CONFIDENTIAL SETTLEMENT AGREEMENT, SECURITY AGREEMENT AND GENERAL RELEASE
CONFIDENTIAL
SETTLEMENT AGREEMENT,
SECURITY
AGREEMENT AND GENERAL RELEASE
This
CONFIDENTIAL SETTLEMENT AGREEMENT, SECURITY AGREEMENT AND GENERAL RELEASE (the
“Agreement”) is entered into by and between Nuevo Financial Center, Inc., a
Delaware corporation located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, as successor-in-interest to Telediscount Communications, Inc., a New
York
corporation (“TCI”) located at ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter, “NFC”) on the one hand, and Envios de Valores La Nacional Corp., a
New York corporation located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“LAN”), on the other hand. NFC and LAN may sometimes
be referred together as the “Parties” or individually as “Party”.
WHEREAS,
on or about February 14, 2003, TCI and LAN entered into a Contractual Agreement
(the “Contractual Agreement”) pursuant to which, among other things: i) TCI
agreed to utilize LAN’s money transfer services on an exclusive basis for a
period of five years; and ii) TCI sold LAN one million seven hundred forty-three
thousand two hundred thirteen (1,743,213) shares of TCI common stock, in
exchange for three hundred fifty thousand dollars ($350,000) (the “Investment”);
WHEREAS,
on or about March 11, 2005, TCI was merged with and into the entity known as
Millennium Venture Capital Holdings, Inc. (“MVCH”), which entity later changed
its name to NFC;
WHEREAS,
NFC’s August 23, 2006 and November 8, 2006 form SB 2/A’s filed with the
Securities and Exchange Commission state that LAN is the owner of 282,855 shares
of NFC;
WHEREAS,
after a further review of various transactions, NFC has determined that LAN
is
presently the owner of 311,605 shares of NFC (the “NFC Shares”), representing
approximately .84% of NFC’s total outstanding and issued shares of 36,891,817 on
a fully diluted basis;
WHEREAS,
LAN has provided TCI and NFC with notice of breach of the exclusivity provision
of the Contractual Agreement, and notice of breach with respect to NFC’s
representations and warranties in connection with the Investment, and has
demanded that NFC immediately return the Investment to LAN;
WHEREAS,
subsequent to TCI and LAN entering into the Contractual Agreement, TCI and
NFC
entered into transactions pursuant to which shares of TCI (and its successors)
common stock were issued;
WHEREAS,
LAN has provided TCI and NFC with notice that LAN believes it was entitled
to
anti-dilution protection pursuant to the Contractual Agreement with respect
to
its Investment and LAN has demanded the right to purchase additional shares
of
common stock of NFC; and
WHEREAS,
in order to avoid the expense and burden associated with litigation and to
avoid
the risks inherent in litigation, the Parties desire to compromise and have
agreed, without admission by NFC of any claims of breach under the Contractual
Agreement, to adjust, settle and compromise such claims and any claims that
either Party may have against each other in accordance with the terms hereof;
NOW
THEREFORE, it is agreed by and between the Parties hereto, that in consideration
of the mutual covenants, agreements, promises and payments set forth herein,
the
Security Agreement attached hereto at Exhibit
B,
and the
General Release set forth on Exhibit
C
hereto,
that any and all claims between the Parties shall be settled, compromised and
resolved, pursuant to the following terms and conditions.
2
1. Definitions.
a. “LAN”
shall mean Envios De Valores La Nacional Corp., its predecessor entities, and
each of its present and former direct and indirect parents and partners,
subsidiaries, divisions, affiliates or associates (as defined in SEC Rule 12b-2
as promulgated pursuant to the Securities and Exchange Act of 1934); and their
present and former partners, stockholders, officers, directors, employees,
agents and legal representatives; and the predecessors, heirs, executors,
administrators, successors and assigns of any of the above persons or
entities.
b. TCI
shall
mean Telediscount Communications, Inc., its predecessor entities, and each
of
its present and former direct and indirect parents and partners, subsidiaries,
divisions, affiliates or associates (as defined in SEC Rule 12b-2 as promulgated
pursuant to the Securities and Exchange Act of 1934); and their present and
former partners, stockholders, officers, directors, employees, agents and legal
representatives; and the predecessors, heirs, executors, administrators,
successors and assigns of any of the above persons or entities.
c. NFC
shall
mean Nuevo Financial Center, Inc., its predecessor entities, and each of its
present and former direct and indirect parents and partners, subsidiaries,
divisions, affiliates or associates (as defined in SEC Rule 12b-2 as promulgated
pursuant to the Securities and Exchange Act of 1934); and their present and
former partners, stockholders, officers, directors, employees, agents and legal
representatives; and the predecessors, heirs, executors, administrators,
successors and assigns of any of the above persons or entities.
2. Disclaimer
of Liability.
This
Agreement is a full and final compromise, settlement and release of disputed
claims. This
Agreement, and any and all negotiations, documents and discussions associated
with it, shall not in any event be construed or be deemed to be an admission
or
concession on the part of TCI, NFC and/or LAN, or anyone acting on their behalf
of any liability or wrongdoing whatsoever or as any evidence of any claimed
violation by TCI, NFC and/or LAN of the Contractual Agreement and/or any federal
or state statute, regulation, or law. Neither this Agreement, nor any of its
provisions, nor the Security Agreement attached hereto, nor the General Release
attached hereto, nor evidence of any negotiations or proceedings in pursuance
of
this Agreement, shall be offered or received in any action or proceeding as
an
admission or concession of any liability or wrongdoing whatever on the part
of
TCI, NFC and LAN, or anyone acting on their behalf.
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3. Payment
by NFC to LAN.
a. In
settlement of LAN’s claims of breach against TCI and NFC, NFC shall make
payments to LAN of $350,000 plus interest at ten percent (10%) per annum (said
interest to commence accruing as of January 1, 2007), for a total settlement
payment of $389,482.60 (the “Settlement Amount”) as follows:
i. On
or
before December 20, 2006, NFC shall pay LAN the sum of Thirty Five Thousand
Dollars ($35,000) (the “Initial Payment”);
ii. After
the
Initial Payment, NFC shall make monthly payments to LAN, commencing on January
2, 2007, and thereafter on the first business day of each successive month,
as
detailed on the payment schedule attached hereto at Exhibit
A
(provided there are no defaults in payment) until such time as the Settlement
Amount is paid off in its entirety.
b. The
payments provided for in Section 3(a)(i) and (ii) shall be made by wire transfer
to an account designated by LAN or via certified or bank check to LAN’s address
set forth above.
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c. TCI
and
NFC agree that in the event of a default by NFC of its payment obligations
provided for Section 3 (a)(i) and (ii), they shall have fifteen (15) days to
cure the default, and during said fifteen (15) day period, the interest rate
on
the unpaid balance of the Settlement Amount due and owing to LAN will be
increased from 10% to 18% per annum. In the event that TCI and NFC are unable
to
cure the default after the expiration of the fifteen (15) day cure period,
LAN
may pursue any remedy that it has or may have, in law, or in equity; and the
interest on the unpaid balance shall continue to accrue at eighteen percent
(18%) per annum until such time as the default is cured and payment is brought
current, at which time the interest rate will revert to ten percent (10%) per
annum. TCI and NFC further agree that the filing of a cause of action by LAN
to
recover the unpaid balance shall not toll the accrual of interest at 18% per
annum on the unpaid balance of the Settlement Agreement.
d. Notwithstanding
the foregoing payment obligations, NFC represents that it is presently in the
process of trying to raise financing, funding and/or capital (collectively
“Financing”) and intends to accomplish this goal by on or about April 1, 2007.
In connection therewith, TCI and NFC agree that if, following the execution
of
this Agreement, NFC is able to raise Financing it shall make payments against
any outstanding unpaid Settlement Amount as follows:
i. in
the
event NFC raises Financing of $500,000 to $999,999, NFC will pay LAN twenty
five
percent (25%) of the outstanding unpaid Settlement Amount. As an example of
how
such partial payment may be made and its effect on the payment schedule,
attached hereto as Exhibit
A-1
is a
payment schedule assuming a 25% prepayment as of April 1, 2007; and
5
ii.
in the
event NFC raises Financing of $1,000,000 to $1,999,999, NFC will pay LAN fifty
percent (50%) of the outstanding unpaid Settlement Amount. As an example of
how
such partial payment may be made and its effect on the payment schedule,
attached hereto as Exhibit
A-2
is a
payment schedule assuming a 50% prepayment as of April 1, 2007; and
iii. in
the
event NFC raises Financing of $2,000,000 or more, it will pay LAN the entire
balance of the outstanding unpaid Settlement Amount.
