EXHIBIT 10.30
ZENASCENT, INC.
NOTE AND WARRANT PURCHASE AGREEMENT
Zenascent, Inc.
00 Xxxx 00xx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Gentlemen:
1. The Loan. Subject to the terms of this Note and Warrant Purchase Agreement
(the "Agreement"), ______________ (the "Purchaser") hereby agrees to loan
Zenascent, Inc. (the "Company") a principal amount equal to $________. The loan
shall be evidenced by a 10% mandatory convertible promissory note in
substantially the form attached hereto as Exhibit A (the "Note"). The Purchaser
acknowledges and agrees that, pursuant to the terms of the Note, in the event
the principal amount of the Note, together with accrued but unpaid interest, is
not paid on or before the one hundred twenty (120th) calendar day after the date
of the Note, the Company shall have an additional thirty (30) calendar days in
which to pay off the principal and accrued but unpaid interest. In the event the
principal amount of the Note, together with accrued but unpaid interest, is not
paid on or before the one hundred fiftieth (150th) calendar day after the date
of the Note, the Purchaser shall be required to convert the outstanding
principal amount of the Note, together with accrued but unpaid interest, into
that number of shares of the Company's common stock equal to the outstanding
principal amount of the Note, together with accrued but unpaid interest, divided
by eighty-five percent (85%) of the five day average closing bid price of the
Company's common stock for the five trading day period immediately preceding the
one hundred fiftieth (150th) calendar day after the date hereof. Unless
otherwise defined, the capitalized terms herein shall have the meanings assigned
to such terms in the Note.
Payment. The Purchaser encloses herewith a check payable to, or will immediately
make a wire transfer payment to, "Zenascent, Inc.," in the full amount of the
principal amount of the Note. The wire transfer instructions shall be provided
by the Company. Such funds will be marked for the Purchaser's benefit, and will
be returned promptly, without interest, penalty, expense or deduction if this
Agreement is not accepted by the Company.
2. Deposit of Funds. All payments made as provided in Section 1 hereof shall be
deposited by the Company in a bank account until the Agreement has been accepted
by the Company and the Agreement, as executed by the Company, together with a
Note and Warrant (as defined below) has been delivered (which shall for this
purpose be satisfied by facsimile transmission) to the Purchaser.
3. Issuance of Warrant. The Company shall issue the Purchaser a warrant (the
"Warrant") to purchase common stock with an aggregate value equal to 50% of the
original principal amount of the Note. The exercise price for each share of
common stock of the Company for which the Warrant
can be exercised shall be $.50. The Warrant shall be in substantially the form
attached hereto as Exhibit B. There will be no warrants for fractional shares.
If fractional shares would occur based upon the mathematical formula used in
this Section to calculate the number of shares to be issued upon the exercise of
the Warrant, the amount of shares will be rounded up to the next highest share.
Notwithstanding the foregoing, there are not sufficient shares of common stock
of the Company reserved to issue such shares of common stock of the Company if
the Note was converted or the Warrant were exercised on the date hereof. If such
number of shares of common stock of the Company are for any reason whatsoever
still not available to be issued by the Company at the time of the conversion of
the Note or exercise of the Warrant, the Company shall so issue such shares of
common stock as soon as practicable.
4. Acceptance of Subscription. The Purchaser understands and agrees that the
Company, in its sole discretion, reserves the right to accept or reject this or
any other subscription for Notes, in whole or in part, notwithstanding prior
receipt by the Purchaser of notice of acceptance of this subscription. The
Company shall have no obligation hereunder until the Company shall execute and
deliver to the Purchaser an executed copy of this Agreement. If this
subscription is rejected in whole, all funds received from the Purchaser will be
returned without interest, penalty, expense or deduction, and this Agreement
shall thereafter be of no further force or effect. If this subscription is
rejected in part, the funds for the rejected portion of this subscription will
be returned without interest, penalty, expense or deduction, and this Agreement
will continue in full force and effect to the extent this subscription was
accepted. The Purchaser acknowledges and agrees that the Note is one of a number
of other promissory notes, which are substantially the same as the Note, which
such notes are being issued in connection with the offering of the Note.
