SECURITIES PURCHASE AGREEMENT
THIS
SECURITIES PURCHASE AGREEMENT (this "Agreement")
is made
and entered into as of the 3rd day of September, 2008 (the “Effective
Date”)
by and
among BioAuthorize Holdings, Inc. formerly known as Genesis Holdings, Inc.,
a
Nevada corporation (“Company”),
and
Launch Pad Research and Marketing Company, an Arizona corporation (“Launch”).
RECITALS
A. Subject
to the terms and conditions set forth in this Agreement and pursuant to Section
4(2) of the Securities Act of 1933, as amended (the “Securities
Act”),
and
Rule 506 promulgated thereunder, the Company desires to issue and sell to
Launch, and Launch desires to purchase from the Company, securities of the
Company as more fully described in this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises, the mutual representations,
warranties, covenants, conditions and agreements contained herein, and for
other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Launch (each a “Party”
and
collectively, the "Parties")
hereby
agree as follows:
SECTION
1
PURCHASE
AND SALE
1.1 Purchase
and Sale.
(a) On
the
terms and subject to the conditions of this Agreement, at the Closing referred
to in Section
2.1
hereof,
Company shall sell, convey, assign, transfer and deliver to Launch, and Launch
shall purchase, acquire and accept delivery of Four Million (4,000,000) duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock,
par value $.001 per share, of the Company free and clear of all liens and
encumbrances imposed by Company other than restrictions on transfer as set
forth
in this Agreement (the “Shares”).
(b)To
effect
the transfer contemplated by Section
1.1(a),
at the
Closing, the Company shall deliver or cause to be delivered to Launch, against
the payment therefore in accordance with Section
1.2
hereof,
a stock certificate(s) for 4,000,000 shares of Common Stock of the Company
(each
a “Certificate”)
representing the Shares.
1.2 Purchase
Price and Security.
(a)
As
payment for the Shares being acquired by Launch hereunder, Launch shall pay
to
Company $0.02 per share of common stock for a total sum of Eighty Thousand
Dollars ($80,000.00) (the “Purchase
Price”)
which
shall be payable in cash or certified funds at the Closing.
SECTION
2
CLOSING
AND THE PRE-CLOSING PERIOD
2.1 Closing.
The
closing of the purchase and sale of the Shares pursuant to this Agreement (the
"Closing")
shall
be on September 3, 2008 at 12:00 p.m. (the "Closing
Date")
and
shall occur at the offices of the
Company, 00000 X. 00xx
Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, XX 00000,
or at
such other time and place as shall be mutually agreed to by the
Parties.
At
the
Closing:
(a) Company
shall deliver the Certificates representing the Shares to Launch with
instructions directing the transfer agent to register the Shares to Launch
on
the books of the Company and a certificate executed by Company to the effect
that the conditions set forth in Section 6.2 have been satisfied;
(b) Launch
shall deliver to Company that same day immediately available funds or a
cashier's or certified check for $80,000.00; and
(c) A
certificate executed by Launch to the effect that the conditions set forth
in
Section 6.1 have been satisfied.
(d) The
delivery of certificates of good standing by the Company and Launch dated within
five (5) days of the Closing.
2.2 Termination
in Absence of Closing.
(a)
Subject
to the provisions of Section 6, if by the close of business on September 5,
2008, the Closing has not occurred, then any Party hereto may thereafter
terminate this Agreement by written notice to such effect, to the other Parties
hereto, without liability of or to any party to this Agreement or any
representative of such Party unless the reason for Closing having not occurred
is (i) such Party’s willful breach of the provisions of this Agreement, or (ii)
if all of the conditions to such Party’s obligations set forth in Section 6 have
been satisfied or waived in writing by the date scheduled for the Closing
pursuant to Section 2.1, the failure of such Party to perform its obligations
under Section 2 on such date; provided,
however,
that
the provisions of Sections 7.1 through 7.5 and Section 8.1 shall survive any
such termination; and
provided further, however,
that
any termination pursuant to this Section 2.2 shall not relieve any party hereto
who was responsible for Closing having not occurred as described in clauses
(i)
or (ii) above of any liability for (x) such Party’s willful breach of the
provisions of this Agreement, or (y) if all of the conditions to such Party’s
obligations set forth in Section 6 have been satisfied or waived in writing
by
the date scheduled for the Closing pursuant to Section 2.1, the failure of
such
Party to perform its obligations under this Section 2 on such date.
