Exhibit 10.14
DEBT EXCHANGE AGREEMENT
This Debt Exchange Agreement (the "Agreement") dated as of March , 2006
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is by and between Cytation Corporation, a Delaware corporation (the "Company"),
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having a principal place of business at 0000 Xxxxxxxxxx Xxxx., Xxxxx 000, Xxxxx,
XX 00000 and Vicis Capital Master Fund (the "Lender") having an address at 25
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Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
WHEREAS, the Lender is the holder of the Interest Bearing Non-Convertible
Installment Promissory Note in the form on EXHIBIT "A" attached hereto (the
"Note");
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WHEREAS, the Lender has agreed to exchange its Note for the Company's
Series A Convertible Preferred Stock, $.001 Par Value ("Series A Preferred
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Stock"), Series A Common Stock Purchase Warrants (the "Series A Warrants") in
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the form of EXHIBIT "B" attached hereto, and Series B Common Stock Purchase
Warrants (the "Series B Warrants") in the form of EXHIBIT "C" attached hereto,
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in each case issued pursuant to the Company's ongoing equity offering as
referenced in the term sheet attached hereto as EXHIBIT "D";
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
THE EXCHANGE
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Section 1.1 Transfer and Exchange. Subject to and in accordance with the
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terms and conditions of this Agreement, at the Closing (as hereinafter defined),
the Lender shall tender and deliver the Note to the Company for cancellation of
all principal and accrued interest, and the Company shall issue and deliver to
the Lender (a) 150,000 shares of Series A Preferred Stock, (b) a Series A
Warrant certificate with 2,000,000 underlying Warrant Shares, and (c) a Series B
Warrant certificate with 1,000,000 underlying Warrant Shares (the "Exchanged
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Shares"). As a point of clarification, the Lender shall be entitled to keep its
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Series D Common Stock Purchase Warrant issued at the time of the original
issuance of the Note.
Section 1.2 Deliveries at Closing. At the Closing (a) the Company shall
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deliver to the Lender one or more certificates representing the Exchanged Shares
registered in the Lender's name (or its nominee), duly authorized, free and
clear of all liens and restrictions of any kind (except for those imposed by the
applicable Certificate of Designations and applicable securities laws), and (b)
the Lender shall deliver or cause to be delivered to the Company the Note held
by the Lender together with all documents necessary to validly and duly tender,
assign and convey such Note to the Company for cancellation thereof.
Section 1.3 Closing. The closing of the transactions described in this
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Agreement shall take place at the offices of Xxxx Xxxx, P.A. 000 X. Xxxxxxxx
Xxxxxx, Xxxxx, Xxxxxxx 00000 at 8:00 a.m., Eastern Time, on March 7, 2005, or on
such other business day thereafter as may be agreed to by the Company and the
Lender (such closing, the "Closing" and such date and time, the "Closing Date").
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Section 1.4 Cancellation of Subordinated Notes; Guarantees. Upon receipt
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from the Lender of the Note in accordance with Section 1.3 hereof, the Company
shall cancel the Note immediately. The Company and the Lender agree that upon
such cancellation of the Note: (a) the obligations of the Company to pay the
principal of, interest on or redemption premium and otherwise in respect of,
such Note surrendered by the Lender to the Company shall terminate; (b) the
obligations of the Company to pay any interest remaining unpaid in respect of
the Note shall terminate, and such interest shall be deemed to have formed a
portion of the consideration given for the purchase of the Series A Preferred
Stock by the Lender; (c) all obligations of the Lender pursuant to the Note
shall terminate; (d) all obligations of the Company in respect of the cancelled
Note shall terminate, and (e) all obligations of guarantors guarantying
repayment of the Note shall terminate.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Section 2.1 Organization and Authority. The Company is a corporation duly
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organized, validly existing, and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. All necessary action, corporate or otherwise, required to have been
taken by or on behalf of the Company by applicable law, its charter documents or
otherwise to authorize (a) the approval, execution and delivery on behalf of the
Company of this Agreement and the agreements, certificates and other documents
contemplated hereby, including, without limitation, the issuance, sale and
delivery of the Exchanged Shares and (b) the performance by the Company of its
obligations under this Agreement, including, without limitation, the issuance,
sale and delivery of the Exchanged Shares, and the consummation of the
transactions contemplated by this Agreement hereof has been taken. This
Agreement issued at the Closing constitute valid and binding agreements of the
Company, enforceable against the Company in accordance with their respective
terms, except (x) as the same may be limited by applicable bankruptcy,
insolvency, moratorium or similar laws of general application relating to or
affecting creditors' rights and (y) for the limitations imposed by general
principles of equity.
Section 2.2 The Exchanged Shares. Upon delivery to the Lender at the
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Closing of certificates representing the Exchanged Shares, and upon receipt by
the Company of the Note in exchange therefor, (a) good and valid title to such
Exchanged Shares will pass to the Lender, free and clear of all liens and
restrictions of any kind (except for those imposed by the Certificate of
Designations and applicable securities laws) and (b) the Exchanged Shares will
be duly authorized and validly issued, fully paid and nonassessable.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE LENDER
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Section 3.1 Investment Representation. The Exchanged Shares and Warrants
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are being acquired for the Lender's own account, for investment and not with a
view to, or for resale in connection with, a distribution or public offering
thereof within the meaning of the Securities Act or applicable state securities
laws.
