AMENDED AND RESTATED PURCHASE AGREEMENT
Exhibit
4.6
AMENDED
AND RESTATED PURCHASE AGREEMENT
THIS
AMENDED AND RESTATED
PURCHASE AGREEMENT (the "Agreement"), dated as of
_________, 2007, by and among Mohen, Inc. d/b/a Spiral Frog, a Delaware
corporation (the "Company"), and the investors listed on
the Schedule of Buyers attached hereto (individually, a "Buyer"
and collectively, the "Buyers").
WHEREAS:
A. Certain
Buyers (the “Original Buyers”) previously purchased the
Company’s Notes pursuant to an Amended and Restated Purchase Agreement dated as
of April 19, 2007 (the “Prior Purchase
Agreement”);
B. The
Prior Purchase Agreement provided for a maximum amount of Notes to be sold
by
the Company of $5,000,000;
C.
The
Company desires to sell Notes up to a maximum aggregate principal amount of
$11,000,000, and to issue up to 6,000,000 Warrants in connection therewith,
and
the Original Buyers desire to amend and restate the Prior Purchase Agreement
to
allow for the sale of such additional Notes and issuance of
Warrants;
D. The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of
the
Securities Act of 1933, as amended (the "1933 Act"), and Rule
506 of Regulation D ("Regulation D") as promulgated by the
United States Securities and Exchange Commission (the "SEC")
under the 1933 Act.
E. The
Company has authorized a series of senior secured exchangeable notes of the
Company, which notes shall be exchangeable into the Company's Class A Common
Stock, par value $0.001 per share (the "Common Stock"), in
accordance with the terms of the Notes (as defined below).
F. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement that aggregate principal amount of the
Notes, in substantially the form attached hereto as Exhibit A (the
"Notes"), set forth opposite such Buyer's name in column (3) on
the Schedule of Buyers attached hereto (which aggregate amount for all Buyers
shall be $11,000,000) (as exchangeable into Common Stock pursuant to the terms
of the Notes, collectively, the “Exchange Shares”) and such
number of warrants (“Warrants”) to purchase Common Stock (the
“Warrant Shares”), in substantially the form of Exhibit
G, set
forth opposite such Buyer’s name in column (4) on the Schedule of Buyers
attached hereto.
G.
Contemporaneously with the execution and delivery of this Agreement, the parties
hereto are executing and delivering an amended and restated Registration Rights
Agreement, substantially in the form attached hereto as Exhibit B (the
“Registration Rights Agreement”) pursuant to which the Company
has agreed to provide certain registration rights with respect to the Exchange
Shares and the Warrant Shares under the 1933 Act and the rules and regulations
promulgated thereunder, and applicable state securities laws.
I. The
Notes will rank senior to all indebtedness of the Company incurred after April
19, 2007, subject to Permitted Senior Indebtedness (as defined in the Notes)
and
will be secured by a perfected security interest in all of the assets of the
Company and each of the Company’s subsidiaries, as evidenced by the security
agreement attached hereto as Exhibit C (the "Security
Agreement" and, together with the Pledge Agreement attached hereto as
Exhibit D, and any ancillary documents related thereto, collectively
the
"Security Documents").
J. To
facilitate the Closing
(as defined herein), each Buyer shall deposit into escrow its respective
Purchase Price (as defined herein) with Gottbetter & Partners, LLP (the
“Escrow Agent”) pursuant to an Escrow Agreement, among the
parties hereto.
NOW,
THEREFORE, the Company and each Buyer hereby agree as
follows:
1. PURCHASE
AND SALE OF NOTES AND WARRANTS.
(a) Purchase
of Notes and Warrants.
(b) Subject
to the terms of this Agreement and the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and
sell
to each Buyer, and each Buyer severally, but not jointly, shall purchase from
the Company, on the Closing Date (as defined below), a principal amount of
Notes
and number of Warrants as is set forth opposite such Buyer's name in column
(3)
and column (4) on the Schedule of Buyers (the
"Closing").
(i) Closing.
The Closing shall take place at 10:00 a.m., New York City time, at the
offices of Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX
00000, or at such other place or time as mutually agreed to by the parties,
which shall be no later than the second business day after the satisfaction
(or
waiver) of the last to be satisfied (or waived) of the conditions to the Closing
set forth in Sections 6 and 7 below (other than conditions that by their terms
are to be satisfied on the Closing Date). The date on which the
Closing actually takes place is referred to as the "Closing
Date."
(ii) Purchase
Price. The aggregate purchase price for the Notes and Warrants to be
purchased by each Buyer at the Closing or a Subsequent Closing (as defined
below), as the case may be, (the "Purchase Price"), shall be
the amount set forth opposite such Buyer's name in column (3) of the Schedule
of
Buyers.
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(d) Subsequent
Closing. Subject to the terms and conditions of this Agreement,
after the Closing and at any time on or prior to thirty (30) days following
the
Closing, at a subsequent closing (a “Subsequent Closing”), the
Company may issue and sell to one or more individuals and entities approved
by
the Company’s Board of Directors (each an “Additional Buyer”
and collectively, the “Additional Buyers”) an aggregate
principal amount of Notes and Warrants up to an aggregate of $11,000,000,
including all previously issued Notes and Warrants, at the Purchase
Price. At a Subsequent Closing the representations and warranties of
the Company set forth in Section 3 hereof shall speak as of the date of the
Subsequent Closing (subject to any updates to the Disclosure Schedules as may
be
made by the Company), and the representations and warranties of the Additional
Buyers shall speak as of the date of the respective Subsequent
Closing. At a Subsequent Closing, (i) each Additional Buyer and the
Company shall execute a counterpart signature page hereto and to the relevant
Transaction Documents, (ii) the Company shall cause the Schedule of Buyers
hereto to be updated to reflect the purchases made by the Additional Buyers,
(iii) each Additional Buyer shall become a “Buyer” hereunder and the Notes
purchased by such Additional Buyer shall be deemed “Notes”, for purposes of this
Agreement and the other Transaction Documents, and (iv) subject to the
terms and conditions hereof, the Company will deliver to each of the Additional
Buyers purchasing Notes and Warrants at a Subsequent Closing the applicable
Notes and Warrants registered in the name of such Additional Buyer, against
payment to the Company of the Purchase Price therefor in cash by wire transfer,
check or other method acceptable to the Company.
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2.
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BUYER'S
REPRESENTATIONS AND WARRANTIES.
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As
a
material inducement to the Company to enter into this Agreement and sell the
Notes and Warrants hereunder, each Buyer represents and warrants to the Company
with respect to only itself as of the date hereof that:
(a) No
Public Sale or Distribution. Such Buyer is acquiring the Notes and
Warrants for its own account and with the present intention of holding such
securities for the purposes of investment, and not with a view towards, or
for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempt from registration under the 1933 Act;
provided, however, that by making the representations herein, such
Buyer does not agree to hold any of the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time
in
accordance with or pursuant to a registration statement or an exemption from
registration under the 1933 Act. Such Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.
(b) Accredited
Investor Status. Such Buyer is an "accredited investor" as that term
is defined in Rule 501(a) of Regulation D under the 1933 Act. Such Buyer
is not a registered broker-dealer under Section 15 of the 1934 Act (as defined
herein) or an entity engaged in the business of being a broker-dealer and is
acquiring the Securities hereunder in the ordinary course of its
business.
