SECURITIES PURCHASE AGREEMENT
THIS
SECURITIES PURCHASE AGREEMENT
(this
“Agreement”)
is
made as of October __, 2007 by and among United Heritage Corporation, a Utah
corporation (the “Company”),
and
the purchaser whose name and address is set forth on the signature page annexed
hereto (the “Purchaser”).
The
foregoing parties are sometimes referred to hereinafter individually as a
“Party” or collectively as the “Parties.”
RECITALS
WHEREAS,
pursuant
to the Subscription Application of the Purchaser of even date herewith (each
a
“Subscription
Application”),
and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities
Act”),
and
Rule 506 promulgated thereunder, the Company desires to sell to the Purchaser
and the Purchaser desires to acquire from the Company that number of units
of
the Company’s securities (the “Units”)
as are
set forth on the Purchaser’s signature page annexed hereto, at a price of
$24,000 per Unit, subject to the terms and conditions of this Agreement and
the
other documents or instruments contemplated hereby (the “Offering”);
and
WHEREAS,
each
Unit consists of: (i) 32,000 shares of the Company’s common stock, par value
$0.001 per share (the “Common
Stock”),
and
(ii) a warrant, in the form attached hereto as Exhibit
A,
to
purchase up to 52,253 shares of Common Stock, subject to certain vesting
requirements, at an exercise price of $1.40 per share for a 5 year period
commencing upon the Closing (collectively, “Warrants”).
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties do hereby covenant and agree as
follows:
AGREEMENT
Section
1. Sale
and Issuance of Units.
1.1 Subject
to the terms and conditions of this Agreement, and, with respect to issuance
of
the Common Stock underlying the Warrants, subject to stockholder approval as
required under applicable laws and regulations, the Company has authorized
the
sale and issuance of up to twenty-five Units. At the Closing, the Company shall
sell and issue to the Purchaser, and the Purchaser shall purchase from the
Company, the number of Units set forth on the Purchaser’s signature page hereto.
The Company intends to enter into this same form of purchase agreement with
certain other purchasers (collectively, the “Other
Purchasers”)
and
expects to complete sales of Units to them. The maximum number of Units that
the
Company may sell to the Purchaser and Other Purchasers combined is twenty-five.
1.2 The
aggregate purchase price for the Units to be purchased by the Purchaser (the
“Purchase
Price”)
shall
be the amount set forth on the Purchaser’s signature page hereto.
Section
2. The
Closing.
2.1 The
closing of the sale and issuance to the Purchaser (the “Closing”)
shall
take place on or before October 26, 2007, or such other date as the Parties
may
mutually agree in writing, but in no event sooner than the date when all the
closing conditions set forth in Section 5.1 hereof are satisfied (the
“Closing
Date”).
On or
before the Closing Date, the Purchaser shall deliver to Xxxxxxxxxx & Xxxxx,
LLP as escrow agent (the “Escrow
Agent”)
in
accordance with the Escrow Agreement annexed hereto as Exhibit
B
(the
“Escrow
Agreement”),
immediately available funds via wire transfer or a certified check equal to
the
subscription amount set forth on the Purchaser’s signature page
hereto.
2.2 At
the
Closing, the Company shall instruct its transfer agent to issue and deliver
to
the Purchaser certificates representing the Common Stock and the Warrants,
against receipt by the Escrow Agent of a certified bank check or wire transfer
in an aggregate amount equal to the Purchase Price for the Units set forth
on
the Purchaser’s signature page hereto.
Section
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Purchaser as follows:
3.1 Organization.
The
Company is duly organized, validly existing and in good standing under the
laws
of the State of Utah and is qualified to conduct its business as a foreign
corporation in each jurisdiction where the failure to be so qualified would
have
a material adverse effect on the Company.
3.2 Authorization
of Agreement, Etc.
The
execution, delivery, and performance by the Company of its obligations under
this Agreement, the Escrow Agreement, the Subscription Application, the Warrants
and each other document or instrument contemplated hereby or thereby
(collectively, the “Transaction
Documents”)
has
been duly authorized by all requisite corporate action on the part of the
Company; and this Agreement and the Transaction Documents have been duly
executed and delivered by the Company. Each of the Transaction Documents, when
executed and delivered by the Company, constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium, or other similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
3.3
Issuance
of Common Stock and Warrants.
The
Common Stock component of the Units is duly authorized and, when paid for and
issued in accordance with the Transaction Documents, will be duly and validly
issued, fully paid, and nonassessable, free and clear of all liens. The Company
has reserved from its duly authorized capital stock the maximum number of shares
of Common Stock issuable pursuant to this Agreement and upon exercise of the
Warrants; provided, however, the Warrants may not be exercised and no shares
of
Common Stock are issuable thereunder until the Company has obtained stockholder
approval of the Warrants in accordance with applicable federal securities
laws.
