RESTRUCTURE AGREEMENT
This RESTRUCTURE AGREEMENT (this "Agreement"), dated as of June 15, 2003,
is entered into by and among Americana Publishing, Inc., a Colorado corporation
("Company"), Advantage Fund I, LLC, ("Advantage").
W I T N E S S E T H
WHEREAS, on or about April 1, 2002, the investors named on Schedule 1
hereto (the "Original Investors") made several loans to the Company in the
principal aggregate amount of Two Hundred Forty Thousand Dollars ($240,000) in
the individual amounts set forth on Schedule 1 hereto (the "Loans");
WHEREAS, in connection with the Loans, the Company caused to be issued to
the Original Investors warrants to purchase shares of the Company's Common
Stock, including certain "Class A Warrants," certain "Class B Warrants" and
other warrants (collectively, the "Warrants");
WHEREAS, the Loans and Warrants are evidenced by certain documents,
including as follows: 12% Senior Secured Convertible Debenture and Warrant
Purchase Agreements, Note and Warrant Purchase Agreements, Convertible
Promissory Notes (the "Promissory Notes"), 12% Senior Secured Convertible
Debentures (the "Debentures"), the Warrants, and certain Registration Rights
Agreements (collectively, the "Financing Documents");
WHEREAS, Advantage has purchased all right and title to the Loans and the
Warrants from the Original Investors, and has obtained assignments from the
Original Investors as to the Loans, the Warrants, and the Financing Documents,
pursuant to certain purchase agreements entered into by and between Advantage
and the Original Investors (collectively, the "Assignment Agreements");
WHEREAS, Company and Advantage have agreed to enter into this Restructure
Agreement to acknowledge the Assignment Agreements, to amend the terms of the
Loans, and exercise and/or cancel certain Warrants;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, it is agreed as follows:
A. REPLACEMENT OF FINANCING DOCUMENTS
1. Replacement Debenture. All documents evidencing the Loans are
hereby cancelled, superseded and replaced in their entirety by the
Debenture attached hereto as Exhibit A (the "Replacement Debenture"). As of
June 15, 2003, the parties agree there is a compromised amount of $97,195
owing in accrued interest, penalties, fees, liquidated damages and other
costs and expenses incurred and/or accrued. Accordingly, the principal
amount of the Replacement Debenture reflects the original principal amount
of the Loans of $240,000 and a recapitalization of the foregoing
compromised amount, for a total new principle amount of $337,195.
2. Replacement Registration Rights Agreement. All documents evidencing
rights of registration are hereby cancelled, superseded and replaced in
their entirety by the Registration Rights Agreement attached hereto as
Exhibit B (the "Replacement Registration Rights Agreement").
3. Financing Documents. As a result of the foregoing, and pursuant to
the terms and conditions of this Agreement, the Financing Documents, and
each of them, are hereby cancelled and rescinded in their entirety, and
replaced entirely and exclusively by this Agreement and the Exhibits
hereto.
B. WARRANTS
1. Class A Warrants. Advantage hereby elects to exercise that number
of Class A Warrants pursuant to a cashless exercise pursuant to Section 4
of the Class A Warrants resulting in a net election in the amount of
22,142,848 shares of restricted Common Stock of Company (the "Shares"), and
the Company hereby agrees to deliver a certificate representing the Shares
at the Closing (defined below).
2. Subscription of Shares. In connection with the foregoing warrant
exercise and purchase of the Shares, Advantage hereby makes the following
representations and warranties to Company:
2.1. Advantage is an "accredited investor" within the meaning of
Regulation D under the Securities Act of 1933 (the "Securities Act").
The undersigned has received or has had full access to all the
information it considers necessary or appropriate to make an informed
investment decision with respect to the exercise of the Class A
Warrants and acquisition of the Shares. Advantage has had an
opportunity to ask questions and receive answers from the Company
regarding the Company's business, management and financial affairs and
the terms and conditions of the Warrant and to obtain additional
information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to
verify any information furnished to the undersigned or to which the
undersigned had access.
2.2. Advantage has substantial experience in evaluating and
investing in securities in companies similar to the Company so that it
is capable of evaluating the merits and risks of its investment in the
Company and has the capacity to protect its own interests. Advantage
understands it must bear the economic risk of this investment until
the Shares are sold pursuant to (i) an effective registration
statement under the Securities Act, or (ii) an exemption from
registration becomes available.
2.3. Advantage is exercising the Class A Warrants for its own
account and for investment only, and not as a nominee or agent and not
with a view towards or for resale in connection with distribution of
the Shares.
2.4. Advantage represents that by reason of its, or of its
management's, business and financial experience, it has the capacity
to evaluate the merits and risks of its investment in the Company and
to protect its own interests in connection with the exercise of the
Class A Warrants and acquisition of the Shares.
3. Cancellation of All Other Warrants. In consideration of the
foregoing, Advantage hereby cancels, voids and rescinds any and all Class A
Warrants not otherwise exercised pursuant to paragraph B.2 above, all Class
B Warrants, and any and all other warrants granted or issued to the
Original Investors or Advantage.
