SECURITIES ISSUANCE AGREEMENT
THIS
SECURITIES ISSUANCE AGREEMENT is made on the 23rd day
of April 2009, by and among Cellynx Group, Inc., a Nevada corporation (the
“Company”), Dollardex
Group Corp., a company organized under the laws of Panama or its assigns,
(“Investor”), Xxxxxx
Xxxxxxxx, a natural person (“Xxxxxxxx”), Xxxxx Xxxxxx, a
natural person (“Risheq”), and for purposes of
Section 1.3(c) only, Xxxxxx Xxx (“Ash”), a natural person, and
Xxxx Xxxxxxx (“Xxxxxxx”), a natural
person.
THE
PARTIES HEREBY AGREE AS FOLLOWS:
1. Securities
Issuance; Separation.
1.1 Sale of
Securities.
(a) Subject to the terms and conditions of
this Agreement, the Investor agrees, to purchase at the Closing or pursuant to
Section 1.3 and the Company agrees to sell and
issue to the Investor at the Closing or pursuant to Section 1.3, that number of shares of the Company’s
common stock (“Common
Stock” or “Shares”) and warrants to purchase that number
of Shares at $0.10 per share (“Warrants” and together with the Shares, the
“Securities”), set forth opposite the Investor’s
name on Schedule A hereto for the purchase price set forth
thereon. The Investor shall purchase an aggregate of 2,785,000 shares
of common stock and 2,785,000 warrants for an aggregate purchase price of
$278,500.
1.2 Closing.
(a) Closings. The purchase and sale of
the Securities shall be made through several closings.
(b) First
Closing. The first closing in the
aggregate amount of at least $40,000 shall take place at 10:00 am on or prior to
April 23, 2009 at the offices of Xxxxxxxxxx & Xxxxx LLP at 00000 Xxxxxxxx
Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx or at such other time and place the Company
and Investors mutually agree upon orally or in writing (which time and place are
designated as the “First Closing”). The Investor has already
advanced $78,500 to the Company. At the First Closing, the Company
shall deliver to Investors certificates representing the Securities that such
Investor is purchasing.
(c) Subsequent
Closings. Subject to the terms and
conditions of this Agreement, at each subsequent closing (“Subsequent
Closing,” and along with
the First Closing, generically referred to as, a “Closing”), the Company will sell to the
Investor and the Investor will purchase from the Company additional
Securities in installments. Each Subsequent Closing shall
take place at 10:00 a.m. local time on or about the business day on the
conditions in Section 4 applicable to such Subsequent Closing have been
fulfilled or waived or at such other time and date as the Company and the
Investor shall mutually agree. Each Subsequent Closing shall occur in
accordance with Schedule
A, subject to a 10-day grace period for
the purchase of the Securities if requested by Investor.
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1.3 Separation.
(a) Xxxxxxxx. Upon execution of this
Agreement, Xxxxxxxx hereby resigns as Executive Chairman and director of the
Company (and any other officer positions at the Company) and hereby cancels all
options to purchase Shares that were originally granted by the Company to
him. In exchange for cancelling the options and as payment in full
for all services rendered to the Company in any capacity, the Company shall
issue Xxxxxxxx 2,000,000 Shares which shall be delivered after Xxxxxxxx has
tendered his option to the Company. Xxxxxxxx agrees that these 2.0
million Shares shall be subject to the Lock-up Agreement executed by Xxxxxxxx
and the Company on or about June 2008.
(b) Risheq. Upon execution of this
Agreement, Risheq hereby resigns any and all officer positions of the Company
that he holds but will remain as a director and hereby cancels all
options to purchase Shares that were originally granted to him. In
exchange for cancelling the options and for payment in full for all services
rendered to the Company in any capacity, the Company shall issue Risheq
1,500,000 Shares. Risheq agrees that these 1.5 million Shares shall
be subject to the Lock-up Agreement executed by Risheq and the Company on or
about June 2008. (Risheq, Xxxxxxxx and Investor shall generically be
referred to as, “Holders”).
