SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of February
27, 2019, is entered into by and between PARALLAX HEALTH SCIENCES, INC., a Nevada
corporation (the “Company”), and EMA Financial, LLC, a Delaware limited liability company
(the “Purchaser”).
WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant
to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act” or “1933 Act”),
and Rule 506 promulgated thereunder by the United States Securities and Exchange Commission
(the “SEC”), the Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company a 12% Convertible Note of the Company, in the form attached hereto
as Exhibit A, in the principal amount of $111,000.00 (together with any note(s) issued in
replacement thereof or as interest thereon or otherwise with respect thereto in accordance with the
terms thereof, the “Note”), convertible into shares (“Conversion Shares”) of common stock,
$0.001 par value per share (the “Common Stock”), of the Company, upon the terms and subject to
the limitations and conditions set forth in such Note.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company and the Purchaser agree as follows:
1. Purchase and Sale of Note.
a)
Purchase of Note. On the Closing Date (as defined below), the Company
shall issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company, the
Note for an aggregate purchase price of $104,340.00 (“Purchase Price”). Further, Company shall
issue warrants to Buyer to purchase 300,000 shares of common stock (the “Warrant”).
b)
Form of Payment. On the Closing Date (i) the Purchaser shall pay the
Purchase Price by wire transfer of immediately available funds to the Company, in accordance
with the Company’s written wiring instructions, simultaneously with delivery of the Note, and
(ii) the Company shall deliver such Note duly executed on behalf of the Company to the
Purchaser, simultaneously with delivery of such Purchase Price.
c)
Closing Date. Subject to the satisfaction (or written waiver) of the
conditions thereto set forth in Section 8 and Section 9 below, the closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the first business day following
the date hereof or such other mutually agreed upon time (the “Closing Date”)
2. Purchaser’s Representations and Warranties. The Purchaser represents and
warrants to the Company that:
a)
Investment Purpose. Purchaser is acquiring the Note, the Warrant, and the
Conversion Shares (collectively, the “Securities”) for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution thereof in violation of
applicable securities laws; provided, however, by making the representations herein, Purchaser
does not agree, or make any representation or warranty, to hold any of the Securities for any
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minimum or other specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under the 1933 Act. The
Purchaser is acquiring the Securities hereunder in the ordinary course of its business. The
Purchaser does not presently have any agreement or understanding, directly or indirectly, with
any person to distribute any of the Securities in violation of applicable securities laws.
b)
Accredited Investor Status. The Purchaser is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).
3. Representations and Warranties of the Company. Except as disclosed by the
Company in the publicly filed SEC Documents the Company represents and warrants to the
Purchaser, as of the date hereof and the Closing Date, that:
a)
Organization and Qualification. The Company and each of its Subsidiaries
(as defined below), if any, is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated, with full power and authority
(corporate and other) to own, lease, use and operate its properties and to carry on its business as
and where now owned, leased, used, operated and conducted. The SEC Documents set forth a list
of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated The
Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and
is in good standing in every jurisdiction in which its ownership or use of property or the nature of
the business conducted by it makes such qualification necessary except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect. “Material Adverse
Effect” means any material adverse effect on the business, operations, assets, financial condition
or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be entered into in connection
herewith. “Subsidiaries” means any corporation or other organization, whether incorporated or
unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership
interest.
b)
Authorization; Enforcement. (i) The Company has all requisite corporate
power and authority to enter into and perform this Agreement, the Note, and the Warrant and to
consummate the transactions contemplated hereby and thereby and to issue the Securities, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement,
the Note, and the Warrant by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including without limitation, the issuance of the Note, and
Warrant and the issuance and reservation for issuance of the Conversion Shares, and Warrant
Shares (as defined in the Warrant) issuable upon conversion and exercise thereof) have been duly
authorized by the Company’s Board of Directors and no further consent or authorization of the
Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been
duly executed and delivered by the Company by its authorized representative, and such authorized
representative is the true and official representative with authority to sign this Agreement and the
other documents executed in connection herewith and bind the Company accordingly, and (iv)
this Agreement constitutes, and upon execution and delivery by the Company of the Note,
Warrant, and each of such instruments will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
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c)
Capitalization. As of the date hereof, the authorized capital stock of the
Company, and number of shares issued and outstanding, is as set forth in the Company’s most
recent periodic report filed with the SEC. Except as disclosed in the SEC Documents no shares
are reserved for issuance pursuant to the Company’s stock option plans. Except as disclosed in
the SEC Documents no shares are reserved for issuance pursuant to securities exercisable for, or
convertible into or exchangeable for shares of Common Stock. All of such outstanding shares of
capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-
assessable. No shares of capital stock of the Company are subject to preemptive rights or any
other similar rights of the shareholders of the Company or any liens or encumbrances imposed
through the actions or failure to act of the Company. As of the effective date of this Agreement,
and except as disclosed in the SEC Documents, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims
or other commitments or rights of any character whatsoever relating to, or securities, notes or
rights convertible into or exchangeable for any shares of capital stock of the Company or any of
its Subsidiaries, 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,
(ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there
are no anti-dilution or price adjustment provisions contained in any security issued by the
Company (or in any agreement providing rights to security holders) that will be triggered by the
issuance of any of the Securities. The Company has furnished to the Purchaser true and correct
copies of the Company’s Certificate or Articles of Incorporation as in effect on the date hereof
(“Formation Documents”), 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 of the
Company and the material rights of the holders thereof in respect thereto.