5. Representations and Warranties. The Purchaser hereby acknowledges,
represents, warrants and agrees as follows:
(a) None of the Notes or shares of common stock underlying the Notes or the
Warrant are registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws. The Purchaser understands that
the offering and sale of the Notes and Warrant is intended to be exempt from
registration under the Securities Act, by virtue of Section 4(2) thereof and the
provisions of Regulation D promulgated thereunder, based, in part, upon the
representations, warranties and agreements of the Purchaser contained in this
Agreement;
(b) The Purchaser and the Purchaser's attorney, accountant, purchaser
representative and/or tax advisor, if any (collectively, the "Advisors"), have
received all documents requested by Purchaser and its Advisors as they consider
necessary or appropriate to evaluate the risks and merits of an investment in
the Notes and Warrants, including without limitation, the Quarterly Reports on
Form 10-QSB for the quarters ending September 30, 2002 and June 30, 2002;
Current Reports on Form 8-K (and Form 8-K/A) dated November 15, 2002, July 16,
2002 and May 15, 2002, respectively; and the Preliminary Proxy Statement filed
October 30, 2002 (collectively, the "SEC Documents"). Purchaser acknowledges
that the Company is subject to the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
Purchaser has reviewed
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copies of all SEC Documents deemed relevant by the Purchaser and its Advisors
(including, without limitation, any "Risk Factors" contained therein). The
Purchaser and its Advisors have carefully reviewed such documents and understand
the information contained therein, and the Purchaser and the Advisors prior to
the execution of this Agreement;
(c) Neither the Securities and Exchange Commission nor any state securities
commission has approved the Notes, Warrant or shares of common stock underlying
the Notes or Warrant or passed upon or endorsed the merits of the offering or
confirmed the accuracy or determined the adequacy of the offering documents. The
offering documents have not been reviewed by any Federal, state, provincial or
other regulatory authority;
(d) All documents, records, and books pertaining to the investment in the Notes
or the Warrant have been made available for inspection by such Purchaser and the
Advisors, if any;
(e) The Purchaser and the Advisors, if any, have had a reasonable opportunity to
ask questions of and receive answers from a person or persons acting on behalf
of the Company concerning the offering of the Notes and the Warrant and the
business, financial condition, results of operations and prospects of the
Company, and all such questions have been answered to the full satisfaction of
the Purchaser and the Advisors, if any;
(f) In evaluating the suitability of an investment in the Company, the Purchaser
has not relied upon any representation or other information (oral or written)
other than as stated in the offering documents or as contained in documents or
answers to questions so furnished to the Purchaser or the Advisors by the
Company;
(g) The Purchaser is unaware of, is no way relying on, and did not become aware
of the offering of the Notes or the Warrant through or as a result of, any form
of general solicitation or general advertising including, without limitation,
any article, notice, advertisement or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, in
connection with the offering and sale of the Notes and the Warrant and is not
subscribing for Notes or the Warrant and did not become aware of the offering of
the Notes and Warrant through or as a result of any seminar or meeting to which
the Purchaser was invited by, or any solicitation of a subscription by, a person
not previously known to the Purchaser in connection with investments in
securities generally;
(h) The Purchaser has taken no action which would give rise to any claim by
any person for brokerage commissions, finders' fees or the like relating to this
Agreement or the transactions contemplated hereby;
(i) The Purchaser or the purchaser's representative, as the case may be,
together with the Advisors, have such knowledge and experience in financial,
tax, and business matters, and, in particular, investments in securities, so as
to enable them to utilize the information made available to them in connection
with the offering of the Notes and the Warrant to evaluate the merits and risks
of
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an investment in the Notes and the Warrant and the Company and to make an
informed investment decision with respect thereto;
(j) The Purchaser is not relying on the Company, or any of its employees or
agents with respect to the legal, tax, economic and related considerations of an
investment in the Notes or the Warrant, and the Purchaser has relied on the
advice of, or has consulted with, only his own Advisors;
(k) The Purchaser is acquiring the Notes and the Warrant solely for such
Purchaser's own account for investment and not with a view to resale or
distribution thereof, in whole or in part. The Purchaser has no agreement or
arrangement, formal or informal, with any person to sell or transfer all or any
part of the Notes or the Warrant, or the shares of Common Stock issuable upon
repayment or conversion of the Notes or exercise of the Warrant, and the
Purchaser has no plans to enter into any such agreement or arrangement;
(l) The Purchaser must bear the substantial economic risks of the investment in
the Notes and the Warrant indefinitely because the securities may not be sold,
hypothecated or otherwise disposed of unless subsequently registered under the
Securities Act and applicable state securities laws or an exemption from such
registration is available. Legends shall be placed on the Notes and the Warrant
to the effect that they have not been registered under the Securities Act or
applicable state securities laws and appropriate notations thereof will be made
in the Company's stock books. Stop transfer instructions will be placed with the
transfer agent of the securities constituting the Notes and the Warrant .
