EXHIBIT C
CERTIFICATE OF MERGER
OF
STRADEVERI, INC.
WITH AND INTO
HINDSIGHT RECORDS, INC.
[to be provided by Jehu Hand]
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EXHIBIT D
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement"), is entered into and made
effective as of December 30, 2004, by and between HINDSIGHT RECORDS, INC., (the
"Company"), and the PURCHASER listed on Schedule I attached to the Convertible
Debenture Purchase Agreement dated the date hereof (the "Secured Party").
WHEREAS, the Company shall issue and sell to the Secured Party, as provided
in the Convertible Debenture Purchase Agreement dated the date hereof, and the
Secured Party shall purchase One Million Dollars ($1,000,0000) of five percent
(5%) secured convertible debentures (the "Convertible Debentures"), which shall
be convertible into shares of the Company's common stock, par value $100 (the
"Common Stock") (as converted, the "Conversion Shares"), for a total purchase
price of One Million Dollars ($1,000,0000).
WHEREAS, to induce the Secured Party to enter into the transaction
contemplated by the Convertible Debenture Purchase Agreement, the Convertible
Debentures and the Escrow Agreement (collectively referred to as the
"Transaction Documents"), the Company hereby grants to the Secured Party a
security interest in and to the pledged property identified on Exhibit "A"
hereto (collectively referred to as the "Pledged Property") until the
satisfaction of the Obligations, as defined herein below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration, the adequacy
and receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1.
DEFINITIONS AND INTERPRETATIONS
Section 1.1. Recitals.
The above recitals are true and correct and are incorporated herein, in
their entirety, by this reference.
Section 1.2. Interpretations.
Nothing herein expressed or implied is intended or shall be construed to
confer upon any person other than the Secured Party any right, remedy or claim
under or by reason hereof.
Section 1.3. Obligations Secured.
The obligations secured hereby are any and all obligations of the Company
now existing or hereinafter incurred to the Secured Party, whether oral or
written and whether arising before, on or after the date hereof including,
without limitation, those obligations of the Company to the Secured Party under
the Convertible Debenture Purchase Agreement and the Convertible Debentures, and
any other amounts now or hereafter owed to the Secured Party by the Company
thereunder or hereunder (collectively, the "Obligations").
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ARTICLE 2.
PLEDGED COLLATERAL, ADMINISTRATION OF COLLATERAL
AND TERMINATION OF SECURITY INTEREST
Section 2.1. Pledged Property.
(a) Company hereby pledges to the Secured Party, and creates in the
Secured Party for its benefit, a security interest for such time until the
Obligations are paid in full, in and to all of the property of the Company as
set forth in Exhibit "A" attached hereto (collectively, the "Pledged Property"):
The Pledged Property, as set forth in Exhibit "A" attached hereto, and the
products thereof and the proceeds of all such items are hereinafter collectively
referred to as the "Pledged Collateral."
(b) Simultaneously with the execution and delivery of this Agreement,
the Company shall make, execute, acknowledge, file, record and deliver to the
Secured Party any documents reasonably requested by the Secured Party to perfect
its security interest in the Pledged Property. Simultaneously with the execution
and delivery of this Agreement, the Company shall make, execute, acknowledge and
deliver to the Secured Party such documents and instruments, including, without
limitation, financing statements, certificates, affidavits and forms as may, in
the Secured Party's reasonable judgment, be necessary to effectuate, complete or
perfect, or to continue and preserve, the security interest of the Secured Party
in the Pledged Property, and the Secured Party shall hold such documents and
instruments as secured party, subject to the terms and conditions contained
herein.
Section 2.2. Rights; Interests; Etc.
(a) So long as no Event of Default (as hereinafter defined) shall have
occurred and be continuing:
(i) the Company shall be entitled to exercise any and all rights
pertaining to the Pledged Property or any part thereof for any purpose not
inconsistent with the terms hereof; and
(ii) the Company shall be entitled to receive and retain any and
all payments paid or made in respect of the Pledged Property.
(b) Upon the occurrence and during the continuance of an Event of
Default:
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(i) All rights of the Company to exercise the rights which it
would otherwise be entitled to exercise pursuant to Section 2.2(a)(i) hereof and
to receive payments which it would otherwise be authorized to receive and retain
pursuant to Section 2.2(a)(ii) hereof shall be suspended, and all such rights
shall thereupon become vested in the Secured Party who shall thereupon have the
sole right to exercise such rights and to receive and hold as Pledged Collateral
such payments; provided, however, that if the Secured Party shall become
entitled and shall elect to exercise its right to realize on the Pledged
Collateral pursuant to Article 5 hereof, then all cash sums received by the
Secured Party, or held by Company for the benefit of the Secured Party and paid
over pursuant to Section 2.2(b)(ii) hereof, shall be applied against any
outstanding Obligations; and
(ii) All interest, dividends, income and other payments and
distributions which are received by the Company contrary to the provisions of
Section 2.2(b)(i) hereof shall be received in trust for the benefit of the
Secured Party, shall be segregated from other property of the Company and shall
be forthwith paid over to the Secured Party; or
(iii) The Secured Party in its sole discretion shall be
authorized to sell any or all of the Pledged Property at public or private sale
in order to recoup all of the outstanding principal plus accrued interest owed
pursuant to the Convertible Debenture as described herein
(c) Each of the following events shall constitute a default under this
Agreement (each an "Event of Default"):
(i) any default, whether in whole or in part, shall occur in the
payment to the Secured Party of principal, interest or other item comprising the
Obligations as and when due or with respect to any other debt or obligation of
the Company to a party other than the Secured Party;
(ii) any default, whether in whole or in part, shall occur in the
due observance or performance of any obligations or other covenants, terms or
provisions to be performed under this Agreement or the Transaction Documents;
(iii) the Company shall: (1) make a general assignment for the
benefit of its creditors; (2) apply for or consent to the appointment of a
receiver, trustee, assignee, custodian, sequestrator, liquidator or similar
official for itself or any of its assets and properties; (3) commence a
voluntary case for relief as a debtor under the United States Bankruptcy Code;
(4) file with or otherwise submit to any governmental authority any petition,
answer or other document seeking: (A) reorganization, (B) an arrangement with
creditors or (C) to take advantage of any other present or future applicable law
respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief
of debtors, dissolution or liquidation; (5) file or otherwise submit any answer
or other document admitting or failing to contest the material allegations of a
petition or other document filed or otherwise submitted against it in any
proceeding under any such applicable law, or (6) be adjudicated a bankrupt or
insolvent by a court of competent jurisdiction; or
(iv) any case, proceeding or other action shall be commenced
against the Company for the purpose of effecting, or an order, judgment or
decree shall be entered by any court of competent jurisdiction approving (in
whole or in part) anything specified in Section 2.2(c)(iii) hereof, or any
receiver, trustee, assignee, custodian, sequestrator, liquidator or other
official shall be appointed with respect to the Company, or shall be appointed
to take or shall otherwise acquire possession or control of all or a substantial
part of the assets and properties of the Company, and any of the foregoing shall
continue unstayed and in effect for any period of thirty (30) days.
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ARTICLE 3.
ATTORNEY-IN-FACT; PERFORMANCE
Section 3.1. Secured Party Appointed Attorney-In-Fact.
Upon the occurrence of an Event of Default, the Company hereby appoints the
Secured Party as its attorney-in-fact, with full authority in the place and
stead of the Company and in the name of the Company or otherwise, from time to
time in the Secured Party's discretion to take any action and to execute any
instrument which the Secured Party may reasonably deem necessary to accomplish
the purposes of this Agreement, including, without limitation, to receive and
collect all instruments made payable to the Company representing any payments in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same. The Secured Party may demand, collect, receipt for, settle,
compromise, adjust, ▇▇▇ for, foreclose, or realize on the Pledged Property as
and when the Secured Party may determine. To facilitate collection, the Secured
Party may notify account debtors and obligors on any Pledged Property or Pledged
Collateral to make payments directly to the Secured Party.
Section 3.2. Secured Party May Perform.
If the Company fails to perform any agreement contained herein, the Secured
Party, at its option, may itself perform, or cause performance of, such
agreement, and the expenses of the Secured Party incurred in connection
therewith shall be included in the Obligations secured hereby and payable by the
Company under Section 8.3.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Section 4.1. Authorization; Enforceability.
Each of the parties hereto represents and warrants that it has taken all
action necessary to authorize the execution, delivery and performance of this
Agreement and the transactions contemplated hereby; and upon execution and
delivery, this Agreement shall constitute a valid and binding obligation of the
respective party, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights or by the principles
governing the availability of equitable remedies.
Section 4.2. Ownership of Pledged Property.