d)
Issuance of Shares. The Conversion Shares, and Warrant Shares (as defined
in the Warrant) are duly authorized and reserved for issuance and, upon conversion of the Note,
and exercise of the Warrant respectively, as the case may be, in accordance with their respective
terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of shareholders of the Company and will not impose personal liability upon
the holder thereof.
e)
Acknowledgment of Dilution. The Company’s executive officers and
directors understand the nature of the Securities being sold hereby and recognize that the issuance
of the Securities will have a potential dilutive effect on the equity holdings of other holders of the
Company’s equity or rights to receive equity of the Company. The Board of Directors of the
Company has concluded, in its good faith business judgment that the issuance of the Securities is
in the best interests of the Company. The Company specifically acknowledges that its obligation
to issue the Conversion Shares upon conversion of the Notes is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership interests of other
stockholders of the Company or parties entitled to receive equity of the Company.
f)
No Conflicts. The execution, delivery and performance of this Agreement,
the Note, and the Warrant by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the issuances and
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reservations for issuance of the Conversion Shares, and Warrant Shares) will not (i) conflict with
or result in a violation of any provision of the Formation Documents or By-laws, or (ii) violate or
conflict with, or result in a breach of any provision of, or constitute a default (or an event which
with notice or lapse of time or both could become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent
license or instrument to which the Company or any of its Subsidiaries is a party and that is not
filed as an SEC Document or other document filed with the SEC, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and state securities laws
and regulations and regulations of any self-regulatory organizations to which the Company or its
securities are subject) 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 (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as
would not, individually or in the aggregate, have a Material Adverse Effect). Neither the
Company nor any of its Subsidiaries is in violation of its Formation Documents, By-laws or other
organizational documents and neither the Company nor any of its Subsidiaries is in default (and
no event has occurred which with notice or lapse of time or both could put the Company or any
of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken
any action or failed to take any action that would 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 by which any property or assets of the Company
or any of its Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company
and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the
Purchaser owns any of the Securities, in violation of any law, ordinance or regulation of any
governmental entity. Except as specifically contemplated by this Agreement and as required
under the 1933 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,
governmental agency, regulatory agency, self-regulatory organization or stock market or any third
party in order for it to execute, deliver or perform any of its obligations under this Agreement and
the Note in accordance with the terms hereof or thereof or to issue and sell the Securities in
accordance with the terms hereof and thereof and to issue the Conversion Shares. 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 is not in violation of the listing requirements of the Over-the-Counter Bulletin Board
(the “OTCBB”), or OTCQB, and does not reasonably anticipate that the Common Stock will be
delisted by the OTCBB, or OTCQB, in the foreseeable future. The Company and its Subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.
g)
SEC Documents; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with the SEC (all of
the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such documents)
incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”).
Upon written request the Company will deliver to the Purchaser true and complete copies of the
SEC Documents, except for such exhibits and incorporated documents. As of their respective
dates, the SEC Documents complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (“1934 Act” or “Exchange Act”), and none of the
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SEC Documents, at the time they were filed with the SEC, 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 light of the circumstances under which they were made, not
misleading. None of the statements made in any such SEC Documents is, or has been, required
to be amended or updated under applicable law (except for such statements as have been amended
or updated in subsequent filings prior the date hereof). As of their respective dates, the financial
statements of the Company included in the SEC Documents 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
United States generally accepted accounting principles, consistently applied, during the periods
involved and fairly present in all material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the financial statements
of the Company included in the SEC Documents, the Company has no liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary course of business, and (ii) obligations
under contracts and commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in such financial statements, which,
individually or in the aggregate, are not material to the financial condition or operating results of
the Company. The Company is subject to the reporting requirements of the 1934 Act.
h)
Absence of Certain Changes. Except as disclosed in the SEC filings, there
has been no material adverse change and no material adverse development in the assets, liabilities,
business, properties, operations, financial condition, results of operations, prospects or 1934 Act
reporting status of the Company or any of its Subsidiaries.
i)
Absence of Litigation. Except as disclosed in the SEC filings, there is no
action, suit, claim, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company or any of its
Subsidiaries, or their officers or directors in their capacity as such, that could have a Material
Adverse Effect. The public filings contain a complete list and summary description of any pending
or, to the knowledge of the Company, threatened proceeding against or affecting the Company or
any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The
Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to
any of the foregoing.
j)
Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or
possesses the requisite licenses or rights to use all patents, patent applications, patent rights,
inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service
names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its
business as now operated (and, as presently contemplated to be operated in the future); there is
no claim or action by any person pertaining to, or proceeding pending, or to the Company’s
knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect
to any Intellectual Property necessary to enable it to conduct its business as now operated (and,
as presently contemplated to be operated in the future); to the best of the Company’s knowledge,
the Company’s or its Subsidiaries’ current and intended products, services and processes do not
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infringe on any Intellectual Property or other rights held by any person and/or entity; and the
Company is unaware of any facts or circumstances which might give rise to any of the foregoing.
