STOCK PURCHASE AGREEMENT
Exhibit 10.26
THIS
STOCK PURCHASE AGREEMENT is made on the __ day of February 2008, by and among
Cellynx, Inc., a California corporation (the “Company”), and Xxxxxx Xxxxxxx,
an individual (each, an “Investor” and collectively,
the “Investors”).
THE
PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of
Stock.
1.1 Sale and Issuance of Common
Stock.
(a) Subject
to the terms and conditions of this Agreement, each Investor severally agrees,
to purchase at the Closing or pursuant to Section 1.3 and
the Company agrees to sell and issue to each Investor at the Closing or pursuant
to Section 1.3,
that number of shares of the Company’s common stock (“Common Stock” or “Shares”) set forth opposite
each Investor’s name on Schedule A
hereto for the purchase price set forth thereon. The Investors shall
purchase an aggregate of 1,111,111 shares of common stock for an aggregate
purchase price of $100,000. 100,000 shares shall be distributed to
the Investors at the respective closing while the remaining 1,011,111 shares
shall be held in escrow.
1.2 Closing.
(a) Closings. The
purchase and sale of the shares of the Common Stock take place in the aggregate
amount of $100,000 shall take place at 10:00 am on or prior to
February __, 2008 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”). At the
Closing the Company shall deliver to Investors certificates representing an
aggregate of at least shares of Common Stock that such Investor is
purchasing. Certificates for the Investors representing the remaining
shares of Common Stock will be held in escrow at the Company’s
headquarters.
1.3 Escrowed
Shares.
The shares of Company common stock issued at any Closing, to Investors but held
in escrow at the Company’s headquarters (“Escrowed Shares”), shall be
automatically cancelled by the Company immediately prior to the closing of the
Reverse Merger (as defined below). Investors acknowledge that
immediately prior to the Reverse Merger and funding of the entire purchase price
of $100,000, they shall hold 100,000 shares of Company common stock following
such share cancellation.
2. Representations and
Warranties of the Company. The
Company hereby represents and warrants to each Investor that, except as set
forth on a Schedule of Exceptions (the “Schedule of Exceptions”)
furnished each Investor prior to execution hereof and attached hereto as Schedule B, which
exceptions shall be deemed to be representations and warranties as if made
hereunder:
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.
- 1
-
2.2 Capitalization and Voting
Rights. The
authorized capital of the Company will consist of:
(a) Common Stock.
80,000,000 shares of common stock, (“Common Stock”), of which
54,414,666 shares are issued and outstanding as of January 1,
2008. No shares of Common Stock have been issued since then except
for shares of common stock sold at $0.09 per share for an amount no greater than
$2.0 million or 22,222,222 shares.
(b) The
outstanding shares of Common Stock are owned by the shareholders and in the
numbers specified in Section 2.2 of the
Schedule of Exceptions hereto as of January 1, 2008.
(c) 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.
(d) Except
as set forth in Section 2.2(d) of the Schedule of Exceptions, 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. The Company has reserved 25,000,000 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.
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 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 that is being purchased by the Investors 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
-
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.
2.7 Offering. Subject
in part to the truth and accuracy of each 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.
2.8 Litigation. There is
no action, suit, proceeding or investigation pending, or to the Company’s
knowledge, currently threatened against the Company that questions the validity
of this Agreement or the right of the Company to enter into such agreement or to
consummate the transactions contemplated hereby, or that might result, either
individually or in the aggregate, in any material adverse changes in the
business, assets or condition of the Company, financially or otherwise, or any
change in the current equity ownership of the Company (a “Material Adverse
Effect”). The Company has no knowledge of facts that would
give rise to a claim that would have a Material Adverse Effect. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or
investigation by the Company currently pending or that the Company intends to
initiate.
2.9 Material
Agreements.
(a) The
Schedule of Exceptions contains a true and complete list of all commitments,
contracts, sales contracts, purchase orders, mortgage agreements or groups of
related agreements with the same party or any group of affiliated parties which
require or may in the future require payment of aggregate consideration by the
Company in excess of $100,000.
(b) Each
contract, agreement or other arrangement disclosed in the Schedule of Exceptions
is in full force and effect and constitutes a legal, valid and binding
agreement, enforceable in accordance with its terms, of each party thereto; and
the Company has performed all of its obligations required to have been performed
under, and is not in violation or breach of or default under, any such contract,
agreement or arrangement. To the knowledge of the Company, the other
parties to any such contract, agreement or arrangement are not in violation or
breach of or default under any such contract, agreement or
arrangement.
2.10 Proprietary Information
Agreements. Each
employee, officer and consultant of the Company has executed a Proprietary
Information and Inventions Agreement or Consulting Agreement in substantially
the forms provided to counsel to the Investors. The Company is not
aware that any of its employees, officers or consultants are in violation
thereof.
- 3
-
2.11 Patents and Trademarks.
To its
knowledge, the Company possesses all patents, patent rights, trademarks,
trademark rights, service marks, service xxxx rights, trade names, trade name
rights and copyrights (collectively, the “Intellectual Property”)
necessary for its business as contemplated without any conflict with or
infringement of the valid rights of others and the lack of which could
materially and adversely affect the operations or condition, financial or
otherwise, of the Company, and the Company has not received any notice of
infringement upon or conflict with the asserted rights of others The
Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of his or her best efforts to promote
the interests of the Company or that would conflict with the Company’s
business.
2.12 Compliance with Other
Instruments. The
Company is not in violation in any material respect of any provision of its
Articles of Incorporation (“Articles”) or Bylaws nor, to its knowledge, in any
material respect of any instrument, judgment, order, writ, decree or contract,
statute, rule or regulation to which the Company is subject and a violation of
which would have a material adverse effect on the condition, financial or
otherwise, or operations of the Company. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in any such violation, or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision or an event that results in
the creation of any lien, charge or encumbrance upon any assets of the Company
or the suspension, revocation, impairment, forfeiture or nonrenewal of any
material permit, license, authorization or approval applicable to the Company,
its business or operations or any of its assets or properties.
2.13 Tax Returns. The
Company has timely filed all tax returns (federal, state and local) required to
be filed by it. The Company has not been advised that any of its
returns have been or are being audited.
2.14 Permits. The
Company has all franchises, permits, licenses and any similar authority
necessary for the conduct of its business, the lack of which could materially
and adversely affect the business, properties or financial condition of the
Company. The Company is not in default in any material respect under
any of such franchises, permits, licenses or other similar
authority.
2.15 Use of
Proceeds. The
Company shall use the proceeds from the sale and purchase of the Common Stock to
be purchased at the Closing in the manner set forth in Section 2.15 of the
Schedule of Exceptions.
2.16 Environmental and Safety
Laws. To its
knowledge, the Company is not in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, and to
its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation.
- 4
-
2.17 Registration
Rights. Except as
set forth in the Schedule of Exceptions, the Company has not granted or agreed
to grant any registration rights, including piggyback rights, to any person or
entity.
2.18 Corporate Documents; Minute
Books. Except
for amendments necessary to satisfy representations and warranties or conditions
contained herein (the form of which amendments has been approved by the
Investors), the Articles and Bylaws of the Company are in the form previously
provided to special counsel for the Investors. The minute books of
the Company provided to the Investors contain a complete summary of all meetings
of directors and shareholders since the time of incorporation and reflect all
transactions referred to in such minutes accurately in all material
respects.
2.19 Dollardex Assignee.
The
Company acknowledges that (i) the Investor is an assignee of the rights of
Dollardex Group Corp. (“Dollardex”) under the Stock Purchase Agreement between
Dollardex and the Company dated on or about January 3, 2008 (“Dollardex Purchase
Agreement”) in which Dollardex or its assigns agreed to purchase $1,800,000 in
Company common stock; (ii) Dollardex’s purchase obligations under such agreement
has been reduced from $1,800,000 to $1,700,000 as a result of Investors’
purchase of $100,000 in Company common stock; (iii) the $100,000 investment
fulfills a portion of the closing condition under Section 7.1(i)
of the Share Exchange Agreement by and among the shareholders of the
Company and Norpac Technologies, Inc. dated on or about January 3, 2008 (“Share
Exchange Agreement”) such that $100,000 of the closing condition to raise
$1,800,000 in equity financing has been satisfied and (iv) the $100,000
investment fulfills a portion of Dollardex’s obligation under Section 2.3
of the Joint Venture Agreement by and between Dollardex and the
Company dated on or about January 3, 2008 (“Joint Venture Agreement”) such
that $100,000 of the obligation to raise $1,800,000 in equity financing has been
satisfied.
3. Representations and
Warranties of the Investors. Each
Investor hereby represents, warrants and covenants that:
3.1 Authorization.
Such
Investor 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 Purchase Entirely for Own
Account. This
Agreement is made with such Investor in reliance upon such Investor’s
representation to the Company, which by such Investor’s execution of this
Agreement such Investor hereby confirms, that the Common Stock to be received by
such Investor (collectively, the “Securities”) will be acquired
for investment for such Investor’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
Investor has no present intention of selling, granting any participation in or
otherwise distributing the same. By executing this Agreement, such
Investor further represents that such Investor 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.
- 5
-
3.3 Disclosure of Information.
Such
Investor believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Common Stock. Such
Investor 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 Investors to rely thereon.
3.4 Investment
Experience. Such
Investor is an investor 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 Investor also
represents it has not been organized for the purpose of acquiring the Common
Stock.
3.5 Accredited Investor; Non-U.S.
Person. Such
Investor is an “accredited
investor” within the meaning of Securities and Exchange Commission
(“SEC”) Rule 501 of
Regulation D, as presently in effect and such investor is a non
“U.S. Person” as defined under Section 5 of the Securities Act..
3.6 Restricted
Securities. Such
Investor 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 Investor 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.
3.7 Further Limitations on
Disposition. Without
in any way limiting the representations set forth above, such Investor 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
Investor 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 Investor 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.
- 6
-
(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 Investor 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 Investor 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
Investor has reviewed with such Investor’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 Investor 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 Investor (and
not the Company) shall be responsible for such Investor’s own tax liability that
may arise as a result of this investment or the transactions contemplated by
this Agreement.
3.10 U.S. Patriot Act Related
Representations. Investor represents, warrants and covenants to the
Company that Investor: (a) (i)
is purchasing the Shares for Investor’s own account, own risk and own beneficial
interest, (ii) is not acting as an agent, representative, intermediary, nominee
or in a similar capacity for any other person or entity, nominee account or
beneficial owner, whether a natural person or entity (each such natural person
or entity, an “Underlying Beneficial Owner”) and no Underlying Beneficial Owner
will have a beneficial or economic interest in the Shares being purchased by
Investor (whether directly or indirectly, including without limitation, through
any option, swap, forward or any other hedging or derivative transaction), (iii)
if it is an entity, including, without limitation, a fund-of-funds, trust,
pension plan or any other entity that is not a natural person (each, an
“Entity”), has carried out thorough due diligence as to and established the
identities of such Entity’s investors, directors, officers, trustees,
beneficiaries and grantors (to the extent applicable, each a “Related Person” of
such Entity), holds the evidence of such identities, will maintain all such
evidence for at least five years from the date of Investor’s resale or other
disposition of all the Common Stock underlying the Shares, will request such
additional information as the Company may require to verify such identities as
may be required by applicable law, and will make such information available to
the Company upon its request, and (iv) does not have the intention or obligation
to sell, pledge, distribute, assign or transfer all or a portion of the Common
Stock underlying the Shares to any Underlying Beneficial Owner or any other
person; OR
- 7
-
(b)(i) is
subscribing for the Shares as a record owner and will not have a beneficial
ownership interest in the Shares, (ii) is acting as an agent, representative,
intermediary, nominee or in a similar capacity for one or more Underlying
Beneficial Owners, and understands and acknowledges that the representations,
warranties and agreements made in this Agreement are made by Investor with
respect to both Investor and the Underlying Beneficial Owner(s), (iii) has all
requisite power and authority from the Underlying Beneficial Owner(s) to execute
and perform the obligations under this Agreement, (iv) has carried out thorough
due diligence as to and established the identities of all Underlying Beneficial
Owners (and, if an Underlying Beneficial Owner is not a natural person, the
identities of such Underlying Beneficial Owner’s Related Persons (to the extent
applicable)), holds the evidence of such identities, will maintain all such
evidence for at least five years from the date of Investor’s resale or other
disposition of all the Common Stock, and will make such information available to
the Company upon its request and (v) does not have the intention or obligation
to sell, pledge, distribute, assign or transfer all or a portion of the Common
Stock to any person other than the Underlying Beneficial Owner(s).
(c) Investor
hereby represents and warrants that the proposed investment in the Company that
is being made on its own behalf or, if applicable, on behalf of any Underlying
Beneficial Owners does not directly or indirectly contravene United States
federal, state, local or international laws or regulations applicable to
Investor, including anti-money laundering laws (a “Prohibited
Investment”).
(d) Federal
regulations and Executive Orders administered by the U.S. Treasury Department’s
Office of Foreign Assets Control (“OFAC”) prohibit, among other things, the
engagement in transactions with, and the provision of services to, certain
foreign countries, territories, entities and individuals. The lists
of OFAC prohibited countries, territories, persons and entities can be found on
the OFAC website at xxx.xxxxx.xxx/xxxx. Investor hereby represents
and warrants that neither Investor nor, if applicable, any Underlying Beneficial
Owner or Related Person, is a country, territory, person or entity named on an
OFAC list, nor is Investor nor, if applicable, any Underlying Beneficial Owner
or Related Person, a natural person or entity with whom dealings are prohibited
under any OFAC regulations.
(e) Investor
represents and warrants that neither Investor nor, if applicable, any Underlying
Beneficial Owner or Related Person, is a senior foreign political figure, or any
immediate family member or close associate of a senior foreign political figure
within the meaning of, and applicable guidance issued by the Department of the
Treasury concerning, the U.S. Bank Secrecy Act (31 U.S.C. §5311 et seq.), as
amended, and any regulations promulgated thereunder.
(f) Investor
agrees promptly to notify the Company should Investor become aware of any change
in the information set forth in paragraphs (a) through (e).
(g) Investor
agrees to indemnify and hold harmless the Company, its affiliates, their
respective directors, officers, shareholders, employees, agents and
representatives (each, an “Indemnitee”) from and against any and all losses,
liabilities, damages, penalties, costs, fees and expenses (including legal fees
and disbursements) (collectively, “Damages”) which may result, directly or
indirectly, from Investor’s misrepresentations or misstatements contained herein
or breaches hereof relating to paragraphs (a) through (e).
- 8
-
(h) Investor
understands and agrees that, notwithstanding anything to the contrary contained
in any document, if, following Investor’s investment in the Company, it is
discovered that the investment is or has become a Prohibited Investment, such
investment may immediately be redeemed by the Company or otherwise be subject to
the remedies required by law, and Investor shall have no claim against any
Indemnitee for any form of Damages as a result of such forced redemption or
other action.
(i) Upon
the written request from the Company, Investor agrees to provide all information
to the Company to enable the Company to comply with all applicable anti-money
laundering statutes, rules, regulations and policies, including any policies
applicable to a portfolio investment held or proposed to be held by the
Company. Investor understands and agrees that the Company may release
confidential information about Investor and, if applicable, any Underlying
Beneficial Owner(s) or Related Person(s) to any person, if the Company, in its
sole discretion, determines that such disclosure is necessary to comply with
applicable statutes, rules, regulations and policies.
4. Conditions of Investor’s
Obligations at Closing. The
obligations of each 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 Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
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 the Closing.
4.3 Secretary’s
Certificate. A certificate of the Secretary of the Company,
certifying that the attached copies of the articles of incorporation of the
Company, the by-laws of the Company and the resolutions of its board of
directors authorizing the execution of this Agreement and the transactions
contemplated hereby are true, correct and complete copies and are each in full
force and effect and have not been amended or modified, that the officers of the
Company are those persons named in the certificate, and that the signatures of
the officers are as set forth therein.
4.4 Proceedings and
Documents. All
corporate and other proceedings in connection with the transactions contemplated
at the Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to Investors’ special counsel, and they shall
have received all such counterpart original and certified or other copies of
such documents as they may reasonably request.
4.5 Reverse Merger Agreement.
The
Company and/or its shareholders shall have executed an agreement with a
corporation whose common shares are publicly listed for trading on the Over the
Counter Bulletin Board or some other exchange (“Pubco”), pursuant to which (i)
the Company shareholders shall exchange all of their Company common stock for
newly-issued shares of Pubco common stock, or (ii) the Company shall merge with
Pubco or a wholly-owned subsidiary of Pubco such that after the merger, the
Company shall be a wholly-owned subsidiary of Pubco (“Reverse
Merger”).
- 9
-
5. Conditions of the Company’s
Obligations at the Closing. The
obligations of the Company to each 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 Investors contained in Section 3 shall
be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the
Closing.
5.2 Payment of Purchase
Price. The
Investors shall have delivered the purchase price specified in Section 1.2.
6. Registration Rights.
6.1 Definitions. For
purposes of this Section 6:
(a) The
term “Form S-3” means such form under the Act as in effect on the date hereof or
any registration form under the Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.
(b) The
term “Holder” means any person owning or having the right to acquire Registrable
Securities or any assignee thereof.
(c) The
term “register”, “registered,” and “registration” refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement or document.
(d) The
term “Registrable Securities” means (i) the Common Stock issued to
Investors and (ii) any Common Stock of the Company issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of the shares referenced in (i) above, excluding in all cases,
however, any Registrable Securities sold by a person in a transaction in which
his rights under this Section 6 are not assigned.
(e) The
number of shares of “Registrable Securities then outstanding” shall be
determined by the number of shares of Common Stock outstanding which are, and
the number of shares of Common Stock issuable pursuant to then exercisable or
convertible securities which are, Registrable Securities.
6.2 Request for
Registration.
(a) If the
Company shall receive at any time after the three (3) months after the 90
days after the closing of the reverse merger into a public shell, a written
request from the Holders of a majority of the Registrable Securities then
outstanding that the Company file a registration statement under the Act
covering the registration of at least forty percent (40%) of the Registrable
Securities then outstanding then the Company shall:
- 10
-
(i) within
ten (10) days of the receipt thereof, give written notice of such request to all
Holders; and
(ii) effect
as soon as practicable, and in any event within 150 days of the receipt of such
request, effect the registration under the Act of all Registrable Securities
which the Holders request to be registered, subject to the limitations of
subsection 6.2(b), within twenty (20) days of the mailing of such notice by
the Company in accordance with Section 7.5.
(b) If
the Holders initiating the registration request hereunder (“Initiating Holders”)
intend to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a part of their
request made pursuant to subsection 6.2(a) and the Company shall include such
information in the written notice referred to in subsection
6.2(a). The underwriter will be selected by the Company and shall be
reasonably acceptable to a majority in interest of the Initiating
Holders. In such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company as provided in
subsection 6.4(e)) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this
Section 6.2, if the underwriter advises the Initiating Holders in writing
that marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities, including Company
securities, are first entirely excluded from the underwriting.
(c) Notwithstanding
the foregoing, if the Company shall furnish to Holders requesting a registration
statement pursuant to this Section 6.2, a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its shareholders for such registration statement to be filed and it
is therefore essential to defer the filing of such registration statement, the
Company shall have the right to defer taking action with respect to such filing
for a period of not more than 120 days after receipt of the request of the
Initiating Holders; provided, however, that the Company may not utilize this
right more than once in any twelve-month period.
(d) In
addition, the Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to this Section 6.2:
- 11
-
(i) After
the Company has effected one registration pursuant to this Section 6.2 and such
registrations has been declared or ordered effective;
(ii) During
the period starting with the date 30-60 days prior to the Company’s good faith
estimate of the date of filing of, and ending on a date one hundred eighty (180)
days after the effective date of, a registration subject to Section 6.3 hereof;
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective;
or
(iii) If
the Initiating Holders propose to dispose of shares of Registrable Securities
that may be immediately registered on Form S-3 pursuant to a request made
pursuant to Section 6.12 below.
6.3 Company
Registration. If
the Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
stock or other securities under the Act in connection with the public offering
of such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company stock plan, a registration
on any form which does not include substantially the same information as would
be required to be included in a registration statement covering the sale of the
Registrable Securities or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request
of each Holder given within twenty (20) days after mailing of such notice by the
Company in accordance with Section 7.5, the Company shall, to the extent
permitted by applicable law, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be
registered.
6.4 Obligations of the
Company. Whenever
required under this Section 6 to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective for a period of up to one hundred twenty (120) days or until the
distribution contemplated in the Registration Statement has been completed;
provided, however, that (i) such 120-day period shall be extended for a
period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company; and (ii) in the case of
any registration of Registrable Securities which are intended to be
offered on a continuous or delayed basis, such 120-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Securities are sold but no more than 18 months, provided that Rule
415, or any successor rule under the Act, permits an offering on a continuous or
delayed basis, and provided further that applicable rules under the Act
governing the obligation to file a post-effective amendment permit, in lieu of
filing a post-effective amendment which (I) includes any prospectus
required by Section 10(a)(3) of the Act or (II) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of information
required to be included in (I) and (II) above to be contained in periodic
reports filed pursuant to Section 13 or 15(d) of the 1934 Act in the
registration statement.
- 12
-
7. Miscellaneous.
7.1 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
Investors or the Company.
7.2 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.
7.3 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.
7.4 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.
7.5 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.
7.6 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. Each 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 each
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.
7.7 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.
- 13
-
7.8 Effect of Amendment or
Waiver. Each
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.
7.9 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.
7.10 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.
7.11 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.
- 14
-
IN
WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as of
the date first above written.
|
CELLYNX,
INC.
|
|
|
By: /s/ Xxxxx
Xxxxxx
|
|
|
Xxxxx
Xxxxxx, President
|
|
|
Address:
|
|
- 15
-
Please
confirm that the foregoing correctly sets forth the agreement between Cellynx,
Inc. and the Investor by executing in the space provided below for that
purpose.
Dated as
of: _________________, 2008
|
Xxxxxx
Xxxxxxx
Address:
____________________________________________
____________________________________________
____________________________________________
Telephone
Number: ____________________________
Federal
Tax ID (Soc Sec No): ______________________
(U.S.
entities only)
Purchase
Price (in US $)
Country
of Citizenship:
State
of Residency:
(if
U.S. citizen)
|
AGREED AND
ACCEPTED:
CELLYNX,
INC.
By:
____________________________
Name:
Title:
[STOCK
PURCHASE AGREEMENT SIGNATURE PAGE]
- 16
-
SCHEDULE
A
SCHEDULE
OF INVESTORS
|
Investor
|
Purchase
Price
at
|
Shares
Delivered
|
Shares
Escrowed
|
|
Xxxxxx
Xxxxxxx
|
$100,000
|
100,000
|
1,011,111
|
|
TOTAL
|
$100,000
|
100,000
|
1,011,111
|
- 17
-
SCHEDULE
B
SCHEDULE
OF EXCEPTIONS
- 18
-
Section
2.2
Common
Stock
|
Shareholder
Name
|
Number
of Shares
|
|
Xxxxx
Xxxxxx
|
22,533,333
|
|
Xxxxxx
Xxx
|
22,533,333
|
|
Xxxx
Xxxxx
|
3,200,000
|
|
Xxxxxxxx
Patience
|
1,500,000
|
|
Xxxx
Xxxxxxx
|
2,028,000
|
|
Xxxxxxx
X. Xxxxxx
|
200,000
|
|
ULC
Fze
|
1,000,000
|
|
Xxxxxxx
Xxxxx
|
100,000
|
|
Xxxxxxx
Xxxxxxx
|
1,320,000
|
|
Corporate
Capital Advisors, Inc. (CCA)
|
2,172,751
|
|
RP
Capital, Inc.
|
543,150
|
|
Hopscotch
Partners
|
148,890
|
|
Maximus
Capital, LLC
|
113,156
|
- 19
-
Section
2.2(d)
Options,
Warrants, Rights or Agreements
Options
|
Name
|
Number
of
Vested
Options
|
Number
of
Unvested
Options
|
|
Xxxxx
Xxxxxx
|
2,100,000
|
3,647,247
|
|
Xxxxxx
Xxx
|
2,100,000
|
3,647,247
|
|
Xxxx
Xxxxx
|
750,000
|
---
|
|
Xxxx
Xxxxxxx
|
375,000
|
---
|
|
Xxxxxx
Xxxxxxxx
|
---
|
9,725,991
|
|
Xxxxxxx
Xxxxxxx
|
---
|
1,215,749
|
|
Option
Pool
|
---
|
6,078,745
|
Warrants
Palomar
warrant that applies only if the Palomar Convertible Note is
prepaid.
Promissory
Notes
|
|
1.
|
Convertible
Promissory Note dated as of March 27, 2007 by and between Cellynx, Inc.
and Xxxxxxx Xxxxxxx in the principal amount of
$10,000
|
|
|
2.
|
Convertible
Promissory Note dated as of March 27, 2007 by and between Cellynx, Inc.
and Xxxxxx Xxx in the principal amount of
$20,000
|
|
|
3.
|
Convertible
Promissory Note dated as of March 27, 2007 by and between Cellynx, Inc.
and Xxxxx Xxxxxx in the principal amount of
$20,000
|
|
|
4.
|
Convertible
Promissory Note dated as of October 25, 2007 by and between Cellynx, Inc.
and Xxxxxx Xxx in the principal amount of
$10,000
|
|
|
5.
|
Convertible
Promissory Note dated as of October 25, 2007 by and between Cellynx, Inc.
and Xxxxx Xxxxxx in the principal amount of
$10,000
|
|
|
6.
|
Amended
and Restated Subordinated Convertible Promissory Note dated as of November
10, 2007 by and between Cellynx, Inc. and Palomar Ventures III, L.P. in
the principal amount of
$262,356.16
|
- 20
-
|
|
1.
|
Stock
Purchase Agreement dated as of August 10, 2006 by and between Cellynx,
Inc. and designDESIGN, inc.
|
|
|
2.
|
Stock
Purchase Agreement dated as of April 2006 by and between Cellynx, Inc. and
ULC Fze
|
|
|
3.
|
Note
and Warrant Purchase Agreement dated as of August 15, 2006 by and between
Cellynx, Inc. and Palomar Ventures III Principal Funds,
L.L.C
|
|
|
4.
|
Restricted
Stock Purchase Agreement dated as of March 27, 2007 by and between
Cellynx, Inc. and Xxxxxx Xxx
|
|
|
5.
|
Restricted
Stock Purchase Agreement dated as of March 27, 2007 by and between
Cellynx, Inc. and designDESIGN, inc. – CEO Xxxxxxx
Xxxxxxx
|
|
|
6.
|
Restricted
Stock Purchase Agreement dated as of March 27, 2007 by and between
Cellynx, Inc. and Xxxxx Xxxxxx
|
- 21
-
Section
2.9
Material
Agreements
|
|
1.
|
Employment
Agreement dated as of October 25, 2007 by and between Cellynx, Inc. and
Xxxxxx Xxxxxxxx
|
|
|
2.
|
Amended
and Restated Subordinated Convertible Promissory Note dated as of November
10, 2007 by and between Cellynx, Inc. and Palomar Ventures III, L.P. in
the principal amount of $262,356.16
|
- 22
-
Section
2.15
Use
of Proceeds
First
$750,000 in gross proceeds
$10,000 –
Company legal fees regarding term sheet and definitive agreement
$740,000
– Additional engineering for next generation prototype and production of samples
for prospective customers
Remaining
$1,250,000 in gross proceeds
Rollout
of marketing of products, additional engineering of additional
models, repay $250,000 debt, legal and accounting costs related to
the financing and reverse merger, general business corporate expense, working
capital.
- 23
-
Section
2.17
Registration
Rights
|
|
1.
|
Amended
and Restated Subordinated Convertible Promissory Note dated as of November
10, 2007 by and between Cellynx, Inc. and Palomar Ventures III, L.P. in
the principal amount of $262,356.16
|
-
24 -
