AGREEMENT FOR CONVERSION OF PROMISSORY NOTE
Exhibit
10.1
This
Agreement for Conversion of Promissory Note (the “Agreement”) is made as of this
30th day of May, 2009 (the “Effective Time”) by and between Hybrid Dynamics
Corporation, a Nevada corporation (“MAKER”) and the promissory note HOLDER (the
“HOLDER”) whose name appears below.
RECITALS
WHEREAS
the HOLDER is the owner of a promissory note issued to HOLDER by MAKER (the
“Note”) which Note is attached hereto as Exhibit A and made a part hereof,
and
WHEREAS
the HOLDER desires to elect and the MAKER desires to accept the conversion of
the Note into the shares of common stock of MAKER in amount and on such terms as
more fully set forth herein, and
WHEREAS
the Note shall be considered paid in full and of no further force and effect
upon the execution of this Agreement.
NOW
THEREFORE, for and in consideration of the premises and covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and confessed, the parties agree as
follows:
1. Definitions. For
purposes of this Agreement, unless otherwise defined herein, capitalized terms
set forth in this Agreement shall have the meaning ascribed to them in this
Agreement.
2. Conversion. MAKER
shall pay to the HOLDER the number of shares of the restricted common stock of
MAKER $0.00015 par value as set forth opposite HOLDER’S signature below (the
“Conversion Shares”). In the event that MAKER issues additional
shares of its common stock in conversion of promissory notes or other debts
outstanding as of the date of this Agreement or in the event MAKER issues
additional shares of its common stock to ▇▇▇▇ ▇▇▇▇▇ (any such issuance
hereinafter referred to as a "Measurement Transaction"), and if such Measurement
Transaction occurs before the earlier of (i) any financing transaction by which
MAKER raises not less than $600,000 of capital by the issuance of its stock or
notes (“Financing Transaction”) or (ii) September 30, 2009 (the earlier of (i)
or (ii) hereinafter referred to as the “Anti-Dilution Cut-Off Date”), then MAKER
agrees to issue additional Conversion Shares to the HOLDER such that the
aggregate Conversion Shares received by the HOLDER will be not less than the
number of shares of common stock resulting from the multiplication of the
anti-dilution percentage as set forth opposite HOLDER’S signature below (the
“Anti-Dilution Percentage”) times the issued and outstanding shares of MAKER’S
common stock including the Measurement Transactions (but excluding any shares
issued in any Financing Transaction). In no event will any adjustment
be made to Conversion Shares following the Anti-Dilution Cut-Off
Date.
3. No
Adjustment to Conversion Shares. The HOLDER agrees that the
Conversion Shares shall constitute the full and absolute consideration for all
conveyances hereunder, including all rights, title and interest in and to the
Note, whether known or unknown as of the effective date hereof. Other
than as provided in Section 2, there shall be no adjustment made to the
Conversion Shares following the Closing.
4. Sale
or Transfer of Conversion Shares; Legend.
(a) The
Conversion Shares and shares issued in respect of the Conversion Shares shall
not be sold or transferred unless either (A) they first have been registered
under the Securities Act of 1934 (the “Act”), or (B) MAKER shall have been
furnished with an opinion of counsel reasonably satisfactory to MAKER, to the
effect that such sale or transfer is exempt from the registration requirements
of the Act.
(b) All
of the Conversion Shares shall bear the legend in the following
form:
WARNING: THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.
5. Representations
and Warranties of HOLDER. HOLDER, for himself or itself only,
represents and warrants to MAKER the following:
(a) HOLDER,
if an entity, is a company duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation, and has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted;
(b) HOLDER
has full power and authority under its articles of formation, operating
agreement and/or by-laws to conduct its business as presently conducted and to
perform its obligations under this Agreement.
(c) This
Agreement is a legal and binding obligation of HOLDER, enforceable in accordance
with its terms, except as limited by bankruptcy, insolvency reorganization,
moratorium and similar laws and equitable principles relating to or limiting
creditors' rights generally.
