Document:

EX 10.3 Guaranty by ACUS

EXHIBIT 10.3

GUARANTY
THIS GUARANTY (the “Guaranty”) is made by Arch Capital Group (U.S.) Inc., a Delaware corporation (the “Guarantor”), in favor of the Guaranteed Parties (as hereinafter defined).  Capitalized terms used herein without definition shall have the meanings given to them in the Credit Agreement referred to below.
RECITALS
A.    Arch Capital Group Ltd. (the “Guaranteed Borrower”), the Guarantor and various of its Subsidiaries party thereto as Designated Subsidiary Borrowers, certain financial institutions (the “Lenders”), each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”), JPMorgan Chase Bank, N.A. (“JPMCB”), as an L/C Administrator and Fronting Bank with respect to the Existing Letters of Credit, and Bank of America, N.A., as Administrative Agent,  L/C Administrator and Fronting Bank are parties to a Credit Agreement dated as of August 18, 2011 (the “Credit Agreement”) as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”.  
B.    The Guaranteed Borrower is the parent of the Guarantor and the Guarantor will benefit from the extension of credit to the Guaranteed Borrower under the Credit Agreement, which benefits are hereby acknowledged, and accordingly desires to execute and deliver this Guaranty.      
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to induce the Lenders, the Administrative Agent, the Fronting Banks and the L/C Administrator (collectively, the “Guaranteed Parties”) to enter into the Credit Agreement and in recognition of the direct benefits to be received by the Guarantor from the proceeds of the Loans the Guarantor hereby agrees as follows:
1.Guaranty.  The Guarantor hereby unconditionally, absolutely and irrevocably guarantees, as a primary obligor and not merely as surety, the full and punctual payment when due (whether at stated maturity, upon acceleration or otherwise) of all Obligations of the Guaranteed Borrower to the Guaranteed Parties under the Credit  Documents (the “Guaranteed Obligations”).  This Guaranty is a guaranty of payment and not of collection.  Upon failure by the Guaranteed Borrower to pay punctually any of its Guaranteed Obligations when due and payable (whether at stated maturity, upon acceleration or otherwise), the Guarantor agrees to pay forthwith on demand from the Administrative Agent the amount then due and not so paid at the place and in the manner specified in the Credit Agreement.
2.    Guaranty Unconditional.  The obligations of the Guarantor under this Guaranty shall be unconditional, absolute and irrevocable and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

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(a)    any extension, renewal, settlement, compromise, waiver or release (including with respect to any Collateral) in respect of any obligation of any other obligor under any of the Credit  Documents, by operation of law or otherwise;
(a)    any modification or amendment of or supplement to any of the Credit  Documents;
(b)    any release, non-perfection or invalidity of any direct or indirect security for any obligation of any other obligor under any of the Credit Documents;
(c)    any change in the corporate existence, structure or ownership of any obligor, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any other obligor or its assets or any resulting release or discharge of any obligation of any other obligor contained in any of the Credit  Documents;
(d)    the existence of any claim, set-off or other rights which any obligor may have at any time against any other obligor, the Administrative Agent, the L/C Administrator, any Fronting Bank, any Lender or any other corporation or person, whether in connection with any of the Credit  Documents or any unrelated transactions, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;
(e)    any invalidity or unenforceability relating to or against any other obligor for any reason of any of the Credit  Documents, or any provision of applicable law or regulation purporting to prohibit the payment by any other obligor of principal, interest or any other amount payable under any of the Credit  Documents;
(f)    any law, regulation or order of any jurisdiction, or any other event, affecting any term of any obligation of the Guaranteed Parties’ rights with respect thereto; or
(g)    any other act or omission to act or delay of any kind by any obligor, the Administrative Agent, the L/C Administrator, any Fronting Bank, any Lender or any other corporation or person or any other circumstance whatsoever (other than the defense of payment or performance) which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to the Guarantor’s obligations under this Guaranty.
3.    Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances.  The Guarantor’s obligations under this Guaranty shall remain in full force and effect until the Commitments under the Credit Agreement shall have expired or been terminated, no Letters of Credit shall be outstanding and all Obligations payable by the Guaranteed Borrower under the Credit  Documents shall have been paid in full in cash.  If at any time any payment of the principal of or interest on any Loan or any Obligation due and payable by the Guaranteed Borrower under the Credit  Documents is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Guaranteed Borrower or otherwise, the Guarantor’s obligations under this Guaranty with respect to such payment shall be reinstated as though such payment had been due but not made at the time of such reinstatement.

