SECURITIES PURCHASE AGREEMENT
SECURITIES
PURCHASE AGREEMENT (the "Agreement"), dated as of
September 11, 2007, by and among SinoFresh HealthCare, Inc., a Florida
corporation (the "Company") and the investors listed on
the Schedule of Buyers attached hereto as Schedule A (individually, a
"Buyer" and collectively, the
"Buyers").
WHEREAS:
A. The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 3(a)(9)
of
the Securities Act of 1933, as amended (the "1933 Act"), as
promulgated by the United States Securities and Exchange Commission (the
"SEC") under the 1933 Act.
B. The
Buyers have purchased those certain Convertible Debentures issued by the Company
and listed on Schedule B attached hereto and made a part hereof (the
“Debentures”) in accordance with the terms and conditions of
that certain Escrow Agreement, dated as of August 24, 2007, as amended, by
and
among the Buyers (as executed by Razek Azizi representing the Buyers) and the
original holders of the Debentures, pursuant to which Buyers have assumed all
rights, liabilities and obligations under the Debentures, including, without
limitation, all rights to all security interests and other ancillary documents
securing the obligations underlying the Debentures (collectively, the
“Ancillary Documents”), which such Debentures matured on
December 6, 2006.
C. Notwithstanding
that the Debentures are currently in default, Company and Buyers have agreed
to
convert the Debentures into shares of the Company’s no par value common stock
(the “Common Stock”) at a rate of $0.20 per share, such shares
(the “Conversion Shares”) to be issued in such amounts and to
such parties as the Buyers shall direct.
D. Upon
conversion of the Debentures into the Conversion Shares, Buyers shall relinquish
all rights, liabilities and obligations they have pursuant to the Debentures
and
the Ancillary Documents.
E. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, that aggregate amount of Conversion Shares
set forth opposite such Buyer's name in column (3) on the Schedule of Buyers
attached hereto.
NOW,
THEREFORE, the Company and each Buyer hereby agree as
follows:
1. PURCHASE
AND SALE OF CONVERSION SHARES.
(a) Subject
to the satisfaction (or waiver) of the conditions set forth herein, the Company
shall issue and sell to each Buyer, and each Buyer severally, but not jointly,
agrees to purchase from the Company on the Closing Date (as defined below)
that
number of Conversion Shares as is set forth opposite such Buyer’s name in column
(3) on the Schedule of Buyers for that portion of the Debentures owned by such
Buyer, as indicated opposite such Buyer’s name in column (2) on the Schedule of
Buyers.
(b) The
date
and time of the closing (the "Closing") shall be no later than
10:00 a.m., New York City time on [September 6], 2007 (or such later date as
is
mutually agreed to by the Company and each Buyer) (the “Closing
Date”).
2. BUYER'S
REPRESENTATIONS AND WARRANTIES. Each Buyer, severally and not
jointly, represents and warrants with respect to only itself that:
(a) No
Sale or Distribution. Such Buyer is acquiring the Conversion
Shares as principal for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933 Act; provided, however,
that by making the representations herein, such Buyer reserves the right to
dispose of the Conversion Shares at any time in accordance with or pursuant
to a
registration statement or an exemption under the 1933 Act. Such Buyer
is acquiring the Conversion Shares in the ordinary course of its
business. Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any person to distribute any of
the
Conversion Shares.
(b) Accredited
Investor Status. At the time such Buyer was offered the
Debentures and the Conversion Shares, it was, and at the date hereof it is,
either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
(a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Buyer is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act.
(c) Reliance
on Exemptions. Such Buyer understands the Conversion Shares are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws
and
that the Company is relying in part upon the truth and accuracy of, and such
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order
to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Conversion Shares.
(d) Information. Such
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Conversion Shares that have been requested by
such
Buyer. Such Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries
nor any other due diligence investigations conducted by such Buyer or its
advisors, if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and warranties contained
herein. Such Buyer understands that its investment in the Conversion
Shares involves a high degree of risk and is able to afford a complete loss
of
such investment. Such Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Conversion Shares.
(e) No
Governmental Review. Such Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Conversion Shares
or
the fairness or suitability of the investment in the Conversion Shares nor
have
such authorities passed upon or endorsed the merits of the offering of the
Conversion Shares.
