Purchase Consideration. BlastGard currently has 1,000 Preferred Shares authorized, none of which are outstanding. BlastGard's board has the right to determine the rights and preferences of any Preferred Shares to be issued. BlastGard has also authorized 100,000,000 shares of Common Stock, with 56,086,142 shares issued and outstanding and 42,099,283 shares reserved for issuance upon the exercise or conversion, as the case may be, of outstanding options, warrants and promissory notes. Following the filing of BlastGard's 2010 Form 10-K and after receipt of the audited financial statements for HighCom and the appropriate pro form financial statements, BlastGard intends to file a proxy statement with the Securities and Exchange Commission to increase the authorized number of shares of Common Stock of BlastGard to 500,000,000 common shares so as to accommodate the anticipated issuance of the purchase consideration described below and to have sufficient capital stock to provide for BlastGard's future needs ("Stockholder Approval"). It is anticipated that stockholder approval for the increase will occur within one year from the date hereof. The purchase consideration will consist of a payment of cash, Preferred Stock and common stock of BlastGard (the "Stock Payment"). The assets and current outstanding obligations of HighCom are to be itemized in the formal Stock Purchase Agreement referred to herein and made a part hereto by this reference. It being understood that the earn-out shares as referenced in Items (b), (c), and (d) below in this paragraph will be reserved once Blastgard has Increased its authorized common stock by stockholder approval. The terms of the Stock Payment shall be set such that all the shares and payments will be set aside and reserved and placed into escrow (or irrevocable trust at appropriate time) to be released for HighCom’s shareholders as follows: (a) 10,000,000 shares of common stock upon execution of the definitive agreement by all parties; (b) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $5 million dollars within 18 months of close; (c) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $10 million dollars within 24 months of close; and lastly (d) 150 Preferred convertible into 15,000,000 shares of common stock at such time as the company achieves a gross revenue of $15 million dollars within 30 months of close. It is understood that HighCom's shareholders shall be entitled to a pro rata delivery of earn-out shares (as described below) in the event a milestone is not 100% achieved or in the event Blastgard does not raise the amount of two million five hundred thousand dollars, the Highcom shareholders shall be entitled to the same pro rata delivery of shares. At Closing, BGI shall deliver its promissory notes representing its promise to pay $200,000 to HighCom shareholders at the earlier of ninety day or upon receipt of audited financials from HighCom, unless HighCom fails to provide the requested material to the extent they exist with such audit to start within ten days or as soon as practicable. An additional payment of $100,000 will be released upon revenues of $2 million dollars being achieved by HighCom which shall be paid pro-rata and shall be calculated based on revenue achieved at the end of 8 months post close. Upon signing of this Letter of Intent, M▇. ▇▇▇▇▇ will place 100% of his HighCom shares into an irrevocable trust; the terms of the sale of those shares to be negotiated with the Trustee upon closing. All sales mentioned above refer to sales from products presently marketed by HighCom. In addition BlasGard will use its all commercially reasonable efforts to cause Y▇▇▇▇ ▇▇▇▇▇ to be removed from personal guarantee on the bank loans.
Appears in 1 contract
Sources: Binding Letter of Intent (Blastgard International Inc)
Purchase Consideration. BlastGard currently has 1,000 Preferred Shares authorized, none of which are outstanding. BlastGard's board has the right to determine the rights and preferences of any Preferred Shares The aggregate purchase price to be issued. BlastGard has also authorized 100,000,000 shares paid by Buyer for the Purchased Assets (the “Purchase Price”) shall be payable to Seller, or any third party designee of Common StockSeller, with 56,086,142 shares issued in cash and outstanding and 42,099,283 shares reserved for issuance upon the exercise or conversionstock of ASTV, as the case may be, of outstanding options, warrants and promissory notes. Following the filing of BlastGard's 2010 Form 10-K and after receipt of the audited financial statements for HighCom and the appropriate pro form financial statements, BlastGard intends to file a proxy statement with the Securities and Exchange Commission to increase the authorized number of shares of Common Stock of BlastGard to 500,000,000 common shares so as to accommodate the anticipated issuance of the purchase consideration described below and to have sufficient capital stock to provide for BlastGard's future needs ("Stockholder Approval"). It is anticipated that stockholder approval for the increase will occur within one year from the date hereof. The purchase consideration will consist of a payment of cash, Preferred Stock and common stock of BlastGard (the "Stock Payment"). The assets and current outstanding obligations of HighCom are to be itemized in the formal Stock Purchase Agreement referred to herein and made a part hereto by this reference. It being understood that the earn-out shares as referenced in Items (b), (c), and (d) below in this paragraph will be reserved once Blastgard has Increased its authorized common stock by stockholder approval. The terms of the Stock Payment shall be set such that all the shares and payments will be set aside and reserved and placed into escrow (or irrevocable trust at appropriate time) to be released for HighCom’s shareholders as follows: :
(a) 10,000,000 On the Closing Date, Buyer will pay to Seller One Million Five Hundred Sixty Thousand Dollars ($1,560,000).
