UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 6, 2014
LED LIGHTING COMPANY |
(Exact name of registrant as specified in its charter) |
Delaware |
| 000-54146 |
| 46-3457679 |
(State or other jurisdiction of incorporation or organization) |
| Commission file number |
| (IRS Employer Identification No.) |
2090 Novato Blvd |
Novato, California 94947 |
(Address of principal executive offices) |
|
(415) 526-3193 |
(Registrant’s telephone number) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
.Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
.Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
.Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
.Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
Entry Into a Material Definitive Agreement.
Effective November 6, 2014, LED Lighting Company (the “Company”) entered into a Loan Agreement and Convertible Promissory Note (the “Loan Documents”) with Andrew Molasky pursuant to which he loaned the Company $50,000. The Loan Documents provide that the loan shall accrue interest at the rate of 10% per annum; is due on November 6, 2015; and may be converted into shares of Company common stock at the election of Mr. Molasky at $0.10 per share. The foregoing is only a brief description of the material terms of the Loan Documents, and does not purport to be a complete description of the rights and obligations of the parties under those agreements, and such descriptions are qualified in their entirety by reference to the agreements which are filed as exhibits to this Current Report.
Effective November 10, 2014, the Company entered into a Settlement Agreement and Mutual Release and Warrant Agreement (the “Settlement Documents”) with Mark Wolff pursuant to which the Company agreed to issue Mr. Wolff 50,000 shares of Company common stock and a warrant to purchase up to 150,000 shares of Company common stock for $1.00 per share for a period of 2 years, and Mr. Wolff agreed to settle and release any and all claims pursuant to the previously entered into consulting agreement and warrant dated June 1, 2013 between Mr. Wolff and the Company. The foregoing is only a brief description of the material terms of the Settlement Documents, and does not purport to be a complete description of the rights and obligations of the parties under those agreements, and such descriptions are qualified in their entirety by reference to the agreements which are filed as exhibits to this Current Report.
Item 3.02
Unregistered Sales of Registered Securities
The information contained in Item 1.01 is incorporated herein by reference. The issuance of the convertible note and warrants described in Item 1.01 were made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) each of the issuances of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient of the securities in each of the transactions; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individuals and the Company; and (f) the recipients of the securities are accredited investors.
Item 9.01
Financial Statements and Exhibits
(d) Exhibits
No. |
| Description |
10.17 |
| Loan Agreement dated November 6, 2014 with Andrew Molasky |
10.18 |
| Convertible Promissory Note dated November 6, 2014 with Andrew Molasky |
10.19 |
| Settlement Agreement and Mutual Release with Mark Wolff |
10.20 |
| Warrant Agreement with Mark Wolff |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
LED LIGHTING COMPANY
Dated: November 11, 2014
/s/ Kevin Kearney
By: Kevin Kearney
Chief Executive Officer
EXHIBIT 10.17
LOAN AGREEMENT
Agreement made this 6th day of November 2014 by and between Andrew M. Molasky, and individual whose address is 100 North City Parkway, Suite 1700, Las Vegas, Nevada 89601 (“Lender”) and LED LIGHTING COMPANY (“Company”).
Whereas the Company has requested Lender to loan fifty thousand dollars ($50,000.00) to Company (“Loan”), and Lender has agreed to do so,
Now Therefore, it is agreed by and between Lender and Company as follows:
1.
Purpose of Loan. The purpose of the Loan is to fund operations of the Company from November 1 2014 to March 1 2015.
2.
Use of Loan Proceeds. The Loan shall be placed in the general funds of the Company and used to fund operations of the Company and for no other purpose.
3.
Prepayment of principal and interest. The Company may prepay principal and/or interest at any time.
4.
Return of Principal. In the event any portion of principal has not been expended on March 1, 2015, the remaining principal shall be returned to Lender on that date.
5.
Interest. The Loan shall earn interest at ten percent (10%) per annum on a 364 day year on the unpaid principal balance from the date of the deposit of the Loan with the Company until the outstanding principal is paid in full.
6.
Accounting. The Company shall account periodically to Lender for the use of funds and if at March 1 2015 funds are returned in accordance with paragraph 4 above, the Company shall submit an accounting to Lender together with any return of funds
7.