The Company warrants and represents that it is the legal and beneficial
owner of the Pledged Property free and clear of any lien, security interest,
option or other charge or encumbrance, other than as previously disclosed in the
Reports and already exists, except for the security interest created by this
Agreement.
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ARTICLE 5.
DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL
Section 5.1. Default and Remedies.
(a) If an Event of Default described in Section 2.2(c)(i) and (ii)
occurs, then in each such case the Secured Party may declare the Obligations to
be due and payable immediately, by a notice in writing to the Company, and upon
any such declaration, the Obligations shall become immediately due and payable.
If an Event of Default described in Sections 2.2(c)(iii) or (iv) occurs and is
continuing for the period set forth therein, then the Obligations shall
automatically become immediately due and payable without declaration or other
act on the part of the Secured Party.
(b) Upon the occurrence of an Event of Default, the Secured Party
shall: (i) be entitled to receive all distributions with respect to the Pledged
Collateral, (ii) to cause the Pledged Property to be transferred into the name
of the Secured Party or its nominee, (iii) to dispose of the Pledged Property,
and (iv) to realize upon any and all rights in the Pledged Property then held by
the Secured Party.
Section 5.2. Method of Realizing Upon the Pledged Property: Other Remedies.
Upon the occurrence of an Event of Default, in addition to any rights and
remedies available at law or in equity, the following provisions shall govern
the Secured Party's right to realize upon the Pledged Property:
(a) Any item of the Pledged Property may be sold for cash or other
value in any number of lots at brokers board, public auction or private sale and
may be sold without demand, advertisement or notice (except that the Secured
Party shall give the Company ten (10) days' prior written notice of the time and
place or of the time after which a private sale may be made (the "Sale
Notice")), which notice period shall in any event is hereby agreed to be
commercially reasonable. At any sale or sales of the Pledged Property, the
Company may bid for and purchase the whole or any part of the Pledged Property
and, upon compliance with the terms of such sale, may hold, exploit and dispose
of the same without further accountability to the Secured Party. The Company
will execute and deliver, or cause to be executed and delivered, such
instruments, documents, assignments, waivers, certificates, and affidavits and
supply or cause to be supplied such further information and take such further
action as the Secured Party reasonably shall require in connection with any such
sale.
(b) Any cash being held by the Secured Party as Pledged Collateral and
all cash proceeds received by the Secured Party in respect of, sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied as follows:
(i) to the payment of all amounts due the Secured Party for the
expenses reimbursable to it hereunder or owed to it pursuant to Section 8.3
hereof;
(ii) to the payment of the Obligations then due and unpaid.
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(iii) the balance, if any, to the person or persons entitled
thereto, including, without limitation, the Company.
(c) In addition to all of the rights and remedies which the Secured
Party may have pursuant to this Agreement, the Secured Party shall have all of
the rights and remedies provided by law, including, without limitation, those
under the Uniform Commercial Code.
(i) If the Company fails to pay such amounts due upon the
occurrence of an Event of Default which is continuing, then the Secured Party
may institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company and collect the monies adjudged or decreed
to be payable in the manner provided by law out of the property of Company,
wherever situated.
(ii) The Company agrees that it shall be liable for any
reasonable fees, expenses and costs incurred by the Secured Party in connection
with enforcement, collection and preservation of the Transaction Documents,
including, without limitation, reasonable legal fees and expenses, and such
amounts shall be deemed included as Obligations secured hereby and payable as
set forth in Section 8.3 hereof.
Section 5.3. Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relating to the Company or the property of the Company or of
such other obligor or its creditors, the Secured Party (irrespective of whether
the Obligations shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Secured Party shall
have made any demand on the Company for the payment of the Obligations), subject
to the rights of Previous Security Holders, shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of the
Obligations and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Secured Party (including any claim
for the reasonable legal fees and expenses and other expenses paid or incurred
by the Secured Party permitted hereunder and of the Secured Party allowed in
such judicial proceeding), and
(ii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by the Secured Party to
make such payments to the Secured Party and, in the event that the Secured Party
shall consent to the making of such payments directed to the Secured Party, to
pay to the Secured Party any amounts for expenses due it hereunder.
Section 5.4. Duties Regarding Pledged Collateral.
The Secured Party shall have no duty as to the collection or protection of
the Pledged Property or any income thereon or as to the preservation of any
rights pertaining thereto, beyond the safe custody and reasonable care of any of
the Pledged Property actually in the Secured Party's possession.
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ARTICLE 6.
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, from the date hereof and until the
Obligations have been fully paid and satisfied, unless the Secured Party shall
consent otherwise in writing (as provided in Section 8.4 hereof):
Section 6.1. Existence, Properties, Etc.
(a) The Company shall do, or cause to be done, all things, or proceed
with due diligence with any actions or courses of action, that may be reasonably
necessary (i) to maintain Company's due organization, valid existence and good
standing under the laws of its state of incorporation, and (ii) to preserve and
keep in full force and effect all qualifications, licenses and registrations in
those jurisdictions in which the failure to do so could have a Material Adverse
Effect (as defined below); and (b) the Company shall not do, or cause to be
done, any act impairing the Company's corporate power or authority (i) to carry
on the Company's business as now conducted, and (ii) to execute or deliver this
Agreement or any other document delivered in connection herewith, including,
without limitation, any UCC-1 Financing Statements required by the Secured Party
to which it is or will be a party, or perform any of its obligations hereunder
or thereunder. For purpose of this Agreement, the term "Material Adverse Effect"
shall mean any material and adverse affect as determined by Secured Party in its
sole discretion, whether individually or in the aggregate, upon (a) the
Company's assets, business, operations, properties or condition, financial or
otherwise; (b) the Company's to make payment as and when due of all or any part
of the Obligations; or (c) the Pledged Property.
Section 6.2. Financial Statements and Reports.
The Company shall furnish to the Secured Party such financial data as the
Secured Party may reasonably request. Without limiting the foregoing, the
Company shall furnish to the Secured Party (or cause to be furnished to the
Secured Party) the following:
(a) as soon as practicable and in any event within ninety (90) days
after the end of each fiscal year of the Company, the balance sheet of the
Company as of the close of such fiscal year, the statement of earnings and
retained earnings of the Company as of the close of such fiscal year, and
statement of cash flows for the Company for such fiscal year, all in reasonable
detail, prepared in accordance with generally accepted accounting principles
consistently applied, certified by the chief executive and chief financial
officers of the Company as being true and correct and accompanied by a
certificate of the chief executive and chief financial officers of the Company,
stating that the Company has kept, observed, performed and fulfilled each
covenant, term and condition of this Agreement during such fiscal year and that
no Event of Default hereunder has occurred and is continuing, or if an Event of
Default has occurred and is continuing, specifying the nature of same, the
period of existence of same and the action the Company proposes to take in
connection therewith;
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(b) within thirty (30) days of the end of each calendar month, a
balance sheet of the Company as of the close of such month, and statement of
earnings and retained earnings of the Company as of the close of such month, all
in reasonable detail, and prepared substantially in accordance with generally
accepted accounting principles consistently applied, certified by the chief
executive and chief financial officers of the Company as being true and correct;
and
(c) promptly upon receipt thereof, copies of all accountants' reports
and accompanying financial reports submitted to the Company by independent
accountants in connection with each annual examination of the Company.
Section 6.3. Accounts and Reports.
The Company shall maintain a standard system of accounting in accordance
with generally accepted accounting principles consistently applied and provide,
at its sole expense, to the Secured Party the following:
(a) as soon as available, a copy of any notice or other communication
alleging any nonpayment or other material breach or default, or any foreclosure
or other action respecting any material portion of its assets and properties,
received respecting any of the indebtedness of the Company in excess of $15,000
(other than the Obligations), or any demand or other request for payment under
any guaranty, assumption, purchase agreement or similar agreement or arrangement
respecting the indebtedness or obligations of others in excess of $15,000,
including any received from any person acting on behalf of the Secured Party or
beneficiary thereof; and
(b) within fifteen (15) days after the making of each submission or
filing, a copy of any report, financial statement, notice or other document,
whether periodic or otherwise, submitted to the shareholders of the Company, or
submitted to or filed by the Company with any governmental authority involving
or affecting (i) the Company that could have a Material Adverse Effect; (ii) the
Obligations; (iii) any part of the Pledged Collateral; or (iv) any of the
transactions contemplated in this Agreement or the Loan Instruments.
Section 6.4. Maintenance of Books and Records; Inspection.
