Restricted Equity Purchase Agreement
THIS
Restricted
Equity Purchase Agreement
(this
“Agreement”)
is
made and entered into as of May
14,
2007,
between Airbee
Wireless, Inc.,
a
Delaware corporation
(the
“Company”), and Mercatus & Partners Limited a United Kingdom Private Limited
Company (the “Purchaser”).
WHEREAS,
PURCHASER desires to purchase Shares of the Company; and
WHEREAS,
Company desires for Purchaser to purchase Shares of the Company.
NOW,
THEREFORE, subject to the terms and conditions set forth in this Agreement,
for
good, valuable and binding consideration, the receipt and sufficiency of
which
are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, now agree as follows:
ARTICLE
I
INTRODUCTION
AND DEFINITIONS
This
Agreement is entered into by the parties for purchase of equity shares of
the
Company by the Purchaser. This
is a delayed purchase transaction not an immediate funding.
The
Company
recognizes and agrees that the Purchaser shall have up to thirty (30) days,
as
set forth in this Agreement to tender the Purchase Price to the Company through
the intermediary Custodian and Purchaser, once the valuation and purchase
of the
shares is made in accordance with the terms of this Agreement. The Company
shall
have the right to contact the Custodian administrator for Purchaser account
verification and for confirmation of the share status, location and control.
Purchaser shall have up to thirty (30) days from the date of delivery of
the
Shares in the name of the Purchaser to the Custodian to pay the Purchase
Price.
Certain
Definitions.
As used
in this Agreement, and unless the context requires a different meaning, the
following terms have the meanings indicated:
“Affiliate”
means,
with respect to any Person, any Person that, directly or indirectly, controls,
is controlled by or is under common control with such Person. For the purposes
of this definition, “control”
(including, with correlative meanings, the terms “controlled
by”
and
“under
common control with”)
shall
mean the possession, directly or indirectly, of the power to direct or cause
the
direction of the management and policies of such Person, whether through
the
ownership of voting securities or by contract or otherwise.
“Agreement”
shall
have the meaning set forth in the introductory paragraph of this
Agreement.
“Attorney-in-fact”
means
the agent of the Purchaser or Designee, R.
Xxxxxxx Xxxxxx.
The
attorney-in-fact, R.
Xxxxxxx Xxxxxx,
has
limited oversight authority of the Purchaser and the Custodian to submit
terms
sheets, execute the Agreement as well as oversight authority, verify share
deposit, valuation process and share transaction status.
1
“Business
Day”
means
any day except Saturday, Sunday, any day which shall be a legal holiday or
a day
on which banking institutions in the State of New York are authorized or
required by law or other government actions to close.
“Change
of Control”
means
the acquisition, directly or indirectly, by any Person of ownership of, or
the
power to direct the exercise of voting power with respect to, a majority
of the
issued and outstanding voting shares of the Company.
“Closing”
or
"Closing
Date"
shall
be the date of
the
payment by the Purchaser of the Purchase Price.
“Company”
shall
mean (Company) as set forth in the introductory paragraph.
"Control
Person"
shall
have the meaning set forth in Section 4.10(a) (i).
“Custodian”
means
a
financial institution that has the legal responsibility for a customer's
securities. This implies management as well as safekeeping. The Custodian
for
this Agreement is named in Schedule
1.
“Default”
means
any event or condition which constitutes an Event of Default or which with
the
giving of notice or lapse of time or both would, unless cured or waived,
become
an Event of Default.
“Depository”
means
a
company
which
holds securities deposited by others, and where exchanges of these securities
take place.
“Disclosure
Documents”
means
the Company’s reports filed under the Exchange Act with the SEC.
“Event
of Default”
shall
have the meaning set forth in Section
3.1(i).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Execution
Date”
means
the date of this Agreement first written above.
“Final
Market Price”
means
the average of the last sale price for the Common Stock of the Company as
reported on the OTCBB Over-The-Counter (OTC) listing service, for the ten
(10)
Business days immediately preceding the Closing. Final Market Price shall
be
agreed to by the parties as evidenced by the execution by both Company and
Purchaser of the Funding Addendum Schedule
2,
which
is made a part of this Agreement.
“Final
Purchase Price’”
means
the Final Market Price multiplied by the Purchase Price Percentage.
2
“Funding
Addendum”
Schedule
2
shall
mean the instructions provided to Purchaser by Company setting out the Final
Market Price and directing how the Purchase Price is to be
remitted.
“Indemnified
Party”
shall
have the meaning set forth in Section
4.10(b).
“Indemnifying
Party”
shall
have the meaning set forth in Section
4.10(b).
"Losses"
shall
have the meaning set forth in Section 4.10(a) (i).
"Material
Adverse Effect"
shall
have the meaning set forth in Section 3.1(a).
“NASD”
means
the National Association of Securities Dealers, Inc.
