraining and/or enjoining conversion of all or part of the Preferred Stock of
such Holder shall have been sought and obtained, and the Corporation posts a
surety bond for the benefit of such Holder in the amount of 150% of the Stated
Value of Preferred Stock which is subject to the injunction, which bond shall
remain in effect until the completion of arbitration/litigation of the
underlying dispute and the proceeds of which shall be payable to such Holder to
the extent it obtains judgment. In the absence of such injunction, the
Corporation shall issue Conversion Shares and, if applicable, cash, upon a
properly noticed conversion. If the Corporation fails to deliver to a Holder
such certificate or certificates pursuant to Section 6(e)(i) on the second
Trading Day after the Share Delivery Date applicable to such conversion, the
Corporation shall pay to such Holder, in cash, as liquidated damages and not as
a penalty, for each $5,000 of Stated Value of Preferred Stock being converted,
$50 per Trading Day (increasing to $100 per Trading Day on the third Trading Day
and increasing to $200 per Trading Day on the sixth Trading Day after such
damages begin to accrue) for each Trading Day after such second Trading Day
after the Share Delivery Date until such certificates are delivered. Nothing
herein shall limit a Holder’s right to pursue actual damages or declare a
Triggering Event pursuant to Section 9 for the Corporation’s failure to deliver
Conversion Shares within the period specified herein and such Holder shall have
the right to pursue all remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief. The Exercise of any such rights shall not prohibit a Holder
from seeking to enforce damages pursuant to any other Section hereof or under
applicable law.
14
iii. Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Conversion. If the
Corporation fails to deliver to a Holder the applicable certificate or
certificates by the Share Delivery Date pursuant to Section 6(e)(i), and if
after such Share Delivery Date such Holder is required by its brokerage firm to
purchase (in an open market transaction or otherwise), or the Holder’s brokerage
firm purchases, shares of Common Stock to deliver in satisfaction of a sale by
such Holder of the Conversion Shares which such Holder was entitled to receive
upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the
Corporation shall (A) pay in cash to such Holder (in addition to any other
remedies available to or elected by such Holder) the amount by which (x) such
Holder’s total purchase price (including any brokerage commissions) for the
shares of Common Stock so purchased exceeds (y) the product of (1) the aggregate
number of shares of Common Stock that such Holder was entitled to receive from
the conversion at issue multiplied by (2) the actual sale price at which the
sell order giving rise to such purchase obligation was executed (including any
brokerage commissions) and (B) at the option of such Holder, either reissue (if
surrendered) the shares of Preferred Stock equal to the number of shares of
Preferred Stock submitted for conversion or deliver to such Holder the number of
shares of Common Stock that would have been issued if the Corporation had timely
complied with its delivery requirements under Section 6(e)(i). For example, if a
Holder purchases shares of Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted conversion of shares of Preferred
Stock with respect to which the actual sale price (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Corporation shall be
required to pay such Holder $1,000. The Holder shall provide the Corporation
written notice indicating the amounts payable
to such Holder in respect of the Buy-In and, upon request of the Corporation,
evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Corporation’s failure to timely deliver
certificates representing shares of Common Stock upon conversion of the shares
of Preferred Stock as required pursuant to the terms hereof.
15
iv. Reservation
of Shares Issuable Upon Conversion. The Corporation covenants that it
will at all times reserve and keep available out of its authorized and unissued
shares of Common Stock for the sole purpose of issuance upon conversion of the
Preferred Stock and payment of dividends on the Preferred Stock, each as herein
provided, free from preemptive rights or any other actual contingent purchase
rights of Persons other than the Holders of the Preferred Stock, not less than
such aggregate number of shares of the Common Stock as shall (subject to the
terms and conditions in the Purchase Agreement) be issuable (taking into account
the adjustments of Section 7) upon the conversion of all outstanding shares of
Preferred Stock and payment of dividends hereunder. The Corporation covenants
that all shares of Common Stock that shall be so issuable shall, upon issue, be
duly authorized, validly issued, fully paid and nonassessable and, if the
Conversion Shares Registration Statement is then effective under the Securities
Act, shall be registered for public sale in accordance with such Conversion
Shares Registration Statement.
v. Fractional
Shares. No fractional
shares or scrip representing fractional shares shall be issued upon the
conversion of the Preferred Stock. As to any fraction of a share which a Holder
would otherwise be entitled to purchase upon such conversion, the Corporation
shall at its election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Conversion Price
or round up to the next whole share.
vi. Transfer
Taxes. The issuance of
certificates for shares of the Common Stock on conversion of this Preferred
Stock shall be made without charge to any Holder for any documentary stamp or
similar taxes that may be payable in respect of the issue or delivery of such
certificates, provided that the Corporation shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate upon conversion in a name other than that of
the Holders of such shares of Preferred Stock and the Corporation shall not be
required to issue or deliver such certificates unless or until the Person or
Persons requesting the issuance thereof shall have paid to the Corporation the
amount of such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid.