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4.    Waiver by the Guarantor.  The Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Guaranteed Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Guaranteed Obligations, as well as any requirement that at any time any action be taken by any corporation or person against any other obligor or any other corporation or person.  The Guarantor warrants and agrees that each waiver set forth in this Section 4 is made with full knowledge of its significance and consequences, and such waivers shall be effective to the maximum extent permitted by law.  
5.    Subrogation.  The Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Guaranteed Borrower that arise from the existence, payment, performance or enforcement of the Guarantor’s obligations under or in respect of this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Lender, any Fronting Bank, the L/C Administrator or the Administrative Agent against any other Credit Party or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any other Credit Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until (a) the Guarantor shall have paid in full in cash all Guaranteed Obligations payable to the Guaranteed Parties under this Guaranty (and all reasonable out‐of‐pocket expenses incurred by any of the Guaranteed Parties (including the reasonable fees, charges and disbursements of any counsel for the Guaranteed Parties)), in connection with the enforcement or protection of its rights under this Guaranty and (b) the Commitments under the Credit Agreement shall have expired or been terminated, no Letters of Credit shall be outstanding and all Obligations payable by the Guaranteed Borrowers under the Credit  Documents shall have been paid in full in cash.  If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the date all Commitments under the Credit Agreement shall have terminated, no Letters of Credit shall be outstanding and all Obligations payable by the Guaranteed Borrowers under the Credit  Documents shall have been paid in full in cash, such amount shall be received and held in trust for the benefit of the Lenders, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Administrative Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to all amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Credit  Documents, or to be held as collateral for any amounts payable under this Guaranty thereafter arising.  If (i) the Guarantor shall have paid in full in cash all Guaranteed Obligations payable to the Guaranteed Parties under this Guaranty (and all reasonable out‐of‐pocket expenses incurred by any of the Guaranteed Parties (including the reasonable fees, charges and disbursements of any counsel for the Guaranteed Parties)), in connection with the enforcement or protection of its rights under this Guaranty and (ii) the Commitments under the Credit Agreement shall have expired or been terminated, no Letters of Credit shall be outstanding and all Obligations payable by the 

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Guaranteed Borrowers under the Credit  Documents shall have been paid in full in cash, the Guaranteed Parties will, at the Guarantor’s request and expense, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the obligations resulting from such payment made by the Guarantor pursuant to this Guaranty.
6.    Stay of Acceleration.  If acceleration of the time for payment of any amount payable by the Guaranteed Borrower under any of the Credit Documents is stayed upon the insolvency, bankruptcy or reorganization of the Guaranteed Borrower, all such Obligations otherwise subject to acceleration under the terms of the Credit Agreement shall nonetheless be payable by the Guarantor under this Guaranty forthwith on demand by the Administrative Agent.
7.    Continuing Guaranty; Assignments.  This Guaranty is a continuing guaranty and shall (a) be binding upon the Guarantor, its successors and assigns and (b) inure to the benefit of and be enforceable by the Lenders, the Issuers and the Administrative Agent and their successors, transferees and assigns.  Without limiting the generality of clause (b) of the immediately preceding sentence, any Lender and any Fronting Bank may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise, in each case as and to the extent provided in Section 9.06(b) or 10.06, as the case may be, of the Credit Agreement.
8.    Payments; Application; Set-Off.
(a)    All payments made by the Guarantor hereunder will be made in Dollars to the Administrative Agent, without set-off, counterclaim or other defense and, in accordance with the Credit Agreement, the Guarantor hereby agreeing to comply with and be bound by the provisions of the Credit Agreement in respect of all payments made by it hereunder.
(b)    All payments made hereunder shall be applied in accordance with the provisions of the Credit Agreement.
(c)    If an Event of Default shall have occurred and be continuing, each Guaranteed Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Guaranteed Party or any such Affiliate to or for the credit or the account of the Guarantor against any and all of the obligations of the Guarantor now or hereafter existing under this Guaranty or any other Credit  Document to such Guaranteed Party, irrespective of whether or not such Guaranteed Party shall have made any demand under this Guaranty or any other Credit  Document and although such obligations of the Guarantor may be contingent or unmatured or are owed to a branch or office of such Guaranteed Party different from the branch or office holding such deposit or obligated on such indebtedness.  The rights of each Guaranteed Party and their respective Affiliates under this subsection are in addition to other rights and remedies (including other rights of set-off) that such Guaranteed Parties or their respective Affiliates may have.  Each Guaranteed Party agrees to 

