Document:

ex1047.htm

    STOCK
REPURCHASE AGREEMENT

    

    This
Stock Repurchase Agreement (“Agreement”) is entered into as of January 1, 2010
(the “Effective
Date”), by and between LAS VEGAS GAMING, INC., a Nevada corporation (the
“Company”)
and TRIANGLE HOLDINGS VI LLC, an Oregon limited liability company (“Seller”).

    

    RECITALS

    

    A.           Seller
owns 150,000 shares of Series G Convertible Preferred Stock of the Company,
recorded in the name of Seller on the books of the Company (the “Shares”).

    

    B.           Pursuant
to the terms of Shares, Seller is entitled to receive a 12% annual
dividend.  The Company was unable to pay the dividend due January 1,
2010, which amounted to $107,847.12.

    

    C.           As
a result of Seller’s failure to pay the past due dividend, Seller has asked the
Company to repurchase the Shares for the amount of Seller’s initial
investment.

    

    D.           The
Company desires to repurchase the Shares from Seller and Seller desires to sell
the Shares to the Company on the terms and subject to the conditions set forth
in this Agreement.

    

    AGREEMENT

    

    NOW,
THEREFORE, the parties agree as follows:

    

    
      1.  Sale
and Purchase of Shares.

    

    

    1.1     
Sale.  Subject
to the terms and conditions of this Agreement, the Seller hereby sells, assigns,
and transfers all of the Shares to Company (“Repurchase”)
in consideration for the Purchase Price (as defined below).

    

    1.2     
Purchase
Price.  Company shall purchase the Shares for $750,000 (the
“Purchase
Price”), payable in the form of, and pursuant to, a promissory note
substantially in the form of Exhibit A hereto (the “Note”).  The
amount of such promissory note shall include, in addition, the amount of the
past due dividend of $107,847.12.

    

    1.3    
Closing.  Upon
execution of this Agreement, (i) Seller shall deliver to the Company the
certificate or certificates for the Shares, together with an assignment separate
from certificate in the form attached to this Agreement as Exhibit B and
endorsed in blank, and (ii) Company shall deliver the Note.

    

    
      2.  Representations
by Seller.

    

    

    2.1     
Authorization;
Enforcement.  Seller represents and warrants to the Company
that Seller has the absolute and unrestricted right, power and authority to
sell, transfer and assign the Shares to the Company pursuant to this
Agreement.  This Agreement has been duly authorized and executed by
Seller, and is the valid and binding agreement of Seller, enforceable against it
in accordance with its terms.

     

     

    
      
        
        

      

      
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    2.2     
Consents.  No
consent, approval or authorization of or notice to any third party is necessary
to be obtained or given by or on behalf of Seller in connection with the
Repurchase. Seller further represents and warrants to Company that the
Repurchase does not violate the organizational documents of Seller or any
agreement to which Seller is a party.

    

    2.3      
Ownership.  Seller
has and is conveying to the Company good and marketable title to the Shares,
free and clear of any liens, restrictions, claims or other
encumbrances.

    

    2.4      
Knowledge of
Seller.  Seller has sufficient knowledge to independently
evaluate, and is fully familiar with, the Company and its financial position,
prospects and valuation. Seller has not relied on, is not relying on, and has
not been influenced by, any representation, information or recommendation
provided by Company, its directors, management, employees, agents or advisors in
determining the sale price or evaluating or reaching Seller’s decision to sell
the Shares.

    

    
      3.  Miscellaneous.

    

    

    3.1      
Governing
Law.  This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Nevada.

    

    3.2       
Entire Agreement;
Enforcement of Rights.  This Agreement, including all exhibits
hereto, contains the entire agreement and understanding of the parties relating
to its subject matter and supersedes all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the
parties. The failure by either party to enforce any rights under this Agreement
shall not be construed as a waiver of any rights of such party.

    

    3.3       Severability.  Any
provision of this Agreement which is invalid, illegal or unenforceable shall be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof or rendering that
or any other provision of this Agreement invalid, illegal or unenforceable. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.

    

    3.4       
Costs.  Each
party shall pay all of its own costs and expenses, including the fees and costs
of its attorneys, consultants, contractors and representatives, incurred in
connection with this Agreement. If any dispute arises out of or relates to this
Agreement, whether or not a suit or other proceeding is commenced, and whether
in mediation, in arbitration, at trial, on appeal, the prevailing party shall be
entitled to recover and be reimbursed for its costs and expenses incurred,
including reasonable attorney fees.

     

    
      
        
        

      

      
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    3.5        
Notices.  Any
notice required or permitted by this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by facsimile or other form
of electronic transmission or 48 hours after being deposited in the U.S. mail,
as certified or registered mail, with postage prepaid, and addressed to the
party to be notified at such party’s address, facsimile number or email address
as set forth below or as subsequently modified by written notice.

    

    3.6        
Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns.

    

    3.7         Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original and which together shall constitute one and the same instrument.
Evidence of execution may be provided on a facsimile basis by telecopy or other
electronic means.

    

    3.8        
Further
Assurances.  Each of the parties agrees to execute such further
instruments or documents reasonably requested by the other party or as necessary
to carry out the purposes of this Agreement.

    

    The
parties have executed this Stock Repurchase Agreement as of the day and year
first set forth above.

    

    

    
      	
              COMPANY:

              LAS
      VEGAS GAMING, INC.