(c) Replacement
Personnel. Following execution of this
Agreement, Ash, Risheq and Xxxxxxx agree to appoint Xxx Xxxxxx as a director of
the Company. Ash, Risheq and Xxxxxxx acknowledge that they have
discussed Xx. Xxxxxx’x directorship appointment and reviewed his employment
history, education and other relevant background and believe such an appointment
would be in the best interests of the Company’s shareholders. Within
30 days of this Agreement, Investor shall propose another designee to serve on
the Company’s Board of Directors. Ash, Risheq and Xxxxxxx agree not
to unreasonably withhold their support and approval of such
designee. Notwithstanding the foregoing, Ash, Risheq and Xxxxxxx may
withhold their appointment of Xxxxxx or any Investor designee as a director if
they in their good faith believe that such appointment would not be in the best
interest of the Company and its shareholders.
2. Representations
and Warranties of the Company. As of the
date of this Agreement, or such other date as set forth therein, the Company
hereby represents and warrants to the Investor that:
2.1 Organization,
Good Standing and Qualification.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of California. The Company is
duly qualified to transact business and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on its
business or properties.
2.2 Capitalization
and Voting Rights. As
of December 31, 2008, the number of authorized Shares and the number of
outstanding Shares as of such date, were described in the Company’s latest Form
10-Q filed with the Securities and Exchange Commission (“Form 10-Q”).
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(a) The outstanding shares of Common Stock
are all duly and validly authorized and issued, fully paid and nonassessable,
and were issued in compliance with all applicable state and federal laws
concerning the issuance of securities.
(b) There are no options, warrants, rights
(including conversion or preemptive rights) or agreements for the purchase or
acquisition from the Company of any shares of its capital stock other than as
reported in the Company’s Form 10-Q or other filings with the Securities and
Exchange Commission (“SEC”). The Company has reserved
such number of shares of its Common Stock for purchase upon exercise of options
to be granted in the future under the Company’s stock option
plan. The Company is not a party or subject to any agreement or
understanding, and, to the Company’s knowledge, there is no agreement or
understanding between any persons and/or entities, which affects or relates to
the issuance of additional securities of the Company, or voting or giving of
written consents with respect to any security or by a director of the Company
other than as described in the Company’s filings with the
SEC.
2.3 Subsidiaries. The
Company does not presently own or control, directly or indirectly, any interest
in any other corporation, association, or other business entity. The
Company is not a participant in any joint venture, partnership, or similar
arrangement.
2.4 Authorization. All
corporate action on the part of the Company, its officers, directors and
shareholders necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of the Company hereunder and
thereunder, and the authorization (or reservation for issuance), sale and
issuance of the Common Stock being sold hereunder has been taken or will be
taken prior or subsequent to the Closing. This Agreement constitutes
valid and legally binding obligations of the Company, enforceable in accordance
with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, and (iii) to the extent the
indemnification provisions may be limited by applicable federal or state
securities laws.
2.5 Valid
Issuance of Common Stock. The
Common Stock (including Common Stock subject to the Warrants) that is being
purchased by the Investor hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable and will
be free of restrictions on transfer, other than restrictions on transfer under
this Agreement and under applicable state and federal securities
laws.
2.6 Governmental
Consents. No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection with
the consummation of the transactions contemplated by this Agreement, except for:
(i) the filing of a Form D under Regulation D promulgated under the Securities Act of
1933, as amended (the “Act”), which filing will be effected within
the time prescribed by law, and (ii) such other filings required pursuant
to applicable federal and state securities laws and blue sky laws, which filings
will be effected within the required statutory period.
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2.7 Offering. Subject
in part to the truth and accuracy of the Investor’s representations set forth in
Section 3 of
this Agreement, the offer, sale and issuance of the Common Stock as contemplated
by this Agreement are exempt from the registration requirements of the Act or
other applicable blue sky laws. Neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemptions.
