Exh 10-a
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), effective as of
April 13, 2006 by and among VERIDIUM CORPORATION, a Delaware corporation
(the "Company"), and the Buyers listed on Schedule I attached
hereto (individually, a "Buyer" or collectively "Buyers").
WITNESSETH
WHEREAS, the Company and the Buyer(s) are executing and delivering
this Agreement in reliance upon an exemption from securities registration
pursuant to Section 4(2) and/or Rule 506 of Regulation D ("Regulation D") as
promulgated by the U.S. Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the
Buyer(s), as provided herein, and the Buyer(s) shall purchase Four Million
Four Hundred Thousand Dollars ($4,400,000) of secured convertible debentures
(the "Convertible Debentures"), which shall be convertible into shares of
the Company's common stock, par value $0.001 (the "Common Stock") (as
converted, the "Conversion Shares") all of which shall be funded on the
fifth (5th) business day following the date hereof (the "Closing"), for a
total purchase price of $4,400,000, (the "Purchase Price") in the respective
amounts set forth opposite each Buyer(s) name on Schedule I (the
"Subscription Amount"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement (the "Investor Registration Rights Agreement") pursuant to
which the Company has agreed to provide certain registration rights under
the Securities Act and the rules and regulations promulgated there under,
and applicable state securities laws; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Company and the Buyers are executing and delivering one or
more Security Agreements (all such security agreements shall be referred to
as the "Security Agreement") pursuant to which the Company and its
subsidiaries agreed to provide the Buyers a security interest in Pledged
Collateral (as this term is defined in the each Security Agreement) to
secure the Company's obligations under this Agreement, the Transaction
Documents, or any other obligations of the Company to the Buyer; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering Irrevocable
Transfer Agent Instructions (the "Irrevocable Transfer Agent Instructions").
NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Buyer(s) hereby
agree as follows:
1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.
(a) Purchase of Convertible Debentures. Subject to the
satisfaction (or waiver) of the terms and conditions of this Agreement, each
Buyer agrees, severally and not jointly, to purchase at each Closing and the
Company agrees to sell and issue to each Buyer, severally and not jointly,
at each Closing, Convertible Debentures in amounts corresponding with the
Subscription Amount set forth opposite each Buyer's name on Schedule I
hereto.
(b) Closing Date. The Closing of the purchase and sale
of the Convertible Debentures shall take place at 10:00 a.m. Eastern
Standard Time on the fifth (5th) business day following the date hereof,
subject to notification of satisfaction of the conditions to the Closing set
forth herein and in Sections 6 and 7 below (or such later date as is
mutually agreed to by the Company and the Buyer(s)) (the "Closing Date").
The Closing shall occur on the respective Closing Dates at the offices of
Yorkville Advisors, LLC, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxx
Xxxxxx 00000 (or such other place as is mutually agreed to by the Company
and the Buyer(s)).
(c) Form of Payment. Subject to the satisfaction of the
terms and conditions of this Agreement, on the Closing Dates, (i) the Buyers
shall deliver to the Company such aggregate proceeds for the Convertible
Debentures to be issued and sold to such Buyer(s), minus the fees to be paid
directly from the proceeds the Closings as set forth herein, and (ii) the
Company shall deliver to each Buyer, Convertible Debentures which such
Buyer(s) is purchasing in amounts indicated opposite such Buyer's name on
Schedule I, duly executed on behalf of the Company.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants, severally and not jointly, that:
(a) Investment Purpose. Each Buyer is acquiring the
Convertible Debentures and, upon conversion of Convertible Debentures, the
Buyer will acquire the Conversion Shares then issuable, for its own account
for investment only and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered or exempted under the Securities Act; provided, however, that by
making the representations herein, such Buyer reserves the right to dispose
of the Conversion Shares at any time in accordance with or pursuant to an
effective registration statement covering such Conversion Shares or an
available exemption under the Securities Act.
(b) Accredited Investor Status. Each Buyer is an
"Accredited Investor" as that term is defined in Rule 501(a)(3) of
Regulation D.
(c) Reliance on Exemptions. Each Buyer understands that
the Convertible Debentures are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United States
federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and such Buyer's compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of
such exemptions and the eligibility of such Buyer to acquire such
securities.
(d) Information. Each Buyer and its advisors (and his
or, its counsel), if any, have been furnished with all materials relating to
the business, finances and operations of the Company and information he
deemed material to making an informed investment decision regarding his
purchase of the Convertible Debentures and the Conversion Shares, which have
been requested by such Buyer. Each Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and its
management. Neither such inquiries nor any other due diligence
investigations conducted by such Buyer or its advisors, if any, or its
representatives shall modify, amend or affect such Buyer's right to rely on
the Company's representations and warranties contained in Section 3 below.