Note. The Company and Lender shall enter into a note in the form attached hereto, effective on the date the Loan is deposited with the Company.
In Witness Whereof, the parties have executed this Agreement as of the date first written above.
LED LIGHTING COMPANY
By: /s/ Kevin Kearney
Kevin Kearney, Chief Executive Officer
LENDER
/s/ Andrew Molasky
Andrew M. Molasky
EXHIBIT 10.18
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
LED LIGHTING COMPANY
CONVERTIBLE PROMISSORY NOTE
$50,000.00 | Issue Date: November 6, 2014 |
FOR VALUE RECEIVED, LED Lighting Company, a Delaware corporation (the “Company”), promises to pay to Andrew M. Molasky (the “Holder”), or its registered assigns, the principal amount of Fifty Thousand Dollars ($50,000.00), together with simple interest from the date of this Note on the unpaid principal balance at a rate equal to ten percent (10%) per annum, computed on the basis of the actual number of days elapsed and a year of 365 days.
Unless converted as provided herein, all unpaid principal, together with any then accrued but unpaid interest and any other amounts payable hereunder, shall be due and payable upon the earlier of (i) at any time after the first anniversary of the Issue Date of this Note at the written request of the Holder to the Company; or (ii) when, upon or after the occurrence of an Event of Default (as defined below), such amounts are declared due and payable by the Holder or made automatically due and payable in accordance with the terms hereof.
The following is a statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, agrees:
1.
Conversion.
1.1
Conversion. At the election of the Holder and upon written notice to the Company, the Holder may convert all of the outstanding principal and interest hereunder into shares of Common Stock of the Company at the conversion price of Ten Cents ($.10) per share (the “Note Conversion Price”).
1.2
Conversion Procedure. The Note shall be converted into shares of Company Common Stock at the Note Conversion Price upon receipt by the Company of notice from Holder of its election for such conversion and specifying the principal and interest amount of the Note to be converted. Upon such conversion, the Holder shall surrender this Note at the Company’s principal executive office, or, if this Note has been lost, stolen, destroyed or mutilated, then, in the case of loss, theft or destruction, the Holder shall deliver an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, the Holder shall surrender and cancel this Note. The Company shall, as soon as practicable thereafter, issue and deliver to such Holder at such principal executive office a certificate or certificates for the number of shares to which the Holder shall be entitled upon such conversion (bearing such legends as are required by the Company and applicable state and federal securities laws in the opinion of counsel to the Company). Any fractional shares to be issued upon conversion of this Note shall be rounded down to the nearest whole share.
1.3
Further Assurances. In connection with the conversion of this Note, the Holder, by acceptance of this Note, agrees to execute all agreements and other documents executed by the Company shareholders, and any such other documents as may be reasonably requested by the Company.
1.4.
Stock Splits. If the Company, at any time while this Note is outstanding: (i) subdivides outstanding shares of common stock into a larger number of shares, (ii) combines (including by way of reverse stock split) outstanding shares of common stock into a smaller number of shares or (iii) issues by reclassification of shares of the common stock any shares of capital stock of the Company, then in each case the Note Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of common stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of common stock outstanding immediately after such event and the number of shares issuable upon conversion of this Note shall be proportionately adjusted such that the aggregate Note Conversion Price of this Note shall remain unchanged. Any adjustment made pursuant to this Section 1.4 shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
2.
Prepayment. This Note may be prepaid in whole or in part by the Company without penalty and without the consent of Holder; provided, however, prior to any such prepayment the Company shall provide the Holder with ten (10) days advance notice of prepayment to allow the Holder to exercise its conversion rights as described in Section 1 during such ten (10) day period.
3.
Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:
3.1
Failure to Pay. The Company shall fail to pay when due any repayment required under the terms of this Note on the date due and such repayment shall not have been made within five (5) days of the Company’s receipt of the Holder’s written notice to the Company of such failure to pay; or
3.2
Voluntary Bankruptcy or Insolvency Proceedings. 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) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (iii) 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 (iv) take any action for the purpose of effecting any of the foregoing; or
3.3
Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the Company’s property, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the Company’s debts 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.