(b) As part of the consideration for the Purchased Assets, HNHI previously issued to Seller and its designees, Five Million (5,000,000) unregistered shares of common stock upon execution of HNHI (all shares issued to Seller by either HNHI or to be issued to Seller by ASTV shall be referred to as “Shares”). Subsequent to the issuance of the definitive Shares, ASTV, in October, 2011, undertook a one-for-twenty reverse stock split. Accordingly, Seller, as of the Closing Date, owns Two Hundred Fifty Thousand (250,000) Shares. A new stock certificate for such post-reverse stock split Shares will be issued and delivered on the Closing Date upon submission to Buyer of the pre-split certificate. Buyer acknowledges and agrees that the 250,000 Shares referenced in this Section 2.5(b) of this Agreement, having been held for more than one year since issue, are now unrestricted and freely transferrable as of the Closing Date.
(c) On the Closing Date, ASTV will deliver to Seller Two Hundred Fifty Thousand (250,000) new Shares in such denominations as agreed by the parties. Those Shares will be subject to a one-year lock-up agreement by all parties; in the form attached hereto as Exhibit “B.”
(d) Seller may designate certain persons to receive directly a portion of its Shares described in paragraphs (b) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $5 million dollars within 18 months of close; and (c) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $10 million dollars within 24 months of close; and lastly (d) 150 Preferred convertible into 15,000,000 shares of common stock at such time as the company achieves a gross revenue of $15 million dollars within 30 months of closeabove. It is understood Those persons shall agree in writing that HighCom's shareholders they shall be entitled obligated to treat those Shares in the same manner in which Shares are treated under this Agreement, including but not limited to, the sale provisions hereof, and that they shall promptly communicate any sale of such Shares and the appropriate sale information to Seller, who shall promptly transmit that information to Buyer. All other transfers of Seller’s Shares shall be in accordance with applicable state and federal securities laws.
(e) On the Closing Date, ASTV will deliver to Seller Two Hundred Fifty Thousand (250,000) new Warrants at an exercise price of Sixty-Four Cents ($.64) for a pro rata delivery period of earnthree (3) years from the Closing Date. The Warrants shall be subject to piggy-out shares back registration rights.
(as described belowf) Buyer previously has paid to Seller Fifty Thousand Dollars ($50,000) in cash or other immediately available funds.
(g) Commencing not later than April 1, 2012, and for each of the event a milestone is not 100% achieved or succeeding four years, Buyer shall contribute in the event Blastgard does not raise the amount names of two million five hundred thousand dollars, the Highcom shareholders shall be entitled to the same pro rata delivery of shares. At Closing, BGI shall deliver its promissory notes representing its promise to pay $200,000 to HighCom shareholders at the earlier of ninety day or upon receipt of audited financials from HighCom, unless HighCom fails to provide the requested material to the extent they exist with such audit to start within ten days or as soon as practicable. An additional payment of $100,000 will be released upon revenues of $2 million dollars being achieved by HighCom which shall be paid pro-rata and shall be calculated based on revenue achieved at the end of 8 months post close. Upon signing of this Letter of Intent, MSOTV/▇. ▇▇▇▇▇▇▇ will place 100% the amount of his HighCom shares into an irrevocable trust; the terms Ten Thousand Dollars ($10,000) per year, for a total contribution of the sale of those shares Fifty-Thousand Dollars ($50,000), to be negotiated with the Trustee upon closing. All sales mentioned above refer to sales from products presently marketed by HighCom. In addition BlasGard will use its all commercially reasonable efforts to cause YThe ▇▇▇▇ ▇▇▇▇▇ Cancer Center in Tampa, Florida. Seller acknowledges that payment of $10,000 of this amount previously has been made to The ▇▇▇▇▇▇▇ Cancer Center.
(h) Buyer also previously issued to Seller, or its designee, One Million (1,000,000) warrants to acquire additional shares of ASTV, at an exercise price equal to Thirty-five Cents ($.35), exercisable at any time and with an expiration date five (5) years from the date of issue. Following the one for twenty reverse stock split, that grant shall constitute Fifty Thousand (50,000) warrants to acquire Shares at an exercise price reduced to One Dollar ($1.00) each for a period of five (5) years from the new issue date.
(i) The Parties agree that the shares of common stock can be removed sold in accordance with Rule 144 of the Securities Act subject to the lock-up Agreement attached as Exhibit B. If ASTV undertakes a registration of its shares with the U.S. Securities and Exchange Commission, Seller shall have “piggy-back registration rights” with respect to its Shares.
(j) Notwithstanding any other provision of this Agreement, from personal guarantee the Closing Date through December 31, 2014 and if Seller continues to own during that time at least 250,000 Shares that it has received under the terms of this Agreement, Seller shall have anti-dilution protection on all of its Shares that it has received or will receive pursuant to this Agreement. If any shares of common stock of ASTV are issued by ASTV during that time frame, Seller shall be issued additional Shares to maintain its proportional ownership in ASTV. The foregoing anti-dilution protection shall not apply to the bank loansissuance of Shares pursuant to the exercise of any warrants that have been issued by ASTV to the Closing Date.
