Document:

nght_ex102.htm

EXHIBIT 10.2

 

THIS DEBENTURE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NEITHER THIS DEBENTURE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS DEBENTURE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.  NEITHER THIS DEBENTURE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS DEBENTURE MAY BE SOLD OR OTHERWISE TRANSFERRED OR PLEDGED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION OR EXCLUSION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

	No. 2012-__ 	$_____________

 

NightCulture, Inc.

5.0% Convertible Debenture Due 2015

Section 1.   General.

FOR VALUE RECEIVED, NightCulture, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of _______________, or its registered assigns (the “Investor”), the principal sum of ____________________ DOLLARS AND ZERO CENTS ($__________), or such lesser amount as shall then equal the outstanding principal amount hereof, together with interest thereon at a rate equal to five percent (5%)(the “Interest Rate”) per annum, simple interest computed on the basis of the actual number of days elapsed and a year of 360 days comprised of twelve 30 day months.  Unless earlier converted in accordance with Section 6, all unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earlier of (i) September 12, 2015 (the “Maturity Date”); or (ii) when such amounts become due and payable as a result of, and following, an Event of Default in accordance with Section 4.  All payments required to be made hereunder, if any, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender therein for the payment of public and private debts.

This is one of a duly authorized issue of debentures (this debenture being referred to as the “Debenture” and, collectively, all similar debentures issued by the Company pursuant to the Unit Offering (as defined below) being referred to as the “Debentures”) of the Company.   An aggregate of $500,000.00 in principal amount of Debentures are being offered (the “Unit Offering”) by the Company in units (the “Units”) together with warrants (the “Warrants”), each Unit consisting of one Debenture and one Warrant.

Section 2.  Interest.

Interest shall accrue on the unpaid balance of the principal amount of this Debenture (without any compounding) from and including the date hereof to, but excluding, the date on which the principal amount of this Debenture is paid in full (or converted in accordance with Section 6 hereof) and shall be payable on the earlier of (i) the Maturity Date, or (ii) with respect to Debentures converted pursuant to Section 6, on the Conversion Date.

Section 3.  Prepayment.

Not withstanding anything herein to the contrary, without the prior written consent of the holder of this Debenture, the Company may not prepay the principal amount of this Debenture prior to the Maturity Date or an Event of Default.

  

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Section 4.   Defaults.

The occurrence of any of the following shall constitute an “Event of Default” under this Debenture:

(a)           The Company shall fail to pay (i) when due any principal or interest payment hereof on the due date hereunder or (ii) any other payment required under the terms of this Debenture on the date due and such payment shall not have been made within five (5) business days of Company’s receipt of Investor’s written notice to Company of such failure to pay; or

(b)           The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Debenture (other than those specified in Section 4(a)) and such failure shall continue for ten (10) business days after written notice thereof is delivered to the Company; or

 

(c)           Any representation, warranty, certificate, or other statement (financial or otherwise) made or furnished by or on behalf of the Company to the Investor in writing in connection with this Debenture, or as an inducement to the Investor to purchase this Debenture, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or

 

(d)           The Company shall (i) fail to make any payment when due under the terms of any bond, debenture, note or other evidence of indebtedness to be paid by the Company (excluding this Debenture, which default is addressed by Section 4(a) above, but including any other evidence of indebtedness of the Company to the Investor) and such failure shall continue beyond any period of grace provided with respect thereto, or (ii) default in the observance or performance of any other agreement, term or condition contained in any such bond, debenture, note or other evidence of indebtedness, and the effect of such failure or default is to cause, or permit the holder thereof to cause, indebtedness in an aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or more to become due prior to its stated date of maturity; or

 

(e)           The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated in full or in part, (v) commence a voluntary case or other 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 consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of effecting any of the foregoing; or

 

(f)           Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within thirty (30) days of commencement; or

 

(g)           One or more judgments for the payment of money in an amount in excess of Two Hundred Fifty Dollars ($250,000) in the aggregate, outstanding at any one time, shall be rendered against the Company and the same shall remain undischarged for a period of thirty (30) days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against a substantial part of the property of the Company and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within thirty (30) days after issue or levy.