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(c) Reliance
on Exemptions. Such Buyer understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Buyer's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of such Buyer to acquire
the
Securities.
(d) Information.
Such Buyer and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company
and
materials relating to the offer and sale of the Securities which have been
requested by such Buyer. Such Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence
investigations conducted
by such Buyer or its advisors, if any, or its representatives shall modify,
amend or affect such Buyer's right to rely on the Company's representations
and
warranties contained herein. Such Buyer understands that its investment in
the Securities involves a high degree of risk. Such Buyer has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the
Securities.
(e) No
Governmental Review. Such Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(f) Transfer
or Resale. Such Buyer understands that, except as provided for in the
Registration Rights Agreement: (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not
be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company an
opinion of counsel, in a form reasonably acceptable to the Company, to the
effect that such Securities to be sold, assigned or transferred may be sold,
assigned or transferred (1) pursuant to an exemption from such registration,
or
(2) pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended
(or any successor rule thereto); (ii) any sale of the Securities made in
reliance on Rule 144 or Rule 144A may be made only in accordance with the terms
of Rule 144 or Rule 144A, respectively, and further, if neither Rule 144 nor
Rule 144A is applicable, any resale of the Securities under circumstances in
which the seller (or the Person (as defined in Section 3(o) below) through
whom
the sale is made) may be deemed to be an underwriter (as that term is defined
in
the 0000 Xxx) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other Person is under any obligation to register the Securities
under the 1933 Act or any state securities laws or to comply with the terms
and
conditions of any exemption thereunder. The Securities may be pledged in
connection with a bona fide margin account or other loan or financing
arrangement secured by the Securities and such pledge of Securities shall not
be
deemed to be a transfer, sale or assignment of the Securities hereunder, and
no
Buyer effecting a pledge of Securities shall be required to provide the Company
with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement or any other Transaction Document (as defined in Section
3(b)), including, without limitation, this Section 2(f).
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(g) Legends.
Such Buyer understands that the certificates or other instruments
representing the Notes and Warrants and the stock certificates representing
the
Exchange Shares and Warrant Shares, except as set forth below, shall bear any
legend as required by federal law and the "blue sky" laws of any state and
a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which
it is
stamped, if, unless otherwise required by federal or state securities laws,
(i)
such Securities are transferred through a registered resale under the 1933
Act,
or (ii) in connection with a sale, assignment or other transfer, such holder
provides the Company with an opinion of counsel, in a form reasonably acceptable
to the Company, to the effect that (A) such sale, assignment or transfer of
the
Securities may be made without registration under the applicable requirements
of
the 1933 Act, or (B) that the Securities can be sold, assigned or transferred
pursuant to Rule 144.
(h) Authorization;
Enforcement; Validity. Such Buyer has the requisite power and
authority to enter into and perform its obligations under this Agreement and
each of the other Transaction Documents (as defined below) to which it is a
party. This Agreement and each of the other Transaction Documents (as defined
below) to which Buyer is a party has been duly and validly authorized, executed
and delivered on behalf of such Buyer, and constitute the legal, valid and
binding obligations of such Buyer enforceable against such Buyer in accordance
with their respective terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to,
or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
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(i) No
Conflicts. The execution, delivery and performance by such Buyer of
this Agreement and the other Transaction Documents to which such Buyer is a
party and the consummation by such Buyer of the transactions contemplated hereby
and thereby will not (i) result in a violation of the organizational documents
of such Buyer or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give
to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which such Buyer is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such Buyer,
except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect
on
the ability of such Buyer to perform its obligations hereunder.
(j) Residency.
Such Buyer is a resident of that jurisdiction specified below its address
on the Schedule of Buyers.
(k) Independent
Investment Decision. Such Buyer has independently evaluated the merits
of its decision to purchase the Securities pursuant to the Transaction
Documents, and such Buyer confirms that it has not relied on the advice of
any
other Buyers’ business and/or legal counsel in making such decision.
(l) [Reserved]
(m) General
Solicitation. Such Buyer is not purchasing the Securities as a result
of any advertisement, article, notice or other communication regarding the
Securities published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar.
(n) Organization;
Authority. Such Buyer is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization
with
the requisite corporate or partnership or other entity power and authority
to
enter into and to consummate the transactions contemplated by the Transaction
Documents to which it shall be a party and otherwise to carry out its
obligations thereunder.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
As
a
material inducement to each Buyer to enter into this Agreement and purchase
the
Notes and Warrants hereunder, the Company represents and warrants to each of
the
Buyers as of the date hereof that, except as set forth in the Disclosure
Schedule attached hereto (the "Disclosure
Schedule"):
(a) Organization
and Qualification. The Company is a corporation duly organized and
validly existing in good standing under the laws of the jurisdiction in which
it
is formed, and has the requisite power and authority to own its properties
and
to carry on its business as now being conducted. The Company is duly
qualified as a foreign entity to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material
Adverse Effect. As used in this Agreement, "Material Adverse
Effect" means any material adverse effect on the business, properties,
assets, operations, results of operations, condition (financial or otherwise)
or
prospects of the Company, or on the transactions contemplated hereby and by
the
other Transaction Documents or by the agreements and instruments to be entered
into in connection herewith or therewith, or on the authority or ability of
the
Company to perform its obligations under the Transaction Documents (as defined
below). The Company has no subsidiaries.
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(b) Authorization;
Enforcement; Validity. Except as set forth in Schedule 3(b),
the Company has the requisite power and authority to enter into and perform
its
obligations under this Agreement, the Notes, the Warrants, the Security
Documents, the Irrevocable Transfer Agent Instructions (in the form of Exhibit
E
annexed hereto), and each of the other agreements entered into by the Company
in
connection with the transactions contemplated by this Agreement (collectively,
the "Transaction Documents") and to issue the Securities in
accordance with the terms hereof and thereof. The execution and
delivery of this Agreement and the other Transaction Documents by the Company and the issuance of the Notes
and Warrants has been,
and the consummation by the Company of the transactions contemplated hereby
and
thereby, including, without limitation, the issuance of the Notes and Warrants,
the reservation for issuance and the issuance of the Exchange Shares and Warrant
Shares issuable upon exchange of the Notes and exercise of the Warrants and
the
granting of a security interest in the Collateral (as defined in the Security
Documents), will be prior to Closing, duly authorized by the Company's Board
of
Directors and (other than (i) the filing of appropriate UCC financing statements
with the appropriate states and other authorities pursuant to the Security
Agreement, and (ii) the filing of a Form D under Regulation D of the 0000
Xxx) no further filing, consent, or authorization is required by the Company,
its Board of Directors or its stockholders. This Agreement and each of the
other Transaction Documents of even date herewith has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by general principles of equity
or
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement
of
applicable creditors' rights and remedies.
(c) Issuance
of Securities. The Notes and Warrants are duly authorized and are free
from all taxes, liens and charges with respect to the issue
thereof. A number of shares of Common Stock has been duly authorized
and reserved for issuance which equals 200% of the maximum number of shares
Common Stock issuable upon exchange of the Notes and exercise of the Warrants.
Upon exchange in accordance with the Notes and exercise in accordance with
the Warrants, the Exchange Shares and Warrant Shares will be validly issued,
fully paid and nonassessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common Stock.