16
Section
7. Certain
Adjustments.
a) Stock
Dividends and Stock Splits. If the Corporation, at any time while
this Preferred Stock is outstanding: (A) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on
shares of Common Stock or any other Common Stock Equivalents (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Corporation upon conversion of, or payment of a dividend on, this Preferred
Stock); (B) subdivides outstanding shares of Common Stock into a larger number
of shares; (C) combines (including by way of a reverse stock split) outstanding
shares of Common Stock into a smaller number of shares; or (D) issues, in the
event of a reclassification of shares of the Common Stock, any shares of capital
stock of the Corporation, then the Conversion Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding any treasury shares of the Corporation) outstanding immediately
before such event and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event. Any adjustment made
pursuant to this Section 7(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.
b) Subsequent Equity
Sales. If, at any time while this Preferred Stock is outstanding, the
Corporation or any Subsidiary sells or grants any option to purchase or sells or
grants any right to reprice its securities, or otherwise disposes of or issues
(or announces any sale, grant or any option to purchase or other disposition)
any Common Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock at an effective price per share that is lower than the
then Conversion Price (such lower price, the “Base Conversion
Price” and such issuances collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with
such issuance, be entitled to receive shares of Common Stock at an effective
price per share that is lower than the Conversion Price, such issuance shall be
deemed to have occurred for less than the Conversion Price on such date of the
Dilutive Issuance), then (A) as to Dilutive Issuances that occur on or before
the two year anniversary of the Original Issue Date, the Conversion Price shall
be reduced to equal the Base Conversion Price and (B) as to Dilutive Issuances
that occur after the two year anniversary of the Original Issue Date, the
Conversion Price shall be reduced by multiplying the Conversion Price by a
fraction, the numerator of which is the number of shares of Common Stock issued
and outstanding immediately prior to the Dilutive Issuance plus the number of
shares of Common Stock which the offering price for such Dilutive Issuance would
purchase at the then Conversion Price, and the
denominator of which shall be the sum of the number of shares of Common Stock
issued and outstanding immediately prior to the Dilutive Issuance plus the
number of shares of Common Stock so issued or issuable in connection with the
Dilutive Issuance. Notwithstanding the foregoing, no adjustment will be made
under this Section 7(b) in respect of an Exempt Issuance. If the Corporation
enters into a Variable Rate Transaction, despite the prohibition set forth in
the Purchase Agreement, the Corporation shall be deemed to have issued Common
Stock or Common Stock Equivalents at the lowest possible conversion price at
which such securities may be converted or exercised. The Corporation shall
notify the Holders in writing, no later than the Business Day following the
issuance of any Common Stock or Common Stock Equivalents subject to this Section
7(b), indicating therein the applicable issuance price, or applicable reset
price, exchange price, conversion price and other pricing terms (such notice,
the “Dilutive Issuance
Notice”). For purposes of clarification, whether or not the Corporation
provides a Dilutive Issuance Notice pursuant to this Section 7(b), upon the
occurrence of any Dilutive Issuance, the Holders are entitled to receive a
number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether a Holder accurately refers
to the Base Conversion Price in the Notice of Conversion.
17
c) Subsequent
Rights Offerings. If the
Corporation, at any time while this Preferred Stock is outstanding, shall issue
rights, options or warrants to all holders of Common Stock (and not to Holders)
entitling them to subscribe for or purchase shares of Common Stock at a price
per share that is lower than the VWAP on the record date referenced below, then
the Conversion Price shall be multiplied by a fraction of which the denominator
shall be the number of shares of the Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase, and of which the numerator
shall be the number of shares of the Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered (assuming
delivery to the Corporation in full of all consideration payable upon exercise
of such rights, options or warrants) would purchase at such VWAP. Such
adjustment shall be made whenever such rights or warrants are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights, options or
warrants.