Upon the occurrence or existence of any Event of Default described in Section 5.1 and at any time thereafter during the continuance of such Event of Default, the Holder may, by written notice to Company, declare this Note immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained in this Note to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in Sections 5.2 and 5.3, immediately and without notice, this Note 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 in this Note to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Holder may exercise any other right, power or remedy permitted to it by law.
4.
Representations and Warranties of Holder.
4.1
Authorization. This Note constitutes Holder’s valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors’ rights and (ii) laws relating to the availability of specific performance, injunctive relief or other equitable remedies. Holder represents that it has full power and authority to enter into this Note.
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4.2
Investor Representations. Holder represents and warrants that each of its representations and warranties to the Company that.
Purchase Entirely for Own Account
. Holder acknowledges that the Note is issued to Holder in reliance upon Holder’s representation to the Company that the Note and any shares issued upon conversion of the Note (collectively, the “Securities”) will be acquired for investment for Holder’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that Holder has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Note, Holder further represents that Holder does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Securities.
Disclosure of Information
. Holder acknowledges that it has received all the information it considers necessary or appropriate for deciding whether to acquire the Securities. Holder further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities.
Investment Experience
. Holder is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Securities. If other than an individual, Holder also represents it has not been organized solely for the purpose of acquiring the Securities.
Accredited Investor
. Holder is an "accredited investor" within the meaning of Rule 501 of Regulation D under the Securities Act, such that one or more of the qualifications set forth on the Investor Suitability Questionnaire set forth in Exhibit A applies, and Holder has completed, executed and delivered to the Company an Investor Suitability Questionnaire, and the information contained in the Investor Suitability Questionnaire is true and correct.
Restricted Securities. Holder understands that the Securities have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Holder’s representations as expressed herein. Holder understands that the Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, Holder must hold the Securities indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Holder acknowledges that the Company has no obligation to register or qualify the Securities for resale. Holder further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Holder’s control, and which the Company is under no obligation and may not be able to satisfy.
Further Limitations on Disposition
. Without in any way limiting the representations and warranties set forth above, Holder further agrees not to make any disposition of all or any portion of the Securities unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 5 and: (i) there is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or Holder has notified the Company (or its successor in interest) of the proposed disposition and has furnished the Company (or its successor in interest) with a detailed statement of the circumstances surrounding the proposed disposition; and If reasonably requested by the Company (or its successor in interest), Holder shall have furnished the Company (or its successor in interest) with an opinion of counsel, reasonably satisfactory to the Company (or its successor in interest), that such disposition will not require registration of such shares under the Act. It is further understood that the certificate(s) evidencing any Securities issued to Holder upon conversion of the Note will have a restrictive legend with respect to transferability under state and federal laws.
(g)
Knowledge. Holder is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Holder is not relying upon any promise, guarantee or other representation made by the Company as to the Company’s business or its future prospects.
(h)
Principal Residence. The principal residence of the Holder is as set forth on the Holder’s signature page.
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5.
Miscellaneous.
5.1
Loss, Theft, Destruction or Mutilation of Note. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of loss, theft or destruction, delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Note, the Company shall execute and deliver, in lieu of this Note, a new Note executed in the same manner as this Note, in the same principal amount as the unpaid principal amount of this Note and dated the date to which interest shall have been paid on this Note or, if no interest shall have yet been so paid, dated the date of this Note.
5.2
Payment. All payments under this Note shall be made in lawful tender of the United States.
5.3
Waivers. The Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument.
5.4
Usury. In the event that any interest paid on this Note is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.
5.5
Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.
5.6
Successors and Assigns. This Note may be assigned or transferred by the Holder only with the prior written approval of the Company (which approval shall be conditioned upon the assignee’s execution of a new note). Subject to the preceding sentence, the rights and obligations of the Company and the Holder of this Note shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
5.7
Governing Law. THIS NOTE SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF DELAWARE AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN DELAWARE RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN DELAWARE.
IN WITNESS WHEREOF, the parties have executed this Note as of the date first above written.