e. In
addition to the payment of the Settlement Amount in settlement of LAN’s claim of
breach against TCI and NFC, NFC hereby agrees to issue LAN a common stock
warrant providing LAN the right to purchase 1,507,589 shares of NFC common
stock
(the “Warrant Shares”) based on the following terms and conditions, as well as
additional terms and conditions set forth in the form of common stock warrant
attached hereto as Exhibit
D
(the
“Warrant”):
i. The
Warrant may be exercised by LAN at any time between (a) the earlier to occur
of
either (i) thirty (30) days after NFC’s registration statement is approved by
the the Securities and Exchange Commission (“SEC”) and NASD, Inc. (“NASD”)
(which approval permits NFC’s securities to be traded on a public market and/or
exchange) or (ii) June 1, 2007 and (b) on or prior to March 31, 2009 or an
earlier date upon the occurrence of the payment of the Settlement Agreement
in
full (the “Exercise Period”);
ii. LAN
shall
have a one time right to exercise the Warrant in whole and not in part, during
the Exercise Period, provided the Settlement Agreement is not paid in its
entirety prior to the commencement of the Exercise Period. The exercise price
for the Warrant Shares shall be payable in a lump sum of $303,553 (the “Exercise
Price”); and
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iii. The
stock
certificate representing the shares of NFC common stock issuable by NFC upon
payment of the Exercise Price to NFC during the Exercise Period shall contain
the following restrictive legends (in addition to the other restrictions set
forth in the Warrant):
(a) “THE
SECURITIES REPRESENTED HEREBY ARE RESTRICTED SECURITIES WITHIN THE MEANING
OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE
ACT
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THE ISSUER OF THESE SECURITIES WILL NOT
TRANSFER SUCH SECURITIES EXCEPT UPON RECEIPT OF EVIDENCE SATISFACTORY TO THE
ISSUER THAT THE REGISTRATION PROVISIONS OF THE ACT HAVE BEEN COMPLIED WITH
OR
THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT VIOLATE
ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS.”; and
(b) “Provided
Nuevo Financial Center, Inc.’s (“NFC”) common stock represented hereby is
registered and trading on a public securities market or exchange, the holder
of
this stock certificate shall not be permitted to sell, on any given business
day, NFC shares represented hereby equal to more than ten percent (10%) of
the
average number of NFC shares traded on a public securities market or exchange
during the previous five (5) business days. This restriction shall not apply:
(i) in the event NFC’s common stock is not registered and trading on a public
securities market or exchange, or (ii) to a private transaction whereby the
proposed transfer may be effected without registration under the Securities
Act
or that may be effected under applicable state securities laws; provided,
however, the NFC common stock represented hereby prior to the registration
and
trading of the NFC common stock on a public securities market or exchange shall
continue to be subject to this restriction after such transfer.” The purpose of
this restriction is to establish an orderly trading market for shares of NFC’s
common stock, which NFC believes to be in the best interest of its shareholders.
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4. LAN’S
right to sell the NFC Shares.
a. Subject
to Section 4(b) below, LAN, as the owner of 311,605 NFC Shares, shall have
the
right, during the term of this Agreement, to sell any part and/or all of its
NFC
Shares to third parties; provided however, that upon receiving a bona fide
third
party offer to purchase the NFC Shares, LAN shall, within ten (10) days of
receiving such offer, notify NFC and provide NFC with a twenty (20) day right
of
first refusal to purchase the NFC Shares on the same terms and conditions as
set
forth in the third party offer. If NFC rejects to purchase the shares pursuant
to the terms and conditions set forth in the third party offer, LAN may sell
the
NFC Shares to the third party. To the extent that the sale of the NFC Shares
by
LAN results in LAN receiving proceeds equal to or in excess of any outstanding
Settlement Amount for which LAN has not yet received payment, NFC’s payment
obligations with respect to the Settlement Amount shall be deemed satisfied.
In
the event the sale of the NFC Shares by LAN results in LAN receiving proceeds
less than the then outstanding Settlement Amount for which LAN has not yet
received payment, NFC’s monthly payment obligations shall be recalculated and a
revised Exhibit
A
shall be
agreed to by the Parties in writing and attached hereto, provided the interest
rate on the outstanding principal amount remains ten percent (10%) per annum
and
the monthly payment remains approximately $12,500 per month.
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b. Notwithstanding
Section 4(a) above, the percentage of the NFC Shares which LAN is permitted
to
sell will be proportionately reduced each time LAN receives payment against
the
outstanding Settlement Amount, whether such payment is a result of a monthly
payment in accordance with the payment schedule attached as Exhibit
A,
or LAN
receives payment from a third party in exchange for the sale of all or a portion
of the NFC Shares in accordance with the terms of this Agreement. Accordingly,
and by way of example only, in the event LAN receives 10% of the outstanding
Settlement Amount, LAN shall thereafter only be permitted to sell 90% of the
NFC
Shares which it then owns. In accordance with the foregoing, each time LAN
receives payment on the outstanding Settlement Amount LAN hereby agrees to
return the stock certificate it holds representing the number of NFC Shares
it
owned prior to such transaction and/or payment to NFC and NFC hereby agrees
to
issue a new stock certificate to LAN representing the number of shares LAN
shall
be deemed to own after giving affect to such transaction and/or payment and
if
applicable, NFC agrees to issue a new stock certificate to the third party
purchasing all or a portion the NFC Shares owned by LAN. The Parties hereby
agree that NFC shall not be obligated to make the next scheduled payment to
LAN
under the payment schedule attached hereto as Exhibit
A
unless
and until LAN returns the stock certificate representing the number of NFC
shares it owned prior to the previous transaction and/or payment. As an example
of how the certificate return and re-issuance will work in practice, on January
2, 2007 NFC will pay LAN $12,660.10 pursuant to Exhibit
A
and
after receipt thereof, LAN will return to NFC the NFC stock certificate in
its
possession representing 280,444 NFC Shares. NFC will then issue a new stock
certificate to LAN representing 271,510 NFC Shares and this process will be
repeated each month in accordance with the terms of this Agreement.1
1
The calculation to determine the number of shares to be repurchased by NFC
shall
be based on a share price of $1.232/share ($350,000 divided by 311,605 shares)
and only the principal portion of the payments set forth on Exhibit
A
shall be
used in such calculation. In this example, the principal portion of the payment
made on January 2, 2007 was $10,035.10 and therefore when divided by
$1.1232/share, the number of shares repurchased equals 8,934.
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c. Upon
full
execution of this Agreement, NFC shall pay LAN the Initial Payment and issue
LAN
a stock certificate for 280,444 NFC Shares, which NFC Shares shall be subject
to
the same restrictions set forth in Section 3, subsection e.(iii). Upon receipt
of the Initial Payment and the stock certificate for 280,444 NFC Shares, LAN
hereby agrees to direct its legal counsel to release the original TCI stock
certificate from escrow and return such TCI stock certificate to NFC for
cancellation. As of the date of this Agreement, NFC is in the process of working
with its transfer agent to change the name on its stock certificates from MVCH
to “Nuevo Financial Center, Inc.” Prior to such change becoming effective, the
stock certificates to be issued in connection herewith shall bear the name
“Millenium Venture Capital Holdings, Inc.” Once the change is effective, which
is expected to occur prior to January 31, 2007, the stock certificates will
be
issued under the name “Nuevo Financial Center, Inc.”.
d. NFC
explicitly agrees that upon being notified by LAN of a bona fide third party
offer to purchase LAN’s NFC Shares, NFC shall in no way interfere with or
otherwise limit LAN’s ability to sell, and to profit from the sale of the NFC
Shares by paying any outstanding Settlement Amount such that LAN receives less
than it would be entitled to receive in connection with the sale of the NFC
Shares to the third party offerror, or if NFC chooses, to NFC.
e. As
previously stated in the Contractual Agreement, LAN acknowledges and understands
that its purchase of the NFC Shares (i) involves a high degree of risk, (ii)
LAN
may not be able to liquidate its investment, (iii) transferability is extremely
limited, (iv) LAN could sustain a loss of its investment and (iv) there is
no
public market for the sale of the NFC Shares.
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f. (i) If
NFC
shall conduct an initial public offering of equity securities, anytime
thereafter, upon written request by LAN (a “Requested Registration”) that NFC
effect the registration under the Securities Act of 1933, as amended (the “Act”)
of all or part of the NFC Shares (the “Registrable Securities”), NFC will use
its best efforts to effect the registration under the Act of the Registrable
Securities which NFC has been so requested to register by LAN within sixty
(60)
days after receipt of such request.
(ii) If
NFC
for itself or any of its security holders shall at any time or times after
the
date hereof determine to register under the Act any shares of its capital stock
or other securities, on each such occasion NFC will notify LAN of such
determination at least ▇▇▇▇▇▇ (30) days prior to the filing of such registration
statement, and upon notice, NFC will use its best efforts, as soon as
practicable thereafter, to cause any of the Registrable Securities specified
by
LAN to be included in such registration statement to the extent such
registration is permissible under the Act, subject to the conditions of the
Act
and at the reasonable discretion of NFC’s underwriters.
5. Security
of the Payment Obligations.
TCI and
NFC agree that its payment obligations under this Agreement shall be secured
by
all of TCI’s and NFC’s assets, in accordance with the Subordinate Security
Agreement attached hereto at Exhibit
B.
LAN
agrees and understands that its security interest in NFC’s assets shall always
be subordinate to NFC’s existing bridge loans with Vision Opportunity Capital
Partners, LP, as evidenced by a certain secured convertible note in the
principal amount of $500,000 and dated as of May 2, 2006 and a certain second
convertible note in the amount of $500,000 and dated as of November 1, 2006
and
will further be subordinate to any senior lender from which it can raise
Financing in connection with its efforts to raise financing, capital and/or
funding on or about April 1, 2007 as described in Section 3(d) above. LAN shall
have priority over all other creditors except those referenced in this Section
5.
