Exhibit 10.21
Note Purchase Agreement with Xxxx Xxxxxxx dated June 10, 2003
NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (the "Agreement") is entered into as of June
10, 2003, by and between PetCARE Television Network, Inc., a Florida corporation
(the "Company") and Xxxx Xxxxxxx, an individual residing at 0000 Xxxxxxxxx
Xxxxx, Xxxxxxx Xxx, XX 00000 ("Maltzer").
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Company is issuing that certain Convertible Promissory Note (the
"Note"), attached hereto as Exhibit A, to Maltzer in the principal amount of
$50,000, payable to Maltzer in cash or convertible into equity of the Company in
the manner and under the terms set forth therein; and
WHEREAS, the Company and Maltzer wish to set forth the nature of the
consideration Maltzer is providing to the Company in exchange for the Note and
to acknowledge delivery and receipt thereof.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Maltzer hereby agree as follows:
1. Purchase and Sale of Note. Subject to all of the terms and conditions
of this Agreement and in reliance on the representations and warranties set
forth herein, the Company proposes to sell to Maltzer the Note in exchange for
the consideration described in Section 2 hereof.
2. Consideration for Note. Upon and in exchange for the Company's
issuance of the Note to Maltzer, Maltzer shall deliver to the Company, and by
signing below, the Company hereby accepts and acknowledges receipt of,
immediately available funds in the amount of $50,000.
3. Representations and Warranties.
(a) Company. The Company represents and warrants to Maltzer as
follows:
(i) Organization. The Company and each of its Subsidiaries, if
any, are duly organized and validly existing corporations in
good standing under the laws of the jurisdiction of
incorporation. The Company and each of its Subsidiaries, if
any, is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in
which it does business, except where the failure to so
qualify would not have a material adverse effect. For the
purposes of this Agreement, the term "Subsidiary" shall mean
with respect to any person, any corporation, limited
liability company, partnership, joint venture, trust or
estate of which, or in which, more than 50% of (i) the
issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such
corporation, (ii) the interest in capital or profits of such
limited liability company, partnership or joint venture, or
(iii) the beneficial interest in such trust or estate, is at
the time directly or indirectly owned or controlled by such
person, by such person and one or more of its subsidiaries,
or by one or more of such person's other subsidiaries.
(ii) Corporate Power, Authorization. The Company has all
necessary corporate power and authority to enter into and
perform this Agreement and its obligations under the Note
and to carry on the business now conducted or presently
proposed to be conducted by it. All corporate actions on the
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part of the Company necessary for the due authorization,
execution and delivery of this Agreement and the
consummation of the transactions contemplated herein, and
for the due authorization and issuance of the Note have been
taken. This Agreement and the Note are legally binding on
the Company, enforceable in accordance with their terms. The
execution, delivery and performance by the Company of this
Agreement and the issuance and sale of the Note will not
result in any violation of or be in conflict with, or result
in a breach of or constitute a default under, any term or
provision of the Company's certificate of incorporation,
by-laws or any contract to which the Company is a party or
by which it is bound, except where such violation, conflict,
breach or default would not have a material adverse effect
on the Company.
(iii) No Insolvency. The Company is not insolvent. Insolvent
means any of the following:
A. the Company shall have (a) applied for or consented to
the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of
its property, (b) made a general assignment for the
benefit of its creditors, (c) been dissolved or
liquidated in full or in part, or (d) commenced a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to
any such relief or to the appointment of or taking
possession of its property by any official in an
involuntary case or other proceeding commenced against
it;
B. proceedings for the appointment of a receiver, trustee,
liquidator or custodian of the Company or all or a
substantial part of the property thereof, or an
involuntary case or other proceedings seeking
liquidation, reorganization or other relief with
respect to Company or the debts thereof under any
bankruptcy, insolvency or other similar law now or
hereafter in effect shall have been commenced and such
proceeding shall not have been dismissed, discharged or
stayed; or
C. the Company is unable to pay in full and in a timely
manner of its debts due and payable in the ordinary
course of business.