(d) HOLDER
owns its Note free and clear of all mortgages, liens, pledges, security
interests, charges, claims and encumbrances of any nature whatsoever that have
been created by, through, or under HOLDER, but not otherwise.
(e) Subject
to any requisite consents to assignment or transfer pursuant to this Agreement,
the execution of this Agreement and the consummation of the transactions
contemplated hereby will not result in a breach of, constitute default under, or
result in a violation of the material provisions of any agreement to which
HOLDER is a party.
(f) HOLDER
has been furnished with or has had access to the information it has requested
from MAKER and has had an opportunity to ask questions and receive answers from
management of MAKER. HOLDER acknowledges that he or it has received
and had the opportunity to review copies of MAKER’s books and
records. HOLDER is either (i) an "accredited investor" (as defined in
Rule 501(a) of the Act) or (ii) alone, or together with a "purchaser
representative" (as defined in Rule 501(h) promulgated pursuant to the
Act), has knowledge, experience and skill in business and financial
matters and with respect to investments in securities so as to enable it to
understand and evaluate the merits and risks of the acquisition of the
Conversion Shares of common stock and to form an investment decision with
respect to such investment. HOLDER agrees that each certificate
representing shares of Conversion Shares issued pursuant to this Agreement will
contain the restrictive legend set forth in Section 5(b)(ii) hereof and
acknowledge that stop transfer instructions will be given to MAKER’s transfer
agent for the shares of MAKER.
6. Representations
and Warranties of MAKER. MAKER represents and warrants to HOLDER the
following:
(a) MAKER
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada.
(b) MAKER
has full power and authority to carry on its business as presently conducted, to
enter into this Agreement, to perform on the terms described in this Agreement,
and to perform its other obligations under this Agreement.
(c) The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all requisite
action on the part of MAKER.
(d) This
Agreement is a legal and binding obligation of MAKER, enforceable in accordance
with its terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws and equitable principles relating to or limited
creditors' rights generally.
(e) MAKER
has incurred no liability, contingent or otherwise, for brokers' or finders'
fees relating to the transactions contemplated by this Agreement for which
HOLDER shall have any responsibility whatsoever.
7. Survival
of Representations and Warranties. The representation and warranties
of HOLDER in Section 5 and of MAKER in Section 6 shall survive the Closing for a
period of one (1) year from the Closing Date (as hereinafter
defined).
8. Closing.
(a) Unless
the parties hereto mutually agree otherwise and subject to the conditions stated
in this Agreement, the consummation of the transactions contemplated hereby
(herein called the "Closing" and the date of which herein called the "Closing
Date") shall be held as soon as practicable. The Closing shall be
held at the office of MAKER or at such other place as MAKER and the HOLDER may
agree.
(b) At
the Closing, the following events shall occur, each being a condition precedent
to the others and each being deemed to have occurred simultaneously with the
others.
(i) Each
HOLDER shall execute, acknowledge and deliver to MAKER an assignment of the Note
covering the surrender and transfer of his or its Note to MAKER, together with
the original of the Note or, in lieu thereof, a lost certificate affidavit
evidencing the Note.
(ii) MAKER
shall instruct and cause its transfer agent to issue the Conversion Shares to
each HOLDER as specified herein.
(c) After
Closing, each party shall execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered such instruments and take such other action
as may be reasonably necessary or advisable to carry out their obligations under
this Agreement and under any document, certificate or other instrument delivered
pursuant hereto or required by law.
9. Miscellaneous
Provisions.
(a) Successors
and Assigns. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the respective successors and assigns of
the parties. Notwithstanding the foregoing, no party hereto may
assign their rights or obligations hereunder prior to Closing without the
written consent of the other parties.
(b) Counterparts. This
Agreement may be executed in two or more identical counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. All proceedings to be taken and all documents to
be executed and delivered by the parties at Closing shall be deemed to have been
taken and executed simultaneously with all other proceedings to be taken and
documents to be executed and delivered at Closing and no proceeding shall be
deemed taken or any documents delivered or executed until all have been taken,
executed and delivered at Closing.
