SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this "AGREEMENT") is dated as of _______ ___,
2009, among Sanswire Corp., a Delaware corporation (the "COMPANY"), and the
purchasers identified on the signature pages hereto (each a "PURCHASER" and
collectively the "PURCHASERS"); and
"ACTION"
shall have the meaning ascribed to such term in Section 3.1(j).
"AFFILIATE"
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 144. With respect to a
Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser will be
deemed to be an Affiliate of such Purchaser.
"BUSINESS
DAY" means any day except Saturday, Sunday and any day which shall be a federal
legal holiday or a day on which banking institutions in the State of New York
are authorized or required by law or other governmental action to
close.
"CLOSING"
means the closing of the purchase and sale of the Common Stock and the Warrants
pursuant to Section 2.1.
"CLOSING
DATE" means the Trading Day when all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchasers' obligations to pay the Subscription Amount and
(ii) the Company's obligations to deliver the Securities have been satisfied or
waived.
"CLOSING
PRICE" means on any particular date (a) the last reported closing bid price per
share of Common Stock on such date on the Trading Market (as reported by
Bloomberg L.P. at 4:15 PM (New York time), or (b) if there is no such price on
such date, then the closing bid price on the Trading Market on the date nearest
preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New York time)
for the closing bid price for regular session trading on such day), or (c) if
the Common Stock is not then listed or quoted on the Trading Market and if
prices for the Common Stock are then reported in the "pink sheets" published by
the National Quotation Bureau Incorporated (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (d) if the shares of Common Stock are
not then publicly traded the fair market value of a share of Common Stock as
determined by an appraiser selected in good faith by the Purchasers of a
majority in interest of the Shares then outstanding.
"COMMISSION"
means the Securities and Exchange Commission.
"COMMON
STOCK" means the common stock of the Company, $0.00001 par value per share, and
any securities into which such common stock may hereafter be
reclassified.
"COMMON
STOCK EQUIVALENTS" means any securities of the Company or the Subsidiaries which
would entitle the holder thereof to acquire at any time Common Stock, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.
"DISCLOSURE
SCHEDULES" means the Disclosure Schedules delivered concurrently
herewith.
"EFFECTIVE
DATE" means the date that a Registration Statement covering the shares sold
hereunder (or for which there is a conversion pursuant hereto is first declared
effective by the Commission or such time that such shares are eligible for
resale pursuant to Rule 144.
"EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended.
"INTELLECTUAL
PROPERTY RIGHTS" shall have the meaning ascribed to such term in Section
3.1(o).
"LIENS"
means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.
"MATERIAL
ADVERSE EFFECT" shall have the meaning ascribed to such term in Section
3.1(b).
"MATERIAL
PERMITS" shall have the meaning ascribed to such term in Section
3.1(m).
"PER
SHARE CONVERSION PRICE" equals $.105 subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement.
However, if after 90 days from the date hereof the market price of the Company’s
common shares during the 90 day period has not closed at a bid price at or above
$.12 per share for 3 or more consecutive trading days. In such instance then the
Investors’s price per share shall be equal to the average closing bid price for
the last 30 trading days immediately prior to the 90th day
after the date of this addendum. Should the price of the common shares be $.105
or higher on the 90th day
after the date of this addendum, then the purchase price per share shall remain
at $.105 per share. Should the Market Price of the shares be $.105 or
higher on the 90th day
after the date of this addendum, but less than $.125, then the Investor shall be
entitled to an amount of additional shares equal to 10% of the number of shares
to which the Investor is otherwise entitled.
"PERSON"
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
"PROCEEDING"
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
"REQUIRED
APPROVALS" shall have the meaning ascribed to such term in Section
3.1(e).
"RULE
144" means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
"SEC
REPORTS" shall have the meaning ascribed to such term in Section
3.1(h).
"SECURITIES"
means the Shares, the Warrants and the Warrant Shares.
"SECURITIES
ACT" means the Securities Act of 1933, as amended.
"SHARES"
means the shares of Common Stock issued or issuable to each Purchaser pursuant
to this Agreement.