(iv) Capitalization. The Company has delivered to Maltzer a
schedule (the "Capitalization Schedule") detailing the
capitalization of the Company as of the date hereof. On the
date hereof, the Company has no outstanding capital stock
except as listed on the Capitalization Schedule. All of the
outstanding shares of capital stock have been offered and
sold in compliance with applicable federal and state
securities laws. No Subsidiary has any outstanding capital
stock except for shares of capital stock owned beneficially
and of record by the Company, all of which are duly
authorized, validly issued, fully paid and non-assessable.
Other than as set forth on the Capitalization Schedule,
neither the Company nor any Subsidiary has outstanding (a)
any rights (either preemptive or otherwise) or options to
subscribe for or purchase, or any warrants or other
agreements providing for or requiring the issuance of, any
capital stock or any securities convertible into or
exchangeable for its capital stock, (b) any obligation to
repurchase or otherwise acquire or retire any of its capital
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stock, any securities convertible into or exchangeable for
its capital stock or any rights, options or warrants with
respect thereto, (c) any rights that require it to register
the offering of any of its securities under the Securities
Act of 1933, as amended or (d) any restrictions on voting
any of its securities.
(v) Financial Statements and projections. Maltzer has been
furnished with complete and correct copies of (A) the most
recent financial statements of the Company and its
Subsidiaries, if any, and (B) a Business Plan for the
Company dated March 2003 which includes a five year budget
with supporting schedules, with actual expenditures for the
first twelve months. Except where otherwise noted therein,
the Phase 1 column of actual expenditures accurate report
the expenditures of the Company during the applicable period
and the budgeted projections and supporting schedules are
based on and reflect reasonable assumptions made in good
faith by management of the company.
(vi) Disclosure. To the knowledge of the Company, neither this
Agreement, nor any other agreement, certificate, statement
or document furnished in writing by or on behalf of the
Company to Maltzer in connection herewith or therewith
(including without limitation the Business Plan for the
Company and projections referred to above), contains any
untrue statement of material fact or omits to state a
material fact necessary in order to make the statements
herein or therein not misleading in any material respect.
(vii) Legal Proceedings. There is no action, suit or proceeding
pending or to the Company's knowledge currently threatened
against the Company or any of subsidiaries. Neither the
Company nor any of its subsidiaries is a party or subject to
the provisions of any order, writ, injunction, judgment or
decree of any court or governmental agency or
instrumentality. There is no action suit or proceeding by
the Company or any of its subsidiaries currently pending or
which the Company or its subsidiaries intend to initiate.
(viii) Proprietary Rights. To its knowledge, the Company owns all
patents trademarks, service marks, trade names, copyrights
trade secrets, licenses, information and proprietary rights
and processes which it currently uses or is necessary for
its business without any conflict with, or infringement of
the rights of others. The Company has not received any
communication alleging that the Company has violated or, by
conducting its business, would violate any of the patents,
trademarks, service marks, trade names, copyrights, trade
secrets or other proprietary rights or processes of any
other person or entity.
(ix) Compliance with Other Instruments. (a) To the actual
knowledge of the President of the Company, the Company is
not in any material violation or default of any provisions
of its Amended and Restated Certificate of Incorporation or
Bylaws or of any instrument, judgment, order, writ, decree
or contract to which it is a party or by which it is bound
or, to the actual knowledge of the President of the Company,
of any material provision of federal or state statute, rule
or regulation applicable to the Company. The execution,
delivery and performance of the Agreements and the
consummation of the transactions contemplated hereby or
thereby will not result in any such material violation or
materially conflict with or constitute, with or without the
passage of time and giving of notice, either a material
default under any such provision, instrument, judgment,
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order, writ, decree or contract or an event which results in
the creation of any material lien, charge or encumbrance
upon any assets of the Company other than (i) carriers',
warehousemen's, mechanics', materialmen's and repairmen's
liens, and other like Encumbrances imposed by applicable
law, arising in the ordinary course of business in
connection with activities properly undertaken in the
Company's business; (ii) easements, zoning restrictions,
rights-of-way, reservations, restrictions and other similar
encumbrances on real property imposed by law that do not
secure any monetary obligations and do not materially
detract from the value of the affected property or interfere
with the ordinary conduct of business, (iii) liens, charges
or encumbrances for taxes, assessments or governmental
charges not yet due and payable, (iv) inchoate statutory and
common law liens, charges or encumbrances for which payment
is not delinquent, and (v) minor defects, irregularities,
liens, and clouds on title which do not materially impair or
materially adversely affect the value of the assets,
financial condition, operating results, or business of the
Company (collectively, "Permitted Encumbrances").