Section 3.2 Transfer Restrictions under Securities Laws. The Lender
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understands that none of the Exchanged Shares or Common Stock issuable upon
exercise of the Exchanged Shares have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or qualified under any state
securities laws. The Lender understands that the resale of the Exchanged Shares
or Common Stock issuable upon exercise of the Exchanged Shares may be restricted
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act and registered under any state securities law or is exempt from
such registration. Certificates representing the Exchanged Shares (the
"Securities") shall be endorsed with the following legend, and any other legends
required by applicable securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED
UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT, OR (II) IN
COMPLIANCE WITH RULE 144 OR (III) OTHERWISE PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS UNDER THE ACT.
The Company may instruct its transfer agent not to register the transfer of the
Securities, unless the conditions specified in the foregoing legend are
satisfied. The Warrants shall be endorsed with legends substantially in the
form set forth in the Warrant Certificates.
Section 3.3 Accredited Investor Status. The Lender is an "Accredited
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Investor" as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. The Lender is able to bear the economic risk of acquiring
the Exchanged Shares and Warrants pursuant to the terms of this Agreement,
including a complete loss of the Lender's investment in the Exchanged Shares and
Warrants.
Section 3.4 Authority. The Lender has all requisite power and authority to
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execute and deliver this Agreement and to consummate the transactions
contemplated hereby. All necessary action, corporate or otherwise, required to
have been taken by or on behalf of the Lender by applicable law, its charter
documents or otherwise to authorize (a) the approval, execution and delivery on
behalf of it of this Agreement and (b) the performance by it of obligations
under this Agreement and the agreements, certificates and other documents
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby has been taken. This Agreement constitutes a valid and
binding agreement of the Lender, enforceable against it in accordance with its
terms.
Section 3.5 No Conflicts. Neither the execution and delivery of this
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Agreement nor the consummation and performance of the transactions contemplated
hereby to be performed or satisfied on the part of the Lender is prevented,
limited by, conflicts with, or will result in, a breach of the terms,
conditions, or provisions of any agreement to which the Lender is a party or any
law, rule, regulation, or order of any court or government agency.
Section 3.6 Good Title to Note. The Lender is the lawful owner of the Note
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and the Lender has good title thereto, free and clear of all liens, claims and
encumbrances of any kind.
ARTICLE 4
MISCELLANEOUS
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Section 4.1 Binding Effect; Benefit. This Agreement shall be binding upon
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and shall inure to the benefit of the parties hereto and their respective
permitted successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto or their
respective permitted successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 4.2 Entire Agreement. This Agreement, the exhibits and schedules
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hereto and any documents delivered by the parties in connection herewith
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings (oral and
written) among the parties with respect thereto.
Section 4.3 Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Florida without regard to
its rules of conflict of laws. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of Florida and of the United States of America located in the State
of Florida (the "Florida Courts") for any litigation arising out of or relating
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to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Florida Courts
and agrees not to plead or claim that such litigation brought in any Florida
Court has been brought in an inconvenient forum.
Section 4.4 Remedies; Specific Performance. The Company and the Lender may
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take all steps necessary or advisable to protect and enforce their rights
hereunder, whether by action, suit or proceeding at law or in equity, for the
specific performance of any covenant, condition or agreement contained herein,
or in aid of the execution of any power herein granted, or for the enforcement
of any other appropriate legal or equitable remedy or otherwise as the Company
or the Lender shall deem necessary or advisable. No right or remedy hereunder
shall be exclusive of any other right, power or remedy, but shall be cumulative
and in addition to any other right or remedy hereunder or now or hereafter
existing by law or in equity and the exercise by a party hereto of any one or
more of such rights, powers or remedies shall not preclude the simultaneous
exercise of any or all of such other rights, powers or remedies. Any failure to
insist upon the strict performance of any provision hereof or to exercise any
option, right, power or remedy contained herein shall not constitute a waiver or
relinquishment thereof for the future.
Section 4.5 Counterparts. This Agreement may be executed by the parties
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hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
Section 4.6 Headings. Headings of the Sections of this Agreement are for
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the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
Section 4.7 Interpretation. In this Agreement, unless the context otherwise
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requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
Section 4.8 Incorporation of Exhibits and Schedules. All exhibits and
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schedules hereto are hereby incorporated herein and made a part hereof for all
purposes as if fully set forth herein.
Section 4.9 Severability. Any term or provision of this Agreement which is
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invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement.
Section 4.10 Attorneys' Fees and Court Actions. If a legal action is
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initiated by any party to this Agreement against another, arising out of or
relating to the alleged performance or non-performance of any right or
obligation established hereunder, or any dispute concerning the same, any and
all fees, costs and expenses reasonably incurred by each prevailing party or its
legal counsel in investigating, preparing for, prosecuting, defending against,
or providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several obligation of, and shall be paid
or reimbursed by, the nonprevailing party.
IN WITNESS WHEREOF, the Company and Lender have caused this Agreement to be
executed and delivered by their respective officers, thereunto duly authorized.
CYTATION CORPORATION
By:
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Xxxxxxx X. Xxxxxxx, President and CEO
VICIS CAPITAL MASTER FUND
By:
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Xxxx Xxxxxxxx, Managing Director
