SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This
Series A Preferred Stock Purchase Agreement (this “Agreement”) is made as of
February 3, 2011 by and among Neah Power Systems, Inc., a Nevada corporation
(“NPS”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and, collectively,
the “Purchasers”). NPS
and the Purchasers are sometimes individually referred to herein as a “Party” and collectively as the
“Parties.”
RECITALS
WHEREAS,
subject to the terms and conditions set forth in this Agreement, NPS desires to
issue and sell to each Purchaser, and each Purchaser desires to purchase from
NPS, shares of NPS’ Series A Preferred Stock having the rights, preferences and
privileges set forth in the certificate of designation attached to this
Agreement as Exhibit
A (the “Preferred
Stock”); and
WHEREAS,
the issuance and sale of the Preferred Stock to each of the Purchasers is
intended to be exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933, as amended, and the safe harbor set forth in Rule
506 of Regulation D promulgated thereunder.
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
contained in this Agreement, and intending to be legally bound, the Parties
agree as follows:
ARTICLE
I
PURCHASE
AND SALE; CLOSING
1.1 The Sale. Subject to the terms
and conditions of this Agreement, on the Closing Date (as defined below), NPS
will issue and sell to each Purchaser, and each Purchaser will purchase and
acquire from NPS, the number of shares of Preferred Stock set forth on such
Purchaser’s signature page to this Agreement (the “Sale”).
1.2 Purchase Price. The purchase
price for each share of Preferred Stock is $0.055 (the “Per Share Purchase Price”).
Each Purchaser agrees to pay the purchase price determined by multiplying the
number of shares of Preferred Stock purchased by such Purchaser by the Per Share
Purchase Price. The purchase price for each Purchaser as determined by the
foregoing formula is set forth on such Purchasers signature page to this
Agreement (the “Subscription
Amount”).
1.3 Advancement. Certain of the
Purchasers have advanced certain portions of their Subscription Amount to NPS
(the “Advancement”)
prior to the date of this Agreement. The amount of such Advancement, if
applicable, is set forth on such Purchaser’s signature page to this Agreement.
NPS acknowledges receipt of the Advancement as set forth on such Purchaser’s
signature page to this Agreement.
1.4 Closing. Upon the terms and
subject to the conditions set forth in this Agreement, the closing of the Sale
shall take place on a day designated by NPS that shall be no more than fifteen
Business Days following the date of this Agreement (the “Closing Date”). NPS shall
provide to the Purchasers at least 24 hours notice prior to the Closing Date. On
or prior to the Closing Date, NPS shall file with the Nevada Secretary of State
the certificate of designation in the form attached as Exhibit A (the “Certificate of Designation”).
On the Closing Date, after the Nevada Secretary of State has returned a filing
receipt indicating the successful filing of the Certificate of Designation, (i)
each Purchaser shall deliver to NPS via wire transfer or a certified check of
immediately available funds such Purchaser’s Subscription Amount (minus any
Advancement) and (ii) NPS shall deliver to each Purchaser a stock certificate
representing such Purchaser’s respective shares of Preferred Stock. “Business Day” means any day
except any Saturday, any Sunday, any day which is a federal legal holiday in the
United States or any day on which banking institutions in the State of
Washington are authorized or required by law or other governmental action to
close.
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ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF NPS
NPS
hereby represents and warrants as of the date hereof and as of the Closing Date
to each of the Purchasers, except as disclosed in the SEC Reports (as defined
below) filed on or prior to the date of this Agreement, as follows:
2.1 Organization and
Qualification. NPS is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of
Nevada, with the requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. NPS is duly
qualified to conduct business and is in good standing as a foreign corporation
or other entity 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,
could not have or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of this Agreement, (ii) a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of NPS, or (iii) a material adverse effect on
NPS’s ability to perform in any material respect on a timely basis its
obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse
Effect”).
2.2 Power and Authority. NPS has
the requisite power and authority to enter into and deliver this Agreement and
to perform its obligations hereunder. This Agreement has been duly authorized,
executed and delivered by NPS and is a valid and binding agreement enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws of general applicability
relating to or affecting creditors’ rights generally and general principals of
equity.
2.3 No Conflicts. No consent,
approval, or authorization of or designation, declaration or filing with any
third party or any governmental authority is required in connection with the
valid execution and delivery of this Agreement.