The Company shall maintain its books, accounts and records in accordance
with generally accepted accounting principles consistently applied, and permit
the Secured Party, its officers and employees and any professionals designated
by the Secured Party in writing, at any time to visit and inspect any of its
properties (including but not limited to the collateral security described in
the Transaction Documents and/or the Loan Instruments), corporate books and
financial records, and to discuss its accounts, affairs and finances with any
employee, officer or director thereof.
Section 6.5. Maintenance and Insurance.
(a) The Company shall maintain or cause to be maintained, at its own
expense, all of its assets and properties in good working order and condition,
making all necessary repairs thereto and renewals and replacements thereof.
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(b) The Company shall maintain or cause to be maintained, at its own
expense, insurance in form, substance and amounts (including deductibles), which
the Company deems reasonably necessary to the Company's business, (i) adequate
to insure all assets and properties of the Company, which assets and properties
are of a character usually insured by persons engaged in the same or similar
business against loss or damage resulting from fire or other risks included in
an extended coverage policy; (ii) against public liability and other tort claims
that may be incurred by the Company; (iii) as may be required by the Transaction
Documents and/or applicable law and (iv) as may be reasonably requested by
Secured Party, all with adequate, financially sound and reputable insurers.
Section 6.6. Contracts and Other Collateral.
The Company shall perform all of its obligations under or with respect to
each instrument, receivable, contract and other intangible included in the
Pledged Property to which the Company is now or hereafter will be party on a
timely basis and in the manner therein required, including, without limitation,
this Agreement.
Section 6.7. Defense of Collateral, Etc.
The Company shall defend and enforce its right, title and interest in and
to any part of: (a) the Pledged Property; and (b) if not included within the
Pledged Property , those assets and properties whose loss could have a Material
Adverse Effect, the Company shall defend the Secured Party's right, title and
interest in and to each and every part of the Pledged Property, each against all
manner of claims and demands on a timely basis to the full extent permitted by
applicable law.
Section 6.8. Payment of Debts, Taxes, Etc.
The Company shall pay, or cause to be paid, all of its indebtedness and
other liabilities and perform, or cause to be performed, all of its obligations
in accordance with the respective terms thereof, and pay and discharge, or cause
to be paid or discharged, all taxes, assessments and other governmental charges
and levies imposed upon it, upon any of its assets and properties on or before
the last day on which the same may be paid without penalty, as well as pay all
other lawful claims (whether for services, labor, materials, supplies or
otherwise) as and when due
Section 6.9. Taxes and Assessments; Tax Indemnity.
The Company shall (a) file all tax returns and appropriate schedules
thereto that are required to be filed under applicable law, prior to the date of
delinquency, (b) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon the Company, upon its income and profits or upon
any properties belonging to it, prior to the date on which penalties attach
thereto, and (c) pay all taxes, assessments and governmental charges or levies
that, if unpaid, might become a lien or charge upon any of its properties;
provided, however, that the Company in good faith may contest any such tax,
assessment, governmental charge or levy described in the foregoing clauses (b)
and (c) so long as appropriate reserves are maintained with respect thereto.
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Section 6.10. Compliance with Law and Other Agreements.
The Company shall maintain its business operations and property owned or
used in connection therewith in compliance with (a) all applicable federal,
state and local laws, regulations and ordinances governing such business
operations and the use and ownership of such property, and (b) all agreements,
licenses, franchises, indentures and mortgages to which the Company is a party
or by which the Company or any of its properties is bound. Without limiting the
foregoing, the Company shall pay all of its indebtedness promptly in accordance
with the terms thereof.
Section 6.11. Notice of Default.
The Company shall give written notice to the Secured Party of the
occurrence of any default or Event of Default under this Agreement, the
Transaction Documents or any other Loan Instrument or any other agreement of
Company for the payment of money, promptly upon the occurrence thereof.
Section 6.12. Notice of Litigation.
The Company shall give notice, in writing, to the Secured Party of (a) any
actions, suits or proceedings wherein the amount at issue is in excess of
$50,000, instituted by any persons against the Company, or affecting any of the
assets of the Company, and (b) any dispute, not resolved within fifteen (15)
days of the commencement thereof, between the Company on the one hand and any
governmental or regulatory body on the other hand, which might reasonably be
expected to have a Material Adverse Effect on the business operations or
financial condition of the Company.
ARTICLE 7.
NEGATIVE COVENANTS
The Company covenants and agrees that, from the date hereof until the
Obligations have been fully paid and satisfied, the Company shall not, unless
the Secured Party shall consent otherwise in writing:
Section 7.1. Indebtedness.
Except for the SEDA transaction and the Commander Fund Transactions, the
Company shall not directly or indirectly permit, create, incur, assume, permit
to exist, increase, renew or extend on or after the date hereof any indebtedness
on its part, including commitments, contingencies and credit availabilities, or
apply for or offer or agree to do any of the foregoing, except as already
exists.
Section 7.2. Liens and Encumbrances.
The Company shall not directly or indirectly make, create, incur, assume or
permit to exist any assignment, transfer, pledge, mortgage, security interest or
other lien or encumbrance of any nature in, to or against any part of the
Pledged Property or of the Company's capital stock, or offer or agree to do so,
or own or acquire or agree to acquire any asset or property of any character
subject to any of the foregoing encumbrances (including any conditional sale
contract or other title retention agreement), or assign, pledge or in any way
transfer or encumber its right to receive any income or other distribution or
proceeds from any part of the Pledged Property or the Company's capital stock;
or enter into any sale-leaseback financing respecting any part of the Pledged
Property as lessee, or cause or assist the inception or continuation of any of
the foregoing, except as already exists.
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Section 7.3. Certificate of Incorporation, By-Laws, Mergers,
Consolidations, Acquisitions and Sales.
Except for the SEDA transaction and the Commander Fund Transactions,
without the prior express written consent of the Secured Party, the Company
shall not: (a) Amend its Certificate of Incorporation or By-Laws; (b) issue or
sell its stock, stock options, bonds, notes or other corporate securities or
obligations, except as set forth in the Convertible Debenture Purchase
Agreement, (c) be a party to any merger, consolidation or corporate
reorganization, (d) purchase or otherwise acquire all or substantially all of
the assets or stock of, or any partnership or joint venture interest in, any
other person, firm or entity, (e) sell, transfer, convey, grant a security
interest in or lease all or any substantial part of its assets, nor (f) create
any subsidiaries nor convey any of its assets to any subsidiary.
Section 7.4. Management, Ownership.
The Company shall not materially change its ownership, executive staff or
management without the prior written consent of the Secured Party. The
ownership, executive staff and management of the Company are material factors in
the Secured Party's willingness to institute and maintain a lending relationship
with the Company.
Section 7.5. Dividends, Etc.
The Company shall not declare or pay any dividend of any kind, in cash or
in property, on any class of its capital stock, nor purchase, redeem, retire or
otherwise acquire for value any shares of such stock, nor make any distribution
of any kind in respect thereof, nor make any return of capital to shareholders,
nor make any payments in respect of any pension, profit sharing, retirement,
stock option, stock bonus, incentive compensation or similar plan (except as
required or permitted hereunder), without the prior written consent of the
Secured Party.
Section 7.6. Guaranties; Loans.
The Company shall not guarantee nor be liable in any manner, whether
directly or indirectly, or become contingently liable after the date of this
Agreement in connection with the obligations or indebtedness of any person or
persons, except for (i) the indebtedness currently secured by the liens
identified on the Pledged Property identified on Exhibit A hereto and (ii) the
endorsement of negotiable instruments payable to the Company for deposit or
collection in the ordinary course of business. The Company shall not make any
loan, advance or extension of credit to any person other than in the normal
course of its business.
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Section 7.7. Debt.
Except for the SEDA transaction and the Commander Fund Transactions, the
Company shall not create, incur, assume or suffer to exist any additional
indebtedness of any description whatsoever in an aggregate amount in excess of
$25,000 (excluding any indebtedness of the Company to the Secured Party, trade
accounts payable and accrued expenses incurred in the ordinary course of
business and the endorsement of negotiable instruments payable to the Company,
respectively for deposit or collection in the ordinary course of business),
except as set forth in the Convertible Debenture Purchase Agreement.
Section 7.8. Conduct of Business.
The Company will continue to engage, in an efficient and economical manner,
in a business of the same general type as conducted by it on the date of this
Agreement.
Section 7.9. Places of Business.
The location of the Company's chief place of business is Massena, New York.
The Company shall not change the location of its chief place of business, chief
executive office or any place of business disclosed to the Secured Party or move
any of the Pledged Property from its current location without thirty (30) days'
prior written notice to the Secured Party in each instance.
ARTICLE 8.
MISCELLANEOUS
Section 8.1. Notices.
