Document:

exh_101.htm

Exhibit 10.1

 

PURCHASE AND SALE AGREEMENT

THIS AGREEMENT is made and entered into as of the 14th day of July, 2014 (“Effective Date”), by and between NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION, a Delaware corporation (“Purchaser”) and GLENWILLOW HOLDINGS LLC, an Ohio limited liability company (“Seller”).  In consideration of the mutual covenants and promises herein set forth, the parties agree as follows:

	
I.

	
Sale and Purchase.  Seller agrees to sell and convey unto Purchaser, and Purchaser agrees to purchase and accept from Seller, for the price and subject to the terms, covenants, conditions, and provisions herein set forth, the following:

 

	
  

	
A.

	
All right, title, and interest of Seller in and to the land in Cuyahoga County, Ohio, commonly known as 23900-23920 Mercantile Road, Beachwood, Ohio (PPN 742-24-009) and being described on Exhibit “A” attached hereto (the “Land”), together with all improvements thereon including an approximately 12,318 square foot office/warehouse building (the “Improvements”);

 

	
  

	
B.

	
All right, title, and interest, if any, of Seller, in and to (i) any land lying in the bed of any street, road, or access way, opened or proposed, in front of, at a side of, or adjoining the Land or the Improvements to the centerline thereof; (ii) all reversions, remainders, appurtenances, licenses, tenements and hereditaments appertaining to, or otherwise benefiting or used in the operation of the Land or the Improvements; and (iii) any and all water, water rights or similar rights or privileges (including tap rights) appurtenant to or used on connection with the ownership or operation of the Land or the Improvements (the “Property Rights”);

 

	
  

	
C.

	
All right, title, and interest, if any, of Seller, in and to assignable guaranties, warranties and other intangible property related to the Land and the Improvements (the “Intangible Property”);

 

	
  

	
D.

	
All right, title, and interest, if any, of Seller, in and to assignable licenses and permits related to the Land and the Improvements (the “Permits and Licenses”);

 

	
  

	
E.

	
All right, title, and interest, if any, of Seller, in and to fixtures located in the Improvements and used in the operation or maintenance of the Land and Improvements, including, without limitation, the heating, plumbing, sprinkling, electrical, air conditioning and ventilation systems (the “Fixtures”);

 

	
  

	
F.

	
To the extent in Seller’s possession, non-proprietary records of Seller used or useful in connection with the operation of the Land and Improvements, including all records regarding management and leasing, real estate taxes and assessments, insurance, tenants, maintenance, repairs, capital improvements and services (the “Records”); and

 

  

  

  

	
  

	
G.

	
To the extent in Seller’s possession, plans and specifications prepared in connection with the Improvements and the Fixtures (the “Plans”).

 

The items described in (a) through (g) of this Section 1 are hereinafter collectively referred to as the “Property.”

	
II.

	
Purchase Price; Terms of Payment.  The purchase price (the “Purchase Price”) to be paid by Purchaser to Seller for the Property is One Million One Hundred Thousand and 00/100 Dollars ($1,100,000.00).  The Purchase Price, subject to prorations and adjustments as hereinafter set forth, shall be paid by Purchaser at Closing in cash by wire transfer.  The Deposit (as described below) shall be part of said funds and credited against the Purchase Price for the Property.

 

	
III.

	
Deposit.  To secure the performance of Purchaser of its obligations under this Agreement, Purchaser shall within two (2) business days of the Effective Date deliver to Precision Title Agency, Inc. as agent (the “Escrow Agent”), the sum of Fifteen Thousand and 00/100 Dollars ($15,000.00) (the “Deposit”) by check or wire transfer, the proceeds of which shall be held as an earnest money deposit.  At the request of Purchaser, Escrow Agent shall invest the Deposit in an interest-bearing account approved by Purchaser.  Any reference to the Deposit shall include any interest accrued or earned thereon.  The Deposit shall be paid to Seller, with credit to Purchaser, at the time the Deposit is released by Escrow Agent at Closing (defined below), if any.  In the event the sale does not close, the Deposit shall be delivered to the party entitled thereto pursuant to this Agreement, and if this Agreement does not so specify, then the Deposit shall be delivered to Seller.

 

	
IV.

	
Submittals for Approval.  Seller agrees, on or before the Effective Date or within three (3) business days after the Effective Date, to furnish to Purchaser for Purchaser’s review and approval, to the extent in Seller’s possession, copies of the following items (collectively, the “Due Diligence Materials”):

 

	
  

	
A.

	
Any Records.

 

	
  

	
B.

	
Any Permits and Licenses.

 

	
  

	
C.

	
Any Plans.

 

	
  

	
D.

	
Copies of all real property taxes and assessments statements for the years 2012, 2013 and 2014, and any information relating to proposed or pending assessments with respect to the Property.

 

	
  

	
E.

	
Any certificates of occupancy (“Certificates of Occupancy”) with respect to the Property.

 

	
  

	
F.

	
Certificates of insurance with respect to the Property.

 

	
  

	
G.

	
Any information relating to the soil and subsurface conditions of the Property and other environmental reports relating to the Property.

 

  

  

  

	
  

	
H.

	
Any boundary or as-built surveys, and any engineering, property inspection, geotechnical or other reports with respect to the Property.

 

	
  

	
I.

	
Any guaranties and warranties with respect to the Property, any equipment used in the operation or maintenance of the Property, or any work performed with respect to the Property.

 

	
  

	
J.

	
Any information regarding income and expenses for the years 2012, 2013 and 2014 year-to-date.

 

	
  

	
K.

	
Any appraisals or market studies for the Property.

 

	
V.