Appears in 1 contract
Purchase Consideration. BlastGard currently has 1,000 Preferred Shares authorized, none of which are outstanding. BlastGard's board has the right to determine the rights and preferences of any Preferred Shares to be issued. BlastGard has also authorized 100,000,000 shares of Common Stock, with 56,086,142 shares issued and outstanding and 42,099,283 shares reserved for issuance upon the exercise or conversion, as the case may be, of outstanding options, warrants and promissory notes. Following the filing of BlastGard's 2010 Form 10-K and after receipt of the audited financial statements for HighCom and the appropriate pro form financial statements, BlastGard intends to file a proxy statement with the Securities and Exchange Commission to increase the authorized number of shares of Common Stock of BlastGard to 500,000,000 common shares so as to accommodate the anticipated issuance of the purchase The aggregate consideration described below and to have sufficient capital stock to provide for BlastGard's future needs ("Stockholder Approval"). It is anticipated that stockholder approval for the increase will occur within one year from the date hereof. The purchase consideration will consist of a payment of cash, Preferred Stock and common stock of BlastGard Acquired Assets (the "Stock Payment"). The assets and current outstanding obligations of HighCom are to be itemized in the formal Stock “Purchase Agreement referred to herein and made a part hereto by this reference. It being understood that the earn-out shares as referenced in Items (b), (c), and (dConsideration”) below in this paragraph will be reserved once Blastgard has Increased its authorized common stock by stockholder approval. The terms of the Stock Payment shall be set such that all the shares and payments will be set aside and reserved and placed into escrow (or irrevocable trust at appropriate time) to be released for HighCom’s shareholders as followsis: (a) 10,000,000 shares of common stock upon execution of the definitive agreement by all parties; (b) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $5 million dollars within 18 months of close; (c) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $10 million dollars within 24 months of close; and lastly (d) 150 Preferred convertible into 15,000,000 shares of common stock at such time as the company achieves a gross revenue of $15 million dollars within 30 months of close. It is understood that HighCom's shareholders shall be entitled to a pro rata delivery of earn-out shares (as described below) in the event a milestone is not 100% achieved or in the event Blastgard does not raise the an amount of cash (the “Cash Consideration”) equal to: (i) thirty two million five hundred thousand dollarsand 00/100 U.S. Dollars ($32,500,000) (the “Initial Cash Consideration”), minus (ii) the amount, if any, by which (A) each Seller’s current assets (excluding current or deferred Tax assets) as historically calculated in accordance with the Sellers’ past practices as of 12:01 A.M. Eastern time on the Closing Date that are included in the Acquired Assets, minus each Seller’s current liabilities (excluding Indebtedness, Transaction Expenses and deferred Tax Liabilities) as historically calculated in accordance with the Sellers’ past practices as of 12:01 A.M. Eastern time on the Closing Date that are included in the Assumed Liabilities (“Net Working Capital”), is less than (B) the Net Working Capital Target; plus (iii) the amount, if any, by which the Net Working Capital is more than the Net Working Capital Target.
(b) the assumption of the Assumed Liabilities, to be assumed on the Closing Date.
(c) Notwithstanding anything in this Agreement to the contrary, the Highcom shareholders Purchaser and Holdings shall be entitled permitted to round down the number of any Equity Consideration Shares to be issued to the same pro rata delivery of Owner pursuant to this Agreement to the nearest whole number in order to avoid issuing any fractional shares. At Closing, BGI shall deliver its promissory notes representing its promise to pay $200,000 to HighCom shareholders at the earlier of ninety day or upon receipt of audited financials from HighCom, unless HighCom fails to provide the requested material provided that to the extent they exist that the number of such Equity Consideration Shares is “rounded down”, the Purchaser shall also pay or cause to be paid to the Sellers an amount of cash equal to the product obtained by multiplying (i) such fraction of an Equity Consideration Share that has been rounded down by (ii) the applicable per share issuance price with respect to such audit Equity Consideration Shares.
(d) On the Payment Date, the Purchaser and Holdings may elect to start within ten days pay some or as soon as practicable. An additional payment all of the Cash Consideration through Equity Consideration Shares in lieu of cash, subject to the terms set forth below; provided that at least One Million Three Hundred Thirty Five Thousand U.S. Dollars ($100,000 will be released upon revenues 1,335,000) of $2 million dollars being achieved by HighCom which the Cash Consideration shall be paid pro-rata in cash.
