Document:

exv10w2

 

Exhibit ___

AGREEMENT

     This Agreement made and entered into as of October 22, 2007 by and between Cornerworld
Corporation, a Nevada Corporation (the “Company”), and Dynasty Capital LLC, a Delaware Limited
Liability Company (“Dynasty”).

WITNESSETH:

     WHEREAS, on or about August 10, 2007, the Company completed the acquisition of Cornerworld,
Inc., a privately held corporation formed under the laws of the State of Delaware, pursuant to and
in accordance with the terms and conditions of the certain Share Exchange Agreement dated May 11,
2007, as amended (the “Share Exchange Agreement);

     WHEREAS, in accordance with the terms and conditions of the transactions completed pursuant to
the Share Exchange Agreement (the “Transactions”), Dynasty deposited an aggregate of 3,000,000
shares at a brokerage account (the “Shares”), and remains entitled to receive an aggregate of
$254,000 of additional proceeds from the sale of the Shares as part of the purchase price paid in
connection with the completion of the Transactions;

     WHEREAS, Paul F. Lovito, Jr. (“Lovito”) has offered to buy an aggregate of 800,000 of the
Shares from Dynasty for an aggregate purchase price of $867,500, and Dynasty has agreed, on behalf
of its shareholders, to sell such 800,000 shares to Lovito;

     WHEREAS, the aggregate amount of proceeds to be received by Dynasty from the sale of the
800,000 shares is greater than the amount of proceeds that Dynasty is entitled to receive as
additional proceeds from the sale of the Shares in order to satisfy the purchase price pursuant to
the Share Exchange Agreement;

     WHEREAS, the Company is willing to allow Dynasty to sell such 800,000 shares on the condition
that Dynasty loan the Company’s subsidiary, Cornerworld, Inc. the excess proceeds that it will be
receiving above the additional $254,000 of proceeds that it is entitled to receive to satisfy all
remaining Company obligations with respect to the purchase price pursuant to the Share Exchange
Agreement;

     NOW THEREFORE, in consideration of the mutual covenants and promises herein contained and upon
the terms and conditions hereinafter set forth, the parties hereto, intending to be legally bound,
agree as follows:

1. Consent to Sale of Shares. The Company hereby agrees to allow Dynasty to sell 800,000
shares to Lovito on the condition that Dynasty loan the Company’s subsidiary Cornerworld, Inc. the
excess proceeds that it will be receiving above the additional $254,000 of proceeds that it is
entitled to receive to satisfy all remaining Company obligations with respect to the purchase price
pursuant to the Share Exchange Agreement.

 

 

2. Loan Transaction. In connection with, and as a condition to, such transaction, the
Cornerworld, Inc. and Dynasty shall enter into a Purchase Agreement, Promissory Note, and Security
Agreement (collectively, the “Transaction Documents”), simultaneously with the execution of this
Agreement and the Share Purchase Agreement and Promissory Note between Dynasty and Lovito, pursuant
to which Dynasty shall agree to loan Cornerworld, Inc. any excess funds received by Dynasty above
the $254,000 of proceeds that it is entitled to receive to satisfy all remaining Company
obligations with respect to the purchase price pursuant to the Share Exchange Agreement.

3. Return of Excess Shares for Cancellation. Immediately upon completion of the sale of the
800,000 shares to Lovito, any and all of the remaining Shares held at the brokerage account shall
be forthwith returned to the Company for cancellation, and Dynasty shall execute and deliver any
and all required documentation in order to effect such cancellation.

4. Further Assurances. In order to assure compliance with, and completion of, the
foregoing, following the execution of this Agreement, at the request of either party, the other
party shall execute, acknowledge and deliver, without further consideration, all such further
assignments, conveyances, endorsements, deeds, powers of attorney, consents and other documents and
take such other action as may be reasonably requested to consummate the transactions contemplated
by this Agreement.