 

  

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Section 5.   Rights Of Investor Upon Default.

Upon the occurrence or existence of any Event of Default (other than an Event of Default referred to in Sections 4(f) or 4(g) hereof) and at any time thereafter during the continuance of such Event of Default, the Investor may, by written notice to the Company, declare all outstanding amounts payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.  Upon the occurrence or existence of any Event of Default described in Sections 4(f) or 4(g) hereof, immediately and without notice, all outstanding amounts payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.  In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Investor may exercise any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both. So long as an Event of Default occurs and is continuing, this Debenture shall bear interest at the rate equal to the lesser of (i) twelve percent (12%) per annum, and (ii) the maximum lawful non-usurious contract rate of interest allowed by applicable law, until such time as the Event of Default is cured or outstanding principal and all accrued but unpaid interest on this Debenture and any other amounts due there under are paid in full.

Section 6.   Conversion.

(a)           At any time, and from time to time, the Investor may, in the manner described in Section 6(b) and at the Investor’s sole and exclusive option, convert all, or a portion, of the principal and/or interest outstanding under this Debenture into shares of the Company’s common stock, $0.001 par value (the “Common Stock”) at the then effective Conversion Price.  The number, and nature, of shares of Common Stock into which this Debenture shall be converted shall be determined by dividing the principal amount, and interest if any, so converted by the Conversion Price in effect at the time of conversion, subject to adjustments, if any, provided for pursuant to Section 6(d).  

(b)           The Investor shall exercise its right to convert this Debenture by providing written notice of conversion (a “Conversion Notice”, the date of receipt by the Company of each such Conversion Notice being referred to herein as the “Conversion Date”) accompanied by this Debenture.  The Company shall, within five (5) business days following the Conversion Date and at the Company’s expense, issue and deliver to the Investor, or to its nominee, at such Investor’s address as shown in the records of the Company, a certificate or certificates for the number of whole shares of Common Stock issuable upon such conversion in accordance with the provisions hereof (bearing such legends as are required by applicable state and federal securities laws in the opinion of counsel to the Company).  No fractional shares of Common Stock shall be issued upon conversion of this Debenture and, after aggregating all fractional shares subject to conversion, any remaining fractional share to which the Investor would otherwise be entitled shall be rounded up to the nearest whole number.  As of the Conversion Date, the accrued interest so converted, first, and, then, the principal amount of this Debenture so converted shall be deemed paid in full, and all rights with respect to such accrued interest and principal amount of this Debenture so converted shall immediately cease and terminate, except only the right of the Investor to receive shares of Common Stock in exchange therefor and the payment of any accrued and unpaid and unconverted interest thereon.  On the Conversion Date, the shares of Common Stock issuable upon such conversion shall be deemed to be outstanding, and the Investor shall be entitled to exercise and enjoy all rights with respect to such shares of Common Stock.  

 

  

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(c)           The term “Conversion Price” shall mean, as of any time, fifty percent (50%) of the Market Price. For the purpose of this Debenture, “Market Price” shall mean for the Common Stock (or its successor security) (i) if the Common Stock is traded on a national securities exchange (an “Exchange”), the average closing sales price of the Common Stock on the Exchange on which the Common Stock is then listed or quoted for trading as reported by Bloomberg L.P. over the twenty (20) consecutive trading day period ending on the Conversion Date (the “Measurement Period”); (ii) if the Common Stock is not listed on an Exchange but is quoted for trading on the OTC Bulletin Board (the “OTCBB”), the average closing sale price of the Common Stock as so reported by the OTC Bulletin Board over the Measurement Period; and (iii) if the Common Stock is not then listed on an Exchange or quoted for trading on the OTCBB but are then reported in any of the OTC Markets published by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices)(the “OTC Market”), the average of the last accepted bid price per share of Common Stock as so reported over the Measurement Period.  If the Common Stock is listed or quoted on an Exchange and/or the OTCBB and/or the OTC Market during a portion, but not all, of the Measurement Period, the Market Price shall computed taking into account the days within the Measurement Period on which each of (i), (ii) and (iii) above, in that order of preference, applied. If the Common Stock is not listed for trading or eligible for quotation on any of the foregoing exchanges or public markets, then the Market Price of the Common Stock shall be determined in good faith by the Company’s board of directors.