	
Title.  Purchaser shall have the right to obtain a title commitment (the “Commitment”) for an ALTA owner’s title insurance policy (the “Title Policy”) from a title insurance company acceptable to Purchaser in Purchaser’s sole discretion (the “Title Company”) in favor of Purchaser in the amount of the Purchase Price.  The Commitment shall show Seller to be vested with fee simple title to the Land, subject to the exceptions stated in the Commitment.  If Purchaser finds title to be unacceptable in Purchaser’s sole discretion, Purchaser shall, prior to the expiration of the Inspection Period (as hereinafter defined), notify Seller in writing of the defect(s), provided that if Purchaser fails to give Seller written notice of defect(s) before the expiration of Inspection Period, the matters shown in the Commitment shall be deemed to be waived as title objections.  Seller agrees to remove by payment, bonding, or otherwise, any lien or encumbrance in a liquidated amount against the Property which was created by Seller and which is removable by the payment of money or the posting of a bond.  If Purchaser has given Seller timely written notice of defect(s) (i.e., before the expiration of the Inspection Period), Seller shall have the option (but not the obligation except as otherwise provided above) to cure (or cause the Title Company to insure over) any such title defect(s) noted by Purchaser within thirty (30) days of Purchaser’s written notice.  In the event that Seller is unable or unwilling (in Seller’s sole discretion) to cure such title defect(s) (or cause the Title Company to insure over), then Purchaser shall have the option of either: (a) closing and accepting the title “as is,” without reduction in the Purchase Price and without claim against Seller therefor; or (b) canceling this Agreement, in which event the Escrow Agent shall return the Deposit and all interest earned thereon to Purchaser, whereupon both parties shall be released from all further obligations under this Agreement (except those provisions hereof which by their terms expressly survive the Closing and any cancellation or termination of this Agreement).  Any title matters to which Purchaser does not object or which Purchaser elects to take title subject to at Closing shall be defined as “Permitted Exceptions”.  In addition to the foregoing, (i) non-delinquent liens for real estate taxes and assessments, (ii) any exceptions or matters of record (not objected to or accepted as provided above), (iii) zoning and building ordinances, (iv) items which would be discovered by an accurate survey of the Property, and (v) any exceptions or matters created by Purchaser or Purchaser’s agents shall be considered Permitted Exceptions.

 

	
VI.

	
Survey.  Purchaser shall have the right to obtain an as-built survey of the Property (the “Survey”) surveyed and certified to Purchaser, Seller and Title Company by a registered land surveyor, and acceptable in form and content to Purchaser and the Title Company.  If 

 

  

  

  

	
 

	
the Survey reveals encroachments on the Property, or shows that the Improvements encroach on setback lines, easements, lands of others, or violate any restrictions, covenants, or applicable governmental regulations, or shows other items not acceptable to Purchaser in its sole discretion, the same shall be treated as a title defect pursuant to Section 5 above. If Purchaser has given Seller timely written notice of defect(s) (i.e., before the expiration of the Inspection Period), Seller shall have the option (but not the obligation) to cure (or cause the Title Company to insure over) any such defects noted by Purchaser within thirty (30) days of Purchaser’s written notice. In the event that Seller is unable or unwilling (in Seller’s sole discretion) to cure such defect(s) (or cause the Title Company to insure over), then Purchaser shall have the right to close this transaction and accept title and survey matters “as is” or cancel this Agreement all as provided in Section 5 above.

 

	
VII.

	
Inspection Period.  Purchaser shall have forty-five (45) days following the Effective Date (as the same may be extended pursuant to the terms of this Section, the “Inspection Period”), to make such physical, zoning, and other examinations, inspections, and investigations of the Property and of the books, records, and leasing of the Property that Purchaser, in Purchaser’s sole discretion, may elect to make.  Purchaser shall provide at least two (2) days prior written notice to Seller of any entry upon the Land and/or Improvements for the purpose of inspecting the Property and/or records relating thereto.  Purchaser shall conduct such entry and any inspections so as to minimize interference with any occupant’s business and otherwise in a manner reasonably acceptable to Seller.  Purchaser shall obtain Seller’s prior written consent to any proposed tests (including the identity of the company or persons who will perform such testing and the proposed scope of the testing) of any invasive nature or which could damage the Property.  Purchaser shall bear the cost of all inspections and tests.  Purchaser acknowledges that all entry onto the Property shall be at Purchaser’s sole risk, and subject to the rights of any occupants of the Property.  During the Inspection Period, Seller shall cooperate with Purchaser in coordinating the review and inspection of the Due Diligence Materials as well as the Property by Purchaser and its third-party contractors.  Purchaser shall have the one-time right to extend the Inspection Period for an additional fifteen (15) days by giving Seller written notice of such extension prior to the expiration of the initial Inspection Period.

 

	
VIII.

	
Inspection Obligations.  Purchaser and its agents and representatives shall:

 

	
  

	
A.

	
Repair any damage to the Property caused by Purchaser’s inspections or testing;

 

	
  

	
B.

	
Promptly pay when due the costs of all tests, investigations, and examinations done with regard to the Property pursuant to Purchaser’s authorization;

 

	
  

	
C.

	
Not permit any liens to attach to the Property by reason of the exercise of its rights hereunder;

 

	
  

	
D.

	
Maintain, or cause to be maintained by Purchaser’s agents, commercial general liability insurance, including broad form property damage, with limits of not less than $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate in form and substance adequate to insure against all liability of Purchaser and/or

 

  

  

  

	
  

	
 

	
Purchaser’s agents, arising out of any entry or inspections of the Property pursuant to the provisions hereof, and Purchaser shall provide Seller with evidence of such insurance coverage before any such entry; and

 

	
  

	
E.

	
Indemnify Seller against all losses, costs, damages and expenses including reasonable attorneys’ fees arising out of Purchaser’s inspections and tests, including, without limitation, any liens upon the Property due to such inspections or tests; provided, however, that in no event shall Purchaser have any liability whatsoever arising by reason of pre-existing conditions merely discovered by Purchaser as a result its investigations.

 

	
IX.

	
Right of Termination.  If Purchaser’s inspection of the Property reflects that the Property is unsuitable under Purchaser’s investment criteria for any reason, Purchaser shall be entitled to terminate this Agreement by delivering a notice of termination to Seller no later than three (3) business days after the expiration of the Inspection Period.  In the event of such termination, (a) all Due Diligence Items shall be returned to Seller, and (b) Purchaser shall deliver to Seller a statement that all work ordered by or on behalf of Purchaser which could give rise to a claim against the Property has been paid in full.  The obligation to deliver these items shall survive the Closing and any cancellation or termination of this Agreement.  Upon Seller’s receipt of such deliveries, the Deposit shall be returned to Purchaser and neither party shall have further rights hereunder, except those provisions hereof which by their terms expressly survive the Closing and any cancellation or termination of this Agreement.

 

	
X.

	
Seller’s Representations and Warranties.  Seller represents and warrants to Purchaser as follows, as of the Effective Date:

 

	
  

	
A.

	
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Ohio.  Seller has full power and authority to enter into this Agreement and to perform all its obligations hereunder.  This Agreement is binding on Seller and enforceable against Seller in accordance with its terms.  No consent of any other person or entity to such execution, delivery, and performance is required.

 

	
  

	
B.

	
There are no service, supply or maintenance contracts or other contracts or agreements which would affect the Property after Closing.

 

	
  

	
C.

	
Seller is not a “foreign person” within the meaning of the United States tax laws and to which reference is made in Internal Revenue Code Section 1445(b)(2).  At Closing, Seller shall deliver to Purchaser a certificate to such effect.

 

	
  

	
D.