3. Representations
and Warranties of the Holder.
Each Holder hereby represents, warrants and covenants that:
3.1 Authorization. Such
Holder has full power and authority to enter into this Agreement, and such
agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms.
3.2 Acquisition
Entirely for Own Account. This
Agreement is made with such Holder in reliance upon such Holder’s representation
to the Company, which by such Holder’s execution of this Agreement such Holder
hereby confirms, that the Securities will be acquired for investment for such
Holder’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Holder has no present
intention of selling, granting any participation in or otherwise distributing
the same. By executing this Agreement, such Holder further represents
that such Holder does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the
Securities.
3.3 Disclosure
of Information. Such
Holder believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Common Stock. Such
Holder further represents that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Common Stock and the business, properties, prospects and
financial condition of the Company. The foregoing, however, does not
limit or modify the representations and warranties of the Company in Section 2 of
this Agreement or the right of the Holder to rely thereon.
3.4 Investment
Experience. Such
Holder is an Holder in securities of companies in the development stage and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Common Stock. If other than an individual, such Holder also
represents it has not been organized for the purpose of acquiring the Common
Stock.
3.5 Accredited
Holder. Such
Holder is an “accredited
Holder” within the meaning of Securities and Exchange Commission (“SEC”) Rule 501 of
Regulation D, as presently in effect.
3.6 Restricted
Securities. Such
Holder understands that the Securities it is purchasing are characterized as
“restricted securities”
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under such
laws and applicable regulations such Securities may be resold without
registration under the Act only in certain limited circumstances. In
the absence of an effective registration statement covering the Securities or an
available exemption from registration under the Act, the Common Stock must be
held indefinitely. In this connection, such Holder represents that it
is familiar with SEC Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Act, including without limitation
the Rule 144 condition that current information about the Company be available
to the public.
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3.7 Further
Limitations on Disposition. Without
in any way limiting the representations set forth above, such Holder further
agrees not to make any disposition of all or any portion of the Securities
unless and until the transferee has agreed in writing for the benefit of the
Company to be bound by this Section 3,
and:
(a) There is then in effect a registration
statement under the Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(b) (i) Such Holder shall have
notified the Company of the proposed disposition and shall have furnished the
Company with a summary of the circumstances surrounding the proposed disposition
sufficient for the Company to determine if the transaction complies with
applicable securities laws, and (ii) if requested by the Company, such Holder
shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company that such disposition will not require registration
of such shares under the Act. It is agreed that the Company will not
require opinions of counsel for transactions made pursuant to Rule 144 except in
unusual circumstances.
(c) Notwithstanding the provisions of
subsections (a) and (b) above, no such registration statement or opinion of
counsel shall be necessary for a transfer by an Holder that is a partnership to
a partner of such partnership or a retired partner of such partnership who
retires after the date hereof, or to the estate of any such partner or retired
partner or the transfer by gift, will or intestate succession of any partner to
his or her spouse or to the siblings, lineal descendants or ancestors of such
partner or his or her spouse, if the transferee agrees in writing to be subject
to the terms hereof to the same extent as if he or she were an original Holder
hereunder.
3.8 Legends. It
is understood that the certificates evidencing the Securities may bear one or
all of the following legends:
(a) “These securities have not been
registered under the Securities Act of 1933, as amended. They may not
be sold, offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the securities under such Act
or an opinion of counsel satisfactory to the Company that such registration is
not required or unless sold pursuant to Rule 144 of such
Act.”
3.9 Tax
Advisors. Such
Holder has reviewed with such Holder’s own tax advisors the federal, state and
local tax consequences of this investment, where applicable, and the
transactions contemplated by this Agreement. Each such Holder is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents and understands that each such Holder (and not
the Company) shall be responsible for such Holder’s own tax liability that may
arise as a result of this investment or the transactions contemplated by this
Agreement.
