Document:

numobile_10q-ex1001.htm

EXHIBIT 10.1

 

DEBT SETTLEMENT AGREEMENT

 

DEBT SETTLEMENT AGREEMENT (“Agreement”), dated as of February 15, 2011, by and between NUMOBILE, INC., a Nevada corporation (the “Company”), and Galleon Investments, Ltd., a business domiciled in Turks and Caicos, BWI (“Investor”) (together hereinafter referred to as “the Parties”).

 

RECITALS

 

This agreement is made with reference to the following facts:

 

	
A.  

	
On October 15, 2008, NewMarket Technology, Inc., a Nevada corporation (“NewMarket”), made a loan in an amount equal to $607,058.00 in cash to Stonewall Networks, Inc., a Delaware corporation (“Stonewall”),  such loan evidenced by  a certain Promissory Note also dated October 15, 2008, by and between the Seller and Stonewall (the “Note”) ; and,

 

	
B.  

	
Whereas, among other terms and conditions, the Note is unsecured, carries an interest rate of 8% per annum, has a maturity date of October 15, 2011 and is a valid and binding obligation in the principal amount of $607,058 plus accrued interest as of the date herein owed by Stonewall  to the Seller;  and,

 

	
C.  

	
Pursuant to the terms of that certain Stock Purchase Agreement (the “Stock Purchase Agreement”) dated October 7, 2009 by and between NuMobile, Inc., a Nevada corporation (“NuMobile”) and Stonewall, NuMobile acquired all of the outstanding shares of Stonewall, resulting in NuMobile assuming of all the liabilities of Stonewall, including the Note;

	
D.  

	
Pursuant to the terms of that certain Note Purchase Agreement (the “Note Purchase Agreement”) dated July 15, 2010 by and between Resource Operations of NG, LLC, a Texas limited-liability company (“RONG”) and NewMarket, NewMarket sold the Note, together with all accrued interest as of the date thereto, to RONG; and,

	
E.  

	
Pursuant to the terms of that certain Debt Purchase Agreement (the “Debt Purchase Agreement”) dated February 15, 2011 by and between RONG and the Investor, RONG sold a $200,000 principal portion of the Note (the “Purchased Debt”), together with accrued interest as of the date thereto, to the Investor; and,

 

	
F.  

	
The Parties agree that as of the date hereof the outstanding principal plus accrued and unpaid interest, together with fees and expenses, under the Purchased Debt is $238,500 (the “Outstanding Balance”): and,

 

	
G.  

	
The Parties desire to provide an alternative mechanism for settling the obligations under the Purchased Debt, as the Company may not have, and may not be able to obtain, enough cash to repay the Purchased Debt in full within an acceptable timeframe, and;

 

 

  

  

  

 

	
H.  

	
Accordingly, this Agreement is made for the purpose, among others, of allowing the Investor, at its option and in its sole discretion as it may elect from time to time, to exchange all or part of the Outstanding Balance of the Purchased Debt for the issuance of shares of common stock of the Company (the “Common Stock”).

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Investor hereby agree as follows:

 

	
i.  

	
INVESTOR ELECTION TO EXCHANGE.  From time to time the Investor may elect, in its sole and absolute discretion, to exchange all or a portion of the Outstanding Balance to Common Stock; provided, however, that (i) Investor may not elect to convert less than $5,000 of Purchased Debt at any given time, and (ii) at any given time the Investor shall not beneficially own more than 4.99% of the issued and outstanding shares of the Common Stock of the Company.  This limitation, however, shall not prevent the Investor from eventually converting all of the Purchased Debt into Common Stock.

 

	
ii.  

	
CONVERSION PRICE.  The Investor may convert the Purchased Debt at a price per share equal to fifty percent (50.0%) of the lowest of the five  closing bid prices (“Closing Bid Price”), as reported on Bloomberg, of the Company’s Common Stock immediately prior to conversion (the “Conversion Price”).

 

	
iii.  