(b) To the actual knowledge of the Company's President, the
Company has not performed any act, the occurrence of which
would result in the Company's loss of any material right
granted under any license, distribution agreement or other
agreement.
(x) No Conflict of Interest. Except as set forth on Schedule
3(a)(x), the Company is not indebted, directly or
indirectly, to any of its officers or directors or to their
respective spouses or children, in any amount whatsoever
other than in connection with expenses or advances of
expenses incurred in the ordinary course of business of the
Company or relocation expenses of employees. None of the
Company's officers or directors, or any members of their
immediate families, are, directly or indirectly, indebted to
the Company (other than in connection with purchases of the
Company's capital stock) or have any direct or indirect
ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a
business relationship, or any firm or corporation which
competes with the Company except that officers, directors
and/or stockholders of the Company may own stock in (but not
exceeding five percent (5%) of the outstanding capital stock
of) any publicly traded companies that is affiliated with
the Company, with which the Company has a business
relationship, or which may compete with the Company. To the
actual knowledge of the President of the Company none of the
Company's officers or directors or any members of their
immediate families are, directly or indirectly, interested
in any material contract or proposed contract with the
Company. The Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
(xi) Rights of Registration and Voting Rights. The Company has
not granted or agreed to grant any registration rights,
including piggyback rights, to any person or entity except
set forth on Schedule 3(a)(xi). To the actual knowledge of
the Company's President, no stockholder of the Company has
entered into any agreements with respect to the voting of
capital shares of the Company.
(xii) Title to Property and Assets. The Company owns its property
and assets free and clear of all Encumbrances, except for
(1) Encumbrances that may appear in the Financial
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Statements, or (2) any Permitted Encumbrances. With respect
to the property and assets it leases, the Company is in
material compliance with such leases and, to the actual
knowledge of the Company's President, such leases are valid
and effective in accordance with their respective terms,
except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other
laws and judicial decisions of general application relating
to or affecting enforcement of creditors' rights generally,
by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies
and with respect to indemnification provisions contained
therein, or principles of public policy.
(xiii) Changes. Since December 31, 2002, there has not been:
(a) any material change in the assets, liabilities,
financial condition or operating results of the Company
from that reflected in the Financial Statements, except
changes in the ordinary course of business, that have
not been material and adverse;
(b) any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting the
business, properties, prospects, or financial condition
of the Company;
(c) any waiver or compromise by the Company of a valuable
right or of a material debt owed to it that would have
an adverse affect;
(d) any satisfaction or discharge of any liens, claim, or
encumbrance of payment of any obligation by the
Company, except in the ordinary course of business and
that is not material and adverse to the business,
properties, prospects or financial condition of the
Company;
(e) any material change to a material contract or agreement
by which the Company or any of its assets is bound or
subject;
(f) any material change in any compensation arrangement or
agreement with any employee, officer, director or
stockholder;
(g) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other
intangible assets other than in the ordinary course of
business;
(h) any resignation or termination of employment of any
officer or key employee of the Company; and the
President of the Company has no actual knowledge of any
impending resignation or termination of employment of
any such officer or key employee;
(i) any mortgage, pledge, transfer of a security interest
in, or lien, created by the Company, with respect to
any of its material properties or assets, except liens
for taxes not yet due or payable;
(j) any loans or guarantees made by the Company to or for
the benefit of its employees, officers or directors, or
any members of their immediate families, other than
travel advances and other advances made in the ordinary
course of its business;
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(k) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital
stock; or any direct or indirect redemption, purchase,
or other acquisition of any such stock by the Company;
(l) to the actual knowledge of the officers and directors
of the Company, any other event or condition of any
character that might materially and adversely affect
the business, properties or financial condition of the
Company; or
(m) any arrangement or commitment by the Company to do any
of the things described in this Section 3(a)(xiii).
