NOTE PURCHASE AGREEMENT
Exhibit
9.1
THIS NOTE PURCHASE AGREEMENT (this
“Agreement”) is made and entered into as of the ___ day of ________, 2008, by
and between Save the World Air, Inc., a Nevada corporation (the “Issuer”)
and those individuals and entities who sign and deliver an executed
copy of this Agreement to the Issuer (each, a “Purchaser” and collectively, the
“Purchasers”), with reference to the following:
RECITALS
A. Purchasers
desire to purchase from Issuer and Issuer desires to sell to Purchaser certain
of Issuer’s Convertible Promissory Notes in the aggregate face amount of at
least $30,000 and up to $500,000 in the form of Exhibit A attached
hereto (individually, a “Note” and collectively, the “Notes”) and Stock Purchase
Warrants, each to purchase up to a certain number of shares of the common stock
(the “Common Stock”) of the Issuer equal to 50% of the number of shares
initially issuable on conversion of the Notes, in the form of Exhibit B attached
hereto (individually, the “Warrants” and collectively with the Notes, the
“Securities”). The face amount of Convertible Promissory Notes each
Purchaser has committed to purchase, and the amount of the purchase price
thereof to be paid to the Issuer by the Purchaser (a “Commitment”) is listed on
the signature page such Purchaser executes and delivers to the
Issuer.
B. Issuer’s
sale of the Securities to the Purchasers will be made in reliance upon the
provisions of Section 4(2) under the Securities Act of 1933, as amended (the
"Securities Act"), Rule 506 of Regulation D promulgated by the Securities and
Exchange Commission (the ”SEC”) thereunder, and other applicable rules and
regulations of the SEC and/or upon such other exemption from the registration
requirements of the Securities Act as may be available with respect to the
transactions contemplated hereby.
C. At
any time when any amount of principal or interest of the Notes shall be
outstanding, such unpaid amounts shall be convertible into shares of the
Issuer’s, at the election of the Purchaser, Common Stock at a price per share
equal to the average closing bid price of a share of the Issuer’s Common stock
for the five (5) trading days prior to the Closing, as defined herein (the
“Conversion Price”).
D. The
Warrants shall be issued at the same time each Note is issued to the Purchaser
hereunder and shall be exercisable at $0.30 per share as the Conversion Price
(the “Exercise Price”), for such number of shares equal to 50% of result
obtained by dividing (i) the face amount of the Notes issued simultaneously with
the Warrant by (ii) the Conversion Price (the “Exercisable
Amount”).
AGREEMENT
NOW THEREFORE, in consideration of the
foregoing recitals, which shall be considered an integral part of this
Agreement, the covenants and agreements set forth hereafter, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Purchasers and the Issuer hereby agree as follows
1. Purchase of the Notes and
Warrants. On the terms and subject to the conditions set forth
in this Agreement and in the Notes and Warrants, the Purchasers shall purchase
from the Issuer and the Issuer shall sell to the Purchaser the
Securities.
2. Purchaser’s Representations,
Warranties and Covenants. In order to induce the Issuer to sell and issue
the Securities to the Purchaser under one or more exemptions from registration
under the Securities Act, the Purchasers, severally and not jointly, represent
and warrant to the Issuer, and covenant with the Issuer, that:
(a) (i)
Such Purchaser has the requisite power and authority to enter into and perform
this Agreement, and each of the other agreements entered into by the parties
hereto in connection with the transactions contemplated by this Agreement
(collectively, the "Transaction Documents"), and to purchase the Securities in
accordance with the terms hereof and thereof.
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(ii) The execution and delivery of the
Transaction Documents by the Purchaser and the consummation by it of the
transactions contemplated thereby have been duly and validly authorized by the
Purchaser's organizational documents and no further consent or authorization is
required by the Purchaser.
(iii) The Transaction Documents have
been duly and validly executed and delivered by the Purchaser.
(iv) The Transaction Documents, and
each of them, constitutes the valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.
(b) The execution, delivery and
performance of the Transaction Documents by the Purchaser and the consummation
by the Purchaser of the transactions contemplated thereby will not conflict with
or constitute a default under any agreement or instrument to which the Purchaser
is a party or by which the Purchaser is bound.