	
Seller has not received notice of violations from any municipal, county, federal, or state governmental agency or any insurance company or affiliate thereof with regard to violations of any rules, ordinances, orders, requirements, or regulations imposed on or affecting the Property.  Seller shall promptly deliver to Purchaser any such notices received by Seller during the term of this Agreement.

 

  

  

  

	
  

	
E.

	
There is no pending or, to Seller’s actual knowledge, threatened action, suit, or proceeding before any court, governmental agency, or body, which would adversely affect the Property or Seller’s ability to perform under this Agreement.  There are no condemnation or eminent domain proceedings pending or, to Seller’s actual knowledge, threatened with respect to the Property.

 

	
  

	
F.

	
There is one (1) tenant lease currently in effect with respect to the Property, but Seller will cause such lease to be terminated prior to Closing.

 

	
  

	
G.

	
To Seller’s actual knowledge, the Due Diligence Materials delivered to Purchaser by Seller or made available to Purchaser by Seller are accurate in all material respects.

 

	
  

	
H.

	
To Seller’s actual knowledge, neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated herein will conflict with or result in a breach of any contract, license, or undertaking to which Seller is a party or by which any of its property is bound, or constitute a default thereunder or result in the creation of any lien or encumbrance upon the Property.

 

	
  

	
I.

	
To Seller’s actual knowledge, Seller has received no notice of any pending governmental assessments (i.e., governmental assessments which have not yet been levied and do not yet constitute a lien against the Property) with respect to the Property.  To Seller’s actual knowledge, no ordinance or hearing is now before any local governmental body which either contemplates or authorizes any public improvements, the cost of which may be assessed against the Property.

 

	
  

	
J.

	
To Seller’s actual knowledge, no toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyl, petroleum products including gasoline, fuel oil, crude oil and various constituents of such products, and any hazardous substance as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 9601-9657, as amended) have been generated, treated, stored, released or disposed of, or otherwise placed, deposited in or located on the Property in violation of applicable laws.  To Seller’s actual knowledge, no above ground or underground tanks, wells or septic systems are located in or about the Property.

 

	
  

	
K.

	
No management agents or other personnel employed in connection with the operation of the Property have the right to continue such employment after the Closing date.  There are no claims for brokerage commission or other payments with respect to the Property (but excluding with respect to this Agreement) that will survive and remain unpaid after the Closing Date.

 

	
  

	
L.

	
The Property is not currently occupied by Seller, its employees, agents or any tenants or other third party, except for the storage of personal property and inventory, which Seller shall cause to be removed prior to Closing.

 

  

  

  

All representations and warranties of Seller are subject to any contrary facts or information set forth in the Due Diligence Materials provided to Purchaser.

 

Seller agrees to promptly notify Purchaser upon discovery by Seller that any of the above representations and warranties are incomplete or become untrue prior to Closing.  Unless otherwise expressly stated in this Agreement, each of the covenants, obligations, representations, warranties and agreements contained in this Agreement shall survive Closing for a period of six (6) months after Closing and shall not be merged in the execution and delivery of the Deed (as defined below) and other documents of conveyance executed hereunder.

 

Except as set forth in this Agreement to the contrary, Purchaser is purchasing the Property on an AS-IS, WHERE IS basis, without any representations or warranties from Seller.

 

	
XI.

	
Purchaser’s Representations.  Purchaser represents to Seller that (a) Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware; (b) the execution, delivery, and performance of this Agreement by Purchaser have been duly authorized, and this Agreement is binding on Purchaser and enforceable against Purchaser in accordance with its terms; (c) no consent of any other person or entity to such execution, delivery, and performance is required, and (d) there is not now pending or threatened any action, suit or proceeding before any court, governmental agency, or body which might result in any adverse change in the financial condition of Purchaser which would adversely affect Purchaser’s ability to perform under this Agreement.

 

Purchaser agrees to promptly notify Seller upon discovery by Purchaser that any of the above representations and warranties are incomplete or untrue prior to Closing.  Unless otherwise expressly stated in this Agreement, each of the covenants, obligations, representations, warranties and agreements contained in this Agreement shall survive for a period of six (6) months after Closing and shall not be merged in the execution and delivery of the Deed and other documents of conveyance executed hereunder.

 

	
XII.

	
Operation of the Property.  During the pendency of this Agreement, Seller shall carry on its business and activities relating to the Property substantially in the same manner as it did before the Effective Date; provided that Seller shall not be obligated to make any extraordinary repairs or make any capital improvements to the Property, provided, however, that Seller shall advise Purchaser in writing of the necessity for any such extraordinary repairs or capital improvements.  Seller shall not make any structural changes to the Improvements or other changes of a material nature prior to Closing without Purchaser’s consent, except in the case of an emergency.  Through the Closing Date, Seller shall maintain or cause to be maintained, at Seller’s sole cost and expense, Seller’s existing policy or policies of insurance insuring the Property.  Seller shall not enter into any new leases of the Property without the prior written consent of Purchaser.  In addition, Seller shall not enter into any new contracts with respect to the Property without the prior written consent of Purchaser, to the extent that any such new contract is for a term that extends past the Closing Date.  Seller shall be responsible for and shall promptly pay all amounts owed for labor and services rendered, and materials supplied,

 

  

  

  

	
 

	
to the Property prior to the Closing Date (excluding labor and materials supplied at the direction of Purchaser).

 

	
XIII.

	
Default Provisions.

 

	
  

	
A.

	
In the event of a default by Purchaser under this Agreement resulting from Purchaser’s failure to close in accordance with the terms and provisions of this Agreement, without default on Seller’s part, Seller shall receive the Deposit as Seller’s sole and exclusive remedy and as agreed and liquidated damages, whereupon the parties shall be relieved of all further obligations hereunder (except those provisions hereof which by their terms expressly survive the Closing and any cancellation or termination of this Agreement).  Purchaser and Seller acknowledge and agree that, in such event, actual damages are difficult or impossible to ascertain and the Deposit is a fair and reasonable estimation of the damages of Seller.

 

	
  

	
B.

	
In the event of a default by Seller under this Agreement, without any defaults of Purchaser, and such default continues for three (3) business days after notice from Purchaser to Seller, Purchaser at its option shall have the right to:  (i) receive the return of the Deposit, whereupon this Agreement shall terminate and the parties shall be released from all further obligations hereunder (except those provisions hereof which by their terms expressly survive the Closing and any cancellation or termination of this Agreement), (ii) bring suit for damages for breach of this Agreement, and/or (iii) seek specific performance of the Seller’s obligations hereunder, in which action Seller shall have the right to recover damages suffered by Seller by reason of the delay or of omission in the acquisition of the Property.

 

	
XIV.

	
Prorations, Deposits.

 

	
  

	
A.