(xiv) Employee Benefit Plans. Except as set forth on Schedule
3(a)(xiv), the Company does not have any Employee Benefit
Plan as defined in the Employee Retirement Income Security
Act of 1974.
(xv) Tax Returns and Payments. The Company has filed all tax
returns and reports as required by applicable law. These
returns and reports are true and correct in all material
respects. The Company has paid all taxes and other
assessments due except those being contested in good faith.
(xvi) Insurance. The Company has obtained fire and casualty
insurance policies, with extended coverage, sufficient in
amount (subject to reasonable deductibles) to allow it to
replace any of its properties material to its business that
might be damaged or destroyed.
(xvii) Labor Agreements and Actions. Except for a contract with
the screen actors guild/AFTRA, the Company is not bound by
or subject to (and none of its assets or properties is bound
by or subject to) any written or oral, express or implied,
contract, commitment or arrangement with any labor union,
and no labor union has requested or, to the actual knowledge
of the President of the Company, has sought to represent any
of the employees, representatives or agents of the Company.
There is no strike or other labor dispute involving the
Company pending, or to the actual knowledge of the Company's
President threatened, which could have a material adverse
effect on the assets, properties, financial condition,
operating results, or business of the Company, nor does the
President of the Company have actual knowledge of any labor
organization activity involving its employees. The
employment of each officer and employee of the Company is
terminable at the will of the Company. To the actual
knowledge of the President of the Company, the Company has
complied in all material respects with all applicable state
and federal equal employment opportunity laws and with other
laws related to employment.
(xviii) Permits. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct
of its business, the lack of which could materially and
adversely affect the business, properties, prospects, or
financial condition of the Company. The Company is not in
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default in any material respect under any of such
franchises, permits, licenses or other similar authority
that would materially and adversely affect the Company's
business.
(b) Maltzer.
(i) Maltzer represents and warrants to the Company that he is
acquiring this Note and the underlying securities for his
own account for investment only and not with a view to
distribution or resale of the Note or underlying securities.
Maltzer represents that he is an "accredited investor" as
such term is defined in Rule 501 under the Act. Maltzer
understands that the Note and the underlying securities are
being issued to him pursuant to an exemption from the
registration requirements of the Act and, accordingly, must
be held indefinitely by Maltzer unless later transferred in
transactions that are either registered under the Act or
exempt from registration.
(ii) Maltzer represents and warrants to the Company that he has
such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks
of an investment in the Note and the underlying securities
and that he is able to incur a complete loss of his
investment and to bear the risk of such a loss for an
indefinite period of time. Maltzer understands that the Note
and any securities acquired upon conversion are a risky and
speculative investment.
4. Financial Information. For so long as the obligations under the Note are
outstanding and for so long as Maltzer holds an equity interest in the Company,
the Company shall deliver to Maltzer within fifty (50) days of the end of each
of the Company's fiscal quarters and one hundred and five (105) days from the
end of the Company's fiscal year, the Company's balance sheet and income
statement ("Financial Statements") for the most recent quarter or year as the
case may be, together with the related statements of income and cash flow, and
an updated Capitalization Schedule, which Financial Statements shall be prepared
in accordance with United States Generally Accepted Accounting Principles
consistently applied.