(b) This
Agreement and the transactions contemplated herein may be terminated and
abandoned at any time on or prior to the Closing Date by Launch if:
1. any
representation or warranty made herein for the benefit of Launch, or any
certificate, schedule or document furnished to Launch pursuant to this Agreement
is untrue in any material respect; or
2. The
Company shall have defaulted in any material respect in the performance of
any
material obligation under this Agreement.
(c)
This
Agreement and the transactions contemplated herein may be terminated and
abandoned at any time on or prior to the Closing Date by Company
if:
1. any
representation or warranty made herein for the benefit of Company, or any
certificate, schedule or document furnished to Company pursuant to this
Agreement is untrue in any material respect; or
2. Launch
shall have defaulted in any material respect in the performance of any material
obligation under this Agreement.
THE
PRE-CLOSING PERIOD
2.3 Due
Diligence, Delivery of Information, Inspection.
During
the period of time prior to the Closing of this Agreement (the "Pre-Closing
Period"),
Company shall make available to Launch
for
review and inspection the Company’s business, its assets and all materials,
documentation and other information relating to the Company’s business, its
assets and all other transactions contemplated by this Agreement (the
“Due
Diligence”).
(a) For
many
months and weeks prior to the Effective Date (the “Due
Diligence Period”),
Launch
was
given the opportunity to investigate, make its own independent evaluation of
the
Company’s business, financial condition and the risks associated with purchasing
the Shares, and any and all other matters which Launch determined to be relevant
to its decision to purchase the Shares (the “Investigation”).
From
the Investigation, Launch
did not
find any item for which it disapproved or which in any way deterred Launch’s
desire to close the purchase of the Shares, or if it did so find any item of
disapproval or deterrence, such item was corrected by the Company to Launch’s
satisfaction prior to the Closing. Launch acknowledges that the Investigation
was completed to its satisfaction.
SECTION
3
REPRESENTATIONS
AND WARRANTIES OF COMPANY
Company
hereby represents and warrants to Launch that:
3.1 Corporate
Existence and Qualification.
Company
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Nevada; Company has the corporate power to own, manage,
lease and hold its properties and to carry on its business as and where such
properties are presently located and such business is presently
conducted.
3.2 Authority,
Approval and Enforceability.
Company
has all right, title and interest in and to the Shares and has the authority
to
sell, convey, assign, transfer and deliver to Launch the Shares free and clear
of any and all liens, mortgages, adverse claims, charges, security interests,
encumbrances or other restrictions or limitations whatsoever. This Agreement
has
been duly executed and delivered by Company and Company, respectively, and
Company and Company each have all requisite power and legal capacity to execute
and deliver this Agreement and all collateral agreements executed and delivered
or to be executed and delivered in connection with the transactions provided
for
hereby, to consummate the transactions contemplated hereby and by the collateral
agreements, and to perform their respective obligations hereunder and under
the
collateral agreements. This Agreement and each collateral agreement to which
Company and Company are a party constitute, or upon execution and delivery
will
constitute, the legal, valid and binding obligation of such Party, enforceable
in accordance with its terms, except as such enforcement may be limited by
general equitable principles or by applicable bankruptcy, insolvency,
moratorium, or similar laws and judicial decisions from time to time in effect
which affect creditors’ rights generally.
3.3
Capitalization
and Corporate Records.
(a)
Company’s
authorized capital stock consists of 100,000,000 shares of Common Stock, par
value $.001 per share, and 1,000,000 shares of Preferred Stock, par value $.001
per share, to be issued in series or classes as the Board of Directors shall
determine, of which 23,725,000 shares of Common Stock are issued and
outstanding. All of the outstanding shares of Company are duly authorized,
validly issued, fully paid and non-assessable and were not issued in violation
of (i) any preemptive or other rights of any person to acquire securities of
Company, or (ii) any applicable federal or state securities laws, and the rules
and regulations promulgated thereunder (collectively, the “Securities
Laws”).
There
are no outstanding subscriptions, options, convertible securities, rights
(preemptive or otherwise), warrants, calls or agreements relating to any shares
of capital stock of Company. Upon delivery to Launch at the Closing of
Certificates representing the Shares, good and valid title to the Shares will
pass to Launch, free and clear of all liens, mortgages, adverse claims, charges,
security interests, encumbrances or other restrictions or limitations
whatsoever, other than those arising from acts of Launch.
