NOTE PURCHASE AGREEMENT
Exhibit 9.1
THIS NOTE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of the
___ day of June, 2007 by and between Save the World Air, Inc., a Nevada corporation (the
“Issuer”) and those individuals and entities who sign and deliver an executed copy of this
Agreement to the Issuer (each, a “Purchaser” and collectively, the “Purchasers”), with reference to
the following:
RECITALS
A. Purchasers desire to purchase from Issuer and Issuer desires to sell to Purchaser certain
of Issuer’s Convertible Promissory Notes in the aggregate face amount of at least $165,000 and up
to $550,000 in the form of Exhibit A attached hereto (individually, a “Note” and
collectively, the “Notes”) and Stock Purchase Warrants, each to purchase up to a certain number of
shares of the common stock (the “Common Stock”) of the Issuer equal to 50% of the number of shares
initially issuable on conversion of the Notes, in the form of Exhibit B attached hereto
(individually, the “Warrants” and collectively with the Notes, the “Securities”). The face amount
of Convertible Promissory Notes each Purchaser has committed to purchase, and the amount of the
purchase price thereof to be paid to the Issuer by the Purchaser (a “Commitment”) is listed on the
signature page such Purchaser executes and delivers to the Issuer.
B. Issuer’s sale of the Securities to the Purchasers will be made in reliance upon the
provisions of Section 4(2) under the Securities Act of 1933, as amended (the “Securities Act”),
Rule 506 of Regulation D promulgated by the Securities and Exchange Commission (the ”SEC”)
thereunder, and other applicable rules and regulations of the SEC and/or upon such other exemption
from the registration requirements of the Securities Act as may be available with respect to the
transactions contemplated hereby.
C. At any time when any amount of principal or interest of the Notes shall be outstanding,
such unpaid amounts shall be convertible into shares of the Issuer’s, at the election of the
purchaser Common Stock at a price per share equal to the average closing bid price of a share of
the Issuer’s Common stock for the five (5) trading days prior to the Closing, as defined herein
(the “Conversion Price”).
D. The Warrants shall be issued at the same time each Note is issued to the Purchaser
hereunder and shall exercisable at $0.50 per share as the Conversion Price (the “Exercise Price”),
for such number of shares equal to 50% of result obtained by dividing (i) the face amount of the
Notes issued simultaneously with the Warrant by (ii) the Conversion Price (the “Exercisable
Amount”).
AGREEMENT
NOW THEREFORE, in consideration of the foregoing recitals, which shall be considered an
integral part of this Agreement, the covenants and agreements set forth
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hereafter, and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Purchasers and the Issuer hereby agree as follows
1. Purchase of the Notes and Warrants. On the terms and subject to the conditions set
forth in this Agreement, the Purchasers shall purchase from the Issuer and the Issuer shall sell to
the Purchaser the Securities.
2. Purchaser’s Representations, Warranties and Covenants. In order to
induce the Issuer to sell and issue the Securities to the Purchaser under one or more
exemptions from registration under the Securities Act, the Purchasers, severally and
not jointly, represent and warrant to the Issuer, and covenant with the Issuer, that:
(a) (i) Such Purchaser has the requisite power and authority to enter into and perform this
Agreement, and each of the other agreements entered into by the parties hereto in connection with
the transactions contemplated by this Agreement (collectively, the “Transaction Documents”), and to
purchase the Securities in accordance with the terms hereof and thereof.
(ii) The execution and delivery of the Transaction Documents by the Purchaser and the
consummation by it of the transactions contemplated thereby have been duly and validly authorized
by the Purchaser’s organizational documents and no further consent or authorization is required by
the Purchaser.
(iii) The Transaction Documents have been duly and validly executed and delivered by the
Purchaser.
(iv) The Transaction Documents, and each of them, constitutes the valid and binding obligation
of the Purchaser enforceable against the Purchaser in accordance with their respective 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 creditors’ rights and remedies.
(b) The execution, delivery and performance of the Transaction Documents by the Purchaser and
the consummation by the Purchaser of the transactions contemplated thereby will not conflict with
or constitute a default under any agreement or instrument to which the Purchaser is a party or by
which the Purchaser is bound.