(c) The Purchaser is acquiring the
Securities for investment for its own account, and not with a view toward
distribution thereof, and with no present intention of dividing its interest
with others or reselling or otherwise transferring or disposing all or any
portion of either the Notes or Warrants. The undersigned has not offered or sold
a participation in this purchase of either the Notes or Warrants, and will not
offer or sell any interest therein. The Purchaser further acknowledges that the
Purchaser does not have in mind any sale of either the Notes or Warrants
currently or after the passage of a fixed or determinable period of time or upon
the occurrence or non-occurrence of any predetermined events or consequence; and
that it has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for or which is likely to
compel a disposition of either the Notes or Warrants and is not aware of any
circumstances presently in existence that are likely in the future to prompt a
disposition thereof.
(e) The Purchaser acknowledges that the
Securities have been offered to it in direct communication between itself and
the Issuer and not through any advertisement of any kind.
(f) The Purchaser acknowledges that the
Issuer has given it access to all information relating to the Issuer’s business
that it has requested. The Purchaser has reviewed all materials
relating to the Issuer's business, finance and operations which it has requested
and the Purchaser has reviewed all of such materials as the Purchaser, in the
Purchaser’s sole and absolute discretion shall have deemed necessary or
desirable. The Purchaser has had an opportunity to discuss the business,
management and financial affairs of the Issuer with the Issuer's
management. Specifically but not by way of limitation, the
Purchaser acknowledges the Issuer’s publicly available filings made periodically
with the SEC, which filings are available at xxx.xxx.xxx and which
filings the Purchaser acknowledges reviewing or having had the opportunity of
reviewing.
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(g)
The Purchaser acknowledges that it has, by reason of its business and financial
experience, such knowledge, sophistication and experience in financial and
business matters and in making investment decisions of this type that it is
capable of (i) evaluating the merits and risks of an investment in the
Securities and making an informed investment decision in connection therewith;
(ii) protecting its own interest; and (iii) bearing the economic risk of such
investment for an indefinite period of time for Securities which are not
transferable or freely tradable. The undersigned hereby agrees to
indemnify the Issuer thereof and to hold each of such persons and entities, and
the officers, directors and employees thereof harmless against all liability,
costs or expenses (including reasonable attorneys’ fees) arising by reason of or
in connection with any misrepresentation or any breach of warranties of the
undersigned contained in this Agreement, or arising as a result of the sale or
distribution of the Securities or the Common Stock issuable upon conversion of
the Notes or exercise of the Warrants, by the undersigned in violation of the
Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or any other applicable law, either federal or state. This
subscription and the representations and warranties contained herein shall be
binding upon the heirs, legal representatives, successors and assigns of the
Purchaser
(h) The
Purchaser is familiar with the definition of an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D of the Securities Act and
represents and warrants to the Issuer that it is an accredited investor as so
defined. If the Purchaser is not a resident of the United States, the
Purchaser is not a “U.S. person[s]” as that term is defined in Rule 902 of
Regulation S promulgated under the Securities Act of 1933, as
amended.
(i) During the term of this Agreement
and the other Transaction Documents, the Purchaser will comply with the
provisions of Section 9 of the Exchange Act, and the rules and regulations
promulgated thereunder, with respect to transactions involving the Common Stock.
During the term of this Agreement and the other Transaction Documents, the
Purchaser agrees not to sell the Issuer's Common Stock short or engage in any
hedging transactions in the Issuer’s Common Stock, either directly or
indirectly, through its affiliates, principals, agents or advisors.
(j) The Purchaser is aware of the
restrictions of transferability of both the Notes and the Warrants, and the
shares of Common Stock issuable upon conversion of the Notes or exercise of the
Warrants, and further understands and acknowledges that any certificates
evidencing the Notes, the Warrants or the shares of Common Stock issuable upon
conversion of the Notes or exercise of the Warrants will bear the legends in
substantially the following form:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED FOR SALE UNDER ANY STATE
SECURITIES LAWS (COLLECTIVELY, “SECURITIES LAWS”) AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED FOR SALE UNDER ALL
APPLICABLE SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, ANY SUCH OFFER,
SALE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION OR QUALIFICATION
REQUIREMENTS OF SUCH SECURITIES LAWS.