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notify the Guarantor and the Administrative Agent promptly after any such set-off and application; provided that the failure to give such notice shall not affect the validity of such set-off and application.
9.    No Waiver.  The rights and remedies of the Guaranteed Parties expressly set forth in this Guaranty and the other Credit Documents are cumulative and in addition to, and not exclusive of, all other rights and remedies available at law, in equity or otherwise.  No failure or delay on the part of any Guaranteed Party in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or be construed to be a waiver of any Default or Event of Default.  No course of dealing between the Guarantor and the Guaranteed Parties or their agents or employees shall be effective to amend, modify or discharge any provision of this Guaranty or any other Credit  Document or to constitute a waiver of any Default or Event of Default.  No notice to or demand upon the Guarantor in any case shall entitle the Guarantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of any Guaranteed Party to exercise any right or remedy or take any other or further action in any circumstances without notice or demand.
10.    Enforcement.  The Guaranteed Parties agree that this Guaranty may be enforced only by the Administrative Agent, acting upon the instructions or with the consent of the Required Lenders as provided for in the Credit Agreement, and that no Guaranteed Party shall have any right individually to enforce or seek to enforce this Guaranty or to realize upon any Collateral or other security given to secure the payment and performance of the Guarantor’s obligations hereunder.  The obligations of the Guarantor hereunder are independent of the Guaranteed Obligations, and a separate action or actions may be brought against the Guarantor whether or not action is brought against any other Credit Party and whether or not any other Credit Party is joined in any such action.
11.    Amendments, Waivers, etc.  No amendment, modification, waiver, discharge or termination of, or consent to any departure by the Guarantor from, any provision of this Guaranty, shall be effective unless in a writing signed by the Administrative Agent and such of the Lenders as may be required under the provisions of the Credit Agreement to concur in the action then being taken, and then the same shall be effective only in the specific instance and for the specific purpose for which given.
12.    Addition, Release of Guarantors.  The Guarantor agrees that its obligations hereunder shall not be discharged, limited or otherwise affected by reason of the Administrative Agent’s actions in releasing any other guarantor, in each case without the necessity of giving notice to or obtaining the consent of the Guarantor.
13.    Successors and Assigns; Assignment.  This Guaranty shall (i) be binding upon and enforceable against the Guarantor and its successors and assigns (provided, however, that the Guarantor may not sell, assign or transfer any of its rights, interests, duties or obligations hereunder without the prior written consent of the Administrative Agent, except as provided in 

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Section 10.07 of the Credit Agreement) and (ii) inure to the benefit of and be enforceable by each Guaranteed Party and its successors and assigns.
14.    Governing Law; Consent to Jurisdiction; Appointment of Process Agent; Attorney-in-Fact; Waiver of Jury Trial.  The parties hereto agree that the provisions of Sections 10.14 and 10.15 of the Credit Agreement are incorporated here in, mutatis mutandis, as if fully set forth herein.
15.    Notices.  All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or other electronic transmission as follows: (a) if to the Guarantor, at its address for notices set forth in the Credit Agreement, and (b) if to any Guaranteed Party, at its address for notices set forth in the Credit Agreement; in each case, as such addresses may be changed from time to time pursuant to the Credit Agreement, and with copies to such other Persons as may be specified under the provisions of the Credit Agreement.  Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile or other electronic transmission shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in the Credit Agreement shall be effective as provided therein.
16.    Severability.  To the extent any provision of this Guaranty is prohibited by or invalid under the applicable law of any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity and only in such jurisdiction, without prohibiting or invalidating such provision in any other jurisdiction or the remaining provisions of this Guaranty in any jurisdiction.
17.    Limitation.  Notwithstanding any other provision of this Guaranty to the contrary, in the event that any action is brought seeking to invalidate the Guarantor’s obligations under this Guaranty under any fraudulent conveyance or fraudulent transfer theory, the Guarantor shall be liable under this Guaranty only for an amount equal to the maximum amount of liability that could have been incurred under applicable law by the Guarantor under any guarantee of the Guaranteed Obligations (or any portion thereof) at the time of the execution and delivery of this Guaranty (or, if such date is determined not to be the appropriate date for determining the enforceability of the Guarantor’s obligations under this Guaranty for fraudulent conveyance or transfer purposes, on the date determined to be so appropriate) without rendering such a hypothetical guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer (the “Maximum Guaranteed Obligations”) and not for any greater amount, as if the stated amount of the Guaranteed Obligations had instead been the Maximum Guaranteed Obligations.
18.    Construction.  The headings of the various sections and subsections of this Guaranty have been inserted for convenience only and shall not in any way affect the meaning or 

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construction of any of the provisions hereof.  Unless the context otherwise requires, words in the singular include the plural and words in the plural include the singular.
19.    Counterparts; Effectiveness.  This Guaranty may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  This Guaranty shall become effective upon the execution and delivery by the Guarantor of a counterpart hereof.  Delivery of a counterpart hereof, or a signature hereto, by facsimile or by email in .pdf or similar format shall be effective as delivery of a manually-executed original counterpart hereof.  
20.    Currency Indemnification.  The parties hereto agree that the provisions of Section 10.20 of the Credit Agreement are incorporated here in, mutatis mutandis, as if fully set forth herein.     
21.    Credit  Document.  This Guaranty is a Credit Document.

                         [Signature Pages Follow]

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IN WITNESS WHEREOF, the parties have caused this Guaranty to be executed under seal by their duly authorized officers as of the date first above written. 

ARCH CAPITAL GROUP (U.S.) INC.

By: /s/ Thomas J. Ahern
Name: Thomas J. Ahern
Title: SVP & Chief Financial Officer

ACCEPTED AND AGREED TO:

BANK OF AMERICA, N.A. 
AS ADMINISTRATIVE AGENT

BY: /S/ TIFFANY BURGESS
NAME:  TIFFANY BURGESS
TITLE:  VICE PRESIDENTex101.htm

SETTLEMENT AGREEMENT AND STIPULATION

THIS SETTLEMENT AGREEMENT and STIPULATION dated as of December 4, 2013 by and between Vanity Events Holding, Inc. (“Vanity” or the “Company”), a corporation formed under the laws of the State of Nevada, and IBC Funds, LLC (“IBC”), a Nevada Limited Liability Company.

