Settlement - On January 11, 2012, the Company executed a Loan Purchase and Sale Agreement with Summitbridge Credit Investments
LLC (Summitbridge) in order to resolve certain outstanding loans owed by the recently acquired CCS Environmental
Worldwide Inc. to Summitbridge, along with accrued interests and fees, in the amount of $2,018,339 (the Summitbridge Settlement).
Pursuant to the Loan Purchase and Sale Agreement, the parties agreed to the following: (i) that Summitbridge sell, assign, convey
and transfer to the Company, without recourse, representation or warranty all of Summitbridges interest in the loans; and
(ii) the Company to pay Summitbridge the amount of $1,335,000.
Promissory Note and Convertible Preferred Stock Purchase Agreement - On January 12, 2012, the Company entered into a Secured
Promissory Note and Convertible Preferred Stock Purchase Agreement with Peter S. Johnson, Esq. as Trustee of the Magliochetti
Family 2009 Trust DTD 1/12/09 (the Magliochetti Trust) whereby the parties agreed to the following: (i) the Maliochetti
Trust agreed to lend to the Company $1,000,000, and (ii) for the Company to issue 10,000,000 shares of Series A Convertible Preferred
Stock pursuant to a Certificate of Designation in form and substance acceptable to the Magliochetti Trust and to take all steps
necessary and desirable to amend its Certificate of Incorporation to increase the number of authorized shares of the Companys
common stock such that a sufficient number of such shares of common stock shall be reserved for issuance upon conversion of the
Series A Preferred Stock.
and Security Agreement - On March 9th, 2012, the Company entered into a Factoring & Security Agreement (the Agreement)
with Midland American Capital (Midland). As part of the agreement, the Company sold its right, title and interest
in its accounts receivable, with full recourse. The initial value of accounts receivable purchased by Midland was $1,100,002.
As of March 31, 2012, the total outstanding accounts receivable of the Company that has been purchased by Midland is $2,317,155.
As stipulated in the Agreement, approximately 80% of the amount of accounts receivable purchased by Midland throughout the term
of the Agreement is funded to the Company for operational use and working capital. As of March 31, 2012, the Company has been
funded a total of $1,672,291 and Midland has received a total of $236,419 in collections from the Companys customers. The
initial term of the Agreement is for 12 months and will automatically renew for an additional 12 months at the end of the initial
term and each subsequent term unless terminated by the Company via 60 days written notice to Midland. The Agreement contains warranties
and covenants that must be complied with on a continuing basis. Midland has terminated this agreement early and is no longer making
advances on new accounts receivable.
in Capitalization - Effective January 12, 2012, the Board of Directors and a majority of the Companys shareholders
increased the Company's authority to issue all classes stock to 200,000,000 shares of Common Stock, $.0001 par value (Common
Stock) and 50,000,000 shares of Preferred Stock, $.0001 par value (Preferred Stock). In addition, 10,000,000
shares of the authorized and un-issued Preferred Stock of the Company were designated as Series A Preferred Stock
(Series A Preferred). The Third Amended and Restated Certificate of Incorporation of Urban AG. Corp was filed with
the State of Delaware Secretary of State Division of Corporations on April 30, 2012 to effectuate the increases in Common Stock
and Preferred Stock.
shares of authorized Series A Preferred bear dividends at the rate of 12% of the Original Issue Price of $.005 per share, per
annum, plus any previously issued and accrued dividends (compounded monthly) to be declared and paid monthly in cash. Holders
of shares of Series A Preferred have voting rights equal to two times the number of shares of Common Stock to be received upon
conversion of the Series A Preferred. The Series A Preferred Shares are convertible initially into shares of common stock on a
one-to-one basis, subject to adjustment to prevent dilution of the conversion rights of the holders resulting from the issuance
of shares of common stock or rights to acquire common stock. The holders of the Common Stock and the holders of Series A Preferred
each voting as a class, are each entitled to elect two directors.
Series A Preferred is subject to mandatory redemption by the Company upon the request of a majority of the holders of Series A
Preferred, after January 10, 2015, for a Redemption Price payable in cash in three annual installments. The Redemption Price (as
defined in the Certificate) shall be the greater of the original Issue Price ($.005) plus accrued but unpaid dividends and the
fair market value of the shares.
10,000,000 shares of Series A Preferred held by the Magliochetti Trust had accrued and unpaid dividends of approximately $5,100
at October 5, 2012.