d) Pro Rata
Distributions. If the
Corporation, at any time while this Preferred Stock is outstanding, distributes
to all holders of Common Stock (and not to Holders) evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security (other than Common Stock, which shall
be subject to Section 7(b)), then in each such case the Conversion Price shall
be adjusted by multiplying such Conversion Price in effect immediately prior to
the record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the VWAP determined
as of the record date mentioned above, and of which the numerator shall be such
VWAP on such record date less the then fair market value at such record date of
the portion of such assets, evidence of indebtedness or rights or warrants so
distributed applicable to one outstanding share of the Common Stock as
determined by the Board of Directors of the Corporation in good faith. In either
case the adjustments shall be described in a statement delivered to the Holders
describing the portion of assets or evidences of indebtedness so distributed or
such subscription rights applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.
18
e) Fundamental
Transaction. If, at any time while this Preferred Stock is outstanding,
(A) the Corporation effects any merger or consolidation of the Corporation with
or into another Person, (B) the Corporation effects any sale of all or
substantially all of its assets in one transaction or a series of related
transactions, (C) any tender offer or exchange offer (whether by the Corporation
or another Person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or
property, or (D) the Corporation effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental
Transaction”), then, upon any subsequent conversion of this Preferred
Stock, the Holders shall have the right to receive, for each Conversion Share
that would have been issuable upon such conversion immediately prior to the
occurrence of such Fundamental Transaction, the same kind and amount of
securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of one share of Common Stock (the
“Alternate
Consideration”). For purposes of any such conversion, the determination
of the Conversion Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the
Corporation shall apportion the Conversion Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holders shall be given the same choice as to
the Alternate Consideration it receives upon any conversion of this Preferred
Stock following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Corporation or
surviving entity in such Fundamental Transaction shall file a new Certificate of
Designation with the same terms and conditions and issue to the Holders new
preferred stock consistent with the foregoing provisions and evidencing the
Holders’ right to convert such preferred stock into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this Section 7(e) and insuring that this
Preferred Stock (or any such replacement security) will be similarly adjusted
upon any subsequent transaction analogous to a Fundamental
Transaction.
f) Calculations. All calculations under this Section 7
shall be made to the nearest cent or the nearest 1/100th of a share, as the case
may be. For purposes of this Section 7, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding any treasury shares of the
Corporation) issued and outstanding.
19
g) Notice to
the Holders.
i. Adjustment
to Conversion Price.
Whenever the Conversion Price is adjusted pursuant to any provision of this
Section 7, the Corporation shall promptly deliver to each Holder a notice
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.
ii. Notice to
Allow Conversion by Holder. If (A) the Corporation shall declare
a dividend (or any other distribution in whatever form) on the Common Stock, (B)
the Corporation shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Corporation shall authorize the granting
to all holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Corporation shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to
which the Corporation is a party, any sale or transfer of all or substantially
all of the assets of the Corporation, of any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property or (E) the
Corporation shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Corporation, then, in each case,
the Corporation shall cause to be filed at each office or agency maintained for
the purpose of conversion of this Preferred Stock, and shall cause to be
delivered to each Holder at its last address as it shall appear upon the stock
books of the Corporation, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange, provided that the failure to deliver such
notice or any defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such notice. The
Holder is entitled to convert the Conversion Amount of this Preferred Stock (or
any part hereof) during the 20-day period commencing on the date of such notice
through the effective date of the event triggering such
notice.
20
Section
8. Forced
Conversion.