(b) The
copies of the Articles of Incorporation and Bylaws of Company and the Report
on
Form 10-KSB for the year ended 12/31/07 and the Reports on Form 10-Q for the
quarterly periods ending 3/31/08 and 6/30/08 provided to Launch al are true,
accurate, and complete and reflect all amendments, where applicable, made
through the date of this Agreement. Company’s stock and minute books made
available to Launch for review were correct and complete as of the date of
such
review, no further entries have been made through the date of this Agreement,
and such minute books contain an accurate record of all required stockholder
and
required corporate actions of the stockholders and directors (and any committees
thereof) of Company taken by written consent or at a meeting. All corporate
actions taken by Company have been duly authorized or ratified. All accounts,
books, ledgers and official and other records of Company fairly and accurately
reflect all of Company’s transactions, properties, assets and
liabilities.
3.4 No
Company Defaults or Consents.
The
execution and delivery of this Agreement by Company and the performance by
Company of its obligations hereunder will not violate any provision of law
or
any judgment, award or decree or any indenture, agreement or other instrument
to
which Company is a party, or by which the properties or assets of Company are
bound or affected, or conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under, any such indenture,
agreement or other instrument, in each case except to the extent that such
violation, default or breach could not reasonably be expected to delay or
otherwise significantly impair the ability of the parties to consummate the
transactions contemplated hereby.
3.5 Litigation.
As
of the
Closing, Company is unaware of any litigation filed against Company and has
not
received notification of any alleged facts which may give rise to any threatened
litigation which would have a material adverse effect on Company.
3.6 Brokers
or Finders.
Company
has not incurred or will not incur, directly or indirectly, any liability for
brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Agreement or any transaction contemplated
hereby.
SECTION
4
REPRESENTATIONS
AND WARRANTIES OF LAUNCH
Launch
hereby represents and warrants to Company that:
4.1
Corporate
Existence and Qualification; Authority, Approval and
Enforceability.
Launch
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Arizona; Launch has the corporate power to own, manage,
lease and hold its properties and to carry on its business as and where such
properties are presently located and such business is presently conducted.
This
Agreement has been duly executed and delivered by Launch, and Launch has all
requisite legal capacity to execute and deliver this Agreement and all
collateral agreements executed and delivered or to be executed and delivered
by
Launch in connection with the transactions provided for hereby, to consummate
the transactions contemplated hereby, and to perform its obligations hereunder.
This Agreement to which Launch is a party constitutes, or upon execution and
delivery will constitute, the legal, valid and binding obligation of Launch,
enforceable in accordance with its terms, except as such enforcement may be
limited by general equitable principles or by applicable bankruptcy, insolvency,
moratorium, or similar laws and judicial decisions from time to time in effect
which affect creditors’ rights generally.
4.2
No
Default or Consents.
Neither
the execution and delivery of this Agreement nor the carrying out of the
transactions contemplated hereby will:
(a) violate
any legal requirements applicable to Launch;
(b)
violate, conflict with, result in a breach of, constitute a default under
(whether with or without notice or the lapse of time or both), or accelerate
or
permit the acceleration of the performance required by, or give any other party
the right to terminate, any contract or permit applicable to Launch;
(c)
result in the creation of any lien, charge or other encumbrance on any property
of Launch; or
(d)
require Launch to obtain or make any waiver, consent, action, approval or
authorization of, or registration, declaration, notice or filing with, any
private non-governmental third party or any governmental authority.
4.3 No
Proceedings.
No
suit, action or other proceeding is pending or, to Launch’s knowledge,
threatened before any governmental authority seeking to restrain Launch or
prohibit its entry into this Agreement or prohibit the Closing, or seeking
damages against Launch or its properties as a result of the consummation of
this
Agreement.
4.4
Investment
Representations.
(a)
Investment
Intent.
As a
condition to the Company issuing the Shares to Launch, Launch represents and
warrants as follows:
(i)
Respecting the Company, its business, plans and financial condition, and any
other matters relating to issuance of the Shares: Launch has received all
materials which have been requested by Launch including copies of the most
recent report filed by the Company with the Securities and Exchange Commission
on Form 10-Q for the quarterly periods ended March 31, 2008 and June 30, 2008
and Form 10-KSB for the year ending December 31, 2007; has had a reasonable
opportunity to ask questions of the Company and its representatives; and the
Company has answered all inquiries that Launch or Launch's representatives
have
put to it. The Company undertakes no obligation to update, review or revise
any
forward-looking statements to reflect
any change in the Company's expectations or any change in events, conditions,
circumstances or assumptions on which any such statements are based. Launch
has
had access to all additional information necessary to verify the accuracy of
the
information set forth in this Agreement and any other materials furnished
herewith, and has taken all the steps necessary to evaluate the merits and
risks
of an investment as proposed hereunder.