2.4 Issuance of the Securities.
The Preferred Stock is duly authorized and, when issued and paid for in
accordance with this Agreement, will be duly and validly issued, fully paid and
nonassessable, and free and clear of all liens imposed by NPS.
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2.5 SEC Reports; Financial
Statements. NPS has filed all reports, schedules, forms, statements and
other documents required to be filed by NPS under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as NPS was required by
law or regulation to file such material) (the foregoing materials referred to
herein as the “SEC
Reports”). As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
financial statements of NPS included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes required by GAAP,
and fairly present in all material respects the financial position of NPS and
its consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit
adjustments.
2.6 Litigation. There is no
Proceeding pending or, to the knowledge of NPS, threatened against or affecting
NPS or any of its respective properties before or by any Governmental Body which
adversely affects or challenges the legality, validity or enforceability of any
of this Agreement or the Preferred Stock. There has not been, and to the
knowledge of NPS, there is not pending or contemplated, any investigation by the
Securities and Exchange Commission involving NPS or any current or former
director or officer of NPS. The Commission has not issued any stop order or
other order suspending the effectiveness of any registration statement filed by
NPS under the Exchange Act or the Securities Act. “Proceeding” means an action,
claim, suit, investigation or proceeding (including an investigation or partial
proceeding, such as a deposition). “Governmental Body” means any
(i) nation, state, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (ii) U.S. federal and state
government; or (iii) governmental or quasi-governmental authority of any nature
(including any governmental division, department, agency, commission,
instrumentality, official, ministry, fund, foundation, center, organization,
unit, body or entity and any court or other tribunal).
2.7 Private Placement. Assuming
the accuracy of the Purchasers’ representations and warranties set forth
in ARTICLE III, no registration under the Securities Act is required for
the offer and sale of the Preferred Stock by NPS to the Purchasers as
contemplated by this Agreement.
2.8 Investment Company. NPS is
not, and is not an affiliate of, and immediately after receipt of payment for
the Preferred Stock, will not be an affiliate of, an “investment company” within
the meaning of the Investment Company Act of 1940, as amended. NPS shall conduct
its business in a manner so that it will not become subject to the Investment
Company Act of 1940, as amended.
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2.9 No General Solicitation.
Neither NPS nor any person acting on behalf of NPS has offered or sold any of
the Preferred Stock by any form of general solicitation or general advertising.
NPS has offered the Preferred Stock for sale only to the Purchasers and certain
other “accredited investors” within the meaning of Rule 501 under the Securities
Act.
2.10 Brokers, Finders and Investment
Bankers
2.11 . NPS, nor any of its
officers, directors, employees or affiliates has employed any broker, finder or
investment banker or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees or finders’ fees in connection with the
transactions contemplated by this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PURCHASERS
Each
Purchaser, for itself and for no other Purchaser, hereby represents and warrants
as of the date hereof and as of the Closing Date to NPS as follows:
3.1 Power and Authority. Purchaser
has the requisite power and authority to enter into and deliver this Agreement
and to perform its obligations hereunder. This Agreement has been duly
authorized, executed and delivered by Purchaser and is a valid and binding
agreement enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium of similar loans of
general applicability relating to or affecting creditors’ rights generally and
general principals of equity.
3.2 No Conflict. No consent,
approval, or authorization of or designation, declaration or filing with any
third party or any governmental authority is required in connection with the
valid execution and delivery of this Agreement.
3.3 Accredited Investor. Purchaser
is an “accredited investor” as that term is defined in Regulation D promulgated
under the Securities Act of 1933 as amended.
3.4 Investment Intent. Purchaser
is purchasing the Preferred Stock for Purchaser’s own account and for investment
purposes only and has no present intention, agreement or arrangement for the
distribution, sale, transfer, assignment, pledge, hypothecation, encumbrance or
other disposition, or subdivision of the Preferred Stock. Purchaser does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person with
respect to any of the Preferred Stock.
3.5 Prior Relationship. Purchaser
has a pre-existing business or personal relationship with NPS, its directors,
officers or agents. The sale of the Preferred Stock has not been accompanied by
the publication of any advertisement or by any general
solicitation.