(d)          If the Company shall:

(i)            make or issue a dividend or other distribution payable in securities, then and in each such event provision shall be made so that the Investor shall receive upon conversion of this Debenture, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities that they would have received had this Debenture been converted into Common Stock on the date of such event and had they thereafter during the period from the date of such event to and including the Conversion Date, retained such securities receivable by them as aforesaid during such period giving effect to all adjustments called for during such period under this paragraph with respect to the rights of the Investor; or

(ii)           reclassify its Common Stock (including any reclassification in connection with a consolidation or merger in which the Company is the surviving corporation), then and in each such event provision shall be made so that the holder of this Debenture shall receive upon conversion thereof, the amount of such reclassified Common Stock that they would have received had this Debenture been converted into Common Stock immediately prior to such reclassification and had they thereafter during the period from the date of such event to and including the Conversion Date, retained such reclassified Common Stock giving effect to all adjustments called for during such period under this paragraph with respect to the rights of the holders of this Debenture; and

(iii)          whenever adjustments are made as provided in Section 6(d)(i) or (ii), the Company shall forthwith, and not more than five business days following the events giving rise to such adjustments, provide notice of such adjustment to the holder of this Debenture, a statement, certified by the chief financial officer of the Company, showing in detail the facts requiring such adjustment. 

(iv)          if a state of facts shall occur which, without being specifically controlled by the provisions of this Section 6, would not fairly protect the conversion rights of the holders of this Debenture in accordance with the essential intent and principles of such provisions, then the board of directors of the Company shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as to protect such conversion rights.

 

  

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(e)           The Company shall not amend its Articles of Incorporation or participate in any reorganization, transfer of assets, consolidation, merger, issue or sale of securities or any other voluntary action for the purpose of avoiding or seeking to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but shall at all times in good faith assist in carrying out all such action as may be reasonably necessary or appropriate in order to protect the conversion rights of the Investor against impairment as provided herein.

Section 7.   Defenses.

The obligations of the Company under this Debenture shall not be subject to reduction, limitation, impairment, termination, defense, set-off, counterclaim or recoupment for any reason.

Section 8.   Exchange or Replacement of Notes.

(a)           The Investor may, at its option, in person or by duly authorized attorney, surrender this Debenture for exchange, at the principal business office of the Company, and receive in exchange therefore, a new Debenture in the same principal amount as the unpaid principal amount of this Debenture and bearing interest at the same annual rate as this Debenture, each such new Debenture to be dated as of the date of this Debenture and to be in such principal amount as remains unpaid and payable to such person or persons, or order, as the Investor may designate in writing.

(b)           Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction, or mutilation of this Debenture and (in the case of loss, theft or destruction) of an indemnity reasonably satisfactory to it, and upon surrender and cancellation of this Debenture, if mutilated, the Company will deliver a new Debenture of like tenor in lieu of this Debenture.  Any Debenture delivered in accordance with the provisions of this Section 8 shall be dated as of the date of this Debenture.

Section 9.   Attorneys’ and Collection Fees.

Should the indebtedness evidenced by this Debenture or any part hereof be collected at law or in equity or in bankruptcy, receivership or other court proceedings, the Company agrees to pay, in addition to the principal and interest due and payable hereon, all costs of collection, including reasonable attorneys’ fees and expenses, incurred by the Investor in collecting or enforcing this Debenture.

Section 10.  Amendments.