(m) The Purchaser has adequate means of providing for such Purchaser's current
financial needs and foreseeable contingencies and has no need for liquidity of
the investment in the Notes or the Warrant for an indefinite period of time;
(n) The Purchaser is aware that an investment in the Notes and the Warrant
involves a number of very significant risks, and, in particular, acknowledges
that the Company has had a limited operating history and is engaged in a highly
competitive business;
(o) The Purchaser meets the requirements of at least one of the suitability
standards for an "accredited investor" as set forth on the Accredited Investor
Certification contained herein;
(p) The Purchaser (i) if a natural person, represents that the Purchaser has
reached the age of 21 and has full power and authority to execute and deliver
this Agreement and all other related agreements or certificates and to carry out
the provisions hereof and thereof; (ii) if a corporation, partnership, or
limited liability company or partnership, or association, joint stock company,
trust, unincorporated organization or other entity, represents that such entity
was not formed for the specific purpose of acquiring the Notes or the Warrant,
such entity is duly organized, validly existing and in good standing under the
laws of the state of its organization, the consummation of the transactions
contemplated hereby is authorized by, and will not result in a violation of
state law or its charter or other organizational documents, such entity has full
power and authority to execute and
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deliver this Agreement and all other related agreements or certificates and to
carry out the provisions hereof and thereof and to purchase and hold the
securities constituting the Notes and the Warrant, the execution and delivery of
this Agreement has been duly authorized by all necessary action, this Agreement
has been duly executed and delivered on behalf of such entity and is a legal,
valid and binding obligation of such entity; or (iii) if executing this
Agreement in a representative or fiduciary capacity, represents that it has full
power and authority to execute and deliver this Agreement in such capacity and
on behalf of the subscribing individual, xxxx, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Purchaser is executing this Agreement, and such individual,
partnership, xxxx, trust, estate, corporation, or limited liability company or
partnership, or other entity has full right and power to perform pursuant to
this Agreement and make an investment in the Company, and represents that this
Agreement constitutes a legal, valid and binding obligation of such entity. The
execution and delivery of this Agreement will not violate or be in conflict with
any order, judgment, injunction, agreement or controlling document to which the
Purchaser is a party or by which it is bound;
(q) The Purchaser and the Advisors, if any, have had the opportunity to obtain
any additional information, to the extent the Company had such information in
its possession or could acquire it without unreasonable effort or expense,
necessary to verify the accuracy of the information contained in the offering
documents and all documents received or reviewed in connection with the purchase
of the Notes and the Warrant and have had the opportunity to have
representatives of the Company provide them with such additional information
regarding the terms and conditions of this particular investment and the
financial condition, results of operations, business and prospects of the
Company deemed relevant by the Purchaser or the Advisors, if any, and all such
requested information, to the extent the Company had such information in its
possession or could acquire it without unreasonable effort or expense, has been
provided to the full satisfaction of the Purchaser and the Advisors, if any;
(r) The Purchaser represents to the Company that any information which the
undersigned has heretofore furnished or furnishes herewith to the Company is
complete and accurate and may be relied upon by the Company in determining the
availability of an exemption from registration under Federal and state
securities laws in connection with the offering of the Notes and the Warrant.
