THIS EXCHANGE AGREEMENT is made the 29 day of December 2005
EXHIBIT
10.3
THIS
EXCHANGE AGREEMENT is
made
the 29 day of December 2005
BETWEEN
(1) CAYMAN LENDER (IN VOLUNTARY LIQUIDATION), a Cayman Islands exempted company
(“the Company”); and
(2)
GREEN MOUNTAIN CAPITAL, INC., a Nevada corporation (“GMCI”).
WHEREAS:
(1)
By a
written resolution of the sole shareholder of the Company passed pursuant to
Article 86 of the Company’s Articles of Association and dated __________
December 2005 it was resolved that the Company should be wound up voluntarily
and that Xxxxxxxxxxx X Xxxxxxx and Xxxxxxx Xxxxx (“the Liquidators”) should be
appointed liquidators for the purposes of such winding up;
(2)
GMCI
is in the process of re-organizing itself (the “GMCI Plan of Re-organization”)
by effecting a business combination with Internet Communications PLC
(“ITPLC”);
(3)
Pursuant to a Loan Agreement dated 1 November 2005 (“the Loan Agreement”) to
which they are parties, the Company is contractually required to make various
loans to GMCI in connection with the GMCI Plan of Re-organization, so that,
accordingly:
(a)
prior
to the execution of this Agreement, the Company has made various loans to GMCI
(“the Past Loans”) to enable GMCI to begin to implement the GMCI Plan of
Re-organization by entering into a business combination with ITPLC;
and
(b)
subsequent to the execution of this Agreement, the Company is required to make
additional loans to GMCI (“the Future Loans”) to enable GMCI to continue to
implement the GMCI Plan of Re-organization by integrating the operations of
ITPLC into its, GMCI’s, existing business
(4)
By
virtue
of having made the Past Loans, and by virtue of being required to make the
Future Loans, the Company is, and shall continue to be, a creditor of, and
has,
and shall continue to have, claims against GMCI (“Past Claims” and “Future
Claims”);
(5)
Prior
to the execution of this Agreement, Past Loans made by the Company to GMCI,
and,
therefore, Past Claims which the Company has against GMCI, total US $
3,700,000.00;
(6)
Subsequent to the execution of this Agreement, it is anticipated that Future
Loans to be made by the Company to GMCI, and, therefore, Future Claims which
Cayman shall have against GMCI, shall not exceed US $
21,300,000.00;
(7)
Schedules
1
and
2
to this
Agreement respectively identify (i) those loans made prior to this Agreement
and
(ii) those loans to be made subsequent to this Agreement by the Company to
GMCI
pursuant to the Loan Agreement, which loans are identified by reference to
the
name of the instrument used in the Loan Agreement to evidence the transaction
together with the date of the instrument;
(8)
GMCI
is corporation which is required to file, and has duly filed,
periodic
reports
to the United
States Securities and Exchange Commission
(the
“SEC”) under the Securities Exchange Act of 1934, as amended (“the Exchange
Act”);
(9)
As a
result of the Past Loans, GMCI has already increased its shareholder value
and
as a result of the Future Loans, it is anticipated that GMCI will continue
to
increase its shareholder value, all as set forth in that valuation study of
ITPLC prepared by XPower Technologies dated 13 September 2005 (“the Valuation
Study”);
(10)
The
Loan
Agreement requires that GMCI satisfy both the Past and Future Claims the Company
has and shall have against GMCI by repaying both the Past Loans and the Future
Loans in cash;
(11)
By
virtue
of the Liquidators’ analysis of the Valuation Study, the Company believes that
it would be fair and in its best interest for it to exchange, subject to the
approval of the Grand Court of the Cayman Islands (“the Court”), both its Past
and Future Claims against GMCI for shares in the Common Stock of GMCI and with
a
view to obtaining the benefit of Section 3 (a) (10) of the Securities Act of
1933, as amended (the “Securities Act”);
(12)
It
is the intention of the Company, by the Liquidators, to apply to the Court
pursuant to sections 141 and 164 of the Companies Law (2004 Revision) for the
approval of this Agreement on the ground that the same is fair, just and
beneficial to the Company;
NOW
IT IS
HEREBY AGREED as follows:
1.
Approval of the Court.
This
Agreement is conditional on the same being approved by the Court and none of
the
provisions hereinafter contained shall bind the parties or either of them until
such approval is obtained.
2.
Exchange
by Cayman of Past Claims and Future Claims for Shares of
GMCI.
The
Company may from time to time, during the pendency of the Liquidation,
exchange:
(a)
its
Past
Claims against GMCI for shares of the Common Stock of GMCI at the rate
set
forth in Schedule
1;
(b)
its
Future Claims against GMCI for shares of the Common Stock of GMCI at the
rate
or
rates set forth in Schedule
2.
3.
The
Company’s Warranties and Representations.