5. Covenants of the Company. The Company covenants that from and after the
date hereof and for so long as the Note is outstanding:
(a) Dividends and Distributions. The Company shall not, and shall cause
each of its Subsidiaries not to, directly or indirectly, (i) declare
or pay any dividend or make any distribution in cash or property to
holders of Capital Stock of the Company or any Subsidiary of the
Company or (ii) purchase, redeem or otherwise acquire or retire for
value (other than through the issuance solely of Capital Stock of the
Company) any Capital Stock or warrants, rights or options to acquire
Capital Stock of the Company or any securities exchangeable for or
convertible into any such shares or permit any Subsidiary to purchase,
redeem or otherwise acquire or retire for value any Capital Stock of
the Company or any Subsidiary or any such warrant, rights or options
on convertible securities.
(b) Compliance with Laws. The Company will, and will cause each of its
Subsidiaries to, comply with all applicable Laws with respect to the
conduct of its business and the ownership of its properties, including
without limitation, compliance with the reporting requirements of all
applicable securities Laws; provided that the Company shall not be
deemed to be in violation of this Section 6(c) as a result of any
failure to comply with any provisions of any such Laws, the
noncompliance with which would not, individually or in the aggregate,
have or reasonably be expected to have a Material Adverse Effect or
have a materially adverse effect on the ability of the holder of any
Securities to sell such Securities.
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(c) Limitation of Agreements. The Company will not, and will not permit
any Subsidiary to, enter into any Contract, or any amendment,
modification, extension or supplement to any existing Contract, which
contractually prohibits the Company from paying interest on, or
principal of, the Note or effecting the conversion of the Note.
(d) Preservation of Franchises and Existence. The Company will maintain
and cause each Subsidiary to maintain its corporate existence, rights
and franchises in full force and effect, provided that nothing in this
Section 6(e) shall prevent the Company or any Subsidiary from
discontinuing its operations in any particular state or at any
particular location or locations within the state, or prevent the
corporate existence, rights and franchises of any Subsidiary from
being terminated if, in the opinion of the Board of Directors of the
Company, the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries taken as a
whole.
(e) Payment of Taxes and Other Charges. The Company will pay or discharge,
and will cause each Subsidiary to pay or discharge, before the same
shall become delinquent, (i) all Taxes imposed upon it or any of its
properties or income, and (ii) all claims of material men, mechanics,
landlords and other like Persons which, in the case of either clause
(i) or clause (ii), if unpaid, might result in the creation of a
material lien upon any of its properties, provided, however, that the
Company shall not be required to pay or discharge or cause to be paid
or discharged any such Tax or claim whose amount, applicability or
validity is being contested in good faith pursuant to appropriate
proceedings.
(f) Lost, Stolen, Damaged and Destroyed Securities. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any certificate representing shares of
Common Stock or a Note and in the case of loss, theft or destruction,
upon delivery of an indemnity satisfactory to the Company (which, in
the case of Maltzer, may be an undertaking by Maltzer to so indemnify
the Company and which, in the case of any Person other than Maltzer,
shall be delivery of an indemnity bond), or, in the case of
mutilation, upon surrender and cancellation thereof, the Company will
issue a new share certificate of like tenor for a number of shares of
Common Stock equal to the number of shares of such stock represented
by the certificate lost, stolen, destroyed or mutilated, or a new Note
of like tenor in an amount equal to the amount of such Note lost,
stolen, destroyed or mutilated.
(g) Transactions with Affiliates. The Company will not, and will not
permit any Subsidiary to, engage in any transaction or group of
related transactions (including, without limitation, the purchase,
lease, sale or exchange of properties of any kind or the rendering of
any service) with any of its Affiliates (other than the Company) or
Associates, except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business
and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than would be obtainable in a comparable arm's-length
transaction with a person not an Affiliate or Associate and except
that the Company may issue stock options pursuant to its employee
benefit plans, provided that award must be approved by a compensation
committee made up of non-executive board members, and the exercise
price on any option granted cannot be less than Maltzer's then
effective conversion price as defined in the Note.