“NASDAQ”
shall
mean the Nasdaq Stock Market, Inc.®
“Number
of Shares”
means
the number of shares to be received by the Custodian which is thirty three
million three hundred thirty four thousand (33,334,000) shares.
“OTCBB”
shall
mean the NASD over-the counter Bulletin Board®.
“Person”
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof)
or
other entity of any kind.
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Purchase
Price”
shall
have the meaning set forth in Article
II.
“Purchase
Price Percentage”
means
forty five percent (45%).
“Purchaser”
shall
have the meaning set forth in the introductory paragraph.
“Reporting
Issuer”
means
a
company that is subject to the reporting requirements of Section 13 or 15(d)
of
the Exchange Act.
“Required
Approvals”
shall
have the meaning set forth in Section
3.1(g).
“Securities”
means
the Common Stock and stock of any other class into which such shares may
hereafter have been reclassified or changed.
“SEC”
means
the Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shares”
shall
have the meaning set forth in
Article II.
3
“Subsidiaries”
shall
have the meaning set forth in
Section 3.1(a).
“Trading
Day”
means
(a) a day on which the Common Stock is quoted on NASDAQ, the OTCBB or the
principal stock exchange on which the Common Stock has been listed, or (b)
if
the Common Stock is not quoted on NASDAQ, the OTCBB or any stock
exchange.
“Transaction
Documents”
means
this Agreement and all exhibits and schedules hereto, and all other documents,
instruments and writings required pursuant to this Agreement.
“U.S.”
means
the United States of America.
ARTICLE
II
The
Purchaser
hereby
agrees to purchase 33,334,000 shares
of the
Common Stock,
par
value $0.00004 per share
of the
Company
(the "Shares").
The
Purchase Price to be paid by the Purchaser shall be determined at Closing.
The
Purchase Price shall be the Final Purchase Price as defined herein multiplied
by
the Number of Shares deposited with the Custodian.
I
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1 Representations,
Warranties and Agreements of the Company.
The
Company hereby makes the following representations and warranties to the
Purchaser, all of which shall survive the Closing:
(a) Organization
and Qualification.
The
Company is a publicly traded corporation, duly incorporated, validly existing
and in good standing under the laws of the State of Delaware,
with the requisite corporate power and authority to own and use its properties
and assets and to carry on its business as currently conducted. The Company
has
no subsidiaries other than as set forth on Schedule
3.1(a)
attached
hereto (collectively, the “Subsidiaries”).
Each
of the Subsidiaries is a corporation, duly incorporated, validly existing
and in
good standing under the laws of the jurisdiction of its incorporation, with
the
full corporate power and authority to own and use its properties and assets
and
to carry on its business as currently conducted. Each of the Company and
the
Subsidiaries is duly qualified to do business and is in good standing as
a
foreign corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may
be,
would not, individually or in the aggregate, have a material adverse effect
on
the results of operations, assets, prospects, or financial condition of the
Company and the Subsidiaries, taken as a whole (a “Material
Adverse Effect”).
4
(b) Authorization,
Enforcement.
The
Company has the requisite corporate power and authority to enter into and
to
consummate the transactions contemplated hereby and by each other Transaction
Document and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby has been duly authorized by all necessary
action
on the part of the Company. This Agreement and each of the other Transaction
Documents has been or will be duly executed by the Company and when delivered
in
accordance with the terms hereof or thereafter will constitute the valid
and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws
relating to, or affecting generally the enforcement of, creditors’ rights and
remedies or by other equitable principles of general application.
(c) Capitalization.
The
authorized, issued and outstanding capital stock of the Company is set forth
on
Schedule
3.1(c).
No
shares of Common Stock are entitled to preemptive or similar rights, nor
is any
holder of the Common Stock entitled to preemptive or similar rights arising
out
of any agreement or understanding with the Company by virtue of this Agreement.
Except as disclosed in Schedule
3.1(c),
there
are no outstanding options, warrants, scripts,
rights
to subscribe to, registration rights, calls or commitments of any character
whatsoever relating to securities, rights or obligations convertible into
or
exchangeable for, or giving any person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings, or
arrangements by which the Company or any Subsidiary is or may become bound
to
issue additional shares of Common Stock, or securities or rights convertible
or
exchangeable into shares of Common Stock. Neither the Company nor any Subsidiary
is in violation of any of the provisions of its Certificate of Incorporation,
bylaws or other charter documents.
(d) Issuance
of Securities.
The
Shares have been duly and validly authorized for issuance, offer and sale
pursuant to this Agreement and, when issued and delivered as provided hereunder
against payment in accordance with the terms hereof, shall be valid and binding
obligations of the Company enforceable in accordance with their respective
terms.
(e) Use
of
Proceeds.
The
proceeds from the sale of shares shall be used by the Company for payment
of
obligations and general working capital needs consistent with financial budgets
and approved from time to time by the Board of Directors.
(f) No
Conflicts.