Each Buyer understands that its investment in the Convertible Debentures and
the Conversion Shares involves a high degree of risk. Each Buyer is in a
position regarding the Company, which, based upon employment, family
relationship or economic bargaining power, enabled and enables such Buyer to
obtain information from the Company in order to evaluate the merits and
risks of this investment. Each Buyer has sought such accounting, legal and
tax advice, as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Convertible Debentures and
the Conversion Shares.
(e) No Governmental Review. Each Buyer understands that
no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement
of the Convertible Debentures or the Conversion Shares, or the fairness or
suitability of the investment in the Convertible Debentures or the
Conversion Shares, nor have such authorities passed upon or endorsed the
merits of the offering of the Convertible Debentures or the Conversion
Shares.
(f) Transfer or Resale. Each Buyer understands that
except as provided in the Investor Registration Rights Agreement: (i) the
Convertible Debentures have not been and are not being registered under the
Securities Act or any state securities laws, and may not be offered for
sale, sold, assigned or transferred unless (A) subsequently registered
thereunder, or (B) such Buyer shall have delivered to the Company an opinion
of counsel, in a generally acceptable form, to the effect that such
securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration requirements;
(ii) any sale of such securities made in reliance on Rule 144 under the
Securities Act (or a successor rule thereto) ("Rule 144") may be made only
in accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules
and regulations of the SEC thereunder; and (iii) neither the Company nor any
other person is under any obligation to register such securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder. The Company reserves the right to
place stop transfer instructions against the shares and certificates for the
Conversion Shares.
(g) Legends. Each Buyer understands that the
certificates or other instruments representing the Convertible Debentures
and or the Conversion Shares shall bear a restrictive legend in
substantially the following form (and a stop transfer order may be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD
RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF
COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed and the Company within two (2)
business days shall issue a certificate without such legend to the holder of
the Conversion Shares upon which it is stamped, if, unless otherwise
required by state securities laws, (i) in connection with a sale
transaction, provided the Conversion Shares are registered under the
Securities Act or (ii) in connection with a sale transaction, after such
holder provides the Company with an opinion of counsel, which opinion shall
be in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale, assignment or
transfer of the Conversion Shares may be made without registration under the
Securities Act.
(h) Authorization, Enforcement. This Agreement has been
duly and validly authorized, executed and delivered on behalf of such Buyer
and is a valid and binding agreement of such Buyer enforceable in accordance
with its terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and remedies.
(i) Receipt of Documents. Each Buyer and his or its
counsel has received and read in their entirety: (i) this Agreement and
each representation, warranty and covenant set forth herein and the
Transaction Documents (as defined herein); (ii) all due diligence and other
information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; (iii) the Company's Form 10-KSB
for the fiscal year ended December 31, 2005 and (iv) (v) answers to all
questions each Buyer submitted to the Company regarding an investment in the
Company; and each Buyer has relied on the information contained therein and
has not been furnished any other documents, literature, memorandum or
prospectus.
(j) Due Formation of Corporate and Other Buyers. If the
Buyer(s) is a corporation, trust, partnership or other entity that is not an
individual person, it has been formed and validly exists and has not been
organized for the specific purpose of purchasing the Convertible Debentures
and is not prohibited from doing so.
(k) No Legal Advice From the Company. Each Buyer
acknowledges, that it had the opportunity to review this Agreement and the
transactions contemplated by this Agreement with his or its own legal
counsel and investment and tax advisors. Each Buyer is relying solely on
such counsel and advisors and not on any statements or representations of
the Company or any of its representatives or agents for legal, tax or
investment advice with respect to this investment, the transactions
contemplated by this Agreement or the securities laws of any jurisdiction.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants as of the date hereof to each of
the Buyers that, except as set forth in the SEC Documents (as defined
herein) or in the Disclosure Schedule attached hereto (the "Disclosure
Schedule"):
(a) Organization and Qualification. The Company and its
subsidiaries are corporations duly organized and validly existing in good
standing under the laws of the jurisdiction in which they are incorporated,
and have the requisite corporate power to own their properties and to carry
on their business as now being conducted. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to do business and
is in good standing in every jurisdiction in which the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries taken as
a whole.