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(h) Notice of Breach. As promptly as practicable, and in any event not
later than five Business Days after senior management of the Company
becomes aware thereof, the Company shall provide Maltzer with written
notice of any breach by the Company of any provision of this
Agreement, including, without limitation, this Article 6, specifying
the nature of such breach and any actions proposed to be taken by the
Company to cure such breach.
(i) Reporting Company. The Company shall immediately take all necessary
steps, including but not limited to auditing the Company's financial
records for the previous two fiscal years, to become a reporting
company pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended.
(j) Directors' Indemnification; Insurance.
(i) The Company does not have directors' and officers' liability
insurance, however, the Company intends on obtaining and
maintaining directors' and officers' liability insurance in the
near future, and Maltzer shall be covered under such insurance.
(ii) The Certificate of Incorporation, By-laws and other
organizational documents of the Company shall at all times, to
the fullest extent permitted by law, provide for indemnification
of, advancement of expenses to, and limitation of the personal
liability of, the members of the Board of Directors of the
Company. Such provisions may not be amended, repealed or
otherwise modified in any manner adverse to any member of the
Board of Directors of the Company until at least six years
following the date that Maltzer is no longer a member of the
Board of Directors of the Company.
(iii) Maltzer is intended to be a third-party beneficiary of the
obligations of the Company pursuant to this Section 6(n), and the
obligations of the Company pursuant to this Section 6(n) shall be
enforceable by Maltzer.
(k) Merger, Etc. The Company will not merge with or into or consolidate
with, or sell all or substantially all of its assets to, any other
Person unless (i) the surviving entity shall have assumed in writing
all of the obligations of the Company under each of the documents that
are part of this transaction, and (ii) immediately after the
consummation of such merger or consolidation the surviving entity
would not be in violation of any of the provisions applicable to the
Company contained in any of the Transaction Documents.
6. Notices. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
sent via facsimile or overnight or second day delivery service, to the
respective addresses and/or facsimile numbers of the parties as set forth below:
If to the Company: PetCARE Television Network, Inc.
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0
Xxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxx, President and CEO
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
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If to Maltzer: Xx. Xxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxx, XX 00000
Facsimile No.: (000) 000-0000
Any party hereto may by notice so given change its address for future notice
hereunder. Notice shall conclusively be deemed to have been given upon confirmed
receipt of delivery.
7. Successors and Assigns; Assignment. The terms and conditions of the Note and
this Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and permitted assigns of the
parties. Neither party hereto may assign any of its rights or obligations
hereunder without the prior written consent of the other party; provided,
however, Maltzer may assign his rights and obligations hereunder to any
Permitted Transferee (as defined in the Note).
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without reference to conflict
of laws principles.
9. Headings. The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
10. Further Assurances. The Company will take such further action, and will
execute and
deliver to Maltzer all such further financing statements, certificates, and
other documents as Maltzer may reasonably request from time to time in order to
give full effect to this Agreement and to secure the rights of Maltzer
hereunder.
11. Entire Agreement. This Agreement and the Note of even date herewith, are
acknowledged by Maltzer and the Company to constitute the entire agreement of
the parties with respect to the subject matter hereof and thereof and supersede
all prior and contemporaneous understandings, whether written or oral.
12. Media Releases. All media releases and public announcements or disclosures
by either party relating to this Agreement and the Note or the business
relationship between the parties contemplated by those documents shall be
coordinated with and approved by the other party in writing prior to the release
thereof.
13. Jurisdiction. The Company consents to and agrees that it is subject to the
jurisdiction of the Courts in the California and Florida with respect to any
litigation in connection with this Agreement. The Company will also reimburse
Maltzer for any legal fees it incurred in enforcing his rights under this
Agreement.
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IN WITNESS WHEREOF, the Company and Maltzer have caused this Agreement to
be executed as of the date first set forth above.