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6. General
Release.
LAN
agrees that, as a condition to receiving any benefits and covenants set forth
in
this Agreement, it shall execute, under oath, the general release in the form
attached hereto as Exhibit
C.
The
General Release shall be executed contemporaneously with the signing of this
Agreement and shall be delivered to LAN’s counsel to be held in escrow and later
delivered to counsel for TCI and NFC in accordance with Section 7 of this
Agreement.
7. Delivery
of General Release.
Within
five (5) business days following delivery of the final payment provided for
in
Sections 3 and 4 above and the attached Exhibit
A,
LAN, by
its counsel, shall deliver the General Release to counsel for NFC.
8. Binding
on Successors.
This
Agreement shall be binding upon and inure to the benefit of successors and
assigns of the Parties hereto.
9. No
Assignment.
Each
party hereby
represents and warrants that they have not assigned, conveyed, sold or
transferred, by operation of law or otherwise, any claims, demands, obligations,
rights, causes of action, or interests herein and/or under the Contractual
Agreement to any person or entity. In addition, LAN hereby represents and
warrants that it is the current owner of the NFC Shares and that it has not
transferred the NFC Shares to any person or entity. Furthermore, each Party
hereby represents and warrants that they have not assigned the Contractual
Agreement to any person or entity. In the event there is any claim based on,
arising out of or in connection with any such transfer or assignment or
purported assignment, the Party which made or purported to make such transfer
or
assignment hereby agrees to indemnify, defend and hold harmless the other Party
from and against any such claim, action or cause of action, including reasonable
attorneys’ fees and costs incurred in connection therewith.
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10. Confidentiality.
a. Except
as
provided in subsection (b) of this Section 10, the Parties agree that the terms
end conditions of this Agreement are and shall remain confidential.
b. Nothing
in subsection (a) of this Section 10 shall prohibit: i) any Party from
disclosing terms and conditions of the Agreement to the extent required by
a
final and binding court order or other compulsory process, provided that the
disclosing Party provides the other Parties with at least ten (10) days notice
of the order or compulsory process; ii) any Party from disclosing the terms
and
conditions of the Agreement to (a) its respective attorneys, auditors, lending
institutions, or other agents or representatives that the disclosing Party
in
good faith believes should have access and/or to (b) its parent company, and
such parent’s company’s respective attorneys, auditors, lending institutions, or
other agents or representatives that the disclosing Party in good faith believes
should have access; and/or (iii) NFC disclosing certain aspects of this
Agreement on NFC securities filings, to the extent required by the United States
Securities and Exchange Commission.
11. No
Presumption Against Drafter.
None
of
the Parties to this Agreement shall be considered to be the drafter of the
Agreement, or any provision hereof, or the exhibits attached hereto, for the
purpose of any statute, case law, or rule of interpretation or construction
that
would or might cause any provision to be construed against the
drafter.
12. Governing
Law; Jurisdiction and Venue.
This
Agreement will be construed and governed by the laws of the state of New York.
Each Party, for itself and himself, and their respective successors and assigns,
hereby consents to personal jurisdiction over it and them in the State or
Federal courts located in New York County in connection with any action or
proceeding arising out of or related to this Agreement. Each Party irrevocably
waives, to the fullest extent permitted by law, any objection which it may
have
to the laying of the venue of any such suit, action or proceeding brought in
such court and any claim that any such suit, action or proceeding brought in
such court has been brought in an inconvenient forum. Each Party agrees that
a
final judgment in any such suit, action or proceeding brought in such court,
after all appropriate appeals, is conclusive and binding upon it. Each Party
agrees that process may be served against it in any suit, action or proceeding
referred to in this subsection by sending same via certified or registered
mail,
return receipt requested or via overnight courier service. Each Party agrees
that any such service (i) will be effective service of process upon it in any
such suit, action or proceeding; and (ii) will to the fullest extent enforceable
by law, be valid personal service upon and personal delivery to
it.
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13. Enforcement
of Rights Under this Agreement.
In the
event that either Party is required to institute legal proceedings against
the
other Party arising out of a breach of this Agreement, the breaching Party
shall
be entitled to recover, in addition to any other remedy available, its costs
and
expenses, including its reasonable attorneys’ fees, in connection with such
proceeding.
14. Counterpart
and Execution by Facsimile.
This
Agreement, and the exhibits hereto, may be executed in any number of
counterparts and by different Parties on separate counterparts, each of which
counterpart, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and
the
same Agreement. Facsimile signatures shall be considered as valid signatures
as
of the date hereof, although the original signature pages shall hereafter be
appended to this Agreement.
14
15. Representation
of Authority.
Each
undersigned representative of TCI, NFC and LAN, respectively, covenants and
represents that such representative is fully authorized to enter into and to
execute this Agreement on behalf of his or her respective party.
16. Effective
Date.
The
Agreement shall become effective upon its execution by the undersigned and
delivery of a copy of the same to each Party (the “Effective
Date”).
17. Severability.
Should
any one or more of the provisions of this Agreement or the exhibits hereto
be
determined to be illegal or unenforceable, such provision(s) shall (i) be
modified to the minimum extent necessary to render it valid and enforceable,
or
(ii) if it cannot be so modified, be deemed not to be a part of this Agreement
and shall not affect the validity or enforceability of the remaining
provisions.
18. Termination
of Contractual Agreement.
Upon
full execution of this Agreement all provisions of the Contractual Agreement
shall terminate and be of no further force or effect. In accordance with the
foregoing, upon full execution of this Agreement, LAN hereby acknowledges and
agrees as follows: (i) Section 1 of the Contractual Agreement shall be of no
further force and effect, including, but not limited to, the provisions thereof
pertaining to the exclusivity provisions of subsection (a) and the provisions
providing for NFC to offer LAN’s money transfer services; (ii) Section 3 of the
Contractual Agreement, subsection (c) providing LAN with the right to appoint
one of its executive officers to the board of directors of NFC, shall be of
no
further force and effect; and (iii) Section 3 of the Contractual Agreement,
subsection (i) providing LAN the right to purchase securities to preserve the
relative dividend rights and voting rights at prices not less favorable than
the
prices such securities are to be offered for sale to others, shall be of no
further force and effect.
15
19. Entire
Agreement.
This
Agreement and the attached exhibits sets forth the entire agreement between
the
Parties hereto, and fully supersedes any prior agreements or understandings
between the Parties. This Agreement may only be amended in writing, signed
by
all of the Parties hereto.
20. Voluntary
Execution.
Each of
the Parties hereby acknowledge that it has carefully read this Agreement and
understands all of its terms including the full and final release of claims
pursuant to the General Release of claims pursuant to the General Release
referenced in Section 6 hereof and attached hereto as Exhibit
C.
The
Parties further acknowledge that each has voluntarily entered into this
Agreement.
21. Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested
(or by the most nearly comparable method if mailed from or to a location outside
of the United States) or by Federal Express, Express Mail, or similar overnight
delivery, or courier service or delivered in person or by telecopy, or similar
telecommunications equipment against receipt to the party to whom it is to
be
given at the address of such party set forth in this Section 21 (or to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 21).
If
to
LAN:
Envios
de
Valores La Nacional Corp.
▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
(P)
917.529.0700
(F)
917.529.0749
16
With
a
copy (which copy shall not constitute notice) to:
▇▇▇▇▇
& ▇▇▇▇▇, P.C.
▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ 10004-2271
Attn.:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
(P)
212.471.2990
(F)
212.471.2997
If
to the
NFC:
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇▇▇▇▇▇, CEO
(P)
201.537.0956
(F)
201.271.1154
With
a
copy (which copy shall not constitute notice) to:
Feingold
▇▇▇▇▇▇▇▇▇ P.A.
▇▇▇▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(P)
954.967.2575
(F)
954.967.2576
Any
notice or other communication given by certified mail (or by such comparable
method) shall be deemed given at the time of certification thereof (or
comparable act), except for a notice changing a party's address which will
be
deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 21 shall be deemed given at the time of receipt
thereof.
22. Incorporation.
The
recitals set forth above are
true
and correct and are incorporated herein by reference.
23. Cooperation.
The
Parties hereby agree to execute any and all additional documents reasonably
necessary to carry out the terms, conditions and provisions of this Agreement.
17
IN
WITNESS WHEREOF, the Parties hereto knowingly and voluntarily executed this
Agreement and the General Release as of the date set forth below.
Delaware
corporation, as successor-in-interest to
Telediscount
Communications, Inc.
By:
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
CEO
Date: December
__, ▇▇▇▇
▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇ ▇▇ NACIONAL CORP., a
New
York
corporation
By:
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
President
Date:
December
__, 2006
18
EXHIBIT
A
PAYMENT
SCHEDULE
See
attached.
19
EXHIBIT
B
SECURITY
AGREEMENT
This
SECURITY AGREEMENT (the “Security Agreement”) is made this ___ day of December
2006, by and between Nuevo Financial Center, Inc. (“Obligor”) and Envios De
Valores La Nacional Corp. (“Secured Party”).