               

               

              By:
      /s/ Bruce A.
      Shepard                                  
      

               Name:
      Bruce A. Shepard

               Its:     
      Chief Financial Officer

               

              Address:  
      3980 Howard Hughes Parkway

                                
      Las Vegas, Nevada  89169

              Facsimile: (702)
      733-4907

               

              Email:       
      bruce@lvgi.com

            	
              SELLER:

              TRIANGLE
      HOLDINGS VI LLC

               

               

              By: 
      /s/ Jay
      Zidell                                             
      

              Name:  
      Jay Zidell

              Its:        
      Manager

               

              Address: 
      3121 S.W. Moody Avenue

                 Portland,
      Oregon  97239

              Facsimile: 
      (503) 827-0289

               

              Email:        
      jayz@zidell.com

            

    

    

     

    

    
      
         

      

      
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    EXHIBIT
A

    

    ASSIGNMENT
SEPARATE FROM CERTIFICATE

    

    FOR VALUE RECEIVED and pursuant to that
certain Stock Repurchase Agreement between the undersigned (“Seller”) and LAS
VEGAS GAMING, INC. (the “Company”), dated as of January 1, 2010, Seller hereby
sells, assigns and transfers unto Company a total of 150,000 shares of Series G
Convertible Preferred Stock of the Company, recorded in Seller’s name on the
books of Company and does hereby irrevocably constitute and appoint Company as
transfer agent to transfer the said shares on the books of Company with full
power of substitution in the premises.

    

    Dated: 
March 23, 2010

    

    SELLER:

     

    TRIANGLE
HOLDINGS VI LLC

    

    

    By:  /s/  Jay
Zidell                                   

    Name:   Jay
Zidell

    Title:    
Manager

    

     

    
 

    
      
         

      

      
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    EXHIBIT
B

    

    SECURED SECOND POSITION
PROMISSORY NOTE

    
 

    
      
        	
                $1,107,847.12

              	
                Las
      Vegas, Nevada

              	
                January
      1, 2010

              

      

    

     

    FOR VALUE
RECEIVED, the undersigned, LAS VEGAS GAMING, INC., a Nevada corporation with its
principal place of business at 3980 Howard Hughes Parkway, Suite 450, Las Vegas,
Nevada 89169 (“Maker”),
hereby unconditionally promises to pay to the order of Triangle Holdings VI LLC,
(“Payee”) at
3121 SW Moody Avenue, Portland, Oregon 97239, in immediately available funds by
wire transfer or cashier’s check, the principal sum of ONE MILLION ONE HUNDRED
SEVEN THOUSAND EIGHT HUNDRED FORTY SEVEN AND 12/100 DOLLARS ($1,107,847.12), or
such lesser amount as may be payable hereunder pursuant to the terms of this
Secured Second Position Promissory Note (this “Note”),
together with accrued interest on the outstanding and unpaid principal balance
as herein specified.

     

    1.           Loans.  The
principal amount of this Note represents (a) the repurchase by Maker of 150,000
shares of Series G Convertible Preferred Stock of Maker currently held by Payee
for the amount of Payee’s initial investment of $750,000, together with the 12%
dividend amounting to $107,847.12 that was due and payable on January 1, 2010,
which Maker is unable to pay, (b) a new loan in the amount of $150,000, to be
made on March 18, 2010, and to be used to lease or purchase materials that will
be used to produce, and that will become a part or component of, Maker’s
products, including PlayerVision 3 software applications incorporated into
Maker’s slot machine products, and (c) a $100,000 loan fee charged by Payee in
connection with making the new loan (the “Loan
Fee”).

     

    2.           Payments. (a) The
entire outstanding principal balance of this Note, together with all accrued and
unpaid interest, shall be due and payable in one payment on the earlier to occur
of (a) the date that that certain loan from IGT, a Nevada corporation, to Maker
in the principal amount of $1,500,000 is repaid in full and (b) the date on
which IGT forecloses on such loan as a result of a default thereunder (such
date, the “Due
Date”). Maker may prepay all or any portion of the principal of this Note
without giving Payee prior written notice of its intention to make such
prepayment and without a prepayment penalty. Any prepayment shall be accompanied
by the payment of all accrued and unpaid interest on the amount of principal
being so prepaid.

     

    (b) All
payments and prepayments of principal or interest on this Note shall be made in
lawful money of the United States of America at the address of Payee indicated
above, or such other place as the holder of this Note shall designate in writing
to Maker.  Each payment under this Note shall be credited as follows:
first, to accrued but unpaid fees (including, without limitation, the Loan Fee);
second, to accrued and unpaid interest; and third, to the unpaid principal
balance of this Note.

     

     

    
      
        
        

      

      
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    3.           Interest Rate. The
principal balance hereof from time to time outstanding, as well as any interest
not paid when due, shall bear interest at the rate of ten percent (10%) per
annum from the date hereof and continuing until all sums due hereunder are paid
in full.  All accrued interest shall be payable on the Due
Date.