This Debenture may not be amended without the express written consent of both the Company and the Investor.

Section 11.  Waivers.

The Company hereby waives presentment, demand for payment, notice of dishonor, notice of protest and all other notices or demands in connection with the delivery, acceptance, performance or default of this Debenture.  No delay by the Investor in exercising any power or right hereunder shall operate as a waiver of any power or right, nor shall any single or partial exercise of any power or right preclude other or further exercise thereof, or the exercise thereof, or the exercise of any other power or right hereunder or otherwise; and no waiver whatsoever or modification of the terms hereof shall be valid unless set forth in writing by the Investor and then only to the extent set forth therein.

 

  

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Section 12.  Governing Law.

This Debenture is made and delivered in, and shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to principles of conflicts of laws of the State of Texas or any other state).  Any action to enforce the terms of this Debenture shall be exclusively brought in the state and/or federal courts in Harris County, Texas.

Section 13.  Successors and Assigns.

 The rights and obligations of the Company and the Investor under this Debenture shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.  Notwithstanding the foregoing, neither this Debenture nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company, without the prior written consent of the Investor

Section 14.  Notices.

All notices, requests, demands and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party at its address or facsimile number set forth below or such other address or facsimile number as such party may hereafter specify by notice to the other parties listed below:

 

	 	(a) 	If to the Company: 	NightCulture, Inc. 

6400 Richmond Avenue

Houston, Texas 77057

Attention: Michael Long

Telephone: (832) 535-9070

Facsimile: (281) 605-1333

	 	 	 	 
	 	(b)	If to the Investor: 	At the address shown on the signature page

 

Each such notice, request or other communication shall be effective (i) upon receipt (provided, however, that notices received on a Saturday, Sunday or legal holiday or after 5:00 p.m. on any other day will be deemed to have been received on the next business day), if given by legible facsimile transmission with proof from sender of confirmation of receipt, or (ii) upon receipt if delivered personally or by overnight courier, or (iii) 72 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid.

Section 15.  No Rights of Stockholders.

Except as otherwise provided herein, this Debenture shall not entitle the Investor to any of the rights of a stockholder of the Company, including without limitation, the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other proceedings of the Company, unless and to the extent converted into shares of Common Stock in accordance with the terms hereof.

Section 16.  Registration Rights Agreement.

In conjunction with this Debenture, the Company and the Investor have entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to file, with the Securities and Exchange Commission, a registration statement registering the shares of Common Stock issuable upon exercise of this Debenture.

 

  

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Section 17.  Entire Agreement.

This Debenture, the Securities Purchase Agreement relating to the offer and sale of the Units, and the Registration Rights Agreement constitute the full and entire understanding and agreement between the parties with regard to the subjects hereto and thereof.

Section 18.  Headings.

The headings used in this Debenture are used for convenience only and are not to be considered in construing or interpreting this Debenture.

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

 

	 	NightCulture, Inc.	 
	 	 	 	 
	
Date: September 12, 2012

	
By: 

	/s/ Michael Long	 
	 	 	Michael Long	 
	 	 	President	 

	
Note No.

	
2012-

	
Amount:

	
$

	
Investor Name:

	  
	
Address:

	  
	  	  
	
Telephone:

	  
	
Facsimile:

	  

 

  

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ANNEX A

 

CONVERSION NOTICE

 

(To be Executed by the Registered Holder

in order to Convert the Debenture)

The undersigned hereby irrevocably elects to convert the above Debenture No. 2012-__ into shares of Common Stock, $0.001 par value per share, of NightCulture, Inc. according to the provisions hereof, as of the date written below.

 

	Conversion calculations: 	_________________________________________ 

Date of Conversion Notice

_________________________________________

Principal Amount of Debenture to be Converted

_________________________________________

Accrued Interest to be Converted

_________________________________________

Conversion Price

_________________________________________

Number of Shares to be Issued Upon Conversion

_________________________________________

Signature

_________________________________________

Name

_________________________________________

Address

 

 

 

8nght_ex103.htm

EXHIBIT 10.3

 

THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

SUBJECT TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. CENTRAL TIME ON DECEMBER 31, 2015 (the “EXPIRATION DATE”).