LED LIGHTING COMPANY
By: /s/ Kevin Kearney
Kevin Kearney, Chief Executive Officer
HOLDER
/s/ Andrew Molasky
Andrew M. Molasky
100 North City Parkway, Suite 1700
Las Vegas, Nevada 89106
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EXHIBIT 10.19
SETTLEMENT AND GENERAL RELEASE AGREEMENT
This Settlement and General Release Agreement (“Agreement”) is made as of October 22, 2014 the (“Effective Date”) by and between Mark L. Wolff (“Wolff”), and LED Lighting Company, a Delaware corporation (the “Company”), and is a general release of claims. In consideration of the covenants undertaken and the releases contained in this Agreement, Wolff and the Company agree as follows:
1.
TERMINATION OF PRIOR AGREEMENTS
The parties acknowledge and agree that (i) the Consulting Agreement and Warrant To Purchase Common Stock, each dated June 1, 2013, any and all agreements, understandings, or arrangements between Wolff and the Company (the “Prior Agreements”), whether written or oral, are terminated and of no further effect, and (ii) except as provided herein, Wolff does not have any rights, claims or agreements with the Company with respect to any monetary or equity compensation, reimbursement, stock, options or any other compensation whatsoever.
2.
COMPANY EQUITY; GENERAL RELEASES; REPRESENTATIONS
2.1
The Company shall (i) issue to Wolff 50,000 shares (the “Shares”) of restricted Company Common Stock; and (ii) execute the Warrant Agreement in the form attached hereto as Exhibit A (the “Warrant Agreement”).
2.2
The Company is issuing the Shares and Warrant Agreement (collectively, the “Securities”) to Wolff based on the following representations and warranties of Wolff:
(a)
The Securities shall be acquired for investment for its own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and the undersigned has no present intention of selling. By executing this investment representation statement, Wolff further represents that he does not have any contract, undertaking, agreement or arrangement with any person to sell to any third person the Securities.
(b)
Wolff understands that the Securities are not registered under the Act, and applicable state securities laws, and have been issued on the ground that such Securities are exempt pursuant to Section 4(2) of the Act and state law exemptions relating to offers and sales not by means of a public offering, and that the Company’s reliance on such exemptions is predicated on the Wolff’s representations set forth herein.
(c)
Wolff agrees that in no event will it make a disposition of any Securities unless and until he shall have furnished the Company with an opinion of counsel satisfactory to the Company and the Company’s counsel to the effect that (A) appropriate action necessary for compliance with the Act and any applicable state securities laws has been taken or an exemption from the registration requirements of the Act and such laws is available, and (B) the proposed transfer will not violate any of said laws. Wolff acknowledges that the Securities must be held indefinitely unless subsequently registered under the Act or an exemption from such registration is available. Wolff is aware of the provisions of Rule 144 (“Rule 144”) promulgated under the Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions under Rule 144.
(d)
Wolff acknowledges that an investment in the Company is highly speculative and represents that it is able to fend for itself in the transactions contemplated by this investment representation statement, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investments, meets the requirements and qualifies as an “Accredited Investor” as defined in Rule 501(a) under the Regulation D promulgated under the Act, and has the ability to bear the economic risks (including the risk of a total loss) of its investment.
(e)
Wolff has had the opportunity to review the Company’s public filings filed with the Securities and Exchange Commission (the “SEC Filings”). Wolff has not been furnished any literature other than the SEC Filings and is not relying on any information, representation or warranty by the Company or any of its affiliates or agents, other than information contained in the SEC Filings, in determining whether to receive the Securities.
(f)
Wolff has consulted to the extent deemed appropriate by him with his own advisers as to the financial, tax, legal and related matters concerning an investment in the Securities and on that basis believes that an investment in the Company is suitable and appropriate for the undersigned. Wolff acknowledges that legal counsel to the Company does not represent the undersigned, and that legal counsel to the Company shall owe no duties directly to the undersigned.
(g)
Wolff either has a pre-existing personal or business relationship with the Company or its officers, directors or controlling persons, or by reason of the undersigned’s business or financial experience, or the business or financial experience of their professional advisors who are unaffiliated with and who are not compensated by the Company, directly or indirectly, have the capacity to protect their own interests in connection with the issuance of the Securities.
