SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of May 5,
2006, is entered into by and among XXX XXXXX CORP., a Nevada 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"); and
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 (i) up to $1,000,000 (the
"Purchase Price") principal amount of unsecured Convertible Debentures (the
"Convertible Debentures"), which shall become convertible into units ("Units")
of the Company's securities. Each Unit shall consist of one share of the
Company's common stock, par value $0.001 (the "Common Stock") (as converted, the
"Conversion Shares") and one common stock purchase warrant ("Warrants"). The
total Purchase Price shall be allocated among the Buyer(s) in the respective
amounts set forth opposite each Buyers name on Schedule I (the "Subscription
Amount"); and
WHEREAS, the Company is in the process of preparing an Information
Statement (the "Information Statement") for filing with the Securities and
Exchange Commission (the "SEC"). Upon the clearance of the Information Statement
by the SEC, the Company intends to seek the consent of its shareholders to amend
(the "Amendment") its Articles of Incorporation to, among other things, change
its name to Blacksands Petroleum Inc. and to increase its authorized
capitalization to 300,000,000 shares of Common Stock; and
WHEREAS, upon the filing of the Amendment with the Secretary of State of
the State of Nevada (the date of such filing being the "Effective Date"), the
Company intends to effect a 30 for one stock split in the form of a stock
dividend (the "Stock Split"); and
WHEREAS, following the Effective Date and the Stock Split the Company will
conduct a private placement offering (the "PPO") of its Units, and
WHEREAS, the Convertible Debentures shall be automatically converted into
Units simultaneously with the closing of the PPO; and
WHEREAS, the aggregate proceeds of the sale of the Convertible Debentures
shall be held in escrow pursuant to the terms of an escrow agreement
substantially in the form of the Escrow Agreement among the Company, the
Buyer(s) and the Escrow Agent (as defined below) attached hereto as Exhibit A
(the "Escrow Agreement") until the closing of the PPO.
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 Closing (as defined
herein below) and the Company agrees to sell and issue to each Buyer, severally
and not jointly, at Closing, Convertible Debentures in amounts set forth
opposite each Buyer's name on Schedule I hereto. Upon execution hereof by a
Buyer, the Buyer shall wire transfer the Subscription Amount set forth opposite
his name on Schedule I in same-day funds or a check payable to "Gottbetter &
Partners, LLP, as Escrow Agent for Xxx Xxxxx Corp.", which Subscription Amount
shall be held in escrow pursuant to the terms of the Escrow Agreement and
disbursed in accordance therewith.
(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
or before 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 7 and 8 below (or such later or earlier date as is mutually
agreed to by the Company and the Buyer(s)) (the "Closing Date"). The Closing
shall occur on the Closing Date at the offices of Gottbetter & Partners, LLP,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place as is mutually
agreed to by the Company and the Buyer(s)).
(c) Escrow Arrangements; Form of Payment. Upon execution
hereof by Buyer and pending the Closing, the Purchase Price shall be deposited
in a non-interest bearing escrow account with Gottbetter & Partners, LLP as
escrow agent (the "Escrow Agent"), pursuant to the terms of the Escrow
Agreement. Subject to the satisfaction of the terms and conditions of this
Agreement, from and after the Closing Date, (i) the Escrow Agent shall deliver
to the Company in accordance with the terms of the Escrow Agreement the Purchase
Price, pursuant to instructions received from time to time by the Chief
Executive Officer of the Company, and (ii) the Company shall deliver to the
Buyer(s), the Convertible Debenture, 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, the Warrants and/or Warrant 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, the Warrants and the
Warrant Shares at any time in accordance with or pursuant to an effective
registration statement covering such Conversion Shares, the Warrants and the
Warrant Shares or an available exemption under the Securities Act. The Investor
agrees not to sell, hypothecate or otherwise transfer the Investor's securities
unless the securities are registered under the Federal and applicable state
securities laws or unless, in the opinion of counsel satisfactory to the
Company, an exemption from such law is available.
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(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 underlying Units, 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 upon conversion the underlying Units 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.
(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, the Warrants, the Warrant Shares or the Conversion
Shares, or the fairness or suitability of the investment in the Convertible
Debentures, the Warrants, the Warrant Shares or the Conversion Shares, nor have
such authorities passed upon or endorsed the merits of the offering of the
Convertible Debentures, the Warrants, the Warrant Shares or the Conversion
Shares.