The Purchaser further represents and warrants that it will notify and supply
corrective information to the Company immediately upon the occurrence of any
change therein occurring prior to the Company's issuance of the Notes and the
Warrant;
(s) The Purchaser has significant prior investment experience, including
investment in non-listed and non-registered securities. The Purchaser is
knowledgeable about investment considerations in development-stage companies.
The Purchaser has a sufficient net worth to sustain a loss of its entire
investment in the Company in the event such a loss should occur. The Purchaser's
overall commitment to investments which are not readily marketable is not
excessive in view of the Purchaser's net worth and financial circumstances and
the purchase of the Notes and the Warrant will not cause such commitment to
become excessive. The investment is a suitable one for the Purchaser;
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(t) The Purchaser is satisfied that the Purchaser has received adequate
information with respect to all matters which it or the Advisors, if any,
consider material to its decision to make this investment;
(u) Within five days after receipt of a request from the Company, the Purchaser
will provide such information and deliver such documents as may reasonably be
necessary to comply with any and all laws and ordinances to which the Company is
subject; and
(v) THE NOTE AND WARRANT (AND ANY SECURITIES ISSUED UPON CONVERSION OF THE NOTE
OR EXERCISE OF THE WARRANT) OFFERED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND
ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE NOTE AND WARRANT (AND ANY SECURITIES
ISSUED UPON CONVERSION OF THE NOTE OR EXERCISE OF THE WARRANT) IS SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE NOTE AND WARRANT (AND ANY SECURITIES ISSUED UPON
CONVERSION OF THE NOTE OR EXERCISE OF THE WARRANT) HAS NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF ANY OFFERING DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
6. Indemnification. The Purchaser agrees to indemnify and hold harmless the
Company, and its officers, directors, employees, agents, control persons and
affiliates from and against all losses, liabilities, claims, damages, costs,
fees and expenses whatsoever (including, but not limited to, any and all
expenses incurred in investigating, preparing or defending against any
litigation commenced or threatened) based upon or arising out of any actual or
alleged false acknowledgment, representation or warranty, or misrepresentation
or omission to state a material fact, or breach by the Purchaser of any covenant
or agreement made by the Purchaser herein or in any other document delivered in
connection with this Agreement.
7. Irrevocability; Binding Effect. The Purchaser hereby acknowledges and agrees
that the subscription hereunder is irrevocable by the Purchaser, except as
required by applicable law, and that this Agreement shall survive the death or
disability of the Purchaser and shall be binding upon and inure to the benefit
of the parties and their heirs, executors, administrators, successors, legal
representatives, and permitted assigns. If the Purchaser is more than one
person, the obligations of the Purchaser hereunder shall be joint and several
and the agreements, representations, warranties, and acknowledgments herein
shall be deemed to be made by and be binding upon each such person and such
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person's heirs, executors, administrators, successors, legal representatives,
and permitted assigns.
8. Modification. This Agreement shall not be modified or waived except by an
instrument in writing signed by the party against whom any such modification or
waiver is sought.
9. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or delivered against receipt to the party to whom it is to be
given (a) if to the Company, at the address set forth above, or (b) if to the
Purchaser, at the address set forth on the signature page hereof (or, in either
case, to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 9). Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
10. Assignability. This Agreement and the rights, interests and obligations
hereunder are not transferable or assignable by the Purchaser and the transfer
or assignment of the Notes or Warrant or the shares of Common Stock issuable
upon conversion of the Notes or exercise of the Warrant shall be made only in
accordance with all applicable laws.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York relating to contracts entered
into and to be performed wholly within such State. Each party hereto hereby
irrevocably submits to the jurisdiction of any Xxx Xxxx Xxxxx xxxxx xx Xxxxxx
Xxxxxx Federal court sitting in New York County over any action or proceeding
arising out of or relating to this Agreement or any agreement contemplated
hereby, and each party hereby irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such New York State or
Federal court. Each party hereto further waives any objection to venue in such
State and any objection to an action or proceeding in such State on the basis of
a non-convenient forum. The Purchaser further agrees that any action or
proceeding brought against the Company shall be brought only in New York State
or United States Federal courts sitting in New York County. EACH PARTY HERETO
AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED
HEREBY.