(k) The Purchaser understands and
acknowledges that following the purchase of the Notes, the Warrants and any
shares of Common Stock issuable upon conversion of the Notes or exercise of the
Warrants, each may only be disposed of pursuant to either (i) an effective
registration statement under the Securities Act or (ii) an exemption from the
registration requirements of the Securities Act.
(l) The Purchaser understands and
acknowledges that the Issuer has neither filed a registration statement with the
SEC or any state authorities nor agreed to do so, nor contemplates doing so in
the future for the transactions contemplated by this Agreement or the other
Transaction Documents, and in the absence of such a registration statement or
exemption, the undersigned may have to hold the Notes, the Warrants and any
shares of Common Stock issuable upon conversion of the Notes or exercise of the
Warrants, indefinitely and may be unable to liquidate any of them in case of an
emergency.
(m) The Purchaser is purchasing the
Notes and Warrants, and will acquire any shares of Common Stock issuable upon
conversion of the Notes or exercise of the Warrants, for its own account for
investment purposes and not with a view towards distribution and agrees to
resell or otherwise dispose of any of the Notes or the Warrants, or any shares
of Common Stock issuable upon conversion of the Notes or exercise of the
Warrants, in accordance with the registration provisions of the Securities Act
(or pursuant to an exemption from such registration provisions).
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(n) The Purchaser is not and will not
be required to be registered as a "dealer" under the Exchange Act, either as a
result of its execution and performance of its obligations under this Agreement
or otherwise.
(o) The Purchaser understands and
acknowledges that proceeds raised in connection with this Agreement will be used
by Issuer for general working capital purposes, including without limitation,
the payment of salaries and professional fees.
(p) The Purchaser understands that it
is liable for its own tax liabilities and has obtained no tax advice from the
Issuer in connection with the purchase of the Securities.
(q) The Purchaser will not pay or
receive any finder’s fee or commission in respect of the consummation of the
transactions contemplated by this Agreement.
3. Issuer’s Representations,
Warranties and Covenants. The Issuer represents and warrants to the
Purchaser that:
(a) The Issuer is a corporation duly
organized and validly existing in good standing under the laws of the State of
Nevada, and has the requisite corporate power and authorization to own its
properties and to carry on its business as now being conducted.
(b) (i)
The Issuer has the requisite corporate power and authority to enter into and
perform this Agreement, and each of the other agreements entered into by the
parties hereto in connection with the transactions contemplated by the
Transaction Documents, and to issue the Notes and Warrants in accordance with
the terms hereof and thereof.
(ii) the execution and delivery of the
Transaction Documents by the Issuer and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation the
reservation for issuance and the issuance of the Notes and Warrants pursuant to
this Agreement, have been duly and validly authorized by the Issuer's Board of
Directors and no further consent or authorization is required by the Issuer, its
Board of Directors, or its shareholders.
(iii) The Transaction Documents have
been duly and validly executed and delivered by the Issuer.
(iv) The Transaction Documents, and
each of them, constitutes the valid and binding obligation of the Issuer
enforceable against the Issuer in accordance with their respective terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.
(c) The execution, delivery and
performance of the Transaction Documents by the Issuer and the consummation by
the Issuer of the transactions contemplated thereby will not conflict with or
constitute a default under any agreement or instrument to which the Issuer is a
party or under any organizational documents of the Purchaser.
4. Closing and
Deliverables.
(a) Subject to the provisions of
Section 4(b) below, provided that the Issuer shall have received on or prior to
December 31, 2008 copies of this Agreement executed by each respective Purchaser
and providing that the total Commitments equal or exceed $30,000, there shall be
a closing or closings (each, a “Closing”) at which:
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(i) each Purchaser shall deliver to
the Issuer immediately available funds, by wire transfer to the Issuer’s account
at the Bank of America, 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxx
00000, Routing Number 0000-0000-0 , Account Number 06687-19702, in an amount
equal to the amount of such Purchaser’s Commitment as set forth beside the name
of such Purchaser on such Purchaser’s signature page hereto; and
(ii) the Issuer shall deliver to the
Purchaser (x) a Note, in the face amount equal to 110% of the Purchaser’s
Commitment and (y) a Warrant to purchase the Exercisable Amount of the Issuer’s
Common Stock at the Exercise Price.