5. Miscellaneous

     5.1 Binding Effect; Benefits. This Agreement shall inure to the benefit of, and shall
be binding upon, the parties hereto and their respective successors and permitted assigns. Except
as otherwise set forth herein, this Agreement may not be assigned by any party hereto without the
prior written consent of the other party hereto. Except as otherwise set forth herein, nothing in
this Agreement, expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

     5.2 Notices. All notices, requests, demands and other communications which are
required to be or may be given under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person, or transmitted by telecopy or telex, or upon receipt
after dispatch by certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made, at the following addresses (or such
others as shall be provided in writing hereinafter):

	 	 	 	 	 
	(a)

	 	If to the Company, to:
	 	 
	 
	 	 	 	 
	 

	 	Cornerworld Corporation	 	 
	 

	 	12222 Merit Drive	 	 
	 

	 	Suite 120	 	 
	 

	 	Dallas, Texas 75251	 	 
	 

	 	Fax:	 	 

 

 

	 	 	 	 	 
	(b)

	 	If to the Dynasty, to:	 	 
	 
	 	 	 	 
	 

	 	Dynasty Capital, LLC	 	 
	 
	 	 	 	 
	 

	 	 
 
 
 
 
 Fax:	 	 

     5.3 Entire Agreement. This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, oral and written, between the parties hereto with respect
to the subject matter hereof.

     5.4 Headings. The section and other headings contained in this Agreement are for
reference purposes only and shall not be deemed to be a part of this Agreement or to affect the
meaning or interpretation of this Agreement.

     5.5 Counterparts. This Agreement may be executed in any number of counterparts, each
of which, when executed, shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.

     5.6 Governing Law. This Agreement shall be construed as to both validity and
performance and enforced in accordance with and governed by the laws of the State of New York,
without giving effect to the conflicts of law principles thereof.

     5.7 Severability. If any term or provision of this Agreement shall to any extent be
invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each
term and provision of the Agreement shall be valid and enforced to the fullest extent permitted by
law.

     5.8 Amendments. This Agreement may not be modified or changed except by an instrument
or instruments in writing executed by the parties hereto.

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.

	 	 	 	 	 
	CORNERWORLD CORPORATION:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	DYNASTY CAPITAL, LLC:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:exv10w3

 

Exhibit                     

PURCHASE AGREEMENT

     This Purchase Agreement (this “Agreement”) is dated as of October 19, 2007 (the
“Effective Date”) between CornerWorld, Inc., a Delaware corporation (the “Company”), and
the purchaser identified on the signature pages hereto (each, including its successors and assigns,
a “Purchaser” and collectively the “Purchasers”).

     WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company, securities of the
Company as more fully described in this Agreement.

     NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the Company and each Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere in this Agreement: (a)
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
the Notes (as defined herein), and (b) the following terms have the meanings set forth in this
Section 1.1:

     “Action” shall have the meaning ascribed to such term in Section 3.1(j).

     “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person, as
such terms are used in and construed under Rule 405 under the Securities Act. With respect
to a Purchaser, any investment fund or managed account that is managed on a discretionary
basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of
such Purchaser.

     “Board of Directors” means the board of directors of the Company.

     “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.

     “Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

     “Closing Date” means the Trading Day when all of the Transaction Documents have
been executed and delivered by the applicable parties thereto, and all conditions

 

 

precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities have been satisfied or waived.

     “Commission” means the Securities and Exchange Commission.

     “Company Counsel” means Sichenzia Ross Friedman Ference LLP, with offices
located at 61 Broadway, New York, New York 10006.

     “Notes” means the 8.25% Secured Promissory Notes due, subject to the terms
therein, October 22, 2007, issued by the Company to the Purchasers hereunder, in the form of
Exhibit A attached hereto.

     “Disclosure Schedules” shall have the meaning ascribed to such term in Section
3.1.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

     “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

     “Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).

     “Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

     “Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(b).

     “Material Permits” shall have the meaning ascribed to such term in Section
3.1(m).