The Company and each of its Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of their Intellectual Property.
k)
No Materially Adverse Contracts, 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. Neither the Company nor any of its Subsidiaries is
a party to any contract or agreement which in the judgment of the Company’s officers has or is
expected to have a Material Adverse Effect.
l)
Disclosure. No event or circumstance has occurred or exists with respect to
the Company or any of its Subsidiaries or its or their business, properties, prospects, operations
or financial conditions, which, under applicable law, rule or regulation, requires public disclosure
or announcement by the Company but which has not been so publicly announced or disclosed.
m)
Brokers. The Company hereby represents and warrants that it has not hired,
retained or dealt with any broker, finder, consultant, person, firm or corporation (“Broker”) in
connection with the negotiation, execution or delivery of this Agreement or the transactions
contemplated hereunder. The Company covenants and agrees that should any claim be made
against Purchaser for any commission or other compensation by the Broker, based upon the
Company’s engagement of such person in connection with this transaction, the Company shall
indemnify, defend and hold Purchaser harmless from and against any and all damages, expenses
(including attorneys’ fees and disbursements) and liability arising from such claim. The Company
shall pay the commission of the Broker, to the attention of the Broker, pursuant to their separate
agreement(s) between the Company and the Broker.
n)
Permits; Compliance. The Company and each of its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company
Permits”), and there is no action pending or, to the knowledge of the Company, threatened
regarding suspension or cancellation of any of the Company Permits. Neither the Company nor
any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits,
except for any such conflicts, defaults or violations which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. Since December 31, 2017, neither
the Company nor any of its Subsidiaries has received any notification with respect to possible
conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts,
defaults or violations, which conflicts, defaults or violations would not have a Material Adverse
Effect.
o)
Insurance. The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such coverage, amounts
as are prudent and customary in the businesses in which the Company is engaged, including,
but not limited to, directors and officer’s insurance coverage with coverage amounts that are at
least equal to the aggregate Purchase Price. Neither the Company nor any Subsidiary has any
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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 without a significant increase in cost.
p)
No “Shell”. As of the date of this Agreement the Company is an operating
company and, either (i) is not or has never been a “shell issuer” as defined in Rule 144(i)(2) or (ii)
at least 12 months have passed since the Company filed Form 10 Type information indicating it is
not a “shell issuer” (and supporting the claim that it is no longer a shell company), filed all
required reports for at least twelve consecutive months after the filing of the respective Form 10
information, and has therefore complied with Rule 144(i)(2).
q)
Bad Actor. No officer or director of the Company would be disqualified
under Rule 506(d) of the Securities Act as amended on the basis of being a “bad actor”.
r)
Acknowledgement
Regarding
Purchaser’s
Trading
Activity.
Notwithstanding anything in this Agreement or elsewhere to the contrary it is understood and
acknowledged by the Company that: (i) the Purchaser has not been asked by the Company to agree,
nor has any Purchaser agreed, to desist from purchasing or selling, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the Securities for any
specified term; (ii) each Purchaser shall not be deemed to have any affiliation with or control over
any arm’s length counter-party in any “derivative” transaction.
s) Xxxxxxxx-Xxxxx Act. The Company and each Subsidiary is in material compliance with all
applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 that are effective as of the date
hereof, and all applicable rules and regulations promulgated by the SEC thereunder that
are effective as of the date hereof.
4. COVENANTS.
a)
Best Efforts. The parties shall use their best efforts to satisfy timely each of
the conditions described in Section 6 and 7 of this Agreement.
b)
Form D; Blue Sky Laws. The Company agrees when applicable to timely
file a Form D with respect to the Securities as required under Regulation D and to provide a
copy thereof to the Purchaser 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 Securities for sale to the Purchaser at the applicable closing pursuant to this
Agreement under applicable securities or “blue sky” laws of the states of the United States (or
to obtain an exemption from such qualification), and shall provide evidence of any such action
so taken to the Purchaser on or prior to the Closing Date.
c)
Use of Proceeds. The Company shall use the proceeds from the sale of the
Securities for general corporate and administrative purposes.
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d)
Financial Information. Upon written request of the Purchaser, the Company
agrees to within (3) three days of the written request send or make available the following
reports filed with the SEC or OTC Markets Group to the Purchaser: a copy of its Annual Report
and its Quarterly Reports and any Supplemental Reports; (ii) copies of all press releases issued
by the Company or any of its Subsidiaries; and (iii) copies of any notices or other information
the Company makes available or gives to such shareholders. Notwithstanding the foregoing,
the Company shall not disclose any material nonpublic information to the Purchaser without its
consent unless such information is disclosed to the public prior to or promptly following such
disclosure to the Purchaser.
e)
Listing. The Company will obtain and, so long as the Purchaser owns any
of the Securities, maintain the listing and trading of its Common Stock on the OTCBB, and
OTCQB, or any equivalent replacement exchange, the NASDAQ Stock Market (“NASDAQ”),
the New York Stock Exchange (“NYSE”), or the NYSE MKT, f/k/a American Stock Exchange
(“AMEX”), and will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”)
and such exchanges, as applicable. The Company shall promptly provide to the Purchaser
copies of any notices it receives from the SEC, OTC Markets Group and any other exchanges
or quotation systems on which the Common Stock is then listed regarding the continued
eligibility of the Common Stock for listing on such exchanges and quotation systems, provided
that it shall not provide any notices constituting material nonpublic information. If at any time
while the Note is outstanding the Company fails to maintain the listing and trading and of its
Common Stock, or fails in any way to comply with the Company’s reporting/ filing obligations
such failure(s) will result in liquidated damages of fifteen thousand dollars ($15,000), being
immediately due and payable to Holder at its election in the form of cash payment or addition
to the balance of the Note.
f)
Corporate Existence. So long as the Purchaser beneficially owns any
Securities, the Company shall maintain its corporate existence and shall not sell all or
substantially all of the Company’s assets, except in the event of a merger or consolidation or
sale of all or substantially all of the Company’s assets, where the surviving or successor entity
in such transaction (i) assumes the Company’s obligations hereunder and under the agreements
and instruments entered into in connection herewith and (ii) is a publicly traded corporation
whose Common Stock is listed for trading on NASDAQ, NYSE or AMEX.