All notices or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be considered as duly
given on: (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or (b) five (5) days after mailing if
mailed from within the continental United States by certified mail, return
receipt requested to the party entitled to receive the same:
If to the Secured Party: Highgate House, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Telephone:
Facsimile:
With a copy to: Gottbetter & Partners, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
And if to the Company: Hindsight Records, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
D-12
Any party may change its address by giving notice to the other party
stating its new address. Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.
Section 8.2. Severability.
If any provision of this Agreement shall be held invalid or unenforceable,
such invalidity or unenforceability shall attach only to such provision and
shall not in any manner affect or render invalid or unenforceable any other
severable provision of this Agreement, and this Agreement shall be carried out
as if any such invalid or unenforceable provision were not contained herein.
Section 8.3. Expenses.
In the event of an Event of Default, the Company will pay to the Secured
Party the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel, which the Secured Party may incur in
connection with: (i) the custody or preservation of, or the sale, collection
from, or other realization upon, any of the Pledged Property; (ii) the exercise
or enforcement of any of the rights of the Secured Party hereunder or (iii) the
failure by the Company to perform or observe any of the provisions hereof.
Section 8.4. Waivers, Amendments, Etc.
The Secured Party's delay or failure at any time or times hereafter to
require strict performance by Company of any undertakings, agreements or
covenants shall not waiver, affect, or diminish any right of the Secured Party
under this Agreement to demand strict compliance and performance herewith. Any
waiver by the Secured Party of any Event of Default shall not waive or affect
any other Event of Default, whether such Event of Default is prior or subsequent
thereto and whether of the same or a different type. None of the undertakings,
agreements and covenants of the Company contained in this Agreement, and no
Event of Default, shall be deemed to have been waived by the Secured Party, nor
may this Agreement be amended, changed or modified, unless such waiver,
amendment, change or modification is evidenced by an instrument in writing
specifying such waiver, amendment, change or modification and signed by the
Secured Party.
Section 8.5. Continuing Security Interest.
This Agreement shall create a continuing security interest in the Pledged
Property and shall: (i) remain in full force and effect until payment in full of
the Obligations or full conversion of the Convertible Debentures; and (ii) be
binding upon the Company and its successors and heirs and (iii) inure to the
benefit of the Secured Party and its successors and assigns. Upon the payment or
satisfaction in full of the Obligations, the Company shall be entitled to the
return, at its expense, of such of the Pledged Property as shall not have been
sold in accordance with Section 5.2 hereof or otherwise applied pursuant to the
terms hereof.
D-13
Section 8.6. Independent Representation.
Each party hereto acknowledges and agrees that it has received or has had
the opportunity to receive independent legal counsel of its own choice and that
it has been sufficiently apprised of its rights and responsibilities with regard
to the substance of this Agreement.
Section 8.7. Applicable Law: Jurisdiction.
The parties hereto acknowledge that the transactions contemplated by this
Agreement and the exhibits hereto bear a reasonable relation to the State of New
York. The parties hereto agree that the internal laws of the State of New York
shall govern this Agreement and the exhibits hereto. Any action to enforce the
terms of this Agreement or any of its exhibits shall be brought exclusively in
the state and/or federal courts situated in the County and State of New York.
Service of process in any action by the Secured Party to enforce the terms of
this Agreement may be made by serving a copy of the summons and complaint, in
addition to any other relevant documents, by commercial overnight courier to the
Company at its principal address set forth in this Agreement.
Section 8.8. Waiver of Jury Trial.
AS A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT
AND TO MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO
THIS AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.
Section 8.9. Entire Agreement.
This Agreement constitutes the entire agreement among the parties and
supersedes any prior agreement or understanding among them with respect to the
subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
D-14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY:
HINDSIGHT RECORDS, INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:President
SECURED PARTY:
HIGHGATE HOUSE, LLC
By: HH Advisors, LLC, its managing
member
By: ▇▇▇▇▇▇▇ Investment Group, Inc.,
its managing member
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
D-15
EXHIBIT A
DEFINITION OF PLEDGED PROPERTY
For the purpose of securing prompt and complete payment and performance by
the Company of all of the Obligations, the Company unconditionally and
irrevocably hereby grants to the Secured Party a continuing security interest in
and to, and lien upon, the following Pledged Property of the Company:
(a) all goods of the Company, including, without limitation,
machinery, equipment, furniture, furnishings, fixtures, signs, lights, tools,
parts, supplies and motor vehicles of every kind and description, now or
hereafter owned by the Company or in which the Company may have or may hereafter
acquire any interest, and all replacements, additions, accessions, substitutions
and proceeds thereof, arising from the sale or disposition thereof, and where
applicable, the proceeds of insurance and of any tort claims involving any of
the foregoing;
(b) all inventory of the Company, including, but not limited to, all
goods, wares, merchandise, parts, supplies, finished products, other tangible
personal property, including such inventory as is temporarily out of Company's
custody or possession and including any returns upon any accounts or other
proceeds, including insurance proceeds, resulting from the sale or disposition
of any of the foregoing;
(c) all contract rights and general intangibles of the Company,
including, without limitation, goodwill, trademarks, trade styles, trade names,
leasehold interests, partnership or joint venture interests, patents and patent
applications, copyrights, deposit accounts whether now owned or hereafter
created;
(d) all documents, warehouse receipts, instruments and chattel paper
of the Company whether now owned or hereafter created;
(e) all accounts and other receivables, instruments or other forms of
obligations and rights to payment of the Company (herein collectively referred
to as "Accounts"), together with the proceeds thereof, all goods represented by
such Accounts and all such goods that may be returned by the Company's
customers, and all proceeds of any insurance thereon, and all guarantees,
securities and liens which the Company may hold for the payment of any such
Accounts including, without limitation, all rights of stoppage in transit,
replevin and reclamation and as an unpaid vendor and/or lienor, all of which the
Company represents and warrants will be bona fide and existing obligations of
its respective customers, arising out of the sale of goods by the Company in the
ordinary course of business;
(f) to the extent assignable, all of the Company's rights under all
present and future authorizations, permits, licenses and franchises issued or
granted in connection with the operations of any of its facilities;
(g) all products and proceeds (including, without limitation,
insurance proceeds) from the above-described Pledged Property.
A-1
EXHIBIT E
ESCROW AGREEMENT
ESCROW AGREEMENT (this "Agreement"), dated as of December 30, 2004, by and among
Hindsight Records, Inc., a California corporation with its principal place of
business at ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company"); Gottbetter &
Partners, LLP, or its successors or assigns, with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Escrow Agent"); and
Highgate House, LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ (the "Purchaser").
Recitals
A. Simultaneously with the execution of this Agreement, the Purchaser
and the Company entered into a Convertible Debenture Purchase Agreement (the
"Purchase Agreement"), dated as of the date hereof and incorporated herein by
reference, pursuant to which the Company has agreed to issue and sell and the
Purchaser has agreed to purchase certain Debentures (the "Debentures").
B. The Escrow Agent will issue the Debentures to the Purchaser on the
Closing Date (as defined in the Purchase Agreement) in accordance with the terms
of the Purchase Agreement.
C. The Escrow Agent is willing to act as escrow agent pursuant to the
terms of this Agreement with respect to the purchase of the Debentures.
D. All capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Purchase Agreement.
NOW, THEREFORE, IT IS AGREED:
1. Procedure for Escrow. The procedures of the escrow shall be governed by
the provisions of Article 2 of the Purchase Agreement, which are incorporated
herein by reference as if set forth fully herein.
2. Terms of Escrow. The terms of the escrow shall be governed by Article 4
of the Purchase Agreement and Sections 2, 3, 4 and 5 of the Debentures, all of
which are incorporated herein by reference as if set forth fully herein.
3. Duties and Obligations of the Escrow Agent.
(a) The parties hereto agree that the duties and obligations of
the Escrow Agent shall be only those obligations herein specifically provided
and no other. The Escrow Agent's duties are those of a depositary only, and the
Escrow Agent shall incur no liability whatsoever, except as a direct result of
its willful misconduct or gross negligence in the performance of its duties
hereunder.
E-1
(b) The Escrow Agent may consult with counsel of its choice, and
shall not be liable for any action taken, suffered or omitted to be taken by it
in good faith in accordance with the advice of such counsel.
(c) The Escrow Agent shall not be bound in any way by the terms
of any other agreement to which the Purchaser and the Company are parties,
whether or not the Escrow Agent has knowledge thereof, and the Escrow Agent
shall not in any way be required to determine whether or not any other agreement
has been complied with by the Purchaser and the Company, or any other party
thereto. The Escrow Agent shall not be bound by any modification, amendment,
termination, cancellation, rescission or supersession of this Agreement unless
the same shall be in writing and signed by the Purchaser and the Company and
agreed to in writing by the Escrow Agent.