     “Maximum Rate” shall have the meaning ascribed to such term in Section 5.17.

     “Participation Maximum” shall have the meaning ascribed to such term in Section
4.12.

     “Person” means an individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint stock
company, government (or an agency or subdivision thereof) or other entity of any kind.

     “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding, such as a
deposition), whether commenced or threatened.

     “Purchaser Party” shall have the meaning ascribed to such term in Section 4.10.

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     “Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).

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

     “Security Agreement” means the Security Agreement, dated October 19, 2007,
among the Company and the Purchasers.

     “Security Documents” shall mean the Security Agreement and any other documents
and filing required thereunder in order to grant the Purchasers a first priority security
interest in the assets of the Company as provided in the Security Agreement, including all
UCC-1 filing receipts.

     “Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for Note purchased hereunder as specified below such Purchaser’s name on the signature
page of this Agreement and next to the heading “Subscription Amount,” in United States
dollars and in immediately available funds or through cancellation of indebtedness as
described in Section 2.1.

     “Subsequent Financing” shall have the meaning ascribed to such term in Section
4.12.

     “Subsequent Financing Notice” shall have the meaning ascribed to such term in
Section 4.12.

     “Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the American Stock Exchange,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.

     “Transaction Documents” means this Agreement, the Note, the Security Agreement,
all exhibits and schedules thereto and hereto and any other documents or agreements executed
in connection with the transactions contemplated hereunder.

     “Variable Rate Transaction” shall have the meaning ascribed to such term in
Section 4.13(b).

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PURCHASE AND SALE

     1.1 Closing. On the Closing Date, upon the terms and subject to the conditions set
forth herein, substantially concurrent with the execution and delivery of this Agreement by the
parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to
purchase, up to an aggregate of $626,000.00 in principal amount of the Note.

     1.2 The Note shall be drawn in one tranche as follows: Six Hundred and Twenty Six Thousand
($626,000.00) shall be drawn on or before the 60th day after the Effective Date. The
obligation of the Company to repay the Advance shall be evidenced by the Notes in the form of
Exhibit A hereto and dated the date hereof.

     1.3 Subject to mandatory payment of Advances as set forth in Section 1.2, the principal amount
of the Notes shall be payable on the Maturity Date, as set forth in the Notes.

     1.4 Each Purchaser shall deliver to the Company, via wire transfer or a certified check,
immediately available funds equal to its Subscription Amount and the Company shall deliver to each
Purchaser its respective Note, as determined pursuant to Section 2.2(a), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon
satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at such
location as the parties shall mutually agree. The Company may raise the aggregate amount of up to
$626,000 for a period of up to 90 days as of the Closing Date.

     1.5 Deliveries.

     (a) On the Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser (except as noted) the following:

     (i) this Agreement duly executed by the Company;

     (ii) a Note with a principal amount equal to such Purchaser’s Subscription
Amount, registered in the name of such Purchaser; and

     (iii) the Security Agreement, duly executed by the Company;

     (b) On the Closing Date, each Purchaser shall deliver or cause to be delivered to the
Company the following:

     (i) this Agreement duly executed by such Purchaser;

     (ii) such Purchaser’s Subscription Amount (cash Subscription Amounts to be sent
by wire transfer to the Escrow Agent); and

     (iii) the Security Agreement duly executed by such Purchaser;

     1.6 Closing Conditions.

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     (a) The obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

     (i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchasers contained herein;

     (ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and

     (iii) the delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.