Assuming the truth and accuracy of the Buyers’ representations and
warranties in this Agreement, the offer to the Buyers and issuance by the
Company of the Securities is exempt from registration under the 1933
Act.
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(d) No
Conflicts. The execution, delivery and performance of this Agreement
and the other Transaction Documents by the Company and the consummation by
the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Notes and Warrants, the granting of a security
interest in the Collateral and, reservation for issuance and issuance of the
Exchange Shares and Warrant Shares) will not (i) result in a violation of its
Certificate of Incorporation, any capital stock or bylaws of the Company
(provided that it will not be a breach of this subsection until a judgment
against the Company is obtained) or (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration
or
cancellation of, any agreement, indenture or instrument to which the Company
is
a party, or (iii) assuming the truth and accuracy of the Buyers’ representations
and warranties in this Agreement, result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws applicable to the Company or by which any property or asset of the Company
is bound or affected) except, in the cases of clause (ii) and (iii) above,
for
such conflicts, defaults, rights or violations which would not, individually
or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(f) Acknowledgment
Regarding Buyer's Purchase of Securities. The Company acknowledges and
agrees that each Buyer is acting solely in the capacity of an arm's length
purchaser with respect to this Agreement and the other Transaction Documents
and
the transactions contemplated hereby and thereby, and that no Buyer is (i)
an
officer or director of the Company, (ii) to the knowledge of the Company, an
"affiliate" of the Company (as defined in Rule 144, an
"Affiliate") or (iii) to the knowledge of the Company, a
"beneficial owner" of more than 10% of the shares of Common Stock (as defined
for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended
(the "1934 Act")). The Company further
acknowledges that no Buyer is acting as a financial advisor or fiduciary of
the
Company (or in any similar capacity) with respect to this Agreement and the
other Transaction Documents and the transactions contemplated hereby and
thereby, and any advice given by a Buyer or any of its representatives or agents
in connection with this Agreement and the other Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such
Buyer's purchase of the Securities. The Company further represents to
each Buyer that the Company’s decision to enter into the Transaction Documents
has been based solely on the independent evaluation by the Company and its
representatives.
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(g) No
General Solicitation. None of the Company, its Affiliates, nor,
to the Company’s knowledge, any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within
the
meaning of Regulation D) in connection with the offer or sale of the
Securities. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, consultancy fees or brokers’
commissions (other than for persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated
hereby. The Company shall pay, and hold each Buyer harmless against,
any liability, loss or expense (including, without limitation, reasonable
attorney’s fees and out-of-pocket expenses) arising in connection with any such
claim (including any claim from the Consultant (as defined
below)). The Company acknowledges that it has engaged a consultant as
set out in Schedule 3(g) (the “Consultant”) in connection with
the sale of the Securities. Other than the Consultant, the Company
has not engaged any placement agent, consultant or other agent in connection
with the sale of the Securities.
(h) No
Integrated Offering. None of the Company, its respective Affiliates
nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security, or solicited any offers to buy any
security, under circumstances that would require registration of any of the
Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act
or
any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated. None of the Company, its Affiliates or any Person acting
on its or their behalf will take any action or steps referred to in the
preceding sentence that would require registration of any of the Securities
under the 1933 Act or cause the offering of the Securities to be integrated
with
other offerings in a manner that would require such registration.
(i) Dilutive
Effect. The Company understands and acknowledges that the number of
Exchange Shares issuable upon exchange of the Notes and Warrant Shares issuable
upon exercise of the Warrants will increase in certain circumstances. The
Company further acknowledges that its obligation to issue Exchange Shares upon
exchange of the Notes in accordance with this Agreement and the Notes and
Warrant Shares upon exercise of the Warrants in accordance with this Agreement
and the Warrants, is absolute and unconditional regardless of the dilutive
effect that such issuance may have on the ownership interests of other
stockholders of the Company.
(j) Financial
Statements. Except as disclosed in Schedule 3(j), the financial
statements of the Company annexed hereto as Schedule 3(j), were prepared in
accordance with generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes
or may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof and
the
results of its operations and cash flows for the periods then ended (subject,
in
the case of unaudited statements, to normal year-end audit
adjustments). The Company does not have any material liability other
than as set forth in the financial statements, incurred in the ordinary course
of business, or as set forth on Schedule 3(j).
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(k) Conduct
of Business; Regulatory Permits. Except as set forth in Schedule
3(k), the Company (i) is not in violation of any term of or in default under
its Articles of Incorporation or Bylaws and (ii) is not in violation of any
judgment, decree or order or any law, statute, ordinance, rule or regulation
applicable to the Company. The Company possesses
all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct its business, except where the
failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and the Company
has
not received any written notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.
(l) Foreign
Corrupt Practices. None of the Company, nor, to the knowledge of the
Company, any director, officer, agent, or employee, in the course of its actions
for, or on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds of
the
Company; (iii) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.
(m) Transactions
With Affiliates. Other than the transactions disclosed
on Schedule 3(m), none of the officers, directors or employees
of the Company is presently a party to any transaction with the Company (other
than for ordinary course services as employees, officers or directors),
including any contract, agreement, loans or other arrangement providing for
the
furnishing of services to or by, providing for rental of real or personal
property to or from, including obligations to pay back pay, salaries, bonuses,
etc. or otherwise requiring payments to or from any such officer, director
or
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any such officer, director, or employee has
a
substantial interest or is an officer, director, trustee or
partner.
(n) Equity
Capitalization. As of immediately prior to Closing, the authorized
capital stock of the Company consists of (i) 150 million shares of Common Stock,
of which as of the date hereof, 14,257,200 shares are issued and outstanding,
and (ii) 40 million shares of Preferred Stock, of which as of the date hereof
(A) 12 million are classified as Series A Preferred Stock, of which as of the
date hereof, ________ are issued and outstanding and (B) 24 million are
classified as Series B Preferred Stock, of which as of the date hereof
10,414,653.9423 are issued and outstanding. All currently issued and
outstanding shares of Common Stock have been, or upon issuance will be, validly
issued and are fully paid and nonassessable. Except as disclosed herein or
as disclosed in Schedule 3(n): (i) none of the Company's capital stock is
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into,
or
exercisable or exchangeable for, any capital stock of the Company, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional capital stock of the Company or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company; (iii) there are no
outstanding debt securities, notes, credit or loan agreements, credit facilities
or other agreements, documents or instruments evidencing Indebtedness (as
defined below) of the Company or by which the Company is bound or may be
affected; (iv) there are no financing statements securing obligations in any
material amounts, either singly or in the aggregate, filed in connection with
the Company; (v) there are no agreements or arrangements under which the Company
is obligated to register the sale of any of their securities under the 1933
Act;
(vi) there are no outstanding securities or instruments of the Company which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to purchase, repurchase, retire or redeem a security of the
Company; (vii) there are no securities or instruments containing anti-dilution
or similar provisions or reset provisions that will be triggered by the issuance
of the Securities; and (viii) the Company does not have any stock appreciation
rights or "phantom stock" plans or agreements or any similar plan or
agreement. The Company has furnished to the Buyer true, correct and
complete copies of the Company's Articles of Incorporation, as amended and
as in
effect on the date hereof (the "Articles of Incorporation"),
and the Company's Bylaws, as amended and as in effect on the date hereof (the
"Bylaws"), and the terms of all securities convertible into, or
exercisable or exchangeable for, shares of Common Stock and the material rights
of the holders thereof.