     

    4.           Security. This Note
is executed as of March 18, 2010 to be effective as of January 1, 2010. Maker
hereby grants to Payee, for the benefit of Payee and any affiliate of Payee, a
continuing second priority security interest (except as otherwise noted below)
in and to, and assigns to Payee the following, and each item thereof, whether
now owned or now due, or in which Maker has an interest, or hereafter acquired,
arising, or to become due, or in which Maker obtains an interest, and all
products, proceeds, substitutions, and accessions of or to any of the following
(all of foregoing, together with any other property in which Payee may in the
future be granted a security interest, is referred to herein as the “Collateral”):

     

    
      	
              (a) 

               

              (b) 

            	
              All
      accounts and accounts receivable;

               

              All inventory;

            

    

     

    
      	
              (c)  

            	
              All
      general intangibles (including, without limitation, all intellectual
      property and patents for PlayerVision 3 and Nevada
    Numbers);

            

    

     

    
      	
              (d)  

            	
              All
      equipment; (except for 32 slot machines with respect to which Gaming Arts,
      LLC holds a second priority security and with respect to which Payee will
      hold a third priority security
interest);

            

    

     

    
      	
              (e)  

            	
              All
      goods;

            

    

     

    
      	
              (f)  

            	
              All
      fixtures (except the furniture and fixtures at 3980 Howard Hughes Parkway,
      Suite 450, Las Vegas, Nevada with respect to which Gaming Arts, LLC holds
      a second priority security and with respect to which Payee will hold a
      third priority security interest);

            

    

     

    
      	
              (g)  

            	
              All
      chattel paper.

            

    

     

    
      	
              (h)  

            	
              All
      rights under letters of credit of which Seller is the
      beneficiary;

            

    

     

    
      	
              (i)  

            	
              All
      payment intangibles;

            

    

     

     

    
      
        
        

      

      
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              (j)  

            	
              All
      supporting obligations;

            

    

     

    
      	
              (k)  

            	
              All
      books, records, and information relating to the Collateral and/or to the
      operation of Maker’s business, and all rights of access to such books,
      records, and information, and all property in which such books, records,
      and information are stored, recorded, and
  maintained;

            

    

     

    
      	
              (l)  

            	
              All
      leasehold interests;

            

    

     

    
      	
              (m)  

            	
              All
      investment property, instruments, documents, deposit accounts, money,
      policies and certificates of insurance, deposits, impressed accounts,
      compensating balances, cash, or other
property;

            

    

     

    
      	
              (n)  

            	
              All
      insurance proceeds, refunds, and premium rebates, including, without
      limitation, proceeds of fire and credit insurance, whether any of such
      proceeds, refunds, and premium rebates arise out of any of the foregoing.
      ((a) through (m)) or otherwise; and

            

    

     

    
      	
              (o)  

            	
              All
      liens, guaranties, rights, remedies, and privileges pertaining to any of
      the foregoing ((a) through (n)), including the right of stoppage in
      transit.

            

    

     

    All terms
used in this Section 3 and not otherwise defined in this Note shall have the
meanings given to them in the Nevada Uniform Commercial Code (the “UCC”). It
is intended that the Collateral include, without limitation, all PlayerVision
assets of Maker.  Maker agrees to execute such financing statements
and to take whatever other actions are requested by Payee to perfect and
continue Payee’s security interest in the Collateral.  Maker
authorizes Payee to file one or more financing statements describing the
Collateral in any and all jurisdictions where, and with any and all governmental
authorities with whom, the Payee deems such filing to be necessary or
appropriate to perfect and establish the priority of the liens granted by this
Note.

     

    5.           Maker’s
Representations. Maker hereby
represents and warrants to Payee that:

     

    
      	
               
      

            	
              (a)

            	
              Maker
      has good and marketable title to the Collateral, subject only to the liens
      or encumbrances disclosed as of the date hereof to Payee by Maker in
      writing.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Maker
      is duly organized and validly existing as a corporation under the laws of
      the state of Nevada, and is in good standing as a corporation and
      qualified to do business in each state in which the nature of its business
      or property so requires.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Maker
      has the corporate power and authority and is duly authorized to execute
      and deliver this Note and perform the obligations under this
      Note.  This Note has been duly executed and delivered by an
      authorized officer of Maker and constitutes a valid and legally binding
      obligation of Maker, enforceable in accordance with its
    terms.

            

    

     

     

    
      
        
        

      

      
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              (d)

            	
              Maker’s
      execution, delivery, and performance of this Note and compliance with the
      terms, conditions and provisions hereof are not prohibited or restricted
      under the articles of incorporation or bylaws of Maker and do not conflict
      with, violate or constitute a breach of or default under any provision of
      any agreement, contract, lease, deed of trust, indenture, or instrument to
      which Maker is a party or by which Maker or its assets and properties,
      including the Collateral, are bound, or result in the imposition of any
      lien, charge, encumbrance, claim or security interest of any nature
      whatsoever upon any of the
Collateral.

            

    

     

    
      	
               
      

            	
              (e)

            	
              The
      security interest granted hereby in and to the Collateral constitutes a
      present, valid, binding and enforceable security interest as collateral
      security for Maker’s obligations under this Note and will be senior and
      prior to any liens, encumbrances, charges, title defects, interests and
      rights of any others with respect to such Collateral, other than the liens
      granted in favor of IGT and Gaming Arts, LLC, which rank senior to Payee’s
      security interest.

            

    

     

    
      	
               
      

            	
              (f)

            	
              There
      are no actions or proceedings pending or, to the knowledge of Maker,
      threatened against Maker that would reasonably be expected to (i) result
      in any material adverse change in Maker’s financial or business condition
      or (ii) materially adversely affect any of Maker’s assets, including the
      Collateral.

            

    

     

    6.           Maker’s
Covenant.  For so long as this Note remains outstanding, Maker
shall not sell, assign or transfer any of the Collateral, or any part thereof or
interest therein, other than in the ordinary course of business.