 

BACKGROUND:

 

WHEREAS, there are bona fide outstanding liabilities of the Company in the principal amount of not less than $426,908.03; and

 

WHEREAS, these liabilities are past due; and

 

WHEREAS, IBC acquired such liabilities on the terms and conditions set forth in the annexed Claim Purchase Agreement(s), subject however to the agreement of the Company and compliance with the provisions hereof; and

 

WHEREAS, IBC and Vanity desire to resolve, settle, and compromise among other things the liabilities as more particularly set forth on Schedule A annexed hereto (hereinafter collectively referred to as the “Claims”).

NOW, THEREFORE, the parties hereto agree as follows:

 

1.           Defined Terms.    As used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

"AGREEMENT" shall have the meaning specified in the preamble hereof.

 

“CLAIM AMOUNT” shall mean $426,908.03.

 

"COMMON STOCK" shall mean the Company's common stock, $.001 par value per share, and any shares of any other class of common stock whether now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and assets (upon liquidation of the Company).

 

  

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“COURT” shall mean Circuit Court within Sarasota County, Florida.

 

         "DTC" shall have the meaning specified in Section 3b.

 

"DWAC" shall have the meaning specified in Section 3b.

 

	 	
"FAST" shall have the meaning specified in Section 3b.

 

       "MARKET PRICE" on any given date shall mean the lowest Sale Price during the Valuation Period on the Principal Market

 

"PRINCIPAL MARKET" shall mean the Nasdaq National Market, the Nasdaq SmallCap Market, the Over the Counter Bulletin Board, QB marketplace, the American Stock Exchange or the New York Stock Exchange, whichever is at the time the principal trading exchange or market for the Common Stock.

 

"PURCHASE PRICE" shall mean thirty-five (35%) of the Market Price during the Valuation Period (or such other date on which the Purchase Price is calculated in accordance with the terms and conditions of this Agreement).

 

“SELLER” shall mean any individual or entity listed on Schedule A, who originally owned the Claims.

 

"TRADING DAY" shall mean any day during which the Principal Market shall be open for business.

 

"TRANSFER AGENT" shall mean the transfer agent for the Common Stock (and to any substitute or replacement transfer agent for the Common Stock upon the Company's appointment of any such substitute or replacement transfer agent).

 

  

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"VALUATION PERIOD" shall mean the twenty (20) day trading period preceding the share request inclusive of the day of any Share Request pursuant to this agreement (the “trading period”); provided that the Valuation Period shall be extended as necessary in the event that (1) the Initial Issuance is delivered in more than one tranches pursuant to Sections 3(a) and 3(e), and/or (2) one or more Additional Issuances is required to be made pursuant to Section 3(d) below, in which case the Valuation Period for each issuance shall be extended to include additional trading days pursuant to such issuance.  The Valuation Period shall begin on the date of any Share Request pursuant to this Agreement, but shall be suspended to the extent that any subsequent Initial Issuance tranche and/or Additional Issuance is due to be made until such date as such Initial Issuance tranche and/or Additional Issuance is delivered to IBC pursuant to Section 3(b)(iii). Any period of suspension of the Valuation Period shall be established by means of a written notice from IBC to the Company.

 

        2.           Fairness Hearing.   Upon the execution hereof, Company and IBC agree, pursuant to Section 3(a)(10) of the Securities Act of 1933 (the “Act”), to immediately submit the terms and conditions of this Agreement to the Court for a hearing on the fairness of such terms and conditions, and the issuance exempt from registration of the Settlement Shares.  This Agreement shall become binding upon the parties only upon entry of an order by the Court substantially in the form annexed hereto as Exhibit A (the “Order”).

 

3.           Settlement Shares.   Following entry of an Order by the Court in accordance with Paragraph 2 herein and the delivery by IBC and Company of the Stipulation of Dismissal (as  defined below), Company shall issue and deliver to IBC shares of its Common Stock (the “Settlement Shares”) as follows:

 

  

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a.           In settlement of the Claims, Company shall initially issue and deliver to IBC, in one or more tranches as necessary subject to paragraph 3(f) herein, shares of Common Stock (the “Initial Issuance”), subject to adjustment and ownership limitations as set forth below, sufficient to satisfy the compromised amount at thirty-five percent (35%) of the market price (the total amount of the claims multiplied by 35%) based on the market price during the valuation period as defined herein through the issuance of freely trading securities issued pursuant to Section 3(a)(10) of the Securities Act (the “settlement shares”).  The Company shall also issue to IBC, on the issuance date(s), upon conclusion of the payout of the second payment pursuant to Schedule “A” attached hereto, or otherwise upon default by the Company pursuant to the terms of this agreement one hundred and fifty thousand (150,000) shares as a settlement fee.