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(f) Transfer or Resale. Each Buyer understands that: (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 and the Warrant Shares to the extent specifically set forth
under this Agreement.
(g) Legends. Each Buyer understands that the certificates or
other instruments representing the Convertible Debentures, the Warrants, the
Warrant Shares 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 three (3)
business days shall issue a certificate without such legend to the holder of the
Warrants, Warrant Shares and Conversion Shares upon which it is stamped, if,
unless otherwise required by state securities laws, (i) the Buyer or its broker
make the necessary representations and warranties to the transfer agent for the
Common Stock that it has complied with the prospectus delivery requirements in
connection with a sale transaction, provided the Convertible Debentures,
Warrants, Warrant Shares and 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 satisfactory to the Company,
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 Warrants, Warrant Shares and 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.
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(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; (ii) all due diligence
and other information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; and (iii) it has received 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 a Buyer 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.
(l) No Group Participation. Each Buyer and its affiliates is
not a member of any group, nor is any Buyer acting in concert with any other
person, including any other Buyer, with respect to its acquisition of the
Convertible Debentures, Warrants, the Warrant Shares or Conversion Shares.
(m) Each Buyer understands, acknowledges and agrees that the
Conversion Shares and the Warrant Shares are "restricted securities" within the
meaning of Rule 144 promulgated under the Act. Each Buyer further understands,
acknowledges and agrees that (a) such shares can and will only be resold by the
Buyer pursuant to (i) an effective registration statement under the Act where
the prospectus delivery requirements are complied with or (ii) under an
applicable exemption from registration under the Act, and (b) it will not sell
or otherwise dispose of or transfer the Conversion Shares or the Warrant Shares
or any interest therein in a transaction that is part of a plan or scheme to
avoid the registration requirements of the Act.
(n) Each Buyer understands that the Company, its officers,
directors and agents are relying on the representations of the Buyers set forth
in this Article 2 in order to determine compliance with applicable securities
laws in connection with the sale and issuance of the shares to the Buyer.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that:
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(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, as
defined below.
(b) Authorization, Enforcement, Compliance with Other
Instruments. (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement and the Escrow Agreement and all other
documents necessary or desirable to effect the transactions contemplated hereby
(collectively the "Transaction Documents") and to issue the Convertible
Debentures, the Warrants, the Warrant Shares 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 Warrants, the Warrant Shares and the
Conversion Shares and the reservation for issuance and the issuance of the
Conversion Shares and the Warrant 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.
(c) Capitalization. The authorized capital stock of the
Company consists of 75,000,000 shares of Common Stock. As of the Closing Date
hereof, the Company has 2,100,000 shares of Common Stock issued and outstanding
and 0 shares of preferred stock outstanding. All of such outstanding shares have
been duly authorized, validly issued and are fully paid and nonassessable. The
Company has furnished to the Buyer true and correct copies of the Company's
Certificate of Incorporation, as amended and as in effect on the date hereof
(the "Certificate 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 and the Warrant
Shares have been duly authorized and reserved for issuance, based on the initial
conversion price. Upon conversion or exercise in accordance with the Transaction
Documents, the Conversion Shares and the Warrant Shares will be duly issued,
fully paid and nonassessable.
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(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 (the "OTC") 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 except for those which
could not reasonably be expected to have a material adverse effect on the
assets, business, condition (financial or otherwise), results of operations or
future prospects of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"). Neither the Company nor its subsidiaries is in
violation of any term of or in default under its Certificate 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 Escrow
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) Financial Statements. As of their respective dates, the
financial statements of the Company included in the Company's public filings
(the "SEC Filings") with the SEC (the "Financial Statements") for the two most
recently completed fiscal years and any subsequent interim period 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 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.
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(g) 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) 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 (ii) have a Material Adverse Effect.
(h) 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) in connection with the offer or sale of the Convertible
Debentures, the Warrants, the Warrant Shares or the Conversion Shares.
(i) 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, the Warrants, the Warrant Shares or the Conversion
Shares under the Securities Act or cause this offering of the Convertible
Debentures, the Warrants, the Warrant Shares or the Conversion Shares to be
integrated with prior offerings by the Company for purposes of the Securities
Act.
(j) Employee Relations. The Company has no employees.
(k) Intellectual Property Rights. The Company has no
proprietary intellectual property.