g)
No Integration. The Company shall not make any offers or sales of any
security (other than the Securities) under circumstances that would require registration of the
Securities being offered or sold hereunder under the 1933 Act or cause the offering of the
Securities to be integrated with any other offering of securities by the Company for the purpose
of any stockholder approval provision applicable to the Company or its securities.
h)
Securities Laws Disclosure; Publicity. The Company shall comply with
applicable securities laws by filing a Current Report on Form 8-K, within four (4) Trading Days
following the date hereof, disclosing all the material terms of the transactions contemplated hereby.
i)
Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by this Agreement, the Company covenants and agrees
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that neither it nor any other person acting on its behalf will provide the Purchaser or its agents or
counsel with any information that the Company believes constitutes material non-public
information, unless prior thereto the Purchaser shall have executed a written agreement regarding
the confidentiality and use of such information. The Company understands and confirms that the
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the
Company.
j)
Subsidiaries. So long as the Note remains outstanding, the Company shall
not transfer any assets or rights to any of its subsidiaries or permit any of its subsidiaries to engage
in any significant business or operations, whether such subsidiaries are currently existing or
hereafter created.
k)
Insurance. So long as the Note remains outstanding, the Company and its
Subsidiaries shall maintain in full force and effect insurance reasonably believed by the Company
to be adequate coverage (a) on all assets and activities, covering property loss or damage and loss
of income by fire or other hazards or casualty, and (b) against all liabilities, claims and risks for
which it is customary for companies similarly situated to the Company to insure, including without
limitation applicable product liability insurance, required workmen’s compensation insurance, and
other insurance covering injury or damage to persons or property, but excluding directors and
officers insurance coverage. The Company shall promptly furnish or cause to be furnished
evidence of such insurance to the Purchaser, in form and substance reasonably satisfactory to the
Purchaser
l)
ROFR. At any time while the Note is outstanding, the Company desires to
borrow funds, raise additional capital and/or issue additional promissory notes convertible into
shares of securities of the Company (a “Prospective Financing”), the Purchaser shall have the right
of first refusal to participate in the Prospective Financing, and the Company shall provide written
notice containing the terms of such Prospective Financing (the “ROFR Notice”) to the Purchaser
prior to effectuating any such transaction. The ROFR Notice shall specify all of the key terms of
the Prospective Financing, including, but not limited to, the proposed investment amount, the
proposed rate of interest, the proposed conversion price, the proposed term of the investment, the
type and number of securities to be sold and any and all other relevant terms, each as applicable.
Upon Purchaser’s receipt of the ROFR Notice, Purchaser shall have the exclusive right to
participate in such Prospective Financing(s), upon the terms specified in the ROFR Notice, by
sending written notice to the Company within seven (7) business days after Purchaser’s receipt of
the ROFR Notice. In the event Purchaser fails to exercise its right of first refusal with respect to
an ROFR Notice within the time set forth above, Purchaser shall be deemed to have waived its
right of first refusal with respect to such Prospective Financing, provided that it shall retain such
right with respect to any future Prospective Financing. Notwithstanding anything contained
herein, the Company shall not furnish any material non-public information concerning the
Company without the Purchaser’s prior written consent, and shall initially only indicate to the
Purchaser that the Company contemplates a financing. Notwithstanding anything contained
herein, in no event shall the Purchaser be entitled to purchase any securities which would cause
the sum of (1) the number of shares of Common Stock beneficially owned by the Purchaser and
its affiliates (other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Note or the unexercised or unconverted
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portion of any other security of the Company subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of directly or indirectly
purchasable under this Section, to exceed 4.9% of the outstanding shares of Common Stock (or
9.99% of the total issued Common Stock of the Company if specified by Purchaser and
accompanied with applicable documentation such as any Amendment made to this Agreement or
the Note).
m)
Future Financings: Except for sales or issuances to Company employees,
and members of the Company’s board of directors, from the date hereof until such time as the
Purchaser no longer holds any of the Securities, in the event the Company issues or sells any shares
of Common Stock or securities directly or indirectly convertible into or exercisable for Common
Stock (“Common Stock Equivalents”) or amends the transaction documents relating to any sale or
issuance of Common Stock or Common Stock Equivalents, and the Purchaser reasonably believes
that the terms and conditions thereunder are more favorable to such investors as the terms and
conditions granted under this Agreement, Note or any document provided by the Purchaser to the
Company relating to any sale or issuance of Common Stock (the “Transaction Documents”), upon
notice to the Company by such Purchaser, the Transaction Documents shall be deemed
automatically amended so as to give the Purchaser the benefit of such more favorable terms or
conditions. Promptly following a request to the Company the Company shall provide Purchaser
with all executed transaction documents relating to any such sale or issue of Common Stock or
Common Stock Equivalents. Company shall deliver acknowledgment of such automatic
amendment to the Transaction Documents to Purchaser in form and substance reasonably
satisfactory to the Purchaser (the “Acknowledgment”) within three (3) business days of
Company’s receipt of request from Purchaser (the “Deadline”), provided that Company’s failure
to timely provide the Acknowledgement shall not affect the automatic amendments contemplated
hereby. If the Acknowledgement is not delivered by the Deadline, Company shall pay to the
Purchaser $1000.00 per day in cash, for each day beyond the Deadline that the Company fails to
deliver such Acknowledgement such cash amount shall be paid to Holder by the first day of the
month following the month in which it has accrued or, at the option of the Holder, shall be added
to the principal amount of the Note, in which event interest shall accrue thereon in accordance with
the terms of the Note and such additional principal amount shall be convertible into Common
Stock in accordance with the terms of the Note.
