Exhibit 10.1
CRYSTAL INTERNATIONAL TRAVEL
GROUP, INC.
SECURED NOTE AND WARRANT PURCHASE
AGREEMENT
THIS SECURED NOTE AND WARRANT
PURCHASE AGREEMENT is
made as of the day of November, 2006 (the
“ Effective Date ”) by and among
CRYSTAL INTERNATIONAL TRAVEL GROUP, INC., a Delaware
corporation (the “ Company ”), and the
persons and entities named on the Schedule of Purchasers attached
hereto (individually, a “ Purchaser ” and
collectively, the “ Purchasers
”).
The parties hereby agree as
follows:
1.
AMOUNT AND TERMS OF THE SECURED
LOAN; ISSUANCE OF WARRANTS.
1.1
The Loan. Subject
to the terms of this Agreement, at the Closing, each Purchaser
agrees to purchase and the Company agrees to sell and issue to each
Purchaser a Secured Promissory Note, in substantially the form
attached hereto as Exhibit A (each a “
Note ” and collectively, the “
Notes ”), in a principal amount equal to such
Purchaser’s Pro Rata Share of the total amount to be funded
at each such closing. For purposes of this Agreement, the
term “ Pro Rata Share ” means, as to each
Purchaser, the percentage equivalent of such Purchaser’s
commitment to purchase Notes from the Company (the “
Commitment Amount ”), divided by the combined
Commitment Amounts of all Purchasers to purchase Notes from the
Company, which combined aggregate amount is set forth on the
Schedule of Purchasers attached hereto, as the same may be amended
from time to time (the “ Total Commitment
”).
1.2
Issuance of Warrants. Subject to the terms of this
Agreement, and in consideration for the purchase by the Purchasers
of the Notes and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Company agrees to
issue to each Purchaser, at the Closing, a warrants in
substantially the form attached hereto as
Exhibit B (each, a “ Warrant
” and collectively the “ Warrants
”), for shares of Common Stock of the Company (the “
Common Stock ”).
2.
THE CLOSING.
2.1
Closing. The
closing of the purchase and sale of Notes in the aggregate
principal amount of $400,000 (the “ Loan Amount
”), the issuance of the Restricted Shares (as defined below)
and the issuance of Warrants shall be held on the Effective Date at
the offices of the Company (the “ Closing
”), or at such other place and time as the Company and the
Purchasers shall mutually agree upon (the “Closing
Date” ).
2.2
Delivery. At the
Closing:
(i) Purchaser will
deliver to the Company a certified check or wire transfer funds
equal to the Loan Amount;
(ii) the Company shall issue
and deliver to Purchaser a Note payable to such Purchaser in the
principal amount of $400,000;
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(iii) the Company shall issue and
deliver to Purchaser a Warrant for an aggregate of 400,000 shares
of the Company’s Common Stock at an exercise price of $0.10
per share and in return the Purchaser shall return to the Company
for cancellation any and all warrants issued to it on or about May
2, 2006;
(iv) the Company shall instruct its
transfer agent to issue and deliver to each Purchaser within 5
business days of the date hereof 1,000,000 “restricted
shares” (as such term is defined in the Securities Act of
1933) of the Company’s Common Stock with the registration
rights set forth in Section 5(d) of this Agreement (the “
Restricted Shares ”);
(vi) the Company shall execute
and deliver a security agreement substantially in the form attached
hereto as Exhibit C (the “ Security
Agreement ”), pursuant to which the Company shall
grant the Agent (as defined in Section 7 below) a security interest
in the “Collateral” described therein,
for the ratable benefit of the Purchasers; and
(vi) the Company shall authorize the
filing of a UCC-1 financing statement and shall provide such other
documents as may be necessary or desirable to perfect the
Agent’s security interest in the Collateral, in form
reasonably satisfactory to Purchasers, including a Grant of
Security Interest for filing with the United States Patent and
Trademark Office.
3.
PURCHASER’S REPRESENTATIONS AND WARRANTIES
. Each Purchaser hereby
represents and warrants to and agrees with the Company only as to
such Purchaser that:
3.1
Organization and Standing of the Purchasers . If the Purchaser is an entity, such
Purchaser is a corporation, partnership or other entity duly
incorporated or organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or
organization.
3.2
Authorization and Power . Each Purchaser has the requisite power
and authority to enter into and perform this Agreement and to
purchase the Notes and Warrants being sold to it hereunder.
The execution, delivery and performance of this Agreement by such
Purchaser and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate or partnership action, and no further consent
or authorization of such Purchaser or its Board of Directors,
stockholders, partners, members, as the case may be, is
required. This Agreement has been duly authorized, executed
and delivered by such Purchaser and constitutes, or shall
constitute when executed and delivered, a valid and binding
obligation of the Purchaser enforceable against the Purchaser in
accordance with the terms thereof.
