STOCK PURCHASE AGREEMENT
This
Stock Purchase Agreement (the “Agreement”) dated as of May
13, 2010, by and among American Scientific Resources, Incorporated, a
Nevada corporation, with headquarters located at 0000 Xxxxxx Xxxx,
Xxxx 000, Xxxxxx Xxxxxxx 00000 (the “Company”), and the purchasers
identified on the signature page hereto (including their successors and assigns
(the “Purchasers”)).
WHEREAS,
the Purchasers desire to purchase from the Company convertible debentures in the
aggregate amount of up to $150,000 in substantially the form attached hereto as
Exhibit A (the “Debentures”);
WHEREAS,
in connection with the purchase of the Debentures, the Company will also issue
Purchasers warrants to purchase up to 7,500,000 shares of the Company’s common
stock at $.001 per share (“Warrants”) in substantially the form attached hereto
as Exhibit B;
WHEREAS,
the Debentures and Warrants are collectively referred to as the
“Securities”;
WHEREAS,
the Company desires that Purchasers purchase the Securities; and
NOW,
THEREFORE, in consideration of the foregoing and on the basis of the respective
representations, warranties, covenants, agreements, undertakings and obligations
set forth herein, and intending to be legally bound hereby, the parties agree as
follows:
ARTICLE
1
PURCHASE
AND SALE OF THE DEBENTURES AND THE WARRANTS
1.1 Purchase
and Sale of Securities. Upon the terms and subject to the
conditions set forth in this Agreement, the Company agrees to sell, assign,
transfer and deliver to each Purchaser, and each Purchaser hereby agrees to
purchase at the Closing (as defined in Section 2) and accept delivery from the
Company, a Debenture in the principal amount designated on the signature page
hereto, free of all liens, pledges, mortgages, security interests, charges,
restrictions, adverse claims or other encumbrances of any kind or nature
whatsoever, for the consideration specified herein.
ARTICLE
2
CLOSING
2.1 Closing. As
used herein the Closing Date shall mean the day when all conditions precedent to
(i) the Purchasers’ obligations to purchase the Debentures and (ii) the
Company’s obligations to issue the Debentures and Warrants have been satisfied
or waived. On the Closing Date, upon the terms and subject to the
conditions set forth herein, the Company agrees to sell to each Purchaser and
each Purchaser agrees to purchase a Debenture in the principal amount designated
on the signature page hereto. The closing of the purchase and sale of Debentures
is referred to herein as the “Closing”.
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The Closing Date shall occur on the
date of this Agreement at the offices of Sichenzia Xxxx Xxxxxxxx Xxxxxxx XXX,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., or at such other time and place as the
parties may agree.
2.2 Deliveries.
(a)
On or prior to the Closing Date, the Company shall deliver or cause
to be delivered to each Purchaser:
(i) this
Agreement duly executed by the Company;
(ii) a
Debenture in the principal amount equal to in the principal amount designated on
the signature page hereto; and
(iii) a
Warrant registered in the name of Purchaser to purchase up to the number of
shares of common stock designated on the signature page hereto, at an exercise
price of $.01 per share.
(b
) On or prior to the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Company:
(i) this
Agreement duly executed by the Purchaser; and
(ii) the
principal amount of the Debenture designated on the signature page hereto by
wire to the account specified in writing by the Company.
2.3 Closing
Conditions
(a)
The obligations of the Company hereunder in connection with each Closing are
subject to the following conditions being met:
(i) the
accuracy in all material respects on each Closing Date of the representations
and warranties of the Purchasers contained herein;
(ii) the
delivery by the Purchasers of the items set forth in Section 2.2
(b).
(b) The
obligations of each Purchaser hereunder in connection with the Closing are
subject to the following conditions being met:
(i) the
accuracy in all material respects when made and on each Closing Date of the
representations and warranties of the Company contained herein;
(ii) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the relevant Closing Date shall been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2
(a).
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ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
3. Representations
and Warranties of the Company. The Company represents and
warrants to each Purchaser as follows:
(a) The
Company is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada, and is
qualified in no other state.
(b) This
Agreement has been duly executed and delivered by Company and constitutes the
valid, binding and enforceable obligation of Company, subject to the applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally
and rights of stockholders.
(c) The
authorized capital stock of the Company consists of 2,500,000,000 shares of common
stock, 1,922,027,167 of which are validly issued and outstanding, fully paid and
non-assessable and 1,000,000 shares of blank check preferred stock of which
500,000 have been designated as Series A Preferred Stock of which 0 are issued
and outstanding and 500,000 have been designated as Series B Preferred Stock of
which 0 are issued and outstanding. The Common Stock issuable upon
the conversion of the Debentures and exercise of the Warrants will be when
issued in accordance with the Debenture and or the Warrant validly issued, are
fully paid and non-assessable. The Company has the unqualified right
to sell, assign, and deliver the Securities, and, upon consummation of the
transactions contemplated by this Agreement, the Purchaser will acquire good and
valid title to the Securities, free and clear of all liens, claims, options,
charges, and encumbrances of whatsoever nature. The Company’s
subsidiaries are set forth on Schedule (c) (such subsidiaries and any direct or
indirect subsidiary of the Company formed or acquired after the date hereof
shall be referred as a “Subsidiary”).