4. COVENANTS.
(a) Best Efforts. Each party shall use its best efforts timely
to satisfy each of the conditions to be satisfied by it as provided in Sections
5 and 6 of this Agreement.
(b) Reservation of Shares. The Company shall take all action
reasonably necessary to at all times have authorized, and reserved for the
purpose of issuance, that number of shares of Common Stock equal to equal to the
sum of (i) the number of shares of Common Stock into which the Convertible
Debentures are convertible from time to time based upon a conversion price (the
"Conversion Price") of $1.00 per Unit, plus (ii) the number of shares of Common
Stock for which the Warrants are exercisable from time to time based upon an
exercise price (the "Exercise Price") per Warrant of $3.00 per share.
(c) Listings or Quotation. The Company shall use its best
efforts to maintain the listing or quotation of its Common Stock upon the OTCBB.
(d) Corporate Existence. 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 of 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(i) will thereafter
be applicable to the Convertible Debentures. The provisions of this Section 4(g)
shall be inapplicable with respect to any Orginizational Change effected in
connection with the Merger.
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(e) Resales Absent Effective Registration Statement. Each of
the Buyers understand and acknowledge that (i) this Agreement and the agreements
contemplated hereby may require the Company to issue and deliver Conversion
Shares or Warrant Shares to the Buyers with legend restricting their
transferability under the Securities Act, and (ii) it is aware that resales of
such Conversion Shares or Warrant Shares may not be made unless, at the time of
resale, there is an effective registration statement under the Securities Act
covering such Buyer's resale(s) or an applicable exemption from registration.
5. 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 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) Each Buyer shall have executed the Transaction Documents
and delivered them to the Company.
(b) The Buyer(s) shall have delivered to the Escrow Agent the
Purchase Price for Convertible Debentures in respective amounts as set forth
next to each Buyer as outlined on Schedule I attached hereto and the Escrow
Agent shall have delivered the net proceeds to the Company 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)
contained in this Agreement 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 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 Date.
6. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
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).
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(ii) The representations and warranties of the Company
contained in this Agreement 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.
(iii) 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 and the Warrants in the
respective numbers set forth opposite each Buyer(s) name on Schedule I attached
hereto.
(iv) Subject to the effectiveness of the Amendment, 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, sufficient shares of Common Stock to effect the conversion of all of
the Convertible Debentures' and the exercise of all Warrants.
7. INDEMNIFICATION.
(a) In consideration of the Buyer's execution and delivery of this
Agreement and acquiring the Convertible Debentures, the Warrants 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, the Warrants 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 material
misrepresentation or material breach of any representation or warranty made by
the Company in the Transaction Documents, (b) any material breach of any
covenant, agreement or obligation of the Company contained in the Transaction
Documents, 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 Transaction Document
executed pursuant hereto by any of the Indemnities. 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.
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(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 Company
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, or any other Transaction Document executed by the
Buyer, (b) any breach of any covenant, agreement or obligation of the Buyer(s)
contained in this Agreement, or any other Transaction Document 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 the Transaction Docuemtns by any of the Buyers. 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.
8. GOVERNING LAW: MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without regard
to the principles of conflict of laws. The parties further agree that any action
between them shall be heard exclusively in federal or state court sitting in the
New York County, New York, and expressly consent to the jurisdiction and venue
of the Supreme Court of New York, sitting in New York County and the United
States District Court for the Southern District of New York 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.
11
(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) upon receipt when 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: Xxx Xxxxx Corp.
x/x Xxxxxx X. Xxxxxxxxx
Xxxxx 000, 000 Xxxxx Xxxxx Xxxx Xxxxx
Xxxxxxx, X.X. X0X 0X0
Telephone: (000) 000-0000
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. 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 8, and the indemnification provisions set forth in
Section 7, 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).
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(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) 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.
(m) Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Buyer and
the Company will be entitled to specific performance under the Agreement. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agree to waive in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.
[REMAINDER PAGE INTENTIONALLY LEFT BLANK]
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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:
XXX XXXXX CORP.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
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SCHEDULE I
SCHEDULE OF BUYERS
ADDRESS/FACSIMILE AMOUNT OF
NAME SIGNATURE NUMBER OF BUYER SUBSCRIPTION
/s/ Xxxxx Xxxxxx $500,000
----------------
Xxxxx Xxxxxx
By: /s/ Xxxxx Xxxxxxx $500,000
-----------------
Xxxxx Xxxxxxx
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