     (b) The respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:

     (i) the accuracy in all material respects when made and on the Closing Date of
the representations and warranties of the Company contained herein;

     (ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;

     (iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement; and

     (iv) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof;

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

     2.1 Representations and Warranties of the Company. Except as set forth in the Disclosure
Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any
representation or otherwise made herein to the extent of the disclosure contained in the
corresponding section of the Disclosure Schedules, the Company hereby makes the following
representations and warranties to each Purchaser:

     (a) Organization and Qualification. The Company is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the requisite
corporate power and corporate authority to own and use its properties and assets and to
carry on its business as currently conducted. The Company is not in violation or default of
any of the provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. The Company is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by it makes

5

 

such qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result in (i) a
material adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company, taken as a whole, or (iii) a
material adverse effect on the Company’s ability to perform in any material respect on a
timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

     (b) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company and no further action is
required by the Company, the Board of Directors or the Company’s stockholders in connection
therewith other than in connection with the Required Approvals. Each Transaction Document
has been (or upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its terms,
except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

     (c) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the other transactions
contemplated hereby and thereby do not and will not: (i) conflict with or violate any
provision of the Company’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company, or give to others
any rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company debt or otherwise) or other understanding to which the Company is a
party or by which any property or asset of the Company is bound or
affected, or (iii) subject to the Required Approvals, conflict with or result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material Adverse
Effect.

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     (d) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of
the Transaction Documents.

     (e) Litigation. There is no action, suit, inquiry, notice of violation,
proceeding or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction Documents or
the Notes or (ii) could, if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect.

     (f) Compliance. The Company has not received notice that it (i) is in default
under or in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company under), nor has
the Company received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument
to which it is a party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule
or regulation of any governmental authority, including without limitation all foreign,
federal, state and local laws applicable to its business and all such laws that affect the
environment, except in each case as could not have or reasonably be expected to result in a
Material Adverse Effect.

     (g) Title to Assets. The Company has good and marketable title in fee simple
to all real property owned or leased by them that is material to the business of the Company
and good and marketable title in all personal property owned or leased by them that is
material to the business of the Company, in each case free and clear of all Liens, except
for Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and
Liens for the payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities held under lease by
the Company are held by them under valid, subsisting and enforceable leases with which the
Company is in compliance in all material respects.

     (h) Intentionally Left Blank.

     (i) Certain Fees. No brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Purchasers shall have no obligation with respect to any
fees or with respect to any claims made by or on behalf of other

7

 

Persons for fees of a type
contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.

     (j) Disclosure. Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, the Company confirms that
neither it nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or might
constitute material, nonpublic information. All disclosure furnished by or on behalf of the
Company to the Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is true and
correct and does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

     (k) Solvency. The Company does not intend to incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of cash to be
payable on or in respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the
Closing Date. Schedule 3.1(aa) sets forth as of the date hereof all outstanding
secured and unsecured Indebtedness of the Company, or for which the Company has commitments.
For the purposes of this Agreement, “Indebtedness” means (a) any liabilities for
borrowed money or amounts owed in excess of $300,000 (other than trade accounts payable
incurred in the ordinary course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of indebtedness of others, whether or not the same are or
should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (c) the present value of any lease payments in
excess of $300,000 due under leases required to be capitalized in accordance with GAAP. The
Company is not in default with respect to any Indebtedness.

     (l) Tax Status. Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse Effect, the
Company has filed all necessary federal, state and foreign income and franchise tax returns
and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of
a tax deficiency which has been asserted or threatened against the Company.

     (m) No General Solicitation. Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Notes by any form of general
solicitation or general advertising. The Company has offered the Notes for sale only to the
Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the
Securities Act.

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     (n) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of
the Company, any agent or other person acting on behalf of the Company, has (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any material
respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

     (o) Accountants. The Company’s accounting firm is Schumacher & Associates,
Inc.; 2525 15th Street, Suite 3H Denver, CO 80211

     (p) Seniority. As of the Closing Date, no Indebtedness or other claim against
the Company is senior to the Note in right of payment, whether with respect to interest or
upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase
money security interests (which is senior only as to underlying assets covered thereby) and
capital lease obligations (which is senior only as to the property covered thereby).