	
Real estate taxes due and payable in the year of Closing, items of income and expense, and all other proratable items shall be prorated as of the Closing Date.  Water, sewer, electricity, fuel, and other utility charges will be apportioned based upon meter readings taken as of the Closing Date, but Purchaser and Seller agree to pay their respective shares of all utility bills received subsequent to Closing, prorated as of the day after Closing.  In the event the real estate taxes due and payable in the year of Closing are unknown, the tax proration will be based upon the taxes for the prior year, and at the request of either party, the taxes due and payable in the year of Closing shall be reprorated and adjusted when the tax bill for such year is received and the actual amount of taxes is known.  Purchaser shall be responsible for making any deposits required with utility companies.  The provisions of this Section 14 shall survive the Closing.

 

	
  

	
B.

	
All other operating costs of the Property (properly taking into account whether or not Seller has actually paid such operating costs) or such amounts to be prorated under this Agreement will be allocated between the Seller and Purchaser as of the Closing Date, so that Seller pays that part of such amount attributable to the period before the Closing Date and Purchaser pays that part of such amount attributable to the

 

  

  

  

	
  

	
 

	
period before the Closing Date and Purchaser pays that part of such amount attributable to the period from and after the Closing Date.

 

	
  

	
C.

	
In the event final prorations cannot be made on the Closing Date, or if any of the aforesaid prorations were calculated inaccurately, then Seller and Purchaser agree to allocate such items on a fair and equitable basis as soon as reasonably possible after the Closing Date.  Payments in connection with the final adjustment shall be due within thirty (30) days of written notice.

 

	
XV.

	
Closing Costs.  At Closing, Seller shall pay (i) the cost of the real estate excise tax, documentary stamp taxes or other tax on the deed and all sales tax in connection with the sale, (ii) the title examination fees and costs of copies of all title documents necessary for the examination of title, and (iii) the recording costs of any documents necessary to clear title in accordance with Sections 5 and 6.  Purchaser shall pay (a) the costs associated with the recording of the deed, (b) the costs of the Survey, and (c) any costs related to Purchaser’s mortgage or lender’s title policy.  Seller and Purchaser shall each pay one-half of the escrow fees for closing this transaction and one-half the title insurance premium for the owner’s Title Policy in the amount of the Purchase Price; however, Purchaser shall pay for any endorsements Purchaser elects to obtain.  Seller and Purchaser shall each bear its own attorneys’ fees in connection with the preparation of this Agreement and the Closing documents.  Other costs, charges, and expenses shall be borne and paid as provided in this Agreement, or in the absence of such provision, in accordance with local custom.

 

	
XVI.

	
Conditions to Closing.

 

	
  

	
A.

	
The Closing of the transaction contemplated by this Agreement and the obligations of Seller to sell the Property and Purchaser to purchase the Property shall be subject to the following conditions:

 

	
  

	
1.

	
The representations and warranties heretofore made by Seller and Purchaser in this Agreement shall be correct in all material respects as of the Closing Date with the same force and effect as if such representations and warranties had been made at the Closing Date.

 

	
  

	
2.

	
Seller and Purchaser shall have satisfactorily complied with the terms and conditions of this Agreement and executed and delivered the documents referred to in Section 17, below.

 

	
  

	
3.

	
No material new title exceptions shall have arisen that did not appear in the Commitment prior to expiration of the Inspection Period.

 

	
  

	
4.

	
There shall have been no material and adverse change to the physical condition of the Property from the condition existing on the last day of the Inspection Period (and for purposes of this Section 16(a), the threshold for a “material and adverse change” shall mean a physical change resulting in diminution of the fair market value of the Property in excess of $50,000.00

 

  

  

  

	
  

	
 

	
that is not covered by insurance proceeds assignable to Purchaser at Closing).

 

	
  

	
B.

	
So long as such party is not in default hereunder, beyond any applicable notice and cure period, if any of the above-described items are not satisfied on or before the Closing Date, then such party may, at its option, notify the other party of the failure of said condition, and in such event the Escrow Agent shall return the Deposit to Purchaser (unless Purchaser shall be in default hereunder), this Agreement shall become null and void, and neither party shall have further rights or obligations hereunder but for those provisions hereof which by their terms expressly survive any cancellation or termination of this Agreement.

 

	
XVII.

	
Closing.  Subject to any other provisions of this Agreement for extension, the “Closing” shall be held no later than thirty (30) days after the expiration of the Inspection Period (such date the “Closing Date”) at the office of the Escrow Agent, at such time and place as the parties may agree.  Possession shall be delivered on the Closing Date.

 

At Closing, Seller shall execute and/or deliver (as applicable) to Purchaser the following closing documents in a form acceptable to Purchaser, acting reasonably:

 

	
  

	
A.

	
A limited warranty deed conveying the Land and Improvements subject only to the Permitted Exceptions, in substantially the form attached hereto as Exhibit “B” (the “Deed”);

 

	
  

	
B.

	
a “non-foreign” affidavit or certificate pursuant to Internal Revenue Code Section 1445;

 

	
  

	
C.

	
an Affidavit of Seller and any other documents required by the Title Company to issue the Title Policy in the form required hereunder;

 

	
  

	
D.

	
a closing statement consistent with this Agreement in the form required by the Title Company and Escrow Agent; and

 

	
  

	
E.

	
any additional documents that Purchaser, Escrow Agent or Title Company may reasonably require for the proper consummation of the transaction contemplated by this Agreement.

 

At Closing, Purchaser shall execute and/or deliver (as applicable) to Seller:

 

	
  

	
(a)

	
the balance of the Purchase Price;

 

	
  

	
(b)

	
a closing statement consistent with this Agreement in the form required by the Title Company and Escrow Agent; and

 

	
  

	
(c)

	
any additional documents that Seller, Escrow Agent or Title Company may reasonably require for the proper consummation of the transaction contemplated by this Agreement.

 

  

  

  

Promptly after Closing, Seller shall deliver to the offices of Purchaser, to the extent in Seller’s possession or control and not otherwise provided to Purchaser during the Inspection Period, executed originals of the Permits and Licenses, and Plans, provided that nothing in this sentence shall deemed to limit or reduce Seller’s obligations to deliver Permits, Licenses and Plans as and when required in Section 4.

Upon satisfaction or completion of the foregoing conditions and deliveries, the parties shall direct the Title Company to immediately record and deliver the documents described above to the appropriate parties and make disbursements according to the closing statements executed by Seller and Purchaser.

	
XVIII.