The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or
violate
any provision of its Certificate of Incorporation or bylaws (each as amended
through the date hereof) or (ii) be subject to obtaining any consents except
those referred to in Section
3.1(f),
conflict with, or constitute a default (or an event which with notice or
lapse
of time or both would become a default) under, or give to others any rights
of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or (iii) result
in a
violation of any law, rule, regulation, order, judgment, injunction, decree
or
other restriction of any court or governmental authority to which the Company
or
its Subsidiaries is subject (including, but not limited to, those of other
countries and the federal and state securities laws and regulations), or
by
which any property or asset of the Company or its Subsidiaries is bound or
affected, except in the case of clause (ii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as
would
not, individually or in the aggregate, have a Material Adverse Effect. The
business of the Company and its Subsidiaries is not being conducted in violation
of any law, ordinance or regulation of any governmental authority.
5
(g) Consents
and Approvals.
Except
as specifically set forth in Schedule
3.1(g),
neither
the Company nor any Subsidiary is required to obtain any consent, waiver,
authorization or order of, or make any filing or registration with, any court
or
other federal, state, local or other governmental authority or other Person
in
connection with the execution, delivery and performance by the Company of
this
Agreement and each of the other Transaction Documents (together with the
consents, waivers, authorizations, orders, notices and filings referred to
herein or in Schedule 3.1(g),
the
“Required
Approvals”).
(h) Litigation;
Proceedings.
Except
as specifically disclosed in Schedule
3.1(h),
there is
no action, suit, notice of violation, proceeding or investigation pending
or, to
the best knowledge of the Company, threatened against or affecting the Company
or any of its Subsidiaries or any of their respective properties before or
by
any court, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which (i) relates to or challenges
the legality, validity or enforceability of any of the Transaction
Documents
or the
Shares, (ii) could, individually or in the aggregate, have a Material Adverse
Effect or (iii) could, individually or in the aggregate, materially impair
the
ability of the Company to perform fully on a timely basis its obligations
under
the Transaction Documents.
(i) No
Default or Violation.
Except
as set forth in Schedule
3.1(i)
hereto,
neither the Company nor any Subsidiary (i) is in default under or in violation
of any indenture, loan or credit agreement or any other agreement or instrument
to which it is a party or by which it or any of its properties is bound,
except
such conflicts or defaults as do not have a Material Adverse Effect, (ii)
is in
violation of any order of any court, arbitrator or governmental body, except
for
such violations as do not have a Material Adverse Effect, or (iii) is in
violation of any statute, rule or regulation of any governmental authority
which
could (individually or in the aggregate) adversely
affect the legality, validity or enforceability of this Agreement, have
a
Material Adverse Effect or
adversely impair the Company’s ability or obligation to perform fully on a
timely basis its obligations under this Agreement.
(j) Disclosure
Documents.
The
Disclosure Documents are accurate in all material respects and do not contain
any untrue statement of material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Violation of this
clause is and will be considered grounds for default and could result in
the
termination of this Agreement.
6
(k) Non-Registered
Offering
Neither
the Company nor any Person acting on its behalf has taken or will take any
action (including, without limitation, any offering of any securities of
the
Company under circumstances which would require the integration of such offering
with the offering of the Shares under the Securities Act) which might subject
the offering, issuance or sale of the Shares to the registration requirements
of
Section 5 of the Securities Act.
(l) Registration
Rights.
The
Company agrees: (1) to
instruct and require its
transfer
agent to remove the restrictive legend upon the request of Purchaser
if the
Shares are eligible for resale under Rule 144(k) promulgated under the
Securities Act or if the resale of the Shares has been registered under the
Securities Act; (2) there will be no trading by affiliates of the Company
(as
defined in the Securities Act) within thirty
(30)
days of
the Closing; or (3) there will be no selling by affiliates of the Company
during
the fifteen
(15) months subsequent to the
date
of Closing or three (3) months following the registration of Purchaser shares,
whichever is sooner.
The
Company covenants and agrees that, in the event the Purchaser is deemed to
be an
"affiliate" of the Company pursuant to the Securities Act, as of or at
any time subsequent to the second anniversary of the Closing Date, the
Company will, within 120 days of the Company’s receipt of the Purchaser's
request, file a registration statement with the SEC to register for immediate
resale pursuant to the Securities Act all Shares then held by the Purchaser
(including any shares of common stock issuable upon conversion of the Shares
then held by the Purchaser) (the “Registrable
Securities”). The
Company shall use its commercially reasonable efforts to cause such registration
statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof. The Company shall use its reasonable
commercial efforts to keep such registration statement continuously effective
under the Securities Act until the date which is the earlier date of when
(i)
all Registrable Securities have been sold, or (ii) all Registrable Securities
covered by such registration statement may be sold immediately without
registration under the Securities Act and without volume restrictions pursuant
to Rule 144(k). The
Company shall pay all expenses of such registration, including registration
and
filing fees, "blue sky" fees and expenses and reasonable fees and expenses
of one counsel to the Purchaser, such fee not to exceed $15,000.