 

b.           No later than the first business day following the date that the Court enters the Order, time being of the essence, Company shall: (i) cause its legal counsel to issue an opinion to Company’s transfer agent, in form and substance reasonably acceptable to IBC and such transfer agent, that the shares of Common Stock to be issued as the Initial Issuance and Additional Issuance (as defined below) are legally issued, fully paid and non-assessable, are exempt from registration under the Securities Act, may be issued without restrictive legend, and may be resold by IBC without restriction; (ii) transmit via email, facsimile and overnight delivery an irrevocable and unconditional instruction to Company’s stock transfer agent; and (iii) issue the Initial Issuance, as Direct Registration Systems (DRS) shares to IBC’s account with The Depository Trust Company (DTC) or through the Fast Automated Securities Transfer (FAST) Program of DTC’s Deposit/Withdrawal Agent Commission (DWAC) system, without any legends or restriction on transfer. The date upon which the first tranche of the Initial Issuance shares have been received into IBC’s account and are available for sale by IBC shall be referred to as the “Issuance Date”. In the event that Company is delinquent on issuance of shares of stock to IBC pursuant to the terms and conditions of this Section 3 within three (3) business days of a request for issuance of shares pursuant to Court Order Granting Approval of this Settlement Agreement, then upon demand of IBC, Company shall be responsible for payment of a penalty of $1,000.00 per day, payable to IBC, until said delinquency is cured.

 

  

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c.           During the Valuation Period, the Company shall deliver to IBC, through the Initial Issuance and any required Additional Issuance subject to paragraph 3(f) herein, that number of shares (the “Final Amount”) with an aggregate value equal to (A) the sum of the Claim Amount, divided by (B) the Purchase Price.  The parties acknowledge that the number of Settlement Shares to be issued pursuant to this Agreement is indeterminable as of the date of its execution, and could well exceed the current existing number of shares outstanding as of the date of its execution.

 

d.           If at any time during the Valuation Period the Market Price is below 90% of the Market Price on the day before the Issuance Date, Company will immediately cause to be issued and delivered to IBC in accordance with the provisions of Section 3(b) herein, such additional shares as may be required to effect the purposes of this Settlement Agreement (each, an “Additional Issuance”), subject to the limitation in the paragraph below.  At the end of the Valuation Period, if the sum of the Initial Issuance and any Additional Issuance is greater than the Final Amount, IBC shall promptly deliver any remaining shares to Company or its transfer agent for cancellation.

 

e.           Notwithstanding anything to the contrary contained herein, it is the intention of the parties that the Settlement Shares beneficially owned by IBC at any given time shall not exceed the number of such shares that, when aggregated with all other shares of Company then beneficially owned by IBC, or deemed beneficially owned by IBC, would result in IBC owning more than 9.99% of all of such Common Stock as would be outstanding on such date, as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder.  In compliance therewith, the Company agrees to deliver the Initial Issuance and any Additional Issuances in one or more traunches.

 

  

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f.           For the avoidance of doubt, the price used to determine the number of shares of Common Stock to be delivered pursuant to any Share Request shall be rounded up to the nearest decimal place  of .0001.

 

4.           Necessary Action.   At all times after the execution of this Agreement and entry of the Order by the Court, each party hereto agrees to take or cause to be taken all such necessary action including, without limitation, the execution and delivery of such further instruments and documents, as may be reasonably requested by any party for such purposes or otherwise necessary to effect and complete the transactions contemplated hereby.

 

5.           Releases.   Upon receipt of all of the Settlement Shares for and in consideration of the terms and conditions of this Agreement, and except for the obligations, representations and covenants arising or made hereunder or a breach hereof, the parties hereby release, acquit and forever discharge the other and each, every and all of their current and past officers, directors, shareholders, affiliated corporations, subsidiaries, agents, employees, representatives, attorneys, predecessors, successors and assigns (the “Released Parties”), of and from any and all claims, damages, cause of action, suits and costs, of whatever nature, character or description, whether known or unknown, anticipated or unanticipated, which the parties may now have or may hereafter have or claim to have against each other with respect to the Claims.  Nothing contained herein shall be deemed to negate or affect IBC’s right and title to any securities heretofore issued to it by Company or any subsidiary of Company.