	
Brokers.  The parties each represent and warrant to the other that no real estate broker(s), salesman (salesmen), or finder(s), except NAI DAUS, representing Seller, and Select Ohio, LTD, representing Purchaser (collectively, the “Brokers”), are involved in this transaction.  If a claim for commissions in connection with this transaction is made by any broker, salesman, or finder claiming to have dealt through or on behalf of one of the parties hereto (“Indemnitor”), Indemnitor shall indemnify, defend, and hold harmless the other party hereunder (“Indemnitee”), and Indemnitee’s officers, directors, agents, and representatives from and against all liabilities, damages, claims, costs, fees, and expenses whatsoever (including reasonable attorneys’ fees and court costs at trial and all appellate levels) with respect to said claim for commissions.  Seller agrees to pay the commission due to the Brokers.  Notwithstanding anything to the contrary contained in this Agreement, the provisions of this Section 18 shall survive the Closing and any cancellation or termination of this Agreement.

 

	
XIX.

	
Notices.  Any notices required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered by hand, sent by recognized overnight courier (such as Federal Express), mailed by certified or registered mail, return receipt requested, in a postage prepaid envelope, or emailed (with written confirmation by overnight mail) and addressed as follows:

 

	 	If to the Seller, at: 	
Glenwillow Holdings LLC

24700 Chagrin Boulevard, Suite 104

Beachwood, OH 44122

Attn: Anand Bill Julka

	 	 	
 

	 	with a copy to: 	Hurtuk & Daroff Co., LLP 

Parkland Terrace, Suite 100

6120 Parkland Boulevard

Mayfield Heights, OH 44124

Attn: Charles Daroff

	 	 	 
	 	 	 
	 	If to the Purchaser, at: 	Northern Technologies International Corporation 

4201 Woodland Road

Circle Pines, MN 55014

	 	 	 
	 	with a copy to:	Oppenheimer Wolff & Donnelly LLP

  

  

  

	 	 	

Campbell Mithun Tower, Suite 2000

222 South Ninth Street

Minneapolis, MN 55402-3338

Attn.: Kenneth C. Rowe

 

Notices sent by email shall be deemed delivered on the date of sending (provided that delivery confirmation is sent as required above).  Notices personally delivered or sent by overnight courier shall be deemed given on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given three (3) days after deposit in the U.S. mails.

 

	
XX.

	
Risk of Loss.  In the event that either (i) all or a material portion of the Land or (ii) all or a material portion of the Improvements is taken by eminent domain prior to Closing, Purchaser shall have the option of either: (i) canceling this Agreement and receiving a refund of the Deposit, whereupon both parties shall be relieved of all further obligations under this Agreement (except those provisions hereof which by their terms expressly survive the Closing and any cancellation or termination of this Agreement), or (ii) proceeding with Closing without reduction of the Purchase Price, in which case Purchaser shall be entitled to all condemnation awards and settlements, if any.

 

In the event that the Improvements are damaged by fire or other casualty and the cost of repair is $100,000.00 or less, then Purchaser shall be required to proceed with Closing.  However, at Closing, Purchaser shall receive a credit against the Purchase Price in an amount equal to the cost of repairing such damage (not to exceed $100,000.00), provided, however, if Seller has commenced, but not completed, making repairs prior to Closing, then Purchaser shall receive a credit against the Purchase Price in an amount equal to the cost to complete the repair (not to exceed $100,000.00).  Seller shall retain the right to receive all insurance proceeds payable as a result of damage, except as expressly provided in the immediately following sentence.  If damage exceeds $100,000.00, then Purchaser shall have the right (i) to proceed to Closing without reduction of the Purchase Price, in which case Purchaser shall be entitled to all insurance proceeds for such damage (or the portion thereof not yet used for the repair of such damage), if any, or (i) to terminate this Agreement and the Deposit shall be returned to Purchaser and neither party shall have further rights hereunder (except those provisions hereof which by their terms expressly survive the Closing and any cancellation or termination of this Agreement).

 

	
XXI.

	
Miscellaneous.

 

	
  

	
A.

	
This Agreement shall be construed and governed in accordance with the laws of the State of Ohio.  All of the parties to this Agreement have participated fully in the negotiation and preparation hereof, and, accordingly, this Agreement shall not be more strictly construed against any one of the parties hereto.

 

	
  

	
B.

	
In the event any term or provision of this Agreement is determined by appropriate judicial authority to be illegal or otherwise invalid, such provision shall be given its nearest legal meaning which will carry out the intended meaning of this

 

  

  

  

	
  

	
 

	

Agreement is determined by appropriate judicial authority to be illegal or otherwise invalid, such provision shall be given its nearest legal meaning which will carry out the intended meaning of this Agreement, and the remainder of this Agreement shall be construed to be in full force and effect.

 

	
  

	
C.

	
In the event of any litigation between the parties under this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and court costs at all trial and appellate levels.

 

	
  

	
D.

	
In construing this Agreement, the singular shall be held to include the plural, the plural shall be held to include the singular, the use of any gender shall be held to include every other and all genders, and captions and section headings shall be disregarded.

 

	
  

	
E.

	
All of the exhibits attached to this Agreement are incorporated in, and made a part of, this Agreement.

 

	
  

	
F.

	
Time shall be of the essence for each and every provision of this Agreement.

 

	
  

	
G.

	
Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday for national banks in the location where the Land and Improvements are located, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday or legal holiday.  The last day of any period of time described herein shall be deemed to end at 5:00 p.m. (local time at the Property).

 

	
  

	
H.

	
Purchaser, at the option of Purchaser, may waive any right conferred upon the Purchaser by this Agreement.  Except as otherwise provided herein, such waiver may be made by, and only by, giving Seller written notice specifically describing the right waived.

 

	
  

	
I.

	
This Agreement and the rights hereunder may not be assigned by either party; except that Purchaser reserves the express right to assign this Agreement and the rights and obligations which are contained herein to an affiliate of Purchaser upon prior notice to Seller, provided, however, Purchaser agrees to be personally liable for the performance of such assignee and Purchaser shall not be released of any liability hereunder as a result of any such assignment.

 

	
  

	
J.

	
Except as otherwise required by law or any governmental or quasi-governmental rule or regulation, including, without limitation, the rules of the Securities and Exchange Commission (collectively, “Applicable Laws”), the Due Diligence Materials and all other information relating to the Property, other than matters of public record, furnished to, or obtained through inspection of the Property by Purchaser, its affiliates, lenders, employees or Purchaser’s agents, will be treated by Purchaser, its affiliates, lenders, employees and Purchaser’s agents as confidential, and will not be disclosed to anyone other than on a need-to-know basis to Purchaser’s consultants who agree to maintain the confidentiality of such information, and such information will be returned to Seller by Purchaser if the

 

  

  

  

	
  

	
 

	
Closing does not occur. This provision shall survive the Closing and any cancellation or termination of this Agreement for a period of six months following such Closing, cancellation or termination.

 

	
  

	
K.