All
selling commissions applicable to the sale of Registrable Securities, including
any fees and disbursements of any special counsel to the Purchaser beyond
those
included above, shall not be the responsibility of the Company. The
Company and the Purchaser agree that the determination of the Purchaser's
status
as an "affiliate" will be made by counsel to the Purchaser in good faith
after
consultation with counsel to the Company.
(m) Regulation
S.
Neither
the Company nor any affiliate or any person acting on the Company's behalf,
has
made or is aware of any “directed selling efforts” in the United States, which
is defined in Regulation S to be any activity undertaken for the purpose
of, or
that could reasonably be expected to have the effect of, conditioning the
market
in the United States for any of the Shares being purchased hereby.
7
(n) Due
Diligence.
The
Company agrees to cooperate with the Purchaser and provide access to the
Company's books and records so that the Purchase is able to conduct a due
diligence review of the Company and its business. The Purchaser shall have
up to
thirty (30) days following execution of this Agreement to conduct such due
diligence review.
(o) Material
Misrepresentations.
The
Company agrees that all materials and information it discloses or otherwise
provides to the Purchaser relating to this Agreement and the transactions
contemplated pursuant to this Agreement are accurate in all material respects
and do not contain any untrue statement of material fact or omit to state
any
material face necessary in order to make the statements made therein, in
light
of the circumstances under which they were made, not misleading. Violation
of
this clause is and will be considered an event of default permitting the
Purchaser to terminate the Agreement immediately.
(p) Company
Funding Agent.
In the
event the Company has any agreement for compensation with any party to raise
the
funds on behalf of the Company ("Company Funding Agent Agreement"),
the
Company
will disclose the terms of that Company Funding Agent Agreement to Purchaser
prior to the execution of this Agreement. Following the execution of this
Agreement, the Attorney-in-Fact shall be the Company contact for all information
relating to the status of funding, location of Shares, settlement of the
payment
of the Purchase Price and any other information requests of the Company.
Notwithstanding the above, in the event the Purchase Price is not paid as
required herein, the
Company
may directly contact the Attorney-in-Fact to provide the
Company
notice of demand for the return of the Shares.
The
Purchaser
acknowledges and agrees that the Company
makes no
representation or warranty with respect to the transactions contemplated
hereby
other than those specifically set forth in this
Section
3.1.
3.2 Representations
and Warranties of the Purchaser.
The
Purchaser hereby represents and warrants to the Company as follows:
(a) Organization;
Authority.
The
Purchaser is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation with the requisite
power and authority to enter into and to consummate the transactions
contemplated hereby and by the other Transaction Documents and otherwise
to
carry out its obligations hereunder and thereunder. The acquisition of the
Shares to be purchased by the Purchaser hereunder has been duly authorized
by
all necessary action on the part of the Purchaser. This Agreement has been
duly
executed and delivered by the Purchaser and constitutes the valid and legally
binding obligation of the Purchaser, enforceable against it in accordance
with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to,
or affecting generally the enforcement of, creditors rights and remedies
or by
other general principles of equity.
8
(b) Investment
Intent.
The
Purchaser is acquiring the Shares to be purchased by it hereunder, for its
own
account for investment purposes only and not with a view to or for distributing
or reselling such Shares, or any part thereof or interest therein. Purchaser’s
right, subject to the provisions of this Agreement, to sell or otherwise
dispose
of all or any part of such Shares shall be in compliance with applicable
federal
and state securities laws.
(c) Experience
of Purchaser.
The
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 an investment in the
Shares
to be acquired by it hereunder, and has so evaluated the merits and risks
of
such investment.
(d) Ability
of Purchaser to Bear Risk of Investment.
The
Purchaser is able to bear the economic risk of an investment in the Shares
to be
acquired by it hereunder and, at the present time, is able to afford a complete
loss of such investment.
(e) Reliance.
The
Purchaser understands and acknowledges that (i) the Shares being offered
and
sold to it hereunder are being offered and sold without registration under
the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act under Section 4(2) of the Securities Act
and
(ii) the availability of such exemption depends in part on, and that the
Company
will rely upon the accuracy and truthfulness of, the foregoing representations
and such Purchaser hereby consents to such reliance.
(f) Regulation
S.
Purchaser understands and acknowledges that (A) the Shares have
not
been registered under the Securities Act, are being sold in reliance upon
an
exemption from registration afforded by Regulation S; and that such Shares
have
not been registered with any state securities commission or authority; (B)
pursuant to the requirements of Regulation S, the Shares may not be transferred,
sold or otherwise exchanged unless in compliance with the provisions of
Regulation S and/or pursuant to registration under the Securities Act, or
pursuant to an available exemption hereunder; and (C) Purchaser is under
no
obligation to register the Shares under the Securities Act or any state
securities law, or to take any action to make any exemption from any such
registration provisions available.