     (q) No Disagreements with Accountants and Lawyers. There are no disagreements
of any kind presently existing, or reasonably anticipated by the Company to arise, between
the Company and the accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its accountants and lawyers
which could affect the Company’s ability to perform any of its obligations under any of the
Transaction Documents.

     (r) Acknowledgment Regarding Purchasers’ Purchase of Notes. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no Purchaser is acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with respect to
the Transaction Documents and the transactions contemplated thereby and any advice given by
any Purchaser or any of their respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Notes. The Company further represents to each Purchaser that the
Company’s decision to enter into this Agreement and the other Transaction Documents has been
based solely on the independent evaluation of the transactions contemplated hereby by the
Company and its representatives.

     2.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself
and for no other Purchaser hereby, represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:

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     (a) Organization; Authority. Such Purchaser is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization
with full right, corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution and delivery of the Transaction
Documents and performance by such Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate or similar action
on the part of such Purchaser. Each Transaction Document to which it is a party has been
duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.

     (b) General Solicitation. Such Purchaser is not purchasing the Notes as a
result of any advertisement, article, notice or other communication regarding the Notes
published in any newspaper, magazine or similar media or broadcast over television or radio
or presented at any seminar or any other general solicitation or general advertisement.

ARTICLE III.

OTHER AGREEMENTS OF THE PARTIES

     3.1 Subsequent Financing or Equity Sales.

     (a) The Company shall be permitted to enter into other subsequent agreements to effect
any future financing involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company issues or sells (i) any debt or
equity securities that are convertible into, exchangeable or exercisable for, or include the
right to receive additional shares of Common Stock either (A) at a conversion, exercise or
exchange rate or other price that is based upon and/or varies with the trading prices of or
quotations for the shares of Common Stock at any time after the initial issuance of such
debt or equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such debt or equity
security or upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock or (ii) enters
into any agreement, including, but not limited to, an equity line of credit, whereby the
Company may sell securities at a future determined price.

10

 

ARTICLE IV.

MISCELLANEOUS

     4.1 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and
schedules.

     4.2 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) 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 a Trading Day, (b) 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, (c) the second Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.

     4.3 Amendments; Waivers. No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed, in the case of an amendment, by the
Company and the Purchasers of at least a majority interest of the Securities still held by
Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waived
provision is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

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

     4.5 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written consent of each
Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this
Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that
such transferee agrees in writing to be bound, with respect to the transferred Securities, by the
provisions of the Transaction Documents that apply to the “Purchasers.”

     4.6 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.10.

     4.7 Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York. Any controversy or claim arising

11

 

out of or
related to this Agreement or the breach thereof, shall be settled by binding arbitration in New
York, New York in accordance with the Expedited Procedures (Rules 53-57) of the Commercial
Arbitration Rules of the American Arbitration Association (“AAA”). A proceeding shall be
commenced upon written demand by the Company or Purchaser to the other. The arbitrator(s) shall
enter a judgment by default against any party, which fails or refuses to appear in any properly
noticed arbitration proceeding. The proceeding shall be conducted by one (1) arbitrator, unless
the amount alleged to be in dispute exceeds two hundred fifty thousand dollars ($50,000), in which
case three (3) arbitrators shall preside. The arbitrator(s) will be chosen by the parties from a
list provided by the AAA, and if the parties are unable to agree within ten (10) days, the AAA
shall select the arbitrator(s). The arbitrators must be experts in securities law and financial
transactions. The arbitrators shall assess costs and expenses of the arbitration, including all
attorneys’ and experts’ fees, as the arbitrators believe is appropriate in light of the merits of
the parties’ respective positions in the issues in dispute. Each party submits irrevocably to the
jurisdiction of any state court sitting in New York, New York or to the United States District
Court sitting in New York, New York for purposes of enforcement of any discovery order, judgment or
award in connection with such arbitration. The award of the arbitrator(s) shall be final and
binding upon the parties and may be enforced in any court having jurisdiction. The arbitration
shall be held in such place as set by the arbitrator(s) in accordance with Rule 55. With respect
to any arbitration proceeding in accordance with this section, the prevailing party’s reasonable
attorney’s fees and expenses shall be borne by the non-prevailing party.