WHEREAS,
Obligor and Secured Party have entered into a Confidential Settlement Agreement,
Security Agreement and General Release (the “Agreement”) of even date, whereby
Obligor has agreed to make payment to Secured Party in the amount of Three
Hundred and Fifty Thousand Dollars ($350,000) together with interest;
and
WHEREAS,
Obligor has agreed to secure its performance under the Agreement by providing
Secured Party with a subordinate security interest in the Collateral as defined
and described below;
NOW
THEREFORE, Obligor hereby agrees as follows:
1. Security
Interest.
Obligor
hereby grants Secured Party a subordinate security interest in the following
properties, assets and rights of Obligor, wherever located, whether now owned
or
hereafter acquired or arising, and all proceeds and products thereof (which
will
hereinafter be referred to as the “Collateral”):
All
personal and fixture property of every kind and nature including, without
limitation, all furniture, fixtures, equipment, raw materials, inventory, other
goods, accounts, contract rights, rights to the payment of money, insurance
refund claims and all other insurance claims and proceeds, tort claims, chattel
paper, documents, instruments, securities and other investment property, deposit
accounts, rights to proceeds of letters of credit and all general intangibles
including, without limitation, all tax refund claims, license fees, patents,
patent applications, trademarks, trademark applications, trade names,
copyrights, copyright applications, rights to ▇▇▇ and recover for past
infringement of patents, trademarks and copyrights, computer programs, computer
software, engineering drawings, service marks, customer lists, goodwill, and
all
licenses, permits, agreements of any kind or nature pursuant to which the
Obligor possesses, uses or has authority to possess or use property (whether
tangible or intangible) of others or others possess, use or have authority
to
possess or use property (whether tangible or intangible) of the Obligor, and
all
recorded data of any kind or nature, regardless of the medium of recording,
including, without limitation, all software, writings, plans, specifications,
formulations and schematics. The Obligor acknowledges and agrees that the
foregoing collateral description covers all assets of the
Obligor.
20
The
foregoing subordinate security interest in the Collateral shall be subordinate
in all respects to the security interest granted by Obligor to Vision
Opportunity Capital Partners, LP (“VOCP”) in connection with a certain secured
convertible note in the amount of $500,000, as well as a certain securities
purchase agreement, security agreement and Unit Purchase Warrant all dated
as of
May 2, 2006 and a certain secured convertible note in the amount of $500,000,
as
well as a certain securities purchase agreement, security agreement and Unit
Purchase Warrant all dated as of November 1, 2006. In addition, following the
execution of this Security Agreement, and for a period of one (1) year
hereafter, Secured Party will, at the request of Obligor agree to amend this
Security Agreement to become subordinate to one (1) additional senior creditor
from which Obligor may obtain credit and/or a credit facility, provided Obligor
obtains such credit and/or credit facility. In such event, Secured Party agrees
to remain subordinate to such senior creditor for the term of such loan and
any
modifications and/or extensions thereto.
2. Obligor’s
Representations and Warranties.
Except
for the security interest granted by this Agreement, and except for Secured
Party’s position as a subordinate secured party to a senior creditor as
contemplated in Section 1 hereof, and except for the interests granted by
Obligor to VOCP, as well as Telediscount Communications, Inc.’s (“TCI”) dispute
with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ d/b/a AC Consulting, pursuant to a default judgment
entered on October 11, 2005 in the amount of $36,634.48 (of which approximately
$4,000 has been paid by TCI to date and which dispute is currently the subject
of good faith negotiations to reach a settlement agreement that is anticipated
to result in a payment of less than the amount remaining due thereunder in
return for a full release of claims), to the best of Obligor’s actual knowledge
and belief, Obligor is the owner of the Collateral free from any adverse lien,
security interest or encumbrance. To the best of Obligor’s actual knowledge and
belief, no consent or approval (other than any which may be incidental to any
filing with a filing officer to perfect the security interests in the
Collateral) of any governmental body, regulatory authority, person, trust,
or
entity is or will be (i) necessary to the validity of the rights created
hereunder, or (ii) required prior to the assignment, transfer, and delivery
of
any of the Collateral to Secured Party (or any agent designated by Secured
Party). Other than as disclosed herein and in Obligor’s SB 2/A filed on November
8, 2006, to the best of Obligor’s actual knowledge and belief, no material
dispute, right to setoff, counterclaim, or defense exists with respect to all
or
any part of the Collateral. At Secured Party’s request, Obligor will join with
Secured Party in executing one or more financing statements pursuant to the
Uniform Commercial Code in a form satisfactory to Secured Party. Obligor shall
have the right to sell portions of the Collateral in the ordinary course of
its
business, without Secured Party’s consent, provided, however, in the event
Obligor seeks the Secured Party’s written consent, Secured Party agrees that its
consent shall not be unreasonably withheld or delayed.
21
3. Events
of Default.
Obligor
shall be in default under this Agreement upon the happening of any of the
following events or conditions: a) default in the payment of performance of
any
obligation, covenant or liability contained or referred to herein or in the
Agreement; b) any warranty, representation or statement made or furnished to
Secured Party by or on behalf of Obligor proves to have been false in any
material respect when made or furnished; or c) dissolution, termination of
existence, insolvency, business failure, appointment of a receiver of any part
of the property, assignment for the benefit of creditors, or the commencement
of
any proceeding under any bankruptcy or insolvency laws by or against, Obligor
or
any guarantor or surety for Obligor.
22
4. Rights
and Remedies.
Upon
default by Obligor, Secured Party shall immediately notify Obligor in writing,
which writing shall specify in detail the nature of such default and provide
Obligor fifteen (15) days to cure such default. On the occurrence of any default
hereunder after receipt of written notice and Obligor’s failure to cure the same
within fifteen (15) days, and subject to the provisions contained in the
Agreement, Secured Party shall be entitled to all rights and remedies provided
for under law. Such rights of Secured Party shall be cumulative, and the
exercise of any right by Secured Party shall not affect or impair other rights
which Secured Party may have under the Agreement, this Security Agreement or
at
law.
5. Full
Payment.
Upon
payment in full by Obligor to Secured Party of all amounts due and payable
under
the Agreement, Secured Party shall have no further right or interest in or
to
the Collateral and shall file UCC-3 Termination Statements with respect to
the
financing statements previously filed with respect to the
Collateral.
6. Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested
(or by the most nearly comparable method if mailed from or to a location outside
of the United States) or by Federal Express, Express Mail, or similar overnight
delivery, or courier service or delivered in person or by telecopy, or similar
telecommunications equipment against receipt to the party to whom it is to
be
given at the address of such party set forth in this Section 6 (or to such
other
address as the party shall have furnished in writing in accordance with the
provisions of this Section 6).
23
If
to
LAN:
Envios
de
Valores La Nacional Corp.
▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
(P)
917.529.0700
(F)
917.529.0749
With
a
copy (which copy shall not constitute notice) to:
▇▇▇▇▇
& ▇▇▇▇▇, P.C.
▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ 10004-2271
Attn.:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
(P)
212.471.2990
(F)
212.471.2997
If
to the
NFC:
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇▇▇▇▇▇, CEO
(P)
201.537.0956
(F)
201.271.1154
With
a
copy (which copy shall not constitute notice) to:
Feingold
▇▇▇▇▇▇▇▇▇ P.A.
▇▇▇▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(P)
954.967.2575
(F)
954.967.2576
Any
notice or other communication given by certified mail (or by such comparable
method) shall be deemed given at the time of certification thereof (or
comparable act), except for a notice changing a party's address which will
be
deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 6 shall be deemed given at the time of receipt
thereof.
24
7. Counterparts/Faxes.
This
Security Agreement may be executed in any number of counterparts and by
different Parties on separate counterparts, each of which counterpart, when
so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Security
Agreement. Facsimile signatures shall be considered as valid signatures as
of
the date hereof, although the original signature pages shall hereafter be
appended to this Security Agreement.
8. Governing
Law.
This
Security Agreement will be construed and governed by the laws of the State
of
New York. Each party, for itself and himself, and their respective successors
and assigns, hereby consents to personal jurisdiction over it and them in the
State or Federal courts located in New York County in connection with any action
or proceeding arising out of or related to this Security Agreement. Each Party
irrevocably waives, to the fullest extent permitted by law, any objection which
it may have to the laying of the venue of any such suit, action or proceeding
brought in such court and any claim that any such suit, action or proceeding
brought in such court has been brought in an inconvenient forum. Each Party
agrees that a final judgment in any such suit, action or proceeding brought
in
such court, after all appropriate appeals, is conclusive and binding upon it.
Each Party agrees that process may be served against it in any suit, action
or
proceeding referred to in this subsection by sending same via certified or
registered mail, return receipt requested or via overnight courier service.
Each
Party agrees that any such service (i) will be effective service of process
upon
it in any such suit, action or proceeding; and (ii) will to the fullest extent
enforceable by law, be valid personal service upon and personal delivery to
it.
25
IN
WITNESS WHEREOF, the parties have caused this Security Agreement to be executed
as of the first date written above.
as
successor-in-interest to Telediscount
Communications,
Inc.
By:
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
CEO
Date: December
__, ▇▇▇▇
▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇ ▇▇ NACIONAL CORP.