(d) Other
than as set forth on the financial statements for the year ended December 21,
2009, attached hereto as Exhibit “C” (the “Financial Statements”), the Company
is not a party to or bound by any unexpired, undischarged or unsatisfied written
or oral contract, agreement, indenture, mortgage, debenture, note or other
instrument under the terms of which performance by Purchaser according to the
terms of this Agreement will be a default or an event of acceleration, or
grounds for termination, or whereby timely performance by Purchaser according to
the terms of this Agreement may be prohibited, prevented or
delayed.
(e) The
Company has full power and authority to sell and transfer the Securities to
Purchaser without obtaining the waiver, consent, order or approval of (i) any
state or federal governmental authority or (ii) any third party or other
person. The Company has the corporate power, authority and
capacity to carry on its business as presently conducted.
(f) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will constitute a violation or default under
any term or provision of the Certificate of Incorporation or By-Laws of the
Company or of any contract, commitment, indenture,
other agreement or restriction of any kind or character to which the Company is
a party to or by which the Company is bound.
(g) As of December 31, 2009, the Company has no
outstanding liabilities or obligations to any party except as reflected on the
Financial Statements.
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(h) The Company has the
corporate power to own its properties and to carry on its business as now being
conducted and is duly qualified to do business and is in good standing in each
jurisdiction in which the failure to be so qualified and in good standing would
have a material adverse effect on the Company. The Company is not in
violation of any of the provisions of its certificate of incorporation or
by-laws. No consent, approval or agreement of any individual or
entity is required to be obtained by the Company in
connection with this Agreement.
(i) There is no private or governmental action, suit,
proceeding, claim, arbitration or investigation pending before any agency, court
or tribunal, foreign or domestic, or, to the Company’s best
knowledge, threatened against the Company or any of
its properties or any of its officers or directors (in their capacities as
such). There is no judgment, decree or order against the Company that could
prevent, enjoin, alter or delay any of the transactions contemplated by this
Agreement.
(j) There are no material claims, actions, suits,
proceedings, inquiries, labor disputes or investigations (whether or not
purportedly on behalf of the Company) pending
or, to the Company’s knowledge, threatened against the Company or any of
its assets, at law or in equity or by or before any governmental entity or in
arbitration or mediation. No bankruptcy, receivership or debtor
relief proceedings are pending or, to the best of the Company’s
knowledge, threatened against the Company.
(k) Other
than with respect to the filing of tax returns, the Company has
complied with, is not in violation of, and has not received any notices of
violation with respect to, any federal, state, local or foreign laws, judgment,
decree, injunction or order, applicable to it, the conduct of its business, or
the ownership or operation of its business. References in
this Agreement to “Laws” shall refer to any laws, rules or regulations of any federal, state or local
government or any governmental or quasi-governmental agency, bureau, commission,
instrumentality or judicial body
(including, without limitation, any federal or state securities law, regulation,
rule or administrative order).
(l) All representations, covenants and warranties of the
Company contained in this Agreement shall be true and correct
on and as of the Closing date with the same effect as though the same had been
made on and as of such date.
(m) The Company has the
corporate power, authority and capacity to carry on its business as presently
conducted.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF BUYER
4. Representations
and Warranties of Buyer. Each Purchaser hereby represents and
warrants to the Company only as to such Purchaser as follows:
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(a) Organization;
Authority. Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of this Agreement and performance by
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of
Purchaser. This Agreement has been duly executed by Purchaser, and
when delivered by Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
(b) Own
Account. Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act of
1933, as amended (the “Securities Act”) or any applicable state securities law
and is acquiring the Securities as principal for its own account and not with a
view to or for distributing or reselling such Securities or any part thereof in
violation of the Securities Act or any applicable state securities law, has no
present intention of distributing any of such Securities in violation of the
Securities Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other persons to distribute or
regarding the distribution of such Securities (this representation and warranty
not limiting Purchaser’s right to sell the Securities pursuant to an effective
registration statement or otherwise in compliance with applicable
federal and state securities laws) in violation of the Securities Act or any
applicable state securities law.
(c) Purchaser
Status. At the time Purchaser was offered the Securities, it
was, as of the date hereof it is, as of the date of each Closing and when it
converts any portion of the Debentures or when it exercises any portion of the
Warrant it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Purchaser is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act. Purchaser has (i) a preexisting
personal or business relationship with the Company or one or more of its
directors, officers or control persons or (ii) by reason of Purchaser’s business
or financial experience Purchaser is capable of evaluating the risks and merits
of this investment and of protecting Purchaser’s own interests in connection
with an investment in the Securities.
(d) Experience of
Purchaser. Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment. Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.
(e) General
Solicitation. Purchaser is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
(f) Receipt of
Information. Purchaser believes it has received all the information
it considers necessary or appropriate for deciding whether to purchase the
Securities. Purchaser further represents that through its
representatives it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Securities and the business, properties and financial condition of the Company
and to obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to it or to which
it had access. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 3 of this Agreement or
the right of Purchaser to rely thereon.