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(ii)
Launch is experienced in evaluating and investing in newly organized
technology companies such as the Company. Launch has such knowledge
and
experience in financial and business matters to enable Launch to
evaluate
the merits and risks of
an investment in the Shares, to make an informed investment decision
with
respect thereto, and
can afford to bear such risks, including, without limitation, the
risks of
losing its entire investment in the Shares or if Launch were to purchase
shares of Common Stock upon exercise of the Shares.
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(iii)
Launch
acknowledges, agrees and recognizes that neither the Company nor
any of
its affiliates or agents or consultants have made any representation
or
warranty concerning the Company's financial results, upon which Launch
is
relying in accepting the issuance of the Shares. Launch is subscribing
for
the Shares based solely upon Launch's own independent analysis of
the
Company's business and the historical financial information which
is
publicly available.
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"The
securities represented by this certificate have not been registered
under
the Securities Act of 1933, or any state securities laws and neither
such
securities nor any interest therein may be offered, sold, pledged,
assigned or otherwise transferred unless (1) a registration statement
with
respect thereto is effective under the Act and any applicable state
securities laws, or (2) the Company receives an opinion of counsel
to the
holder of such securities, which counsel and opinion are reasonably
satisfactory to the Company, that such securities may be offered,
sold,
pledged, assigned or transferred in the manner contemplated without
an
effective registration statement under the Act or applicable state
securities laws."
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(v)
Launch is acquiring the Shares for investment for its own account and not with
the view to, or for resale in connection with, any distribution thereof
or
the
granting of any participation therein, and has no present intention of
distributing or selling to others any of such interest or granting
participations therein.
(vi)
Launch acknowledges that a limited trading market for the Shares presently
exist
and it is uncertain that a more active market for the Shares will develop in
the
future, and that Launch may find it impossible to liquidate the investment
at a
time when it may be desirable to do so, or at any other time.
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(viii)
Launch is not relying on the Company with respect to the tax and
other
economic considerations of an investment in the Shares.
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(ix)
There are no registration rights for the
Shares.
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(x)
Without limiting the effect of any representation or warranty made by Company
or
Company, Launch and/or her agents have met with representatives of Company
and
Company and thereby have had the opportunity to ask questions of, and receive
answers satisfactory to Launch concerning Company, the Shares and the terms
and
conditions of this transaction, as well as to obtain any information requested
by Launch including, but not limited to information meeting the requirements
of
Rule 502(b) of Regulation D promulgated under the Act, and Launch further
confirms that all documents requested by her have been and remain available
for
inspection or copying and that Launch has been supplied with all of the
additional information concerning this investment that has been requested and
has obtained other information necessary to verify the accuracy of the
information given to it.
(xi)
Funds provided to Company by Launch are the exclusive property of Launch and
have not been obtained by Launch’s issuance of any securities in violation of
any federal or state securities laws. If any of the funds provide to Company
by
Launch have been obtained from the resources of any person other than Launch,
such person is an “accredited investor” as that term is defined in Regulation D
promulgated under the Act and Launch has obtained such funds only after
disclosure of all material facts regarding Company, it business, properties
and
financial condition and of Launch to such person so that the person meets all
of
the qualifications and requirements in this Section 4.4.
(xii)
Launch acknowledges that the representations, warranties and agreements made
by
Launch herein shall survive the execution and delivery of this
Agreement.
(b)
Purchaser
Qualifications.
Launch
has
reviewed, understands and satisfies the eligible purchaser requirements under
this Agreement as set forth in Rule 501(a) of Regulation D promulgated under
the
Act in that Launch at the time Launch was offered the Shares, it was, and as
of
the date of this Agreement and as of the Closing Date, will be an “accredited
investor” as qualified under at least one of the categories set forth in Rule
501(a), and Launch acknowledges that Company and Company have relied on Launch’s
representation to form a reasonable belief that the Launch satisfies the
eligible purchaser requirements set forth herein.
SECTION
5
OBLIGATIONS
PRIOR TO THE CLOSING
5.1 Covenants
of the Parties.
Company
and Launch covenant as follows:
(a)
From
the
Effective Date through the Closing, each Party shall promptly inform the other
Parties in writing of any change in facts and circumstances that could render
any of the representations and warranties made herein by the Party providing
the
notice, inaccurate or misleading if such representations and warranties had
been
made upon the occurrence of the fact or circumstance in question.