(h)
The principal residence of Wolff is in the state listed on the signature page hereto.
2.3
Except for any rights or claims created by or contained in this Agreement, Wolff, for itself and for each of its affiliates, representatives, successors and assigns, does hereby release, acquit and forever discharge the Company and its directors, officers, shareholders, agents, insurance carriers, parents, subsidiaries, and/or sister corporations, attorneys, insurers, successors, and/or assigns (collectively, the “Company Released Parties”), from and against any and all claims, rights, demands, actions, obligations, liabilities and causes of action, whether asserted or un-asserted, of any and every kind, nature and character whatsoever, known or unknown, that it may now have or has ever had against the Company Released Parties or any one of them, including but not limited to those arising from or in any way connected with or related to the Prior Agreements and the consulting services provided to, the Company by Wolff.
2.4
Except for any rights or claims created by or contained in this Agreement, the Company for itself and for each of its representatives, successors and assigns, does hereby release, acquit and forever discharge Wolff from and against any and all claims, rights, demands, actions, obligations, liabilities and causes of action, whether asserted or un-asserted, of any and every kind, nature and character whatsoever, known or unknown, that it may now have or has ever had against Wolff, including but not limited to those arising from or in any way connected with or related to the Prior Agreements and the consulting services provided to the Company.
3.
AGREEMENT NOT AN ADMISSION OF FAULT
In entering this Agreement, the Company expressly deny any violation of any of its policies, procedures, state or federal laws or regulations. Accordingly, this Agreement shall not be construed as an admission by the Company of any violation of its policies, procedures, state or federal laws or regulations. Neither this Agreement nor anything in this Agreement shall be construed to be admissible in any proceeding as evidence of or an admission by the Company of any violation of its policies, procedures, state or federal laws or regulations. This Agreement may be introduced, however, in any proceeding to enforce the Agreement. Such introduction shall be pursuant to an order protecting its confidentiality.
4.
WAIVER OF CALIFORNIA CIVIL CODE SECTION 1542
It is the intention of the Company and Wolff that this Agreement shall be effective as a bar to each and every claim, demand and cause of action specified herein. In furtherance of this intention, the Company and Wolff hereby expressly waives any and all rights and benefits conferred upon them by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE, and expressly consents that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those related to unknown and unsuspected claims, demands and causes of action, if any, as well as those relating to any other claims, demands and causes of action specified herein. Section 1542 provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
The Company and Wolff acknowledge that he or they may hereafter discover claims or facts in addition to, or different from, those which such party now knows or believes to exist with respect to the subject matter of this Agreement and which, if known or suspected at the time of executing this Agreement, may have materially affected this settlement. Nevertheless, the Company and Wolff hereby waive any right, claim or cause of action that might arise as a result of such different or additional claims or facts. The Company and Wolff acknowledge that he and they understands the significance and consequence of such release and such specific waiver of Section 1542.
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5.
INTEGRATION
This instrument constitutes and contains the entire agreement and understanding concerning any and all consulting or business relationship or agreement between Wolff and the Company, and the other subject matters addressed herein between the parties, and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof, including, without limitation, the subject matter of any and all monetary or equity compensation, reimbursement, stock, stock options, or any and all other form or manner or compensation from the Company to Wolff. This is an integrated document. This Agreement may only be modified or amended by a mutually executed written agreement between Wolff and the Company.
6.
DISPUTES
6.1
Any controversy or claim arising out of or relating to this Agreement (whether in contract or tort, or both) shall be determined by binding arbitration in San Francisco, California, in accordance with the commercial arbitration rules of the American Arbitration Association, by a panel of three arbitrators, one chosen by each of the parties and the third by the two so chosen. If the two arbitrators cannot agree on a third, then the third shall be appointed in accordance with such rules. The prevailing party in any arbitration proceeding shall be awarded reasonable attorney’s fees and costs of the proceedings. The arbitration award shall be final, and may be entered in and enforced by any court having jurisdiction.
6.2
In the event of arbitration or litigation in connection with or concerning the subject matter of this Agreement, the prevailing party shall be entitled to recover all costs and expenses incurred by such party in connection therewith, including reasonable attorneys’ fees.