Notwithstanding anything herein to the contrary, if after the Effective Date (i)
the VWAP for each of any 20 consecutive Trading Day period, which 20 consecutive
Trading Day period shall have commenced only after the Effective Date
(“Threshold
Period”), exceeds 300% of
the then effective Conversion Price, and (ii) the average daily trading volume
for the previous 20 Trading Days exceeds the lesser of (A) $250,000 or (B) 0.75%
of the Company’s total market capitalization as of the Forced Conversion Notice
Date, then the Corporation may, within 1 Trading Day after the end of any such
Threshold Period, deliver a written notice to all Holders (a “Forced
Conversion Notice” and the
date such notice is delivered to all Holders, the “Forced
Conversion Notice Date”)
to cause each Holder to convert all or part of such Holder’s Preferred Stock (as
specified in such Forced Conversion Notice) plus all accrued but unpaid
dividends thereon and all liquidated damages and other amounts due in respect of
the Preferred Stock pursuant to Section 6, it being agreed that the “Conversion
Date” for purposes of Section 6 shall be deemed to occur on the third Trading
Day following the Forced Conversion Notice Date (such third Trading Day, the
“Forced
Conversion Date”). The
Corporation may not deliver a Forced Conversion Notice, and any Forced
Conversion Notice delivered by the Corporation shall not be effective, unless
all of the Equity Conditions have been met on each Trading Day during the
applicable Threshold Period through and including the later of the Forced
Conversion Date and the Trading Day after the date that the Conversion Shares
issuable pursuant to such conversion are actually delivered to the Holders
pursuant to the Forced Conversion Notice. Any Forced Conversion Notices shall be
applied ratably to all of the Holders based on each Holder’s initial purchases
of Preferred Stock hereunder, provided that any voluntary conversions by a
Holder shall be applied against such Holder’s pro rata allocation, thereby decreasing the
aggregate amount forcibly converted hereunder if less than all shares of the
Preferred Stock are forcibly converted. For purposes of clarification, a Forced
Conversion shall be subject to all of the provisions of Section 6, including,
without limitation, the provisions requiring payment of liquidated damages and
limitations on conversions.
Section
9. Redemption
Upon Triggering Events. a) “Triggering
Event” means any one or
more of the following events (whatever the reason and whether it shall be
voluntary or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or regulation of any
administrative or governmental body):
i. the Corporation shall fail for any
reason to pay in full the amount of cash due pursuant to a Buy-In within five
calendar days after notice therefor is delivered hereunder or shall fail to pay
all amounts owed on account of any Event (as defined in the Registration Rights
Agreement) within five days of the date due;
ii. the Corporation shall fail to have
available a sufficient number of authorized and unreserved shares of Common
Stock to issue to such Holder upon a conversion hereunder;
iii. Reserved
21
iv. the Corporation shall redeem more than
a de minimis number of Junior Securities other than
as to repurchases of Common Stock or Common Stock Equivalents from departing
officers and directors of the Corporation, provided that, while any of the
Preferred Stock remains outstanding, such repurchases shall not exceed an
aggregate of $100,000 from all officers and directors;
v. any breach of the agreements delivered
to the initial Holders at the Closing pursuant to Section 2.2(a)(iv) of the
Purchase Agreement;
vi. the Corporation shall be party to a
Change of Control Transaction;
vii. there shall have occurred a Bankruptcy
Event;
viii. the Common Stock shall fail to be
listed or quoted for trading on a Trading Market for more than five Trading
Days, which need not be consecutive Trading Days; or
ix. any monetary judgment, writ or similar
final process shall be entered or filed against the Corporation, any subsidiary
or any of their respective property or other assets for greater than $50,000,
and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days.
b) Upon the occurrence of a Triggering
Event, each Holder shall (in addition to all other rights it may have hereunder
or under applicable law) have the right, exercisable at the sole option of such
Holder, to require the Corporation to, (A) with respect to the Triggering Events
set forth in Sections 9(a)(i), (iii), (iv), (vi) (as to Changes of Control
approved by the Board of Directors of the Corporation) and (vii) (as to
voluntary filings only), redeem all of the Preferred Stock then held by such
Holder for a redemption price, in cash, equal to the Triggering Redemption
Amount or (B) at the option of each Holder and with respect to the Triggering
Events set forth in Sections 9(a) (ii), (v), (vi) (as to Changes of Control not
approved by the Board of Directors of the Corporation), (vii) (as to involuntary
filings only), (viii) and (ix), either (a) redeem all of the Preferred Stock
then held by such Holder for a redemption price, in shares of Common Stock,
equal to a number of shares of Common Stock equal to the Triggering Redemption
Amount divided by 75% of the average of the 10 VWAPs immediately prior to the
date of election hereunder or (b) increase the dividend rate on all of the
outstanding Preferred Stock held by such Holder to 18% per annum thereafter. The
Triggering Redemption Amount, in cash or in shares, shall be due and payable or
issuable, as the case may be, within five Trading Days of the date on which the
notice for the payment therefor is provided by a Holder (the “Triggering
Redemption Payment Date”).
If the Corporation fails to pay in full the Triggering Redemption Amount
hereunder on the date such amount is due in accordance with this Section
(whether in cash or shares of Common Stock), the Corporation will pay interest
thereon at a rate equal to the lesser of 18% per annum or the maximum rate
permitted by applicable law, accruing daily from such date until the Triggering
Redemption Amount, plus all such interest thereon, is paid in full. For purposes
of this Section, a share of Preferred Stock is outstanding until such date as
the applicable Holder shall have received Conversion Shares upon a conversion
(or attempted conversion) thereof that meets the requirements hereof or has been
paid the Triggering Redemption Amount in cash.