By:
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
President
Date: December
__, 2006
26
EXHIBIT
C
GENERAL
RELEASE
Envios
De
Valores La Nacional Corp., its predecessor entities and each of its present
and
former direct and indirect parents and partners, subsidiaries, divisions,
affiliates or associates (as defined in SEC Rule 12b-2 promulgated pursuant
to
the Securities and Exchange Act of 1934); and their present and former partners,
stockholders, officers, directors, employees, accountants, agents and legal
representatives; and the predecessors, heirs, executors, administrators,
successors and assigns of any of the above persons or entities (“LAN”) hereby
fully release and discharge Nuevo Financial Center, Inc. its predecessor
entities and each of its present and former direct and indirect parents and
partners, subsidiaries, divisions, affiliates or associates (as defined in
SEC
Rule 12b-2 promulgated pursuant to the Securities and Exchange Act of 1934);
and
their present and former partners, stockholders, officers, directors, employees,
accountants, agents and legal representatives; and the predecessors, heirs,
executors, administrators, successors and assigns of any of the above persons
or
entities (“NFC”), from any and all actions, causes of action, suit, debts,
damages, remedies, contracts (express or implied), dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, agreements,
promises, judgments, obligations, grievances, claims, charges, complaints,
and
demands whatsoever, in law or equity, known or unknown, against NFC that LAN
may
now have or hereafter can, shall or may have for, upon or by reason of any
matter, cause, or thing, under any federal, state, city, or local laws, rules,
regulations or guidelines but based solely upon conduct occurring from the
beginning of the world, up to and including the date of LAN’s delivery of this
General Release to NFC. LAN will not institute or be represented in, and will
not submit or file, or authorize the submission of filing on its behalf of,
any
lawsuit, claim, charge, complaint or other proceeding against NFC based on
conduct occurring up to and including the date of NFC’s execution of the
Confidential Settlement Agreement, Security Agreement and General Release (the
“Agreement”). LAN shall not seek or accept any award or settlement from any such
source or proceeding. In the event LAN institutes, is a party to, or is a member
of a class that institutes, any such action or proceeding, its claims shall
be
dismissed or class membership terminated immediately upon presentation of the
Agreement in full satisfaction of any such claim and LAN shall immediately
reimburse NFC for all monies paid by NFC to obtain such dismissal, including,
but not limited to, its reasonable attorneys’ fees.
December
___, 2006
|
ENVIOS
DE VALORES LA NACIONAL CORP.
|
||
| |
|
|
| By: | ||
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
Title:
President
|
||
27
EXHIBIT
D
FORM
OF COMMON STOCK WARRANT
THIS
WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED OR
PLEDGED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR SUCH APPLICABLE STATE SECURITIES LAWS, OR IF THE PROPOSED
TRANSFER MAY BE EFFECTED WITHOUT REGISTRATION, UNDER THE SECURITIES ACT OR
REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS.
THIS
WARRANT, THE SECURITIES REPRESENTED BY THIS WARRANT AND THE COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO CERTAIN RESTRICTIONS
ON
TRANSFER AS SET FORTH IN A CERTAIN CONFIDENTIAL SETTLEMENT AGREEMENT, SECURITY
AGREEMENT AND GENERAL RELEASE DATED AS OF DECEMBER __, 2006, BY AND BETWEEN
THE
ISSUER OF SUCH SECURITIES (THE "CORPORATION") AND ENVIOS DE VALORES LA NACIONAL
CORP., A NEW YORK CORPORATION (THE “SETTLEMENT AGREEMENT”). A COPY OF SUCH
SETTLEMENT AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO
THE
HOLDER HEREOF UPON WRITTEN REQUEST.
NUEVO
FINANCIAL CENTER, INC.
COMMON
STOCK WARRANT
| No. W-LAN |
December
__,
2006
|
VOID
AFTER March 31, 2009
(or
earlier upon the occurrence of
certain
events described below)
THIS
CERTIFIES
that,
for value received, ENVIOS
DE VALORES LA NACIONAL CORP., a
New
York corporation or
its
assigns (the "Holder"), shall be entitled to subscribe for and purchase
from
NUEVO FINANCIAL CENTER, INC., a
Delaware corporation (the "Corporation"), 1,507,589 shares of common stock,
$.001 par value per share of the Corporation (the "Common Stock"), during the
“Exercise Period” (as defined in Section 1 hereof), pursuant to the terms and
subject to the conditions hereof.
28
Section
1. Exercise
Period.
This
Warrant may be exercised by the Holder at any time or from time to time between
(a) the earlier to occur of either (i) thirty
(30) days after the Corporation’s registration statement is approved by the
Securities and Exchange Commission (“SEC”) and NASD, Inc. (“NASD”) (which
approval permits the Corporation’s securities to be traded on a public market
and/or exchange)
or (ii)
June 1, 2007 and (b) on or prior to March 31, 2009, or an earlier date upon
the
occurrence of the payment of the “Settlement Amount” (as defined in the
Settlement Agreement) in full in accordance with the terms of the Settlement
Agreement (such period being herein referred to as the "Exercise
Period").
Section
2. Exercise
Price.
The
exercise price for all of the NFC common stock represented hereby (the “Warrant
Shares”) shall be payable in a lump sum of $303,553 (the "Exercise
Price").
Section
3. Exercise
of Warrant; Warrant Shares.
(a) The
rights represented by this Warrant may be exercised one time during the Exercise
Period (provided the Settlement Agreement is not paid in its entirety prior
to
the commencement of the Exercise Period), in whole and not in any part, by
(i)
the surrender of this Warrant (properly endorsed) at the office of the
Corporation (or at such other agency or office of the Corporation in the United
States of America as it may designate by notice in writing to the Holder at
the
address of the Holder appearing on the books of the Corporation), (ii)
delivery to the Corporation of a notice of election to exercise in the form
of
Exhibit
A
attached
hereto, and (iii) payment to the Corporation of the Exercise Price by cash,
wire
transfer of funds or check.
(b) The
date
on which this Warrant is surrendered and on which payment of the Exercise Price
is made in accordance with Section 3(a) above is referred to herein as an
"Exercise Date." Simultaneously with such exercise, the Corporation shall issue
and deliver a certificate for the Warrant Shares being purchased pursuant to
such exercise, registered in the name of the Holder or the Holder's designee,
to
such Holder or designee, as the case may be.
(c) The
person in whose name the certificate for shares of Common Stock is issued upon
the exercise shall for all purposes be deemed to have become the holder of
record of such shares as of the Exercise Date, except that if the Exercise
Date
is a date on which the stock transfer books of the Corporation are closed,
such
person or entity shall be deemed to have become the holder of record of such
shares at the close of business on the next succeeding date on which the stock
transfer books are open. The Corporation shall pay all documentary, stamp or
other transactional taxes attributable to the issuance or delivery of shares
of
Common Stock upon exercise of this Warrant; provided,
however,
that
the Corporation shall not be required to pay any taxes which may be payable
in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the Holder to the extent such
taxes
would exceed the taxes otherwise payable if such certificate had been issued
to
the Holder.
Section
4. Representations,
Warranties and Covenants as to Common Stock.
The
Corporation represents and warrants to the Holder that all shares of Common
Stock that may be issued upon the proper exercise of this Warrant will, upon
issuance, be validly issued, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof, and free from all taxes, liens
and
charges with respect to the issue thereof. The Corporation will from time to
time use its reasonable best efforts to take all such action as may be required
to assure that the stated or par value per share of the Common Stock is at
all
times no greater than the then effective Exercise Price. The Corporation shall
at all times have authorized and reserved, free from preemptive rights, a
sufficient number of shares of its Common Stock to provide for the exercise
of
this Warrant. The Corporation shall not take any action which would cause the
number of authorized but unissued shares of Common Stock to be less than the
number of such shares required to be reserved hereunder for issuance upon
exercise of this Warrant. If any shares of Common Stock reserved for the purpose
of issuance upon the exercise of this Warrant require registration with or
approval of any governmental authority under any Federal or state law before
such shares may be validly issued or delivered upon exercise, then the
Corporation shall in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be.
29
Section
5. Intentionally
Omitted.
Section
6. Notice
of Record Date.
In
case
the Corporation shall take a record of the holders of its Common Stock (or
other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares
of
stock of any class or any other securities, or to receive any other right,
then
the Corporation will mail or cause to be mailed to the Holder of this Warrant
a
notice specifying the date on which a record is to be taken for the purpose
of
such dividend, distribution or right. Such notice shall be mailed at least
ten
(10) days, or if such advance notice is not practicable, then such shorter
period as may be practicable, prior to the record date.
Section
7. No
Shareholder Rights.
This
Warrant shall not entitle the Holder to any voting rights or other rights as
a
shareholder of the Corporation.
Section
8. Restrictions
on Transfer.