	
Except as otherwise required by Applicable Laws, Purchaser shall not make a public announcement or disclosure of this Agreement or any information related to this Agreement or Closing, if any, to outside brokers or third parties, before Closing without the prior written consent of Seller.  This provision shall survive the Closing and any cancellation or termination of this Agreement for a period of six months following such Closing, cancellation or termination.  Purchaser and Seller acknowledge that Applicable Laws require the filing of a copy of this Agreement with the Securities and Exchange Commission, and no such filing shall be deemed to constitute a violation of this Agreement.

 

	
  

	
L.

	
This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof and there are no other agreements, representations, or warranties other than as set forth herein.

 

	
  

	
M.

	
This Agreement may not be changed, altered, or modified except by an instrument in writing signed by the party against whom enforcement of such change would be sought.

 

	
  

	
N.

	
This Agreement shall be binding upon the parties hereto and their respective successors and permitted assigns.

 

	
  

	
O.

	
This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all constituting only one agreement.

 

	
XXII.

	
Notice to Utilities.  Seller shall notify all utility companies of this sale, and Purchaser shall arrange for change-over of responsibility for utilities as of Closing.  In the event any utility contracts extend over periods beyond the Closing Date, the same shall be prorated on a per diem basis.

 

(Signatures are on the following page.)

 

  

  

  

IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the Effective Date.

 

	 	SELLER:
	 	 
	 	
GLENWILLOW HOLDINGS LLC,

an Ohio limited liability company 

	 	 
	 	 
	 	
By: /s/ Anand Julka

Name: Anand Julka

Title: Manager 

 

 

 

 

 

	 	PURCHASER:
	 	 
	 	
NORTHERN TECHNOLOGIES 

INTERNATIONAL CORPORATION,

a Delaware corporation

	 	 
	 	
By: /s/ Matthew Wolsfeld

Name: Matthew Wolsfeld

Title: Chief Financial OfficerUnassociated Document

Exhibit 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

THIS DEBENTURE AND THE INDEBTEDNESS EVIDENCED HEREBY IS SUBJECT TO THE RESTRICTIONS CONTAINED IN A SUBORDINATION AGREEMENT DATED AS OF MARCH 27, 2014, BY AND AMONG HILLAIR CAPITAL INVESTMENTS L.P., BOLDFACE GROUP, INC. AND STAR FUNDING, INC., AND EACH HOLDER OF THIS DEBENTURE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY SAID SUBORDINATION AGREEMENT.

Original Issue Date: July 3, 2014

Original Conversion Price (subject to adjustment herein): $0.175

$281,120.00

8% ORIGINAL ISSUE DISCOUNT SENIOR SECURED CONVERTIBLE DEBENTURE

DUE JULY 1, 2015

THIS 8% ORIGINAL ISSUE DISCOUNT SENIOR SECURED CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued 8% Original Issue Discount Senior Secured Convertible Debentures of BOLDFACE Group, Inc., a Nevada corporation (the “Company”), having its principal place of business at 1945 Euclid Street, Santa Monica, CA 90404, designated as its 8% Original Issue Discount Senior Secured Convertible Debenture due July 1, 2015 (this debenture, the “Debenture” and, collectively with the other debentures of such series, the “Debentures”).

 

  

1

  

FOR VALUE RECEIVED, the Company promises to pay to HILLAIR CAPITAL INVESTMENTS L.P. or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of $281,120.00 on July 1, 2015 (the “Maturity Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions hereof.  This Debenture is subject to the following additional provisions:

Section 1.          Definitions.  For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

“Alternate Consideration” shall have the meaning set forth in Section 5(e).

“Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

“Base Conversion Price” shall have the meaning set forth in Section 5(b).

“Beneficial Ownership Limitation” shall have the meaning set forth in Section 4(d).

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Buy-In” shall have the meaning set forth in Section 4(c)(v).

 

  

2

  

“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 33% of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and the Securities issued together with the Debentures), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company  is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

“Conversion” shall have the meaning ascribed to such term in Section 4.

“Conversion Date” shall have the meaning set forth in Section 4(a).

“Conversion Price” shall have the meaning set forth in Section 4(b).

“Conversion Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance with the terms hereof.

“Debenture Register” shall have the meaning set forth in Section 2(c).

“Dilutive Issuance” shall have the meaning set forth in Section 5(b).

“Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“Equity Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and redemptions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company shall have paid all liquidated damages and other amounts owing to the Holder in respect of this Debenture, (c)(i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or other restrictions as determined by the counsel to the Company as set forth in a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Holder, (d) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) there is no existing Event of Default and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default, (g) the issuance of the shares in question to the Holder would not violate the limitations set forth in Section 4(d) herein, (h) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, (i) the applicable Holder is not in possession of any information provided by the Company that constitutes, or may constitute, material non-public information and (j) the number of shares of Common Stock proposed to be issued in respect of such payment at issue, in each case as attributable to all holders of Debentures, is less than 10% of the aggregate number of shares of Common Stock traded on the principal Trading Market during the 20 Trading Days immediately prior to such payment date.

 

“Event of Default” shall have the meaning set forth in Section 8(a).

“Fundamental Transaction” shall have the meaning set forth in Section 5(e).

“Late Fees” shall have the meaning set forth in Section 2(d).

“Mandatory Default Amount”  means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in full, whichever has a higher VWAP, or (ii) 130% of the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.

“New York Courts” shall have the meaning set forth in Section 9(d).

“Notice of Conversion” shall have the meaning set forth in Section 4(a).

“Optional Redemption” shall have the meaning set forth in Section 6(a).

“Optional Redemption Amount” means the sum of (a)(i) 110% of the then outstanding principal amount of the Debenture, if the Optional Redemption shall occur prior to the 12 month anniversary of the Original Issue Date or (ii) 120% of the then outstanding principal amount of the Debenture, if the Optional Redemption shall occur on or after the 12 month anniversary of the Original Issue Date, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the Debenture.

 

  

3

  

“Optional Redemption Date” shall have the meaning set forth in Section 6(a).

“Optional Redemption Notice” shall have the meaning set forth in Section 6(a).

“Optional Redemption Notice Date” shall have the meaning set forth in Section 6(a).

“Optional Redemption Period” shall have the meaning set forth in Section 6(a).

“Original Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and regardless of the number of instruments which may be issued to evidence such Debentures.