(c) Titles
and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
(d) Finder's
Fee. Each party hereto hereby represents and warrants to each other
party hereto that they neither are nor will be obligated for any finder fee or
commission in connection with this transaction.
(e) Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
(f) Notices. Any
notice, demand or other communication required to be given or made under this
Agreement shall be in writing and be deemed duly given or made if delivered or
sent by telex or facsimile as follows:
|
MAKER:
|
Hybrid
Dynamics Corporation
|
|
|
▇▇-▇▇
▇▇▇▇ ▇▇▇▇▇▇
|
||
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
||
|
HOLDER:
|
To
the address appearing below
|
Any party
may change its address for the purpose of this Agreement by giving notice of
such change to the other parties pursuant to the provisions of this
section. Any notice, demand or other communication sent by facsimile
shall be deemed given, in absence of proof to the contrary, upon receipt in a
legible form by the party being served.
(g) Legal
Costs. The costs of legal counsel incidental to the
instructions for and the preparation and execution of this Agreement, all
counterparts thereof and all documents executed in connection therewith shall be
borne and paid by the parties who engage such counsel or on whose behalf such
counsel was engaged.
(h) Governing
Law; Jurisdiction and Venue. The terms and interpretation of this
Agreement shall be governed by the laws of the State of Nevada. In no
event shall any other laws or principles of conflicts of law be used to permit
the laws of another jurisdiction to govern, nor to permit jurisdiction or venue
to be other than those specified herein. The courts of the State of
Nevada shall have exclusive jurisdiction over any dispute related to this
Agreement.
(i) Amendments. No
modification, variation or amendment of this Agreement shall have any force or
effect unless it is in writing and signed by all parties
hereto. Unless the context otherwise so requires, a reference to this
Agreement shall include a reference to this Agreement as modified, varied or
amended from time to time.
(j) Entire
Agreement. This Agreement supersedes all prior proposals,
whether oral or written, and all previous negotiations and understanding among
the parties hereto with respect to the subject matter hereof.
(k) Conflicts. In
the event that the provisions of this Agreement conflict with the provisions of
any other agreement or instrument executed and delivered to effectuate
the
transactions
contemplated by this Agreement, the provisions of this Agreement shall prevail
over all others.
(l) Conflict
Of Interest. The parties to this Agreement waive any conflict
of interest by and between the parties hereto that may arise as to
representation of any party hereto by virtue of any relationship of common
management, control or ownership by or among any of the parties or their
affiliates.
(m) Incorporation
of Exhibits and Schedules. All Exhibits and Schedules referred to
herein are incorporated herein and made a part of this Agreement for all
purposes.
(n) Publicity. No
party shall be entitled to issue any press releases and other publicity issued
concerning this Agreement or the transactions contemplated hereby, except as may
be required by applicable laws or the applicable rules and regulations of any
governmental agency or stock exchange.
(o) Attorneys'
Fees. If any litigation is commenced between the parties
concerning this Agreement, the party prevailing in such litigation shall be
entitled to the reasonable attorneys' fees and expenses of counsel and court
costs incurred by reason of such litigation.
EXECUTED,
as of the date last written below, but effective for all purposes as of the
Effective Time.
|
HYBRID
DYNAMICS CORPORATION
|
||||
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇▇
|
5/30/2009
|
||
|
Print
Name: ▇▇▇▇ ▇▇▇▇▇
|
Date
|
|||
|
Print
Title: President
|
||||
|
HOLDER
|
Promissory
Note Principal
|
Conversion
Shares
|
Anti-Dilution
Percent
|
|
|
/s/
▇▇▇▇▇ ▇.
▇▇▇
5/30/2009
|
$100,000
|
1,433,039
(a)
|
11.29%
|
|
|
Signature Date
|
||||
|
Print
Name: ▇▇▇▇▇ ▇. ▇▇▇
|
||||
|
(a)
Pre May, 2009 reverse split
|
||||
|
Address
|
||||
|
City State Zip
Code
|
||||