Warrant No. 2012-__

NIGHTCULTURE INC.

WARRANT TO PURCHASE __________ SHARES OF

COMMON STOCK, $0.001 PAR VALUE

For VALUE RECEIVED, ______________ (“Warrantholder”), is entitled to purchase, subject to the provisions of this Warrant, from NightCulture Inc., a Nevada corporation (“Company”), at any time not later than 5:00 P.M., Central time, on the Expiration Date (as defined above), at an exercise price per share equal to the Warrant Price (as defined below), __________ shares (“Warrant Shares”) of the Company’s common stock, $0.001 par value per share (“Common Stock”).  The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as described herein.

The “Warrant Price” shall mean, as of any time, fifty percent (50%) of the Market Price. For the purpose of this Warrant, “Market Price” shall mean for the Common Stock (or its successor security) (i) if the Common Stock is traded on a national securities exchange (an “Exchange”), the average closing sales price of the Common Stock on the Exchange on which the Common Stock is then listed or quoted for trading as reported by Bloomberg L.P. over the twenty (20) consecutive trading day period ending on the Conversion Date (the “Measurement Period”); (ii) if the Common Stock is not listed on an Exchange but is quoted for trading on the OTC Bulletin Board (the “OTCBB”), the average closing sale price of the Common Stock as so reported by the OTC Bulletin Board over the Measurement Period; and (iii) if the Common Stock is not then listed on an Exchange or quoted for trading on the OTCBB but are then reported in any of the OTC Markets published by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices)(the “OTC Market”), the average of the last accepted bid price per share of Common Stock as so reported over the Measurement Period.  If the Common Stock is listed or quoted on an Exchange and/or the OTCBB and/or the OTC Market during a portion, but not all, of the Measurement Period, the Market Price shall computed taking into account the days within the Measurement Period on which each of (i), (ii) and (iii) above, in that order of preference, applied. If the Common Stock is not listed for trading or eligible for quotation on any of the foregoing exchanges or public markets, then the Market Price of the Common Stock shall be determined in good faith by the Company’s board of directors.

 

  

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Section 1.  Registration.  The Company shall maintain books for the transfer and registration of the Warrant.  Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in the name of the Warrantholder.

Section 2.  Transfers.  As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration.  Subject to such restrictions, the Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon surrender thereof for transfer properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and the surrendered Warrant shall be canceled by the Company.

Section 3.  Exercise of Warrant.  Subject to the provisions hereof, the Warrantholder may exercise this Warrant in whole or in part at any time prior to its expiration upon surrender of the Warrant, together with delivery of the duly executed Warrant exercise form attached hereto as Appendix A (the “Exercise Agreement”) and payment by cash, certified check or wire transfer of funds for the aggregate Warrant Price for that number of Warrant Shares then being purchased, to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder).  The Warrantholder shall deliver the Exercise Agreement to the Company’s Chief Executive Officer by facsimile to 281-605-1333 and by Email to mike@nightculture.com.  The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder or the Warrantholder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered (or evidence of loss, theft or destruction thereof and security or indemnity satisfactory to the Company), the Warrant Price shall have been paid and the completed Exercise Agreement shall have been delivered.  Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the Warrantholder within a reasonable time, not exceeding three (3) business days, after this Warrant shall have been so exercised.  The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall be designated by the Warrantholder.