22
Section 10. Negative Covenants.
So long as any shares of Preferred Stock are outstanding, unless the holders of
at least 67% in Stated Value of the then outstanding shares of Preferred Stock
shall have otherwise given prior written consent, the Corporation shall not, and
shall not permit any of its subsidiaries (whether or not a Subsidiary on the
Original Issue Date) to, directly or indirectly:
a) other than Permitted Indebtedness,
enter into, create, incur, assume, guarantee or suffer to exist any indebtedness
for borrowed money of any kind, including but not limited to, a guarantee, on or
with respect to any of its property or assets now owned or hereafter acquired or
any interest therein or any income or profits therefrom;
b) other than Permitted Liens, enter into,
create, incur, assume or suffer to exist any Liens of any kind, on or with
respect to any of its property or assets now owned or hereafter acquired or any
interest therein or any income or profits therefrom;
c) amend its certificate of incorporation,
bylaws, or other charter documents so as to materially and adversely affect any
rights of any Holder;
d) amend this Certificate of
Designations;
e) repay, repurchase or offer to repay,
repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock,
Common Stock Equivalents or Junior Securities, except for the Conversion Shares
to the extent permitted or required under the Transaction Documents or as
otherwise permitted by the Transaction Documents;
f) enter into any agreement or
understanding with respect to any of the foregoing; or
g) pay cash dividends or distributions on
Junior Securities of the Corporation.
23
Section
11. Miscellaneous.
a) Notices. Any and all notices or other
communications or deliveries to be provided by the Holders hereunder including,
without limitation, any Notice of Conversion, shall be in writing and delivered
personally, by facsimile, or sent by a nationally recognized overnight courier
service, addressed to the Corporation, at the address set forth above, facsimile
number _______, Attention:
_________________or such
other facsimile number or address as the Corporation may specify for such
purposes by notice to the Holders delivered in accordance with this Section 11.
Any and all notices or other communications or deliveries to be provided by the
Corporation hereunder shall be in writing and delivered personally, by
facsimile, or sent by a nationally recognized overnight courier service
addressed to each Holder at the facsimile number or address of such Holder
appearing on the books of the Corporation, or if no such facsimile number or
address appears on the books of the Corporation, at the principal place of
business of the Holders. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section 11 prior to 5:30 p.m. (New York City
time) on any date, (ii) the date immediately following the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section 11 between 5:30 p.m. and 11:59 p.m. (New York
City time) on any date, (iii) the second Business Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be
given.
b) Absolute
Obligation. Except as
expressly provided herein, no provision of this Certificate of Designation shall
alter or impair the obligation of the Corporation, which is absolute and
unconditional, to pay liquidated damages, accrued dividends and accrued
interest, as applicable, on the shares of Preferred Stock at the time, place,
and rate, and in the coin or currency, herein prescribed.
c) Lost or
Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock
certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall
execute and deliver, in exchange and substitution for and upon cancellation of a
mutilated certificate, or in lieu of or in substitution for a lost, stolen or
destroyed certificate, a new certificate for the shares of Preferred Stock so
mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such
loss, theft or destruction of such certificate, and of the ownership hereof
reasonably satisfactory to the Corporation.
24
d) Governing Law. All
questions concerning the construction, validity, enforcement and interpretation
of this Certificate of Designation shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware, without
regard to the principles of conflict of laws thereof. Each party agrees that all
legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and
federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of such New York Courts, or such New York Courts are improper or
inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Certificate of Designation and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by applicable law. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Certificate of Designation or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Certificate of Designation, then
the prevailing party in such action or proceeding shall be reimbursed by the
other party for its attorneys’ fees and other costs and expenses incurred in the
investigation, preparation and prosecution of such action or
proceeding.
e) Waiver. Any waiver by the Corporation or a
Holder of a breach of any provision of this Certificate of Designation shall not
operate as or be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Certificate of Designation or a
waiver by any other Holders. The failure of the Corporation or a Holder to
insist upon strict adherence to any term of this Certificate of Designation on
one or more occasions shall not be considered a waiver or deprive that party (or
any other Holder) of the right thereafter to insist upon strict adherence to
that term or any other term of this Certificate of Designation. Any waiver by
the Corporation or a Holder must be in writing.