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4. Conditions
of Investor’s Obligations at each Closing. The
obligations of the Investor under Sections 1.2 and
1.3 of this
Agreement are subject to the fulfillment on or before the applicable Closing of
each of the following conditions, the waiver of which shall not be effective
against any Investor who does not consent thereto:
4.1 Representations
and Warranties. The
representations and warranties of the Company contained in Section 2 shall
be true on and as of the respective Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing.
4.2 Performance. The
Company shall have performed and complied with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before such Closing.
5. Conditions
of the Company’s Obligations at each Closing. The
obligations of the Company to the Investor under this Agreement are subject to
the fulfillment on or before each Closing of each of the following conditions by
that Investor:
5.1 Representations
and Warranties. The
representations and warranties of the Investor contained in Section 3 shall
be true on and as of each Closing with the same effect as though such
representations and warranties had been made on and as of such
Closing.
5.2 Payment of
Purchase Price. The
Investor shall have delivered the purchase price specified in Section 1.2 or
1.3, as
applicable.
6. Miscellaneous.
6.1 Survival. The
warranties, representations and covenants of the Company and Investors contained
in or made pursuant to this Agreement shall survive the execution and delivery
of this Agreement and the Closing and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the Investor
or the Company.
6.2 Successors
and Assigns. Except
as otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of any
Securities). Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
6.3 Governing
Law. This
Agreement shall be governed by and construed under the laws of the State of
California as applied to agreements among California residents entered into and
to be performed entirely within California.
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6.4 Titles and
Subtitles. The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
6.5 Notices. All
notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be notified,
(ii) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day;
(iii) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be
sent to the address as set forth on the signature page hereof or at such other
address as such party may designate by ten days advance written notice to the
other parties hereto.
6.6 Finder’s
Fee. Each
party represents that it neither is nor will be obligated for any finders’ fee
or commission in connection with this transaction. The Investor
agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finders’ fee (and the costs and
expenses of defending against such liability or asserted liability) for which
such Investor or any of its officers, partners, employees or representatives is
responsible. The Company agrees to indemnify and hold harmless the
Investor from any liability for any commission or compensation in the nature of
a finders’ fee (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers, employees
or representatives is responsible.
6.7 Amendments
and Waivers. Any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the holders of a majority of the Common Stock. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities are convertible), each future
holder of all such securities, and the Company.
6.8 Effect of
Amendment or Waiver. The
Investor acknowledges that by the operation of Section 7.7 hereof
the holders of a majority of the Common Stock sold pursuant to this Agreement
will have the power to diminish or eliminate all rights of such Investor under
this Agreement.
6.9 Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
6.10 Aggregation
of Stock. All
shares of the Common Stock held or acquired by affiliated entities or persons
shall be aggregated together for the purpose of determining the availability of
any rights under this Agreement.
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6.11 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
[signature page
follows]
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IN WITNESS WHEREOF, the parties have
executed this Securities Issuance Agreement as of the date first above
written.
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By:
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/s/ Xxxxxx Xxx | ||
| Xxxxxx Xxx, President | |||
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Address:
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DOLLARDEX GROUP
CORP.
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By:
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/s/ Xxx Xxxxx | ||
| Xxx Xxxxx, President | |||
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Address:
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0000 xxxxxxxxx xxx | ||
| Xxxxxx, XX 00000 | |||
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XXXXXX
XXXXXXXX
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By:
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/s/ Xxxxxx
Xxxxxxxx
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Address:
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XXXXX
XXXXXX
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By:
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/s/ Xxxxx
Xxxxxx
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Address:
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For purposes of Section 1.3
(c):
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XXXXXX
XXX
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By:
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/s/ Xxxxxx
Xxx
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Address:
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XXXX
XXXXXXX
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By:
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/s/ Xxxx
Xxxxxxx
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Address:
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[SECURITIES
ISSUANCE AGREEMENT SIGNATURE PAGE]