     Although the parties, as expressed above, agree that all claims, including claims that are
equitable in nature, for example specific performance, shall initially be prosecuted in the binding
arbitration procedure outlined above, if the arbitration panel dismisses or otherwise fails to
entertain any or all of the equitable claims asserted by reason of the fact that it lacks
jurisdiction, power and/or authority to consider such claims and/or direct the remedy requested,
then, in only that event, will the parties have the right to initiate litigation respecting such
equitable claims or remedies. The forum for such equitable relief shall be in either a state or
federal court sitting in New York, New York. Each party waives any right to a trial by jury,
assuming such right exists in an equitable proceeding, and irrevocably submits to the jurisdiction
of said New York court. New York law shall govern both the proceeding as well as the
interpretation and construction of this Agreement and the transaction as a whole.

     4.8 Survival. The representations and warranties shall survive the Closing and the
delivery of the Securities for the applicable statue of limitations.

     4.9 Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.

12

 

     4.10 Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

     4.11 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein
provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, in the case
of a rescission of a conversion of a Note, the Purchaser shall be required to return any shares of
Common Stock delivered in connection with any such rescinded conversion or exercise notice.

     4.12 Replacement of Securities. If any instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new
certificate or instrument under such circumstances shall also pay any reasonable third-party costs
(including customary indemnity) associated with the issuance of such replacement Securities.

     4.13 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agrees to waive and not to assert in
any action for specific performance of any such obligation the defense that a remedy at law would
be adequate.

     4.14 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the performance or
non-performance of the obligations of any other Purchaser under any Transaction Document.

     4.15 Liquidated Damages. The Company’s obligations to pay any partial liquidated
damages or other amounts owing under the Transaction Documents is a continuing obligation of the
Company and shall not terminate until all unpaid partial liquidated damages and other amounts have
been paid notwithstanding the fact that the instrument or security pursuant to

13

 

which such partial liquidated damages or other amounts are due and payable shall have been
canceled.

     4.16 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a Business Day,
then such action may be taken or such right may be exercised on the next succeeding Business Day.

     4.17 Construction. The parties agree that each of them and/or their respective counsel
has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal
rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments
hereto.

(Signature Pages Follow)

14

 

     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first indicated above.

	 	 	 	 	 	 	 
	CORNERWORLD, INC.	 	 	 	Address for Notice

12222 Merit Drive

Suite 120; Dallas

Texas 75251:
	By:

	 	 	 	 	 	Fax: 972-404-4056
	 

	 	 	 	 	 	 
	 

	 	Name: Scott Beck	 	 	 	 
	 

	 	Title: President	 	 	 	 
	 
	 	 	 	 	 	 
	With a copy to (which shall not constitute notice):

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

15

 

[PURCHASER SIGNATURE PAGES TO CORNERWORLD, INC. PURCHASE AGREEMENT]

     IN WITNESS WHEREOF, the undersigned have caused this Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated above.

	 	 	 
	Name of Purchaser: Dynasty Capital LLC

	 	 
	 

	 	 

	 	 	 
	Signature of Authorized Signatory of Purchaser:
	 	 
	 

	 	 

	 	 	 
	Name of Authorized Signatory:

	 	 
	 

	 	 

	 	 	 
	Title of Authorized Signatory:

	 	 
	 

	 	 

Email Address of Purchaser: psiserve@telus.net

	 	 	 
	Facsimile Number of Purchaser:

	 	 
	 

	 	 

			
	Address for Notice of Purchaser:     	 	1201 Orange Street, Suite 600

1 Commerce Center

Wilmington, DE 19801

Address for Delivery of Securities for Purchaser (if not same as address for notice):

Subscription Amount: $626,000

			
	EIN Number (if applicable):	 	[PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

16

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