PETCARE TELEVISION NETWORK, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx, President and CEO
XXXX XXXXXXX
By: /s/ Xxxx Xxxxxxx
--------------------------------
Xxxx Xxxxxxx, an individual
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SCHEDULE 3(a)(iv)
CAPITALIZATION SCHEDULE,
SECURITIES SUBJECT TO REGISTRATION, AND
RESTRICTIONS ON VOTING OF SECURITIES
------------------------------------
Capital Stock Structure:
------------------------
Common Stock: 50,000,000 shares authorized
11,836,000 shares issued and outstanding
Preferred Stock: 10,000,000 shares authorized
Series A: 1,500,000 shares authorized
Series A: 101,250 shares issued and outstanding (1)(2)
(1) These shares are automatically convertible into the Company's Common
Stock ten (10) days after the Company's Common Stock begins to be
quoted. To determine the number of shares of Common Stock which will
be issued in exchanged for the Series A Preferred Stock upon
conversion, take the price per share of the Series A Preferred ($2.00)
and divide it by 50% of the average closing price as reported for the
five trading days preceding the date of conversion, or $2.00,
whichever is less. Prior to the Company's Common Stock being traded,
the holders of the Series A Preferred Stock will not be able to
convert into shares of Common Stock.
(2) The Reserved Shares issuable upon conversion of the Series A Preferred
Stock are covered under a Registration Rights Agreement.
Securities Subject to Registration Rights:
------------------------------------------
a) See (1) and (2) above.
b) Promissory Note dated May 16, 2002 for $100,000 to Xxxxx Xxxxxxx with
accompanying Registration Rights Agreement for 2,355,158 shares. Of
these shares, Xx. Xxxxxxx retains ownership of 2,300,000 as the others
were gifted and transferred.
c) Promissory Note dated June 5, 2002 for $5,000 to Xxxxxx and Xxxxx
Xxxxxx with accompanying Registration Rights Agreement for 5,000
shares of Common Stock.
d) Promissory Note dated June 7, 2002 for $25,000 to Xxxxxx X. Xxxx with
accompanying Registration Rights Agreement for 573,395 shares of
Common Stock.
e) Senior Convertible Promissory Note dated March 10, 2003 for $1,000,000
to Edge Pet, LLC and Senior Convertible Promissory Note dated May 29,
2003 for $50,000 to Edge Pet, LLC with accompanying Registration
Rights Agreements for 4,268,293 shares of Common Stock.
Restrictions on Voting of Securities:
-------------------------------------
Series A Preferred Shares: Until or unless the Series A Preferred Stock is
converted into Common Stock as set forth above, no holder of the Series A
Preferred Stock shall have any voting rights except as may be required under
Florida law in certain instances or as set forth in the Certificate of
Designation, Preferences, Rights and Limitations of Series A Convertible
Preferred Stock No Par Value of PetCARE Television Network, Inc.
12
SCHEDULE 3(a)(x)
CONFLICTS OF INTEREST
---------------------
Company's Indebtedness to Officers and Directors:
-------------------------------------------------
1) Xxxxx Xxxxxxx - $207,400 as of February 28, 2003, plus interest (under
promissory notes)
2) Xxxxxx Xxxx - $25,000 as of February 28, 2003, plus interest (under
promissory note)
3) See Edge Pet Note(s) referenced above. Xxxx Xxxxxxxxx is the managing
partner of Edge Pet and also a director of the Company.
Indebtedness to the Company by Officers and Directors:
------------------------------------------------------
None.
13
SCHEDULE 3(a)(xi)
RIGHTS OF REGISTRATION AND VOTING RIGHTS
----------------------------------------
See Capitalization Schedule for shares subject to Registration Rights.
14
SCHEDULE 3(a)(xiv)
EMPLOYEE BENEFITS PLAN
SAVAGE MOJO, INC. 2002 EQUITY INCENTIVE PLAN -
Stock option plan for key employees covering 2,000,000 shares.
15