     

    7.           
Events of
Default. Maker shall be in default hereunder upon the happening
of any of the following events or conditions (each such event or condition
hereinafter referred to as an “Event of
Default”):

     

    
      	
              (a)  

            	
              Maker
      shall fail to pay when due any principal of or accrued and unpaid interest
      on this Note on or before three business days after Payee has given Maker
      written notice of such payment
default.

            

    

     

    
      	
              (b)  

            	
              Maker
      shall fail to pay when due any principal of or accrued and unpaid interest
      on any indebtedness of Maker for borrowed money, and such failure to pay
      shall remain unremedied for a period of five business
  days.

            

    

     

    
      	
              (c)  

            	
              Maker
      or any subsidiary of Maker shall breach any of the terms of any agreement
      between Maker or any of its subsidiaries, on the one hand, and Payee or
      any of its affiliates, on the other
hand.

            

    

     

     

    
      
        
        

      

      
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              (d)  

            	
              Maker
      shall commence a voluntary proceeding seeking liquidation, reorganization,
      or other relief with respect to itself or its debts under any bankruptcy,
      insolvency, or other similar law now or hereafter in effect, or seeking
      the appointment of a trustee, receiver, liquidator, custodian, or other
      similar official for it or a substantial part of its property or shall
      consent to any such relief or to the appointment of or taking possession
      by any such official in an involuntary case or other proceeding commenced
      against it or shall make a general assignment for the benefit of creditors
      or shall take any corporate action to authorize any of the
      foregoing.

            

    

     

    
      	
              (e)  

            	
              Any
      involuntary proceeding shall be commenced against Maker seeking
      liquidation, reorganization, or other relief with respect to it or its
      debts under any bankruptcy, insolvency, or other similar law now or
      hereafter in effect, or seeking the appointment of a trustee, receiver,
      liquidator, custodian, or other similar official for it or a substantial
      part of its property, and such involuntary proceeding shall remain
      undismissed and unstayed for a period of ninety (90)
  days.

            

    

     

    
      	
              (f)  

            	
              The
      failure by Maker to timely file with the United States Securities and
      Exchange Commission all reports and other documents required of the Maker
      under the Securities Act of 1933 and the Securities Exchange Act of
      1934.

            

    

     

    
      	
              (g)  

            	
              Any
      condition or event occurs that Payee determines, in its sole and absolute
      discretion, has or is reasonably likely to have a material adverse effect
      on (i) Maker’s business or operations, (ii) the validity or enforceability
      of this Note or the rights and remedies of Payee hereunder or (iii) the
      value of the Collateral.

            

    

     

    8.           Remedies.  (a)
Maker shall promptly notify Payee upon becoming aware of the occurrence of an
Event of Default hereunder. Upon the occurrence of any Event of Default set
forth in clauses (a), (b) or (c) above, the entire unpaid principal balance of
and accrued interest on this Note shall immediately become due and payable with
no action required by the holder hereof. Upon the occurrence of any other Event
of Default, the holder hereof may, at its option, declare the entire unpaid
principal balance of and accrued interest on this Note immediately due and
payable without notice, demand or presentment, all of which are hereby waived,
and upon such declaration the same shall become and shall be immediately due and
payable.  Upon the occurrence of any Event of Default hereunder, Payee
shall have (a) all rights and remedies provided to a secured party with respect
to the Collateral under the UCC and (b) all rights or remedies available to
Payee at law or in equity.

     

     

    
      
        
        

      

      
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    (b) If
Payee or any other holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, all reasonable collection costs and
fees incurred by the holder, including reasonable attorneys’ fees, shall be
added to the principal amount of this Note.

     

    9.           GOVERNING LAW; VENUE.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEVADA AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.  ANY ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS
NOTE AGAINST MAKER OR ANY OTHER PARTY LIABLE FOR PAYMENT OF ANY SUMS OF MONEY
PAYABLE ON THIS NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN CLARK
COUNTY, NEVADA.  MAKER AND EACH SUCH OTHER PARTY HEREBY IRREVOCABLY
(A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND (B) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF PAYEE TO BRING ANY ACTION OR PROCEEDING
AGAINST MAKER OR ANY OTHER PARTY LIABLE HEREUNDER OR WITH RESPECT TO ANY
COLLATERAL IN ANY STATE OR FEDERAL COURT IN ANY OTHER JURISDICTION.

     

    10.           Waivers. Maker and
each surety, guarantor, endorser, and other party ever liable for payment of any
sum s of money payable on this Note jointly and severally waive notice,
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, grace, and all other formalities of
any kind, and consent to all extensions without notice for any period or periods
of time and partial payments, before or after maturity, and any impairment of
any collateral securing this Note, all without prejudice to Payee or any other
holder hereof.  Payee and any other such holder shall similarly have
the right to deal in any way, at any time, with one or more of the foregoing
parties without notice to any other party, and to grant any such party any
extensions of time for payment of any of said indebtedness, or to release or
substitute part or all of the collateral securing this Note, or to grant any
other indulgences or forbearances whatsoever, without notice to any other party
and without in any way affecting the personal liability of any party
hereunder.

     

    11.           Full
Recourse.  The liability of Maker for amounts owing hereunder
shall not be limited to the Collateral.  Maker shall remain fully
liable for indefeasible repayment in full of the full amount of this Note,
including all accrued and unpaid interest, fees, and expenses, and,
specifically, any remaining amounts owing in the event that sale or other
liquidation of the Collateral is deficient to satisfy the full amount owing
hereunder.

