SUBSCRIPTION AGREEMENT
Exhibit
10.65
This
Subscription Agreement (this “Agreement”)
is
made and entered into as of the 5th day of April, 2007 by and between Trulite,
Inc., a Delaware corporation (“Trulite”)
and
Standard Renewable Energy Group, LP (“SREG,
LP”).
RECITALS
A. SREG,
LP
has lent to Trulite an aggregate of $125,000 pursuant to the terms of the
promissory note listed on Exhibit
A
attached
hereto (collectively, the “Note”);
and
B. SREG,
LP
desires to convert the aggregate principal balance of and all accrued but unpaid
interest on the Note into shares of Trulite Common Stock, $0.001 par value
per
share (“Common
Stock”)
on the
terms and conditions set forth in this Agreement.
C. Trulite
desires to issue to SREG, LP shares of its Common Stock in consideration of
the
cancellation of the aggregate principal balance of and accrued but unpaid
interest on the Note on the terms and conditions set forth in this
Agreement.
NOW,
THEREFORE, for and consideration of the mutual promises and covenants contained
herein, the receipt and sufficiency of which is hereby acknowledged, Trulite
and
SREG, LP agree as follows:
1. On
the
third (3rd)
business day following the last of the first ten (10) trading days on which
Trulite Common Stock has traded on the Over the Counter Bulletin Board (the
“Initial
Ten Trading Days”)
(such
third business day being referred to herein as the “Effective
Date”),
Trulite shall issue to SREG, LP a number of shares of Common Stock determined
by
multiplying 2.0 times the quotient of (x) the aggregate principal balance of
and
accrued but unpaid interest on the Notes as of the close of business on the
day
immediately preceding the Effective Date divided by (y) the average closing
sale
price for the Common Stock as quoted on the Over the Counter Bulletin Board
for
the Initial Ten Trading Days (collectively, the “Shares”).
2. In
consideration of the receipt of the Shares, on the Effective Date, SREG, LP
shall surrender to Trulite the Note.
3. Trulite
hereby represents and warrants to SREG, LP as follows:
(a) Trulite
has duly authorized the issuance and sale of the Shares in accordance with
the
terms of this Agreement.
(b) The
Shares, when issued and paid for in accordance with this Agreement, will
represent validly authorized, duly issued and fully paid and non-assessable
shares of Common Stock.
4. SREG,
LP
hereby represents, warrants and covenants to Trulite as follows:
(a) SREG,
LP
is purchasing the Shares for SREG, LP’s own account, and not for the account of
any other person;
(b) SREG,
LP
is purchasing the Shares for investment only, and is not purchasing the Shares
with a view towards the current or future resale, assignment, fractionalization
or distribution of the Shares;
(c) SREG,
LP
understands that (A) the Shares (1) have not been registered under the
Securities Act of 1933, as amended (the “Act”)
or any
other federal or state securities laws, and (2) must be held by SREG, LP
indefinitely; and (B) SREG, LP must therefore bear the economic risk of such
investment indefinitely; unless a subsequent disposition thereof is registered
under the Act and applicable state securities laws or is exempt therefrom.
SREG,
LP further understands that such exemptions depend on, among other things,
the
bona fide nature of the investment intent of SREG, LP expressed herein. Pursuant
to the foregoing, SREG, LP acknowledges that the certificate representing the
Shares acquired hereunder shall bear a restrictive legend substantially as
follows:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AS AMENDED, AND STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I) REGISTERED UNDER THE APPLICABLE
SECURITIES LAWS OR (II) AN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL
ARE BOTH REASONABLY SATISFACTORY TO TRULITE, HAS BEEN DELIVERED TO TRULITE
AND
SUCH OPINION STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH
REGISTRATION.”
(d) SREG,
LP
acknowledges and understands that Trulite has a limited operating
history;
(e) Trulite
has made available to SREG, LP the opportunity to ask questions of and obtain
additional information from Trulite (or any person acting on its behalf),
concerning the terms and conditions of this investment, and all such questions
have been answered to the full satisfaction of SREG, LP and are sufficient
for
SREG, LP to evaluate the merits and risks of the investment;
(f) SREG,
LP
represents that it has been called to its attention that its investment in
Trulite involves a high degree of risk which may result in the loss of the
total
amount of its investment;
(g) SREG,
LP
has been furnished by Trulite all information (or provided access to all
information) regarding the business and financial condition of Trulite, its
expected plans for future business activities, the attributes of the Shares
and
the merits and risks of an investment in the Shares that SREG, LP has requested
or otherwise needs to evaluate the investment in the Shares.
2
5. In
the
event that within two (2) years of the date of this Agreement, Trulite files
with the Securities and Exchange Commission a registration statement under
the
Act, other than a Registration Statement on Form S-8, a Registration Statement
on Form S-4 or a similar or successor form, Trulite will use its reasonable
efforts to cause registration of the resale of 5% of the Shares to be included
in the first such registration statement filed by Trulite; provided that SREG,
LP complies with all reasonable requests made by Trulite related to the
inclusion of such Shares in such registration statement.
6. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Texas, notwithstanding principles of conflicts of laws.
7. This
Agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof, and may be amended only by a writing executed
by
all parties hereto.
Executed
as of the date first set forth above.
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TRULITE,
INC.
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| By: | /s/ Xxxxxxxx X. Xxxxxxxx | |
|
Name:
Xxxxxxxx
X.
Xxxxxxxx
Title: President
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STANDARD
RENEWABLE ENERGY GROUP, LP
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| |
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| By: | /s/ Xxxx X. Xxxxx | |
|
Name: Xxxx
X.
Xxxxx
Title:
General
Counsel and Senior Vice President
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3
EXHIBIT
A
|
Date
of Note
|
Payee
|
Aggregate
Principal Amount
|
|||
|
August
9, 2006
|
Standard
Renewable Energy Group, LP
|
$
|
125,000
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