(b) From
the
Effective Date through the Closing, Company shall carry on the operation of
its
business in the ordinary course consistent with the practice conducted
immediately prior to the Effective Date,
and will
use commercially reasonable efforts not to take any action inconsistent with
this Agreement. Except as contemplated hereby or as may be incidental to or
in
furtherance of the transactions contemplated hereby or as may have been set
forth herein, Company shall use commercially reasonable efforts to maintain
the
present character and quality of its business, including its present operations,
physical facilities, working conditions, and relationships with lessors,
licensors, suppliers, customers,
partners
(including, without limitation, joint venture partners, syndication partners
and
strategic partners)
and
employees. Without limiting the generality of the foregoing, unless consented
to
by Launch in writing, Company, except as specifically contemplated by this
Agreement, shall not:
(i) incur
any
indebtedness for borrowed or purchase money or letters of credit, or assume,
guarantee, endorse (other than endorsements for deposit or collection in the
ordinary course of business), or otherwise become responsible for obligations
of
any other person or entity except in the ordinary course of
business;
(ii) issue
or
redeem any securities other
than
pursuant to the exercise of options or warrants outstanding as of the date
hereof;
(iii) make
or
incur any obligation to make any distribution to its stockholders;
(iv) make
any
change to its Articles of Incorporation or Bylaws;
(v) mortgage,
pledge or otherwise encumber any of its assets or sell, transfer or otherwise
dispose of any of its assets except in the ordinary course of
business;
(vi) make
any
investment of a capital nature either by purchase of stock or securities,
contributions to capital, property transfer or otherwise, or by the purchase
of
any property or assets of any other person or entity, except in the ordinary
course of business;
(vii) adopt
a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization or otherwise permit
its
corporate existence to be suspended, lapsed or revoked;
(viii) sell,
lease, license, transfer or otherwise dispose of assets of Company in excess
of
$10,000.00 in any single transaction or series of transactions;
(ix) terminate
any material contract or make any change in any material contract which will
result in an aggregate value, cost or amount in excess of $50,000.00;
(x) make
any
change in any method of accounting or accounting practice except as required
by
GAAP or applicable law;
(xi) enter
into, modify or amend any employment agreement or arrangement with, or grant
any
bonuses, salary increase, or retention pay to, any officer, director, consultant
or key employee, other than (x) in connection with promotions or other changes
in positions or responsibilities of employees that do not involve an increase
in
compensation, severance or benefits; or (y) as may be required by
applicable law or any benefit plan as in effect on the date hereof;
(xii) modify,
amend or terminate any benefit plan or increase the benefits provided under
any
benefit plan except as required by applicable law and except for implementation
of the new health insurance plan of which Launch has provided assistance in
sourcing and is fully aware and hereby acknowledges;
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(xiii) enter
into, renew on materially different terms or agree to enter into, or renew
on
materially different terms, any employee welfare, pension, retirement,
profit-sharing or similar plan, program, agreement, policy or arrangement except
as required by applicable law;
(xiv) enter
into any new or renew any other material contract with respect to the Business
which has an aggregate value, cost or amount in excess of
$10,000.00;
(xv) file
any
amended returns with respect to taxes, make
or
change any election in respect of material taxes, enter into any closing
agreement, settle any claim or assessment in respect of material taxes, or
consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of material taxes;
(xvi) make
any
prepayments with respect to, or advance any funds under, any agreement or
arrangement to which the Company is a party other than in the ordinary course
of
business; or
(xvii) make
any
individual cash payment in excess of $10,000.00, other than payments made in
the
ordinary course of business (including, without limitation, payments for taxes
due and payments to Company’s suppliers).
SECTION
6
CONDITIONS
TO Company’S AND LAUNCH’S OBLIGATIONS
6.1 Conditions
to Obligations of Company.
The
obligations of Company to sell the Shares are subject, at the option of Company,
to the satisfaction or waiver by Company of the following
conditions:
(a) All
representations and warranties of Launch contained in this Agreement shall
be
true and correct in all material respects at and as of the Closing, and Launch
shall have performed and satisfied in all material respects all covenants and
agreements required by this Agreement to be performed and satisfied by Launch
at
or prior to the Closing.
(b) As
of the
Closing Date, no suit, action or other proceeding (excluding any such matter
initiated by or on behalf of Company) shall be pending or threatened before
any
governmental authority seeking to restrain Company or prohibit the Closing
or
seeking damages against Company as a result of the consummation of this
Agreement.