The
Company
represents and warrants to, and covenants and agrees with, GMCI as
follows:
(a)
The
Company is a corporation
duly
organized and validly existing under the laws of the jurisdiction in which
it
was incorporated.
The
Company, by the Liquidators, has all requisite corporate power and authority
to
own, lease and operate its properties and assets, and to carry on its business
as presently conducted. The Company is qualified to do business as a foreign
corporation in each jurisdiction in which the ownership of its property or
the
nature of its business requires such qualification, except where failure to
so
qualify would not have a material adverse effect on the Company.
(b) This
Agreement has been duly authorized, validly executed and delivered on behalf
of
the Company and, subject to the approval of the Court, is a valid and binding
agreement in accordance with its terms, subject to general principles of equity
and to bankruptcy or other laws affecting the enforcement of creditors’ rights
generally. All corporate action on the part of the Company and the Liquidators
necessary for the authorization, execution, delivery and performance of this
Arrangement has been taken.
(c) The
execution and delivery of this Agreement does not, and the consummation of
the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both),
or
give rise to a right of termination, cancellation or acceleration of any
obligation or to a loss of a material benefit, under, any provision of the
Memorandum and Articles of Association of the Company or any material mortgage,
indenture, lease or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law ordinance, rule or
regulation applicable to the Company, its properties or assets.
(d)
The
Company has had an opportunity to receive and review all material information
and financial data of GMCI.
(e)
The
Company, by its Liquidators, has such knowledge and experience in financial
and
business matters that it is capable of evaluating the merits and risks of
accepting this Agreement and the Common Stock of GMCI.
4.
GMCI’s
Warranties and Representations.
GMCI
represents and warrants to, and covenants and agrees with the Company as
follows:
(a) GMCI
is
a corporation
duly
organized and validly existing under the laws of the jurisdiction in which
it
was incorporated.
GMCI
has all requisite corporate power and authority to own, lease and operate its
properties and assets, and to carry on its business as presently conducted.
GMCI
is qualified to do business as a foreign corporation in each jurisdiction in
which the ownership of its property or the nature of its business requires
such
qualification, except where failure to so qualify would not have a material
adverse effect on GMCI.
(b) This
Agreement has been duly authorized, validly executed and delivered on behalf
of
GMCI and, subject to the approval of the Court, is a valid and binding agreement
in accordance with its terms, subject to general principles of equity and to
bankruptcy or other laws affecting the enforcement of creditors’ rights
generally. All corporate action on the part of GMCI, its directors and
shareholders necessary for the authorization, execution, delivery and
performance of this Arrangement has been taken.
(c) The
execution and delivery of this Agreement does not, and the consummation of
the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both),
or
give rise to a right of termination, cancellation or acceleration of any
obligation or to a loss of a material benefit, under, any provision of the
Articles of Incorporation, and any amendments thereto, By-laws, Stockholders
Agreements and any amendments thereto of GMCI or any material mortgage,
indenture, lease or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law ordinance, rule or
regulation applicable to GMCI , its properties or assets.
(d)
GMCI
has
had an opportunity to receive and review all material information and financial
data of the Company.
(e)
GMCI
has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of accepting this
Agreement.
5.
Notice.
(a)
Any
notice, request, instruction or other document required by the terms of this
Agreement
to be given to any other Party hereto shall be in writing and shall be given
either
(i)
by
telephonic facsimile, in which case notice shall be presumptively deemed to
have
been given at the date and time displayed on the sender’s transmission
confirmation receipt showing the successful receipt thereof by the
recipient;
(ii)
by
nationally recognized courier or overnight delivery service in which the date
of
delivery is recorded by the delivery service, in which case notice shall be
presumptively deemed to have been given at the time that records of the delivery
service indicate the writing was delivered to the addressee;
(iii)
by
United
States or Cayman Islands mail
sent by
registered or certified mail, postage prepaid, with return receipt requested,
in
which case notice shall be presumptively deemed to have been given at the time
that records of the United States Postal Service or the Cayman Islands Post
Office indicate the writing was delivered to the addressee.
(b)
Notice
shall be sent:
(i)
If
to the
Company, to:
Cayman
Lender, Ltd.
c/o
Xxxxx
Xxxxxxx Associates Ltd,
Xxxxxxxxxx
Xxxxx,
X.X.
Xxx
Xxxxxx
Xxxx
Xxxxx
Xxxxxx, Xxxxxx Xxxxxxx
Attention:
Xxxxxxx Xxxxx
Telephone Number: |
(345)
946 - 0820
|
(ii)
If
to
GMCI, to:
Green
Mountain Capital, Inc.,
000
Xxxxx
Xxxxxxxx Xxxxxxxxx
00xx
Xxxxx
Xxxxx,
Xxxxxxx 00000
Attention:
Xxxxxx Xxxxxxxxx, President
Telephone Number: |
(917)
620 - 6401
|
Facsimile Telephone Number: |
(925)
955 - 0800
|
(iii)
or
to
such other address as a Party may have specified in writing to the
other
Parties using the procedures specified above in this Section.