(e) If the Purchaser and Holdings elect to pay ten percent (10%) or less of the Cash Consideration in Equity Consideration Shares, such Equity Consideration Shares will be issued on the Payment Date by dividing the amount of Cash Consideration to be paid through Equity Consideration Shares by the Issuance Per Share Price. If the Purchaser and Holdings elect to pay more than 10% of the Cash Consideration through Equity Consideration Shares in lieu of cash, then:
(i) Twenty percent (20%) of the Equity Consideration Shares issued to the Seller Parties (the “Uncollared Equity Consideration Shares”) shall be calculated based issued on revenue achieved the Payment Date to the Seller Parties at the end Issuance Per Share Price, as calculated by dividing twenty percent (20%) of 8 months post close. Upon signing the Cash Consideration to be paid in Equity Consideration Shares by the Issuance Per Share Price.
(ii) Of the remaining eighty percent (80%) of the Equity Consideration Shares to be issued to the Seller Parties (the “Collared Equity Consideration Shares”), thirty percent (30%) of the Collared Equity Consideration Shares shall be issued on the Payment Date at the Issuance Per Share Price to the Seller Parties, as calculated by dividing twenty four percent (24%) of the Cash Consideration to be paid in Equity Consideration Shares by the Issuance Per Share Price (the “Payment Date Collared Share Value”), provided, however, that if, on the first anniversary of the Payment Date, the First Anniversary Issuance Per Share Price is less than the Issuance Per Share Price, then, for each of the Collared Equity Consideration Shares issued pursuant to this Letter Section 1.5(e)(ii) that the Seller Parties have retained as of Intentthe first anniversary of the Payment Date (the “Retained Collared Equity Shares”), M▇. ▇▇▇▇▇ will place 100Holdings shall issue additional Collared Equity Consideration Shares (the “True-Up Equity Consideration Shares”) to the Seller Parties equal to: (1) the Retained Collared Equity Shares multiplied by the Issuance Per Share Price, divided by (2) the First Anniversary Issuance Per Share Price, minus (3) the Retained Collared Equity Shares.
(iii) The remainder of the Collared Equity Consideration Shares shall be issued on the first anniversary of the Payment Date (the “First Anniversary Issuance Date”) as follows:
(1) If the First Anniversary Issuance Per Share Price is less than the Issuance Per Share Price, then an amount of Collared Equity Consideration Shares issued at the Issuance Per Share Price as needed to pay the remainder of the Cash Consideration owed to the Seller Parties.
(2) If the First Anniversary Issuance Per Share Price is more than the Issuance Per Share Price but less than the Issuance Per Share Price Collar, then an amount of Collared Equity Consideration Shares that would have been issued at the Issuance Per Share Price as needed to pay the remainder of the Cash Consideration owed to the Seller Parties.
(3) If the First Anniversary Issuance Per Share Price is more than the Issuance Per Share Price Collar, then an amount of Collared Equity Consideration Shares issued at the First Anniversary Issuance Per Share Price as needed to pay the remainder of the Cash Consideration owed to the Seller Parties.
(4) In the event that the value of the Collared Equity Consideration Shares issued pursuant to Section 1.5(e)(ii), measured at the First Anniversary Issuance Per Share Price, exceeds 90% of his HighCom shares into an irrevocable trust; the terms amount of the sale Purchase Consideration paid in Equity Consideration Shares, the Purchaser shall not issue any additional Collared Equity Consideration Shares to the Seller Parties, and the Seller Parties shall repay, in either cash or Collared Equity Consideration Shares, the amount by which the value of those shares the Collared Equity Consideration Shares issued pursuant to Section 1.5(e)(ii), measured at the First Anniversary Issuance Per Share Price, exceeds 90% of the amount of the Purchase Consideration which was designated on the Payment Date to be negotiated with paid in Equity Consideration Shares.