(b) Authorization, Enforcement, Compliance with Other
Instruments. (i) The Company has the requisite corporate power and
authority to enter into and perform this Agreement, the Security Agreement,
the Investor Registration Rights Agreement, the Irrevocable Transfer Agent
Agreement, and any related agreements (collectively the "Transaction
Documents") and to issue the Convertible Debentures and the Conversion
Shares in accordance with the terms hereof and thereof, (ii) the execution
and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Convertible Debentures
the Conversion Shares and the reservation for issuance and the issuance of
the Conversion Shares issuable upon conversion or exercise thereof, have
been duly authorized by the Company's Board of Directors and no further
consent or authorization is required by the Company, its Board of Directors
or its stockholders, (iii) the Transaction Documents have been duly executed
and delivered by the Company, (iv) the Transaction Documents constitute the
valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies. The
authorized officer of the Company executing the Transaction Documents knows
of no reason why the Company cannot file the registration statement as
required under the Investor Registration Rights Agreement or perform any of
the Company's other obligations under such documents.
(c) Capitalization. The authorized capital stock of the
Company consists of 250,000,000 shares of Common Stock and 10,000,000 shares
of Preferred Stock, par value $0.001 ("Preferred Stock") of which
245,256,317 shares of Common Stock and 1,254,244 shares of Series A
Preferred Stock, 553,750 shares of Series B Preferred Stock, and 1,000,000
shares of Series D Preferred Stock are issued and outstanding. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. No shares of Common Stock are subject to preemptive rights
or any other similar rights or any liens or encumbrances suffered or
permitted by the Company. As of the date of this Agreement, (i) there are
no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by
which the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries
or options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible
into, any shares of capital stock of the Company or any of its subsidiaries,
(ii) there are no outstanding debt securities and (iii) there are no
agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of their securities
under the Securities Act (except pursuant to the Registration Rights
Agreement) and (iv) there are no outstanding registration statements and
there are no outstanding comment letters from the SEC or any other
regulatory agency. There are no securities or instruments containing anti-
dilution or similar provisions that will be triggered by the issuance of the
Convertible Debentures as described in this Agreement. The Company has
furnished to the Buyer true and correct copies of the Company's Articles of
Incorporation, as amended and as in effect on the date hereof (the "Articles
of Incorporation"), and the Company's By-laws, as in effect on the date
hereof (the "By-laws"), and the terms of all securities convertible into or
exercisable for Common Stock and the material rights of the holders thereof
in respect thereto other than stock options issued to employees and
consultants.
(d) Issuance of Securities. The Convertible Debentures
are duly authorized and, upon issuance in accordance with the terms hereof,
shall be duly issued, fully paid and nonassessable, are free from all taxes,
liens and charges with respect to the issue thereof. The Conversion Shares
issuable upon conversion of the Convertible Debentures have been duly
authorized and reserved for issuance. Upon conversion or exercise in
accordance with the Convertible Debentures the Conversion Shares will be
duly issued, fully paid and nonassessable.
(e) No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby will not (i) result
in a violation of the Articles of Incorporation, any certificate of
designations of any outstanding series of preferred stock of the Company or
the By-laws or (ii) 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 or any of
its subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of The
National Association of Securities Dealers Inc.'s OTC Bulletin Board on
which the Common Stock is quoted) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected. Neither the Company nor its subsidiaries
is in violation of any term of or in default under its Articles of
Incorporation or By-laws or their organizational charter or by-laws,
respectively, or any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its subsidiaries. The business of
the Company and its subsidiaries is not being conducted, and shall not be
conducted in violation of any material law, ordinance, or regulation of any
governmental entity. Except as specifically contemplated by this Agreement
and as required under the Securities Act and any applicable state securities
laws, the Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under or contemplated by this Agreement or the Registration Rights Agreement
in accordance with the terms hereof or thereof. All consents,
authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof. The Company and its subsidiaries
are unaware of any facts or circumstance, which might give rise to any of
the foregoing.
(f) SEC Documents: Financial Statements. Since January
1, 2003, the Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (all of the foregoing
filed prior to the date hereof or amended after the date hereof and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to
as the "SEC Documents"). The Company has delivered to the Buyers or their
representatives, or made available through the SEC's website at
xxxx://xxx.xxx.xxx., true and complete copies of the SEC Documents. As of
their respective dates, the financial statements of the Company disclosed in
the SEC Documents (the "Financial Statements") complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods involved
(except (i) as may be otherwise indicated in such Financial Statements or
the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may exclude footnotes or may be condensed or summary
statements) and, fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyer which is
not included in the SEC Documents, including, without limitation,
information referred to in this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(g) 10(b)-5. The SEC Documents do not include any
untrue statements of material fact, nor do they omit to state any material
fact required to be stated therein necessary to make the statements made, in
light of the circumstances under which they were made, not misleading.
(h) Absence of Litigation. There is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending against or
affecting the Company, the Common Stock or any of the Company's
subsidiaries, wherein an unfavorable decision, ruling or finding would (i)
have a material adverse effect on the transactions contemplated hereby (ii)
adversely affect the validity or enforceability of, or the authority or
ability of the Company to perform its obligations under, this Agreement or
any of the documents contemplated herein, or (iii) have a material adverse
effect on the business, operations, properties, financial condition or
results of operations of the Company and its subsidiaries taken as a whole.