6.
Choice
of Law, Venue.
(a) All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the Cayman Islands without regard to the rules of
private international law thereof.
(b) The
Parties irrevocably agree that the Court shall have exclusive jurisdiction
in
respect of any dispute, suit, action or proceeding (“Proceedings”) which may
arise out of or in connection with this Agreement and that, without prejudice
to
the rules of service of said Court, Proceedings may be served by delivering
the
same in an envelope addressed to the Party to be served at the address for
such
Party set out in Clause 4 of this Arrangement.
7. Miscellaneous.
(a) Title
and Subtitles.
The
titles and subtitles used in this Agreement are used for the convenience of
reference and are not to be considered in construing or interpreting this
Agreement.
(b) Counterparts.
This
Agreement may be executed in multiple counterparts, each of which may be
executed by less than all of the Parties. each of which shall be deemed to
be an
original instrument which shall be enforceable against the Parties actually
executing such counterparts, and all of which together shall constitute one
and
the same instrument.
(c) Severability.
In the
event that any provision of this Agreement becomes or is declared by a court
or
other tribunal of competent jurisdiction to be illegal, unenforceable or void,
this Agreement shall continue in full force and effect without said
provision.
(d)
Amendment;
No Waiver.
No Party
shall be liable or bound to any other Party in any manner by any warranties,
representations or covenants except as specifically set forth in this Agreement.
Except as expressly provided in this Agreement, neither this Agreement nor
any
term hereof may be amended, waived, discharged or terminated other than by
a
written instrument signed by both parties hereto. The failure of the either
Party to insist on strict compliance with this Agreement, or to exercise any
right or remedy under this Agreement, shall not constitute a waiver of any
rights provided under this Agreement, nor estop a Party from thereafter
demanding full and complete compliance nor prevent a Party from exercising
such
a right or remedy in the future.
(e) Transaction
Costs.
Each
party shall bear its own legal fees and other out of pocket costs in connecting
with the negotiation and execution of this Agreement.
(f) Brokerage.
Each of
the Parties hereto represents that it has had no dealings in connection with
this transaction with any finder or broker which would impose a legal obligation
to pay any fee or commission. Each of the Parties agree to indemnify and hold
the others harmless against any and all liabilities to any persons claiming
brokerage commissions or finder’s fees on account of services purported to have
been rendered on behalf of the indemnifying party in connection with this
Agreement or the transactions contemplated hereby.
(g) Survival.
All
representations and warranties contained in this Agreement by the Parties shall
survive the termination of this Agreement.
IN
WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of
the
date first set forth above.
THE
COMPANY:
Cayman
Lender, Ltd.
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|
|
Date: | By: | /s/ Xxxxxxxxxxx X. Xxxxxxxx |
Xxxxxxxxxxx X Xxxxxxx, Liquidator | ||
GMCI:
Green
Mountain Capital, Inc.
|
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By: | /s/ Xxxxxx Xxxxxxxxx | |
Xxxxxx Xxxxxxxxx, President | ||
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
Schedule
1
Begins on the Following Page
Schedule
1
Amounts
Owed by GMCI to THE COMPANY
PAST
LOANS MADE
PRIOR
TO
THE
EXECUTION OF THIS AGREEMENT
Loan
Document
Ratio/Shares
|
Dated
|
Amount
|
Exchange
|
GMCI-to-Cayman
Preliminary
Funding
Obligation
Memorandum
Number 1 |
November
5, 2005
|
$1,200,000.00
|
$1,200,000.00
=
6,908,108 Shares
$0.1737089
|
GMCI-to-Cayman
Preliminary
Funding
Obligation
Memoranda
Number 2 |
December
23, 2005
|
$500,000.00
|
$500,000.00
=
2,878,378 Shares
$0.1737089
|
GMCI-to-Cayman
Additional
Funding
Obligation
Memoranda
Number 1 |
December
____, 2005
|
$2,000,000.00
|
$2,000,000.00
=
11,513,514 Shares
$0.1737089
|
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
Schedule
2 Begins
on the Following Page
Schedule
2
Amounts
to Be Owed by GMCI to THE COMPANY
FUTURE
LOANS TO BE MADE
SUBSEQUENT
TO
THE
EXECUTION OF THIS AGREEMENT
GMCI-to-Cayman
Additional
Funding
Obligation
Memoranda
Number 2 January __, 2006 |
$_________.00
|
Not
more than 70% of Market Price =
________________
Shares
|
GMCI-to-Cayman
Additional
Funding
Obligation
Memoranda
Number 3, etc March __, 2006 |
$
__________.00
|
Not
more than 70% of Market Price =
________________
Shares
|