(b) The
Issuer may continue to accept Commitments from Purchasers and issue and sell
Securities to Purchasers at Closings on the terms and subject to the conditions
set forth in this Agreement until (i) the aggregate amount of the Commitments
equals $500,000 or (ii) on or before December 31, 2008, whichever shall first
occur.
5. Miscellaneous.
(a). Each party shall pay the fees and
expenses of its own advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of the Transactions
Documents.
(b) This Agreement may be executed in
two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party; provided that a facsimile signature
or signature transmitted by e-mail shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original signature.
(c) The headings of this Agreement are
for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Whenever required by the context of this
Agreement, the singular shall include the plural and neutral shall include the
masculine and feminine.
(d) If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.
(e) This Agreement and the Notes and
Warrants represent the final agreement between the Purchasers and the Issuer
with respect to the terms and conditions set forth herein, and, the terms of
this Agreement and the Notes and Warrants may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the
parties. No provision of this Agreement and the Notes and Warrants
may be amended other than by an instrument in writing signed by the Purchaser
and the Issuer, and no provision hereof or thereof may be waived other than by
an instrument in writing signed by the party against whom enforcement is
sought.
(f) Any notices or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
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If
to the Issuer:
Save the
World Air, Inc.
000
Xxxxxxx Xxxxxx
Xxxxxx
Xxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with
a copy to:
Xxxxxxxxxx
Xxxxxxx Xxxxxx & Xxxxxx, LLP
00000
Xxxxxxxx Xxxxxxxxx
Xxxxx
0000
Xxx
Xxxxxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to a Purchaser:
to the
address set forth on the Purchaser’s signature page hereto.
Each
party shall provide five (5) days prior written notice to the other party of any
change in address or facsimile number.
(g) This Agreement may not be assigned
by Purchaser.
(h) This Agreement is intended for the
benefit of the parties hereto and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
(i) The representations and warranties
of the Purchaser and the Issuer contained herein shall survive each of the
Closings and the termination of this Agreement and the other Transaction
Documents.
(j) The Purchaser and the Issuer shall
consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and no party
shall issue any such press release or otherwise make any such public statement
without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed, except that no prior consent shall be required
if such disclosure is required by law or the rules and regulations of the
SEC.
(k). Each party shall do and perform,
or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the other Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby.
(l) The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party,
as the parties mutually agree that each has had a full and fair opportunity to
review this Agreement and the other Transaction Documents and seek the advice of
counsel on it and them.
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(m) The Purchaser and the Issuer each
shall have all rights and remedies set forth in this Agreement and all rights
and remedies which such holders have been granted at any time under any other
agreement
or contract and all of the rights which the Purchaser has by law. Any person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any default or breach of any provision of this
Agreement, including the recovery of reasonable attorneys fees and costs, and to
exercise all other rights granted by law.
(n) This Agreement and the
other Transaction Documents shall be construed and governed by the laws of the
State of California with respect to agreements wholly performed therein, and
without regard to the doctrine known as conflicts of law.
[remainder of page intentionally left
blank]
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IN WITNESS WHEREOF the Purchasers and
the Issuer have executed this Agreement as of the date first above
written.
THE
ISSUER
SAVE
THE WORLD AIR, INC.
| By: | ||
| Xxxxxxx X. Xxxx | ||
| Its: | Chief Executive Officer |
THE
PURCHASER
|
_______________________________
Name
(signature)
_______________________________
Print
Name
_______________________________
Address
_______________________________
Address
_______________________________
Phone
Number
_______________________________
Fax
Number
_______________________________
Social
Security Number
|
________________________
Amount of Commitment
(U.S. Dollars)
|
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