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ARTICLE
5
MISCELLANEOUS
5.1 Debenture
and Warrant Dated February 16, 2010 and Debenture and Warrant dated
March 23, 2010. Reference is made to the (i) Debenture
dated February 16, 2010 (the “February 2010 Debenture”) in the principal amount
of $100,000 issued by the Company to Granite Financial Group, LLC (“Granite”),
(ii) the Warrant dated February 16, 2010 (the “February 0000
Xxxxxxx”) to purchase 5,000,000 shares of the Company’s Common Stock issued by
the Company to Granite, (iii) the Debenture dated March 23, 2010 (the “March
2010 Debenture”) in the principal amount of $300,000 issued by the Company to
Granite and (iv) the Warrant dated March 23, 2010 (the “Xxxxx 00,
0000 Xxxxxxx”) to purchase 15,000,000 shares of the Company’s Common
Stock. For good and valuable consideration the receipt of which
is acknowledged the Company and Granite agree that (i) in exchange
for the February 2010 Debenture, the Company shall issue Granite a Debenture in
the form of Exhibit “D” (ii) in exchange for the March 2010 Debenture, the
Company shall issue Granite a Debenture in the Form of Exhibit “E”, (iii) in
exchange for the February Warrant 2010, the Company shall issue Granite a
Warrant in the Form of Exhibit “F”, and (iv) in exchange for the March 2010
Warrant the Company shall issue Granite a Warrant in the form of
Exhibit “G”. The aforementioned Debentures and Warrants will be
issued within one week of the receipt of the original February 2010 Debenture
and February 2010 Warrant and the Original March 2010 Debenture and
March 2010 Warrant. The parties agree that upon the issuance of the
aforementioned Debentures and Warrants the February 2010 Debenture, the February
2010 Warrant, the March 0000 Xxxxxxxxx and the March 2010 Warrant will be null
and void.
5.2 Further
Assurances. By its signature hereto, each party consents and
agrees to all of the transactions contemplated hereby. Each party
hereto shall execute, deliver, file and record any and all instruments,
certificates, agreements and other documents, and take any and all other
actions, as reasonably requested by any other party hereto in order to
consummate the transactions contemplated hereby and, in the case of the Company,
to ensure that each Purchaser receive in full the benefits of the equity
interests to which it is entitled hereby.
5.3 Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given or made if (i) sent by
registered or certified mail, return receipt requested, postage prepaid, (ii)
hand delivered, (iii) sent by prepaid overnight carrier, with a record of
receipt or (iv) sent by facsimile (with confirmation of receipt), to the parties
at the following address (or at such other addresses as shall be specified by
the parties by like notice):
(i) To the
Company:
American Scientific Resources,
Incorporated
0000 Xxxxxx Xxxx, Xxxx
000
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Xxxxxx, Xxxxxxx, 00000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx
Xxxxxxx
With a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx
LLP
00 Xxxxxxxx
Xxx Xxxx 00000
Fax: (000)
000-0000
Attention: Xxxxx X. Xxxxx,
Esq.
(ii) To each
Purchaser:
Granite
Financial Group, LLC
000
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxxxx Xxxxxxxxx
Each
notice or other communication shall be deemed to have been given on the date
received.
5.4 Entire
Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof.
5.5 Headings. The
section and other headings contained in this Agreement are for reference
purposes only and shall not be deemed to be a part of this Agreement or to
affect the meaning or interpretation of this Agreement.
5.6 Counterparts. This
Agreement may be executed in any number of counterparts, each of which, when
executed, shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
5.7 Governing
Law and Jurisdiction. This Agreement shall be construed as to
both validity and performance and enforced in accordance with and governed by
the laws of the State of New York, without giving effect to the conflicts of law
principles thereof. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the civil or state courts of New York or in the federal courts located in the
State of New York. The parties executing this Agreement and other
agreements referred to herein or delivered in connection herewith on behalf of
the Company agree to submit to the jurisdiction of such courts.
5.8 Severability. If
any term or provision of this Agreement shall to any extent be invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby,
and each term and provision of the Agreement shall be valid and enforced to the
fullest extent permitted by law.
5.9 Amendments. This
Agreement may not be modified or changed except by an instrument or instruments
in writing executed by the parties hereto.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first written above
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THE
COMPANY:
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AMERICAN
SCIENTIFIC RESOURCES, INCORPORATED
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By:
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Name: Xxxxxxxxxxx
X. Xxxxxxx, MD, MBA
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Title: CEO
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PURCHASERS:
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GRANITE
FINANCIAL GROUP, LLC
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By:
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Name:
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Title:
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Amount
of Debenture: $101,000
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Amount
of Warrants: 5,050,000
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XXXXXX
XXXXXXXXX SEP XXX
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By:
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Name:
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Title:
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Amount
of Debenture: $49,000
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Amount
of Warrants:
2,450,000
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Schedule
3 (Subsidiaries)
Kidz-Med,
Inc., Florida corporation
Heartsmart,
Inc., Nevada corporation
Ulster
Scientific, New York corporation
1