f) Severability. If any provision of this Certificate
of Designation is invalid, illegal or unenforceable, the balance of this
Certificate of Designation shall remain in effect, and if any provision is
inapplicable to any Person or circumstance, it shall nevertheless remain
applicable to all other Persons and circumstances. If it shall be found that any
interest or other amount deemed interest due hereunder violates the applicable
law governing usury, the applicable rate of interest due hereunder shall
automatically be lowered to equal the maximum rate of interest permitted under
applicable law.
g) Next
Business Day. Whenever any
payment or other obligation hereunder shall be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business
Day.
h) Headings. The headings contained herein are for
convenience only, do not constitute a part of this Certificate of Designation
and shall not be deemed to limit or affect any of the provisions
hereof.
25
i) Status of
Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be
issued pursuant to the Purchase Agreement. If any shares of Preferred Stock
shall be converted, redeemed or reacquired by the Corporation, such shares shall
resume the status of authorized but unissued shares of preferred stock and shall
no longer be designated as Series A 10% Convertible Preferred
Stock.
*********************
26
RESOLVED,
FURTHER, that the Chairman, the president or any vice-president, and the
secretary or any assistant secretary, of the Corporation be and they hereby are
authorized and directed to prepare and file a Certificate of Designation of
Preferences, Rights and Limitations in accordance with the foregoing resolution
and the provisions of Delaware law.
IN
WITNESS WHEREOF, the undersigned have executed this Certificate this ___ day of
December __ 2007.
|
Name:
Title:
|
Name:
Title:
|
27
ANNEX
A
NOTICE OF
CONVERSION
(TO BE
EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES
OF
PREFERRED STOCK)
The
undersigned hereby elects to convert the number of shares of Series A 10%
Convertible Preferred Stock indicated below into shares of common stock, par
value $0.001 per share (the “Common Stock”), of
Marine Park Holdings, Inc., a Delaware corporation (the “Corporation”),
according to the conditions hereof, as of the date written below. If shares of
Common Stock are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions as may be
required by the Corporation in accordance with the Purchase Agreement. No fee
will be charged to the Holders for any conversion, except for any such transfer
taxes.
Conversion
calculations:
Date to Effect Conversion:
________________________________________________________
Number of
shares of Preferred Stock owned prior to Conversion:
____________________________
Number of
shares of Preferred Stock to be Converted:
____________________________________
Stated Value of shares of Preferred
Stock to be Converted: _________________________________
Number of shares of Common Stock to be
Issued: ________________________________________
Applicable Conversion Price:
_______________________________________________________
Number of shares of Preferred Stock
subsequent to
Conversion: ____________________________
Address for Delivery:
_____________________________________________________________
or
DWAC
Instructions:
Broker no:
______________
Account
no: ________________
|
[HOLDER]
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
28
EXHIBIT
E
FORM
OF LEGAL OPINION
[List of
Purchasers]
Ladies
and Gentlemen:
We have acted as counsel to Marine Park
Holdings, Inc., a Delaware corporation (the “Company”), in
connection with the execution and delivery by the Company of the Share Exchange
Agreement, dated as of December __, 2007 (the “Agreement”), by and
among the Company, NewCardio, Inc. and the shareholders of NewCardio, Inc.
identified on the signature pages thereto (the “Shareholders”). This
opinion is given to you pursuant to Section 9.3(1) of the
Agreement. (Capitalized terms not otherwise
defined herein are defined as set forth in the Agreement.)
We have participated in the preparation
and negotiation of the Agreement and the Exhibits and Schedules thereto, and the
other documents referred to therein. We also have examined such
certificates of public officials, corporate documents and records and other
certificates, opinions, agreements and instruments and have made such other
investigations as we have deemed necessary in connection with the opinions
hereinafter set forth.
Based on the foregoing and upon such
investigation as we have deemed necessary, we give you our opinion as
follows:
1. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Delaware. The Company has all requisite power and
authority, and all material governmental licenses, authorizations, consents and
approvals, that are required to own and operate its properties and assets and to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to qualify could have a material adverse
effect on the Company.