3.6 Restricted Preferred Stock.
Purchaser understands that the Preferred Stock and the shares of Common Stock
issuable upon conversion of the Preferred Stock (the “Underlying Shares”) are and
will be “restricted securities” as that term is defined in Rule 144 under the
Securities Act of 1933, as amended, and the Preferred Stock and the Underlying
Shares must be held indefinitely unless they are subsequently registered or
qualified under the Securities Act of 1933, as amended, and other applicable
securities laws or that exemptions from such registration or qualification are
available. The certificates representing the Preferred Stock and Underlying
Shares may bear a legend in substantially the form set forth below:
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[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [CONVERTIBLE]] HAS
[NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY
[AND THE SECURITIES ISSUABLE UPON [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
3.7 Preferred Stock Terms;
Conversion. Purchaser has read and understands the terms of the Preferred
Stock set forth in the Certificate of Designation. Purchaser acknowledges that
the Preferred Stock is convertible into shares of Common Stock only at the
option of the Company. Purchaser further acknowledges that NPS may not have
sufficient authorized Common Stock as of the date of this Agreement or at the
time of issuing the Preferred Stock to convert the Preferred Stock to Common
Stock.
3.8 Brokers, Finders and Investment
Bankers. Purchaser, nor any of its
officers, directors, employees or affiliates has employed any broker, finder or
investment banker or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees or finders’ fees in connection with the
transactions contemplated by this Agreement.
ARTICLE
IV
MISCELLANEOUS
4.1 Termination. This Agreement
may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder
only and without any effect whatsoever on the obligations between NPS and the
other Purchasers, by written notice to NPS, if the Closing has not been
consummated on or before the fifteenth Business Day following the date of this
Agreement. This Agreement may be terminated by the Company by written notice to
each of the Purchasers if the Closing has not been consummated on or before the
fifteenth Business Day following the date of this Agreement.
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4.2 Entire Agreement. This
Agreement is the final, complete and exclusive statement of the agreement of the
parties with respect to the subject matter of it and supersedes any prior or
contemporaneous agreements, understandings, or course of dealing.
4.3 Applicable Law; Consent to
Jurisdiction. This Agreement and the rights and remedies of each party
arising out of or relating to this Agreement (including, without limitation,
equitable remedies) shall be solely governed by, interpreted under, and
construed and enforced in accordance with the laws (without regard to the
conflicts of law principles thereof) of the State of Washington, as if this
Agreement were made, and as if its obligations are to be performed, wholly
within the State of Washington. Any and all proceedings resulting from or
arising out of a controversy or claim relating to this Agreement or the breach
thereof, shall be held exclusively in King County in the State of Washington,
and the parties hereto expressly consent to hold themselves subject to such
jurisdiction for the purposes of any and all such proceedings.
4.4 Independent Nature of Purchasers’
Obligations and Rights. The obligations of each Purchaser under this
Agreement are several and not joint with the obligations of any other Purchaser,
and no Purchaser shall be responsible in any way for the performance or
non-performance of the obligations of any other Purchaser under this Agreement.
Nothing contained herein, and no action taken by any Purchaser pursuant hereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation, the rights arising out of this Agreement, and it shall not
be necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of this
Agreement.
4.5 Notices. Any and all notices
or other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the
earliest of (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number set forth on the signature pages
attached hereto prior to 5:30 p.m. (Pacific Time) on a Business Day, (b) the
next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto on a day that is not a Business Day or
between 5:30 p.m. and 11:59 p.m. (Pacific Time) on any Business Day, (c) the
Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto, or
to such other address as a party may specify by notice to the other parties
delivered in accordance with this Section 4.5.
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4.6 Saturdays, Sundays and
Holidays. If the last or appointed day for the taking of any action or
the expiration of any right required or granted herein shall not be a Business
Day, then such action may be taken or such right may be exercised on the
following Business Day.
4.7 Successors and Assigns. This
Agreement, and the rights and obligations of each of the parties hereunder, may
not be assigned by Purchaser without the prior written consent of NPS. Subject
to the foregoing sentence, this Agreement shall inure to the benefit of, and
shall be binding upon, the Parties and their successors and
assigns.
4.8 Counterparts. This Agreement
may be executed in multiple counterparts and transmitted by facsimile or by
electronic mail in “portable document format” (PDF) form, or by any electronic
means intended to preserve the original graphic and pictorial appearance of a
party’s signature. Each such counterpart and facsimile or PDF signature shall
constitute an original, and all of which, when taken together, shall constitute
one instrument.