2
Section
4. Representations
and Warranties of the Purchaser.
The
Purchaser hereby represents and warrants to the Company as follows:
4.1 Authorization
of the Documents.
The
Purchaser has all requisite power and authority (corporate or otherwise) to
execute, deliver, and perform its obligations under the Transaction Documents,
and the execution, delivery, and performance by the Purchaser of its obligations
under the Transaction Documents has been duly authorized by all requisite action
on the part of the Purchaser and each such Transaction Document, when executed
and delivered by the Purchaser, shall constitute the valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
4.2 Investment
Representations.
All
of
the representations, warranties, and information of the Purchaser as set forth
in the Purchaser’s Subscription Application are incorporated by reference
herein, shall be deemed to be a part hereof, and shall be true and correct
at
the Closing with the same force and effect as if made by the Purchaser as of
the
date thereof.
4.3
Access
to Company Information.
The
Purchaser acknowledges that it has been afforded access and the opportunity
to
obtain all financial and other information concerning the Company that such
Purchaser desires (including the opportunity to meet with the Company’s
executive officers). The Purchaser has reviewed copies of all reports filed
by
the Company (the “Filings”)
with
the Securities and Exchange Commission (the “Commission”)
under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
since
March 31, 2005, which are available for review at xxx.xxx.xxx.
The
Purchaser further acknowledges that it is familiar with the contents of the
Company’s Filings, including, without limitation, the risk factors contained in
the Company’s annual report on Form 10-KSB for the fiscal year ended March 31,
2007, and that there is no further information about the Company that the
Purchaser desires in determining whether to acquire the Units in this
Offering.
Section
5. Closing
Conditions; Covenants.
5.1 Closing
Conditions.
(i) Minimum
Subscriptions.
It is a
condition precedent to the Closing that the Escrow Agent shall have received
binding subscriptions and immediately available funds of at least $500,000
from
the Purchaser and Other Purchasers combined.
3
(ii) Consulting
Agreement.
Concurrent with or prior to the Closing, the Company will enter into a
Consulting Agreement with DK True Energy Development Ltd, a Cyprus corporation
and RTP Secure Energy Corp., a Delaware corporation (collectively, “Consultant”),
in
the form attached hereto as Exhibit
C.
5.2 Covenants. As
soon
as practicable following the Closing, the Company shall use its reasonable
best
efforts to (i) obtain the written consent of the holders of at least a majority
of its issued and outstanding capital stock (the “Consent”),
in
accordance with applicable federal securities laws and the rules and regulations
of any national securities exchange or inter-dealer quotation system upon which
the Company’s Common Stock is then traded, to approve the sale and issuance of
(A) the Warrants and the Common Stock underlying the Warrants, and (B) not
less
than an aggregate principal amount of $3,000,000 of the Company’s equity or
equity-linked securities in one or more financing transactions with qualified
investors, and (ii) upon obtaining such Consent, to prepare and file with the
Commission an Information Statement pursuant to Section 14(c) of the Exchange
Act (the “Information Statement”), and cause the Information Statement to be
transmitted to the holders of the Company’s Common Stock.
Section
6. Brokers
and Finders.
The
Company shall not be obligated to pay any commission, brokerage fee, or finder’s
fee based on any alleged agreement or understanding between the Purchaser and
a
third person in respect of the transactions contemplated hereby. The Purchaser
hereby agrees to indemnify the Company against any claim by any third person
for
any commission, brokerage fee, finder’s fee, or other payment with respect to
this Agreement or the transactions contemplated hereby based on any alleged
agreement or understanding between the Purchaser and any such third person,
whether express or implied from the actions of the Purchaser or anyone acting
or
purporting to act on behalf of the Purchaser.
Section
7. Indemnification.
7.1 By
the
Purchaser.
The
Purchaser hereby agrees to indemnify and defend (with counsel acceptable to
the
Company) the Company and its officers, directors, employees, and agents and
hold
them harmless from and against any and all liability, loss, damage, cost, or
expense, including costs and reasonable attorneys’ fees, incurred on account of
or arising from:
(i) any
breach of or inaccuracy in any of the Purchaser’s representations, warranties,
or agreements made herein, in any of the Transaction Documents, or in any
document or instrument contemplated hereby or thereby; and
(ii) any
action, suit, or proceeding based on a claim that the Purchaser’s
representations, warranties or agreements made herein, in any of the Transaction
Documents, or in any document or instrument contemplated hereby or thereby,
were
inaccurate or misleading, or otherwise cause for obtaining damages or redress
from the Company or any current or former officer, director, employee, or agent
of the Company under the Securities Act.
4
7.2 By
the
Company.