	
CONVERSION NOTICE.  The Investor shall provide notice to the Company of its intent to convert a given portion of the Purchased Debt by delivering to the Company a Conversion Notice, a form of which is attached hereto as Exhibit “A”.  Upon receipt of a Conversion Notice, the Company shall immediately, but in no event later than three days after receipt, deliver the number of shares of Common Stock set forth on the Conversion Notice to the account specified by the Investor on the Conversion Notice.  Notwithstanding anything herein to the contrary, all such deliveries of shares shall be electronic, via DWAC or DTC.  In the event the Company fails to deliver said shares within three days of receipt of the Conversion Notice, a penalty equal to one and one half percent (1.5%) of the Conversion Amount shall be added to the balance of the Purchased Debt per day.  The amount of the Purchased Debt  that Investor elects to convert on a Conversion Notice is defined as the “Conversion Amount.”

4.           RESTRICTIVE LEGEND. The certificates, if applicable, in due and proper form, representing the shares of Common Stock to be issued to Investor will bear a legend substantially in the following form:

“THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.”

 

 

  

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5.           INVESTOR’S REPRESENTATIONS AND WARRANTIES.

Investor hereby acknowledges, represents and warrants to, and agrees with, the Company as follows:

(a)           Investor is acquiring the Common Stock for Investor’s own account as principal, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such Securities.

 

(b)           Investor acknowledges its understanding that the issuance of the Common Stock is intended to be exempt from registration under the Act by virtue of Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and the provisions of Regulation D thereunder.

 

(c)           Investor has the financial ability to bear the economic risk of his investment, has adequate means for providing for his current needs and personal contingencies and has no need for liquidity with respect to his investment in the Company.

 

(d)           Investor is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D under the Act (17 C.F.R. 230.501(a)).

 

(e)           Investor has made an independent investigation of the Company’s business, been provided an opportunity to obtain additional information concerning the Company as Investor deems necessary to make an investment decision and all other information to the extent the Company possesses such information or can acquire it without unreasonable effort or expense.

 

(f)           Investor represents, warrants and agrees that Investor will not sell or otherwise transfer the Common Stock unless registered under the Act or in reliance upon an exemption therefrom, and fully understands and agrees that Investor must bear the economic risk of his purchase for an indefinite period of time because, among other reasons, the Common Stock or underlying securities have not been registered under the Act or under the securities laws of certain states and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Act and under the applicable securities laws  of such states or an exemption from such registration is available.  Investor also understands that the Company is under no obligation to register the Common Stock on his behalf or to assist Investor in complying with any exemption from registration under the Act.  Investor further understands that sales or transfer of the Common Stock is restricted by the provisions of state securities laws.

 

(g)           Investor has not transferred or assigned an interest in the Outstanding Balance to any third party.

 

(h)           The foregoing representations, warranties and agreements shall survive the delivery of the Securities under this Agreement.

 

 

 

  

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6.           COMPANY REPRESENTATIONS, WARRANTIES AND COVENANTS.

The Company hereby acknowledges, represents and warrants to, and agrees with Investor as follows:

(a)           The Company has been duly organized, validly exists and is in good standing under the laws of the State of Nevada.  The Company has full corporate power and authority to enter into this Agreement and this Agreement has been duly and validly authorized, executed and delivered by the Company and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be limited by the United States Bankruptcy Code and laws effecting creditors rights, generally.

 

(b)           Subject to the performance by Investor of its obligations under this Agreement and the accuracy of the representations and warranties of Investor, the offering and sale of the shares will be exempt from the registration requirements of the Act.

 

(c)           The execution and delivery by the Company of, and the performance by the Company of its obligations under this Agreement in accordance with the terms of this Agreement will not contravene any provision of applicable law or the charter documents of the Company or any agreement or other instrument binding upon the Company, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement in accordance with the terms of this Agreement.

 

(d)           All of the information, facts and representations set forth in the Recitals section of this Agreement are in all respects true and accurate as of the date hereof and are incorporated as representations and warranties of the Company as if set forth in this Section 4.