 

  

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6.           Representations.     Company hereby represents, warrants and covenants to IBC as follows:

 

a.           There are five hundred million (500,000,000) shares of Common Stock of the Company authorized, of which approximately four million nineteen thousand six hundred ninety four (4,019,694) Shares of Common Stock are issued and oustanding; and approximately four hundred ninety five million nine hundred eight thousand three hundred and six (495,980,306) Shares of Common Stock are available for issuance pursuant hereto;

 

b.           The shares of Common Stock to be issued pursuant to the Order are duly authorized, and when issued will be duly and validly issued, fully paid and non-assessable, free and clear of all liens, encumbrances and preemptive and similar rights to subscribe for or purchase securities;

 

c.           The shares will be exempt from registration under the Securities Act and issuable without any restrictive legend;

 

d.           The Company has reserved from its duly authorized capital stock a number of shares of Common Stock at least equal to the greater of the number of shares that could be issued pursuant to the terms of the Order and that it shall reserve at its transfer agent, at a minimum, Eight Million Five Hundred Thousand (8,500,000) during the Valuation Period in order to ensure that it can properly carry out the terms of this agreement, which may only be released to Company once all of the settlement shares have been delivered and converted pursuant to this agreement and Company’s obligations are otherwise fully satisfied or there has otherwise been a default pursuant to the terms of this agreement;

 

  

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e.           If at any time it appears reasonably likely that there may be insufficient authorized shares to fully comply with the Order, Company shall promptly increase its authorized shares to ensure its ability to timely comply with the Order;

 

f.           The execution of this Agreement and performance of the Order by Company and IBC will not (1) conflict with, violate or cause a breach or default under any agreements between Company and any creditor (or any affiliate thereof) related to the account receivables comprising the Claims, or (2) require any waiver, consent, or other action of the Company or any creditor, or their respective affiliates, that has not already been obtained;

 

g.           Without limitation, the Company hereby waives any provision in any agreement related to the account receivables comprising the Claims requiring payments to be applied in a certain order, manner, or fashion, or providing for exclusive jurisdiction in any court other than this Court;

 

h.           The Company has all necessary power and authority to execute, deliver and perform all of its obligations under this Agreement;

 

i.           The execution, delivery and performance of this Agreement by Company has been duly authorized by all requisite action on the part of Company and its Board of Directors (including a majority of its independent directors), and this Agreement has been duly executed and delivered by Company;

 

j.           Company did not enter into the transaction giving rise to the Claims in contemplation of any sale or distribution of Company’s common stock or other securities;

 

k.           There has been no modification, compromise, forbearance, or waiver entered into or given with respect to the Claims.  There is no action based on the Claims that is currently pending in any court or other legal venue, and no judgments based upon the Claims have been previously entered in any legal proceeding;

 

  

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l.           There are no taxes due, payable or withholdable as an incident of Seller’s provision of goods and services, and no taxes will be due, payable or withholdable as a result of settlement of the Claims;

 

m.           Seller was not and within the past ninety (90) days has not been directly or indirectly through one or more intermediaries in control, controlled by, or under common control with, the Company and is not an affiliate of the Company as defined in Rule 144 promulgated under the Act;

 

n.           To the best of the Company’s knowledge, Seller is not, directly or indirectly, utilizing any of the proceeds received from IBC for selling the Claims to provide any consideration to or invest in any manner in the Company or any affiliate of the Company;

 

o.           Company has not received any notice (oral or written) from the SEC or Principal Market regarding a halt, limitation or suspension of trading in the Common Stock; and

 

p.           Seller will not, directly or indirectly, receive any consideration from or be compensated in any manner by, the Company, or any affiliate of the Company, in exchange for or in consideration of selling the Claims;

 

q.           Company represents that none of the services provided or to be provided which gave rise to the Claims were or are services related to promoting the Company’s Securities or that may be considered relations services;

 

r.           Company represents that each Claim being purchased pursuant hereto is a bona-fide Claim against the Company and that the invoices or written contract(s)/promissory notes underlying each Claim are accurate representations of the nature of the debt and the amounts owed by the Company to Seller;

 

  

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s.           Company acknowledges that IBC or its affiliates may from time to time, hold outstanding securities of the Company which may be convertible in shares of the Company’s common stock at a floating conversion rate tied to the current market price for the stock.  The number of shares of Common Stock issuable pursuant to this Agreement may increase substantially in certain circumstances, including, but not necessarily limited to the circumstance wherein the trading price of the Common Stock declines during the Valuation Period. The Company’s executive officers and directors have studied and fully understand the nature of the transaction contemplated by this Agreement and recognize that they have a potential dilutive effect.  The board of directors of the Company has concluded in its good faith business judgment that such transaction is in the best interests of the Company.  The Company specifically acknowledges that its obligation to issue the Settlement Shares is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company.  The Board of Directors of the Company has further given its consent for each conversion of shares of stock pursuant to this agreement and agrees and consents that same may occur below the par value of the Company’s Common Stock.

 

t.           None of the transactions agreements or proceedings described above is part of a plan or scheme to evade the registration requirements of the Securities Act and VANITY and IBC are acting and has acted in an arms length capacity.

 

7.           Continuing Jurisdiction.   Simultaneously with the execution of this Agreement, the attorneys representing the parties hereto will execute a stipulation of dismissal substantially in the form annexed hereto as Exhibit B (the “Stipulation of Dismissal”).  In order to enable the Court to grant specific enforcement or other equitable relief in connection with this Agreement, (a) the parties consent to the jurisdiction of the Court for purposes of enforcing this Agreement, and (b) each party to this Agreement expressly waives any contention that there is an adequate remedy at law or any like doctrine that might otherwise preclude injunctive relief to enforce this Agreement.

