Document:

ex101.htm

Exhibit 10.1

 

 

THIS DEBENTURE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE (COLLECTIVELY, THE "SECURITIES"), HAVE NOT BEEN REGISTERED WITHTHE UNITED STATES SECURITIES EXCHANGE COMMISSION OR THESECURITIES COMMISSION OF ANY STATE. THE SECURITIES ARE BEINGOFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDERREGULATION S AND/OR REGULATION 0 PROMULGATED UNDER THESECURITIES ACT OF 1933, AS AMEMDED (THE "ACT"). THE SECURITIES ARE"RESTRICTED" AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATESOR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S PROMULGATED UNDER THE ACT) UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION SAND/OR REGULATION 0 OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE. FURTHER HEDGING TRANSACTION INVOLVING THE SECURITIES MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH THE ACT.

DEBENTURE

WORLD SERIES OF GOLF, INC.

8% Convertible Debenture

Due December 31, 2011

	
No.3JT 

	
$15,000

 

This Debenture is issued by WORLD SERIES OF GOLF, INC., a Nevada corporation (the "Company"), to JIM D. TIL TON,JR. (together with its permitted successors and assigns, the "Holder") pursuant to exemptions from registration under the Securities Act of 1933, as amended.

ARTICLE I.

Section 1.01 Principal and Interest. For value received on MARCH 31, 2011 the Company hereby promises to pay to the order of Holder in lawful money of the United States of America and in immediately available funds the principal sum of $15,000, together with interest on the unpaid principal of this Debenture at the rate of eight percent (8%) per year (computed on the basis of the 365-day year and the actual days elapsed) from the date of this Debenture until paid. At the Company's option, the entire principal amount and all accrued interest shall be either (a) paid to the Holder on or before the due date of this Debenture or (b) converted in accordance with Section 1.02 herein. Section 1.02 Optional Conversion. The Holder is entitled, at its option, to convert, at any time and from time to time, until payment in full of this Debenture, all or any part of the principal amount of this Debenture, plus accrued interest, into shares (the "Conversion Shares") of the Company's common stock, par value $0.001 per share ("Common Stock"), at a price per share equal to fifty percent (50%) of the closing bid price of the Common Stock on the date that the Company receives notice of conversion. To convert this debenture, the Holder shall deliver written notice (the "Conversion Notice") thereof, such Conversion Notice containing such information necessary including amount of conversion and number of shares, to the Company at its address set forth herein. The date upon which the conversion shall be effective (the "Conversion Date") shall be deemed to be the date set forth in the Conversion Notice. The Conversion Shares shall be delivered to the Holder at the address indicated herein. The Company is entitled, at its option, to convert, at any time and from time to time, until payment in full of this Debenture, all or any part of the principal amount of this Debenture, plus accrued interest, into shares (the "Conversion Shares") of the Company's common stock, par value $0.001 per share ("Common Stock"), at a price per share equal to fifty percent (50%) of the closing bid price of the Common Stock on the date that the Company issues such notice of conversion. To convert this debenture, the Company shall deliver written notice (the "Conversion Notice") thereof, such Conversion Notice containing such information necessary including amount of conversion and number of shares, to the Holder at its address set forth herein. The date upon which the conversion shall be effective (the "Conversion Date") shall be deemed to be the date set forth in the Conversion Notice. The Conversion Shares shall be delivered to the Holder at the address indicated herein. Section 1.03 Reservation of Common Stock. The Company shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of this Debenture, such number of shares of Common Stock as shall from time to time be sufficient to effect such conversion, based on the Conversion Price. If at any time the Company does not have a sufficient number of Conversion Shares authorized and available, then the Company shall call and hold a special meeting of its stockholders within Sixty (60) days of that time for the sole purpose of increasing the number of authorized shares of Common Stock. Section 1.04 Registration Rights. The Company is obligated to register the resale of the Conversion Shares under the Securities Act of 1933, as amended. Section 1.05 Interest Payments. The interest so payable will be paid at the time of maturity or conversion to the person in whose name this Debenture is registered. At the time such interest is payable, the Company, in its sole discretion, may elect to pay interest in cash or in the form of Common Stock. If paid in Common Stock, the amount of stock to be issued shall be calculated in accordance with the formula and procedure set forth in Section 1.02 above. Section 1.06 Right of Redemption. The Company shall have the right to redeem, with thirty (30) business days advance notice to the Holder, any or all outstanding Debentures remaining in its sole discretion ("Right of Redemption"). The redemption price shall be equal to 100% of the face amount of the Debenture redeemed plus all accrued interest ("Redemption Price"). Section 1.07 Ownership Limitation. Notwithstanding anything to the contrary contained in this Note, if and to the extent that, on any date the issuance of any shares to the Holder would result in the Holder being deemed the beneficial owner of more than 9.99% of the then-outstanding shares of common stock of the Company (the "Common Stock"), then the Holder shall not have the right to receive, and the Company shall not be permitted to issue, any shares in the name of the Holder as shall cause the Holder to be deemed the beneficial owner of more than 9.99% of the common stock of the then Outstanding Common Stock. "Outstanding", when used with reference to the Common Stock, means, on any date of determination, all issued and outstanding shares of Common Stock, and includes all such shares issuable in respect of outstanding scrip or any certificates representing fractional interests in such shares.