n)
Piggyback Registration Rights. Borrower shall include on the: (i) next
registration statement Borrower files with the SEC; or (ii) on the subsequent registration statement
if such registration statement is withdrawn), or, (iii) amend a registration statement previously
filed, but not effective as of the Issue Date all shares issuable upon conversion of the Note. Failure
to do so will result in liquidated damages of fifty percent (50%) of the outstanding principal amount
of the Note, but not less than twenty-five thousand dollars ($25,000), being immediately due and
payable to Holder at its election in the form of cash payment or addition to the balance of the Note.
o)
Subsequent Financings. Notwithstanding anything contained herein, if at
any time while this Note is outstanding the Company enters into any capital raising transaction,
including without limitation an equity line transaction, a loan transaction or the sale of shares of
Common Stock or securities convertible into or exercisable or exchangeable for Common Stock,
whether or not permitted under the Transaction Documents (“Subsequent Financing”), then
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following the closing of each such Subsequent Financing the Holder in its sole and absolute
discretion may compel the Company to redeem up to the entire outstanding balance of the Note
from the gross proceeds therefrom (“Redemption Amount”), provided however (a) if the Holder
is holding other convertible notes similar to this Note whether issued prior or after the Issue Date
of this Note (collectively with this Note, the “Notes”), the Redemption Amount may be applied to
redeem any or all of the Notes specified by the Holder, (b) the Holder shall be notified in writing
of the closing of each such Subsequent Financing within one (1) day following such closing, and
(c) the Holder may elect not to exercise its right to such redemption in whole or in part, in which
case the Company may not redeem any Notes in connection with such Subsequent Financing to
the extent so rejected (for clarification, if the holder elects to reject any redemption in any instance,
such rejection shall not affect the Holder’s redemption rights hereunder in the future). Further, in
the event that the Holder demands redemption of a portion or the full balance of the Note within
the first six (6) months from Note’s Issue Date, such Redemption Amount shall subject to then
then applicable Prepayment Factor, as defined in the Note shall be applied). To the extent the
Company is obligated to redeem any portion of the Notes pursuant to this Section but fails to do
so, such default shall constitute an Event of Default under all the Notes.
p)
Additional Investment Right. Purchaser shall have the right at any time from
time to time, as of the date hereof, and until such date when the Note is no longer outstanding, to
in its sole and absolute discretion purchase an additional convertible promissory note, or additional
convertible promissory notes, from the Company for up to a principal amount equal to the amount
of the Note purchased hereunder (each a “Subsequent Note” and collectively the “Subsequent
Notes”) on the same terms and conditions as applicable to the purchase and sale of the Note
purchased on the date hereof by Purchaser, and in substantially the same form and substance as
the Note issued pursuant to this Agreement, mutatis mutandis, (each a “Subsequent Note Purchase”
and collectively “Subsequent Note Purchases”). For Purchaser to exercise such Subsequent Note
Purchase right, Purchaser shall deliver written notice, to the Company (for clarity notice sent via
electronic mail shall satisfy such written notice requirement) electing to exercise such Subsequent
Note Purchase right, which notice shall specify the principal amount of the Additional Note to be
purchased by such Purchaser (“Subsequent Note Amount”) and the date on which such purchase
and sale shall occur (“Subsequent Note Closing”), which Subsequent Note Closing shall occur
within five (5) days following such notice by such Purchaser, or such other date mutually agreed
upon by the Purchaser and Company. The terms and conditions of any Subsequent Note Purchase
shall be identical to the terms and conditions set forth in this Agreement applicable to the sale of
the Note on the date hereof, including without limitation each Subsequent Note will be in the form
of the Note issued hereto, provided that the Maturity Date thereunder shall be on ninth (9
th) month
from the Subsequent Note’s issue date. Further, if a warrant to purchase Company’s common stock
was issued pursuant to this Agreement then Purchaser shall receive a warrant in the form as the
same form and substance as the warrant issued pursuant to this Agreement (“Subsequent
Warrant”), provided that the Termination Date of the Additional Warrant shall be the fifth (5th)
anniversary from the issue date of the Subsequent Warrant. On or prior to any Subsequent Note
Closing(s), the Company and the Purchaser shall, upon Purchaser’s request, execute and deliver a
new securities purchase agreement with respect to the Subsequent Note Purchase(s) in the same
form and substance as this Agreement (each a “Subsequent Purchase Agreement and collectively
“Subsequent Purchase Agreements”), mutatis mutandis, and all the representations, warrants,
covenants, indemnities and conditions set forth herein shall be included and incorporated with
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respect to such Note Purchase, mutatis mutandis. Purchaser may assign its Subsequent Note
Purchase right hereunder to any affiliate of such Purchaser.
q)
Subsequent Financings. Notwithstanding anything contained herein if at
any time while this Note is outstanding the Company enters into any capital raising transaction,
including without limitation an equity line transaction, a loan transaction or the sale of shares of
Common Stock or securities convertible into or exercisable or exchangeable for Common Stock,
whether or not permitted under the Transaction Documents (“Subsequent Financing”), no more
than five (5) Trading Days following the closing of each such Subsequent Financing in Holder’s
sole and absolute discretion at least 50% of the gross proceeds therefrom (“Redemption Amount”)
shall be paid to the Holder to redeem a portion of the Note’s balance, provided however (a) if the
Holder is holding other convertible notes similar to this Note issued by the Company (collectively
with this Note, the “Notes”), the Redemption Amount shall be applied to redeem the Note specified
by the Holder, (b) the Holder shall be notified in writing of the closing of each such Subsequent
Financing within one (1) day following such closing, and (c) the Holder may elect to reject any
such redemption in whole or in part, in which case the Company may not redeem any Notes in
connection with such Subsequent Financing to the extent so rejected (for clarification, if the Holder
elects to reject any redemption in any instance, such rejection shall not affect the Holder’s
redemption rights hereunder in the future). To the extent the Company is obligated to redeem any
portion of the Notes pursuant to this Section but fails to do so, such default shall constitute an
Event of Default under all the Notes.