7.
MISCELLANEOUS
7.1
If any provision of this Agreement or application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement that can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.
7.2
This Agreement shall be deemed to have been executed and delivered within the State of California, and the rights and obligations of the parties hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of California without regard to principles of conflict of laws.
7.3
The language of all parts of this Agreement shall be construed as a whole accordingly to its fair meaning, and not strictly for or against any of the parties.
7.4
No waiver of any breach of any term or provision of this Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach.
7.5
Wolff represents that he has had an opportunity to thoroughly discuss all aspects of this Agreement with the legal counsel of his choice and have done so, and further represent that he fully understands all of its provisions and that he is voluntarily entering into this agreement with the full knowledge of its legal significance and with the intent to be legally bound by its terms.
7.6
Each party to this Agreement has cooperated in the drafting and preparation of this Agreement. Therefore, no construction of any term or provision of this Agreement shall be construed against any party.
7.7
This Agreement may be executed in counterparts and delivered by facsimile or email transmission in PDF format, and when each party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute one Agreement, which shall be binding upon and effective as to all parties.
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The undersigned parties have read the foregoing Agreement and accept and agree to the provisions it contains and hereby execute it voluntarily with full understanding of its consequences.
COMPANY:
LED LIGHTING COMPANY
By: /s/ Kevin Kearney
Kevin Kearney, Chief Executive Officer
WOLFF:
/s/ Mark Wolff
Mark L. Wolff
Address: |
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[Signature Page to the LED/Wolff Settlement Agreement dated October 22, 2014]
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EXHIBIT 10.20
THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF SUCH SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
October 22, 2014
WARRANT TO PURCHASE COMMON STOCK
OF
LED LIGHTING COMPANY
FOR VALUE RECEIVED, and subject to the terms and conditions herein set forth, during the Exercise Period and prior to the Termination Date, Mark Wolff (“Holder”) is entitled to purchase from LED Lighting Company, a Delaware corporation (the “Company”), the Warrant Stock at a price per share equal to the Exercise Price. This Warrant is being issued in connection with the Settlement Agreement dated October 22, 2014 between Holder and the Company of even date herewith.
1.
Certain Definitions. The following definitions shall apply for purposes of this Warrant.
(a)
“Common Stock” shall mean the common stock of the Company.
(b)
“Exercise Period” shall mean the period commencing as of the date hereof and ending on the Termination Date. All of the warrants are vested as of the date hereof.
(c)
“Exercise Price” means one dollar ($1.00), subject to adjustments as described below.
(d)
“Holder” shall mean Mark Wolff, and his successors and assigns.
(e)
“Termination Date” shall mean the two (2) year anniversary of the date of this Warrant.
(f)
“Warrant” means this Warrant and any warrant(s) delivered in substitution or exchange therefor, as provided herein.
(g)
“Warrant Stock” means up to One Hundred Fifty Thousand (150,000) shares of Common Stock, subject to the vesting and any adjustments as described herein.
2.
Adjustments and Notices. The Exercise Price shall be subject to adjustment from time to time in accordance with the following provisions:
(a)
Subdivision, Stock Dividends or Combinations. In case the Company shall, at any time, subdivide the outstanding shares of the Common Stock or shall issue a stock dividend with respect to the Common Stock, the Exercise Price in effect immediately before such subdivision or the issuance of such dividend shall be proportionately decreased and the number of shares of Warrant Stock shall be proportionately increased, and in case the Company shall at any time combine the outstanding shares of the Common Stock, the Exercise Price in effect immediately before such combination shall be proportionately increased and the number of shares of Warrant Stock shall be proportionately decreased, effective at the close of business on the date of such subdivision, dividend or combination, as the case may be.
(b)
Reclassification, Exchange, Substitution, In-Kind Distribution. Upon any reclassifications, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise of this Warrant or upon the payment of a dividend in securities or property other than Common Stock, the Holder shall be entitled to receive, upon exercise of this Warrant, the number and kind of securities and property that Holder would have received for the Warrant Stock if this Warrant had been exercised immediately before the record date for such reclassification, exchange, substitution, or other event or immediately prior to the record date for such dividend. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 2 including, without limitation, adjustments to the Exercise Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions of this Section 2(b) shall similarly apply to successive reclassifications, exchanges, substitutions, or other events and successive dividends.