  

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ARTICLE II.

Section 2.01 Amendments and Waiver of Default. The Debenture may be amended with the consent of Holder. Without the consent of Holder, the Debenture may be amended to cure any ambiguity, defect or inconsistency, to provide assumption of the Company obligations to the Holder or to make any change that does not adversely affect the rights of the Holder.

ARTICLE III.

Section 3.01 Events of Default. An Event of Default is defined as follows: (a) failure by the Company to pay amounts due hereunder within fifteen (15) days of the date of maturity of this Debenture; (b) failure by the Company for thirty (30) days after notice to it to comply with any of its other agreements in the Debenture; (c) events of bankruptcy or insolvency; (d) a beach by the Company of its obligations under the Registration Rights Agreement which is not cured by the Company within ten (10) days after receipt of written notice thereof. The Holder may not enforce the Debenture except as provided herein.  Section 3.02 Failure to Issue Unrestricted Common Stock. As indicated above, a breach by the Company under its obligation under the Registration Rights Agreement shall be deemed an Event of Default, which if not cured with ten (10) days, shall entitle the Holder accelerated full payment of all debentures outstanding. The Company acknowledges that failure to honor a Notice of Conversion shall cause hardship to the Holder.

  

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ARTICLE IV.

Section 4.01 Anti-dilution. In the event that the Company shall at any time subdivide the outstanding shares of Common Stock, or shall issue a stock dividend on the outstanding Common Stock, the Conversion Price in effect immediately prior to such subdivision of the issuance of such dividend shall be proportionately decreased and, in the event that the Company shall at any time combine the outstanding shares of Common stock, the Conversion price in effect immediately prior to such combination shall be proportionally increased, effective at the close of business on the date of such subdivision, dividend or combination as the case may be.

ARTICLEV.

Section 5.01 Notice. Notices regarding this debenture shall send to the parties at the following addresses, unless a party notifies the other parties, in writing, of a change of address:

 

If to the Company:

WORLD SERIES OF GOLF, INC.

ATTN: JIM D. TILTON, JR.

2520 SOUTH THIRD STREET - #206

LOUISVILLE, KENTUCKY 40208

If to the Holder:

JIM D. TILTON, JR.

2520 SOUTH THIRD STREET - #206

LOUISVILLE, KENTUCKY 40208

 

Section 5.02 Governing Law. This Debenture shall be deemed to be made under and shall be construed in accordance with the laws of the State of Kentucky without giving effect to the principals of conflict of the laws thereof. Each of the parties consents to the jurisdiction of the U.S. District Court sitting in the District of the State of Kentucky in connection with any dispute arising under this debenture and hereby waives, to the maximum extent permitted by law, any objection, including the objection based on forum non conveniens to the bringing of any such proceeding in such jurisdictions.

Section 5.03 Severability. The invalidity of any of the provisions of this Debenture shall not invalidate or otherwise affect any of the other provisions of this Debenture, which shall remain in full force effect.

Section 5.04 Entire Agreement and Amendments. This Debenture represents the entire agreement between the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth herein. This Debenture may be amended only by an instrument in writing executed by the parties hereto.

Section 5.05 Counterparts. This Debenture may be executed in multiple counterparts, each of which shall be an original, but all of which shall be deemed to constitute and instrument.

IN WITNESS WHEREOF, with the intent to legally bound hereby, the Company has executed this Debenture as of the date first written above.