 

  

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8.           Conditions Precedent/ Default .

 

a.           If Company shall default in promptly delivering the Settlement Shares to IBC in the form and mode of delivery as required by Paragraphs 2, 3, 4 and 6 herein or otherwise fail in any way to fully comply with the provisions thereof;

b.           If the Order shall not have been entered by the Court on or prior to ninety (90) days after execution of this agreement;

 

c.           If the Company shall fail to comply with the Covenants set forth in Paragraph 14 hereof;

 

d.           If Bankruptcy, dissolution, receivership, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors or other legal proceedings for any reason shall be instituted by or against the Company; or if the trading of the Common Stock shall have been halted, limited, or suspended by the SEC or on the Principal Market; or trading in securities generally on the Principal Market shall have been suspended or limited;  or, minimum prices shall been established for securities traded on the Principal Market or eligible for delivery via DTC or DWAC;  or the Common Stock is not eligible or unable to be deposited for trade on the Principal Market; or the Common Stock is no longer eligible for book transfer delivery via DWAC;  or the Company is delinquent or has not made its required Securities and Exchange Commission filings; or if at any time the market price for the Company’s Common Stock drops below .20; or there shall have been any material adverse change (i) in the Company’s finances or operations, or (ii) in the financial markets such that, in the reasonable judgment of the IBC, makes it impracticable or inadvisable to trade the Settlement Shares; and such suspension, limitation or other action is not cured within ten (10) trading days; then the Company shall be deemed in default of the Agreement and Order and this Agreement shall be voidable in the sole discretion of IBC;

 

  

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e.           In the event that the Company fails to fully comply with the conditions precedent as specified in paragraph 8 a. through d. herein, then the Company shall be deemed in default of the agreement and IBC, at its option and in its sole discretion, may declare Company to be in default of the Agreement and Order, and this Agreement shall be voidable in the sole discretion of IBC.  In said event, IBC shall have no further obligation to comply with the terms of this agreement and can thus opt out of making any remaining payments, if applicable, not previously made to creditors as contemplated by the Claims Purchase Agreements as referenced in schedule A, 1 through 10.

 

9.           Information.   Company and IBC each represent that prior to the execution of this Agreement, they have fully informed themselves of its terms, contents, conditions and effects, and that no promise or representation of any kind has been made to them except as expressly stated in this Agreement.

 

10.         Ownership and Authority.   Company and IBC represent and warrant that they have not sold, assigned, transferred, conveyed or otherwise disposed of any or all of any claim, demand, right, or cause of action, relating to any matter which is covered by this Agreement, that each is the sole owner of such claim, demand, right or cause of action, and each has the power and authority and has been duly authorized to enter into and perform this Agreement and that this Agreement is the binding obligation of each, enforceable in accordance with its terms.

 

11.           No Admission.   This Agreement is contractual and it has been entered into in order to compromise disputed claims and to avoid the uncertainty and expense of the litigation.  This Agreement and each of its provisions in any orders of the Court relating to it shall not be offered or received in evidence in any action, proceeding or otherwise used as an admission or concession as to the merits of the Action or the liability of any nature on the part of any of the parties hereto except to enforce its terms.

 

  

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12.           Binding Nature.  This Agreement shall be binding on all parties executing this Agreement and their respective successors, assigns and heirs.

 

13.           Authority to Bind.   Each party to this Agreement represents and warrants that the execution, delivery and performance of this Agreement and the consummation of the transactions provided in this Agreement have been duly authorized by all necessary action of the respective entity and that the person executing this Agreement on its behalf has the full capacity to bind that entity.  Each party further represents and warrants that it has been represented by independent counsel of its choice in connection with the negotiation and execution of this Agreement, and that counsel has reviewed this Agreement.

 

  14.           Covenants.

 

a.           For so long as IBC or any of its affiliates holds any shares of Common Stock, neither Company nor any of its affiliates shall  vote any shares of Common Stock owned or controlled by it (unless voting in favor of a proposal approved by a majority of Company’s Board of Directors), or solicit any proxies or seek to advise or influence any person with respect to any voting securities of Company; in favor of (1) an extraordinary corporate transaction, such as a reorganization or liquidation, involving Company or any of its subsidiaries, (2) a sale or transfer of a material amount of assets of Company or any of its subsidiaries, (3) any material change in the present capitalization or dividend policy of Company, (4) any other material change in Company’s business or corporate structure, (5) a change in Company’s charter, bylaws or instruments corresponding thereto (6) causing a class of securities of Defendant to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (7) causing a class of equity securities of Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, (8) terminating its Transfer Agent (9) taking any action which would impede  the purposes and objects of this Settlement Agreement  or (10) taking any action, intention, plan or arrangement similar to any of those enumerated above.  Nothing in this section shall be deemed to exclude strategic decisions by Company made in an effort to expand the Company except as expressly stated herein.  The provisions of this paragraph may not be modified or waived without further order of the Court.