"SUBSCRIPTION
AMOUNT" means, as to each Purchaser, the amounts set forth below such
Purchaser's signature block on the signature page hereto, in United States
dollars and in immediately available funds.
"SUBSIDIARY"
shall mean the subsidiaries of the Company, if any, set forth on Schedule
3.1(a).
"TRADING
DAY" means (i) a day on which the Common Stock is traded on a Trading Market, or
(ii) if the Common Stock is not quoted on a Trading Market, a day on which the
Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); provided, that in the event that
the Common Stock is not listed or quoted as set forth in (i) and (ii) hereof,
then Trading Day shall mean a Business Day.
"TRADING
MARKET" means the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: The Pink Sheets the OTC
Bulletin Board, the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or the Nasdaq SmallCap Market.
"TRANSACTION
DOCUMENTS" means this Agreement, the Warrants and the Convertible Note and any
other documents or agreements executed in connection with the transactions
contemplated hereunder.
"WARRANTS"
means the Common Stock Purchase Warrants, in the form of EXHIBIT C, issuable to
the Purchasers at the Closing, which warrants shall be exercisable immediately
upon issuance for a term of 36 months and have an exercise price equal to $.21
and $.315, except as adjusted as per below “Warrant Shares.”
"WARRANT
SHARES" means the shares of Common Stock issuable upon exercise of the Warrants.
The number of Warrant Shares shall be equal to 100% of the number of shares
purchased by the Purchaser, with 50% of such warrants having an exercise price
of $.21 and 50% of such warrants having an exercise price of .315. However, If
the Investors’ price per share is adjusted pursuant to the above definition of
“Purchase Price”, the $.21 warrant price shall be adjusted to double the
adjusted share price and the $.315 warrant price shall be adjusted to triple the
adjusted share price.
On the
First Closing Date, each Purchaser shall purchase from the Company, severally
and not jointly with the other Purchasers, and the Company shall issue and sell
to each Purchaser, (a) a Convertible Note equal to such Purchaser's Subscription
Amount and (b) the Warrants as determined pursuant to Section 2.2(a)(iii). The
aggregate Subscription Amounts for Shares sold hereunder shall be up to
$250,000. Upon satisfaction of the conditions set forth in Section 2.2, the
Closing shall occur at the offices of Company Counsel or such other location as
the parties shall mutually agree.
(a) On
the Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
Convertible Note equal to such Purchaser's Subscription Amount in the name of
such Purchaser; and
(iii) a
Warrant, registered in the name of such Purchaser, pursuant to which such
Purchaser shall have the right to acquire up to the number of shares of Common
Stock equal to 50% of the Shares to be issued to such Purchaser at the Closing
at a price of $.21 per share and the number of shares of Common Stock equal to
50% of the Shares to be issued to such Purchaser at the Closing at a price of
$.315 per share, subject to adjustment as set forth in the definition of
warrant, above.
(b) On
the Closing Date, each Purchaser shall deliver or cause to be delivered to the
Company the following:
(i) this
Agreement duly executed by such Purchaser;
(ii) such
Purchaser's Subscription Amount by wire transfer to the account of the Company;
and
(iii) the
Registration Rights Agreement duly executed by such Purchaser.
(c) All
representations and warranties of the other party contained herein shall remain
true and correct as of the Closing Date.
(d) All
obligations, covenants and agreements of the parties required to be performed at
or prior to the Closing Date shall have been performed.
(e) From
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission, and, at any time prior to the Closing Date,
trading in securities generally as reported by Bloomberg Financial Markets shall
not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any
material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable
judgment of each Purchaser, makes it impracticable or inadvisable to purchase
the Shares at the such Closing.
(g)
CAPITALIZATION. Approximately 160,000,000 shares of the Company’s Capital stock
issued and outstanding. All of the outstanding shares of capital stock of the
Company are validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale of the Shares. Except as disclosed
in the SEC Reports, there are no stockholders agreements, voting agreements or
other similar agreements with respect to the Company's capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company's stockholders.
(p)
FOREIGN CORRUPT PRACTICES. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any corrupt funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.
