CONVERSION AND SETTLEMENT AGREEMENT
This CONVERSION AND SETTLEMENT AGREEMENT (this "Agreement") dated as
of November 11, 2005, by and among ▇▇▇ Piceni ("Piceni") and Satellite
Enterprises Corp., a Nevada corporation (the "Company").
WHEREAS, Piceni is the holder of debt in the principal balance of
approximately $1,523,180, including accounts payable and debentures, but not
including late fees, penalties and default fees, if any.
WHEREAS, the Company has requested that PICENI assist the Company in
its effort to effect a recapitalization and pay off certain debt obligations
from the Company's balance sheet, including the repayment of approximately
$3,380,000 of debt
WHEREAS, to so assist the Company as requested, PICENI has agreed to
convert the sum of $1,500,000 (the "Debt") into 177,533 shares of the Company's
Class A Preferred Stock, which is convertible into common stock at the rate of
1,000 shares of common stock per share of Class A Preferred Stock, and
22,466,806 shares of common stock of the Company (the "Securities");
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
CONVERSION
Section 1.1 Conversion. The Company and PICENI hereby agree that the
Debt (including any unpaid interest on such Debt) is hereby converted into
177,533 shares of the Company's Class A Preferred Stock and 22,466,806 shares of
common stock of the Company. The Class A Preferred Stock shall be convertible
into common stock at the rate of 1,000 shares of common stock per share of Class
A Preferred Stock, and shall automatically convert into common stock on the
effective date of an amendment to the Company's Articles of Incorporation to
increase the authorized shares of common stock to a sufficient number to allow
all of the outstanding shares of Class A Preferred Stock to be converted.
Section 1.2 Closing. The closing of the transactions referred to in
Section 1.1 hereof (the "Closing") shall take place as soon as possible after
full execution of this Agreement, or at such other time as the parties may agree
upon. Such time and date are herein referred to as the "Closing Date." The
Company shall take such action as is required to cause the Certificate of
Designations attached hereto as Exhibit 1 to become effective as soon as
possible, and upon such effectiveness, shall issue the shares of Class A
Preferred Stock to PICENI.
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ARTICLE II
REPRESENTATIONS OF THE COMPANY
The Company represents and warrants, as follows:
Section 2.1 Common Stock. The Class A Preferred Stock to be
delivered to PICENI shall be validly issued, duly authorized, fully paid and
non-assessable.
Section 2.2 Authorization and Validity of Agreement. The Company has
full power and authority (corporate or otherwise) to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and, assuming the due execution of this Agreement by
PICENI, is a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization and similar laws affecting the enforcement of creditors' rights
generally and to general equitable principles.
Section 2.3 Consents and Approvals; No Violations. The execution and
delivery of this Agreement by Company and the consummation by Company of the
transactions contemplated herein and the other transactions contemplated hereby
(a) will not violate the provisions of the Certificate of Incorporation or
Bylaws of the Company, (b) will not violate any statute, rule, regulation, order
or decree of any public body or authority by which Company is bound or by which
any of its properties or assets are bound, (c) will not require any filing with,
or permit, consent or approval of, or the giving of any notice to, any United
States governmental or regulatory body, agency or authority on or prior to the
Closing Date (as defined in Section 1.3), and (d) will not result in a violation
or breach of, conflict with, constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
payment or acceleration) under, or result in the creation of any Encumbrance
upon any of the properties or assets of the Company under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease, franchise agreement or any other instrument
or obligation to which Company is a party, or by which they or any of its
properties or assets may be bound.
ARTICLE III
CERTAIN AGREEMENTS
Section 3.1 Reasonable Best Efforts. Each of the parties hereto
agrees to use its reasonable best efforts to take, or cause to be taken, all
action to do or cause to be done, and to assist and cooperate with the other
party hereto in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
Section 3.2 Authorization of Common Stock. The Company agrees to
take such action as is necessary to increase the Company's authorized shares of
common stock as soon as practicable so that the Class A Preferred Stock can be
converted into common stock.
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Section 3.3. Remaining Loans. The Company agrees that all remaining
debt and loans owed to Piceni shall be convertible into common stock of the
Company at the rate of $0.0075 per share of common stock. In the event Piceni
elects to make any additional advances to the Company, such advances will be
added to the existing loans, and shall therefore be convertible at the rate of
$0.0075 per share of common stock.
ARTICLE IV
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 4.1 Survival of Representations. The representations and
warranties set forth in this Agreement shall survive for three years after the
Closing Date.
ARTICLE V
MISCELLANEOUS
Section 5.1 Expenses. Except as otherwise provided in this
Agreement, each party to this Agreement will bear its respective fees and
expenses incurred in connection with the preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated herein. If this
Agreement is terminated, the obligation of each party to pay its own fees and
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.
Section 5.2 Waiver; Remedies Cumulative. The rights and remedies of
the parties to this Agreement are cumulative and not alternative. Neither any
failure nor any delay by any party in exercising any right, power or privilege
under this Agreement or any of the documents referred to in this Agreement will
operate as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement or any of the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of that party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
Section 5.3 Entire Agreement and Modification. This Agreement
supersedes all prior agreements, whether written or oral, between the parties
with respect to its subject matter, and constitutes a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended, supplemented, or otherwise
modified except by a written agreement executed by the party to be charged with
the amendment.
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Section 5.4 Assignments, Successors and No Third-Party Rights. No
party may assign any of its rights or delegate any of its obligations under this
Agreement without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provision
of this Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to this Section.
Section 5.5 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
Section 5.6 Construction. The headings of Articles and Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Articles" and "Sections"
refer to the corresponding Articles and Sections of this Agreement.
Section 5.7 Time of Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
Section 5.8 Notices. All notices, consents, waivers and other
communications required or permitted by this Agreement shall be in writing and
shall be deemed given to a party when (a) delivered to the appropriate address
by hand or by nationally recognized overnight courier service (costs prepaid);
(b) sent by facsimile or e-mail with confirmation of transmission by the
transmitting equipment, so long as such facsimile or e-mail is followed by a
copy sent by mail; or (c) received or rejected by the addressee, if sent by
certified mail, return receipt requested, in each case to the following
addresses, facsimile numbers or e-mail addresses and marked to the attention of
the person (by name or title) designated on the signature page hereof (or to
such other address, facsimile number, e-mail address or person as a party may
designate by notice to the other parties).
Section 5.9 Governing Law; Consent to Jurisdiction. The
interpretation and construction of this Agreement, and all matters relating
hereto, shall be governed by the laws of the State of Nevada applicable to
contracts made and to be performed entirely within the State of Nevada.
Section 5.10 Execution of Agreement. This Agreement may be executed
in one or more counterparts, each of which will be deemed to be an original copy
of this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement. The exchange of copies of this Agreement
and of signature pages by facsimile transmission shall constitute effective
execution and delivery of this Agreement as to the parties and may be used in
lieu of the original Agreement for all purposes. Signatures of the parties
transmitted by facsimile shall be deemed to be their original signatures for all
purposes.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by their respective officers who have been duly authorized, all as of
the day and year first above written.
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▇▇▇ PICENI SATELLITE ENTERPRISES CORP.
BY: BY:
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▇▇▇ Piceni Name:
Title:
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