“Permitted Indebtedness” means (a) the indebtedness evidenced by the Debentures, (b) the indebtedness, liabilities or other obligations incurred by the Company in connection with those certain Supply Agreements and Factoring Agreements, dated as of October 17, 2012, by and among the Company, BOLDFACE Licensing + Branding and Star Funding, Inc. (as amended, modified, supplemented or restated from time to time), (c) the Indebtedness existing on the Original Issue Date and set forth on Schedule 3.1(aa) attached to the Purchase Agreement, (d) lease obligations and purchase money indebtedness of up to $750,000, in the aggregate, incurred in connection with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets, and (e) up to $250,000 of indebtedness that (i) is expressly subordinate to the Debentures pursuant to a written subordination agreement with the Purchasers that is acceptable to each Purchaser in its sole and absolute discretion and (ii) matures on a date later than the 91st day following the Maturity Date.

“Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, (c) Liens incurred in connection with Permitted Indebtedness under clauses (a), (b) and (c) thereunder, and (d) Liens incurred in connection with Permitted Indebtedness under clause (d) thereunder, provided that such Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired or leased.

 

  

4

  

 

“Purchase Agreement” means the Securities Purchase Agreement, dated as of July 3, 2014 among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Share Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

“Successor Entity” shall have the meaning set forth in Section 5(e).

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or OTC Bulletin Board (or any successors to any of the foregoing).

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

Section 2.          Interest.

a)        Payment of Interest in Cash. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 8% per annum, payable on each Conversion Date (as to that principal amount then being converted), on each Optional Redemption Date (as to that principal amount then being redeemed) and on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in cash.

 

  

5

  

 

b)        Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.  Interest shall cease to accrue with respect to any principal amount converted, provided that, the Company actually delivers the Conversion Shares within the time period required by Section 4(c)(ii) herein.  Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of this Debenture (the “Debenture Register”).

c)        Late Fee.  All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.

 

d)        Prepayment.  Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount of this Debenture without the prior written consent of the Holder.

Section 3.          Registration of Transfers and Exchanges.

 

a)        Different Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the Holder surrendering the same.  No service charge will be payable for such registration of transfer or exchange.

 

b)        Investment Representations. This Debenture has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

c)        Reliance on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

  

6

  

Section 4.          Conversion.

 

a)        Voluntary Conversion. At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(d) hereof).  The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Debenture to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”).  If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder.  No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion.  The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s).  The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion.  In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.

 

b)        Conversion Price.  The conversion price in effect on any Conversion Date shall be equal to $0.175, subject to adjustment herein (the “Conversion Price”).

c)        Mechanics of Conversion.

 

i.           Conversion Shares Issuable Upon Conversion of Principal Amount.  The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y) the Conversion Price.

 

  

7

  

 

ii.           Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares which, on or after the six month anniversary of the Original Issue Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Debenture, (B) a legal opinion of Company counsel as may be requested by the Holder to enable Holder to deposit the Conversion Share certificates in accounts with its prime broker (or other brokerage account), together with the instruction letter to the Transfer Agent and the resolution of the Board of Directors authorizing the Transaction Documents and any additional supporting documentation requested by the Holder (including, without limitation, any instruction letter to the Company’s transfer agent) and (C) a bank check in the amount of any accrued and unpaid interest that may be due thereon. On or after the six month anniversary of the Original Issue Date, if the Company is a participant in the Deposit or Withdrawal at Custodian system (DWAC) of the Depository Trust Company, the Company shall deliver any certificate or certificates required to be delivered by the Company under this Section 4(c) electronically through the Depository Trust Company or another established clearing corporation performing similar functions.

 

iii.           Failure to Deliver Certificates.  If, in the case of any Notice of Conversion, such certificate or certificates and the related legal opinion of Company counsel, the instruction letter to the Transfer Agent and the resolution of the Board of Directors authorizing the Transaction Documents are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.

 

iv.           Obligation Absolute; Partial Liquidated Damages.  The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder.  In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion.  If the Company fails for any reason to deliver to the Holder such certificate or certificates and the related legal opinion of Company counsel, the instruction letter to the Transfer Agent and the resolution of the Board of Directors authorizing the Transaction Documents and other supporting documentation pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share Delivery Date until such certificates and related legal opinion of Company counsel, the instruction letter to the Transfer Agent, the resolution of the Board of Directors authorizing the Transaction Documents and other supporting documentation are delivered or Holder rescinds such conversion.    Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 8 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.  The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

  

8

  

 

v.           Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Debenture in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii).  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000.  The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this Debenture as required pursuant to the terms hereof.

 

  

9

  

 

vi.           Reservation of Shares Issuable Upon Conversion.  After the Company has increased the number of authorized shares of Common Stock by amendment to the articles of incorporation of the Company, the Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Debentures), not less than such number of shares of Common Stock required to be reserved for the Holder pursuant to Section 4.11(a) of the Purchase Agreement. After the Company has increased the number of authorized shares of Common Stock by amendment to the articles of incorporation of the Company, the Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Debentures), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Debenture and payment of interest hereunder.  The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if a registration statement is then effective under the Securities Act, shall be registered for public resale in accordance with such registration statement.

vii.           Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Debenture.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

viii.           Transfer Taxes and Expenses.  The issuance of certificates for shares of the Common Stock on conversion of this Debenture shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Debenture so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.  The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.

 

  

10

  

 

d)        Holder’s Conversion Limitations.  The Company shall not effect any conversion of this Debenture, and a Holder shall not have the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Debenture with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Debenture beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Debentures or the Warrants) beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  To the extent that the limitation contained in this Section 4(d) applies, the determination of whether this Debenture is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Debenture is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Debenture may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Debenture is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.   For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Debenture, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture held by the Holder.  The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Debenture held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue to apply.  Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company.  The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Debenture.

 

  

11

  

Section 5.          Certain Adjustments.

 

a)        Stock Dividends and Stock Splits.  If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Debentures), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)        Subsequent Equity Sales.  If, at any time while this Debenture is outstanding,  the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base Conversion Price.  Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.  Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance.  If the Company enters into a Variable Rate Transaction, despite the prohibition set forth in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised. The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).  For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.

 

  

12

  

 

c)        Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 5(a) above, during such time as this Debenture is outstanding, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Debenture (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).  Notwithstanding the foregoing, no adjustment shall be made pursuant to this Section 5(c) with respect to an Exempt Issuance.

 

d)        Pro Rata Distributions. During such time as this Debenture is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Debenture, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Debenture (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

  

13

  

 

e)        Fundamental Transaction. If, at any time while this Debenture is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock (other than the issuance of the Conversion Securities), (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than the issuance of the Conversion Securities), or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (other than the issuance of the Conversion Securities) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Debenture), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Debenture is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Debenture).  For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction.  The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Debenture and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Debenture, deliver to the Holder in exchange for this Debenture a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Debenture which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Debenture (without regard to any limitations on the conversion of this Debenture) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Debenture immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Debenture and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Debenture and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

  

14

  

 

f)         Calculations.  All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.  For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

g)        Notice to the Holder.