	 	World Series of Golf, Inc.	 
	 	 	 	 
	
 

	
By: 

	/s/ Jim Tilton	 
	 	 	Name: Jim Tilton	 
	 	 	Title: Chief Financial Officer/Director	 
	 	 	 	 

 

 

3ex41.htm

Exhibit 4.1

 

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THEY MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL TO THE COMPANY) SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED

 

	
Warrant No.  03252011

	
To Purchase 13,575,000 Shares

	  	
of Class A Common Stock

	  	
($0.001 par value)

	  	  

WARRANT

YTB INTERNATIONAL, INC.

 

INCORPORATED UNDER THE

LAWS OF THE STATE OF DELAWARE

 

§ 1 Basic Terms»

 

.  This certifies that, for value received, the registered owner is entitled, subject to the terms and conditions of this Warrant, from the date of issue until the expiration date and time shown below (the “Expiration Date”), to purchase 13,575,000 shares of the Class A Common Stock, par value $0.001 (the “Common Stock”), of YTB International, Inc. (the “Company”) from the Company at the Purchase Price shown below (the “Purchase Price”), on delivery of this Warrant to the Company with the exercise form duly executed and payment of the Purchase Price (in cash or by certified or bank cashier’s check payable to the order of the Company by wire transfer to the Company’s designated account for each share purchased.

 

	
Registered Owner:

	
Wood River Capital, LLC

	  	  
	
Purchase Price:

	
$0.032 per share

	  	  
	
Expiration Date and Time:

	
5:00 p.m., Wood River, Illinois time, March 25, 2016

	  	  

§ 2 Company’s Covenants as to Common Stock»

 

.  Promptly after the exercise of this Warrant and the payment of the Purchase Price pursuant to § 1, the Company will issue to the Registered Owner or upon the order of the Registered Owner hereof, a certificate or certificates for the number of whole shares of Common Stock to which the Registered Owner is entitled.  Shares deliverable on the exercise of this Warrant shall, at delivery, be fully paid and nonassessable, free from taxes, liens, and charges with respect to their purchase.  The Company shall take any necessary steps to assure that the par value per share of the Common Stock is at all times equal to or less than the Purchase Price per share of the Common Stock issuable pursuant to this Warrant.  The Company shall at all times reserve and hold available solely for issuance and delivery upon the exercise of this Warrant, sufficient shares of Common Stock to satisfy all conversion and purchase rights of outstanding convertible securities, options and warrants.

 

§ 3 Method of Exercise»

 

.  The purchase rights represented by this Warrant are exercisable at the option of the registered owner in whole or in part, at any time and from time to time within the period above specified.  In case of the exercise of this Warrant for fewer than all the shares then purchasable hereunder, the Company shall cancel this Warrant and execute and deliver a new Warrant of like tenor and date for the balance of the shares purchasable.

 

  

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§ 4 Adjustment of Shares Purchasable»

 

.  The number of shares purchasable hereunder and the Purchase Price per share are subject to adjustment from time to time as specified in this Warrant.

 

§ 5 Limited Rights of Owner»

 

.  This Warrant does not entitle the owner to any voting rights or other rights as a stockholder of the Company, or to any other rights whatsoever except the rights herein expressed.  No dividends are payable or will accrue on this Warrant or the shares purchasable hereunder until, and except to the extent that, this Warrant is exercised.

 

§ 6 Exchange for Other Denominations»

 

.  This Warrant is exchangeable, on its surrender by the registered owner to the Company, for new Warrants of like tenor and date representing in the aggregate the right to purchase the number of shares purchasable hereunder in denominations designated by the registered owner at the time of surrender.

 

§ 7 Transfer»

 

.  The Common Stock issuable upon exercise of this Warrant is transferable only on the books of the Company by the registered owner in person or by attorney, upon surrender of such Common Stock, properly endorsed.

 

§ 8 Recognition of Registered Owner»

 

.  Prior to due presentment for registration of transfer of this Warrant, the Company may treat the registered owner as the person exclusively entitled to receive notices and otherwise to exercise rights hereunder.