(q)
ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF NOTE. The Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an
arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to the Purchasers'
purchase of the Note. The Company further represents to each Purchaser that the
Company's decision to enter into this Agreement has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.
(d)
EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a
complete loss of such investment.
The
Company acknowledges and agrees that each Purchaser does not make or has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section
3.2.
(a) The
Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144, to the Company, to
an Affiliate of a Purchaser or in connection with a pledge as contemplated in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act. As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights
Agreement.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section
4.1(b), of a legend on any of the Securities in the following form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE ACCEPTABLE TO THE COMPANY. THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT.
The
Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an "accredited investor" as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration rights Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Securities to the
pledgees or secured parties. Such a pledge or transfer would not be subject to
approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser's expense,
the Company will execute and deliver such reasonable documentation as a pledgee
or secured party of Securities may reasonably request in connection with a
pledge or transfer of the Securities, including, if the Securities are subject
to registration pursuant to the Registration Rights Agreement, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders thereunder.
(c)
Certificates evidencing the Shares and Warrant Shares shall not contain any
legend (including the legend set forth in Section 4.1(b)), (i) while a
registration statement (including the Registration Statement) covering the
resale of such security is effective under the Securities Act, or (ii) following
any sale of such Shares or Warrant Shares pursuant to Rule 144, or (iii) if such
Shares or Warrant Shares are eligible for sale under Rule 144, or (iv) if such
legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the Staff of
the Commission). The Company shall cause its counsel to issue a legal opinion to
the Company's transfer agent promptly after the Effective Date if required by
the Company's transfer agent to effect the removal of the legend hereunder. If
all or any portion of a Warrant is exercised at a time when there is an
effective registration statement to cover the resale of the Warrant Shares, such
Warrant Shares shall be issued free of all legends. The Company agrees that
following the Effective Date or at such time as such legend is no longer
required under this Section 4.1(c), it will, no later than three Trading Days
following the delivery by a Purchaser to the Company or the Company's transfer
agent of a certificate representing Shares or Warrant Shares, as the case may
be, issued with a restrictive legend (such date, the "LEGEND REMOVAL DATE"),
deliver or cause to be delivered to such Purchaser a certificate representing
such Securities that is free from all restrictive and other legends. The Company
may not make any notation on its records or give instructions to any transfer
agent of the Company that enlarge the restrictions on transfer set forth in this
Section.
(d) As
the Purchaser’s exclusive remedy, the Company shall pay to a Purchaser, in cash,
as liquidated damages and not as a penalty, for each $1,000 of Shares or Warrant
Shares (based on the Closing Price of the Common Stock on the date such
Securities are submitted to the Company's transfer agent) subject to Section
4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading
Days after such damages have begun to accrue) for each Trading Day after such
fifth Trading Day after the Legend Removal Date until such certificate is
delivered. Nothing herein shall limit such Purchaser's right to pursue actual
damages for the Company's failure to deliver certificates representing any
Securities as required by the Transaction Documents, and such Purchaser shall
have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief.
(e) Each
Purchaser, severally and not jointly with the other Purchasers, agrees that the
removal of the restrictive legend from certificates representing Securities as
set forth in this Section 4.1 is predicated upon the Company's reliance that the
Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom.
5.7
GOVERNING LAW. All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
Miami-Dade or Broward Counties, Florida. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
Miami-Dade or Broward Counties, Florida, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by delivering a copy thereof via overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Each party hereto (including its affiliates, agents, officers, directors and
employees) hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any
provisions of a Transaction Document, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its attorneys' fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
(SIGNATURE
PAGE FOLLOWS)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
By:
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Xxxxxxxx
Xxxxxxxx
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Chief
Executive Officer
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Address
for Notice:
c/o
Xxxxxxxx Xxxxxxxx
000 XX
0xx
Xxx., Xxxxx 0000
Xxxx
Xxxxxxxxxx, XX 00000
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGES FOR PURCHASERS
FOLLOW]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
By:
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Name:
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Title:
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ADDRESS
FOR NOTICE
Attn:
Subscription
Amount:
$
Shares:
Warrant
Shares:
WITH A
COPY TO: