Cornell Yorkville Clients

[jonesieatl]

AWYI : 8-K out , Default and Forbearance

Interesting in that Yorkville is taking exception to AWYI not having enough Authorized Shares to allow for Yorkville to convert everything they could convert into common shares ... and for not calling a Special Shareholders' Meeting to raise that Authorized Shares count.

http://www.sec.gov/Archives/edgar/data/1145254/000135448808001032/arielway8k.htm

Excerpts:

Item 1.01 Entry into a Material Definitive Agreement.

On April 21, 2008, under threat of legal action against the Company, its directors and Chief Executive Officer personally, the Company entered into a Forbearance Agreement (the "Agreement") by and among the Company, YA Global Investments, L.P. (formerly Cornell Capital Partners, LP, a Delaware limited partnership ("YA Global")) and Montgomery Equity Partners, Ltd., a Cayman Islands exempted company and wholly owned subsidiary of YA Global (“Montgomery,” and, together with YA Global, the "Investor").

The Company has failed to reserve and keep available out of its authorized but unissued shares of Common Stock, a number of shares sufficient to effect conversion of the Preferred Stock.

Furthermore, the Company has failed to call and hold a special meeting of its stockholders within thirty (30) days of the time that it no longer had a number of shares sufficient to effect conversion of the Preferred Stock, for the purpose of increasing the number of authorized shares of Common Stock.

Under the Agreement, the Company has agreed to:

(a) issue to YA Global a common stock purchase warrant (the "Warrant") to purchase an aggregate of 500,000,000 shares of common stock, $.001 par value per share (the "Common Stock"), of the Company at an exercise price of $0.001 per share and exercisable for a period of five years from the issuance date.

The Warrant may not be exercised for shares of Common Stock if, upon giving effect to the exercise, such exercise would cause the holder and its affiliates to own beneficially in excess of 4.99% of the outstanding shares of the Company’s Common Stock, except that such restriction may be waived upon 65 days prior notice to the Company. The Warrant contains a cashless exercise provision, certain anti-dilution provisions, including a price anti-dilution provision, a piggy back registration right, and other customary provisions;

(b) amend the Company’s Articles of Incorporation (the "Amendment") related to its Preferred Stock so that: (i) the holders of the Preferred Stock will be entitled to receive, when as and if declared by the board of directors of the Company, dividends at the rate of eighteen percent (18%) of the liquidation amount of the Preferred Stock which shall be paid quarterly on the first day of March, June, September and December of each year, shall begin to accrue and shall be cumulative as of the date of the Agreement, and, at the option of the holder of the Preferred Stock, accrued and unpaid dividends may be paid in shares of Common Stock at the conversion price of the Preferred Stock; and (ii) the conversion price as set forth in the Preferred Stock shall be equal to the lesser of (A) Ten Cents ($0.10) or (B) a twenty-five percent (25%) discount to the lowest volume weighted average price of the Common Stock as quoted by Bloomberg, LP during the twenty (20) trading days immediately preceding the date of conversion; and

(c) amend the terms of an outstanding common stock purchase warrant to purchase 1,000,000 shares of Common Stock held by the Investor to reduce the exercise price of such warrant from $0.01 to $.001 per share of Common Stock.

Also under the Agreement, within thirty (30) days of the execution of the Agreement, the Company is required to receive the approval of a majority of its stockholders by written consent in lieu of a special meeting of stockholders