 

(e)           Other than as described in the Recitals, neither the Note nor the Purchased Debt has not been sold, transferred, assigned, exchanged, pledged, hypothecated or encumbered in any way, whether by the Company or by any other person.  The Company makes this representation and warranty after due inquiry.

 

(f)           After due inquiry the Company represents and warrants that at all times, the Company, the Original Lender and all subsequent transferees have complied in all respects with all securities and other applicable laws in relation with the issuance, holding and transfers of the Note.

 

(g)           Investor is not and has never been an Affiliate of the Company, as that term is defined in the Act.

 

(h)           No broker or intermediary is involved in connection with the purchase of the Purchased Debt and no commission or other remuneration is being paid in connection therewith.

 

(i)           The foregoing representations, warranties, covenants and agreements shall survive the Closing.

 

 

  

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7.           RELEASES AND WAIVERS.

(a)           Upon the delivery of the Common Stock to Investor as set forth in Sections 1 and 2 of this Agreement, Investor releases and forever discharges the Company of and from all and all manner of actions, suits, debts, sums of money, contracts, agreements, claims and demands at law or in equity, that Investor had, or may have arising from the Outstanding Balance.

 

(b)           The Company hereby affirms that the obligations under the Note and the Purchased Debt and as set forth herein are valid and binding obligations of the Company, and hereby waives, to the fullest extent allowable under law, any and all defenses that may be available to a debtor under applicable state and federal law including, without limiting the foregoing, any and all defenses available to a debtor or maker under the provisions of the Uniform Commercial Code (“UCC”) pertaining to negotiable instruments.

 

8.          NOTICES.

Whenever the Company or the Investor shall desire to give or serve any notice, demand, request or other communication with respect to this Agreement, each such notice shall be in writing and shall be effective only if the same is delivered by personal service, by telefax or mailed by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

if to the Company:

 

NuMobile, Inc.

2520 South Third Street #206

 Louisville, KY 40208

 

if to the Investor:

Galleon Investments, Ltd.

BCM Building

Leeward Highway

Providenciales

Turks and Caicos Islands, BWI

Any such notice delivered personally shall be deemed to have been received upon delivery.  Any such notice sent by telefax shall be presumed to have been received by the addressee one (1) business day after its acceptance for sending by an authorized carrier thereof.  Any such notice sent by mail shall be presumed to have been received by the addressee three (3) business days after posting in the United States mail.  Any party to whom any such notice is to be sent hereunder may change its address by giving the other such parties written notice of its new address as herein provided.

 

 

  

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9.           MISCELLANEOUS.

(a)           Modification. Neither this Agreement nor any provisions hereof shall be modified, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.

 

(b)           Notices.   Any notice, demand or other communication which any party hereto may be required, or may elect, to give to anyone interested hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a United States mail letter box, registered or certified mail, return receipt requested, ad­dressed to such address as may be given herein, or (b) delivered personally at such address.

 

(c)           Counterparts.  This Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all the parties, notwith­standing that all parties are not signatories to the same coun­terpart.

 

(d)           Binding Effect.   Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns.

 

(e)           Entire Agreement.   This instrument contains the entire agreement of the parties, and there are no representations, covenants or other agreements except as stated or referred to herein.

 

(f)           Applicable Law and Venue.   This Agreement shall be governed and construed under the laws of the State of Nevada, without regard to conflicts of laws principles.  The Company hereby consents to the jurisdiction of any competent court within the State of Nevada and consents to service of process by any means authorized by Nevada law in any action brought under or arising out of this Agreement.

 

(g)           Legal Fees.  The Parties agree that they shall be individually responsible for their respective legal fees that may arise as a result of the review and execution of this Agreement.

 

 

[Signature Page Follows]

 

 

 

 

 

  

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IN WITNESS WHEREOF, the Company and Investor have caused this Agreement to be executed and delivered by their respective officers, thereunto duly authorized.