(f) Transfer
or Resale. Such Buyer understands: (i) the Conversion Shares have
not been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless
(A)
subsequently registered thereunder, (B) such Buyer shall have delivered to
the
Company an opinion of counsel, in a form reasonably acceptable to the Company,
to the effect that such Conversion Shares to be sold, assigned or transferred
may be sold, assigned or transferred pursuant to an exemption from such
registration, or (C) such Buyer provides the Company with reasonable assurance
that such Conversion Shares can be sold, assigned or transferred pursuant to
Rule 144 or Rule 144A promulgated under the 1933 Act, as amended (or a successor
rule thereto) (collectively, "Rule 144"), notwithstanding the
foregoing, the requirement to deliver a legal opinion as set out in clause
(B)
above shall not apply to transfers to an affiliate of the Buyer; (ii) any sale
of the Conversion Shares made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Conversion Shares under circumstances in which
the
seller (or the Person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 0000 Xxx) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of
the
SEC thereunder; and (iii) neither the Company nor any other Person is under
any
obligation to register the Conversion Shares under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder. The Conversion Shares may be pledged in connection with a
bona fide margin account or other loan or financing arrangement secured by
the
Conversion Shares and such pledge of Conversion Shares shall not be deemed
to be
a transfer, sale or assignment of the Conversion Shares hereunder, and no Buyer
effecting a pledge of Conversion Shares shall be required to provide the Company
with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement, including, without limitation, this Section
2(f).
(g) Legends. Such
Buyer understands the certificates or other instruments representing the
Conversion Shares have not been registered under the 1933 Act and shall bear
any
legend as required by the "blue sky" laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):
THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR
(B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO
RULE
144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Conversion Shares upon
which it is stamped, if, unless otherwise required by state securities laws,
in
connection with a sale, assignment or other transfer, such holder provides
the
Company with an opinion of a law firm reasonably acceptable to the Company,
in a
form reasonably acceptable to the Company, to the effect that such sale,
assignment or transfer of the Conversion Shares may be made without registration
under the applicable requirements of the 1933 Act.
(h) Validity;
Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of such Buyer and shall constitute the legal,
valid and binding obligations of such Buyer enforceable against such Buyer
in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to,
or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
(i) No
Conflicts. The execution, delivery and performance by such Buyer
of this Agreement and the consummation by such Buyer of the transactions
contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Buyer or (ii) conflict with, or constitute
a
default (or an event which with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to
which
such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations
hereunder.
(j) Residency. Such
Buyer is a resident of that jurisdiction specified below its address on the
Schedule of Buyers.
(k) Certain
Trading Activities. Other than the transactions contemplated
herein, since the time that such Buyer was first contacted by the Company or
any
other Person regarding this investment in the Company, neither the Buyer nor
any
Affiliate of such Buyer which (x) had knowledge of the transactions contemplated
hereby, (y) has or shares discretion relating to such Buyer's investments or
trading or information concerning such Buyer's investments and (z) is subject
to
such Buyer's review or input concerning such Affiliate's investments or trading
(collectively, "Trading Affiliates") has directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Buyer or Trading Affiliate, effected or agreed to effect
any transactions in the securities of the Company. Such Buyer hereby
covenants and agrees not to, and shall cause its Trading Affiliates not to,
engage, directly or indirectly, in any transactions in the securities of the
Company or involving the Company's securities during the period from the date
hereof until the earlier to occur of (i) such time as the transactions
contemplated by this Agreement are first publicly announced or (ii) such time
as
this Agreement is terminated in full. Other than to other Persons
party to this Agreement and those expressly acknowledged by the Company, such
Buyer has maintained the confidentiality of the existence and terms of this
transaction. "Short Sales" include, without limitation, all
“short sales” as defined in Rule 200 promulgated under Regulation SHO under
the
Exchange Act and all types of direct and indirect stock pledges, forward sale
contracts, options, puts, calls, short sales, swaps and similar arrangements
(including on a total return basis), and sales and other transactions through
non-U.S. broker-dealers or foreign regulated brokers. Such Buyer
acknowledges the SEC's position set forth in Item 65, Section 5 under Section
A,
of the Manual of Publicly Available Telephone Interpretations, dated July 1997,
compiled by the Office of Chief Counsel, Division of Corporation Finance, and
such Buyer will adhere to such position.
(l) Upon
receipt of the Conversion Shares, Buyer shall have no further right, title
or
interest in or to the Debentures or any Ancillary Documents and Buyer hereby
releases the Company from all obligations and liabilities thereunder and agrees
not to assert a claim against the Company thereunder, including, without
limitation, under any security agreement, intellectual property security
agreement or guaranty agreement executed by the Company or its subsidiaries
in
connection with the issuance, assignment or sale of the Debentures.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company hereby represents and
warrants to each of the Buyers that, as of the date hereof:
(a) Organization
and Qualification. The Company and its subsidiaries are entities
validly existing and in good standing under the laws of the jurisdiction in
which they are formed, and have the requisite power and authorization to own
their properties and to carry on their business as now being
conducted.
(b) Authorization;
Enforcement; Validity. The Company has the requisite corporate
power and authority to enter into and perform its obligations under this
Agreement and to issue the Conversion Shares in accordance with the terms hereof
and thereof. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby, including, without limitation, the issuance of the Conversion Shares
have been duly authorized by the Company's Board of Directors and no further
filing, consent, or authorization is required by the Company, its Board of
Directors or its stockholders. This Agreement has been duly executed
and delivered by the Company, and constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by general principles
of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of applicable creditors' rights and remedies.