If by the third business day following the date this Warrant is duly exercised in accordance the preceding paragraph in this Section 3(a), the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to this Section 3, and if after such date and prior to the receipt of such Warrant Shares, shares of Common Stock are purchased by or for the account of the Warrantholder to deliver in satisfaction of a sale by the Warrantholder of the Warrant Shares which the Warrantholder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Warrantholder the amount by which (x) the Warrantholder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Warrantholder in connection with such exercise by (B) the closing price of the Common Stock on the date the Exercise Form was delivered and (2) deliver to the Warrantholder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder; provided, however, that the obligations of the Company with respect to a Buy-In shall not apply where the Warrant Shares in question are subject to resale restrictions under the Securities Act.  The Warrantholder shall provide the Company written notice indicating the amounts payable to the Warrantholder in respect of the Buy-In.

  

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If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.  As used herein, “business day” means a day, other than a Saturday or Sunday, on which banks in Houston, Texas are open for the general transaction of business.

Section 4.  Compliance with Securities Act.  The Company may cause the legend set forth on the first page of this Warrant to be set forth on each Warrant or similar legend on any security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary.

Section 5.  Payment of Taxes.  The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid.  The Warrantholder shall be responsible for income taxes due under federal, state or other law, if any such tax is due.

Section 6.  Mutilated or Missing Warrants.  In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company.

Section 7.  Reservation of Common Stock.  The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Warrant.  The Company agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company.

  

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Section 8.  Adjustments.  Subject and pursuant to the provisions of this Section 8, the Warrant Price and number of Warrant Shares subject to this Warrant shall be subject to adjustment from time to time as set forth hereinafter.

(a)          If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock that is in excess of twenty percent (20%) of the then-issued and outstanding shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares that is in excess of twenty percent (20%) of the then-issued and outstanding shares of Common Stock or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then the number of Warrant Shares purchasable upon exercise of the Warrant shall be adjusted by the Company so that the Warrantholder thereafter exercising the Warrant shall be entitled to receive the number of shares of Common Stock or other capital stock which the Warrantholder would have received if the Warrant had been exercised immediately prior to such event.  Such adjustments shall be made successively whenever any event listed above shall occur.  This Warrant shall not be adjusted for any stock dividend, distribution in shares of Common Stock or stock dividend that is equal to or less than twenty percent (20%) of the then-issued and outstanding Common Stock.

(b)          If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company’s assets to another corporation shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Warrantholder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof.  The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Warrantholder, at the last address of the Warrantholder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may be entitled to purchase, and the other obligations under this Warrant.  The provisions of this paragraph (b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.

  

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(c)          In case the Company shall make or issue a dividend or other distribution payable in securities (other than Common Stock), assets or evidence of indebtedness, then and in each such event provision shall be made so that the Investor shall receive upon exercise of this Warrant, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities, assets and/or evidence of indebtedness that they would have received had this Warrant been exercised into Common Stock on the date of such event and had they thereafter during the period from the date of such event to and including the Conversion Date, retained such securities receivable by them as aforesaid during such period giving effect to all adjustments called for during such period under this paragraph with respect to the rights of the Warrantholder.

 

(d)          If the Company repurchases or retires any of its issued and outstanding shares of Common Stock, the number of Warrant Shares purchasable under this Warrant shall be reduced, on a pro rata basis, to the extent of such reduction of the issued and outstanding shares of Common Stock.  No such adjustment to the Warrant Shares shall be made for the retirement or repurchase of any security that is exercisable for or convertible or exchangeable into shares of Common Stock.

(e)          Adjustments pursuant to this Section 8 shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment.

(f)           In the event that, as a result of an adjustment made pursuant to this Section 8, the Warrantholder shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Warrant.

Section 9.  Fractional Interest.  The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant.  If any fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an amount in cash equal to the Market Price of such fractional share of Common Stock on the date of exercise.

Section 10.  Benefits.  Nothing in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the Warrantholder.

 

  

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Section 11.  Notices to Warrantholder.  Upon the happening of any event requiring an adjustment pursuant to Section 8, the Company shall promptly give written notice thereof to the Warrantholder at the address appearing in the records of the Company, stating the adjustment resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Failure to give such notice to the Warrantholder or any defect therein shall not affect the legality or validity of the subject adjustment.