(i) Acknowledgment Regarding Buyer's Purchase of the
Convertible Debentures. The Company acknowledges and agrees that the
Buyer(s) is acting solely in the capacity of an arm's length purchaser with
respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that the Buyer(s) is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby and any
advice given by the Buyer(s) or any of their respective representatives or
agents in connection with this Agreement and the transactions contemplated
hereby is merely incidental to such Buyer's purchase of the Convertible
Debentures or the Conversion Shares. The Company further represents to the
Buyer that the Company's decision to enter into this Agreement has been
based solely on the independent evaluation by the Company and its
representatives.
(j) No General Solicitation. Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D under the Securities Act) in connection with the
offer or sale of the Convertible Debentures or the Conversion Shares.
(k) No Integrated Offering. Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would
require registration of the Convertible Debentures or the Conversion Shares
under the Securities Act or cause this offering of the Convertible
Debentures or the Conversion Shares to be integrated with prior offerings by
the Company for purposes of the Securities Act.
(l) Employee Relations. Neither the Company nor any of
its subsidiaries is involved in any labor dispute nor, to the knowledge of
the Company or any of its subsidiaries, is any such dispute threatened.
None of the Company's or its subsidiaries' employees is a member of a union
and the Company and its subsidiaries believe that their relations with their
employees are good.
(m) Intellectual Property Rights. The Company and its
subsidiaries own or possess adequate rights or licenses to use all
trademarks, trade names, service marks, service xxxx registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights necessary to conduct
their respective businesses as now conducted. The Company and its
subsidiaries do not have any knowledge of any infringement by the Company or
its subsidiaries of trademark, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service xxxx
registrations, trade secret or other similar rights of others, and, to the
knowledge of the Company there is no claim, action or proceeding being made
or brought against, or to the Company's knowledge, being threatened against,
the Company or its subsidiaries regarding trademark, trade name, patents,
patent rights, invention, copyright, license, service names, service marks,
service xxxx registrations, trade secret or other infringement; and the
Company and its subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.
(n) Environmental Laws. The Company and its
subsidiaries are (i) in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval.
(o) Title. Any real property and facilities held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.
(p) Insurance. The Company and each of its subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes
to be prudent and customary in the businesses in which the Company and its
subsidiaries are engaged. Neither the Company nor any such subsidiary has
been refused any insurance coverage sought or applied for and neither the
Company nor any such subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
(q) Regulatory Permits. The Company and its
subsidiaries possess all material certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, and neither the Company
nor any such subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or
permit.
(r) Internal Accounting Controls. The Company and each
of its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability, and (iii) the recorded
amounts for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(s) No Material Adverse Breaches, etc. Neither the
Company nor any of its subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company's officers has or is expected in the
future to have a material adverse effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company or its subsidiaries. Neither the Company nor any of its
subsidiaries is in breach of any contract or agreement which breach, in the
judgment of the Company's officers, has or is expected to have a material
adverse effect on the business, properties, operations, financial condition,
results of operations or prospects of the Company or its subsidiaries.
(t) Tax Status. The Company and each of its
subsidiaries has made and filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which
it is subject and (unless and only to the extent that the Company and each
of its subsidiaries has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes) has paid all
taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.
(u) Certain Transactions. Except for arm's length
transactions pursuant to which the Company makes payments in the ordinary
course of business upon terms no less favorable than the Company could
obtain from third parties and other than the grant of stock options
disclosed in the SEC Documents, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
(v) Fees and Rights of First Refusal. The Company is
not obligated to offer the securities offered hereunder on a right of first
refusal basis or otherwise to any third parties including, but not limited
to, current or former shareholders of the Company, underwriters, brokers,
agents or other third parties.
4. COVENANTS.
(a) Best Efforts. Each party shall use its best efforts
to timely satisfy each of the conditions to be satisfied by it as provided
in Sections 6 and 7 of this Agreement.
(b) Form D. The Company agrees to file a Form D with
respect to the Conversion Shares as required under Regulation D and to
provide a copy thereof to each Buyer promptly after such filing. The
Company shall, on or before the Closing Date, take such action as the
Company shall reasonably determine is necessary to qualify the Conversion
Shares, or obtain an exemption for the Conversion Shares for sale to the
Buyers at the Closing pursuant to this Agreement under applicable securities
or "Blue Sky" laws of the states of the United States, and shall provide
evidence of any such action so taken to the Buyers on or prior to the
Closing Date.