5. Transfer Agent Instructions. Upon receipt of a duly executed Notice of Conversion,
the Company shall issue irrevocable instructions to its transfer agent to issue certificates,
registered in the name of the Purchaser or its nominee, for the Conversion Shares in such
amounts as specified from time to time by the Purchaser to the Company upon conversion of
the Note, or any part thereof, in accordance with the terms thereof (the “Irrevocable Transfer
Agent Instructions”). In the event that the Company proposes to replace its transfer agent, the
Company shall provide, prior to the effective date of such replacement, a fully executed
Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this
Agreement and the Securities (including but not limited to the provision to irrevocably reserve
shares of Common Stock in the Reserved Amount (as defined in the Note)) signed by the
successor transfer agent (to the Company) and the Company. Prior to registration of the
Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold
pursuant to Rule 144 without any restriction as to the number of Securities as of a particular
date that can then be immediately sold, all such certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer
instructions to give effect to hereof (in the case of the Conversion Shares, prior to registration
of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may
be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a
particular date that can then be immediately sold), will be given by the Company to its transfer
agent and that the Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct
its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring
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SPA – PRLX, T1, 2019-02-27
(or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be
issued to the Purchaser upon conversion of or otherwise pursuant to the Note as and when
required by the Note and this Agreement; and (iii) it will not fail to remove (or direct its transfer
agent not to remove or impair, delay, and/or hinder its transfer agent from removing) any
restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any
certificate for any Conversion Shares issued to the Purchaser upon conversion of or otherwise
pursuant to the Note as and when required by the Note and this Agreement. Nothing in this
Section shall affect in any way the Purchaser’s obligations and agreement set forth in Section
2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale
of the Securities. If the Purchaser provides the Company with (i) an opinion of counsel in form,
substance and scope customary for opinions in comparable transactions, to the effect that a
public sale or transfer of such Securities may be made without registration under the 1933 Act
and such sale or transfer is effected or (ii) the Purchaser provides reasonable assurances that the
Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the
case of the Conversion Shares, promptly instruct its transfer agent to issue one or more
certificates, free from restrictive legend, in such name and in such denominations as specified
by the Purchaser. The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Purchaser, by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at
law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this Section, that
the Purchaser shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being required.
6. Injunction Posting of Bond. In the event the Purchaser shall elect to convert the
Note or any parts thereof, the Company may not refuse conversion or exercise based on any
claim that Purchaser or anyone associated or affiliated with Purchaser has been engaged in any
violation of law, or for any other reason. In connection with any injunction sought or attempted
by the Company, the Company shall be required to post a bond at least equal to the greater of
either: (i) the outstanding principal amount of the Note; and (ii) the market value of the
Conversion Shares sought to be converted, exercised or issued, based on the sale price per share
of Common Stock on the principal market on which it is traded.
7. Delivery of Unlegended Shares.
a)
Within three (3) business days (such third business day being the
“Unlegended Shares Delivery Date”) after the business day on which the Company has
received (i) a notice that Conversion Shares, or any other Common Stock held by the Purchaser
has been sold pursuant to a registration statement or Rule 144 under the 1933 Act, (ii) a
representation that the prospectus delivery requirements, or the requirements of Rule 144, as
applicable and if required, have been satisfied, (iii) the original share certificates representing
the shares of Common Stock that have been sold, and (iv) in the case of sales under Rule 144,
customary representation letters of the Purchaser and, if required, Purchaser’s broker regarding
compliance with the requirements of Rule 144, the Company at its expense, (y) shall deliver,
and shall cause legal counsel selected by the Purchaser to deliver to its transfer agent (with
copies to Purchaser) an appropriate instruction and opinion of such counsel, directing the
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SPA – PRLX, T1, 2019-02-27
delivery of shares of Common Stock without any legends including the legend set forth in
Section 4(h) above (the “Unlegended Shares”); and (z) cause the transmission of the
certificates representing the Unlegended Shares together with a legended certificate
representing the balance of the submitted Common Stock certificate, if any, to the Purchaser at
the address specified in the notice of sale, via express courier, by electronic transfer or otherwise
on or before the Unlegended Shares Delivery Date.
b)
The Company understands that a delay in the delivery of the Unlegended
Shares later than the Unlegended Shares Delivery Date could result in economic loss to the
Purchaser. As compensation to Purchaser for such loss, the Company agrees to pay late
payment fees (as liquidated damages and not as a penalty) to the Purchaser for late delivery of
Unlegended Shares in the amount of $250.00 per business day after the Unlegended Shares
Delivery Date. If during any three hundred and sixty (360) day period, the Company fails to
deliver Unlegended Shares as required by this Section for an aggregate of thirty (30) days, then
Purchaser or assignee holding Securities subject to such default may, at its option, require the
Company to redeem all or any portion of the shares subject to such default at a price per share
equal to the greater of (i) 200% of the most recent closing price of the Common Stock or (ii)
the parity value of the Default Sum to be paid (as defined in Section 3.16 of the Note)
(“Unlegended Redemption Amount”). The Company shall pay any payments incurred under
this Section in immediately available funds upon demand.