2. Each of
the following subsidiaries of the Company (the “Subsidiaries”) is a
corporation, duly organized and in good standing under the laws of its state of
organization, as noted:
3. The
Company has all requisite power and authority (i) to execute, deliver and
perform the Agreement and the other documents contemplated therein, (ii) to
issue, sell and deliver the Acquisition Shares pursuant to the Agreement and
(iii) to carry out and perform its obligations under, and to consummate the
transactions contemplated by, the Agreement and the transactions contemplated
therein.
4. All
action on the part of the Company, its directors and its stockholders necessary
for the authorization, execution and delivery by the Company of the Agreement
and the other documents contemplated therein, the authorization, issuance, sale
and delivery of the Acquisition Shares pursuant to the Agreement, and the
consummation by the Company of the transactions contemplated by the Agreement
has been duly taken. The Agreement and the other documents
contemplated therein have been duly and validly executed and delivered by the
Company and constitute the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with their terms, except that (a)
such enforceability may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors’ rights in general and (b) the
remedies of specific performance and injunctive and other forms of injunctive
relief may be subject to equitable defenses.
5. After
giving effect to the transactions contemplated by the Agreement, and immediately
after the Closing, the authorized capital stock of the Company will consist of:
an aggregate of _________ shares of Marine Park Common Shares, of which shares will be
issued and outstanding and _________ shares are reserved for issuance upon
conversion of issued and outstanding options, warrants and other derivative
securities, __________ shares are reserved for issuance to employees, officers
and directors under currently outstanding incentive stock option grants and
__________ shares are subject to currently outstanding non-qualified stock
option grants. All presently issued and outstanding shares of Marine
Park Common Shares have been duly authorized and validly issued and are fully
paid and nonassessable and free of any preemptive or similar rights, and have
been issued in compliance with applicable securities laws and
regulations. The Acquisition Shares which are being issued on the
date hereof pursuant to the Agreement have been duly authorized and validly
issued and are fully paid and nonassessable and free of preemptive or similar
rights, and have been issued in compliance with applicable securities laws,
rules and regulations. To our knowledge, except for rights described
in the Agreement, there are no other options, warrants, conversion privileges or
other rights presently outstanding to purchase or otherwise acquire from the
Company any capital stock or other securities of the Company, or any other
agreements to issue any such securities or rights. The rights,
privileges and preferences of the Marine Park Common Shares are as stated in the
Company’s Certificate of Incorporation.
6. The
Company has filed all reports (the “SEC Reports”)
required to be filed by it under Sections 13(a) and 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”). As of their respective filing dates, the SEC Reports
complied in all material respects as to form with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder.
7. Based in
part upon the representations of the NewCardio Shareholders contained in the
Agreement, the Acquisition Shares may be issued to the NewCardio
Shareholders without registration under the Securities Act of 1933, as
amended.
8. The
execution, delivery and performance by the Company of, and the compliance by the
Company with the terms of, the Agreement and the other documents contemplated
therein and the issuance, sale and delivery of the Acquisition Shares pursuant
to the Agreement do not (a) conflict with or result in a violation of any
provision of law, rule or regulation applicable to the Company or its
Subsidiaries or of the certificate of incorporation or by-laws or other similar
organizational documents of the Company or its Subsidiaries, (b) conflict with,
result in a breach of or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or result in or permit the
termination or modification of, any agreement, instrument, order, writ, judgment
or decree known to us to which the Company of its Subsidiaries is a party or is
subject or (c) result in the creation or imposition of any lien, claim or
encumbrance on any of the assets or properties of the Company or its
Subsidiaries.
9. To our
knowledge, except as set forth in the Schedules to the Agreement, there is no
claim, action, suit, proceeding, arbitration, investigation or inquiry, pending
or threatened, before any court or governmental or administrative body or
agency, or any private arbitration tribunal, against the Company or its
Subsidiaries, or any of the officers, directors or employees (in connection with
the discharge of their duties as officers, directors and employees) of the
Company or its Subsidiaries, or affecting any of its properties or
assets.
10. In
connection with the valid execution, delivery and performance by the Company of
the Agreement and the other documents contemplated therein, or the offer, sale,
issuance or delivery of the Acquisition Shares or the consummation of the
transactions contemplated thereby, no consent, license, permit, waiver, approval
or authorization of, or designation, declaration, registration or filing with,
any court, governmental or regulatory authority, or self-regulatory
organization, is required.
11. The
Company is not, and after the consummation of the transactions contemplated by
the Agreement and the other documents contemplated therein shall not be, an
Investment Company within the meaning of the Investment Company Act of 1940, as
amended.
Very truly
yours,