(iv) The Seller Parties shall keep the Trustee upon closingUncollared Equity Consideration Shares in a separate and distinct brokerage account from the Collared Equity Consideration Shares until all of the Equity Consideration Shares have been sold by the Seller Parties. All sales mentioned above refer to sales from products presently marketed by HighCom. In addition BlasGard will use its all commercially reasonable efforts to cause Y▇▇▇▇ ▇▇▇▇▇ to be removed from personal guarantee provided, however, that if the Class A Common Stock of Holdings is not listed on the bank loans.NYSE at the First Anniversary Issuance Date, Holdings shall pay to the Sellers on the First Anniversary Issuance Date an amount in cash equal to the value of the (i) remainder of the Cash Consideration not paid on the Payment Date plus (ii) (1) if the stock remains listed on any public stock exchange, the value of the True-Up Equity Consideration Shares or (2) if the stock is no longer listed on any public stock exchange, then the cash value
Appears in 1 contract
Purchase Consideration. BlastGard currently has 1,000 Preferred Shares authorizedIn consideration of the purchase of the Assets and each Seller's and each Stockholder's covenants and agreements set forth in this Agreement, none Buyer agrees (a) to pay to Sellers an aggregate amount of cash equal to the Cash Consideration, of which are outstanding. BlastGard's board has (i) an amount equal to the right to determine Cash Consideration less the rights Cash Holdback shall be delivered on the Closing Date and preferences (ii) the Cash Holdback shall become an element of any Preferred Shares to be issued. BlastGard has also authorized 100,000,000 shares of Common Stockthe Holdback Amount and, with 56,086,142 shares issued and outstanding and 42,099,283 shares reserved for issuance upon the exercise or conversionterms and subject to the conditions specified in Section 11, as be delivered promptly after the case may beDetermination Date and (b) to issue to Sellers the Share Consideration for distribution to the Investor, of outstanding options, warrants and promissory notes. Following the filing of BlastGard's 2010 Form 10-K and after receipt of the audited financial statements for HighCom and the appropriate pro form financial statements, BlastGard intends to file which (x) a proxy statement with the Securities and Exchange Commission to increase the authorized number of shares of Parent Common Stock of BlastGard equal to 500,000,000 common shares so as to accommodate the anticipated issuance Share Consideration less the Shares Holdback will be delivered on the Closing Date and (y) the Shares Holdback shall become an element of the purchase consideration described below Holdback Amount and, upon the terms and subject to the conditions specified in Section 11, be delivered promptly after the Determination Date. Notwithstanding the foregoing, Buyer shall have sufficient capital stock the right, in its sole discretion, to provide for BlastGard's future needs ("Stockholder Approval"). It is anticipated that stockholder approval for pay to Sellers, in lieu of issuing the increase will occur within one year from the date hereof. The purchase consideration will consist of a payment of cash, Preferred Stock and common stock of BlastGard (the "Stock Payment"). The assets and current outstanding obligations of HighCom are Share Consideration pursuant to be itemized in the formal Stock Purchase Agreement referred to herein and made a part hereto by this reference. It being understood that the earn-out shares as referenced in Items (b), (c), and (d) below in this paragraph will be reserved once Blastgard has Increased its authorized common stock by stockholder approval. The terms of the Stock Payment shall be set such that all the shares and payments will be set aside and reserved and placed into escrow (or irrevocable trust at appropriate time) to be released for HighCom’s shareholders as follows: (a) 10,000,000 shares of common stock upon execution of the definitive agreement by all parties; clause (b) 100 Preferred convertible into 10,000,000 of the immediately preceding sentence, an aggregate amount of cash equal to $2,516,968 (Two Million Five Hundred Sixteen Thousand Nine Hundred Sixty-Eight Dollars), of which $2,091,968 (Two Million Ninety-One Thousand Nine Hundred Sixty-Eight Dollars) shall be delivered on the Closing Date and $425,000 (Four Hundred Twenty-Five Thousand Dollars) shall constitute the Shares Holdback and, upon the terms and subject to the conditions specified in Section 11, delivered promptly after the Determination Date. The Parties agree that all Shares of Parent Common Stock acquired by the Investor pursuant to this Agreement (including, without limitation, any shares of common stock at such time as Parent Common Stock constituting a portion of the company achieves a gross revenue of $5 million dollars within 18 months of close; (c) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $10 million dollars within 24 months of close; and lastly (d) 150 Preferred convertible into 15,000,000 shares of common stock at such time as the company achieves a gross revenue of $15 million dollars within 30 months of close. It is understood that HighCom's shareholders Shares Holdback), shall be entitled deemed to a pro rata delivery of earn-out shares (as described below) in have been acquired by the event a milestone is not 100% achieved or in the event Blastgard does not raise the amount of two million five hundred thousand dollars, the Highcom shareholders shall be entitled to the same pro rata delivery of shares. At Closing, BGI shall deliver its promissory notes representing its promise to pay $200,000 to HighCom shareholders at the earlier of ninety day or upon receipt of audited financials from HighCom, unless HighCom fails to provide the requested material to the extent they exist with such audit to start within ten days or as soon as practicable. An additional payment of $100,000 will be released upon revenues of $2 million dollars being achieved by HighCom which shall be paid pro-rata and shall be calculated based on revenue achieved at the end of 8 months post close. Upon signing of this Letter of Intent, M▇. ▇▇▇▇▇ will place 100% of his HighCom shares into an irrevocable trust; the terms of the sale of those shares to be negotiated with the Trustee upon closing. All sales mentioned above refer to sales from products presently marketed by HighCom. In addition BlasGard will use its all commercially reasonable efforts to cause Y▇▇▇▇ ▇▇▇▇▇ to be removed from personal guarantee Investor on the bank loansClosing Date for purposes of Rule 144(d)(3)(iii) under the Securities Act.