4. Proxy. Advantage hereby grants an irrevocable proxy to Xxxxxx
Xxxxxx for a period of 270 days from the date of this Agreement with
respect to the Shares.
5. Indemnity. All original Warrants, Debentures and Promissory Notes
will be promptly surrendered to the Company. Advantage hereby agrees to
indemnify and hold harmless Company from and against any and all claims
asserted by or on behalf of the Original Investors regarding the Warrants
and the Loans.
C. REGISTRATION RIGHTS
1. Advantage expressly authorizes and instructs the Company to
withdraw the Form SB-2 Registration Statement filed on July 16, 2002, with
the Securities and Exchange Commission, and waives and releases Company of
any liability related to or arising under any previously existing
Registration Rights Agreement.
2. Company and Advantage shall enter into the Replacement Registration
Rights Agreement.
D. REPRESENTATIONS AND WARRANTIES OF ADVANTAGE
Advantage hereby represents and warrants to Company that:
1. The execution, delivery, and performance of this Agreement is
within its company powers, and has been duly authorized by all necessary
company action.
2. Advantage owns all right and title to the Financing Documents,
including specifically the Loans and Warrants, and has full authority to
enter into terms, conditions, waivers, and amendments set forth in this
Agreement, and in the attached Exhibits.
E. CONDITIONS TO CLOSING
The satisfaction of each of the following shall constitute conditions
precedent to the effectiveness of this Agreement and each and every
provision hereof:
1. The representations and warranties in this Agreement shall be true
and correct in all respects on and as of the date hereof.
2. This Agreement shall have been duly executed by Company and
Advantage, and copies of such signatures shall have been provided to one
another.
3. Company shall have received all original Class A Warrants, all
original Class B warrants, and all other such warrants issued to the
Original Investors as may be in the possession, custody or control of
Advantage.
4. Closing. Upon confirmation of the foregoing conditions to closing,
the Company shall as soon as practicable thereafter issue or cause its
transfer agent to issue certificates representing the Shares with the
appropriate restrictive legends.
F. MISCELLANEOUS.
1. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to its
conflicts-of-laws principles (other than any provisions thereof validating
the choice of the laws of the State of New York as the governing law).
2. The recitals set forth at the beginning of this Agreement are
incorporated herein and made a part hereof. This Agreement, and the terms
and provisions hereof (including, without limitation, the recitals),
constitute the entire agreement between the Company and Advantage
pertaining to the subject matter hereof and supersedes any and all prior or
contemporaneous amendments relating to the subject matter hereof. Under no
circumstances shall prior drafts of this Agreement be utilized in
interpreting the rights or obligations of the parties hereunder or the
transactions contemplated hereby. This Agreement has been prepared jointly
by the parties hereto and any uncertainty or ambiguity existing herein
shall not be interpreted against either party, but according to the
application of rules of interpretation of contracts, if such an uncertainty
or ambiguity exists. To the extent any terms or provisions of this
Agreement conflict with those of the Replacement Debenture or the
Replacement Registration Rights Agreement, the terms and provisions of this
Agreement shall control.
3. This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument and
any of the parties hereto may execute this Agreement by signing any such
counterpart. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original
executed counterpart of this Agreement. Any party delivering an executed
counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement, but the failure to deliver
an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
4. Company's address for the purpose of delivery of notices is as
follows:
Attn: Xxxxxx Xxxxxx
Americana Publishing, Inc.
000 Xxx Xxxxx XX, Xxxxx 000X
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
With a copy to:
Attn: Xxxxxxx Xxxxx, Esq.
Xxxxxxxxxx & Xxxxx LLP
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Advantage's address for the purpose of delivery of notices is as
follows:
Xxx Xxxxx, President
Knightsbridge Capital
2999 NE 191st Street, Xxxxxxxxx Xxx
X. Xxxxx Xxxxx, Xxxxxxx 00000
5. This Agreement cannot be altered, amended, changed or modified in
any respect or particular unless each such alteration, amendment, change or
modification shall have been agreed to by each of the parties and reduced
to writing in its entirety and signed and delivered by each party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the date first written above.
AMERICANA PUBLISHING, INC.
By:
Xxxxxx Xxxxxx, President
ADVANTAGE FUND I, LLC
-----------------------------
By:
Xxxxxx Press, President
SCHEDULE 1
ORIGINAL INVESTORS
Name Principal Amount
Gulf Coast Advisors, Ltd. $25,000
BG Holdings, LLC $75,000
Karim Amiryani $20,000
Tel-Pro Marketing, Inc. $20,000
Xxxxxxx X. Xxxxxx $10,000
Xxxxxxx X. Xxxxxx, CPA, Defined Benefit Pension Plan $15,000
Xxxxxx X. Xxxx $5,000
Vestcom, Ltd. $35,000
Stranco Investments, Ltd. $35,000
Total $240,000
EXHIBIT A
REPLACEMENT DEBENTURE