The
stock certificate representing the shares of Common Stock issuable upon exercise
of this Warrant shall contain the following restrictive legends:
(a) “THE
SECURITIES REPRESENTED HEREBY ARE RESTRICTED SECURITIES WITHIN THE MEANING
OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE
ACT
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THE ISSUER OF THESE SECURITIES WILL NOT
TRANSFER SUCH SECURITIES EXCEPT UPON RECEIPT OF EVIDENCE SATISFACTORY TO THE
ISSUER THAT THE REGISTRATION PROVISIONS OF THE ACT HAVE BEEN COMPLIED WITH
OR
THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT VIOLATE
ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS.”; and
(b) “Provided
Nuevo Financial Center, Inc.’s (“NFC”) common stock represented hereby is
registered and trading on a public securities market or exchange, the holder
of
this stock certificate shall not be permitted to sell, on any given business
day, NFC shares represented hereby equal to more than ten percent (10%) of
the
average number of NFC shares traded on a public securities market or exchange
during the previous five (5) business days. This restriction shall not apply:
(i) in the event NFC’s common stock is not registered and trading on a public
securities market or exchange, or (ii) to a private transaction whereby the
proposed transfer may be effected without registration under the Securities
Act
or that may be effected under applicable state securities laws; provided,
however, the NFC common stock represented hereby prior to the registration
and
trading of the NFC common stock on a public securities market or exchange shall
continue to be subject to this restriction after such transfer.”
30
Section
9. Registration
Rights.
The
Corporation hereby agrees to register the shares of Common Stock issuable upon
exercise of this Warrant in a manner that is fair and consistent with the
registration of the shares of Common Stock issuable upon the exercise of other
warrants issued by the Corporation, and subject to the sole and absolute
discretion of the Corporation’s underwriters.
Section
10. Lost,
Stolen, Mutilated or Destroyed Warrant.
If this
Warrant is lost, stolen, mutilated or destroyed, the Corporation shall, on
such
terms as to indemnity or otherwise as it may in its reasonable discretion impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant
so
lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute
an
original contractual obligation of the Corporation, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable
by
anyone.
Section
11. Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested
(or by the most nearly comparable method if mailed from or to a location outside
of the United States) or by Federal Express, Express Mail, or similar overnight
delivery, or courier service or delivered in person or by telecopy, or similar
telecommunications equipment against receipt to the party to whom it is to
be
given at the address of such party set forth in this Section 11 (or to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 11).
If
to the
NFC:
Nuevo
Financial Center, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇▇▇▇▇▇, CEO
(P)
201.537.0956
(F)
201.271.1154
31
With
a
copy (which copy shall not constitute notice) to:
Feingold
▇▇▇▇▇▇▇▇▇ P.A.
▇▇▇▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(P)
954.967.2575
(F)
954.967.2576
If
to the
Holder, to the Holder's address as set forth in the records of the
Corporation.
Any
notice or other communication given by certified mail (or by such comparable
method) shall be deemed given at the time of certification thereof (or
comparable act), except for a notice changing a party's address which will
be
deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 11 shall be deemed given at the time of receipt
thereof.
Section
12. Governing
Law.
This
Warrant shall be governed by and construed in accordance with the laws of the
State of New York (without giving effect to the principles or rules, of such
state, governing conflicts of laws).
Section
13. Headings.
The
headings of the various sections contained in this Warrant have been inserted
for convenience of reference only and should not be deemed to be a part of
this
Warrant.
Section
14. Amendment
and Waiver.
The
Warrant may not be modified or amended, or any of the provisions hereof waived,
except by written agreement of the Corporation and the Holder.
*
* *
*
32
IN
WITNESS WHEREOF,
the
Corporation has caused this Warrant to be executed by its duly authorized
officers as of the date first written above.
|
NUEVO
FINANCIAL CENTER, INC.
|
||
| |
|
|
| By: | ||
|
Name:
▇▇▇▇ ▇▇▇▇▇▇
|
||
|
Title:
CEO
|
||
33
EXHIBIT
A TO WARRANT
FORM
OF NOTICE OF ELECTION TO EXERCISE
[To
be
executed only upon exercise
of
the
Warrant to which this form is attached]
To
Nuevo
Financial Center, Inc.:
The
undersigned, the holder of the Warrant to which this form is attached, hereby
irrevocably elects to exercise the right represented by such Warrant to purchase
all 1,507,589 shares of Common Stock of NUEVO
FINANCIAL CENTER, INC.,
and
herewith tenders the aggregate payment of $303,553 in the form of cash, wire
transfer funds or check, in full payment of the purchase price for such shares.
The undersigned requests that a certificate for such shares be issued in the
name of ______,
whose
address is __________________,
and
that such certificate be delivered to __________,
whose
address is ___________.
| |
|
|
| Signature: | ||
|
(Signature
must conform in all respects to the name of the holder of the Warrant
as
specified on the face of the Warrant)
|
||
|
Date:
|
|
|
34
SECURITY
AGREEMENT
This
SECURITY AGREEMENT (the “Security Agreement”) is made this ___ day of December
2006, by and between Nuevo Financial Center, Inc. (“Obligor”) and Envios De
Valores La Nacional Corp. (“Secured Party”).
WHEREAS,
Obligor and Secured Party have entered into a Confidential Settlement Agreement,
Security Agreement and General Release (the “Agreement”) of even date, whereby
Obligor has agreed to make payment to Secured Party in the amount of Three
Hundred and Fifty Thousand Dollars ($350,000) together with interest;
and
WHEREAS,
Obligor has agreed to secure its performance under the Agreement by providing
Secured Party with a subordinate security interest in the Collateral as defined
and described below;
NOW
THEREFORE, Obligor hereby agrees as follows:
1. Security
Interest.
Obligor
hereby grants Secured Party a subordinate security interest in the following
properties, assets and rights of Obligor, wherever located, whether now owned
or
hereafter acquired or arising, and all proceeds and products thereof (which
will
hereinafter be referred to as the “Collateral”):
All
personal and fixture property of every kind and nature including, without
limitation, all furniture, fixtures, equipment, raw materials, inventory, other
goods, accounts, contract rights, rights to the payment of money, insurance
refund claims and all other insurance claims and proceeds, tort claims, chattel
paper, documents, instruments, securities and other investment property, deposit
accounts, rights to proceeds of letters of credit and all general intangibles
including, without limitation, all tax refund claims, license fees, patents,
patent applications, trademarks, trademark applications, trade names,
copyrights, copyright applications, rights to ▇▇▇ and recover for past
infringement of patents, trademarks and copyrights, computer programs, computer
software, engineering drawings, service marks, customer lists, goodwill, and
all
licenses, permits, agreements of any kind or nature pursuant to which the
Obligor possesses, uses or has authority to possess or use property (whether
tangible or intangible) of others or others possess, use or have authority
to
possess or use property (whether tangible or intangible) of the Obligor, and
all
recorded data of any kind or nature, regardless of the medium of recording,
including, without limitation, all software, writings, plans, specifications,
formulations and schematics. The Obligor acknowledges and agrees that the
foregoing collateral description covers all assets of the
Obligor.
35
The
foregoing subordinate security interest in the Collateral shall be subordinate
in all respects to the security interest granted by Obligor to Vision
Opportunity Capital Partners, LP (“VOCP”) in connection with a certain secured
convertible note in the amount of $500,000, as well as a certain securities
purchase agreement, security agreement and Unit Purchase Warrant all dated as of
May 2, 2006 and a certain secured convertible note in the amount of $500,000,
as
well as a certain securities purchase agreement, security agreement and Unit
Purchase Warrant all dated as of November 1, 2006. In addition, following the
execution of this Security Agreement, and for a period of one (1) year
hereafter, Secured Party will, at the request of Obligor agree to amend this
Security Agreement to become subordinate to one (1) additional senior creditor
from which Obligor may obtain credit and/or a credit facility, provided Obligor
obtains such credit and/or credit facility. In such event, Secured Party agrees
to remain subordinate to such senior creditor for the term of such loan and
any
modifications and/or extensions thereto.
2. Obligor’s
Representations and Warranties.
Except
for the security interest granted by this Agreement, and except for Secured
Party’s position as a subordinate secured party to a senior creditor as
contemplated in Section 1 hereof, and except for the interests granted by
Obligor to VOCP, as well as Telediscount Communications, Inc.’s (“TCI”) dispute
with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ d/b/a AC Consulting, pursuant to a default judgment
entered on October 11, 2005 in the amount of $36,634.48 (of which approximately
$4,000 has been paid by TCI to date and which dispute is currently the subject
of good faith negotiations to reach a settlement agreement that is anticipated
to result in a payment of less than the amount remaining due thereunder in
return for a full release of claims), to the best of Obligor’s actual knowledge
and belief, Obligor is the owner of the Collateral free from any adverse lien,
security interest or encumbrance. To the best of Obligor’s actual knowledge and
belief, no consent or approval (other than any which may be incidental to any
filing with a filing officer to perfect the security interests in the
Collateral) of any governmental body, regulatory authority, person, trust,
or
entity is or will be (i) necessary to the validity of the rights created
hereunder, or (ii) required prior to the assignment, transfer, and delivery
of
any of the Collateral to Secured Party (or any agent designated by Secured
Party). Other than as disclosed herein and in Obligor’s SB 2/A filed on November
8, 2006, to the best of Obligor’s actual knowledge and belief, no material
dispute, right to setoff, counterclaim, or defense exists with respect to all
or
any part of the Collateral. At Secured Party’s request, Obligor will join with
Secured Party in executing one or more financing statements pursuant to the
Uniform Commercial Code in a form satisfactory to Secured Party. Obligor shall
have the right to sell portions of the Collateral in the ordinary course of
its
business, without Secured Party’s consent, provided, however, in the event
Obligor seeks the Secured Party’s written consent, Secured Party agrees that its
consent shall not be unreasonably withheld or delayed.