 

i.           Adjustment to Conversion Price.  Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

ii.           Notice to Allow Conversion by Holder.  If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Debenture, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Debenture Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall file such notice with the Commission pursuant to a Current Report on Form 8-K within the time required by the Exchange Act.  The Holder shall remain entitled to convert this Debenture during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

  

15

  

 

Section 6.          Optional Redemption.

a)        Optional Redemption at Election of Company.  Subject to the provisions of this Section 6(a), at any time after the Original Issue Date, the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem some or all of the then outstanding principal amount of this Debenture for cash in an amount equal to Optional Redemption Amount on the 10th Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date”, such 10 Trading Day period, the “Optional Redemption Period” and such redemption, the “Optional Redemption”).  The Optional Redemption Amount is payable in full on the Optional Redemption Date.  The Company may only effect an Optional Redemption if each of the Equity Conditions shall have been met (unless waived in writing by the Holder) on each Trading Day during the period commencing on the Optional Redemption Notice Date through to the Optional Redemption Date and through and including the date payment of the Optional Redemption Amount is actually made in full.  If any of the Equity Conditions shall cease to be satisfied at any time during the Optional Redemption Period, then the Holder may elect to nullify the Optional Redemption Notice by notice to the Company within 3 Trading Days after the first day on which any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents, the Company is obligated to notify the Holder of the non-existence of an Equity Condition, such notice period shall be extended to the third Trading Day after proper notice from the Company) in which case the Optional Redemption Notice shall be null and void, ab initio.  The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the Optional Redemption Notice through the date all amounts owing thereon are due and paid in full. The Company’s determination to pay an Optional Redemption shall be applied ratably to all of the holders of the then outstanding Debentures based on their (or their predecessor’s) initial purchases of Debentures pursuant to the Purchase Agreement.

 

 

16

 

b)        Redemption Procedure.  The payment of cash pursuant to an Optional Redemption shall be payable on the Optional Redemption Date.  If any portion of the payment pursuant to an Optional Redemption shall not be paid by the Company by the applicable due date, interest shall accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law until such amount is paid in full.  Notwithstanding anything herein contained to the contrary, if any portion of the Optional Redemption Amount remains unpaid after such date, the Holder may elect, by written notice to the Company given at any time thereafter, to invalidate such Optional Redemption, ab initio, and, with respect to the Company’s failure to honor the Optional Redemption, the Company shall have no further right to exercise such Optional Redemption.  Notwithstanding anything to the contrary in this Section 6, the Company’s determination to redeem in cash or its elections under Section 6(b) shall be applied ratably among the Holders of Debentures. The Holder may elect to convert the outstanding principal amount of the Debenture pursuant to Section 4 prior to actual payment in cash for any redemption under this Section 6 by the delivery of a Notice of Conversion to the Company.

Section 7.          Negative Covenants. As long as any portion of this Debenture remains outstanding, unless the holders of at least 50.1% in principal amount of the then outstanding Debentures shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

a)        other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

b)        other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

c)        amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Holder;

d)        repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as permitted or required under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during the term of this Debenture;

 

 

17

 

e)        other than to repay indebtedness contemplated by clause (b) in the definition of Permitted Indebtedness, repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than the Debentures if on a pro-rata basis;

f)         pay cash dividends or distributions on any equity securities of the Company;

g)        except for the issuance of stock options, under the Company’s 2012 Equity Incentive Plan and the transactions contemplated by the Consulting Agreement, dated as of July 3, 2012, between the Company and Gold Grenade, LLC, enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

h)        enter into any agreement with respect to any of the foregoing.

 

Section 8.          Events of Default.

a)        “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

i.           any default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other amounts owing to a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within 3 Trading Days;

 

ii.          the Company shall fail to observe or perform any other covenant or agreement contained in the Debentures (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (x) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware of such failure;

 

 

18

 

 

iii.         a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv.         any representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;

 

v.          the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X)  shall be subject to a Bankruptcy Event;

 

vi.         the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii.        the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within seven Trading Days;

 

viii.       the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction);

 

ix.         the Company does not meet the current public information requirements under Rule 144 with respect to the Securities;

 

x.          the Company shall fail for any reason to deliver certificates to a Holder prior to the seventh Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Debentures in accordance with the terms hereof; or

 

 

19

 

 

xi.         any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days.

b)           Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount.  Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law.  Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the Company.  In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.  Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 8(b).  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 9.          Miscellaneous.

 

a)        Notices.  Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 9(a).  Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement.  Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

 

20

 

 

b)        Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed.  This Debenture is a direct debt obligation of the Company.  This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein.

 

c)        Lost or Mutilated Debenture.  If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to the Company.

d)        Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof.  Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Debenture, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

 

21

 

 

e)        Waiver.  Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture.  The failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture on any other occasion.  Any waiver by the Company or the Holder must be in writing.

 

f)         Severability.  If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.  If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

 

g)        Next Business Day.  Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

h)        Headings.  The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be deemed to limit or affect any of the provisions hereof.

i)         Secured Obligation.  The obligations of the Company under this Debenture are secured by all assets of the Company and each Subsidiary pursuant to the Security Agreement, dated as of July 3, 2014 between the Company, the Subsidiaries of the Company and the Secured Parties (as defined therein).

*********************

 

(Signature Pages Follow)

 

 

22

 

 

IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above indicated.

 

	 	

BOLDFACE GROUP, INC.

	 
	 	 	 	 
	 	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	

Facsimile No. for delivery of Notices: 310-421-9274

	 

 

23

 

 

ANNEX A

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal under the 8% Original Issue Discount Senior Secured Convertible Debenture due July 1, 2015 of BOLDFACE Group, Inc., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below.  If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith.  No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d) of the Exchange Act.

The undersigned agrees to comply with the requirements of applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

Conversion calculations:

Date to Effect Conversion:

Principal Amount of Debenture to be Converted:

Number of shares of Common Stock to be issued:

Signature:

Name:

Address for Delivery of Common Stock Certificates:

Or

DWAC Instructions:

Broker No:___________

Account No:_________

 

 

24

 

Schedule 1

CONVERSION SCHEDULE

The 8% Original Issue Discount Senior Secured Convertible Debentures due on July 1, 2015 in the aggregate principal amount of $281,120.00 are issued by BOLDFACE Group, Inc., a Nevada corporation.  This Conversion Schedule reflects conversions made under Section 4 of the above referenced Debenture.

Dated:

	
 

Date of Conversion

(or for first entry, Original Issue Date)

	
 

Amount of Conversion

	
Aggregate

Principal

Amount Remaining

Subsequent to Conversion

(or original Principal Amount)

	
 

Company Attest

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00233-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00233-of-00352.parquet"}]]