Purchaser
is not a U.S. person and is not acquiring the Shares for the account of any
U.S.
person; (B) no director or executive officer of Purchaser is a national or
citizen of the United States; and (C) it is not otherwise deemed to be a
“U.S.
Person” within the meaning of Regulation S.
Purchaser
was not formed specifically for the purpose of acquiring the Shares purchased
pursuant to this Agreement.
Purchaser
is purchasing the Shares for its own account and risk and not for the account
or
benefit of a U.S. Person as defined in Regulation S and no other person has
any
interest in or participation in the Shares or any right, option, security
interest, pledge or other interest in or to the Shares. Purchaser understands,
acknowledges and agrees that it must bear the economic risk of its investment
in
the Shares for an indefinite period of time and that prior to any such offer
or
sale, the Company may require, as a condition to effecting a transfer of
the
Shares, an opinion of counsel, acceptable to the
Company,
as to
the registration or exemption therefrom under the Securities Act and any
state
securities acts, if applicable.
9
Purchaser
will, after the expiration of the Restricted Period, as set forth under
Regulation S Rule 903(b) (3) (iii) (A), offer, sell, pledge or otherwise
transfer the Shares only in accordance with Regulation S, or pursuant to
an
available exemption under the Securities Act and, in any case, in accordance
with applicable state securities laws or following the effective date of
a
Registration of the Shares by the Company. The transactions contemplated
by this
Agreement have neither been pre-arranged with a purchaser who is in the U.S.
or
who is a U.S. Person, nor are they part of a plan or scheme to evade the
registration provisions of the United States federal securities
laws.
The
offer
leading to the sale evidenced hereby was made in an “offshore transaction.” For
purposes of Regulation S, Purchaser understands that an “offshore transaction”
as defined under Regulation S is any offer or sale not made to a person in
the
United States and either (A) at the time the buy order is originated, the
purchaser is outside the United States, or the seller or any person acting
on
his behalf reasonably believes that the purchaser is outside the United States;
or (B) for purposes of (1) Rule 903 of Regulation S, the transaction is executed
in, or on or through a physical trading floor of an established foreign exchange
that is located outside the United States or (2) Rule 904 of Regulation S,
the
transaction is executed in, on or through the facilities of a designated
offshore securities market, and neither the seller nor any person acting
on its
behalf knows that the transaction has been prearranged with a buyer in the
U.S.
Neither
the
Purchaser
nor any
affiliate or any person acting on the
Purchaser's
behalf,
has made or is aware of any “directed selling efforts” in the United States,
which is defined in Regulation S to be any activity undertaken for the purpose
of, or that could reasonably be expected to have the effect of, conditioning
the
market in the United States for any of the Shares being purchased
hereby.
Purchaser
understands that the Company is the seller of the Shares which are the subject
of this Agreement, and that, for purpose of Regulation S, a “distributor” is any
underwriter, dealer or other person who participates, pursuant to a contractual
arrangement, in the distribution of securities offered or sold in reliance
on
Regulation S and that an “affiliate” is any partner, officer, director or any
person directly or indirectly controlling, controlled by or under common
control
with any person in question. Purchaser agrees that Purchaser will not, during
the Restricted Period set forth under Rule 903(b)(iii)(A), act as a distributor,
either directly or through any affiliate, nor shall it sell, transfer,
hypothecate or otherwise convey the Shares other than to a non-U.S. Person.
Purchaser
acknowledges that the Shares will bear a legend in the following
form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN
AN
“OFFSHORE TRANSACTION” IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED
BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE
“SECURITIES
ACT”)
AND
MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH REGULATION S, PURSUANT
TO
REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT, THE AVAILABILITY OF WHICH IS
TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
10
The
Company acknowledges and agrees that the Purchaser makes no representations
or
warranties with respect to the transactions contemplated hereby other than
those
specifically set forth in this Section
3.2.
ARTICLE
IV
OTHER
AGREEMENTS OF THE PARTIES
4.1 Manner
of Sale.
The
Shares are being issued pursuant to Section
4(2) of
the Securities Act, and Rule 506 of Regulation D and Regulation S thereunder.
4.2 Non-Shorting.
Purchaser agrees to not engage in short sales of the Shares nor has it engaged
in short sales of the Shares.
4.3 Notice
of Certain Events.
For so
long as the Purchaser shall own any Shares, the Company shall, on a continuing
basis, (i) advise the Purchaser promptly after obtaining knowledge of, and,
if
requested by the Purchaser, confirm such advice in writing, of the issuance
by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of the Shares, for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any
state
securities commission or other regulatory authority, (ii) use its best efforts
to prevent the issuance of any stop order or order suspending the qualification
or exemption from qualification of the Shares under any state securities
or Blue
Sky laws, and (iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Shares under any such laws,
use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time. For so long as the Purchaser shall own any Shares and during
any
period in which the Company has not filed all forms, reports and documents
required to be filed by it with the SEC, the Company shall advise the Purchaser
promptly after obtain knowledge of any event that makes any statement of
a
material fact made by the Company in Section
3.1
or in
the Disclosure Documents untrue or that requires the making of any additions
to
or changes in Section
3.1
or in
the Disclosure Documents in order to make the statements therein, in the
light
of the circumstances under which they are made, not misleading.