(d) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands which, in its
opinion, are in conflict with any of the provisions of this Agreement, the
Escrow Agent shall be entitled to refrain from taking any action other than
keeping safely the Consideration (as defined below) until the Escrow Agent is
directed otherwise in writing jointly by the Purchaser and the Company or by a
final judgment of a court of competent jurisdiction.
(e) The Escrow Agent shall be fully protected in relying upon any
written notice, demand, certificate or document which the Escrow Agent, in good
faith, believes to be genuine. The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of
documents or securities now or hereafter deposited hereunder or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement.
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to defend any legal
proceedings which may be instituted against it or in respect of the
Consideration.
(g) If the Escrow Agent at any time, in its sole discretion,
deems it necessary or advisable to relinquish custody of any of the Debentures
(to the extent delivered to the Escrow Agent pursuant hereto, the
"Consideration"), it may do so by delivering the same to another Person that
agrees to act as escrow agent hereunder and whose substitution for the Escrow
Agent is agreed upon in writing by the Purchaser and the Company. If no such
escrow agent is selected within ten (10) days after the Escrow Agent gives
notice to the Purchaser and the Company of the Escrow Agent's desire to so
relinquish custody of the Consideration and resign as Escrow Agent, then the
Escrow Agent may do so by delivering the Consideration to the clerk or other
proper officer of a state or federal court of competent jurisdiction situate in
the state and county of New York. The fee of any court officer shall be borne by
the Company. Upon such delivery, the Escrow Agent shall be discharged from any
and all responsibility or liability with respect to the Consideration and this
Agreement and each of the Company and the Purchaser shall promptly pay all
monies it may owe to the Escrow Agent for its services hereunder, including, but
not limited to, reimbursement of its out-of-pocket expenses.
E-2
(h) This Agreement shall not create any fiduciary duty on the
Escrow Agent's part to the Purchaser or the Company, nor disqualify the Escrow
Agent from representing either party hereto in any dispute with the other,
including any dispute with respect to the Consideration; provided, however, that
in the event of such dispute, the Escrow Agent shall have the right to commence
an interpleader action in any court of competent jurisdiction of the State of
New York or of the United States located in the county and State of New York,
deposit the Consideration with such court.
(i) The parties acknowledge and agree that the Escrow Agent is
counsel to the Purchaser. The parties agree to, and agree not to object to, the
Escrow Agent's engagement as Escrow Agent hereunder.
(j) Upon the performance of this Agreement, the Escrow Agent
shall be deemed released and discharged of any further obligations hereunder.
(k) The Escrow Agent agrees to perform its obligations hereunder
in accordance with the provisions of Sections 1 and 2 hereof.
4. Indemnification.
(a) The Purchaser hereby indemnifies and holds free and harmless
the Escrow Agent from any and all losses, expenses, liabilities and damages
(including but not limited to reasonable attorney's fees, and amounts paid in
settlement) resulting from claims asserted by the Company against the Escrow
Agent with respect to the performance of any of the provisions of this
Agreement.
(b) The Company hereby indemnifies and holds free and harmless
the Escrow Agent from any and all losses, expenses, liabilities and damages
(including but not limited to reasonable attorney's fees, and amount paid in
settlement) resulting from claims asserted by the Purchaser against the Escrow
Agent with respect to the performance of any of the provisions of this
Agreement.
(c) The Purchaser and the Company, jointly and severally, hereby
indemnify and hold the Escrow Agent harmless from and against any and all
losses, damages, taxes (other than taxes related to the fee of the Escrow Agent)
liabilities and expenses that may be incurred by the Escrow Agent, arising out
of or in connection with its acceptance of appointment as the Escrow Agent
hereunder and/or the performance of its duties pursuant to this Agreement, the
Purchase Agreement, the Debentures, including, but not limited to, all
reasonable legal costs and expenses of the Escrow Agent incurred defending
itself against any claim or liability in connection with its performance
hereunder, provided that the Escrow Agent shall not be entitled to any indemnity
for any losses, damages, taxes, liabilities or expenses that directly result
from its willful misconduct or gross negligence in its performance as Escrow
Agent hereunder.
(d) In the event of any legal action or proceeding involving any
of the parties to this Agreement which is brought to enforce or otherwise
adjudicate any of the rights or obligations of the parties hereunder, the
non-prevailing party or parties shall pay the reasonable legal fees of the
prevailing party or parties and the reasonable legal fees, if any, of the Escrow
Agent.
5. Miscellaneous.
(a) Any notice, request, demand, waiver, consent, approval, or
other communication which is required or permitted to be given to any party
hereunder shall be in writing and shall be deemed given only if delivered to the
party personally or via courier or sent to the party by facsimile upon
electronic confirmation and receipt (promptly followed by a hard-copy delivered
in accordance with this Section 5(a)) or three days after being mailed by
registered or certified mail (return receipt requested), or if sent by
nationally recognized overnight courier, one day after being mailed, in each
case with postage and registration or certification fees thereon prepaid,
addressed to the party at its address set forth below:
(i) If to the Company: Hindsight Records, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Purchaser: See Schedule 1 to the Purchase Agreement.
E-3
With copies to Gottbetter & Partners, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to the Escrow Agent: Gottbetter & Partners, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the state of New York applicable to
contracts entered into and performed entirely within New York, without giving
effect to the principles of New York law relating to the conflict of laws.
(c) This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and 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
page were an original thereof.
(d) This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and permitted assigns. The assignment by a
party of this Agreement or any rights hereunder shall not affect the obligations
of such party under this Agreement.
(e) Any fees and expenses required to be paid by any party
hereunder shall be limited to reasonable and necessary fees and expenses
(f) This Agreement and the other agreements and documents
referenced herein contain the entire agreement among the parties hereto with
respect to the transactions described herein and supercedes all prior agreements
with respect thereto, whether written or oral.
6. Termination of Escrow. The term of this Escrow Agreement shall begin
upon the date hereof and shall continue until the earlier to occur of (i) the
Post-Closing Date, and (ii) the written agreement of the parties to terminate
this Agreement. Upon the termination of this Escrow Agreement, the Escrow Agent
shall return any of the Consideration then held by it to the Company pursuant to
the Purchase Agreement and the other Transaction Documents.
[Signature Page Follows]
E-4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed the day and year first above written.
Escrow Agent: The Company:
Gottbetter & Partners, LLP Hindsight Records, Inc.
By:/s/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------- ------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Managing Partner ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Purchaser:
HIGHGATE HOUSE, LLC
By: HH Advisors, LLC, its managing
member
By: ▇▇▇▇▇▇▇ Investment Group, Inc., its
managing member
By: /S/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
E-5
EXHIBIT F
December 30, 2004
To the Purchaser Listed in Schedule 1 to the "Purchase Agreement"
Re: Hindsight Records, Inc.
Ladies and Gentlemen:
We have acted as counsel to Hindsight Records, Inc., a California
corporation (the "Company"), in connection with the Convertible Debenture
Purchase Agreement, dated as of December 30, 2004, between you and the Company
(the "Purchase Agreement"), and the transactions contemplated thereby.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings given to such terms in the Purchase Agreement.
In addition to the Transaction Documents, we have examined such other
documents, records and legal matters as in our judgment are necessary or
appropriate to enable us to render the opinions expressed below, including,
without limitation, the Company's certificate of incorporation and by-laws, each
as in effect on the date hereof (the "Certificate of Incorporation" and the
"By-Laws," respectively). We have also relied on the certificates furnished by
officers of the Company as of the date hereof. We have, without independent
verification, relied upon and assumed the accuracy of such certificates as to
factual matters and have not attempted to verify independently the statements
contained therein; however, nothing has come to our attention that would cause
us to question the accuracy of such statements.
We have also relied, without independent verification, on the
representations and warranties as to factual matters of the Company and the
Purchaser contained in the Purchase Agreement and on certificates of
governmental officials. In all such examinations, we have assumed: (i) the
genuineness of signatures of all persons other than the signatures of persons
signing on behalf of the Company; (ii) the authenticity of all documents
submitted to us as originals; (iii) the validity of all applicable laws,
statutes, ordinances, rules and regulations, and the proper indexing and
accuracy of all records and documents which are public records; and (iv) the
conformity to authentic original documents of all documents submitted to us as
certified, conformed or photostatic copies.
Based upon the foregoing and subject to the assumptions, limitations,
qualifications and exceptions stated herein, we are of the opinion that as of
the date hereof:
(a) The Company is a corporation, duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, with
the requisite corporate power and authority to own and use its properties and
assets and to carry on its business as currently conducted. To our knowledge,
the Company has no subsidiaries. The Company is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not individually or in the aggregate
reasonably be expected to have a material adverse effect on its business or
financial condition (a "Material Adverse Effect").