12. Blue Sky Qualification. The purchase of Notes and the Warrant under this
Agreement is expressly conditioned upon the exemption from qualification of the
offer and sale of the Notes and Warrant from applicable Federal, state and
provincial securities laws. The Company shall not be required to qualify this
transaction under the securities laws of any jurisdiction and, should
qualification be necessary, the Company shall be released from any and all
obligations to maintain its offer, and may rescind any sale contracted, in the
jurisdiction.
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13. Use of Pronouns. All pronouns and any variations thereof used herein shall
be deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons referred to may require.
14. Confidentiality. The Purchaser acknowledges and agrees that any information
or data the Purchaser has acquired from or about the Company, not otherwise
properly in the public domain, was received in confidence. The Purchaser agrees
not to divulge, communicate or disclose, except as may be required by law or for
the performance of this Agreement, or use to the detriment of the Company or for
the benefit of any other person or persons, or misuse in any way, any
confidential information of the Company, including any scientific, technical,
trade or business secrets of the Company and any scientific, technical, trade or
business materials that are treated by the Company as confidential or
proprietary, including, but not limited to, ideas, discoveries, inventions,
developments and improvements belonging to the Company and confidential
information obtained by or given to the Company about or belonging to third
parties.
15. Miscellaneous.
(a) This Agreement constitutes the entire agreement between the Purchaser and
the Company with respect to the subject matter hereof and supersedes all prior
oral or written agreements and understandings, if any, relating to the subject
matter hereof. The terms and provisions of this Agreement may be waived, or
consent for the departure therefrom granted, only by a written document executed
by the party entitled to the benefits of such terms or provisions.
(b) The Purchaser's representations and warranties made in this Agreement shall
survive the execution and delivery hereof and delivery of the Notes and the
Warrant.
(c) Each of the parties hereto shall pay its own fees and expenses (including
the fees of any attorneys, accountants, appraisers or others engaged by such
party) in connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are consummated.
(d) This Agreement may be executed in one or more counterparts each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
(e) Each provision of this Agreement shall be considered separable and, if for
any reason any provision or provisions hereof are determined to be invalid or
contrary to applicable law, such invalidity or illegality shall not impair the
operation of or affect the remaining portions of this Agreement.
(f) Paragraph titles are for descriptive purposes only and shall not control or
alter the meaning of this Agreement as set forth in the text.
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ZENASCENT, INC.
SIGNATURE PAGE
Purchaser hereby elects to subscribe under the Note and Warrant Purchase
Agreement for a total of $_________________ principal amount of 10% Mandatory
Convertible Promissory Notes (NOTE: to be completed by Purchaser).
Date (NOTE: To be completed by Purchaser): , 2003
Please indicate (circle one) whether the purchaser is investing as a(n):
INDIVIDUAL
JOINT TENANTS
TENANTS IN COMMON
COMMUNITY PROPERTY
PARTNERSHIP
CORPORATION
LIMITED LIABILITY COMPANY
TRUST
Please fill out this section if the purchaser is an INDIVIDUAL, and if purchased
as JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY (If the
investment is being made as JOINT TENANTS, TENANTS IN COMMON, or as COMMUNITY
PROPERTY, please be sure to fill out this section for all purchasers named):
____________________________ ______________________________
Print Name(s) Social Security Number(s)
____________________________ ______________________________
Print Name(s) (if more than Social Security Number(s)
1 individual)
____________________________ ______________________________
Signature(s) of Investor(s) Signature
____________________________ ______________________________
Date Address
Please fill out this section if the purchaser is a PARTNERSHIP, CORPORATION,
LIMITED LIABILITY COMPANY or TRUST:
____________________________ ______________________________
Name of Partnership, Federal Taxpayer
Corporation, Limited Identification Number
Liability Company or
Trust
By:_________________________ ______________________________
Name: State of Organization
Title: Address:______________________
SUBSCRIPTION FOR $ PRINCIPAL AMOUNT OF 10% MANDATORY CONVERTIBLE PROMISSORY
NOTES, ACCEPTED AND AGREED TO this ___ day of __________, 2003
Zenascent, Inc.
By:____________________
Name:
Title:
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