(c) Reporting Status. Until the earlier of (i) the date
as of which the Buyer(s) may sell all of the Conversion Shares without
restriction pursuant to Rule 144(k) promulgated under the Securities Act (or
successor thereto), or (ii) the date on which (A) the Buyer(s) shall have
sold all the Conversion Shares and (B) none of the Convertible Debentures
are outstanding (the "Registration Period"), the Company shall file in a
timely manner all reports required to be filed with the SEC pursuant to the
Exchange Act and the regulations of the SEC thereunder, and the Company
shall not terminate its status as an issuer required to file reports under
the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would otherwise permit such termination.
(d) Use of Proceeds. The proceeds will be funded
directly into Veridium Industrial Design Corp., a wholly owned subsidiary of
the Company, for.
(e) Reservation of Shares. The Company shall take all
action reasonably necessary to at all times have authorized, and reserved
for the purpose of issuance, such number of shares of Common Stock as shall
be necessary to effect the issuance of the Conversion Shares. If at any
time the Company does not have available such shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all of the
Conversion Shares, the Company shall call and hold a special meeting of the
shareholders within thirty (30) days of such occurrence, for the sole
purpose of increasing the number of shares authorized. The Company's
management shall recommend to the shareholders to vote in favor of
increasing the number of shares of Common Stock authorized. Management
shall also vote all of its shares in favor of increasing the number of
authorized shares of Common Stock.
(f) Listings or Quotation. The Company shall promptly
secure the listing or quotation of the Conversion Shares upon each national
securities exchange, automated quotation system or The National Association
of Securities Dealers Inc.'s Over-The-Counter Bulletin Board ("OTCBB") or
other market, if any, upon which shares of Common Stock are then listed or
quoted (subject to official notice of issuance) and shall use its best
efforts to maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all Conversion Shares from time to time issuable
under the terms of this Agreement. The Company shall maintain the Common
Stock's authorization for quotation on the OTCBB.
(g) Fees and Expenses.
(i) Each of the Company and the Buyer(s) shall pay
all costs and expenses incurred by such party in connection with the
negotiation, investigation, preparation, execution and delivery of the
Transaction Documents. The Company shall pay Yorkville Advisors LLC a fee
equal to ten percent (10%) of the Purchase Price.
(ii) The Company shall pay a structuring fee to
Yorkville Advisors LLC of Fifteen Thousand Dollars ($15,000), which shall be
deducted from the Closing proceeds.
(iii) The Company shall issue to the Buyer warrants
to purchase 50,000,000 shares of the Company's Common Stock for a period of
five (5) years (the "Warrant") as follows: 7,500,000 shares at $0.10 per
share, 7,500,000 shares at $0.15 per share, 15,000,000 shares at $0.20 per
share and 20,000,000 shares at $0.25 per share. The shares of Common Stock
issuable under the Warrant shall collectively be referred to as the "Warrant
Shares".
(iv) The Warrant Shares shall have "piggy-back" and
demand registration rights.
(h) Corporate Existence. So long as any of the
Convertible Debentures remain outstanding, the Company shall not directly or
indirectly consummate any merger, reorganization, restructuring, reverse
stock split consolidation, sale of all or substantially all of the Company's
assets or any similar transaction or related transactions (each such
transaction, an "Organizational Change") unless, prior to the consummation
an Organizational Change, the Company obtains the written consent of each
Buyer. In any such case, the Company will make appropriate provision with
respect to such holders' rights and interests to insure that the provisions
of this Section 4(h) will thereafter be applicable to the Convertible
Debentures.
(i) Transactions With Affiliates. So long as any
Convertible Debentures are outstanding, the Company shall not, and shall
cause each of its subsidiaries not to, enter into, amend, modify or
supplement, or permit any subsidiary to enter into, amend, modify or
supplement any agreement, transaction, commitment, or arrangement with any
of its or any subsidiary's officers, directors, person who were officers or
directors at any time during the previous two (2) years, stockholders who
beneficially own five percent (5%) or more of the Common Stock, or
Affiliates (as defined below) or with any individual related by blood,
marriage, or adoption to any such individual or with any entity in which any
such entity or individual owns a five percent (5%) or more beneficial
interest (each a "Related Party"), except for (a) customary employment
arrangements and benefit programs on reasonable terms, (b) any investment in
an Affiliate of the Company, (c) any agreement, transaction, commitment, or
arrangement on an arms-length basis on terms no less favorable than terms
which would have been obtainable from a person other than such Related
Party, (d) any agreement, transaction, commitment, or arrangement which is
approved by a majority of the disinterested directors of the Company; for
purposes hereof, any director who is also an officer of the Company or any
subsidiary of the Company shall not be a disinterested director with respect
to any such agreement, transaction, commitment, or arrangement. "Affiliate"
for purposes hereof means, with respect to any person or entity, another
person or entity that, directly or indirectly, (i) has a ten percent (10%)
or more equity interest in that person or entity, (ii) has ten percent (10%)
or more common ownership with that person or entity, (iii) controls that
person or entity, or (iv) shares common control with that person or entity.
