LAREDO OIL, INC. : entering into a material definitive agreement, creating a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant, unregistered sale of equity securities, financial statements and exhibits (form 8-K)
Item 1.01 Conclusion of a Material Definitive Agreement.
The Company has the right to prepay the Geneva Roth Note at any time during the first six months that the note is in circulation at the rate of (a) 110% of the outstanding principal amount of the note plus interest, during the 120 first days when the note is unpaid, and (b) 115% of the outstanding principal amount of the note plus interest between days 121 and 180 after the date of issue of the note. The Geneva Roth Note cannot be redeemed early after the 180th day following the date of issue, unless Geneva Roth accepts such redemption and these conditions.
Geneva Roth may, at its option, at any time beginning 180 days after the date of the note, convert the principal and unpaid interest of the Geneva Roth Note into common shares of Laredo at a conversion price per share equal to 75% of the average. of the three lowest closing bid prices on the applicable electronic quotation system or the applicable trading market, as reported by a reliable reporting service (the “Dealing Prices”) of the common shares of Laredo during the 15 days market prior to the conversion date. The Company has agreed to reserve a certain number of shares of its ordinary shares which may be issued at any time upon the conversion of the Geneva Roth Note.
The Geneva Roth Note provides for standard and customary events of default such as failure to make timely payments under the Geneva Roth Note at maturity, failure of the Company to comply on time with the Securities Exchange Act of 1934, as amended, with reporting requirements and failure to maintain a listing in over-the-counter markets. The Geneva Roth Note also contains usual positive and negative restrictive covenants. The Geneva Roth note includes penalties and damages payable to Geneva Roth in the event that we fail to comply with the terms of that note, including in the event that we do not issue ordinary shares to Geneva Roth upon conversion of the ticket within the time limits set out therein. In addition, in the event of certain defects, as described in the Geneva Roth Note, we are required to pay damages to Geneva Roth in addition to the amount due under the Geneva Roth Note (including in some cases up to 300 % of the amount of the note).
At no time may the Geneva Roth Note be converted into Laredo ordinary shares if such conversion results in Geneva Roth and its affiliates owning a total of more than 4.99% of the then outstanding ordinary Laredo shares.
The proceeds of the Geneva Roth Note may be used by the Company for general corporate purposes.
The foregoing description is qualified in its entirety by reference to the Securities Purchase Agreement and the Geneva Roth Note, both of which are filed as attachments to this report and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information set out in section 1.01 of this report concerning the Geneva Roth Note is incorporated by reference in its entirety in this section 2.03.
Item 3.02 Unregistered Sales of Securities.
As described above in Section 1.01, the information of which is incorporated by reference in this Section 3.02 in its entirety, the
Item 9.01 Financial statements and supporting documents.
Attachment Contract to purchase securities between
Convertible promissory note with a principal amount of
10.2 issued by
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