 

 

	 	
NUMOBILE, INC.

	 	 
	 	
By: /s/ James D. Tilton, Jr.                        

	 	
Name: James D. Tilton, Jr.

	 	
Title:   President and Chief Executive Officer

 

 

	 	

GALLEON INVESTMENTS, LTD.

	 	 
	 	
By: /s Hugh O'Neill                                   

	 	
Name: Hugh O'Neill

	 	
Title:   President

 

 

 

7numobile_10q-ex1002.htm

EXHIBIT 10.2

 

  

THIS DEBENTURE AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE (TOGETHER, THE “SECURITIES”). HAVE NO T BEEN REGISTERED WITH THE U.S. SECURITIES EXCHANGE COMMISSION OT THE SECURITIES COMMISSION OF ANY STATE.  THE SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION D OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE.

 

NUMOBILE, INC.

 

8% CONVERTIBLE DEBENTURE

 

	March 28, 2011	$100,000.00

                                                                           

This Debenture is issued by NUMOBILE, INC., a Nevada corporation (the “Company”), to Cove Partners, LLC (together with its permitted successors and assigns, the “Holder”) pursuant to exemptions from registration under the Securities Act of 1933, as amended.

 

ARTICLE I

 

Section 1.01 Principal and Interest.   For value received on March 28, 2011,  the Company hereby promises to pay to the order of the Holder in lawful money of the United States of America and in immediately available funds, the principal sum of $100,000.00 together with interest on the principal of this Debenture (the “Debenture”) at the per annum rate of 8% (calculated daily on the basis of a 365-day year and actual calendar days elapsed) from the date of this Debenture until September 28, 2011 (the “Maturity Date”).  At the Company’s option, the entire principal amount and all accrued interest shall be either (a) paid to the Holder on or before the Maturity Date or, (b) converted into shares of common stock of the Company in accordance with Section 1.02 herein.

 

Section 1.02 Optional Conversion. The Holder is entitled, at its, option to convert at any time and from time to time, until payment in full of this Debenture all or part of the principal amount of the Debenture, plus accrued interest, into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a price equal to fifty percent (50%) of the lowest closing bid price for the preceding ten trading days prior to the Company receiving notice of conversion.  To convert this debenture, the Holder shall deliver written notice (the “Conversion Notice”) thereof, such Conversion Notice containing such information necessary including amount of conversion and number of shares, to the Company at its address set forth herein.  The date upon which the conversion shall be effective (the “Conversion Date”) shall be deemed to be the date set forth in the Conversion Notice.  The Conversion Shares shall be delivered to the Holder at the address indicated herein.

 

  

  

  

 

Section 1.03  Reservation of Shares.  The Company shall use its best efforts, including soliciting its stockholders for requisite approval, to at all times have authorized and reserved for issuance a sufficient number of shares of its Common Stock to provide for the full conversion of this Debenture.   If at any time the Company does not have a sufficient number of Conversion Shares authorized and available, the Company shall call and hold a special meeting of shareholders within sixty (60) days of that time for the sole purpose of increasing the number of authorized shares of Common Stock.  The Company agrees that the issuance of this Debenture shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares upon the conversion of this Debenture or any securities issued pursuant to this Debenture.

 

Section 1.04  Interest Payments.  The interest payable under this Debenture will be paid at the Maturity Date or conversion to the individual or entity in whose name this Debenture is registered.  At such time as interest is payable, the Company, at its sole discretion, may elect to pay the accrued interest in cash or in the form of Common Stock.  If paid in Common Stock, the amount of stock to be issued shall be calculated in accordance with the formula and procedure set forth in Section 1.02.

 

Section 1.05   Right of Redemption.   The Company shall have the right to redeem, with thirty (30) business days advance notice to the Holder, any or all outstanding Debentures remaining at its sole discretion.  The redemption price shall be equal to 100% of the face amount of the Debenture redeemed plus all accrued interest.