 

§ 9 Adjustments of Purchase Price and Number of Shares»

 

.  The Purchase Price in effect at any time, and the number and kind of securities purchasable upon exercise of this Warrant shall be subject to adjustment from time to time upon the happening of certain events as follows:

 

	
(a)  

	
In case the Company shall hereafter (i) declare a dividend or a distribution on its Common Stock in shares of its Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its outstanding Common Stock into a smaller number of shares, or (iv) issue other securities of the Company by reclassification of its Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), the Purchase Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the owner of any Warrant exercised after such date shall be entitled to receive the aggregate number and kind of shares of Common Stock which, if such Warrant had been exercised immediately prior to such time, he would have owned upon such exercise and been entitled to receive upon such dividend, distribution, subdivision, combination or reclassification.  If any cash is paid or other property that is not stock or securities described above (“Other Property”) is distributed in conjunction with the issuance of distribution of or change in stock or securities described in the foregoing sentence, then the aggregate purchase price for the Common Stock will be reduced by the amount of cash and the value of the Other Property Registered Owner would have received had it exercised this Warrant provided in the foregoing sentence.  Such adjustment shall be made successively whenever any event listed above shall occur.

 

  

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(b)  

	
If after the date of this agreement, Company purchases for cash or property (other than in exchange for shares of Company’s stock) shares of Company’s Common Stock for a price per share in excess of the then current market value of each share purchased, then the price under this Warrant for each share of Common Stock will be reduced by the amount of such excess.  Property will be valued at the time the purchase price is payable.  Values under this §9(b) will be determined by Company’s board of directors in good faith, and their determination will be final, binding and conclusive on all parties.  Company will furnish Registered Owner with a statement of the valuations under this § 9(b).  The acquisition by Company of Common Stock in exchange, in whole or in part, for Company’s debt will be governed by the provisions of this § 9(b) – and not by the provisions of § 9(a).

 

	
(c)  

	
If after the date of this agreement, Company issues any Common Stock or other warrants, options or rights to purchase any Common Stock, and if the purchase price for such Common Stock or other warrants, options or rights (the “Issue Price”) is less than the then current market price, and if any such issuance takes place when the Common Stock is not publicly traded, then the Purchase Price under this Warrant will be reduced to the Issue Price.  The Issue Price of Common Stock under any warrant, option or other right will not include the price paid for the warrant, option or other right.

 

The Company shall not undertake any reverse stock split, combination, reorganization or other reclassification of its capital stock which would have the effect of making this Warrant exercisable for less than one share of Common Stock.

 

§ 10 Effect of Merger Etc»

 

.  If the Company consolidates with or merges into another corporation, the Registered Owner shall thereafter be entitled on exercise to purchase, with respect to each share of Common Stock purchasable hereunder immediately before the consolidation or merger becomes effective, the securities or other consideration to which a holder of one share of Common Stock is entitled in the consolidation or merger without any change in or payment in addition to the Purchase Price in effect immediately prior to the merger or consolidation.  The Company shall take any necessary steps in connection with a consolidation or merger to assure that all the provisions of this Warrant shall thereafter be applicable, as nearly as reasonably may be, to any securities or other consideration so deliverable on exercise of this Warrant.  The Company shall not consolidate or merge unless, prior to consummation, the successor Company (if other than the Company) assumes the obligations of this paragraph by written instrument executed and mailed to the Registered Owner at the address of the owner on the books of the Company.

 

§ 11 Notice of Adjustment»

 

.  On the happening of an event requiring an adjustment of the Purchase Price or the shares purchasable hereunder, the Company shall forthwith give written notice to the Registered Owner stating the adjusted Purchase Price and number and kind of securities or other property purchasable hereunder resulting from the event and setting forth in reasonable detail the method of calculation and the facts upon which the calculation is based.  The Board of Directors of the Company, acting in good faith, shall determine the calculation.

 

§ 12 Notice and Effect of Dissolution. Etc»

 

.  In case a voluntary or involuntary dissolution, liquidation, or winding up of the Company (other than in connection with a consolidation or merger covered by § 10 above) is at any time proposed, the Company shall give at least 30 days’ prior written notice to the Registered Owner.  Such notice shall contain: (a) the date on which the transaction is to take place; (b) the record date (which shall be at least 30 days after the giving of the notice) as of which holders of Common Stock will be entitled to receive distributions as a result of the transaction; (c) a brief description of the transaction; (d) a brief description of the distributions to be made to holders of Common Stock as a result of the transaction; and (e) an estimate of the fair value of the distributions.  Company shall not voluntarily dissolve, liquidate or wind-up without the prior written consent of Registered Owner, which consent shall not be unreasonably withheld, delayed or conditioned.  On the date of the transaction, if it actually occurs, this Warrant and all rights hereunder shall terminate.

