AGREEMENT

 

THIS AGREEMENT (this “Agreement”) dated February 20 2007, is entered into between CORNELL CAPITAL PARTNERS, LP (the “Purchaser”) and HEADLINERS ENTERTAINMENT GROUP, INC. (the “Company”).

1. Purchase and Sale. Subject to the terms and conditions set forth in this Agreement, the Buyer shall purchase from the Company and the Company shall issue to the Buyer a Secured Convertible Debenture in the form attached hereto as Exhibit A (the “Debenture”) in the face amount of $35,000 for a purchase price of $35,000.

 

2. Closing. The closing of the issuance of the Debenture shall occur within 1 business day of the satisfaction of all conditions precedent set forth in Section 6 hereof at the offices of the Buyer (the “Closing”).

 

3. Closing Procedure. At the Closing, the Company shall execute and deliver the Debenture and the Buyer shall pay the Purchase Price in accordance with the disbursement instructions set forth on Schedule I attached hereto.

 

4. Representations and Warranties of the Company.  The Company makes the following representations, warranties and agreements and confirms the following understandings:

 

(a) Organization and Qualification. The Company and its subsidiaries are corporations duly organized and validly existing in good standing under the laws of the jurisdiction in which they are incorporated, and have the requisite corporate power to own their properties and to carry on their business as now being conducted. Each of the Company and its subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole.

 

(b) SEC Documents: Financial Statements. Since January 1, 2005, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (all of the foregoing filed prior to the date hereof or amended after the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred to as the “SEC Documents”). As of their respective dates, the financial statements of the Company disclosed in the SEC Documents (the “Financial Statements”) complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such Financial Statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and, fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Subscribers which is not included in the SEC Documents, including, without limitation, information referred to in this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

 

(c) 10(b)-5. The SEC Documents do not include any untrue statements of material fact, nor do they omit to state any material fact required to be stated therein necessary to make the statements made, in light of the circumstances under which they were made, not misleading.

 

(d) Legal and Other Proceedings. Neither the Company, nor any of its affiliates or its executive officers or directors (in their capacity as executive officers or directors), is a party to any pending or, to the best knowledge of the Company, threatened, or unasserted but considered by it to be probable of assertion, claim, action, suit, investigation, arbitration or proceeding, or is subject to any order, judgment or decree that is reasonably expected by management of the Company to have, either individually or in the aggregate, a material adverse effect on the condition (financial or otherwise), earnings or results of operations of the Company. The Company is not, as of the date hereof, a party to or subject to any enforcement action instituted by, or any agreement or memorandum of understanding with, any federal or state regulatory authority restricting its operations or requiring that actions be taken, and no such regulatory authority has threatened any such action, memorandum or order against the Company and the Company has not received any report of examination from any federal or state regulatory agency which requires that the Company address any problem or take any action which has not already been addressed or taken in a manner satisfactory to the regulatory agency.

 

(e) Authorization; Conflict; Valid and Binding Obligation. When issued in accordance herewith, the Debenture will be duly and validly authorized by all requisite corporate action of the Company. The Company has full right, power and capacity to execute, deliver and perform its obligations under the Debenture. No governmental license, permit or authorization and no registration or filings with any court, governmental authority or regulatory agency is required in connection with the Company's execution, delivery and/or performance of the Debenture, other than any filings required by applicable federal and state securities laws. The execution, delivery and performance of the Debenture, the consummation of the transactions herein contemplated and the compliance with the terms of the Debenture by the Company will not violate or conflict with any provision of the Articles of Incorporation, as amended or By-laws of the Company, or any agreement, instrument, law or regulation to which the Company is a party or by which the Company may be bound. The Debenture, upon execution and delivery by the Company, will represent the valid and binding obligation of the Company enforceable in accordance with its terms.

 

 

5. Use of Proceeds. The Company shall use the net proceeds of the Debenture to pay the amounts set forth, to the persons or entities set forth, in Schedule II hereto. The Company authorizes the Buyer to send the net proceeds directly to the payees as set forth in Schedule II for the benefit of the Company.

 

6. Other Agreements to Continue. The Company acknowledges that the documents set forth in Schedule III hereto shall remain in full force and effect.

 

7. (RESERVED)   

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date written above.

	BUYER:
	CORNELL CAPITAL PARTNERS, LP
	By:	Yorkville Advisors, LLC
	Its:	Investment Manager
	By:	/s/ Mark Angelo
	Name:	Mark Angelo
	Title:	Portfolio Manager
	COMPANY:
	HEADLINERS ENTERTAINEMENT GROUP, INC.
	By:	/s/ Frank J. Orlando
	Name:	Frank J. Orlando
	Title:	Chief Restructuring Officer

The purchase price shall be disbursed in immediately available U.S. funds, payable to the following parties:

Gross Proceeds:
	Gross Proceeds from Cornell Capital Partners, LP		$ 35,000.00
Disbursements:
	Rosenberg Rich Baker Berman & Company		$ 5,000
	Kathy Suplee		$ 7,500
	Eduardo Rodriquez		$ 5,000
	Frank J Orlando		$ 5,000
Net Proceeds:
	Net Proceeds Payable to the Company:		$ 12,500

 

Proceeds of the Debenture shall be used by the Company to pay the following persons or entities:

NAME		AMOUNT
Rosenberg Rich Baker Berman & Company		$	5,000
Kathy Suplee		$	7,500
Eduardo Rodriquez		$	5,000
Frank J Orlando		$	5,000

HEADLINERS ENTERTAINMENT GROUP, INC.			Cornell Capital Partners, LP
			By:	Yorkville Advisors, LLC
			Its:	General Partner
By:	/s/ Frank J. Orlando		By:	/s/ Mark Angelo
Name: Frank J. Orlando			Name: Mark Angelo
Its: Chief Restructuring Officer			Its: Portfolio Manager