 

  

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b.           Immediately upon the signing of the Settlement Order by the Court, the Company shall cause to be filed a Form 8-K with the Securities and Exchange Commission disclosing the settlement. The Company shall file such additional SEC filings as may be required in respect of the transactions.

 

15.           Indemnification.   Company shall indemnify, defend and hold IBC and its affiliates harmless with respect to all obligations of Company arising from or incident or related to this Agreement, including, without limitation, any claim or action brought derivatively or by the Seller or shareholders of Company.

 

16.           Legal Effect.   The parties to this Agreement represent that each of them has been advised as to the terms and legal effect of this Agreement and the Order provided for herein, and that the settlement and compromise stated herein is final and conclusive forthwith, subject to the conditions stated herein, and each attorney represents that his or her client has freely consented to and authorized this Agreement after have been so advised.

 

17.           Waiver of Defense.     Each party hereto waives a statement of decision, and the right to appeal from the Order after its entry.  Company further waives any defense based on the rule against splitting causes of action.  The prevailing party in any motion to enforce the Order shall be awarded its reasonably attorney fees and expenses in connection with such motion.  Except as expressly set forth herein, each party shall bear its own attorneys’ fees, expenses and costs.

 

18.           Signatures.   This Agreement may be signed in counterparts and the Agreement, together with its counterpart signature pages, shall be deemed valid and binding on each party when duly executed by all parties. Facsimile and electronically scanned signatures shall be deemed valid and binding for all purposes.  This Agreement may be amended only by an instrument in writing signed by the party to be charged with enforcement thereof. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

19.           Choice of Law, Etc.   Notwithstanding the place where this Agreement may be executed by either of the parties, or any other factor, all terms and provisions hereof shall be governed by and construed in accordance with the laws of the State of Florida, applicable to agreements made and to be fully performed in that State and without regard to the principles of conflicts of laws thereof.  Any action brought to enforce, or otherwise arising out of this Agreement shall be brought only in State Court sitting in Sarasota County, Florida.

 

  

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20.           Exclusivity.   For a period of the later of one hundred eighty (180) days from the date of the execution of this Agreement or upon IBC’s final sale of all shares of stock issued pursuant hereto subsequent to final adjustment; (a) Company and its representatives shall not enter into any exchange transaction under Section 3(a)(10) of the Securities Act nor directly or indirectly discuss, negotiate or consider any proposal, plan or offer from any other party relating to any liabilities, or any financial transaction having an effect or result similar to the transactions contemplated hereby, and (b) IBC shall have the exclusive right to negotiate and execute definitive documentation embodying the terms set forth herein and other mutually acceptable terms.

 

21.           Inconsistency.   In the event of any inconsistency between the terms of this Agreement and any other document executed in connection herewith, the terms of this Agreement shall control to the extent necessary to resolve such inconsistency.

 

       22.           NOTICES.  Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of

(a)  the date delivered, if delivered by personal delivery as against written receipt therefore or by confirmed facsimile transmission,

(b)  the seventh business day after deposit, postage prepaid, in the United States Postal Service by registered or certified mail, or

(c)  the second business day after mailing by domestic or international express courier, with delivery costs and fees prepaid,

in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by ten (10) days’ advance written notice similarly given to each of the other parties hereto):

  

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Company:                              Vanity Events Holding, Inc.

Philip Ellett

Chief Executive Officer

12555 Orange Drive, Suite 216

Davie, Florida 33330

Tel: 786-763-3830

Fax: 954-756-8043

Phil@vanityeventsholdinginc.com

with a copy to:

Michael G. Brown, Esquire

P.O. Box 19702

Sarasota, Florida 34237

941-780-1300 (phone)

941-296-7500 (fax)

Florida Bar No. 0148709

IBC Funds, LLC

Attn: Samuel Oshana

1170 Kane Concourse, Suite 404

Bay Harbor, Florida 33154

Telephone: 786-218-4651

Email: sam@ibcfunds.com

and

Charles N. Cleland, Jr., P.A.

2127 Ringling Boulevard, Suite 104

Sarasota, Florida 34237

(941) 955-1595 phone

(941) 953-7185 facsimile

Florida Bar No. 0896195

ccleland@clelandpa.com email

 

  

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IN WITNESS WHEREOF, the parties have duly executed this Settlement Agreement and Stipulation as of the date first indicated above.

 

	 	IBC Funds, LLC	 
	 	 	 	 
	
 

	
By: 

	/s/ Samuel Oshana	 
	 	 	Name: Samuel Oshana	 
	 	 	Title: Managing Member	 
	 	 	 	 

	 	Vanity Events Holding, Inc.	 
	 	 	 	 
	
 

	
By: 

	/s/ Philip Ellett	 
	 	 	Name: Philip Ellett	 
	 	 	Title: CEO	 
	 	 	 	 

  

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Affiliates

 

 

 

18

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