8. Conditions to the Company’s Obligation to Sell. The obligation of the Company
hereunder to issue and sell the Note to the Purchaser at the Closing is subject to the satisfaction,
at or before the Closing Date 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)
The Purchaser shall have executed this Agreement and delivered the same
to the Company.
b)
The Purchaser shall have delivered the Purchase Price to the Company.
c)
The representations and warranties of the Purchaser shall be true and correct
in all material respects 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
Purchaser 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 Purchaser at or prior to the Closing Date.
d)
No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in any court or
governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
9. Conditions to The Purchaser’s Obligation to Purchase. The obligation of the
Purchaser hereunder to purchase the Note at the Closing is subject to the satisfaction, at or
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SPA – PRLX, T1, 2019-02-27
before the Closing Date of each of the following conditions, provided that these conditions are
for the Purchaser’s sole benefit and may be waived by the Purchaser at any time in its sole
discretion:
a)
The Company shall have executed this Agreement and delivered the same
to the Purchaser.
b)
The Company shall have delivered to the Purchaser the duly executed Note
(in such denominations as the Purchaser shall request) in accordance with Section 1 above.
c)
The Irrevocable Transfer Agent Instructions, in form and substance
satisfactory to the Purchaser, shall have been delivered to and acknowledged in writing by the
Company’s Transfer Agent (a copy of which written acknowledgment shall be provided to
Purchaser prior to Closing).
d)
The representations and warranties of the Company shall be true and correct
in all material respects as of the date when made and as of the Closing Date as though made at
such 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. The Purchaser shall have
received a certificate or certificates reasonably requested by the Purchaser including, but not
limited to certificates with respect to the Company’s Formation Documents, By-laws, and
Board of Directors’ resolutions relating to the transactions contemplated hereby.
e)
No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in any court or
governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
f)
No event shall have occurred which could reasonably be expected to have
a Material Adverse Effect on the Company including but not limited to a change in the 1934
Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act
reporting obligations.
g)
The Conversion Shares shall have been authorized for quotation on the
OTCBB, OTCQB, and OTC Pink and trading of the Common Stock on the OTCBB, OTCQB,
and OTC Pink shall not have been suspended by the SEC or the OTC Markets Group.
10. Governing Law; Miscellaneous.
a)
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to principles of conflicts of laws
thereof or any other State. Any action brought by any party against any other party hereto
concerning the transactions contemplated by this Agreement shall be brought only in the state
courts of New York or in the federal courts located in the state and county of New York. The
parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of
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SPA – PRLX, T1, 2019-02-27
any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. The parties executing this Agreement and other
agreements referred to herein or delivered in connection herewith on behalf of the
Company agree to submit to the in personam jurisdiction of such courts and hereby
irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the
other party its reasonable attorney’s fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to
the extent that it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision of any agreement. Each
party hereto hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Agreement or any other
transaction document contemplated hereby by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by law.
b)
Removal of Restrictive Legends. In the event that Purchaser has any shares
of the Company’s Common Stock bearing any restrictive legends, and Purchaser, through its
counsel or other representatives, submits to the Transfer Agent any such shares for the removal
of the restrictive legends thereon in connection with a sale of such shares pursuant
to any exemption to the registration requirements under the Securities Act, and the Company
and or its counsel refuses or fails for any reason (except to the extent that such refusal or failure
is based solely on applicable law that would prevent the removal of such restrictive legends) to
render an opinion of counsel or any other documents or certificates required for the removal of
the restrictive legends, then the Company hereby agrees and acknowledges that the Purchaser
is hereby irrevocably and expressly authorized to have counsel to the Purchaser render any and
all opinions and other certificates or instruments which may be required for purposes of
removing such restrictive legends, and the Company hereby irrevocably authorizes and directs
the Transfer Agent to, without any further confirmation or instructions from the Company, issue
any such shares without restrictive legends as instructed by the Purchaser, and surrender to a
common carrier for overnight delivery to the address as specified by the Purchaser, certificates,
registered in the name of the Purchaser or its designees, representing the shares of Common
Stock to which the Purchaser is entitled, without any restrictive legends and otherwise freely
transferable on the books and records of the Company.
c)
Filing Requirements. From the date of this Agreement until the Notes are
no longer outstanding, the Company will timely and voluntarily comply with all reporting
requirements that are applicable to an issuer with a class of shares registered pursuant to Section
12(g) of the 1934 Act, whether or not the Company is then subject to such reporting
requirements, and comply with all requirements related to any registration statement filed
pursuant to this Agreement. The Company will use reasonable efforts not to take any action or
file any document (whether or not permitted by the 1933 Act or the 1934 Act or the rules
thereunder) to terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under said acts until the Notes are no longer outstanding. The Company
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SPA – PRLX, T1, 2019-02-27
will maintain the quotation or listing of its Common Stock on the OTCBB, OTCQB, NYSE, or
NASDAQ Stock Market (whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock (the “Principal Market”), and will comply in all
respects with the Company’s reporting, filing and other obligations under the bylaws or rules
of the Principal Market, as applicable. The Company will provide Purchaser with copies of all
notices it receives notifying the Company of the threatened and actual delisting of the Common
Stock from any Principal Market. As of the date of this Agreement and the Closing Date, the
OTCQB, is the Principal Market. Until the Note is no longer outstanding, the Company will
continue the listing or quotation of the Common Stock on a Principal Market and will comply
in all respects with the Company’s reporting, filing and other obligations under the bylaws or
rules of the Principal Market.