F-1
(b) The Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by each of the Transaction
Documents, and to otherwise carry out its obligations thereunder. The execution
and delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company. Each of the
Transaction Documents has been duly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights or by other equitable principles of general application.
(c) The Company has duly authorized and reserved for issuance such number
of shares of its common stock, $100.00 par value per share (the "Common Stock"),
as are issuable upon conversion of the Debentures (the "Underlying Shares"),
assuming conversion of the Debentures in full on the date hereof. The Underlying
Shares, when issued pursuant to the terms of the Debentures and the Purchase
Agreement will be validly issued, fully paid and non-assessable.
(d) No shares of the Common Stock are entitled to statutory preemptive or
similar contractual rights known to such counsel. To our knowledge, except as
specifically disclosed in Schedule 3.1(c) to the Purchase Agreement, there are
no outstanding options, warrants, script rights to subscribe to, registration
rights, calls or commitments of any character whatsoever relating to, or, except
as a result of the purchase and sale of the Debentures, securities, rights or
obligations convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock,
except as otherwise provided in the Purchase Agreement.
(e) To our knowledge, other than the Required Approvals, neither the
Company nor any Subsidiary is required to obtain any consent, waiver,
authorization or order of, or make any filing or registration with, any court of
other federal, state, local or other governmental authority or other person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, the absence of which could reasonably be expected to have
a Material Adverse Effect.
(f) The execution and delivery of the Transaction Documents by the Company
and its performance of and compliance with the terms of the Transaction
Documents, including, without limitation, the issuance of the Debentures do not,
and its issuance of the Underlying Shares will not, violate any provision of the
Articles of Incorporation or the By-Laws or, to our knowledge, any provision of
any applicable federal or state law, rule or regulation, which could reasonably
be expected to have a Material Adverse Effect. To our knowledge, except as
disclosed in Schedule 3.1(e) to the Purchase Agreement, the execution, delivery
and performance of and compliance with the Transaction Documents, and the
issuance of the Debentures have not resulted, and will not result, nor will the
issuance of the Underlying Shares result, in any violation of, or constitute a
default under (or an event which with the passage of time or the giving of
notice or both would constitute a default under), any contract, agreement,
instrument, judgment or decree binding upon the Company or any Subsidiary known
to us which, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
F-2
These opinions are limited to the matters expressly stated herein and are
rendered solely for your benefit and may not be quoted or relied upon for any
other purpose or by any other person.
The opinions expressed herein are subject to the following assumptions,
limitations, qualifications and exceptions:
(a) We have assumed that the Purchaser subscribing to the Transaction
Documents has the legal right, capacity and power to enter into and perform all
of its obligations under each of the Transaction Documents. Furthermore, we have
assumed the due authorization by the Purchaser of all requisite action and the
due execution and delivery of the Transaction Documents, and that the
Transaction Documents are the valid and binding agreements of the Purchaser
enforceable against it in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights or by other equitable
principles of general application.
(b) Our opinions on the binding effect and enforceability of any obligation
are subject to limitations resulting from the effects of (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance,
arrangement and assignment for the benefit of creditors laws and similar laws or
judicially developed doctrines, and (ii) general principles of equity, whether
applied by a court of law or equity.
(c) We disclaim any opinion as to (i) any provisions in any documents which
purport to waive any procedural due process rights and (ii) any provisions
relating to choice of governing law, which choice may depend upon factual
circumstances and the laws of other jurisdictions.
(d) Enforcement of your rights and remedies may be limited by laws and
judicial decisions which have imposed duties and standards of conduct
(including, without limitation, obligations of good faith, fair dealing and
reasonableness), and in this regard we have assumed that you will exercise your
rights and remedies under the Transaction Documents, to the extent required by
such laws and judicial decisions, in good faith and in circumstances and a
manner which are commercially reasonable.
(e) Requirements set forth in any of the Transaction Documents to the
effect that any provision thereof may be waived only in writing may not be
valid, binding or enforceable to the extent that an oral agreement or an implied
agreement by practice or course of conduct modifying such requirements has been
or may be created.
F-3
(f) We express no opinion as to the enforceability of any remedies provided
for under any of the Transaction Documents to the extent such remedies would
have the effect of compensating the party entitled to the benefit of such
remedies in amounts in excess of the actual loss suffered by such party.
(g) Whenever our opinion with respect to the existence or absence of facts
is indicated to be based on our knowledge, we are referring to the actual
current knowledge of partners and associates of Hand & Hand who have had
substantive involvement in the representation of the Company in connection with
this transaction. We have not undertaken any independent investigation to
determine the existence or absence of such facts (and have not caused to be made
any review of any court files or indices) and no inferences as to our knowledge
concerning such facts should be drawn from the fact that such representation has
been undertaken by us.
(h) Our opinions are limited to the matters expressly set
forth herein and to laws and facts existing on the date hereof and no opinion is
to be implied or inferred beyond the matters expressly so stated.
(i) We note that we are members of the bar of the State of
California. To the extent that the governing law with respect to any matters
covered by this opinion is the law of any jurisdiction other than the state of
California, the California Corporation Law, the securities laws of the state of
Minnesota or the federal securities law of the United States, we have assumed
that the law of such other jurisdiction is identical to California.
(j) In furnishing the opinion regarding the valid existence
and good standing of the Company and its Subsidiaries and the qualification of
the Company and its Subsidiaries to do business, we have relied solely upon the
good standing certificates attached to this letter.
This opinion is given as of the date hereof and we assume no obligation
to update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to our attention or any changes in laws which may hereafter
occur.
Very truly yours,
Hand & Hand, a professional corporation
Counsel to Hindsight Records, Inc.
F-4
EXHIBIT G
RULE 504 LEGAL OPINION
December 30, 2004
Highgate House, LLC
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Supporting Legal Opinion for Request to Issue Free Trading
Securities Pursuant to Rule 504 for Hindsight Records, Inc.
Dear Sirs:
The undersigned has been retained as special securities and acquisition
counsel to Michelex Corporation, a Utah corporation, ("MLXOV") and Hindsight
Records, a California corporation ("PRCO"). We can advise you that prior to the
transactions referred to herein, PRCO was not affiliated with MLXOV.
The subject of this letter are securities to be issued by PRCO on or about
December 30, 2004, pursuant to a Convertible Debenture Purchase Agreement
("Purchase Agreement") dated December 30, 2004 between PRCO and the Investor (as
defined below), to wit, the PRCO 5% Secured Convertible Debenture in the
aggregate principal amount of One Million Dollars ($1,000,000) (the "PRCO
Debentures"), together with the underlying shares of the PRCO common stock, par
value $100.00 (the "PRCO Common Stock"), into which the PRCO Debentures are
convertible, from time to time (the "PRCO Underlying Shares"). The PRCO
Debentures, the PRCO Common Stock and the PRCO Underlying Shares may be referred
to collectively herein as the "PRCO Securities."
The PRCO Debentures are to be issued to the accredited investor listed on
Exhibit A to this opinion, an accredited Minnesota resident or domiciliary (the
"Investor"). Under and pursuant to the terms of the PRCO Debentures and the
Purchase Agreement, the Investor may elect to convert all or some of the PRCO
Debentures into the PRCO Common Stock.
Following the issuance of the PRCO Debentures on or about December 30,
2004, Stradaveri, Inc., a California corporation ("Acquisition"), a wholly owned
subsidiary of MLXOV, will be merged with and into PRCO (the "Merger") pursuant
to the Agreement and Plan of Merger dated as of December 30, 2004 by and among
MLXOV, Acquisition and PRCO (the "Merger Agreement"). Pursuant to the Merger,
the PRCO Debentures shall be convertible into shares of MLXOV's common stock
(the "MLXOV Common Stock"), par value $.001 per share (the "MLXOV Underlying
Shares"). The MLXOV Underlying Shares will be issued by MLXOV to the Investor or
its assigns to satisfy MLXOV's obligations upon conversion of the Debentures by
the Investor or its assigns in accordance with the terms of the Purchase
Agreement and the Debentures. This opinion addresses the validity of the
issuance of the MLXOV Underlying Shares and the delivery of the MLXOV Underlying
Shares to the Investor or its assigns from time-to-time in accordance with the
Merger Agreement, Purchase Agreement and PRCO Debentures. The PRCO Debentures
and the MLXOV Underlying Shares, are referred to collectively herein as the
"MLXOV Securities."