 

ARTICLE II

 

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

 

ARTICLE III

 

Section 3.01  Events of Default.   An Event of Default is defined as follows:  (a) failure of the Company to pay amounts due and owing hereunder within fifteen (15) days of the Maturity Date of this Debenture; (b) failure by the Company for thirty (30) days after notice to it to comply with any of its other agreements in the Debenture; (c) events of bankruptcy or insolvency.  The Holder may not enforce the Debenture except as provided herein.

 

Section 3.02 Acceleration.  If an Event of Default occurs, then the outstanding principal of and all accrued interest on this Debenture shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are expressly waived pursuant to Section 5.02 below.

 

ARTICLE IV

 

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

 

  

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ARTICLE V

 

Section 5.01 Loss, Etc., of Debenture.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Debenture, and of indemnity reasonably satisfactory to the Company if lost, stolen or destroyed, and upon surrender and cancellation of this Debenture if mutilated, and upon reimbursement of the Company’s reasonable incidental expenses, the Company shall execute and deliver to the Holder a new Debenture of like date, tenor and denomination.

 

Section 5.02  Waiver.  The Company hereby waives presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Debenture.  If an action is brought for collection under this Debenture, the Holder shall be entitled to receive all costs of collection, including, but not limited to, its reasonable attorneys’ fees.

 

Section 5.03 Notice.   All notices, requests, consents, and other communications under this Debenture shall be in writing and shall be deemed delivered (i) three business days after being sent by registered or certified mail, return receipt requested, postage prepaid or (ii) one business day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, in each case to the intended recipient as set forth below:

 

	 	
(a) 

	
If to the Company, to:

 

NuMobile, Inc.

2520 South Third Street

Louisville, KY   40208

 

	 	
(b) 

	
If to the Holder, to:

 

Cove Partners, LLC

200 Broadhollow Road, Suite 207

Melville, NY   11747

Fax Number: (631) 824-9318

 

Any party may give any notice, request, consent or other communication under this Debenture using any other means (including, without limitation, personal delivery, messenger service, telecopy, first class mail or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the party for whom it is intended.  Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section.

 

Section 5.04 Headings; References.  All headings used herein are used for convenience only and shall not be used to construe or interpret this Debenture.  Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

 

 

  

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Section 5.05  Successors and Assigns.  All of the covenants, stipulations, promises, and agreements in this Debenture by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

 

Section 5.06   Governing Law.  This Debenture shall be governed by the laws of the State of Nevada, and the laws of such state (other than conflicts of laws principles) shall govern the construction, validity, enforcement and interpretation hereof, except to the extent federal laws otherwise govern the validity, construction, enforcement and interpretation hereof.

 

Section 5.07   Severability.   The invalidity of any of the provisions of this Debenture shall not invalidate or otherwise affect any of the other provisions of this Debenture, which shall remain in full force effect.

 

Section 5.08   Counterparts.   This Debenture may b e executed in multiple counterparts, each of which shall be an original, but all of which shall be deemed to constitute an instrument.

 

[Signature Page Follows]

 

 

 

 

 

 

  

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IN WITNESS WHEREOF, with the intent to legally bind hereby, the Company has caused its duly authorized officer to execute this Debenture as of the date first written above.

 

 

	 	NUMOBILE, INC.	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ James Tilton, Jr.	 
	 	Name:     	James Tilton, Jr.	 
	 	Title:	President and Chief Executive Officer	 
	 	 	 	 

 

 

ACKNOWLEDGMENT

	
STATE OF

	
)

: ss.:

	
COUNTY OF

	
)

On the ___ day of __________ in the year 2010, before me personally came JAMES TILTON, JR., to me known, who, being by me duly sworn, did depose and say that he resides in _________________________; that he is the President of NUMOBILE, INC., the corporation described in and which executed the above instrument; and that he signed his name thereto by authority of the board of directors of said corporation.

 

 

	 	
Notary Public

 

 

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