d)
Fees and Expenses. On or prior to the Closing, the Company shall pay or
reimburse to Purchaser a non-refundable, non-accountable sum equal to $4,440.00 as and for
the fees, costs and expenses (including without limitation legal fees and disbursements and due
diligence and administrative expenses) incurred by the Purchaser in connection with the
Purchaser’s due diligence and negotiation, preparation and execution of the Transaction
Documents and consummation of the Transactions. The Purchaser may withhold and offset the
balance of such amount from the payment of its Purchase Price otherwise payable hereunder at
Closing, which offset shall constitute partial payment of such Purchase Price in an amount equal
to such offset. Except as expressly set forth in this Agreement or the Note to the contrary, 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 transfer
agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any
Securities to the Purchaser.
e)
Usury. To the extent it may lawfully do so, the Company hereby agrees not
to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to
be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any
time hereafter in force, in connection with any claim, action or proceeding that may be brought
by the Purchaser in order to enforce any right or remedy under the Note. Notwithstanding any
provision to the contrary contained in herein or under the Note, it is expressly agreed and
provided that the total liability of the Company under the Note for payments in the nature of
interest shall not exceed the maximum lawful rate authorized under applicable law (the
“Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the nature of interest
that the Company may be obligated to pay under the Note or herein exceed such Maximum
Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable
to the Note is increased or decreased by statute or any official governmental action subsequent
to the date hereof, the new maximum contract rate of interest allowed by law will be the
Maximum Rate applicable to the Note from the effective date forward, unless such application
is precluded by applicable law. If under any circumstances whatsoever, interest in excess of
the Maximum Rate is paid by the Company to the Purchaser with respect to indebtedness
evidenced by the Note, such excess shall be applied by the Purchaser to the unpaid principal
balance of any such indebtedness or be refunded to the Company, the manner of handling such
excess to be at the Purchaser’s election.
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SPA – XXXX, X0, 0000-00-00
f)
Headings. The headings of this Agreement are for convenience of reference
only and shall not form part of, or affect the interpretation of, this Agreement.
g)
Severability. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision hereof.
h)
Entire Agreement; Amendments. 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 the Purchaser 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 Purchaser.
i)
Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be: (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with
charges prepaid, or (iv) transmitted by hand delivery, telegram, email or facsimile, addressed
as set forth below or to such other address as such party shall have specified most recently by
written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by email or facsimile with accurate
confirmation generated by the transmitting facsimile machine or computer, at the address, email
address or facsimile 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) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications shall be:
Purchaser:
EMA Financial, LLC
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
xxxxxxxx@xxxxxx.xxx
Company:
Parallax Health Sciences, Inc.
0000 Xxxxx Xxx, Xxxxx X
Xxxxx Xxxxxx, XX 00000
Attn: Xxxx X. Arena, CEO
Email: ________________
Fax: ________________
Each party shall provide notice to the other party of any change in address.
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SPA – PRLX, T1, 2019-02-27
j)
Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns. Neither the Company nor the
Purchaser shall assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the
Purchaser may assign its rights hereunder to any person that purchases Securities in a private
transaction from the Purchaser or to any of its “affiliates,” as that term is defined under the 1934
Act, without the consent of the Company.
k)
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.
l)
Survival. The representations and warranties of the Company and the
agreements and covenants set forth in this Agreement shall survive the Closing hereunder
notwithstanding any due diligence investigation conducted by or on behalf of the Purchaser.
The Company agrees to indemnify and hold harmless the Purchaser and all their officers,
directors, employees and agents for loss or damage arising as a result of or related to any breach
or alleged breach by the Purchaser of any of its representations, warranties and covenants set
forth in this Agreement or any of its covenants and obligations under this Agreement, including
advancement of expenses as they are incurred.
m)
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.
n)
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.
o)
Remedies. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Purchaser 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 Agreement will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this Agreement,
that the Purchaser shall be entitled, in addition to all other available remedies at law or in equity,
and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Agreement and to enforce specifically the terms and
provisions hereof, without the necessity of showing economic loss and without any bond or
other security being required.
p)
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be an original
and all of which together shall be deemed to be one and the same agreement. Any signature
19
SPA – PRLX, T1, 2019-02-27
transmitted by facsimile, e-mail, or other electronic means shall be deemed to be an original
signature.
[Remainder of Page Intentionally Left Blank]
20
SPA – PRLX, T1, 2019-02-27
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused this
Agreement to be duly executed as of the date first above written.
PARALLAX HEALTH SCIENCES, INC.
By:
Name: Xxxx X. Arena
Title: CEO
EMA FINANCIAL, LLC
By:
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
GUARANTY
Each of the undersigned subsidiaries of the Company jointly and severally, absolutely,
unconditionally and irrevocably, guarantees to the Purchaser and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and performance by the
Company when due (whether at the stated maturity, by acceleration or otherwise) of all amounts
due under, and all other obligations under, the Note. Each such subsidiary’s liability under this
Guaranty shall be unlimited, open and continuous for so long as this Guaranty remains in force.
PARALLAX HEALTH MANAGEMENT, PARALLAX COMMUNICATIONS,
INC.
INC.
By:
By:
Print Name:
Print Name:
Title:
Title:
PARALLAX BEHAVIORAL HEALTH, INC. PARALAX DIAGNOSTICS, INC.
By:
By:
Print Name:
Print Name:
Title:
Title:
ROXSAN PHARMACY, INC
By:
Print Name:
Title:
21
SPA – XXXX, X0, 0000-00-00