     

     

    
      
        
        

      

      
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    12.           Miscellaneous.

     

    
      	
               
      

            	
              (a)

            	
              This
      Note shall be binding upon Maker and shall inure to the benefit of Payee
      and its successors, assigns, heirs, and legal
    representatives.

            

    

     

    
      	
               
      

            	
              (b)

            	
              No
      failure or delay by Payee to insist upon the strict performance of any
      term, condition, covenant or agreement of this Note, or to exercise any
      right, power or remedy hereunder shall constitute a waiver of any such
      term, condition, covenant, agreement, right, power or
    remedy.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Time
      is of the essence.

            

    

     

    IN WITNESS WHEREOF, this Note
has been executed effective the date and place first written above.

    

    

    LAS
VEGAS GAMING, INC.

     

    By: /s/  Bruce A.
Shepard                                            

    Name: 
Bruce A. Shepard

    Title:   
Chief Financial Officer

    

    

    

    
      
         

      

      
        - 11
-ex4_1.htm

Exhibit 4.1

	

	
ROSS MILLER

Secretary of State

204 North Carson Street, Suite 1

Carson City, Nevada 89701-4520

(775) 684 5708

Website: www.nvsos.gov

	
 

 

Certificate of Designation

(PURSUANT TO NRS 78.1955)

 

 

	  

	
USE BLACK INK ONLY - DO NOT HIGHLIGHT

	
ABOVE SPACE IS FOR OFFICE USE ONLY

Certificate of Designation For

Nevada Profit Corporations

(Pursuant to NRS 78.1955)

1.  Name of corporation:

NANOVIRICIDES, INC.

2.  By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.

CERTIFICATE OF DESIGNATION, RIGHTS AND PREFERENCES

OF

SERIES B CONVERTIBLE PREFERRED STOCK

OF

NANOVIRICIDES, INC.

1. Designation.  The designation of the series of preferred stock created hereby shall be "Series B Convertible Preferred Stock" (the "Series B Preferred Stock") and the number of shares constituting the Series B Preferred Stock shall be 1,000,000 shares, par value $0.001 per share.

(balance attached)

3.  Effective date of filing: (optional)

	  	
(must not be later than 90 days after the certificate is filed)

4.   Signature: (required)

 

	
X /s/ Anil R. Diwan,

	  

Signature of Officer

 

Filing Fee: $175.00

 

IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

 

	
This form must be accompanied by appropriate fees.

	
Nevada Secretary of State Stock Designation

Revised: 3-6-09

  

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CERTIFICATE OF DESIGNATION, RIGHTS AND PREFERENCES

OF

SERIES B CONVERTIBLE PREFERRED STOCK

OF

NANOVIRICIDES, INC.

(Continued)

2.             Certain Definitions. For the purposes of the Certificate of Designation, Preferences and Rights which embodies this resolution, unless the context otherwise requires, capitalized terms used and not otherwise defined in such Certificate of Designation, Preferences and Rights shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural):

“Additional Shares of Common Stock” shall mean all shares (including treasury shares) of common stock issued or sold by the Company after the date hereof, whether or not subsequently reacquired or retired by the Company, other than (i) shares of common stock issued upon conversion of the Series B Preferred Stock or (ii) shares of common stock issued concurrently with the issuance of the Series B Preferred Stock to the Holders thereof.

“Balance of Series B Preferred Stock” shall mean the number of shares of Series B Preferred Stock held by any Holder for which a conversion hereunder has not been completed at the time the Balance of Series B Preferred Stock is calculated.

“Business Day” shall mean any day on which banks are open for business in New York, New York (other than a Saturday or Sunday), provided that any reference to “days” (unless Business Days are specified) shall mean calendar days.

“Commission” shall mean the Securities and Exchange Commission or any successor federal agency having similar powers.

“Common Stock” shall mean the common stock of the Company, par value $.001 per share, and any stock into which such stock shall have been converted or changed or any stock resulting from any reclassification of such stock and all other stock of any class or classes (however designated) of the Company, the holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference.

“Company” shall mean NanoViricides, Inc., a Nevada corporation.

“Conversion Shares” shall mean the shares of Common Stock into which the Series B Convertible Stock are convertible.

“Convertible Security” shall mean with respect to the Company any evidence of indebtedness, shares of stock (other than Common Stock) or other securities directly or indirectly convertible into or exchangeable for Common Stock.

  

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“Event of Default” shall mean the Company’s failure to provide written instructions to deliver shares of Common Stock to the Company’s transfer agent for its Common Stock within two (2) Business Days of a Conversion Date and the Company’s voluntary or involuntary, or a third party’s, petition for bankruptcy protection for the Company or for an assignment of assets for benefit of the Company’s creditors.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Floor” shall mean $0.20 (as the same may be proportionately adjusted in respect of any stock split, stock dividend, combination, recapitalization or the like with respect to the Common Stock)

“Holder” shall mean a holder of the Series B Preferred Stock.

“Market Trigger Event” shall mean any instance of the 20-day VWAP falling below the Floor on its principal Trading Market.

“Options” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock, Additional Shares of Common Stock or Convertible Securities.

“Other Securities” shall mean, when referring to the Company, any stock (other than Company Common Stock) and any other securities of the Company or any other Person (corporate or otherwise) which the holder of Series B Preferred Stock shall at any time be entitled to receive, or shall have received, upon conversion of Series B Preferred Stock, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities.