(c) All
proceedings to be taken by Launch in connection with the transactions
contemplated hereby and all documents incident thereto, including deliveries
by
Launch at the Closing under Section 2.1, shall be satisfactory in form and
substance to Company and its counsel, and Company and said counsel shall have
received all such counterpart originals or certified or other copies of such
documents as it or they may reasonably request.
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(d) No
proceeding in which Launch shall be a debtor, defendant or party seeking an
order for its own relief or reorganization shall have been brought or be pending
by or against Launch under any United States or state bankruptcy or insolvency
law.
6.2
Conditions
to Obligations of Launch.
The
obligations of Launch to purchase the Shares are subject, at the option of
Launch, to the satisfaction, or waiver by Launch, of the following
conditions:
(a)
All
representations and warranties of Company contained in this Agreement shall
be
true and correct in all material respects at and as of the Closing, and Company
shall have performed and satisfied in all material respects all agreements
and
covenants required by this Agreement to be performed and satisfied by them
at or
prior to the Closing.
(b)
As
of the
Closing Date, no suit, action or other proceeding (excluding any such matter
initiated by or on behalf of Launch) shall be pending or threatened before
any
court or governmental agency seeking to restrain Launch or prohibit the Closing
or seeking damages against Launch or Company or its properties as a result
of
the consummation of this Agreement.
(c)
All
proceedings to be taken by Company in connection with the transactions
contemplated hereby and all documents incident thereto, including deliveries
by
Company at the Closing under Section 2.1, shall be satisfactory in form and
substance to Launch and its counsel, and Launch and said counsel shall have
received all such counterpart originals or certified or other copies of such
documents as it or they may reasonably request.
(d)
No
proceeding in which Company shall be a debtor, defendant or party seeking an
order for its own relief or reorganization shall have been brought or be pending
by or against Company under any United States or state bankruptcy or insolvency
law.
SECTION
7
POST-CLOSING
OBLIGATIONS
7.1
Post-Closing
Indemnification.
(a)
Subject to the provisions of Section 8.1, from and after the Closing, Company
and Company shall indemnify and hold harmless Launch for, from and against
any
and all damages arising out of, resulting from or in any way related to a breach
of, or the failure to perform or satisfy any of, the representations,
warranties, covenants and agreements made by Company or Company, respectively,
in this Agreement or in any document or certificate delivered by Company or
Company at the Closing pursuant hereto.
(b)
Subject to the provisions of Section 8.1, from and after the Closing, Launch
shall indemnify and hold harmless Company for, from and against any and all
damages arising out of, resulting from or in any way related to a breach of,
or
the failure to perform or satisfy any of, the representations, warranties,
covenants and agreements and the obligations made by Launch in this Agreement
or
in any document or certificate delivered by Launch at the Closing pursuant
hereto.
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7.2
Anti-Piracy. During
the
Time Period, Launch shall not solicit or divert to a third party any business,
contract, client, or prospective client that Launch learned of as a result
of
its relationship with Company, or assist any other person, firm, corporation,
or
entity in doing so or attempting to do so, nor will Launch use any information
it receives regarding the business of Company, nor will Launch divulge such
information to anyone, whether or not such information is confidential or
propriety information of Company. Such information includes but is not limited
to, clients and identified business opportunities (including identities,
contacts, and requirements); financial information; the business of Company
and
marketing plans and strategies; and product formulas and
ingredients.“Time
Period”
shall
mean the period beginning as of the Closing Date of this Agreement and ending
two (2) years after the Closing Date; provided
however,
that if
a court of competent jurisdiction determines that such period is unenforceable,
“Time
Period”
shall
mean the period beginning as of the Closing Date and ending one (1) year after
the Closing Date of this Agreement.
7.3 Nonpublic
Information. Except
with respect to the material terms and conditions of the transactions
contemplated by this Agreement, Company covenants and agrees that neither it,
nor any other person acting on its behalf, will provide Launch or its agents
or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto Launch shall have executed a
written agreement regarding the confidentiality and use of such information.
Company understands and confirms that Launch shall be relying on the foregoing
covenant in effecting transactions in securities of Company.
7.4 Form
D; Blue Sky Filings.
The
Company agrees to timely file a Form D with respect to the Securities as
required under Regulation D and to provide a copy thereof, promptly upon request
of any Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to
qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and
shall provide evidence of such actions promptly upon request of any
Purchaser.
7.5 Securities
Laws Disclosure; Publicity.