 

§ 13 Method of Giving Notice: Extent Required»

 

.  Notices shall be given by first class mail, postage prepaid, addressed to the Registered Owner at the address of the owner appearing in the records of the Company.  No notice to Warrant holders is required except as specified herein.

 

§ 14 Restrictions on Transfer»

 

.  This Warrant has not been registered under the Securities Act of 1933, as amended.  This Warrant has been purchased for investment and not with a view to distribution or resale, and may not be made subject to a security interest, pledged, hypothecated, or otherwise transferred without an effective registration statement for such Warrant under the Securities Act of 1933, as amended, or an opinion of counsel for the Company or other counsel reasonably acceptable to the Company that registration is not required under such Act.  Any certificates for Common Stock issued upon the exercise of this Warrant shall bear a legend substantially in the following form:

 

“The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended.  These shares have been acquired for investment and not with a view to distribution or resale, and may not be made subject to a security interest, pledged, hypothecated, or otherwise transferred without an effective registration statement for such shares under the Securities Act of 1933, as amended, or an opinion of counsel for the Company or other counsel reasonably acceptable to the Company that registration is not required under such Act.”

 

  

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§ 15 Rule 144 Reporting»

 

.  With a view to making available to the holders of this Warrant or any holders of shares of Common Stock issued or issuable upon exercise thereof the benefits of certain rules and regulations of the Commission which may permit the sale of shares of Common Stock issuable upon exercise thereof to the public without registration, the Company agrees, after such time as a public market exists for the Common Shares, to:

 

(a) make and keep public information available as those terms are understood and defined in Rule144;

 

(b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended; and

 

(c) furnish to the holder of this Warrant or shares of Common Stock issued upon the exercise thereof forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Exchange Act, a copy of the most recent annual or quarterly report of the Company filed with the Commission, if any, and such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as such holders may reasonably request in availing themselves of any rule or regulation of the Commission allowing them to sell securities without registration under the Securities Act.

 

§ 16 Assignment»

 

.  Registered Owner may assign this Warrant and all rights and benefits contained therein to any of its parent, affiliates or subsidiaries, effective upon delivery of notice thereof to Company.  Upon the effective date of such assignment, the assignee shall be deemed the Registered Owner hereof.

 

§ 17 Information»

 

.  Company shall promptly provide to Registered Owner all information provided to Company’s shareholders so long as this Warrant is outstanding.

 

§ 18 Replacement of Warrant»

 

.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement in such reasonable amount as the Company may determine, or (in the case of mutilation) upon surrender and cancellation thereof, the Company at its expense, will issue a replacement warrant in substantially identical form to this Warrant.

 

§ 19 Headings»

 

.  The headings in this Warrant are for purposes of reference only and shall not be deemed to constitute a part hereof.

 

§ 20 Governing Law»

 

.  This Warrant shall be construed in accordance with and governed by the laws of the State of Delaware.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed this 25th day of March, 2011 by its corporate officer thereunto duly authorized.

 

	 	 
YTB INTERNATIONAL, INC.

	 
	 	 	 	 
	 	
By: 

	/s/ Robert M. Van Patten	 
	 	 	
Name: Robert M. Van Patten

	 
	 	 	
Title: President

	 
	 	 	 	 

 

  

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FORM OF ASSIGNMENT

 

[To be executed only upon transfer of Warrant]

 

For value received, the undersigned registered holder of the within Warranty hereby sells, assigns and transfers unto ______________ the right represented by such Warrant to purchase _______ shares of Class A Common Stock of YTB INTERNATIONAL, INC. to which such Warrant relates, and appoints Attorney to make such transfer on the books of YTB INTERNATIONAL, INC. maintained for such purpose, with full power of substitution in the premises.

 

	
Dated:

	  
	  	
(Signature must conform in all respects to name of holder as specified on the face of Warrant)

	  	  
	  	  
	  	  
	  	
(Street Address)

	  	  
	  	  
	  	
(City)(State)(Zip Code)

	
Signed in the presence of:

 

 

 

	  

 

 

 

 

 

 

 

 

 

 

 

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