“Per Share Conversion Price” shall be an amount equal to the lower of (i) the daily VWAP for the ten consecutive Trading Days ending on the last Trading Day immediately preceding a Conversion Date multiplied by 0.85 or (ii) the daily VWAP for the Trading Day immediately preceding a Conversion Date multiplied by 0.88.

“Registration Statement” means the registration statement of the Company, Commission File No. 333-165221, as the same may amended from time to time, covering the issuance and sale to the Holder, and the resale by the Holder, of the Conversion Shares.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Series B Purchase Price” shall mean $10.00, as the same shall be proportionately adjusted in respect of any stock split, stock dividend, combination, recapitalization or the like.

“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 AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

  

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“Trigger Event” shall mean

(a)            a default of any obligations of the Company under any agreement with a Holder, including with limitation, a breach of a representation, warranty, covenant or other obligation;

(b)            a non-appealable judgment against the Company in favor of a third party, or a default on an obligation to a third party in an amount (or cumulative combined amounts) of at least Five Hundred Thousand dollars ($500,000);

(c)            the Company’s failure to maintain its status as a reporting company under the Exchange Act;

(d)            the Company’s failure to file on a timely basis all reports required by the Commission;

(e)            a halt, suspension or limitation of trading in the Common Stock on any Trading Market or by the Commission or delisting, if applicable, on any national exchange;

(f)             a Market Price Trigger Event;

(g)            the Company’s failure to maintain DWAC eligibility;

(h)           the failure to deliver shares electronically when any Conversion Shares or shares of Common Stock paid as dividends are required to be delivered to the Holder; or

(i)             the occurrence of any Event of Default.

“VWAP” shall mean the volume weighted average of actual trading prices measured in hundredths of cents of the Common Stock of the Company.

4.             Voting Rights:  The Holder of the Series B Preferred Shares shall not be entitled to vote on matters which shareholders of the Company are entitled to vote, except as otherwise provided by the Nevada corporation statute; provided, however so long as any shares of the Series B Preferred Stock are outstanding, the vote or consent of the Holders of at least 66 2/3% of the shares of the Series B Preferred Stock at the time outstanding, voting as a separate class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for any action which:

(a)          Alters or changes the rights, preferences privileges of the Series B Preferred Stock;

(b)          Creates any new class or series of shares having rights, preferences or privileges senior to or on parity with the Series B Preferred Stock;

(c)          Increases or decreases the authorized number or shares of the Series B Preferred Stock;

  

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(d)           Results in the redemption or repurchase of 500,000 or more shares of Common Stock (other than pursuant to equity incentive agreements with service providers giving the Company the right to repurchase shares upon the termination of services at prices at or below the price initially paid by the service provider),

(e)           Amends or waives any provision of the Company’s Articles of Incorporation or By-laws in a manner adverse to the Series B Preferred Stock;

(f)            Results in the payment or declaration of any dividend on any shares of Common or Series A Preferred Stock; or

(g)           Issues debt in excess of $500,000, except for debt incurred in the acquisition of equipment and securitized by the equipment only; or debt that does not have any rights prior to the Series B Preferred Stock.

5.             Dividends.  From and after the date of the issuance of any shares of Series B Preferred Stock, dividends at the rate per annum of 10% per share shall accrue on such shares of Series B Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B Preferred Stock) (the “Accruing Dividends”).  Accruing Dividends shall accrue from day to day, whether or not declared, and shall be cumulative.  Such Accruing Dividends shall be payable on each Conversion Date, either in cash or in Common Stock, at the Company’s option.  The Common Stock issued as Accruing Dividends hereunder shall be valued at 85% of the 10-day VWAP determined on the Trading Date immediately preceding the dividend date.  Notwithstanding the foregoing, Accruing Dividends may only be paid in Common Stock to the extent the sale of such Common Stock to the Series B Preferred Stock holder and the resale of such Common Stock by the Series B Preferred Stock holder is covered by the Registration Statement and the Registration Statement is in full force and effect.  Delivery of such Common Stock must be made by the DTC DWAC system.  Any Accruing Dividends that cannot be paid in Common Stock pursuant to the foregoing sentence shall be paid in cash. The person or persons entitled to receive the shares of Common Stock issuable as Accruing Dividends shall be treated for all purposes as the record holder or holders of such shares of Common Stock issuable as Accruing Dividends from and after the date such Common Stock is required to be issued. Notwithstanding the foregoing, in the event of a Trigger Event that is not cured within 30 days of the occurrence thereof and in the event of a Market Price Trigger Event that is not cured within 60 days of the occurrence thereof, the Accruing Dividend rate shall automatically, without notice or the necessity of any action, increase to 18% from 10%.

  

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6.             Conversion.

(a)           Commencing on the date of execution of this Certificate of Designation and every fourteenth (14th) day thereafter (or, if such day is not a Trading Day, then the first day thereafter that is a Trading Day) (each, a “Conversion Date”), 60,000 shares of Series B Preferred Stock (or such lesser number of Shares that remains unconverted (or such other greater number as may be agreed upon by the Purchaser and the Company in amounts of 5,000 shares) shall be automatically converted into shares of Common Stock, of the Company, subject to the conditions to conversion set forth herein and in accordance with Section 6(c) below.

(b)           No conversion shall occur on a Conversion Date unless the following conditions are met:

(i)  the 20-Day VWAP as calculated with respect to such Conversion Date shall equal or exceed the Floor; and

(ii)  the Registration Statement shall be in full force and effect.