(c)
Notice. Upon any adjustment of the Exercise Price and any increase or decrease in the number of shares of the Common Stock purchasable upon the exercise of this Warrant, then, and in each such case, the Company, as promptly as practicable thereafter, shall give written notice thereof to the Holder of this Warrant at the address of such Holder as shown on the books of the Company which notice shall state the Exercise Price as adjusted and the increased or decreased number of shares purchasable upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation of each, if possible. The Company further agrees to notify the Holder of this Warrant in writing of a reorganization, merger, sale, voluntary dissolution, liquidation or winding-up of the Company, or upon the Company's taking of a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, at least twenty (20) days prior to the effective date thereof.
(d)
Fractional Shares. No fractional shares shall be issuable upon exercise of the Warrant and the number of shares to be issued shall be rounded down to the nearest whole share. If a fractional share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional share interest by paying the Holder an amount computed by multiplying the fractional interest by the fair market value of a full share.
3.
No Stockholder Rights. This Warrant, by itself, as distinguished from any shares purchased hereunder, shall not entitle its Holder to any of the rights of a stockholder of the Company.
4.
Exercise of Warrant. This Warrant may be exercised in whole or part (but in any event in minimum increments of 25,000 shares) by the Holder, during the Exercise Period, as applicable, and before the termination of this Warrant, by the surrender of this Warrant, together with the Notice of Exercise in the form attached hereto as Attachment 1, and any other reasonably requested investor representations, duly completed and executed, at the principal office of the Company, specifying the portion of the Warrant to be exercised and accompanied by payment in full of the Exercise Price in cash or by cashier’s check with respect to the shares of Warrant Stock being purchased. No cashless exercise of this Warrant shall be permitted. This Warrant shall be deemed to have been exercised immediately before the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Warrant Stock issuable upon such exercise shall be treated for all purposes as Holder of such shares of record as of the close of business on such date. As promptly as practicable after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of full shares of Warrant Stock issuable upon such exercise, which shares shall be duly and validly issued. If the Warrant shall be exercised for less than the total number of shares of Warrant Stock then issuable upon exercise, promptly after surrender of the Warrant upon such exercise, the Company will execute and deliver a new Warrant of like tenor in the name of the Holder, dated the date hereof, evidencing the right of the Holder to the balance of the Warrant Stock purchasable hereunder upon the same terms and conditions set forth herein.
5.
Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.
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6.
Issuance of Stock. The Company covenants that all shares that may be issued upon the exercise of rights represented by this Warrant, upon exercise of the rights represented by this Warrant and payment of the Exercise Price, all as set forth herein, will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein). The Company agrees that its issuance of this Warrant 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 of Common Stock upon the exercise of this Warrant.
7.
Amendments. Any term of this Warrant may be amended with the written consent of the Company and the Holder. No waivers of, or exceptions to, any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.
8.
No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders of this Warrant against impairment.
9.
Reservation of Stock Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, a number of shares of Common Stock equal to the total number of shares of Common Stock from time to time issuable upon exercise of this Warrant.
10.
Miscellaneous. This Warrant shall be governed by the laws of the State of California, without regard for the conflicts of law provisions of the State of California or of any other state. The headings in this Warrant are for purposes of convenience and reference only, and shall not be deemed to constitute a part hereof. Neither this Warrant nor any term hereof may be changed or waived orally, but only by an instrument in writing signed by the Company and the Holder of this Warrant. All notices and other communications from the Company to the Holder of this Warrant shall be delivered personally or mailed by first class mail, postage prepaid, to the address furnished to the Company in writing by the last Holder of this Warrant who shall have furnished an address to the Company in writing, and if mailed shall be deemed given three days after deposit in the United States mail. This Warrant may only be assigned by Holder upon receipt of the written consent of the Company.
COMPANY:
LED LIGHTING COMPANY
By: /s/ Kevin Kearney
Kevin Kearney, CEO
HOLDER:
By: /s/ Mark Wolff
Mark Wolff
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