4.4 Blue
Sky Laws. The
Company shall cooperate with the Purchaser in connection with the exemption
from
registration of the Shares under the securities or Blue Sky laws of such
jurisdictions as the Purchaser
may
request; provided,
however,
that
neither the Company nor its Subsidiaries shall be required in connection
therewith to qualify as a foreign corporation where they are not now so
qualified. The Company agrees that it will execute all necessary documents
and
pay all necessary state filing or notice fees to enable the Company to sell
the
Shares to the Purchaser.
11
4.5 Integration.
The
Company shall ensure that no Affiliate shall sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined
in
Section 2 of the Securities Act) that would be integrated with the offer
or sale
of the Shares in a manner that would require the registration under the
Securities Act of the sale of the Shares to the Purchaser.
4.6 Furnishing
of Rule 144 Materials.
The
Company shall, for so long as any of the Shares remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d) of
the
Exchange Act, make available to any registered holder of the Shares
(“Holder”
or
“Holders”)
in
connection with any sale thereof and any prospective purchaser of such Shares
from such Person, such information in accordance with Rule 144 or Regulation
S
as promulgated under the Securities Act as is required to sell the Shares
under
Rule 144 promulgated under the Securities Act.
4.7 Solicitation
Materials.
The
Company shall not (i) distribute any offering materials in connection with
the
offering and sale of the Shares other than the Disclosure Documents and any
amendments and supplements thereto prepared in compliance herewith or (ii)
solicit any offer to buy or sell the Shares or, if applicable, by
means
of any form of general solicitation or advertising.
4.8 Listing
of Common Stock.
If the
Common Stock is or shall become listed on the OTCBB or on another exchange,
the
Company shall (a) use its best efforts to maintain the listing of its Common
Stock on the OTCBB or such other exchange on which the Common Stock is then
listed until two (2)
years
from the date hereof, and (b) shall provide to the Purchaser evidence of
such
listing.
4.9 Capitalization
and Restructure Plan.
The
Company, with Board approval, shall implement the Capitalization and Restructure
Plan as documented, agreed to and attached as Schedule 3.
4.10 Indemnification.
(a) Indemnification
(i) The
Company shall, notwithstanding termination of this Agreement and without
limitation as to time, indemnify and hold harmless the Purchaser and its
officers, directors, agents, employees and affiliates, each Person who controls
or
the
Purchaser (within the meaning of Section 15 of the Securities Act or Section
20
of the Exchange Act) (each such Person, a “Control
Person”)
and
the officers, directors, agents, employees and affiliates of each such Control
Person, to the fullest extent permitted by applicable law, from and against
any
and all losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and attorneys’ fees) and expenses
(collectively, “Losses”),
as
incurred, arising out of, or relating to, a breach or breaches of any
representation, warranty, covenant or agreement by the Company under this
Agreement or any other Transaction Document.
(ii) The
Purchaser shall, notwithstanding termination of this Agreement and without
limitation as to time, indemnify and hold harmless the Company, its officers,
directors, agents and employees, each Control Person and the officers,
directors, agents and employees of each Control Person, to the fullest extent
permitted by application law, from and against any and all Losses, as incurred,
arising out of, or relating to, a breach or breaches of any representation,
warranty, covenant or agreement by the Purchaser under this Agreement or
any
other
Transaction Document.
12
(b) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party promptly shall notify the Person from whom indemnity is
sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party
and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such
notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall
be
finally determined by a court of competent jurisdiction (which determination
is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying
Party.
An
Indemnified Party shall have the right to employ separate counsel in any
such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed to pay such fees and expenses;
or
(2) the Indemnifying Party shall have failed promptly to assume the defense
of
such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any
such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing
that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense of
the
claim against the Indemnified Party but will retain the right to control
the
overall Proceedings out of which the claim arose and such counsel employed
by
the Indemnified Party shall be at the expense of the Indemnifying Party).
The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
affected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent
of the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All
fees
and expenses of the Indemnified Party to which the Indemnified Party is entitled
hereunder (including reasonable fees and expenses to the extent incurred
in
connection with investigating or preparing to defend such Proceeding in a
manner
not inconsistent with this Section) shall be paid to the Indemnified Party,
as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party.
13
No
right
of indemnification under this Section shall be available as to a particular
Indemnified Party if there is a non-appealable final judicial determination
that
such Losses arise solely out of the negligence or bad faith of such Indemnified
Party in performing the obligations of such Indemnified Party under this
Agreement or a breach by such Indemnified Party of its obligations under
this
Agreement.
(c) Non-Exclusivity.