(iii)  trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Conversion Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities, nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the holder of the Series B Preferred Stock, makes it impracticable or inadvisable to sell the Conversion Shares issuable in connection with such conversion.

(c)           For each Conversion Date for which all conditions to conversion have been satisfied, each Share shall be convertible into the number of shares of Common Stock that results from dividing the Series B Purchase Price plus all Accrued Dividends that are unpaid on such Conversion Date by the Per Share Conversion Price in effect at the time of conversion for each Share being converted.  On each Conversion Date that occurs, the Company shall deliver or cause to be delivered to the Holder the number of Conversion Shares issuable on each such Conversion Date, registered in the name of the Holder, via the DTC DWAC system.

  

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(d)           If, with respect to any Conversion Date, the Floor is not met or the Registration Statement is not in full force and effect, then no conversion of Shares will occur on such Conversion Date.  With respect to any Conversion Date on which no conversion of Shares occurs due to the failure of the Registration Statement to be in full force and effect, the redemption and other rights set forth in this Certificate of Designation shall be available to the Purchaser.  With respect to any Conversion Date on which no conversion of Shares occurs due to the failure of the Floor to be met, the Shares not converted on such Conversion Date shall be added to the Shares to be converted on the following Conversion Date to the extent that such does not cause any Holder to have beneficial ownership (as defined in the Exchange Act) of more than 4.99% of the equity securities of the Company.  Shares that are not converted due to the application of the immediately preceding sentence shall be added to the next succeeding Conversion Date to the extent the conditions to conversion thereof are satisfied, until all such Shares have been converted.

(e)           Each conversion of the Series B Preferred Stock shall be accomplished without any requirement on the part of the Holder to deliver a certificate or certificates representing the shares to be converted on the applicable Conversion Date.  Upon any conversion of the Series B Preferred Stock, the Company shall provide irrevocable instructions to its transfer agent for Common Stock instructing the transfer agent to deliver, via the DWAC DTC system, the number of Conversion Shares to be issued to the Holder at such Conversion Date.

(f)            Record Holder. The person or persons entitled to receive the shares of Common Stock issuable upon a conversion of the Series B Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock from and after the Conversion Date.

(g)           Reservation of Common Stock. The Company shall reserve out of its authorized but unissued shares of Common Stock that number of its shares of Common Stock as shall be sufficient to effect the conversion of all outstanding shares of the Series B Preferred Stock.

(h)          Termination of Rights on Conversion. All shares of the Series B Preferred Stock converted as herein provided shall no longer be deemed to be outstanding, and all rights with respect to such shares, including the rights, if any, to receive dividends, notices and to vote, shall immediately cease and terminate on conversion, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor. Any shares of Series B Preferred Stock so converted shall be retired and canceled and shall not be reissued, and the Company may from time-to-time take such appropriate action as may be necessary to reduce the number of shares of authorized Series B Preferred Stock accordingly.

(i)            Adjustment for Reclassification, Exchange, or Substitution. If the Common Stock issuable upon the conversion of the Series B Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares or stock dividend, or a reorganization, merger, consolidation, change of control, share exchange or sale of assets, as provided for below), then and in each such event the holder of each share of Series B Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, or other change, by holders of the number of shares of Common Stock into which such shares of Series B Preferred Stock might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein.

  

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(j)           Adjustment for Merger, Reorganization, Change of Control, etc. In case of any consolidation, merger or share exchange of the Company with or into another corporation or the sale of all or substantially all of the assets of the Company to another corporation or in the event that there is a change of control, then each share of Series B Preferred Stock shall thereafter be convertible into the kind and amount of shares of stock or other securities or property to which a holder of the number of shares of Common Stock of the Company deliverable upon conversion of such Series B Preferred Stock would have been entitled upon such consolidation, merger, share exchange, sale or change of control; and, in such case, equitable adjustment shall be made in the application of the provisions in this Section 6 set forth with respect to the rights and interest thereafter of the Holders, to the end that the provisions set forth in this Section 6 (including provisions with respect to changes in and other adjustments of the Per Share Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the conversion of the Series B Preferred Stock.

(k)           Adjustment to Conversion Price Due to Stock Split, Stock Dividend, etc. If, prior to the Conversion of all of the Series B Preferred Stock, (A) the number of outstanding shares of Common Stock is increased by a stock split, a stock dividend on the Common Stock, a reclassification of the Common Stock, or the distribution to holders of Common Stock of Options entitling them to subscribe for or purchase Common Stock at less than the then current market price thereof (based upon the subscription or exercise price of such Options at the time of the issuance thereof), the Per Share Conversion Price shall be proportionately reduced, or (B) the number of outstanding shares of Common Stock is decreased by a reverse stock split, combination or reclassification of shares, the Per Share Conversion Price shall be proportionately increased.  In such event, the Company shall notify the Transfer Agent of such change on or before the effective date thereof.

7.             Remedies.

(a)           Automatically, without the necessity of notice or any other action,

(i)           upon the first occurrence of any Trigger Event, other than a Market Price Trigger Event, that is not cured within 30 days of the occurrence of such Trigger Event, (A) the Balance of Series B Preferred Stock shall increase by five (5) percent and (B) the Accruing Dividend shall increase to eighteen (18%) percent as described in Section 5 of this Certificate;

  

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(ii)           upon the first occurrence of any Market Price Trigger Event, the Balance of the Series B Preferred Stock shall increase by ten (10) percent;

(iii)           upon the first occurrence of any Market Price Trigger Event that is not cured within sixty (60) days of the occurrence of such Trigger Event, the Accruing Dividend shall increase to eighteen (18) percent as described in Section 5 of this Certificate.