Company
shall, within 4 business days following the Closing Date, issue a Current Report
on Form 8-K, disclosing the material terms of the transactions contemplated
hereby, and including the Agreement as an exhibit thereto. Company and Launch
shall consult with each other in issuing any other press releases with respect
to the transactions contemplated hereby, and neither Company nor Launch shall
issue any such press release nor otherwise make any such public statement
without the prior consent of Company, with respect to any press release of
Launch, or without the prior consent of Launch, with respect to any press
release of Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing
party
shall promptly provide the other party with prior notice of such public
statement or communication. Notwithstanding the foregoing, Company shall not
publicly disclose the name of Launch, or include the name of Launch in any
filing with the Commission or any regulatory agency, without the prior written
consent of Launch, except: (a) as required by federal securities law in
connection with the filing of the final Agreement (including signature pages
thereto) with the SEC and (b) to the extent such disclosure is required by
law
or applicable regulations, in which case Company shall provide Launch with
prior
notice of such disclosure permitted under this clause (b).
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SECTION
8
GENERAL
PROVISIONS
8.1
Limitation
on Liability.
(a)
The
representations, warranties, agreements, and indemnities of Launch and Company
set forth in this Agreement or in connection with the transactions contemplated
hereby shall survive the Closing except as expressly provided in Section
8.1(b).
(b)
No
party shall have any liability under this Agreement to indemnify (collectively
the “Business
Indemnities”),
in
each case unless the indemnifying Party receives notice in writing from the
other Party of such claim under said indemnity on or before the two-year
anniversary of the Closing Date. The foregoing limitations shall not apply
to
claims under the Note or claims brought or arising under Section 3.3 and such
representations, warranties and indemnification claims shall survive the Closing
and shall expire upon the date of the expiration of the applicable statute
of
limitations. The foregoing limitations shall not apply to any breaches of or
obligations to comply with any of the other provisions of this Agreement,
regardless of whether such breach or obligation also constitutes a breach or
obligation under any of the provisions specifically listed in this Section
8.1(b).
(c)
For
purposes of this Section 8.1(c), a Party making a claim for indemnity under
Section 7.1 is hereinafter referred to as an “Indemnified
Party”
and the
Party against whom such claim is asserted is hereinafter referred to as the
“Indemnifying
Party”.
All
claims by any Indemnified Party under Section 7.1 hereof shall be asserted
and
resolved in accordance with the following provisions. If any claim or demand
for
which an Indemnifying Party would be liable to an Indemnified Party is asserted
against or sought to be collected from such Indemnified Party by a third party,
said Indemnified Party shall with reasonable promptness notify in writing the
Indemnifying Party of such claim or demand stating with reasonable specificity
the circumstances of the Indemnified Party’s claim for indemnification;
provided,
however,
that any
failure to give such notice will not waive any rights of the Indemnified Party
except to the extent the rights of the Indemnifying Party are actually
prejudiced or to the extent that any applicable period set forth in Section
8.1(b) has expired without such notice being given. After receipt by the
Indemnifying Party of such notice, then upon reasonable notice from the
Indemnifying Party to the Indemnified Party, or upon the request of the
Indemnified Party, the Indemnifying Party shall defend, manage and conduct
any
proceedings, negotiations or communications involving any claimant whose claim
is the subject of the Indemnified Party’s notice to the Indemnifying Party as
set forth above, and shall take all actions necessary, including but not limited
to the posting of such bond or other security as may be required by any
governmental authority, so as to enable the claim to be defended against or
resolved without expense or other action by the Indemnified Party. Upon request
of the Indemnifying Party, the Indemnified Party shall, to the extent it may
legally do so and to the extent that it is compensated in advance by the
Indemnifying Party for any costs and expenses thereby incurred,
(i)
take
such action as the Indemnifying Party may reasonably request in connection
with
such action,
a. allow
the
Indemnifying Party to dispute such action in the name of the Indemnified Party
and to conduct a defense to such action on behalf of the Indemnified Party,
and
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b.
render
to the Indemnifying Party all such assistance as the Indemnifying Party may
reasonably request in connection with such dispute and defense.
8.2 Final
Agreement.
This
Agreement constitutes the final and complete agreement between the Parties
concerning the subject matter of this Agreement. This Agreement supersedes
all
prior agreements, understandings, negotiations and discussions, written or
oral,
between the Parties with respect thereto. Any modification, revision or
amendment of this Agreement shall not be effective unless made in a writing
executed by the Parties.
8.3 Language.
The
language used in this Agreement shall be deemed to be the language chosen by
the
Parties to express their mutual intent, and no rule of strict construction
shall
be applied against any Party.