"Control" or "controls" for purposes hereof means that a person or entity
has the power, direct or indirect, to conduct or govern the policies of
another person or entity.
(j) Transfer Agent. The Company covenants and agrees
that, in the event that the Company's agency relationship with the transfer
agent should be terminated for any reason prior to a date which is two (2)
years after the Closing Date, the Company shall immediately appoint a new
transfer agent and shall require that the new transfer agent execute and
agree to be bound by the terms of the Irrevocable Transfer Agent
Instructions (as defined herein).
(k) Restriction on Issuance of the Capital Stock. So
long as any Convertible Debentures are outstanding, the Company shall not,
without the prior written consent of the Buyer(s), (i) issue or sell shares
of Common Stock or Preferred Stock without consideration or for a
consideration per share less than the bid price of the Common Stock
determined immediately prior to its issuance, (ii) issue any preferred
stock, warrant, option, right, contract, call, or other security or
instrument granting the holder thereof the right to acquire Common Stock
without consideration or for a consideration less than such Common Stock's
Bid Price determined immediately prior to it's issuance, (iii) enter into
any security instrument granting the holder a security interest in any and
all assets of the Company, or (iv) file any registration statement on Form S-8.
(l) Neither the Buyer(s) nor any of its affiliates have
an open short position in the Common Stock of the Company, and the Buyer(s)
agrees that it shall not, and that it will cause its affiliates not to,
engage in any short sales of or hedging transactions with respect to the
Common Stock as long as any Convertible Debentures shall remain outstanding.
(m) Rights of First Refusal. So long as any portion of
Convertible Debentures are outstanding, if the Company intends to raise
additional capital by the issuance or sale of capital stock of the Company,
including without limitation shares of any class of common stock, any class
of preferred stock, options, warrants or any other securities convertible or
exercisable into shares of common stock (whether the offering is conducted
by the Company, underwriter, placement agent or any third party) the Company
shall be obligated to offer to the Buyers such issuance or sale of capital
stock, by providing in writing the principal amount of capital it intends to
raise and outline of the material terms of such capital raise, prior to the
offering such issuance or sale of capital stock to any third parties
including, but not limited to, current or former officers or directors,
current or former shareholders and/or investors of the obligor,
underwriters, brokers, agents or other third parties. The Buyers shall have
ten (10) business days from receipt of such notice of the sale or issuance
of capital stock to accept or reject all or a portion of such capital
raising offer.
5. TRANSFER AGENT INSTRUCTIONS.
(a) The Company shall issue the Irrevocable Transfer
Agent Instructions to its transfer agent irrevocably appointing Xxxxx
Xxxxxxxx, Esq. as the Company's agent for purpose of having certificates
issued, registered in the name of the Buyer(s) or its respective nominee(s),
for the Conversion Shares representing such amounts of Convertible
Debentures as specified from time to time by the Buyer(s) to the Company
upon conversion of the Convertible Debentures, for interest owed pursuant to
the Convertible Debenture, and for any and all Liquidated Damages (as this
term is defined in the Investor Registration Rights Agreement). Xxxxx
Xxxxxxxx, Esq. shall be paid a cash fee of Fifty Dollars ($50) for every
occasion they act pursuant to the Irrevocable Transfer Agent Instructions.
The Company shall not change its transfer agent without the express written
consent of the Buyer(s), which may be withheld by the Buyer(s) in its sole
discretion. Prior to registration of the Conversion Shares under the
Securities Act, all such certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement. The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred
to in this Section 5, and stop transfer instructions to give effect to
Section 2(g) hereof (in the case of the Conversion Shares prior to
registration of such shares under the Securities Act) will be given by the
Company to its transfer agent and that the Conversion Shares shall otherwise
be freely transferable on the books and records of the Company as and to the
extent provided in this Agreement and the Investor Registration Rights
Agreement. Nothing in this Section 5 shall affect in any way the Buyer's
obligations and agreement to comply with all applicable securities laws upon
resale of Conversion Shares. If the Buyer(s) provides the Company with an
opinion of counsel, in form, scope and substance customary for opinions of
counsel in comparable transactions to the effect that registration of a
resale by the Buyer(s) of any of the Conversion Shares is not required under
the Securities Act, the Company shall within two (2) business days instruct
its transfer agent to issue one or more certificates in such name and in
such denominations as specified by the Buyer. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to
the Buyer by vitiating the intent and purpose of the transaction
contemplated hereby. Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Section 5 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5, that the Buyer(s) shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the
Convertible Debentures to the Buyer(s) at the Closings is subject to the
satisfaction, at or before the Closing Dates, of each of the following
conditions, provided that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion:
(a) Each Buyer shall have executed the Transaction
Documents and delivered them to the Company.