G-1
You have requested that we provide you with separate legal opinions (i)
covering the issuance of the MLXOV Underlying Shares to the effect that the PRCO
Debentures and the PRCO Common Stock, and the MLXOV Securities, as the case may
be, may be issued without a restrictive legend and may be freely traded; and
(ii) covering the issuance of MLXOV Common Stock as MLXOV Underlying Shares
pursuant to the terms of the Merger Agreement, Purchase Agreement and the PRCO
Debentures to the effect that such shares (or any part thereof) may be issued
and subsequently delivered to the Investor or its assigns upon the receipt by
MLXOV of any notices of conversion issued by the Investor or its assigns
pursuant to the terms of the Purchase Agreement and the PRCO Debentures without
a restrictive legend and may be freely traded. This opinion covers any issuance
of MLXOV Securities and the delivery of the same to the Investor or its assigns
in accordance with the terms of the Purchase Agreement, the Merger Agreement and
the PRCO Debentures.
A. Basis for Supporting Legal Opinion. The following is the basis for our
supporting legal opinion for the requested issuance and delivery of the PRCO
Securities and the MLXOV Securities free of any restrictive legend.
1. Our review and analysis of Rule 504 of Regulation D of the
Securities Act of 1933 (the "Securities Act"), as revised; Chapter 80A of the
Minnesota Statutes, 1986 (the "Minnesota Act"); and the Regulations contained
therein (the "Minnesota Regulations") which are collectively referred to herein
as the "Minnesota Statutes", as they apply to the proposed issuance of the PRCO
Securities and the MLXOV Securities.
2. Our review and analysis of a resolution of the Board of Directors
of PRCO dated December 30, 2004.
3. Our review and analysis of a resolution of the Board of Directors
of MLXOV dated December 30, 2004.
4. Our review of the Merger Agreement and the Certificate of Merger to
be filed pursuant to the Merger Agreement pursuant to which Acquisition is to be
merged with and into PRCO, pursuant to which PRCO will survive as a wholly-owned
subsidiary of MLXOV , which review was taken in connection with our analysis of
Section 3(a)(9) of the Securities Act.
5. Our review and analysis of the Purchase Agreement and the Merger
and discussions with representatives of PRCO and the Investor that:
G-2
(a) the PRCO Securities are to be purchased by the Investor from
PRCO on or about December 30, 2004;
(b) at the time the PRCO Securities were purchased, and within
the contemplation of Regulation D of the Securities Act,
(i) PRCO was not a "reporting company";
(ii) PRCO was not an "investment company";
(iii) PRCO was not a development stage company that either
had no specific business plan or purpose or had indicated that its business plan
was to engage in a merger or acquisition with an unidentified company or entity;
(iv) PRCO had not utilized Rule 504 within the last twelve
calendar months;
(v) the dollar amount of the offering of the PRCO Securities
(including the PRCO Securities) would not exceed $1,000,000.00; and
(vi) the Investor of the PRCO Securities qualifies as an
"accredited investor", the Investor was a bona fide residents of the State of
Minnesota, and was not, prior to, nor would be subsequent to, the Merger, an
"affiliate" of PRCO, Acquisition or MLXOV.
B. New Rule 504. On April 7, 1999, revisions to Rule 504 went into effect
which prohibit general solicitation and general advertising of the offering by
the issuer and which provide that securities issued under the Rule will be
restricted, unless certain specified conditions are met. These conditions are:
1. The transaction is registered under a state law requiring public
filing and delivery of a disclosure document prior to sale;1 or
2. The securities are issued under a state law exemption that permits
general solicitation and general advertising so long as sales are made only to
"accredited investors" as the term is defined in Regulation D.
Thus, if the securities are issued under a state law exemption that permits
general solicitation and general advertising (so long as sales are made only to
accredited investors), the securities are not restricted under Rule 504.
C. Application of Minnesota Statutes. The PRCO Securities are to be
purchased by a resident of Minnesota (i.e., the Investor), who is an accredited
investor. Section 80A.15.2(g) of the Minnesota Act and Administrative Rule
2875.0170 specifically exempts from the securities registration requirements of
Section 80A.08 of the Minnesota Act, offers and sales made to not more than 10
persons in Minnesota in any twelve month period by the same issuer, under any
exception under Section 3(b) of the Securities Act. Rule 504 of Regulation D is
promulgated under Section 3(b) of the Securities Act. Still further, Section
80A.15.2(g) and Administrative Rule 2875.0170 specifically permits general
solicitation and advertising if the securities are sold under an exemption under
Section 3(b) of the Securities Act.
1 For sales to occur in a state without such a state law, the transactions must
be registered in a state with such a law and the disclosure document filed in
that state must be delivered to all purchasers before sale in both states.
G-3
Since the PRCO Debentures and the Common Stock issuable upon conversion
thereof under the exemption provided by Section 3(a)(9) of the Securities Act
will be sold to an accredited investor pursuant to Rule 504, the PRCO Common
Stock may be freely traded if it is issued "[e]xclusively according to [a] state
law exemption[] from registration [i.e., the Minnesota Statutes consisting of
Section 80A.15.2(g) and Administrative Rule 2875.0170 that permit[s] general
solicitation and general advertising so long as sales are made only to
`accredited investors'". Therefore, the PRCO Common Stock may be issued without
a restriction and may be freely traded pursuant to Rule 504. This includes the
issuance of the PRCO Underlying Shares under the Purchase Agreement and the
MLXOV Underlying Shares under the Merger Agreement and the Purchase Agreement.
D. The Merger and Section 3(a) of the Securities Act. Prior to the Merger
of Acquisition into PRCO, the PRCO Securities were issued by PRCO to the
Investor. Pursuant to the Merger, MLXOV will issue MLXOV Underlying Shares to
replace the PRCO Underlying Shares into which the PRCO Debentures may be
converted and delivered to the Investor or its assigns pursuant to the terms of
the Purchase Agreement and PRCO Debentures. By virtue of operation of law and
the Merger Agreement, MLXOV will assume and be responsible for all PRCO
obligations, including those of PRCO under and with respect to the PRCO
Securities.
Section 3(a)(9) exempts any security exchanged by the issuer with "its"
security holders. The Commission has interpreted this language as requiring that
both the security issued and the security surrendered in the exchange be those
of the same issuer. According to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,2 Section 3(a)(9) is available
for certain intracorporate reorganizations where the exchange of securities is
NOT made by the ORIGINAL issuer, where the security issued is that of issuer B
but the security surrendered is that of what was issuer A.
There are two related No-Action Letters which are virtually perfectly on
point. Pacwest Bancorp, SEC No-Action Letter. 1979 WL 14720 [1979-1980 Transfer
Binder] Fed. Sec. L. Rep. (CCH) Paragraph 82, 376 (October 24, 1979), and
Pacwest Bancorp, SEC No-Action Letter 1979 WL 13112 (October 12, 1979).
At the time of the proposed merger into a wholly-owned subsidiary of
Pacwest Bancorp ("Pacwest"), First State Bank ("First State") had issued and
outstanding, debentures that were convertible into its common stock. First State
was to be the surviving company. Under the merger agreement, Pacwest, a
multibank holding company, and First State were to enter into a supplemental
indenture with the trustees providing for the substitution of Pacwest common
stock for First State common stock as the underlying security into which the
debentures were convertible. Pacwest was to assume the obligation to issue its
common stock upon conversion of the debentures, but was not to assume the
obligations of First State to pay the debentures in accordance with their terms.
In relying on Section 3(a)(9) to exempt the issuance of Pacwest common upon
conversion of the debentures, counsel to Pacwest presented two reasons why its
client should be deemed the same issuer:
2 ▇▇▇▇▇, Exempted Transactions Under the Securities Act of 1933, West Group,
1999, Volume 7. See generally, Section 2.04[1], beginning at page 2-35.
G-4
1. Pacwest should be deemed the issuer of the conversion privilege
that the debenture holders of First State possessed by reason of the
supplemental indenture; and
2. Pacwest should be considered as the issuer of the debentures by
assuming the obligations of First State with respect to conversion.
The SEC staff rejected both arguments and found Section 3(a)(9)
inapplicable. However, in a supplementary request to the staff, Pacwest
announced its intention to assume First State's obligation to pay principal,
interest, and premium, if any, on the debentures. On these new facts, which the
SEC staff noted were absent from the original no-action request, the staff
stated that Section 3(a)(9) applied.
According to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the SEC staff continues to follow the Pacwest
position and allows a person who seeks Section 3(a)(9) issuer status for
obligations it did not originate but subsequently assumes primary liability. The
original issuer might be affiliated or nonaffiliated with the new issuer. Under
either circumstance, the issuance of the parent's stock upon conversion of the
subsidiary's debt securities will constitute an exempted exchange.
