EXHIBIT 10.28
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REDEMPTION AND CONVERSION AGREEMENT
This Redemption and Conversion Agreement (this "Agreement") is made
and entered into as of January 14, 2003, by and between ▇▇▇▇▇▇, Inc., a Delaware
corporation (the "Company"), and Laurus Master Fund, Ltd., a Cayman Islands
company (the "Purchaser").
WHEREAS, the outstanding principal balance on that certain Convertible
Note in the original principal amount of $2,000,000.00, dated as of July 31,
2003, made by the Company to the Purchaser (the "Note") is $1,914,750.00.
WHEREAS, the Company gave a Notice of Redemption to the Purchaser on
January 2, 2004 and the Purchaser subsequently requested conversion of
$1,891,000.00 of the principal balance of the Note.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, representations, warranties and covenants hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Note shall have the meanings given such terms in the
Note. As used in this Agreement, the following terms shall have the following
meanings:
"Daily Limit" is defined in Section 4.
"Daily Volume" means, with respect to any trading day, the number of
shares of the Common Stock traded on the Principal Market on such day.
"Market Price" means, with respect to any trading day, the volume
weighted average price for shares of the Common Stock traded on the Principal
Market on such day.
2. Redemption. The Company will redeem $1,150,750.00 of the principal
amount of the Note on January 16, 2004, by wire transfer in accordance with the
wire instructions set forth on Exhibit A hereto. The Redemption Amount shall be
$1,340,971.83.
3. Conversion. Purchaser will convert $764,000.00 of the principal balance
of the Note on January 14, 2004. In satisfaction of such conversion, the Company
will issue 492,904 shares of its Common Stock to Purchaser, in accordance with
the delivery instructions set forth in Exhibit B hereto.
4. Selling Restriction. During the period beginning on the date hereof and
until the fifth anniversary hereof, Purchaser will not, on any trading day, sell
more shares of Common Stock than the Daily Limit for that day. With respect to
any day, the "Daily Limit" shall mean:
(a) If the Market Price on the previous trading day is below $2.00,
there are no selling restrictions;
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(b) If the Market Price on the previous trading day is $2.00 or more
and less than $3.00, 15% of the Daily Volume on the day of the sale;
(c) If the Market Price on the previous trading day is $3.00 or more
and less than $4.00, 22% of the Daily Volume on the day of the sale;
(d) If the Market Price on the previous trading day is $4.00 or more
and not greater than $5.00, 30% of the Daily Volume on the day of the sale;
(e) If the Market Price on the previous trading day is above $5.00,
there are no selling restrictions.
Purchaser can engage in a block sale transaction with an outside party with the
Company's approval at any time.
5. Retirement of Note. Upon the payment of the Redemption Amount to the
Purchaser as set forth in Section 2 hereof and the issuance of shares of Common
Stock as set forth in Section 3 hereof, the Note shall be fully paid, satisfied
and discharged, and no further payments of principal, interest or fees shall be
due or payable thereunder.
6. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by the
Purchaser, of any of their obligations under this Agreement, the Purchaser or
the Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. No
failure or delay on the part of a party hereto in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and Purchaser.
(c) Notices. Any notice or request hereunder may be given to the
Company or the Purchaser at the respective addresses set forth below or as may
hereafter be specified in a notice designated as a change of address under this
Section 6(c). Any notice or request hereunder shall be given by registered or
certified mail, return receipt requested, hand delivery, overnight mail or
telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any officer
of the party to whom it is addressed, in the case of those by mail or overnight
mail, deemed to have been given when deposited in the mail or with the overnight
mail carrier, and, in the case of a telecopy, when confirmed telephonically. The
address for such notices and communications shall be as follows:
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If to the Company: ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: To the address set forth under
such Purchaser name on the
signature pages hereto.
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
(d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties.
(e) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of laws. The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs.
(g) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(h) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
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(i) Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Agreement and, therefore, stipulates
that the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Agreement to
favor any party against the other.
(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties have executed this Redemption and
Conversion Agreement as of the date first written above.
▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: EVP - CFO
LAURUS MASTER FUND, LTD.
By: /s/ ▇▇▇▇▇▇ Grin
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Name: ▇▇▇▇▇▇ Grin
Title: Director
Address for Notice:
c/o Laurus Capital Management, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Grin
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
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