36
3. Events
of Default.
Obligor
shall be in default under this Agreement upon the happening of any of the
following events or conditions: a) default in the payment of performance of
any
obligation, covenant or liability contained or referred to herein or in the
Agreement; b) any warranty, representation or statement made or furnished to
Secured Party by or on behalf of Obligor proves to have been false in any
material respect when made or furnished; or c) dissolution, termination of
existence, insolvency, business failure, appointment of a receiver of any part
of the property, assignment for the benefit of creditors, or the commencement
of
any proceeding under any bankruptcy or insolvency laws by or against, Obligor
or
any guarantor or surety for Obligor.
37
4. Rights
and Remedies.
Upon
default by Obligor, Secured Party shall immediately notify Obligor in writing,
which writing shall specify in detail the nature of such default and provide
Obligor fifteen (15) days to cure such default. On the occurrence of any default
hereunder after receipt of written notice and Obligor’s failure to cure the same
within fifteen (15) days, and subject to the provisions contained in the
Agreement, Secured Party shall be entitled to all rights and remedies provided
for under law. Such rights of Secured Party shall be cumulative, and the
exercise of any right by Secured Party shall not affect or impair other rights
which Secured Party may have under the Agreement, this Security Agreement or
at
law.
5. Full
Payment.
Upon
payment in full by Obligor to Secured Party of all amounts due and payable
under
the Agreement, Secured Party shall have no further right or interest in or
to
the Collateral and shall file UCC-3 Termination Statements with respect to
the
financing statements previously filed with respect to the
Collateral.
6. Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested
(or by the most nearly comparable method if mailed from or to a location outside
of the United States) or by Federal Express, Express Mail, or similar overnight
delivery, or courier service or delivered in person or by telecopy, or similar
telecommunications equipment against receipt to the party to whom it is to
be
given at the address of such party set forth in this Section 6 (or to such
other
address as the party shall have furnished in writing in accordance with the
provisions of this Section 6).
38
If
to
LAN:
Envios
de
Valores La Nacional Corp.
▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
(P)
917.529.0700
(F)
917.529.0749
With
a
copy (which copy shall not constitute notice) to:
▇▇▇▇▇
& ▇▇▇▇▇, P.C.
▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ 10004-2271
Attn.:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
(P)
212.471.2990
(F)
212.471.2997
If
to the
NFC:
Nuevo
Financial Center, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇▇▇▇▇▇, CEO
(P)
201.537.0956
(F)
201.271.1154
With
a
copy (which copy shall not constitute notice) to:
Feingold
▇▇▇▇▇▇▇▇▇ P.A.
▇▇▇▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(P)
954.967.2575
(F)
954.967.2576
Any
notice or other communication given by certified mail (or by such comparable
method) shall be deemed given at the time of certification thereof (or
comparable act), except for a notice changing a party's address which will
be
deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 6 shall be deemed given at the time of receipt
thereof.
39
7. Counterparts/Faxes.
This
Security Agreement may be executed in any number of counterparts and by
different Parties on separate counterparts, each of which counterpart, when
so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Security
Agreement. Facsimile signatures shall be considered as valid signatures as
of
the date hereof, although the original signature pages shall hereafter be
appended to this Security Agreement.
8. Governing
Law.
This
Security Agreement will be construed and governed by the laws of the State
of
New York. Each party, for itself and himself, and their respective successors
and assigns, hereby consents to personal jurisdiction over it and them in the
State or Federal courts located in New York County in connection with any action
or proceeding arising out of or related to this Security Agreement. Each Party
irrevocably waives, to the fullest extent permitted by law, any objection which
it may have to the laying of the venue of any such suit, action or proceeding
brought in such court and any claim that any such suit, action or proceeding
brought in such court has been brought in an inconvenient forum. Each Party
agrees that a final judgment in any such suit, action or proceeding brought
in
such court, after all appropriate appeals, is conclusive and binding upon it.
Each Party agrees that process may be served against it in any suit, action
or
proceeding referred to in this subsection by sending same via certified or
registered mail, return receipt requested or via overnight courier service.
Each
Party agrees that any such service (i) will be effective service of process
upon
it in any such suit, action or proceeding; and (ii) will to the fullest extent
enforceable by law, be valid personal service upon and personal delivery to
it.
40
IN
WITNESS WHEREOF, the parties have caused this Security Agreement to be executed
as of the first date written above.
NUEVO
FINANCIAL CENTER, INC.,
as
successor-in-interest to Telediscount
Communications,
Inc.
By:
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
CEO
Date: December
__, ▇▇▇▇
▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇ ▇▇ NACIONAL CORP.
By:
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
President
Date: December
__, 2006
41
GENERAL
RELEASE
Envios
De
Valores La Nacional Corp., its predecessor entities and each of its present
and
former direct and indirect parents and partners, subsidiaries, divisions,
affiliates or associates (as defined in SEC Rule 12b-2 promulgated pursuant
to
the Securities and Exchange Act of 1934); and their present and former partners,
stockholders, officers, directors, employees, accountants, agents and legal
representatives; and the predecessors, heirs, executors, administrators,
successors and assigns of any of the above persons or entities (“LAN”) hereby
fully release and discharge Nuevo Financial Center, Inc. its predecessor
entities and each of its present and former direct and indirect parents and
partners, subsidiaries, divisions, affiliates or associates (as defined in
SEC
Rule 12b-2 promulgated pursuant to the Securities and Exchange Act of 1934);
and
their present and former partners, stockholders, officers, directors, employees,
accountants, agents and legal representatives; and the predecessors, heirs,
executors, administrators, successors and assigns of any of the above persons
or
entities (“NFC”), from any and all actions, causes of action, suit, debts,
damages, remedies, contracts (express or implied), dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, agreements,
promises, judgments, obligations, grievances, claims, charges, complaints,
and
demands whatsoever, in law or equity, known or unknown, against NFC that LAN
may
now have or hereafter can, shall or may have for, upon or by reason of any
matter, cause, or thing, under any federal, state, city, or local laws, rules,
regulations or guidelines but based solely upon conduct occurring from the
beginning of the world, up to and including the date of LAN’s delivery of this
General Release to NFC. LAN will not institute or be represented in, and will
not submit or file, or authorize the submission of filing on its behalf of,
any
lawsuit, claim, charge, complaint or other proceeding against NFC based on
conduct occurring up to and including the date of NFC’s execution of the
Confidential Settlement Agreement, Security Agreement and General Release (the
“Agreement”). LAN shall not seek or accept any award or settlement from any such
source or proceeding. In the event LAN institutes, is a party to, or is a member
of a class that institutes, any such action or proceeding, its claims shall
be
dismissed or class membership terminated immediately upon presentation of the
Agreement in full satisfaction of any such claim and LAN shall immediately
reimburse NFC for all monies paid by NFC to obtain such dismissal, including,
but not limited to, its reasonable attorneys’ fees.
Dated: New
York,
New York
December
___, 2006
|
ENVIOS
DE VALORES LA NACIONAL CORP.
|
||
| |
|
|
| By: | ||
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
Title:
President
|
||
42
COMMON
STOCK WARRANT
THIS
WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED OR
PLEDGED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR SUCH APPLICABLE STATE SECURITIES LAWS, OR IF THE PROPOSED
TRANSFER MAY BE EFFECTED WITHOUT REGISTRATION, UNDER THE SECURITIES ACT OR
REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS.
THIS
WARRANT, THE SECURITIES REPRESENTED BY THIS WARRANT AND THE COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO CERTAIN RESTRICTIONS
ON
TRANSFER AS SET FORTH IN A CERTAIN CONFIDENTIAL SETTLEMENT AGREEMENT, SECURITY
AGREEMENT AND GENERAL RELEASE DATED AS OF DECEMBER 20, 2006, BY AND BETWEEN
THE
ISSUER OF SUCH SECURITIES (THE "CORPORATION") AND ENVIOS DE VALORES LA NACIONAL
CORP., A NEW YORK CORPORATION (THE “SETTLEMENT AGREEMENT”). A COPY OF SUCH
SETTLEMENT AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO
THE
HOLDER HEREOF UPON WRITTEN REQUEST.
NUEVO
FINANCIAL CENTER, INC.
COMMON
STOCK WARRANT
| No. W-LAN |
December
20,
2006
|
||
VOID
AFTER March 31, 2009
(or
earlier upon the occurrence of
certain
events described below)
THIS
CERTIFIES
that,
for value received, ENVIOS
DE VALORES LA NACIONAL CORP., a
New
York corporation or
its
assigns (the "Holder"), shall be entitled to subscribe for and purchase
from
NUEVO FINANCIAL CENTER, INC., a
Delaware corporation (the "Corporation"), 1,507,589 shares of common stock,
$.001 par value per share of the Corporation (the "Common Stock"), during the
“Exercise Period” (as defined in Section 1 hereof), pursuant to the terms and
subject to the conditions hereof.
Section
15. Exercise
Period.