(b) The Buyer(s) shall have delivered to the Company the
Purchase Price for Convertible Debentures in respective amounts as set forth
next to each Buyer as outlined on Schedule I attached hereto, minus any fees
to be paid directly from the proceeds the Closings as set forth herein, by
wire transfer of immediately available U.S. funds pursuant to the wire
instructions provided by the Company.
(c) The representations and warranties of the Buyer(s)
shall be true and correct in all material respects as of the date when made
and as of the Closing Dates as though made at that time (except for
representations and warranties that speak as of a specific date), and the
Buyer(s) shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer(s) at or
prior to the Closing Dates.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
(a) The obligation of the Buyer(s) hereunder to purchase
the Convertible Debentures at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions:
(i) The Company shall have executed the
Transaction Documents and delivered the same to the Buyer(s).
(ii) The Common Stock shall be authorized for
quotation on the OTCBB, trading in the Common Stock shall not have been
suspended for any reason, and all the Conversion Shares issuable upon the
conversion of the Convertible Debentures shall be approved by the OTCBB.
(iii) The representations and warranties of the
Company shall be true and correct in all material respects (except to the
extent that any of such representations and warranties is already qualified
as to materiality in Section 3 above, in which case, such representations
and warranties shall be true and correct without further qualification) as
of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or
prior to the Closing Date. If requested by the Buyer, the Buyer shall have
received a certificate, executed by the President of the Company, dated as
of the Closing Date, to the foregoing effect and as to such other matters as
may be reasonably requested by the Buyer including, without limitation an
update as of the Closing Date regarding the representation contained in
Section 3(c) above.
(iv) The Company shall have executed and delivered
to the Buyer(s) the Convertible Debentures in the respective amounts set
forth opposite each Buyer(s) name on Schedule I attached hereto.
(v) The Buyer(s) shall have received an opinion of
counsel in a form satisfactory to the Buyer(s).
(vi) The Company shall have provided to the
Buyer(s) a certificate of good standing from the secretary of state from the
state in which the company is incorporated.
(vii) The Company shall have filed a form UCC-1 or
such other forms as may be required to perfect the Buyer's interest in the
Pledged Property as detailed in the Security Agreement dated the date hereof
and provided proof of such filing to the Buyer(s).
(viii) The Company shall have provided to the
Buyer an acknowledgement, to the satisfaction of the Buyer, from the
Company's independent certified public accountants as to its ability to
provide all consents required in order to file a registration statement in
connection with this transaction.
(ix) The Company shall have reserved out of its
authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Convertible Debentures, shares of Common Stock to
effect the conversion of all of the Conversion Shares then outstanding.
(x) The Irrevocable Transfer Agent Instructions,
in form and substance satisfactory to the Buyer, shall have been delivered
to and acknowledged in writing by the Company's transfer agent.
8. INDEMNIFICATION.
(a) In consideration of the Buyer's execution and
delivery of this Agreement and acquiring the Convertible Debentures and the
Conversion Shares hereunder, and in addition to all of the Company's other
obligations under this Agreement, the Company shall defend, protect,
indemnify and hold harmless the Buyer(s) and each other holder of the
Convertible Debentures and the Conversion Shares, and all of their officers,
directors, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Buyer Indemnitees") from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective
of whether any such Buyer Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys'
fees and disbursements (the "Indemnified Liabilities"), incurred by the
Buyer Indemnitees or any of them as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in this Agreement, the Convertible Debentures
or the Investor Registration Rights Agreement or any other certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in this
Agreement, or the Investor Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby, or (c)
any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement or any other instrument, document or agreement
executed pursuant hereto by any of the parties hereto, any transaction
financed or to be financed in whole or in part, directly or indirectly, with
the proceeds of the issuance of the Convertible Debentures or the status of
the Buyer or holder of the Convertible Debentures the Conversion Shares,
as a Buyer of Convertible Debentures in the Company. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities, which is permissible
under applicable law.