The
Company hereby agrees to indemnify and defend (with counsel acceptable to the
Purchaser) the Purchaser and, to the extent applicable, its officers, directors,
employees, and agents and hold them harmless from and against any and all
liability, loss, damage, cost, or expense, including costs and reasonable
attorneys’ fees, incurred on account of or arising from:
(i) any
breach of or inaccuracy in any of the Company’s representations, warranties, or
agreements made herein, in any of the Transaction Documents, or in any document
or instrument contemplated hereby or thereby; and
(ii) any
action, suit, or proceeding based on a claim that the Company’s representations,
warranties or agreements made herein, in any of the Transaction Documents,
or in
any document or instrument contemplated hereby or thereby, were inaccurate
or
misleading, or otherwise cause for obtaining damages or redress from the
Purchaser or, if applicable, any current or former officer, director, employee,
or agent of the Purchaser under the Securities Act.
Section
8. Registration
of Common Stock Underlying the Warrants.
Subject
to Rule 415(a)(1) of the Securities Act, the
Company shall use its reasonable best efforts to file with the Commission,
as
soon as practicable thereafter, but in no event later than 180 days from the
Closing Date, a registration statement (the “Registration
Statement”)
on
Form SB-2, or other applicable form, providing for the resale of all shares
Common Stock underlying the Warrants “Registrable
Securities”).
The
Company shall use its reasonable best efforts to cause the Registration
Statement to be declared effective by the Commission as soon as practicable
thereafter. All expenses incurred in connection with the registration of the
Registrable Securities, including without limitation, all registration, filing,
and qualifications fees, printing expenses, and fees and disbursements of
counsel for the Company, shall be borne by the Company. The Company further
agrees to maintain the effectiveness of the Registration Statement until the
earlier of the date on which all of the Registrable Securities covered by the
Registration Statement are sold or are then eligible for resale pursuant to
Rule
144(k) under the Securities Act.
The
Company may postpone for up to thirty (30) days the filing or the effectiveness
of a Registration Statement if the Company reasonably determines that such
Registration Statement would have a material adverse effect on any proposal
or
plan by the Company to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer,
reorganization or similar transaction.
Section
9. Successors
and Assigns.
This
Agreement shall bind and inure to the benefit of the Company, the Purchaser,
and
their respective successors and assigns.
5
Section
10. Entire
Agreement.
This
Agreement and the other writings and agreements referred to in this Agreement
or
delivered pursuant to this Agreement contain the entire understanding of the
Parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, whether written or verbal, among the Parties
with
respect thereto.
Section
11. Notices.
All
notices, demands and requests of any kind to be delivered to any Party in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if personally delivered or if sent by internationally-recognized
overnight courier or by registered or certified mail, return receipt requested
and postage prepaid, addressed as follows:
if
to the
Company, to:
United
Heritage Corporation
X.X.
Xxx
00000
Xxxxxxx,
Xxxxx 00000
Attention:
Chief Executive Officer
with
a
copy to:
Xxxxxxxxxx
& Xxxxx LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention
Xxxxx Xxxxxxxxx
if
to the
Purchaser, to:
at
the
address of the Purchaser set forth on the Purchaser’s signature page
hereto;
or
to
such other address as the Party to whom notice is to be given may have furnished
to the other Parties to this Agreement in writing in accordance with the
provisions of this Section. Any such notice or communication shall be deemed
to
have been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of internationally-recognized overnight courier,
on
the next business day after the date when sent and (iii) in the case of mailing,
on the third business day following that on which the piece of mail containing
such communication is posted.
Section
12. Amendments.
This
Agreement may not be modified or amended, nor may any provision of this
Agreement be waived, except as evidenced by a written agreement duly executed
by
the Parties hereto.
6
Section
13. Governing
Law; Waiver of Jury Trial.
All
questions concerning the construction, interpretation, and validity of this
Agreement shall be governed by and construed and enforced in accordance with
the
domestic laws of the State of Delaware without giving effect to any choice
or
conflict of law provision or rule (whether in the State of Delaware or any
other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware. In furtherance of the foregoing, the internal
law of the State of Delaware will control the interpretation and construction
of
this Agreement, even if under such jurisdiction’s choice of law or conflict of
law analysis, the substantive law of some other jurisdiction would ordinarily
or
necessarily apply.
Section
14. Submission
to Jurisdiction.
Any
legal
action or proceeding with respect to this Agreement may be brought in the courts
of the State of New York and the United States of America located in the City
of
New York, Borough of Manhattan and, by execution and delivery of this Agreement,
the Company hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The Purchaser
hereby irrevocably waives, in connection with any such action or proceeding,
any
objection, including, without limitation, any objection to the venue or based
on
the grounds of forum non conveniens, which it may now or hereafter have to
the
bringing of any such action or proceeding in such respective jurisdictions.
The
Purchaser hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at its address
as set forth herein.
Section
15. Severability.
It
is the
desire and intent of the Parties that the provisions of this Agreement be
enforced to the fullest extent permissible under the law and public policies
applied in each jurisdiction in which enforcement is sought. Accordingly, in
the
event that any provision of this Agreement would be held in any jurisdiction
to
be invalid, prohibited, or unenforceable for any reason, such provision, as
to
such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such
provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited,
or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section
16. Independence
of Agreements, Covenants, Representations and Warranties.
All
agreements and covenants hereunder shall be given independent effect so that
if
a certain action or condition constitutes a default under a certain agreement
or
covenant, the fact that such action or condition is permitted by another
agreement or covenant shall not affect the occurrence of such default, unless
expressly permitted under an exception to such covenant. In addition, all
representations and warranties hereunder shall be given independent effect
so
that if a particular representation or warranty proves to be incorrect or is
breached, the fact that another representation or warranty concerning the same
or similar subject matter is correct or is not breached will not affect the
incorrectness of or a breach of a representation and warranty hereunder. The
exhibits and any schedules annexed hereto are hereby made part of this Agreement
in all respects.
7
Section
17. Counterparts.
This
Agreement may be executed in any number of counterparts, and each such
counterpart of this Agreement shall be deemed to be an original instrument,
but
all such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable and
binding.
Section
18. Headings.
The
section and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
Section
19. Expenses.
Upon
receiving at least $500,000 in aggregate proceeds from the sale of Units, the
Company will instruct the Escrow Agent to reimburse Consultant for up to an
aggregate principal amount of $50,000 of due diligence, legal, accounting,
appraisal, valuation and engineering expenses (including environmental
assessments and reports) incurred by them, or by Petrosands Energy LLC, in
connection with the transactions contemplated herein, in the Consulting
Agreement or in other transactions previously negotiated by the parties with
respect to the Company. In
the
event that the amount of the reimbursement is less than $50,000, the Company
shall have the obligation to reimburse Consultant for any additional amounts
with respect to such expenses, including, without limitation, appraisal and
valuation costs subsequently incurred that relate to the Company’s issuance of
warrants, provided that the total expenses reimbursed pursuant to this Section
19 shall not exceed $50,000. This provision shall survive the termination of
this Agreement.
Except
as
otherwise set forth herein, each Party shall pay its own fees and expenses
incurred in connection with the negotiation, execution, delivery and performance
of this Agreement, the Transaction Documents and any document or instrument
contemplated hereby or thereby.
Section
20. Preparation
of Agreement.
The
Company prepared this Agreement and the Transaction Documents solely on its
behalf. Each Party to this Agreement acknowledges that: (i) the Party had the
advice of, or sufficient opportunity to obtain the advice of, legal counsel
separate and independent of legal counsel for any other Party hereto; (ii)
the
terms of the transactions contemplated by this Agreement are fair and reasonable
to such Party; and (iii) such Party has voluntarily entered into the
transactions contemplated by this Agreement without duress or coercion. Each
Party further acknowledges that such Party was not represented by the legal
counsel of any other Party hereto in connection with the transactions
contemplated by this Agreement, nor was he or it under any belief or
understanding that such legal counsel was representing his or its interests.
Each Party agrees that no conflict, omission, or ambiguity in this Agreement,
or
the interpretation thereof, shall be presumed, implied, or otherwise construed
against any other Party to this Agreement on the basis that such Party was
responsible for drafting this Agreement.
*
* * *
*
[SIGNATURE
PAGES FOLLOW]
8
IN
WITNESS WHEREOF,
each of
the undersigned has duly executed this Securities Purchase Agreement as of
the
date first written above.
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COMPANY:
UNITED
HERITAGE CORPORATION
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| By: | ||
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Name:
Title:
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[INTENTIONALLY
LEFT BLANK]
[PURCHASER’S
SIGNATURE PAGE FOLLOWS]
9
[PURCHASER
SIGNATURE PAGE TO UNITED HERITAGE CORPORATION SECURITIES PURCHASER
AGREEMENT]
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PURCHASER:
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Name of Purchaser (Individual or
Institution)
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Name of Individual representing Purchaser (if an
Institution)
|
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Title of Individual representing Purchaser (if an
Institution) |
Signature of Individual Purchaser or
Individual representing
Purchaser
|
Address:
Telephone:
Telecopier:
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Number
of Units
|
|
Aggregate Purchase Price |
10
EXHIBIT
A
Form
of Warrant
11
EXHIBIT
B
Form
of Escrow Agreement
12
EXHIBIT
C
Form
of Consulting Agreement
13