This
Warrant may be exercised by the Holder at any time or from time to time between
(a) the earlier to occur of either (i) thirty
(30) days after the Corporation’s registration statement is approved by the
Securities and Exchange Commission (“SEC”) and NASD, Inc. (“NASD”) (which
approval permits the Corporation’s securities to be traded on a public market
and/or exchange)
or (ii)
June 1, 2007 and (b) on or prior to March 31, 2009, or an earlier date upon
the
occurrence of the payment of the “Settlement Amount” (as defined in the
Settlement Agreement) in full in accordance with the terms of the Settlement
Agreement (such period being herein referred to as the "Exercise
Period").
43
Section
16. Exercise
Price.
The
exercise price for all of the NFC common stock represented hereby (the “Warrant
Shares”) shall be payable in a lump sum of $303,553 (the "Exercise
Price").
Section
17. Exercise
of Warrant; Warrant Shares.
(a) The
rights represented by this Warrant may be exercised one time during the Exercise
Period (provided the Settlement Agreement is not paid in its entirety prior
to
the commencement of the Exercise Period), in whole and not in any part, by
(i)
the surrender of this Warrant (properly endorsed) at the office of the
Corporation (or at such other agency or office of the Corporation in the United
States of America as it may designate by notice in writing to the Holder at
the
address of the Holder appearing on the books of the Corporation), (ii)
delivery to the Corporation of a notice of election to exercise in the form
of
Exhibit
A
attached
hereto, and (iii) payment to the Corporation of the Exercise Price by cash,
wire
transfer of funds or check.
(b) The
date
on which this Warrant is surrendered and on which payment of the Exercise Price
is made in accordance with Section 3(a) above is referred to herein as an
"Exercise Date." Simultaneously with such exercise, the Corporation shall issue
and deliver a certificate for the Warrant Shares being purchased pursuant to
such exercise, registered in the name of the Holder or the Holder's designee,
to
such Holder or designee, as the case may be.
(c) The
person in whose name the certificate for shares of Common Stock is issued upon
the exercise shall for all purposes be deemed to have become the holder of
record of such shares as of the Exercise Date, except that if the Exercise
Date
is a date on which the stock transfer books of the Corporation are closed,
such
person or entity shall be deemed to have become the holder of record of such
shares at the close of business on the next succeeding date on which the stock
transfer books are open. The Corporation shall pay all documentary, stamp or
other transactional taxes attributable to the issuance or delivery of shares
of
Common Stock upon exercise of this Warrant; provided,
however,
that
the Corporation shall not be required to pay any taxes which may be payable
in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the Holder to the extent such
taxes
would exceed the taxes otherwise payable if such certificate had been issued
to
the Holder.
Section
18. Representations,
Warranties and Covenants as to Common Stock.
The
Corporation represents and warrants to the Holder that all shares of Common
Stock that may be issued upon the proper exercise of this Warrant will, upon
issuance, be validly issued, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof, and free from all taxes, liens
and
charges with respect to the issue thereof. The Corporation will from time to
time use its reasonable best efforts to take all such action as may be required
to assure that the stated or par value per share of the Common Stock is at
all
times no greater than the then effective Exercise Price. The Corporation shall
at all times have authorized and reserved, free from preemptive rights, a
sufficient number of shares of its Common Stock to provide for the exercise
of
this Warrant. The Corporation shall not take any action which would cause the
number of authorized but unissued shares of Common Stock to be less than the
number of such shares required to be reserved hereunder for issuance upon
exercise of this Warrant. If any shares of Common Stock reserved for the purpose
of issuance upon the exercise of this Warrant require registration with or
approval of any governmental authority under any Federal or state law before
such shares may be validly issued or delivered upon exercise, then the
Corporation shall in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be.
44
Section
19. Intentionally
Omitted.
Section
20. Notice
of Record Date.
In
case
the Corporation shall take a record of the holders of its Common Stock (or
other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares
of
stock of any class or any other securities, or to receive any other right,
then
the Corporation will mail or cause to be mailed to the Holder of this Warrant
a
notice specifying the date on which a record is to be taken for the purpose
of
such dividend, distribution or right. Such notice shall be mailed at least
ten
(10) days, or if such advance notice is not practicable, then such shorter
period as may be practicable, prior to the record date.
Section
21. No
Shareholder Rights.
This
Warrant shall not entitle the Holder to any voting rights or other rights as
a
shareholder of the Corporation.
Section
22. Restrictions
on Transfer.
The
stock certificate representing the shares of Common Stock issuable upon exercise
of this Warrant shall contain the following restrictive legends:
(a) “THE
SECURITIES REPRESENTED HEREBY ARE RESTRICTED SECURITIES WITHIN THE MEANING
OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE
ACT
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THE ISSUER OF THESE SECURITIES WILL NOT
TRANSFER SUCH SECURITIES EXCEPT UPON RECEIPT OF EVIDENCE SATISFACTORY TO THE
ISSUER THAT THE REGISTRATION PROVISIONS OF THE ACT HAVE BEEN COMPLIED WITH
OR
THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT VIOLATE
ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS.”; and
(b) “Provided
Nuevo Financial Center, Inc.’s (“NFC”) common stock represented hereby is
registered and trading on a public securities market or exchange, the holder
of
this stock certificate shall not be permitted to sell, on any given business
day, NFC shares represented hereby equal to more than ten percent (10%) of
the
average number of NFC shares traded on a public securities market or exchange
during the previous five (5) business days. This restriction shall not apply:
(i) in the event NFC’s common stock is not registered and trading on a public
securities market or exchange, or (ii) to a private transaction whereby the
proposed transfer may be effected without registration under the Securities
Act
or that may be effected under applicable state securities laws; provided,
however, the NFC common stock represented hereby prior to the registration
and
trading of the NFC common stock on a public securities market or exchange shall
continue to be subject to this restriction after such transfer.”
45
Section
23. Registration
Rights.
The
Corporation hereby agrees to register the shares of Common Stock issuable upon
exercise of this Warrant in a manner that is fair and consistent with the
registration of the shares of Common Stock issuable upon the exercise of other
warrants issued by the Corporation, and subject to the sole and absolute
discretion of the Corporation’s underwriters.
Section
24. Lost,
Stolen, Mutilated or Destroyed Warrant.
If this
Warrant is lost, stolen, mutilated or destroyed, the Corporation shall, on
such
terms as to indemnity or otherwise as it may in its reasonable discretion impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant
so
lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute
an
original contractual obligation of the Corporation, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable
by
anyone.
Section
25. Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested
(or by the most nearly comparable method if mailed from or to a location outside
of the United States) or by Federal Express, Express Mail, or similar overnight
delivery, or courier service or delivered in person or by telecopy, or similar
telecommunications equipment against receipt to the party to whom it is to
be
given at the address of such party set forth in this Section 11 (or to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 11).
If
to the
NFC:
Nuevo
Financial Center, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇▇▇▇▇▇, CEO
(P)
201.537.0956
(F)
201.271.1154
With
a
copy (which copy shall not constitute notice) to:
Feingold
▇▇▇▇▇▇▇▇▇ P.A.
▇▇▇▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(P)
954.967.2575
(F)
954.967.2576
46
If
to the
Holder, to the Holder's address as set forth in the records of the
Corporation.
Any
notice or other communication given by certified mail (or by such comparable
method) shall be deemed given at the time of certification thereof (or
comparable act), except for a notice changing a party's address which will
be
deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 11 shall be deemed given at the time of receipt
thereof.
Section
26. Governing
Law.
This
Warrant shall be governed by and construed in accordance with the laws of the
State of New York (without giving effect to the principles or rules, of such
state, governing conflicts of laws).
Section
27. Headings.
The
headings of the various sections contained in this Warrant have been inserted
for convenience of reference only and should not be deemed to be a part of
this
Warrant.
Section
28. Amendment
and Waiver.
The
Warrant may not be modified or amended, or any of the provisions hereof waived,
except by written agreement of the Corporation and the Holder.
*
* *
*
47
IN
WITNESS WHEREOF,
the
Corporation has caused this Warrant to be executed by its duly authorized
officers as of the date first written above.
|
NUEVO
FINANCIAL CENTER, INC.
|
||
| |
|
|
| By: | ||
|
Name:
▇▇▇▇ ▇▇▇▇▇▇
|
||
|
Title:
CEO
|
||
48
EXHIBIT
A TO WARRANT
FORM
OF NOTICE OF ELECTION TO EXERCISE
[To
be
executed only upon exercise
of
the
Warrant to which this form is attached]
To
Nuevo
Financial Center, Inc.:
The
undersigned, the holder of the Warrant to which this form is attached, hereby
irrevocably elects to exercise the right represented by such Warrant to purchase
all 1,507,589 shares of Common Stock of NUEVO
FINANCIAL CENTER, INC.,
and
herewith tenders the aggregate payment of $303,553 in the form of cash, wire
transfer funds or check, in full payment of the purchase price for such shares.
The undersigned requests that a certificate for such shares be issued in the
name of _______,
whose
address is _____________,
and
that such certificate be delivered to _________,
whose
address is __________.
| |
|
|
| Signature: | ||
|
(Signature
must conform in all respects to the name of the holder of the
Warrant as
specified on the face of the Warrant)
|
||
|
Date:
|
|
|
49