(c) Issuance
of Conversion Shares. The issuance of the Conversion Shares is
duly authorized and are free from all taxes, liens and charges with respect
to
the issue thereof. Assuming the accuracy of each of the
representations and warranties set forth in Section 2 of this Agreement, the
offer and issuance by the Company of the Conversion Shares is exempt from
registration under the 1933 Act.
(d) No
Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Company of the transactions contemplated
hereby will not (i) result in a violation of any articles of incorporation,
articles of formation, any articles of designations or other constituent
documents of the Company or any of its Subsidiaries, any capital stock of the
Company or any of its Subsidiaries or bylaws of the Company or any of its
Subsidiaries or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration
or
cancellation of, any agreement, indenture or instrument to which the Company
or
any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign, federal and
state securities laws and regulations and the rules and regulations of the
NASD’s OTC Bulletin Board (the "Principal Market")) applicable
to the Company or any of its Subsidiaries or by which any property or asset
of
the Company or any of its Subsidiaries is bound or affected, except in the
case
of each of clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a material adverse effect.
(e) Consents. Neither
the Company nor any of its Subsidiaries is required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its obligations
under or contemplated by this Agreement.
(f) Acknowledgment
Regarding Buyer's Purchase of Conversion Shares. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of
an
arm's length purchaser with respect to this Agreement and the transactions
contemplated hereby and that no Buyer is an officer or director of the
Company.
4. MISCELLANEOUS.
(a) Company’s
Disclosure of Material, Non-Public Information. Notwithstanding anything to
the contrary stated herein, if the Company, in connection with the transactions
contemplated hereby, discloses material, non-public information to the Buyers,
(collectively, the “Information”), in addition to the existence
and terms of this Agreement, the Company covenants that the Information will
be
disclosed in the ordinary course of its business, either by Form 8-K or press
release, or both.
(b) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Florida, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Florida or any other jurisdictions) that would cause the application of
the
laws of any jurisdictions other than the State of Florida. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in
[ ],
Florida, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, 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 brought in an inconvenient forum
or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
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 HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT
OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(c) Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
(d) Headings. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(e) Severability. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(f) Entire
Agreement; Amendments. This Agreement supersedes all other prior
oral or written agreements between the Buyers, the Company, their affiliates
and
Persons acting on their behalf with respect to the matters discussed herein,
and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and,
except as specifically set forth herein, neither the Company nor any Buyer
makes
any representation, warranty, covenant or undertaking with respect to such
matters. No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is
sought. No such amendment shall be effective to the extent that it
applies to less than all of the holders of the applicable Conversion Shares
then
outstanding.
(g) Notices. Any
and all notices or other communications or deliveries required or permitted
to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth
on
the signature pages attached hereto prior to 5:30 p.m. (New York City time)
on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
set
forth on the signature pages attached hereto on a day that is not a Trading
Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the 2nd Trading
Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice
is
required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto.
(h) Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and
assigns.
(i) No
Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
(j) Further
Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any
other
party may reasonably request in order to carry out the intent and accomplish
the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(k) No
Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.
[Signature
Pages Follow]
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.
|
SINOFRESH
HEALTHCARE, INC.
|
Address
for Notice:
000
Xxxx Xxxxxx Xxxxx
Xxxxxxxxx,
Xxxxxxx 00000
|
|
By:__________________________________________
Name:
Title:
|
Facsimile:
[( ) - ]
Attention:
Xxxxxxx Xxxx
|
|
With
a copy to (which shall not constitute notice):
|
Ellenoff
Xxxxxxxx & Schole LLP
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxx X. Xxxxxxxx, Esq.
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR BUYER FOLLOWS]
[BUYER
SIGNATURE PAGES TO SINOFRESH HEALTHCARE, INC. SECURITIES PURCHASE
AGREEMENT]
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.
Name
of
Buyer: ____________________________________________________
Signature
of Authorized Signatory of Buyer:
______________________________
Name
of
Authorized Signatory: ________________________________________
Title
of
Authorized Signatory: _________________________________________
Email
Address of Buyer:______________________________________________
Fax
Number of Buyer: _______________________________________________
Address
for Notice of Buyer:
Address
for Delivery of Securities for Buyer (if not same as address for
notice):
EIN
Number:
SCHEDULE
A
SCHEDULE
OF BUYERS
Buyer Amount
of Debenture
Held Conversion
Shares
SCHEDULE
B
LIST
OF DEBENTURES
|
Investor
|
Current
Outstanding Principal
Amount
of Debentures
|
|
Bushido
Capital Master Fund L.P.
|
$220,000
|
|
Gamma
Opportunity Capital Partners, LP
|
$220,000
|
|
CAMOFI
Master LDC
|
$225,000
|
|
Bluegrass
Growth Fund LP
|
$170,000
|
|
Bluegrass
Growth Fund LTD
|
$170,000
|
|
Asset
Managers International LTD
|
$250,000
|
|
TOTAL
|
$1,255,000.00
|