10
(o) Indebtedness
and Other Contracts. Except as disclosed in Schedule 3(o), the
Company (i) has no outstanding Indebtedness (as defined below), (ii) is not
a
party to any contract, agreement or instrument, the violation of which, or
default under which, by the other party(ies) to such contract, agreement or
instrument would result in a Material Adverse Effect, (iii) is not in violation
of any term of or in default under any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would
not result, individually or in the aggregate, in a Material Adverse Effect,
or
(iv) is not a party to any contract, agreement or instrument relating to any
Indebtedness, the performance of which, in the judgment of the Company's
officers, has or is expected to have a Material Adverse Effect. Schedule
3(p) provides a detailed description of the material terms of any such
outstanding Indebtedness. For purposes of this Agreement: (x)
"Indebtedness" of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services
including (without limitation) "Capital Leases" in accordance with generally
accepted accounting principles (other than trade payables entered into in the
ordinary course of business), (C) all reimbursement or payment obligations
with
respect to letters of credit, surety bonds and other similar instruments, (D)
all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising
under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under
any
leasing or similar arrangement which, in connection with generally accepted
accounting principles, consistently applied for the periods covered thereby,
is
classified as a capital lease, (G) all indebtedness referred to in clauses
(A)
through (F) above secured by (or for which the holder of such Indebtedness
has
an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; (y) "Contingent
Obligation" means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will
be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or
in
part) against loss with respect thereto; and (z) "Person" means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
(p) Absence
of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, the Common Stock or any
of
the or any of the Company's officers or directors, except as set forth in
Schedule 3(p).
11
(q) Insurance.
The Company is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company
is
engaged. The Company has not, within the past two (2) years, been refused any
insurance coverage sought or applied for.
(i)
The
Company is not a party to any collective bargaining agreement and does not
employ any member of a union. Except as disclosed in Schedule 3(r),
no executive officer of the Company (as defined in Rule 501(f) of the 1900
Xxx)
has notified the Company that such officer intends to leave the Company or
otherwise terminate such officer's employment with the Company. No
executive officer of the Company, to the knowledge of the Company, is in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement,
or
any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company to any
liability with respect to any of the foregoing matters.
(ii) The
Company is in compliance with all federal, state, local and foreign laws and
regulations respecting labor, employment and employment practices and benefits,
terms and conditions of employment and wages and hours, except where failure
to
be in compliance would not, either individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect.
(s) Title.
Except as disclosed in Schedule 3(s), the Company has good and marketable
title in fee simple to all real property owned by it and
good and marketable title to all personal property owned by it which is, in
each
case, material to the business of the Company, free and clear of all liens,
encumbrances and defects except such as do not materially affect the value
of
such property and do not interfere with the use made and proposed to be made
of
such property by the Company. Any real property and facilities held
under lease by the Company is held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and facilities by
the
Company.
12
(t) Intellectual
Property Rights. The Company owns or possesses adequate rights or
licenses to use all trademarks, trade names, service marks, service xxxx
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and other
intellectual property rights necessary to conduct its business as now conducted
and as proposed to be conducted ("Intellectual Property
Rights"), provided, that the representation in this sentence
shall not apply to mechanical publishing rights. Except as set forth
in Schedule 3(t), none of the Company's Intellectual Property Rights have
expired or terminated, or are expected to expire or terminate, within three
years from the date of this Agreement. The Company does not have any
knowledge of any infringement by the Company of Intellectual Property Rights
of
others. There is no claim, action or proceeding being made or brought or,
to the knowledge of the Company, being threatened, against the Company regarding
its Intellectual Property Rights. The Company (x) is unaware of any
facts or circumstances which might give rise to any of the foregoing
infringements or claims, actions or proceeding, except as set forth in the
proviso to the first sentence of this Section and (y) has taken reasonable
security measures to protect the secrecy, confidentiality and value of all
of
its Intellectual Property Rights.
(v) Investment
Company. The Company is not, and is not an Affiliate of, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
13
(w) Tax
Status. Except as disclosed on Schedule 3(w), the Company (i)
has made or filed all foreign, federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it
is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and (iii)
has set aside on its books provision reasonably adequate for the payment of
all
taxes for periods subsequent to the periods to which such returns, reports
or
declarations apply. Except as disclosed on Schedule 3(w), there are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company know of no basis for any
such claim. Except as disclosed on Schedule 3(w), no liens
have been filed and no claims are being asserted by or against the Company
with
respect to any taxes (other than liens for taxes not yet due and payable).
The
Company has not received notice of assessment or proposed assessment of any
taxes of a material amount claimed to be owed by it or any other Person on
its
behalf. Except as disclosed on Schedule 3(w), the Company is not a party
to any tax sharing or tax indemnity agreement or any other agreement of a
similar nature that remains in effect. Except as disclosed on Schedule
3(w), the Company has complied in all material respects with all applicable
legal requirements relating to the payment and withholding of taxes and, within
the time and in the manner prescribed by law, has withheld from wages, fees
and
other payments and paid over to the proper governmental or regulatory
authorities all amounts required.
(x) Ranking
of Notes. Except as set forth on Schedule 3(x), no Indebtedness
of the Company is senior to or ranks pari passu with the Notes in right
of payment, whether with respect of payment of redemptions, interest, damages
or
upon liquidation or dissolution or otherwise.
(y) Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other
than income or similar taxes) which are required to be paid in connection with
the sale and transfer of the Securities to be sold to each Buyer hereunder
will
be, or will have been, fully paid or provided for by the Company, and all laws
imposing such taxes will be or will have been complied with.
(z) U.S.
Real Property Holding Corporation. The Company is not, nor has ever
been, a U.S. real property holding corporation within the meaning of Section
897
of the Internal Revenue Code of 1986, as amended, and the Company shall so
certify upon Buyer's request.
4. COVENANTS.
(a) Best
Efforts. Each party shall use its best efforts timely to satisfy each
of the conditions to be satisfied by it as provided in Sections 6 and 7 of
this
Agreement.
14
(c) Reporting
Status. After the date on which the Company is required to file
periodic reports with the SEC pursuant to the 1934 Act and until the date on
which the Holders shall have sold a sufficient number of shares such that,
collectively, they own less than 5% of the total outstanding shares of common
stock of the Company (the "Reporting Period"), the Company
shall file all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the 1934 Act (all of the foregoing filed prior to the date hereof and all
exhibits included therein and financial statements, notes and schedules thereto
and documents incorporated by reference therein being hereinafter referred
to as
the "SEC Documents") and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the
1934
Act or the rules and regulations thereunder would otherwise permit such
termination.
(d) Use
of Proceeds. The Company will use the proceeds from the sale of the
Securities as set forth on Schedule 4(d).
(e) Transfer
Agent Instructions. The Company shall file a Form 10SB (or
similar form) within 45 days following the Closing and shall use its best
efforts to have it declared effective as soon as possible. Upon the
earlier of effectiveness of such Form 10SB or sixty (60) days following its
filing with the SEC, the Company shall employ the services of Continental Stock
Transfer and Trust Co. as its designated transfer agent (“Transfer
Agent”) and execute and cause it to execute the Irrevocable Transfer
Agent Instructions in substantially similar form to Exhibit E, attached
hereto.
(f) [
Reserved. ]
(g) Fees.
The Company shall pay (i) to Gottbetter & Partners, LLP
(“G&P”), an hourly fee for the preparation of the
Transaction Documents; (ii) to G&P, $5,000 plus its usual hourly rates for
serving as escrow agent, and (iii) to Gottbetter Capital Finance, LLC., $10,000
for serving as Collateral Agent, all plus reasonable expenses which shall be
withheld by such Buyer from its Purchase Price at the Closing. The
Company shall be responsible for the payment of any placement agent's fees,
financial advisory fees, consultancy fees or broker's commissions (other than
for Persons engaged by any Buyer) relating to or arising out of the transactions
contemplated by the Transaction Documents including, without limitation, any
fees or commission payable to the Consultant. The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, reasonable attorney's fees and out-of-pocket expenses) arising
in
connection with any claim against a Buyer relating to any such payment.
Except as otherwise set forth in the Transaction Documents, each party to
this Agreement shall bear its own expenses in connection with the sale of the
Securities to the Buyers.
(h) Pledge
of Securities. The Company acknowledges and agrees that the Securities
may be pledged by a Buyer in connection with a bona fide margin agreement or
other loan or financing arrangement that is secured by the Securities. The
pledge of Securities shall not be deemed to be a transfer, sale or assignment
of
the Securities hereunder, and no Buyer effecting a pledge of Securities shall
be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) hereof; provided that
a
Buyer and its pledgee shall be required to comply with the provisions of Section
2(f) hereof in order to effect a sale, transfer or assignment of Securities
to
such pledgee. The Company hereby agrees to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by a
Buyer.
15
(j) Restriction
on Redemption and Cash Dividends. So long as any Notes are
outstanding, the Company shall not, directly or indirectly, redeem, or declare
or pay any cash dividend or distribution on, the Common Stock without the prior
express written consent of the Required Holders (as defined in the
Notes).
(k) Additional
Notes; Variable Securities; Dilutive Issuances. So long as any Buyer
beneficially owns any Securities, the Company will not issue any Notes (other
than as contemplated hereby) and the Company shall not issue any other
securities that would cause a breach or default under the Notes. For
so long as any Notes remain outstanding, the Company shall not, in any manner,
issue or sell any rights, warrants or options to subscribe for or purchase
Common Stock or other securities directly or indirectly convertible into or
exchangeable or exercisable for Common Stock at a price which varies or may
vary
with the market price of the Common Stock, including by way of one or more
reset(s) to any fixed price unless the conversion, exchange or exercise price
of
any such security cannot be less than the then applicable Exchange Price (as
defined in the Notes) with respect to the Common Stock into which any Note
is
exchangeable and Exercise Price (as defined in the Warrants) with respect to
the
Common Stock into which any Warrants is exercisable. For so long as any
Notes or Warrants remain outstanding, the Company shall not, in any manner,
enter into or affect any Dilutive Issuance (as defined in the Notes and
Warrants) if the effect of such Dilutive Issuance is to cause the Company to
be
required to issue upon exchange of any Note or exercise of any Warrant any
shares of Common Stock in excess of that number of shares of Common Stock which
the Company has authorized and reserved for purposes of such exchanges or
exercises or which the Company may issue upon exchange of the Notes or exercise
of the Warrants.
(m) Reservation
of Shares. So long as any Buyer owns any Securities, the Company shall
take all action necessary to at all times have authorized, and reserved for
the
purpose of issuance, no less than 200% of the number of shares of Common Stock
issuable upon exchange of all of the Notes and exercise of the Warrants then
outstanding (without taking into account any limitations on the exchange of
the
Notes or exercise of the Warrants).
(n) [
Reserved. ]
(o) Additional
Issuances of Securities.
16
(i) For
purposes of this Section 4(o), the following definitions shall
apply.
(1) "Convertible
Securities" means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common
Stock.
(2) "Options"
means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.
(3) "Common
Stock Equivalents" means, collectively, Options and Convertible
Securities.
(ii) From
the date hereof until the date that is one year after the Company is required
to
file reports with the SEC (the "Trigger Date"), except (A) with
respect to any sale of Notes and Warrant Shares pursuant to this Agreement,
(B)
any transaction described in Schedule 4(o), (C) with respect to any
issuance to an officer, director or employee pursuant to an employee or director
stock incentive plan, or (D) with respect to an issuance of Excluded Securities
(as defined in the Notes), the Company will not, directly or indirectly, offer,
sell, grant any option to purchase, or otherwise dispose of (or announce any
offer, sale, grant or any option to purchase or other disposition of) any of
its
equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during
its
life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents (any such
offer, sale, grant, disposition or announcement being referred to as a
"Subsequent Placement"), unless the Company shall have complied
with Section 4(o)(iii).
(iii) Prior
to the Trigger Date, the Company will not, directly or indirectly, effect any
Subsequent Placement unless the Company shall have first complied with this
Section 4(o)(iii).
17
(2) To
accept an Offer, in whole or in part, such Buyer must deliver a written notice
to the Company prior to the end of the tenth (10th) day after
such
Buyer's receipt of the Offer Notice (the "Offer Period"),
setting forth the portion of such Buyer's Basic Amount that such Buyer elects
to
purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the
Undersubscription Amount, if any, that such Buyer elects to purchase (in either
case, the "Notice of Acceptance"). If the Basic Amounts
subscribed for by all Buyers are less than the total of all of the Basic
Amounts, then each Buyer who has set forth an Undersubscription Amount in its
Notice of Acceptance shall be entitled to purchase, in addition to the Basic
Amounts subscribed for, the Undersubscription Amount it has subscribed for;
provided, however, that if the Undersubscription Amounts
subscribed for exceed the difference between the total of all the Basic Amounts
and the Basic Amounts subscribed for (the "Available Undersubscription
Amount"), each Buyer who has subscribed for any Undersubscription
Amount shall be entitled to purchase only that portion of the Available
Undersubscription Amount as the Basic Amount of such Buyer bears to the total
Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts,
subject to rounding by the Company to the extent its deems reasonably
necessary.
(3) The
Company shall have thirty (30) Business Days from the expiration of the Offer
Period above to offer, issue, sell or exchange all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by the Buyers
(the "Refused Securities"), but only to the offerees described
in the Offer Notice (if so described therein) or any investor introduced to
the
Company by a placement agent described in the Offer Notice and only upon terms
and conditions (including, without limitation, unit prices and interest rates)
that are not more favorable to the acquiring person or persons or less favorable
to the Company than those set forth in the Offer Notice.
(4) In
the event the Company shall propose to sell less than all the Refused Securities
(any such sale to be in the manner and on the terms specified in Section
4(o)(iii)(3) above), then each Buyer may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered Securities specified
in
its Notice of Acceptance to an amount that shall be not less
than the number or amount of the Offered Securities that such Buyer elected
to
purchase pursuant to Section 4(o)(iii)(2) above multiplied by a fraction, (i)
the numerator of which shall be the number or amount of Offered Securities
the
Company actually proposes to issue, sell or exchange (including Offered
Securities to be issued or sold to Buyers pursuant to Section 4(o)(iii)(3)
above
prior to such reduction) and (ii) the denominator of which shall be the original
amount of the Offered Securities. In the event that any Buyer so elects to
reduce the number or amount of Offered Securities specified in its Notice of
Acceptance, the Company may not issue, sell or exchange more than the reduced
number or amount of the Offered Securities unless and until such securities
have
again been offered to the Buyers in accordance with Section 4(o)(iii)(1)
above.
18
(5) Upon
the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, the Buyers shall acquire from the Company, and the Company
shall issue to the Buyers, the number or amount of Offered Securities specified
in the Notices of Acceptance, as reduced pursuant to Section 4(o)(iii)(3) above
if the Buyers have so elected, upon the terms and conditions specified in the
Offer Notice. The purchase by the Buyers of any Offered Securities is
subject in all cases to the preparation, execution and delivery by the Company
and the Buyers of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Buyers and their respective
counsel and to the Company and its counsel.
(6) Any
Offered Securities not acquired by the Buyers or other persons in accordance
with Section 4(o)(iii)(3) above may not be issued, sold or exchanged until
they
are again offered to the Buyers under the procedures specified in this
Agreement.
(iv) The
restrictions contained in subsections (ii) and (iii) of this Section 4(o) shall
not apply in connection with the issuance of any Excluded Securities (as defined
in the Notes).
(p) Additional
Registration Statements. Until the Effective Date (as defined in the
Registration Rights Agreement), the Company will not file a registration
statement under the 1933 Act relating to securities that are not the
Securities.
(q) No
Short Position. For so long as the Notes remain outstanding, none of the
Buyers or any of its Affiliates shall have an open short position in the Common
Stock.
(r) [reserved]
(s) Transactions
With Affiliates. So long as any Note is outstanding, the Company
shall not enter into, amend, modify or supplement any agreement, transaction,
commitment, or arrangement with any of its officers, directors, persons who
were
officers or directors as of the Issue Date, stockholders who beneficially own
five percent (5%) or more of the Common Stock, or Affiliates (as defined below),
or with any individual related by blood, marriage, or adoption to any such
individual or with any entity in which any such entity or individual owns a
five
percent (5%) or more beneficial interest (each a "Related
Party"), except (a) for customary employment arrangements and benefit
programs on reasonable terms, (b) relating to the transactions described in
Schedule 4(s), or (c) for this Agreement and the agreements referred to
herein and contemplated hereby. For purposes of this Section 4(s)
only, "Affiliate" means, with respect to any person or entity, another person
or
entity that, directly or indirectly, (i) has a ten percent (10%) or more equity
interest in that person or entity, (ii) has ten percent (10%) or more common
ownership with that person or entity, (iii) controls that person or entity,
or
(iv) shares common control with that person or entity. "Control"
or "controls" for purposes hereof means that a person or entity has the power,
direct or indirect, to conduct or govern the policies of another person or
entity.
19
(t) Collateral
Agent.
(i) Each
Buyer hereby (a) appoints Gottbetter Capital Finance, LLC as the collateral
agent hereunder and under the other Security Documents (in such capacity, the
“Collateral Agent”), and (b) authorizes the Collateral Agent
(and its officers, directors, employees and agents) to take such action on
such
Buyer’s behalf in accordance with the terms hereof and thereof. The
Collateral Agent shall not have, by reason hereof or any of the other Security
Documents, a fiduciary relationship in respect of any Buyer. Neither
the Collateral Agent nor any of its officers, directors, employees and agents
shall have any liability to any Buyer for any action taken or omitted to be
taken in connection hereof or any other Security Document except to the extent
caused by its own gross negligence or willful misconduct, and each Buyer agrees
to defend, protect, indemnify and hold harmless the Collateral Agent and all
of
its officers, directors, employees and agents (collectively, the
“Collateral Agent Indemnitees”) from and against any losses,
damages, liabilities, obligations, penalties, actions, judgments, suits, fees,
costs and expenses (including, without limitation, reasonable attorneys’ fees,
costs and expenses) incurred by such Collateral Agent Indemnitee, whether
direct, indirect or consequential, arising from or in connection with the
performance by such Collateral Agent Indemnitee of the duties and obligations
of
Collateral Agent pursuant hereto or any of the Security Documents.
(ii) The
Collateral Agent shall be entitled to rely upon any written notices, statements,
certificates, orders or other documents believed by it in good faith to be
genuine and correct and to have been signed, sent or made by the proper Person,
and with respect to all matters pertaining to this Agreement or any of the
other
Transaction Documents and its duties hereunder or thereunder, upon advice of
counsel selected by it.
(iii) The
Collateral Agent may resign from the performance of all its functions and duties
hereunder and under the Notes and the Security Documents at any time by giving
at least ten (10) Business Days prior written notice to the Company and each
holder of the Notes. Such resignation shall take effect upon the
acceptance by a successor Collateral Agent of appointment as provided
below. Upon any such notice of resignation, the holders of a majority
of the outstanding principal under the Notes shall appoint a successor
Collateral Agent. Upon the acceptance of the appointment as
Collateral Agent, such successor Collateral Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from
its
duties and obligations under this Agreement, the Notes and the other Security
Documents. After any Collateral Agent’s resignation hereunder, the
provisions of this Section 4(t) shall inure to its benefit. If a
successor Collateral Agent shall not have been so appointed within said ten
(10)
Business Day period, the retiring Collateral Agent shall then appoint a
successor Collateral Agent who shall serve until such time, if any, as the
holders of a majority of the outstanding principal under the Notes appoint
a
successor Collateral Agent as provided above.
(u) Appointment
of Directors. So long as any of the Notes remain outstanding or
the original purchasers of the Notes beneficially own at least 5% of the Common
Stock of the Company, calculated in accordance with Section 13(d) of the 1934
Act and Regulation 13D-G thereunder, the Required Holders (as defined in the
Notes) shall have the right to nominate two individuals to the Company’s Board
of Directors, the initial nominees being Xxxxx X. Xxxxx and Xxxx
Xxxx. The Company shall use its best efforts to cause such nominees
to be elected to the Board of Directors of the Company. Such nominees
agree to resign as directors when none of the Notes remain outstanding and
the
original purchasers of the Notes beneficially own less than 5% of the Common
Stock of the Company calculated in accordance with Section 13(d) of the 1934
Act
and Regulation 13D-G thereunder.
20
(v) Proxy
and Voting. Buyers agree that in connection with meetings of
stockholders, they shall grant the Company a proxy, on a pro rata basis based
upon the total number of shares owned, to vote any shares owned by them in
excess of 20%, collectively, of the total outstanding shares of voting stock
of
the Company.
5. [
Reserved. ]
6. CONDITIONS
TO THE COMPANY'S OBLIGATION TO SELL.
The
obligation of the Company hereunder to issue and sell the Notes and Warrants
to
each Buyer and to otherwise cause the transactions contemplated by this
Agreement to be consummated is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing each Buyer with prior written
notice thereof:
(i) Such
Buyer and each other Buyer shall have executed each of the Transaction Documents
to which it is a party and delivered the same to the Company.
(ii) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase
Price less any amount withheld in satisfaction of the Company's obligations
pursuant to Section 4(g) for the Notes and Warrants being purchased by such Buyer at the Closing or Subsequent
Closing by wire
transfer of immediately available funds pursuant to the wire instructions
provided by the Company.
(iii) The
representations and warranties of each Buyer shall be true and correct with
respect to those matters that are qualified by material adverse effect or by
any
other materiality standard and shall be true and correct in all material
respects with respect to all matters that are not so qualified, in each case
as
of the date hereof and as of the Closing Date as though made at that time
(except to the extent any such representation or warranty expressly speaks
as of
an earlier date, in which case such representation and warranty shall be true
and correct or true and correct in all material respects, as applicable, as
of
such earlier date), and each Buyer shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by
such
Buyer at or prior to the Closing Date.
21
(iv) The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.
(v) No
temporary restraining order, preliminary or permanent injunction or other order
preventing the consummation of the transaction contemplated by this Agreement
shall have been issued by any court of competent jurisdiction or other
government body and remain in effect, and there shall not be any legal
requirement enacted or deemed applicable to the transactions contemplated hereby
that makes the consummation of such transactions illegal.
(vi) Each
Buyer shall have delivered to the Company such other documents relating to
the
transactions contemplated by this Agreement as the Company or its counsel may
reasonably request.
7. CONDITIONS
TO EACH BUYER'S OBLIGATION TO PURCHASE.
The
obligation of each Buyer hereunder to purchase the Notes and Warrants at the
Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for each Buyer's
sole benefit and may be waived by such Buyer at any time in its sole discretion
by providing the Company with prior written notice thereof:
(i) The
Company shall have executed and delivered to such Buyer (A) each of the
Transaction Documents and (B) the Notes (in such principal amounts as such
Buyer
shall request) and Warrants being purchased by such Buyer at the Closing
pursuant to this Agreement;
(ii) The
Company shall have delivered to such Buyer a certificate, executed by the
Corporate Secretary of the Company and dated as of the Closing Date, as to
(i) the resolutions consistent with Section 3(b), including the election of
Xxxxx X. Xxxxx and Xxxx Xxxx to the Board of Directors of the Company in a
form
reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation
and
(iii) the Bylaws, each as in effect at the Closing, in the form attached hereto
as Exhibit F .
(iii) The
representations and warranties of the Company shall be true and correct in
all
material respects (other than representations and warranties that are already
qualified by materiality or Material Adverse Effect which shall be true and
correct in all respects) as of the date when made and as of the Closing Date
as
though made at that time (except for representations and warranties that speak
as of a specific date) and the Company shall have performed, satisfied and
complied in all respects with the covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by
the
Company at or prior to the Closing Date. Such Buyer shall have received a
certificate, executed by the Corporate Secretary of the Company, dated as of
the
Closing Date, to the foregoing effect and as to such other matters as may be
reasonably requested by such Buyer.
22
(iv) The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.
(vii) The
following persons shall have pledged and delivered the following number of
shares of Common Stock or shares convertible into Common Stock as existing
on or
before February 14, 2007 to Gottbetter Capital Finance, LLC, as collateral
agent:
|
Xxxxx
Xxxxxxxx
|
120,000
|
|||
|
Xxxx
Xxxxxxx
|
120,000
|
|||
|
Xxx
Xxxxxx
|
50,000
|
|||
|
Xxxxxxx
Xxxxxx
|
200,000
|
|||
|
Xxxxxxxxxxx
XxXxxxxx
|
150,000
|
|||
|
Xxxxxx
X. Xxxxx
|
3,381,000
|
|||
|
Antaeus
Capital Partners
|
753,847
|
|||
|
Mohen,
Inc.
|
1,840,000
|
|||
(viii) Prior
to Closing, the Company shall have delivered or caused to be delivered to each
Buyer (A) true copies of UCC search results, listing all effective financing
statements which name the Company as debtor filed in the prior five years to
perfect an interest in any assets thereof, together with copies of such
financing statements, none of which, except as otherwise agreed in writing
by
the Buyers, shall cover any Collateral (as defined in the Security Documents)
and the results of searches for any tax lien and judgment lien filed against
the
Company or its property, which results, except as otherwise agreed to in writing
by the Buyers, shall not show any such Liens (as defined in the Security
Documents).
This
Agreement may be terminated prior to the Closing Date by mutual written consent
of the Company and each Buyer. If this Agreement is terminated
pursuant to this Section 8, the Company shall remain obligated to reimburse
the
non-breaching Buyers for the expenses described in Section 4(g)
above.
9. MISCELLANEOUS.
(a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of
the
laws of any jurisdictions other than the State of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, 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 any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that
the
venue of such suit, action or proceeding is improper. 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 to
such
party at the address for such notices to it under this Agreement 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 manner permitted by law. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
23
(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all
of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party; provided that a facsimile signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile
signature.
(c) Headings.
The headings of this Agreement are for convenience of reference and shall
not form part of, or affect the interpretation of, this Agreement.
(e) Entire
Agreement; Amendments. This Agreement and the other Transaction
Documents supersede all other prior oral or written agreements between the
Buyers, the Company, their Affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor any Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the Required Holders, and any amendment to this Agreement made
in
conformity with the provisions of this Section 9(e) shall be binding on all
Buyers and holders of securities, as applicable. No provision hereof may
be waived other than by an instrument in writing signed by the Required Holders.
No such amendment shall be effective to the extent that it applies to less
than all of the holders of the applicable Securities then outstanding. No
consideration shall be offered or paid to any Person to amend or consent to
a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration also is offered to all of the parties to the
Transaction Documents, holders of Notes. The Company has not, directly or
indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.
(f) Notices.
Any notices, consents, waivers or other communications required or permitted
to
be given under the terms of this Agreement must be in writing and will be deemed
to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by facsimile (provided confirmation of transmission
is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with an overnight courier service,
in
each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
24
If
to the
Company:
Mohen,
Inc. d/b/a Spiral Frog
00
Xxxxxx
Xxxxxx
Xxxxxx
Xx.
Xxx
Xxxx,
XX 00000
Attention: Chief
Executive Officer
With
a copy
to: Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx,
Xxx
Xxxx,
XX 00000
Attention: D.
Xxxxxx Xxxxxxx, Esq.
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
If
to the
Collateral Agent:
Gottbetter
Capital Finance,
LLC
000
Xxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxxx
X.
Xxxxxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
or
to
such other address and/or facsimile number and/or to the attention of such
other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier
service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from
an
overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
(g) Successors
and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Notes. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Required Holders (unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the
Notes). A Buyer may assign some or all of its rights hereunder
without the consent of the Company, in which event such assignee shall be deemed
to be a Buyer hereunder with respect to such assigned rights; provided that
such
assignee agrees in writing to be bound by all of the provisions contained
herein.
25
(h) No
Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns,
and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person.
(i) Survival.
Unless this Agreement is terminated under Section 8, (x) the representations
and
warranties of the Buyers contained in Section 2, (y) the representations and
warranties of the Company contained in Section 3, and (z) the covenants and
agreements of the parties contained in Sections 4 and 9 shall survive for so
long as any of the Notes remain outstanding or the original purchasers of the
Notes beneficially own at least 5% of the Common Stock of the Company,
calculated in accordance with Section 13(d) of the 1934 Act and Regulation
13D-G
thereunder. Each Buyer shall be responsible for its own
representations, warranties, agreements and covenants hereunder.
(j) Further
Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver
all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish
the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(k) Indemnification.