The
indemnity and agreements contained in this Section are in addition to any
obligation or liability that the Indemnifying Parties may have to the
Indemnified Parties.
ARTICLE
V
MISCELLANEOUS
5.1 Fees
and Expenses.
Except
as set forth in this Agreement, each party shall pay the fees and expenses
of
its 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 this Agreement. The Company shall
pay all
stamp and other taxes and duties levied in connection with the issuance of
the
Shares (and, upon conversion or exercise thereof, the Shares) pursuant hereto.
The
Purchaser shall be responsible for any taxes payable by the Purchaser that
may
arise as a result of the investment hereunder or the transactions contemplated
by this Agreement or any other Transaction Document. The Company shall pay
all
costs, expenses, fees and all taxes incident to and in connection with: (A)
the
issuance and delivery of the Shares, (B) the exemption from registration
of the
Shares for offer and sale to the Purchaser under the securities or Blue Sky
laws
of the applicable jurisdictions, (C)
the
preparation of certificates for the Shares (including, without limitation,
printing and engraving thereof), and (D) all fees and expenses of counsel
and
accountants of the Company. The Company shall pay to Purchaser the fees which
are defined in the
Schedule 1(a)
executed
by the Company and Purchaser,
said
payments to be remitted upon the execution of this Agreement or paid from
the
gross proceeds due the Company at time of payment of the Purchase Price to
the
Company.
5.2 Entire
Agreement.
This
Agreement, together with all of the Exhibits and Schedules annexed hereto,
and
any other Transaction Document contains the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements
and
understandings, oral or written, with respect to such matters. This Agreement
shall be deemed to have been drafted and negotiated by both parties hereto
and
no presumptions as to interpretation, construction or enforceability shall
be
made by or against either party in such regard.
5.3 Notices.
Any
notice or other communication required or permitted to be given hereunder
shall
be in writing and shall be deemed to have been duly given (a) when delivered
to
the address designated below by hand or by nationally recognized overnight
courier services (costs prepaid); or (b) upon facsimile transmission (with
written transmission confirmation report) at the number designated below
(if
delivered on a Business Day during normal business hours where such notice
is to
be received), or the first Business Day following such delivery (if delivered
other than on a Business Day during normal business hours where such notice
is
to be received) whichever shall first occur. The addresses for such
communications shall be:
14
| If to the Company: |
|
Xxxxxxxxx,
Xxxxxxxx 00000
|
| Phone: (000) 000-0000 |
| Fax: (000) 000-0000 |
|
With
copies to:
|
Stradling,
Yocca, Xxxxxxx & Xxxxx
|
|
000
Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
|
|
Xxxxxxx
Xxxxx, XX 00000
|
|
Attn:
Xxxxxxx X. Xxxxxx, Esq.
|
|
Phone:
(000) 000-0000
|
|
Fax:
(000) 000-0000
|
|
Xxxxx
& Associates, LLC
|
|
00000
Xxxxxxxx Xxxx. Xxxxx 0000
|
|
Xxx
Xxxxxx, XX 00000
|
|
Attn:
Xxxxxx Xxxxx
|
|
Phone:
(000)
000-0000
|
|
Fax:
(000)
000-0000
|
| If to the Purchaser: |
Mercatus
& Partners,
Limited
|
| 000 Xxxxxxx Xx. |
|
Xxxxxxxxxx,
XX
00000
|
| Phone: (000) 000-0000 |
| Fax: (000) 000-0000 |
| Attn: Xxxxxx Xxxxxx |
| With copies to: | Mercatus & Partners, Limited |
| 000 Xxxxxxx Xx |
| Xxxxxxxxxx, XX 00000 |
| Attn: Xxxx Xxxxx |
15
|
Waterford
Law Group
|
|
000
Xxxxxxxx Xxxxx, Xxxxx 000
|
|
Xxxxxxxxx,
XX 00000
|
|
Phone:
(000) 000-0000
|
|
Fax:
(000) 000-0000
|
|
Attn:
Xxxx Xxxxxxx
|
5.4 Amendments;
Waivers.
No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by both the Company and the
Purchaser, or, in the case of a waiver, by the party against whom enforcement
of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to
be a
continuing waiver in the future or a waiver of any other provision, condition
or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
5.5 Headings.
The
headings herein are for convenience only, do not constitute part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
5.6 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. The assignment by a party
of
this Agreement or any rights hereunder shall not affect the obligations of
such
party under this Agreement.
5.7 No
Third Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
5.8 Governing
Law; Venue; Service of Process.
The
parties hereto acknowledge that the transactions contemplated by this Agreement
and the exhibits hereto bear a reasonable relation to the State of New York.