Since MLXOV will by operation of law and the Merger Agreement, assume and
be responsible for the payment of principal and interest on the PRCO Debentures,
the issuance of the MLXOV Common Stock upon conversion of the PRCO Debentures
will constitute an exempt exchange.
Therefore, the subject transaction would be exempt from registration, and
the MLXOV Securities, including the issuance of the MLXOV Underlying Shares and
the delivery of such shares to the Investor or its assigns upon conversion of
the PRCO Debentures in accordance with the terms thereof, the Merger Agreement
and the Purchase Agreement will remain freely tradable.
E. Supporting Legal Opinion. Accordingly, based upon the above we are of
the opinion as follows with respect to the issuance of the PRCO Securities and
the MLXOV Securities, including the MLXOV Underlying Shares:
1. Assuming that the sale of the PRCO Securities (and the MLXOV
Securities) does not exceed the aggregate amount of $1,000,000 (which to
our knowledge is correct based solely on our review of the Merger
Agreement, the Purchase Agreement and the PRCO Debentures), that the facts
given to us by management of both companies are true and correct, and that
the other conditions of Rule 504 and the applicable Minnesota Statutes (as
they relate to the facts given to us) are met (which to our knowledge is
correct based solely on our review of the Merger Agreement, the Purchase
Agreement and the PRCO Debentures), the issuance of the PRCO Securities
will be exempt from registration pursuant to Rule 504 of Regulation D and
the applicable Minnesota Statutes. Consequently, when issued, the MLXOV
Securities may be issued without a restrictive legend, may be delivered to
the Investor or its assigns in accordance with the Purchase Agreement and
the PRCO Debentures, and may be freely traded except by affiliates of
either company.
G-5
2. Assuming that the sale of the PRCO Securities (and the MLXOV
Securities) does not exceed the aggregate amount of $1,000,000.00 (which to
our knowledge is correct based solely on our review of the Merger
Agreement, the Purchase Agreement and the PRCO Debentures), that the
representations in the Purchase Agreement given to us are true and correct,
and that the other conditions of Rule 504 and the applicable Minnesota
Statutes (as they relate to the facts given to us) are met(which to our
knowledge is correct based solely on our review of the Merger Agreement,
the Purchase Agreement and the PRCO Debentures), the issuance of the PRCO
Securities will be exempt from registration pursuant to Rule 504 of
Regulation D, the applicable Minnesota Statutes, and Section 3(a)(9) of the
Securities Act. Consequently, when issued, the MLXOV Securities may be
issued without a restrictive legend and may be freely traded except by
affiliates of either company. This would also include the issuance of the
MLXOV Underlying Shares pursuant to the Merger Agreement and the Purchase
Agreement and the delivery of any such shares to the Investor or its
assigns pursuant to the Purchase Agreement and the PRCO Debentures.
3. Accordingly, pursuant to Rule 504, the applicable Minnesota
Statutes, and Section 3(a)(9) of the Securities Act, you may issue the PRCO
Securities and, subsequently, the MLXOV Securities, without a restrictive
legend, and the PRCO Securities and the MLXOV Securities are, and will be,
available for immediate resale by non-affiliates of PRCO and MLXOV.
4. Finally, that PRCO and MLXOV, through their respective Board of
Directors, have taken all necessary and required corporate action to cause
the issuance and delivery of the MLXOV Underlying Shares in accordance with
the Merger Agreement. Further, that the MLXOV Underlying Shares when issued
in accordance with the Merger Agreement, the Purchase Agreement and this
opinion, will be duly authorized, validly issued and non-assessable.
Our above opinions are subject to the following qualifications:
1. Members of our firm are qualified to practice law in the State of
California and we express no opinion as to the laws of any jurisdictions except
for those of California, the securities laws of Minnesota referred to herein and
the United States of America referred to herein. For the purposes of rendering
this opinion, we have assumed that if a court applies the laws of a jurisdiction
(other than the Minnesota securities laws referred to herein) other than the
laws of California, the laws of such other jurisdiction are identical in all
material respects to the comparable laws of the State of California.
2. The opinions set forth herein are expressed as of the date hereof
and remain valid so long as the documents, instruments, records and certificates
we have examined and relied upon as noted above, are unchanged and the
assumptions we have made, as noted above, are valid.`
G-6
This opinion is furnished by us as special securities and acquisition
counsel to PRCO and may only be relied upon by you and Acquisition and in
connection with the issue of MLXOV Underlying Shares, by your transfer agent in
connection with any instruction letters from you to your transfer agent
regarding their authorization to issue shares of MLXOV Underlying Shares without
restrictive legends. It may not be used or relied upon by you for any other
purpose or by any other person, nor may copies be delivered to any other person,
without in each instance our prior written consent.
Please have all stock certificates issued in the name of the Investor shown
on Exhibit A delivered to the office of Gottbetter & Partners, LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq., as that firm is
acting on behalf of the issuer as closing escrow agent with respect to the
transaction referred to herein.
Very truly yours,
Hand & Hand
a professional corporation
G-7
EXHIBIT H
Hindsight Records, Inc.
OFFICER'S CERTIFICATE
I, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, being the President of Hindsight Records, Inc., a
California corporation (the "Company"), pursuant to Section 2.2(a)(iv) of that
certain Convertible Debenture Purchase Agreement (the "Purchase Agreement"),
dated as of December 30, 2004, by and between the Company and Highgate House,
LLC, do hereby certify on behalf of the Company that attached hereto is a copy
of the resolutions duly adopted by the Board of Directors of the Company
authorizing the Company to execute and deliver the Transaction Documents, as
such term is defined in the Purchase Agreement and to enter into the
transactions contemplated thereby.
IN WITNESS WHEREOF, I have executed this Officer's Certificate on behalf of
the Company this __ day of December, 2004.
Hindsight Records, Inc.
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
H-1
EXHIBIT I
OFFICER'S CERTIFICATE
The undersigned hereby certifies that he is the President, and Chief
Executive Officer and Secretary of Hindsight Records, Inc., a California
corporation (the "Company") and that, as such, he is duly authorized to execute
and deliver this Certificate, pursuant to Section 2.3(b)(ii)(B) of that certain
Convertible Debenture Purchase Agreement, dated as of December 30, 2004, by and
between the Company and Highgate House, LLC, on behalf of the Company and he
hereby further certifies as follows:
1. Attached hereto as Exhibit A is a true, correct and complete copy
of the Company's Articles Certificate of Incorporation, as amended to the date
hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy
of the Company's By-Laws, as amended to the date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy
of a Certificate of Good Standing from the Secretary of State of the State of
California.
4. The representations and warranties of the Company contained in
Article 3 of that certain Convertible Debenture Purchase Agreement between the
Company and the purchaser listed on Schedule 1 thereto, dated December 30, 2004,
are true and correct in all material respects on the date hereof.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate on behalf of the Company this 30th day of December, 2004. This
Officer's Certificate was executed immediately prior to the filing of the
Certificate of Merger filed with the Secretary of State of the State of
California pursuant to the terms of that certain Agreement and Plan of Merger,
dated as of December 30, 2004, by and among Michelex Corporation, Stradaveri,
Inc. and the Company.
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President, and Chief Executive Officer and Secretary
I-1
Exhibit A
Certificate of Incorporation, as amended to date
I-2
Exhibit B
By-Laws
I-3
BYLAWS
OF
Hindsight Records, Inc.,
a California corporation
I-4
Exhibit C
California Certificate of Good Standing
I-5
EXHIBIT J
Hindsight Records, Inc.
OFFICER'S CERTIFICATE
I, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, being the President and Chief Executive Officer of
Hindsight Records, Inc., a California corporation (the "Company"), pursuant to
Section 2.3(b)(ii)(C) of that certain Convertible Debenture Purchase Agreement,
dated as of December 30, 2004, by and between the Company LLC and Highgate
House, LLC (the "Purchase Agreement"), do hereby certify on behalf of the
Company as follows:
1. The representations and warranties of the Company contained in Article
III of the Purchase Agreement, as supplemented by the Schedules attached
thereto, were true, correct and complete in all material respects when made
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true, correct and complete in all
material respects as of such date) and are true, correct in all material
respects and complete as at the date hereof.
IN WITNESS WHEREOF, I have executed this Officer's Certificate on behalf of
the Company this __ day of December, 2004. This Officer's Certificate was
executed immediately prior to the filing of the Certificate of Merger filed with
the Secretary of State of the State of California pursuant to the terms of that
certain Agreement and Plan of Merger, dated as of December 30, 2004, by and
among Michelex Corporation, Stradeveri, Inc. and the Company.
Hindsight Records, Inc.
By:/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President and Chief Executive Officer
J-1