3.3
No Conflicts . The
execution, delivery and performance of this Agreement and the
consummation by such Purchaser of the transactions contemplated
hereby or relating hereto do not and will not (i) result in a
violation of such Purchaser’s charter documents or bylaws or
other organizational documents or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument or obligation to which such
Purchaser is a party or by which its properties or assets are
bound, or result in a violation of any law, rule, or regulation, or
any order, judgment or decree of any court or governmental agency
applicable to such Purchaser or its properties (except for such
conflicts, defaults and violations as would not, individually or in
the aggregate, have a
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material adverse effect on such
Purchaser). Such Purchaser is not required to obtain any
consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it
to execute, deliver or perform any of its obligations under this
Agreement or to purchase the Notes or acquire the Warrants in
accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, such Purchaser is assuming
and relying upon the accuracy of the relevant representations and
agreements of the Company herein.
3.4
Information on Company . The Purchaser has been furnished
with or has had access at the EDGAR Website of the Commission to
the Company’s Form 10-KSB for the year ended July 31, 2006
and all periodic reports filed with the Commission thereafter not
later than five days before the Closing Date (hereinafter referred
to as the “ Reports ”). In addition, the
Purchaser has received in writing from the Company such other
information concerning its operations, financial condition and
other matters as the Purchaser has requested in writing (such other
information is collectively, the “ Other Written
Information ”), and considered all factors the Purchaser
deems material in deciding on the advisability of investing in the
Securities.
3.5
Information on Purchaser . The Purchaser is, and will be at the
time of the exercise of the Warrants, an “accredited
investor”, as such term is defined in Rule 501 of Regulation
D and is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of
United States publicly-owned companies in private placements in the
past and, with its representatives, has such knowledge and
experience in financial, tax and other business matters as to
enable the Purchaser to utilize the information made available by
the Company to evaluate the merits and risks of and to make an
informed investment decision with respect to the proposed purchase,
which represents a speculative investment. The Purchaser has
the authority and is duly and legally qualified to purchase and own
the Securities. The Purchaser is able to bear the risk of
such investment for an indefinite period and to afford a complete
loss thereof. The information set forth on the signature page
hereto regarding the Purchaser is accurate.
3.6
Purchase of Notes and Warrants . On the Closing Date, the Purchaser will
purchase the Notes and Warrants as principal for its own account
for investment only and not with a view toward, or for resale in
connection with, the public sale or any distribution thereof, but
Purchaser does not agree to hold the Notes and Warrants for any
minimum amount of time.
3.7
Compliance with Securities Act . The Purchaser understands and agrees
that the Securities have not been registered under the 1933 Act or
any applicable state securities laws, by reason of their issuance
in a transaction that does not require registration under the 1933
Act (based in part on the accuracy of the representations and
warranties of Purchaser contained herein), and that such Securities
must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities
laws or is exempt from such registration. Notwithstanding
anything to the contrary contained in this Agreement, such
Purchaser may transfer (without restriction and without the need
for an opinion of counsel) the Securities to its Affiliates (as
defined below) provided that each such Affiliate is an
“accredited investor” under Regulation D and such
Affiliate agrees to be bound by the terms and conditions of this
Agreement. For the purposes of this Agreement, an “
Affiliate ” of any person or entity means any other
person or entity directly or indirectly controlling, controlled by
or under direct or indirect common control with such person or
entity. Affiliate when employed in connection
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with the Company includes each
Subsidiary [as defined in Section 5(a)] of the Company. For
purposes of this definition, “ control ” means
the power to direct the management and policies of such person or
firm, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise.
3.8
Shares Legend . The
shares underlying the Warrants shall bear the following or similar
legend:
“THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO CRYSTAL INTERNATIONAL TRAVEL GROUP, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.”
3.9
Warrants Legend .
The Warrants shall bear the following or similar legend:
“THIS WARRANT AND THE COMMON
SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO CRYSTAL INTERNATIONAL
TRAVEL GROUP, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.”
3.10
Communication of Offer . The offer to sell the Securities was
directly communicated to the Purchaser by the Company. At no
time was the Purchaser presented with or solicited by any leaflet,
newspaper or magazine article, radio or television advertisement,
or any other form of general advertising or solicited or invited to
attend a promotional meeting otherwise than in connection and
concurrently with such communicated offer.
3.11
Authority; Enforceability . This Agreement and other agreements
delivered together with this Agreement or in connection herewith
have been duly authorized, executed and delivered by the Purchaser
and are valid and binding agreements enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights
generally and to general principles of equity; and Purchaser has
full corporate power and authority necessary to enter into this
Agreement and such other agreements and to perform its obligations
hereunder and under all other agreements entered into by the
Purchaser relating hereto.
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3.12
No Governmental Review . Purchaser understands that no United
States federal or state agency or any other governmental or state
agency has passed on or made recommendations or endorsement of the
Securities or the suitability of the investment in the Securities
nor have such authorities passed upon or endorsed the merits of the
offering of the Securities.
3.13
Correctness of Representations . Each Purchaser represents as to such
Purchaser that the foregoing representations and warranties are
true and correct as of the date hereof and, unless a Purchaser
otherwise notifies the Company prior to the Closing Date shall be
true and correct as of the Closing Date.
3.14
Survival . The
foregoing representations and warranties shall survive the Closing
Date until three years after the Closing Date.
4.
Company Representations and Warranties. The Company represents and warrants to
and agrees with each Purchaser that except as set forth in the
Reports and as otherwise qualified in the Transaction
Documents:
4.1
Due Incorporation .
The Company is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own
it