[SIGNATURE
PAGES FOLLOW]
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IN
WITNESS WHEREOF, the undersigned has caused this Series A Preferred Stock
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
| NEAH POWER SYSTEMS, INC. | ||
| By: | /s/ Xxxxxxx X. Xxxxxx | |
|
Name:
Xxxxxxx X. Xxxxxx
itle:
Chief Financial Officer
|
||
|
Address
for notice:
|
00000
00xx Xxxxxx XX, Xxxxx 000
Xxxxxxx,
Xxxxxxxxxx
Attn:
Xxxxxxx X. Xxxxxx
|
|
|
With
a copy to (which shall not constitute notice):
|
Sheppard,
Mullin, Xxxxxxx & Hampton LLP
000
Xxxxx Xxxx Xxxxxx
Xxxxx-Xxxxx
Xxxxx Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxxxxx Xxxxx, Esq.
|
|
[NEAH
POWER SYSTEMS, INC. SIGNATURE PAGE TO SERIES A PREFERRED STOCK PURCHASE
AGREEMENT]
IN
WITNESS WHEREOF, the undersigned has caused this Series A Preferred Stock
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name of Purchaser: Investor Relations Services,
Inc.
|
Subscription
Amount: $
127,200.00
Advancement
Amount: $
127,200.00
No.
of Shares of Preferred Stock: 2,312,727
|
|
Signature of
Authorized Signatory of Purchaser:
|
/s/
Xxxxxxx X. Xxxxxxx
|
|
Name of Authorized Signatory:
|
Xxxxxxx X. Xxxxxxx |
|
Title of Authorized Signatory:
|
President |
|
Fax Number of
Purchaser:
|
(000) 000-0000 |
|
Address
for notice:
|
Investor Relations Services,
Inc.
|
|
| 000 Xxxxxxx Xxxxxx | ||
|
Xxx Xxxxxx Xxxxx, Xxxxxxx
00000
|
||
|
With
a copy to (which shall not constitute notice):
|
||
|
Address
for (i) delivery of the Preferred Stock and (ii) registration of the
|
Same
|
|
| Preferred Stock on the books and records of the Company: | ||
EIN
Number: [Provide this
under separate cover.]
[PURCHASER
SIGNATURE PAGE NO. 1 TO PREFERRED STOCK PURCHASE AGREEMENT]
[ADDITIONAL
SIGNATURE PAGES FOLLOW]
IN
WITNESS WHEREOF, the undersigned has caused this Series A Preferred Stock
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name of
Purchaser:
|
Subscription
Amount: $
Advancement
Amount: $
No.
of Shares of Preferred Stock:
|
|
Signature of
Authorized Signatory of
Purchaser:
|
|
|
Name of Authorized Signatory:
|
|
|
Title of Authorized
Signatory:
|
|
|
Fax Number of
Purchaser:
|
|
|
Address
for notice:
|
||
|
With
a copy to (which shall not constitute notice):
|
||
| Address for (i) delivery of the Preferred Stock and (ii) registration of the | ||
|
Preferred
Stock on the books and records of the Company:
|
||
EIN
Number: [Provide this
under separate cover.]
[PURCHASER
SIGNATURE PAGE NO. 2 TO PREFERRED STOCK PURCHASE AGREEMENT]
[ADDITIONAL
SIGNATURE PAGE FOLLOWS]
IN
WITNESS WHEREOF, the undersigned has caused this Series A Preferred Stock
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name of
Purchaser:
|
Subscription
Amount: $
Advancement
Amount: $
No.
of Shares of Preferred Stock:
|
|
Signature of
Authorized Signatory of
Purchaser:
|
|
|
Name of Authorized
Signatory:
|
|
|
Title of Authorized
Signatory:
|
|
|
Fax Number of
Purchaser:
|
|
|
Address
for notice:
|
||
|
With
a copy to (which shall not constitute notice):
|
||
|
Address
for (i) delivery of the Preferred Stock and (ii) registration of the
|
||
| Preferred Stock on the books and records of the Company: | ||
EIN
Number: [Provide this
under separate cover.]
[PURCHASER
SIGNATURE PAGE NO. 3 TO PREFERRED STOCK PURCHASE AGREEMENT]
[FINAL
SIGNATURES PAGE]
Exhibit
A
Certificate
of Designation