8.4 Severability.
In case
any one or more of the provisions contained herein shall, for any reason, be
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if the invalid, illegal
or
unenforceable provisions(s) had never been contained herein; provided that
such
invalid, illegal or unenforceable provisions shall first be curtailed, limited
or eliminated to the extent necessary to remove such invalidity, illegality
or
unenforceability with respect to the applicable law as it shall then be
applied.
8.5 Waiver.
Except
as
expressly set forth herein, any waiver of, or promise not to enforce, any right
under this Agreement shall not be enforceable unless evidenced by a writing
signed by the Party making such a waiver or promise.
8.6 Headings.
The
headings in this Agreement are for the purpose of convenience only and shall
not
limit, enlarge or affect any of the covenants, terms, conditions or provisions
of this Agreement.
8.7 Effect
of Recitals.
The
recitals contained in this Agreement are an integral part of this
Agreement.
8.8 Notices.
All
notices, requests, demands and other communications made pursuant to this
Agreement shall be in writing and shall be sent by registered or certified
mail,
return receipt requested, or by commercial courier or by facsimile transmission
to the Parties at the addresses or numbers set forth below, or to such other
person and place as the Party shall designate by notice to the other
Party:
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|
Company:
|
BioAuthorize
Holdings, Inc.
|
|
|
00000
X. 00xx
Xxxxxx, Xxxxx 000
|
||
|
Xxxxxxxxxx,
XX 00000
|
||
|
Launch:
|
Launch
Pad Research and
|
|
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Marketing
Company
|
||
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00000
X. 000xx
Xxxx
|
||
|
Xxxxxxxx,
XX 00000
|
||
|
With
copies to:
|
Xxxxxxx
X. Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx Law Firm, P.C.
|
||
|
0000
X. Xxxx Xxxx., Xxxxx 000-000
|
||
|
Xxxxxxxxxx,
XX 00000-0000
|
||
|
___________________________
|
||
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8.9 Assignments.
No Party
may assign this Agreement or delegate any obligations under this Agreement
without obtaining the written consent of each of the other Parties.
8.10 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which taken together shall constitute one and
the
same instrument.
8.11 Governing
Law.
This
Agreement shall be governed construed and enforced in accordance with the laws
of the State of Arizona and the laws of the United States of America.
8.12 Remedies.
(a)
Except as provided below, the parties agree to submit disputes between them
relating to this Agreement and its formation, breach, performance,
interpretation and application to arbitration. Arbitration will be conducted
in
Phoenix, Maricopa County, Arizona pursuant to the Rules of the American
Arbitration Association (“AAA”),
as
modified herein. The arbitration shall be conducted by one (1) arbitrator chosen
in accordance with the rules of the AAA. Unless the arbitrator finds that
exceptional circumstances require otherwise, the arbitrator will grant the
prevailing party in arbitration its costs of arbitration and reasonable
attorneys’ fees as part of the arbitration award. Either party will be entitled
to receive in any court of competent jurisdiction located within the State
of
Arizona injunctive, preliminary or other equitable relief, in addition to
damages, including court costs and fees of attorneys and other professionals,
to
remedy any actual or threatened violation of its rights with respect to which
arbitration is not required hereunder. In this regard and for the purposes
of
set forth above, the parties hereto irrevocably submit to the exclusive
jurisdiction of any federal or state court located within the State of
Arizona.
(b)
Each
of the parties hereto agrees that a judgment in any such dispute may be enforced
in Arizona or in other jurisdictions by suit for judgment on the arbitration
award or in any other manner provided by law.
(c)
Each
of the parties hereto hereby consents to process being served by any party
to
this Agreement in any suit, action or proceeding by the mailing of a copy
thereof to the address of such party set forth above.
(d)
The
parties agree that they will incur irreparable harm for any breach of the terms
and conditions of this Agreement and that the remedy of damages shall be
inadequate in such event. Therefore, the parties agree that the Company shall
be
entitled to equitable remedies in the event of any breach or threatened breach
of the terms and conditions of this Agreement including, without limitation,
the
entry of an injunction to prevent or correct any such breach.
[SIGNATURES
ON FOLLOWING PAGE]
Securities
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IN
WITNESS WHEREOF, the Parties have executed this Securities Purchase Agreement
as
of the date first above written.
Company:
BioAuthorize
Holdings, Inc.
By:
/s/
Yada Xxxxxxxxx
Name:
Yada Xxxxxxxxx
Title:
President & CEO
Launch:
Launch
Pad Research and Marketing Company
By:
/s/
Xxxx Xxxxxx
Name:
Xxxx Xxxxxx
Title:
President
Securities
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Holdings, Inc.
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