In consideration of each Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities thereunder, and in addition to all of
the
Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and all of their
stockholders, partners, members, officers, directors, employees and direct
or
indirect investors and any of the foregoing Person’s agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"Indemnitees") from and against any and all actions, causes of
action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith, and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or
warranty made by the Company in the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in
the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party (including for these purposes
a
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Securities, or (iii) the status of such Buyer or holder of the Securities
as an investor in the Company pursuant to the transactions contemplated by
the
Transaction Documents. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make
the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. Except as otherwise
set forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 9(k) shall be the same as those set forth in
Section 6 of the Registration Rights Agreement.
26
(l) No
Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.
(m) Remedies.
Each Buyer and each holder of the Securities shall have all rights and
remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement
or
contract and all of the rights which such holders have under any law. Any
Person having any rights under any provision of this Agreement shall be entitled
to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement
and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
(n) Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents,
whenever any Buyer exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Buyer may rescind
or
withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.
(o) Payment
Set Aside. To the extent that the Company makes a payment or payments
to the Buyers hereunder or pursuant to any of the other Transaction Documents
or
the Buyers enforce or exercise their rights hereunder or thereunder, and such
payment or payments or the proceeds of such enforcement or exercise or any
part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, foreign,
state
or federal law, common law or equitable cause of action), then to the extent
of
any such restoration the obligation or part thereof originally intended to be satisfied
shall be revived and
continued in full force and effect as if such payment had not been made or
such
enforcement or setoff had not occurred.
27
(p) Independent
Nature of Buyers' Obligations and Rights. The obligations of each
Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way
for
the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Buyer pursuant hereto or thereto, shall be deemed
to
constitute the Buyers as a partnership, an association, a joint venture or
any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents and the Company
acknowledges that to its knowledge the Buyers are not acting in concert or
as a
group, and the Company will not assert any such claim, with respect to such
obligations or the transactions contemplated by the Transaction Documents.
Each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Buyer shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of any other Transaction Documents, and
it
shall not be necessary for any other Buyer to be joined as an additional party
in any proceeding for such purpose.
(q) Litigation
Expenses. In the event of any judgment of a court or arbitration
body on any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein that is not appealed within thirty
(30)
days of such judgment, the prevailing party in such judgment may recover its
reasonable expenses in obtaining such judgment (including without limitation
amounts paid in settlement, interest, court costs, costs of investigators,
fees
and expenses of attorneys, accountants, financial advisors and other experts,
and other expenses of litigation), provided that if such prevailing party
prevails on several motions in the judgment and does not prevail on others,
it
shall be in the discretion of a court or arbitration body to determine what
percentage of such reasonable expenses the prevailing party is entitled to
receive.
[Signature
Page Follows]
28
IN
WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Purchase Agreement to be duly executed as
of
the date first written above.
| MOHEN, INC. | |||
|
|
By:
|
/s/ | |
|
Name:
Xxxxxxx Xxxxxx
Title: Corporate
Secretary
|
|||
IN
WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this
Purchase Agreement to be duly executed as of the date first written
above.
|
BUYER:
|
|||
|
Date
|
|
||
| Print Name | |||
29
SCHEDULE
OF BUYERS
|
(1)
|
|
(2)
|
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
|
Address
and
Facsimile
Number
|
|
Aggregate
Purchase
Price
|
Warrants
|
Legal
Representative’s
Address
and
Facsimile
Number
|
|
|
|
|
|
|
|
|
|
Xxxxx
X. Xxxxx
|
0
Xxxxxx Xxxxxx Xx.
Xxxx
Xxxxxxxx, XX 00000
|
$3,000,000
|
1,636,364
|
|||
|
Xxxx
Xxxx
Xxxx
Xxxxx
Xxxxxx
X. Xxxxx
|
00
Xxxxxxx Xx
Xxxxxx
XX
00000
0
Xxxxxxx Xxx
Xxxxxxxxxx
XX 00000
000
Xxxxxxxxx Xxxxxx
Xxxxxx
Xxxx, XX 00000
|
$1,000,000
$250,000
$100,000
|
545,455
136,364
54,545
|
|||
|
Xxxx
Xxxxxxxx
|
0000
Xxxxxxxxxx Xxxxx
Xxxxxx,
XX 00000
|
$102,000
|
55,636
|
|||
|
Anteaus
Capital, Inc.
|
0000
Xxxxx Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx
Xxxxx, XX 00000
|
$146,000
|
79,636
|
|||
|
Xxxxxx
Xxxxx
|
Antaeus
Capital Inc.
0000
Xxxxx Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx
Xxxxx, XX 00000
|
$10,000
|
5,455
|
|||
|
Golden
Den Corp.
|
RDR
Group
0000
X. Xxxxxxx Xxxx
Xxxxxxx,
XX 00000
|
$50,000
|
27,273
|
|||
|
Agape
World Inc.
|
000
Xxxxx Xxxxxxx Xxxxx 000
Xxxxxxxxxx,
XX 00000
Attn:
President
(000)
000-0000
|
342,000
|
186,545
|
|||
|
Xxxx
X. Xxxxx
|
$500,000
|
272,727
|
||||
|
Xxxxx
X Xxxxxx
|
$250,000
|
136,364
|
||||
|
Xxxxxx
XxXxxxx
|
$200,000
|
109,091
|
||||
|
Xxxxx
X. Xxxxx
|
$25,000
|
13,636
|
||||
|
Xxxxxx
X. Xxxxx
|
$25,000
|
13,636
|
||||
|
Distressed
High Yield Trading Opportunities Fund, Ltd.
|
$5,000,000
|
2,727,273
|
30
EXHIBITS
|
Exhibit
A
|
Form
of Notes
|
|
Exhibit
B
|
Registration
Rights Agreement
|
|
Exhibit
C
|
Form
of Security Agreement
|
|
Exhibit
D
|
Form
of Pledge Agreement
|
|
Exhibit
E
|
Irrevocable
Transfer Agent Instructions
|
|
Exhibit
F
|
Form
of Resolutions, Articles of Incorporation and By-Laws
|
|
Exhibit
G
|
Form
of Warrants
|
SCHEDULES
|
Schedule
3(a)
|
Qualification
|
|
Schedule
3(b)
|
Authorization,
Enforcement, Validity
|
|
Schedule
3(d)
|
No
Conflicts
|
|
Schedule
3(e)
|
Consents
|
|
Schedule
3(g)
|
Consultant
|
|
Schedule
3(j)
|
Financial
Statements
|
|
Schedule
3(k)
|
Conduct
of Business; Regulatory Permits
|
|
Schedule
3(m)
|
Transactions
with Affiliates
|
|
Schedule
3(n)
|
Equity
Capitalization
|
|
Schedule
3(o)
|
Indebtedness
and Other Contracts
|
|
Schedule
3(p)
|
Absence
of Litigation
|
|
Schedule
3(r)
|
Employee
Relations
|
|
Schedule
3(s)
|
Title
|
|
Schedule
3(t)
|
Intellectual
Property Rights
|
|
Schedule
3(w)
|
Tax
Status
|
|
Schedule
3(x)
|
Ranking
of Notes
|
|
Schedule
4(d)
|
Use
of Proceeds
|
|
Schedule
4(o)
|
Additional
Issuances of Securities
|
|
Schedule
4(s)
|
Transactions
with Affiliates
|