Appears in 1 contract
Purchase Consideration. BlastGard currently has 1,000 Buyer agrees to pay Seller in consideration for the acquisition of the Subject Property (the “Purchase Consideration”) an aggregate of 2,824 restricted shares of its to be designated Series B Convertible Preferred Shares authorizedStock (the “Series B Convertible Preferred Stock”), none of which are outstandingshall have such rights as set forth on the designation attached as Exhibit “E” hereto, including no voting rights, no liquidation rights and no redemption rights, but shall have conversion rights. BlastGard's board has The conversion rights shall provide Seller the right to determine convert each Series B Convertible Preferred Stock share into 1,000 shares of the rights and preferences Buyer’s common stock, from time to time at the option of Seller, provided that no conversion will be allowed at any Preferred Shares time that the number of shares to be issued. BlastGard has also authorized 100,000,000 issued to the Seller, together with any other shares of Common common stock beneficially owned by the Seller, would exceed 9.99% of the Buyer’s then outstanding common stock. The Parties agree that the Series B Convertible Preferred Stock shall be valued at an aggregate of $6.354 million dollars (the “Purchase Price”).
a. In connection with the issuance of the Series B Convertible Preferred Stock of Buyer to Seller as provided above (such shares of Series B Convertible Preferred Stock, collectively with 56,086,142 the shares issued and outstanding and 42,099,283 shares reserved for issuance of the Buyer’s common stock issuable upon the exercise or conversionconversion thereof, defined herein as the case may be“Shares”), of outstanding optionsthe Seller hereby represents, confirms, warrants and promissory notesacknowledges the following to Buyer, which representations, warranties, confirmations and acknowledgements shall be automatically re-confirmed by Seller on the Closing Date:
i) Seller recognizes that the Shares have not been registered under the Securities Act of 1933, as amended (the “Act” or the “1933 Act”), nor under the securities laws of any state and, therefore, cannot be resold unless the resale of the Shares is registered under the 1933 Act or unless an exemption from registration is available. Following Seller may not sell the filing Shares without registering them under the 1933 Act and any applicable state securities laws unless exemptions from such registration requirements are available with respect to any such sale. The Buyer is under no obligation to register such Shares under the 1933 Act or under any state “Blue Sky” laws prior to or subsequent to their issuance;
ii) Seller acknowledges that it is an “accredited investor” as such term is defined under Rule 501(a) of BlastGard's 2010 Regulation D of the Act;
iii) Seller acknowledges that it has, in making Seller’s investment decision in connection with the Shares received, had an opportunity to review (A) the Buyer’s Annual Report on Form 10-K and after receipt of the audited financial statements for HighCom and the appropriate pro form financial statements, BlastGard intends to file a proxy statement with the Securities and Exchange Commission to increase the authorized number of shares of Common Stock of BlastGard to 500,000,000 common shares so as to accommodate the anticipated issuance of the purchase consideration described below and to have sufficient capital stock to provide for BlastGard's future needs ("Stockholder Approval"). It is anticipated that stockholder approval for the increase will occur within one year from the date hereof. The purchase consideration will consist of a payment of cashended March 31, Preferred Stock and common stock of BlastGard (the "Stock Payment"). The assets and current outstanding obligations of HighCom are to be itemized in the formal Stock Purchase Agreement referred to herein and made a part hereto by this reference. It being understood that the earn-out shares as referenced in Items (b), (c), 2011; and (dB) below in this paragraph will be reserved once Blastgard has Increased its authorized common stock by stockholder approval. The terms of the Stock Payment shall be set such that all Buyer’s quarterly reports on Form 10-Q for the shares quarters ended June 30, 2011 and payments will be set aside and reserved and placed into escrow (or irrevocable trust at appropriate time) to be released for HighComSeptember 30, 2011, each as filed on the SEC’s shareholders as follows: (a) 10,000,000 shares of common stock upon execution of the definitive agreement by all parties; (b) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $5 million dollars within 18 months of close; (c) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $10 million dollars within 24 months of close; and lastly (d) 150 Preferred convertible into 15,000,000 shares of common stock at such time as the company achieves a gross revenue of $15 million dollars within 30 months of close. It is understood that HighCom's shareholders shall be entitled to a pro rata delivery of earn-out shares (as described below) in the event a milestone is not 100% achieved or in the event Blastgard does not raise the amount of two million five hundred thousand dollars, the Highcom shareholders shall be entitled to the same pro rata delivery of shares. At Closing, BGI shall deliver its promissory notes representing its promise to pay $200,000 to HighCom shareholders at the earlier of ninety day or upon receipt of audited financials from HighCom, unless HighCom fails to provide the requested material to the extent they exist with such audit to start within ten days or as soon as practicable. An additional payment of $100,000 will be released upon revenues of $2 million dollars being achieved by HighCom which shall be paid pro-rata and shall be calculated based on revenue achieved at the end of 8 months post close. Upon signing of this Letter of Intent, M▇. ▇▇▇▇▇ will place 100% website, including the audited and unaudited financial statements, description of his HighCom shares into business, risk factors, results of operations, certain transactions and related business disclosures described therein; has read, reviewed, and relied solely on the documents described in (A) and (B) above (collectively referred to as the “Disclosure Documents”), and an irrevocable trustindependent investigation made by Seller and Seller’s representatives, if any; (C) has, prior to the terms date of this Agreement, been given an opportunity to review material contracts and documents of the sale Buyer and has had an opportunity to ask questions of and receive answers from the Buyer’s officers and directors and has no pending questions as of the date of this Agreement; and (D) is not relying on any oral representation of the Buyer or any other person, nor any written representation or assurance from the Buyer other than those shares contained in the Disclosure Documents or incorporated therein; in connection with such Seller’s acceptance of the Shares and investment decision in connection therewith. The Seller acknowledges that due to Seller’s receipt of and review of the information described above, Seller received similar information as would be negotiated included in a Registration Statement filed under the Act;
iv) Seller has such knowledge and experience in financial and business matters such that Seller is capable of evaluating the merits and risks of an investment in the Shares and of making an informed investment decision, and does not require a representative in evaluating the merits and risks of an investment in the Shares;
v) Seller recognizes that an investment in the Buyer is a speculative venture and that the total amount of consideration tendered in connection with the Trustee Shares is placed at the risk of the business and may be completely lost. The ownership of the Shares as an investment involves special risks;
vi) Seller realizes that the Shares cannot readily be sold as they will be restricted securities and therefore the Shares must not be accepted unless Seller has liquid assets sufficient to insure that Seller can provide for current needs and possible personal contingencies;
vii) Seller confirms and represents that it is able (i) to bear the economic risk of the Shares, (ii) to hold the Shares for an indefinite period of time, and (iii) to afford a complete loss of the Shares. Seller also represents that it has (i) adequate means of providing for its current needs and possible personal contingencies, and (ii) has no need for liquidity in the Shares;
viii) All information which Seller has provided to the Buyer concerning Seller's financial position and knowledge of financial and business matters is correct and complete as of the date hereof;
ix) Seller has carefully considered and has, to the extent it believes such discussion necessary, discussed with its professional, legal, tax and financial advisors, the suitability of an investment in the Shares for its particular tax and financial situation and its advisers, if such advisors were deemed necessary, have determined that the Shares are a suitable investment for it;
x) Seller has not become aware of and has not been offered the Shares by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to the Seller's knowledge, those individuals that have attended have been invited by any such or similar means of general solicitation or advertising;
xi) Seller understands that the Shares are being offered to it in reliance on specific exemptions from or non-application of the registration requirements of federal and state securities laws and that the Buyer is relying upon closingthe truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of Seller set forth herein in order to determine the applicability of such exemptions and the suitability of Seller to acquire the Shares. All sales mentioned above refer information which Seller has provided to sales the Buyer concerning the undersigned's financial position and knowledge of financial and business matters is correct and complete as of the date hereof, and if there should be any material change in such information prior to acceptance of this Agreement by the Buyer, Seller will immediately provide the Buyer with such information;
xii) The Buyer is under no obligation to register or seek an exemption under any federal and/or state securities acts for any sale or transfer of the Shares by Seller, and Seller is solely responsible for determining the status, in its hands, of the Shares acquired in connection herewith and the availability, if required, of exemptions from products registration for purposes of sale or transfer of the Shares;
xiii) No federal or state agency has made any finding or determination as to the fairness of the Shares for investment or any recommendation or endorsement of the Shares. The Shares have not been registered under the 1933 Act or the securities laws of any State and are being offered and sold in reliance on exemptions from the registration requirements of the 1933 Act and such state laws;
xiv) The Seller is acquiring the Shares for its own account for long-term investment and not with a view toward resale, fractionalization or division, or distribution thereof, and it does not presently marketed have any reason to anticipate any change in its circumstances, financial or otherwise, or particular occasion or event which would necessitate or require its sale or distribution of the Shares. No one other than the Seller has any beneficial interest in said securities. The Seller is receiving the Shares for its account for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof; and
xv) Seller understands and agrees that a legend has been or will be placed on any certificate(s) or other document(s) evidencing the Shares in substantially the following form: “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) THEY SHALL HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE STATE SECURITIES ACT, OR (II) THE CORPORATION SHALL HAVE BEEN FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY TO COUNSEL FOR THE CORPORATION, THAT REGISTRATION IS NOT REQUIRED UNDER ANY SUCH ACTS.”
b. The issuance of the Series B Convertible Preferred Stock and the shares of the Buyer’s common stock issuable upon conversion thereof (the “Conversion Shares”) shall in all cases be subject to the approval of this Agreement and the transactions contemplated herein by HighCom. In addition BlasGard will use its all commercially reasonable efforts to cause Y▇▇▇▇ ▇▇▇▇▇ to be removed from personal guarantee the NYSE Amex and the listing of such Conversion Shares on the bank loansNYSE Amex.