(b) In consideration of the Company's execution and
delivery of this Agreement, and in addition to all of the Buyer's other
obligations under this Agreement, the Buyer shall defend, protect, indemnify
and hold harmless the Company and all of its officers, directors, employees
and agents (including, without limitation, those retained in connection with
the transactions contemplated by this Agreement) (collectively, the "Company
Indemnitees") from and against any and all Indemnified Liabilities incurred
by the Indemnitees or any of them as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Buyer(s) in this Agreement, instrument or document
contemplated hereby or thereby executed by the Buyer, (b) any breach of any
covenant, agreement or obligation of the Buyer(s) contained in this
Agreement, the Investor Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby executed
by the Buyer, or (c) any cause of action, suit or claim brought or made
against such Company Indemnitee based on material misrepresentations or due
to a material breach and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement, the Investor
Registration Rights Agreement or any other instrument, document or agreement
executed pursuant hereto by any of the parties hereto. To the extent that
the foregoing undertaking by each Buyer may be unenforceable for any reason,
each Buyer shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities, which is permissible
under applicable law.
9. GOVERNING LAW: MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of New Jersey
without regard to the principles of conflict of laws. The parties further
agree that any action between them shall be heard exclusively in Xxxxxx
County, New Jersey, and expressly consent to the jurisdiction and venue of
the Superior Court of New Jersey, sitting in Xxxxxx County and the United
States District Court for the District of New Jersey sitting in Newark, New
Jersey for the adjudication of any civil action asserted pursuant to this
Paragraph.
(b) Counterparts. This Agreement may be executed in two
or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party. In the event any signature
page is delivered by facsimile transmission, the party using such means of
delivery shall cause four (4) additional original executed signature pages
to be physically delivered to the other party within five (5) days of the
execution and delivery hereof.
(c) Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement, Amendments. This Agreement
supersedes all other prior oral or written agreements between the Buyer(s),
the Company, their affiliates and persons acting on their behalf with
respect to the matters discussed herein, and this Agreement and the
instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the party to be
charged with enforcement.
(f) Notices. Any notices, consents, waivers, or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (i)
upon receipt, when delivered personally; (ii) upon confirmation of receipt,
when sent by facsimile; (iii) three (3) days after being sent by U.S.
certified mail, return receipt requested, or (iv) one (1) day after deposit
with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company, to:
Veridium Corporation
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx
Attn: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile:
If to the Buyer(s), to its address and facsimile number on Schedule I,
with copies to the Buyer's counsel as set forth on Schedule I. Each party
shall provide five (5) days' prior written notice to the other party of any
change in address or facsimile number.
(g) Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. Neither the Company nor any Buyer shall assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto.
(h) 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.
(i) Survival. Unless this Agreement is terminated under
Section 9(l), the representations and warranties of the Company and the
Buyer(s) contained in Sections 2 and 3, the agreements and covenants set
forth in Sections 4, 5 and 9, and the indemnification provisions set forth
in Section 8, shall survive the Closing for a period of two (2) years
following the date on which the Convertible Debentures are converted in
full. The Buyer(s) shall be responsible only for its own representations,
warranties, agreements and covenants hereunder.
(j) Publicity. The Company and the Buyer(s) shall have
the right to approve, before issuance any press release or any other public
statement with respect to the transactions contemplated hereby made by any
party; provided, however, that the Company shall be entitled, without the
prior approval of the Buyer(s), to issue any press release or other public
disclosure with respect to such transactions required under applicable
securities or other laws or regulations (the Company shall use its best
efforts to consult the Buyer(s) in connection with any such press release or
other public disclosure prior to its release and Buyer(s) shall be provided
with a copy thereof upon release thereof).
(k) Further Assurances. Each party shall do and
perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
(l) Termination. In the event that the Closing shall
not have occurred with respect to the Buyers on or before five (5) business
days from the date hereof due to the Company's or the Buyer's failure to
satisfy the conditions set forth in Sections 6 and 7 above (and the non-
breaching party's failure to waive such unsatisfied condition(s)), the non-
breaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date
without liability of any party to any other party; provided, however, that
if this Agreement is terminated by the Company pursuant to this Section
9(l), the Company shall remain obligated to reimburse the Buyer(s) for the
fees and expenses of Yorkville Advisors LLC described in Section 4(g) above.
(m) No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied
against any party.
[REMAINDER PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Buyers and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first
written above.
COMPANY: VERIDIUM CORPORATION
By:
Name: Xxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
SCHEDULE I
SCHEDULE OF BUYERS
Address/Facsimile Amount of
Name Signature Number of Buyer Subscription
-------------------------------------------------------------------------------
Cornell Capital
Partners, XX Xxxxxxxxxx
Equity Partners, Ltd. By: Yorkville 000 Xxxxxx Xxxxxx
Advisors, LLC Suite 3700 $4,400,00
Its: General Jersey City, NJ
Partner 07303
Facsimile: (000) 000-0000
By:
----------------
Name: Xxxx Xxxxxx
Its: Portfolio Manager
With a copy to: Xxxx Xxxxx, Esq. 000 Xxxxxx Xxxxxx -
Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
DISCLOSURE SCHEDULE
None.
2