The
parties hereto agree that the internal laws of the State of New York shall
govern this Agreement and the exhibits hereto, including, but not limited
to,
all issues related to usury. Any action to enforce the terms of this Agreement
or any of its exhibits, or any other Transaction Document shall be brought
exclusively in the state and/or federal courts situate in the County and
State
of New York. Service of process in any action by the Purchaser to enforce
the
terms of this Agreement may be made by serving a copy of the summons and
complaint, in addition to any other relevant documents, by commercial overnight
courier to the Company at its principal address set forth in this
Agreement.
5.9 Survival.
The
representations and warranties of the Company and the Purchaser contained
in
this agreement shall survive the Closing. The provisions contained in Sections
4.9 (Indemnification), 5.1 (Fees and Expenses), 5.11 (Publicity), 5.13
(Limitation of Remedies), and 5.15 (Delivery of Purchase Price and Recall
of
Shares) shall survive termination of this Agreement.
16
5.10 Counterpart
Signatures.
This
Agreement may be executed in two or more counterparts, all of which when
taken
together 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, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation
of the
party executing (or on whose behalf such signature is executed) the same
with
the same force and effect as if such facsimile signature page were an original
thereof.
5.11 Publicity.
The
Company and the Purchaser shall consult with each other in issuing any press
releases or otherwise making public statements with respect to the transactions
contemplated hereby and neither party shall issue any such press release or
otherwise make any such public statement without the prior written consent
of
the other, which consent shall not be unreasonably withheld or delayed; unless
counsel for the disclosing party deems such public statement to be required
by
applicable federal and/or state securities laws. The Company shall provide
the
Purchaser with a copy of its intended communication or filing prior to making
it
public and giving Purchaser sufficient time to discuss it with the Company.
Except as otherwise required by applicable law or regulation, the Company
will
not disclose to any third party (excluding its legal counsel, accountants
and
representatives) the names of the Purchaser.
5.12 Severability.
In case
any one or more of the provisions of this Agreement shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefore, and
upon
so agreeing, shall incorporate such substitute provision in this
Agreement.
5.13 Limitation
of Remedies - Funding.
Without
regard to any other terms in this agreement, in the event that the transactions
contemplated herein are not consummated and funding does not occur within
the
thirty (30) day period, the sole remedy for both parties under this Agreement
shall be the return of the Shares in accordance with Section 5.15.
5.14
Delivery
of Securities.
The
Company shall deliver the Shares directly to the Custodian, in Purchaser’s name,
within five days of the execution of this Agreement in accordance with the
directions provided in Schedule
1.
5.15 Delivery
of Purchase Price and Recall of Shares.
The
Purchaser shall, within thirty (30) days following the delivery of the Shares
to
the Custodian, subject to the execution of Schedule
2
by both
Company and Purchaser, pay the Purchase Price to the Company via wire transfer
to the directed wire transfer bank and account as specified in the Funding
Addendum Schedule
2 which
is
attached hereto.
If
the
Purchase Price is not received by the Company within thirty (30) days of
the
delivery of the Shares to the Custodian in the name of the Purchaser, the
Company may, at its discretion, demand recall of the Shares, issue
or
cause to be issued a stop transfer order or other order impeding the sale
and
delivery of any of the Shares, and terminate this Agreement.
The
Company may recall the Shares by providing notice to the Purchaser pursuant
to
Section 5.3. If the Company recalls the Shares, the Purchaser will use its
best
efforts, and will use its best efforts to cause the Custodian to, transmit
and
deliver the Shares to the Company within 20 days following the deliver of
the
recall notice pursuant to Section 5.3.
17
5.16. Delivery
of Opinion of Counsel. The
Company hereby agrees that it
hereby
binds
itself,
if
requested in writing to the aforementioned address of the Company, by the
Purchaser
or their
designate or assignee, that it
shall
deliver, within five (5) days of such demand, an opinion of counsel regarding
the transferability or status of the Shares;
provided, however, that if the Company’s counsel requires additional information
or representations from or with respect to the Purchaser and/or its designate
or
assignee, then such opinion shall not be required until five (5) days following
the delivery of such additional information or representations.
5.17. Duty
for Due Diligence. The
Company hereby agrees that it,
and on
behalf, its
transfer
agent, and any accessed management of the Company by the Purchaser or designee
banks or purchasers shall cooperate in the verification of the originating
nature of the Shares,
the
restriction period of the Shares,
and the
transferability of the Shares
during
the due diligence period of the Shares
involved
in this transaction. Such
failure of information to said parties is acknowledged as grounds for rejections
by the Purchaser or their designees or assignees as described above.
18
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first indicated above.
| Company: | ||
| Airbee Wireless, Inc.: | ||
| |
|
|
| By: | /s/ Xxxxxxxxxx Xxxx | |
|
Name:
Xxxxxxxxxx Xxxx
Title:
Chief
Executive Officer
|
||
|
Purchaser:
|
||
| Mercatus & Partners, Limited | ||
| |
|
|
| /s/ R. Xxxxxxx Xxxxxx | ||
|
By:
R. Xxxxxxx Xxxxxx POA on behalf of
Mercatus
& Partners, Limited
|
||
19