 

Section 12.  Notices.  All notices, requests, demands and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party at its address or facsimile number set forth below or such other address or facsimile number as such party may hereafter specify by notice to the other parties listed below:

 

	 	(a) 	If to the Company:  	NightCulture, Inc.
	 	 	 	6400 Richmond Avenue
	 	 	 	Houston, Texas 77057
	 	 	 	Attention: 	Michael Long
	 	 	 	Telephone:  	(832) 535-9070
	 	 	 	Facsimile:	(281) 605-1333
	 	 	 	 	 
	 	(b) 	If to the Warrantholder:   At the address shown on the signature page

 

Each such notice, request or other communication shall be effective (i) upon receipt (provided, however, that notices received on a Saturday, Sunday or legal holiday or after 5:00 p.m. on any other day will be deemed to have been received on the next business day), if given by legible facsimile transmission with proof from sender of confirmation of receipt, or (ii) upon receipt if delivered personally or by overnight courier, or (iii) 72 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid.

Section 13.  Registration Rights.   In conjunction with this Warrant, the Company and the initial Warrantholder have entered into a Registration Rights Agreement pursuant to which the Company has agreed to file, with the Securities and Exchange Commission, a registration statement registering the Warrant Shares.

Section 14.  Successors.  All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its respective successors and assigns hereunder.

 

  

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Section 15.  Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant shall be governed by, and construed in accordance with, the internal laws of the State of Texas, without reference to the choice of law provisions thereof.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of Texas located in the County of Harris, State of Texas and the United States District Court for the Southern District of Texas for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Warrant.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  The Company and, by accepting this Warrant, the Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

Section 16.  No Rights as Stockholder.  Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a stockholder of the Company by virtue of its ownership of this Warrant.

Section 17.  Amendment; Waiver.  This Warrant is one of a series of Warrants of like tenor issued by the Company pursuant to the issuance of its Convertible Debentures Units and initially covering an aggregate of up to 25,000,000 shares of Common Stock (collectively, the “Company Warrants”).  Any term of this Warrant may be amended or waived (including the adjustment provisions included in Section 8 of this Warrant) upon the written consent of the Company and the Warrantholder.  A waiver or amendment of this Warrant shall not be an amendment or waiver to any of the other Company Warrants without the written consent of the holder(s) of such other Company Warrants.

Section 18.  Section Headings.  The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit or restrict the provisions hereof.

  

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its duly authorized officer as of the date indicated below.

 

 

	 	NightCulture, Inc.	 
	 	 	 	 
	
Date:     September 12, 2012

	
By: 

	/s/ Michael Long	 
	 	Name:	Michael Long	 
	 	Title: 	President	 
	 	 	 	 

 

	
Warrant No.

	  	
2012-

	
Warrant Shares:

	  	  
	
Warrantholder:

	  	  
	
Address:

	  	  
	  	  	  
	
Telephone:

	  	  
	
Facsimile:

	  	  

  

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APPENDIX A

NIGHTCULTURE INC.

WARRANT EXERCISE FORM

To NightCulture Inc.:

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price and surrender of the Warrant, _______________ shares of Common Stock (“Warrant Shares”) provided for therein, and requests that certificates for the Warrant Shares be issued as follows:

________________________________

Name

________________________________

Address

________________________________

 

________________________________

Federal Tax ID or Social Security No.

and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s Assignee as below indicated and delivered to the address stated below.

Dated: ___________________, ____

	
Note:  The signature must correspond with

	
Signature:______________________

	
the name of the Warrantholder as written

	  
	
on the first page of the Warrant in every

	
______________________________

	
particular, without alteration or enlargement

	
Name (please print)

	
or any change whatever, unless the Warrant

	  
	
has been assigned.

	
______________________________

	  	
______________________________

	  	
Address

	  	
______________________________

	  	
Federal Identification or

	  	
Social Security No.

	  	  
	  	
Assignee:

	  	
______________________________

	  	
______________________________

	  	
______________________________

 

 

 

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