(b)           On the occurrence of an Event of Default, any holder of Series B Preferred Stock may pursue any or all of the remedies available to it under law, or in equity, either simultaneously or in any combination or order, and shall also have:

(i)           a first right of refusal on any offers for the purchase of the Company or its assets or a merger, combination, recapitalization or the like that values the Company at less than the VWAP on the Trading Day prior to the day such value is determined of the outstanding Common Stock, any Common Stock issuable upon conversion or exercise of a Convertible Security and the Conversion Shares issuable upon conversion of the Balance of Series B Preferred Stock, plus all unpaid Accruing Dividends.

(ii)           if the Event of Default is not cured within 90 days of the occurrence thereof, the right to solicit offers for a sale of the equity or assets of the Company or a merger, consolidation, combination or other comparable transaction, from interested parties, and the Company shall have an obligation to enter into good faith negotiations with respect thereto, designed and intended to result in a consummation of such transaction.

(c)           Upon the failure of the Registration Statement to be in full force and effect (a “Registration Statement Default”) the Balance of Series B Preferred Stock shall be redeemed by the Company out of funds lawfully available therefor at a price equal to the greater of the Series B Purchase Price per share or 115% of the VWAP on the Trading Day immediately preceding such redemption, plus, in either event, all accrued but unpaid Accruing Dividends whether or not declared (the “Redemption Price”), in a lump sum within 10 days of the Registration Statement Default.  The date of such payment shall be referred to as a “Redemption Date”.  If the Company does not have sufficient funds legally available to redeem, on the Redemption Date, all of the Balance Series B Preferred Stock, the Company shall redeem a pro rata portion of each Holder’s Series B Preferred Stock out of funds legally available therefor, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the legally available funds were sufficient to redeem all such shares, and shall redeem the remaining shares to have been redeemed as soon as practicable after the Company has funds legally available therefor.  Any shares of Series B Preferred Stock that are redeemed or otherwise acquired by the Company shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred.  The Company may not exercise any rights granted to the Holders following redemption.

  

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8.           Curative Provision.    If at any time conditions shall arise by reason of action taken by the Company which are not adequately covered by the other provisions hereof and which might materially and adversely affect the rights of the holders of Series B Preferred Stock or if at any time any such conditions are expected to arise by reason of any action contemplated by the Company, the Company shall mail a written notice briefly describing the action contemplated and the material adverse effects of such action on the rights of the holders of the Series B Preferred Stock at least thirty (30) calendar days prior to the effective date of such action, and an appraiser selected by the Holders of a majority in interest of the Series B Preferred Stock shall give its opinion as to the adjustment, if any (not inconsistent with the standards established in this Section 8) of the Per Share Conversion Price (including, if necessary, any adjustment as to the securities into which shares of Series B Preferred Stock may thereafter be convertible) and any distribution which is or would be required to preserve without dilution the rights of the Holders of shares of Series B Preferred Stock; provided, however, that the Company, after receipt of the determination by such appraiser, shall have the right to select an additional appraiser, in which case the adjustment shall be equal to the average of the adjustments recommended by each such appraiser. The Board of Directors shall make the adjustment recommended forthwith upon the receipt of such opinion or opinions or the taking of any such action contemplated, as the case may be.

9.            Issuance Taxes. The issuance of certificates for shares of Common Stock on any conversion of Series B Preferred Stock shall be made without charge to the holders thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, 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 such shares of Series B Preferred Stock so converted and the Company shall not be required to issue or deliver such certificates or until the person or persons requesting the issuance thereof who is not a Series B Preferred Stock holder 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 or is otherwise not owing.

10.           Liquidation, Dissolution or Winding Up.  For purposes of the Certificate of Designation, Preferences and Rights, the shares of Series B Preferred Stock shall not be entitled to a liquidation preference with the Common Stock and the other classes of the Company’s securities upon the liquidation, dissolution, or winding up of the Company.

  

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11.           Miscellaneous Provisions.

(a)           Closing of Books. The Company will at no time close its transfer books against the transfer of any shares of Series B Preferred Stock or of any share of the Common Stock issued or issuable upon the conversion of Series B Preferred Stock.

(b)          Headings of Subdivisions. The headings of the various Sections and other subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

(c)           Severability of Provisions. If any voting powers, preferences and relative, participating, optional and other special rights of the Series B Preferred Stock and qualifications, limitations and restrictions thereon set forth in the Certificate of Designation, Preferences and Rights embodying this resolution is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other powers, preferences and relative, participating, optional and other special rights of Series B Preferred Stock and qualifications, limitations and restrictions thereon set forth therein which can be given effect without the invalid, unlawful or unenforceable voting powers, preferences and relative, participating, optional and other special rights of Series B Preferred Stock and qualifications, limitations and restrictions thereon shall, nevertheless, remain in full force and effect, and no voting powers, preferences and relative, participating, optional or other special rights of Series B Preferred Stock and qualifications, limitations and restrictions thereon herein set forth shall be deemed dependent upon any other such voting powers, preferences and relative, participating, optional or other special rights of Series B Preferred Stock and qualifications, limitations and restrictions thereon unless so expressed herein.

 

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