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Purchase Consideration. BlastGard currently has 1,000 Preferred Shares authorized, none of which are outstanding. BlastGard's board has the right to determine the rights and preferences of any Preferred Shares to be issued. BlastGard has also authorized 100,000,000 shares of Common Stock, with 56,086,142 shares issued and outstanding and 42,099,283 shares reserved for issuance upon the exercise or conversion, as the case may be, of outstanding options, warrants and promissory notes. Following the filing of BlastGard's 2010 Form 10-K and after receipt of the audited financial statements for HighCom and the appropriate pro form financial statements, BlastGard intends to file a proxy statement with the Securities and Exchange Commission to increase the authorized number of shares of Common Stock of BlastGard to 500,000,000 common shares so as to accommodate the anticipated issuance of the purchase consideration described below and to have sufficient capital stock to provide for BlastGard's future needs ("Stockholder Approval"). It is anticipated that stockholder approval for the increase will occur within one year from the date hereof. The purchase consideration will consist of a payment of cash, Preferred Stock and common stock of BlastGard (the "Stock Payment"). The assets and current outstanding obligations of HighCom are to be itemized in the formal Stock Purchase Agreement referred to herein and made a part hereto by this reference. It being understood that the earn-out shares as referenced in Items (b), (c), and (d) below in this paragraph will be reserved once Blastgard has Increased its authorized common stock by stockholder approval. The terms of the Stock Payment shall be set such that all the shares and payments will be set aside and reserved and placed into escrow (or irrevocable trust at appropriate time) to be released for HighCom’s shareholders as follows: (a) 10,000,000 shares Subject to the terms and conditions of common stock upon execution this Agreement, the total consideration payable for the Shares consists of the definitive agreement by all parties; (b) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $5 million dollars within 18 months of close; (c) 100 Preferred convertible into 10,000,000 shares of common stock at such time as the company achieves a gross revenue of $10 million dollars within 24 months of close; and lastly (d) 150 Preferred convertible into 15,000,000 shares of common stock at such time as the company achieves a gross revenue of $15 million dollars within 30 months of closeTransaction Consideration. It is understood that HighCom's shareholders shall be entitled to a pro rata delivery of earn-out shares (as described below) in the event a milestone is not 100% achieved or in the event Blastgard does not raise the amount of two million five hundred thousand dollars, the Highcom shareholders shall be entitled to the same pro rata delivery of shares. At Closing, BGI shall deliver its promissory notes representing its promise to pay $200,000 to HighCom shareholders at the earlier of ninety day or upon receipt of audited financials from HighCom, unless HighCom fails to provide the requested material to the extent they exist with such audit to start within ten days or as soon as practicable. An additional payment of $100,000 will be released upon revenues of $2 million dollars being achieved by HighCom which The Transaction consideration shall be paid pro-rata as follows:
(i) At the Closing the NCTI Signing Shares and the Cinema Consideration will be shall be calculated based on revenue achieved at issued to each Seller in the end of 8 months post close. Upon signing of this Letter of Intent, Mamount set forth below opposite such Seller's name: Seller NCTI Signing Shares Cinema Consideration ▇. ▇▇▇ ▇▇▇▇▇▇ will place 100% of his HighCom shares into an irrevocable trust; the terms of the sale of those shares to be negotiated with the Trustee upon closing. All sales mentioned above refer to sales from products presently marketed by HighCom. In addition BlasGard will use its all commercially reasonable efforts to cause Y2,546,816 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 223,467 ▇▇▇▇▇▇ ▇▇▇▇▇ 567,536 ▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,546,816 ▇▇▇▇▇ ▇▇▇▇▇▇ 1,209,560 Total: 7,094,195
(ii) Future payouts will be made to the Sellers in accordance with the percentages set forth next to their respective names in Section 2.1 as follows:
1. NCTI First Payment Shares shall be removed due and issuable on January 31, 2002 and NCTI Second Payment Shares shall be due and issuable on July 31, 2002.
(b) The NCTI Signing Shares shall be registered by Buyer for resale by Sellers pursuant to a filed and declared effective registration statement on Form S-1 or such other form as NCTI may be qualified to use. On the second Trading Day, prior to NCTI submitting a written request to the Securities and Exchange Commission (the "SEC") that such registration statement be declared effective, if the product of the Trailing Market Price on such Trading Day multiplied by the total number of NCTI Signing Shares is less than $2,395,000, then NCTI shall issue to Sellers in accordance with the respective percentages appearing next to their names in Section 2.1, a sufficient number of shares of NCTI Common Stock (the "Fill-Up Shares") such that the total number of shares of NCTI Common Stock then held by Sellers pursuant to this Agreement (assuming Sellers have not transferred or sold any NCTI Signing Shares) multiplied by the Trailing Market Price on such day shall equal $2,395,000, and NCTI shall amend such registration statement prior to it being declared effective to include the Fill-Up Shares for resale by the Sellers pursuant to such registration statement.
(c) On signing of this Agreement Sellers shall cause White & Case LLP, as escrow agent pursuant to that Escrow Agreement dated May 18, 2000 among NCTI, the Company and the escrow agent, to release from personal guarantee on the bank loansescrow and surrender to NCTI _______ shares of NCTI Common Stock represented by NCTI Stock Certificate No. ________, free and clear of all Encumbrances, which NCTI may cancel as issued and outstanding notwithstanding any prior claims or rights that may be asserted by any person or entity in respect thereof.
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