(c) The Purchaser is acquiring the Securities for investment for its own account, and not with
a view toward distribution thereof, and with no present intention of dividing its interest with
others or reselling or otherwise transferring or disposing all or any portion of either the Notes
or Warrants. The undersigned has not offered or sold a participation in this purchase of either the
Notes or Warrants, and will not offer or sell any interest therein. The Purchaser further
acknowledges that the Purchaser does not have in mind any sale of either the Notes or Warrants
currently or after the passage of a fixed
or determinable period of time or upon the occurrence or non-occurrence of any
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predetermined events or consequence; and that it has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for or which is likely to compel a disposition of
either the Notes or Warrants and is not aware of any circumstances presently in existence that are
likely in the future to prompt a disposition thereof.
(e) The Purchaser acknowledges that the Securities have been offered to it in direct
communication between itself and the Issuer and not through any advertisement of any kind.
(f) The Purchaser acknowledges that the Issuer has given it access to all information relating
to the Issuer’s business that it has requested. The Purchaser has reviewed all materials relating
to the Issuer’s business, finance and operations which it has requested and the Purchaser has
reviewed all of such materials as the Purchaser, in the Purchaser’s sole and absolute discretion
shall have deemed necessary or desirable. The Purchaser has had an opportunity to discuss the
business, management and financial affairs of the Issuer with the Issuer’s management.
Specifically but not by way of limitation, the Purchaser acknowledges the Issuer’s publicly
available filings made periodically with the SEC, which filings are available at xxx.xxx.xxx and
which filings the Purchaser acknowledges reviewing or having had the opportunity of reviewing.
THE PURCHASER EXPRESSLY ACKNOWLEDGES THAT THE ISSUER IS NOT CURRENT IN ITS FILINGS WITH THE
SEC AND HAS NOT FILED A QUARTERLY REPORT ON FORM 10-QSB FOR ITS QUARTER ENDED MARCH 31,
2007, NOR HAS THE ISSUER FILED THE INFORMATION REQUIRED TO BE INCLUDED IN PART THREE OF ITS
ANNUAL REPORT ON FORM 10-KSB FOR ITS YEAR ENDED DECEMBER 31, 2007. THE PUCHASER EXPRESSLY
WAIVES ANY RIGHTS THE PURCHASER MAY HAVE TO RECEIVE SUCH INFORMATION. FURTHER, IN ORDER TO
INDUCE THE ISSUER TO ENTER INTO THIS AGREEMENT AND TO SELL TO THE PURCHASER THE SECURITIES
THE PURCHASER HAS ELECTED TO ENTER INTO THIS AGREEMENT AND PURCHASE THE SECURITIES
NOTWITHSTANDING THAT THE PURCHASER HAS NEITHER RECEIVED NOR REVIEWED SUCH INFORMATION.
Issuer’s Initials
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Purchaser’s Initials |
(g) The Purchaser acknowledges that it has, by reason of its business and financial
experience, such knowledge, sophistication and experience in financial and business matters and in
making investment decisions of this type that it is capable of (i) evaluating the merits and risks
of an investment in the Securities and making an informed
investment decision I connection therewith; (ii) protecting its own interest; and (iii)
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bearing the economic risk of such investment for an indefinite period of time for Securities which
are not transferable or freely tradable. Based on the foregoing, the undersigned hereby agrees to
indemnify the Issuer thereof and to hold each of such persons and entities, and the officers,
directors and employees thereof harmless against all liability, costs or expenses (including
reasonable attorneys’ fees) arising by reason of or in connection with any misrepresentation or any
breach of such warranties of the undersigned, or arising as a result of the sale or distribution of
the Securities or the Common Stock issuable upon conversion of the Notes or exercise of the
Warrants, by the undersigned in violation of the Securities Act, the Securities Exchange Act of
1934, as amended (the “Exchange Act”), or any other applicable law, either federal or state. This
subscription and the representations and warranties contained herein shall be binding upon the
heirs, legal representatives, successors and assigns of the Purchaser
(h) The Purchaser is familiar with the definition of an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D of the Securities Act and represents and warrants to the
Issuer that it is an accredited investor as so defined. If the Purchaser is not a resident of the
United States, the Purchaser is not a “U.S. person[s]” as that term is defined in Rule 902 of
Regulation S promulgated under the Securities Act of 1933, as amended.
(i) During the term of this Agreement and the other Transaction Documents, the Purchaser will
comply with the provisions of Section 9 of the Exchange Act, and the rules and regulations
promulgated thereunder, with respect to transactions involving the Common Stock. During the term of
this Agreement and the other Transaction Documents, the Purchaser agrees not to sell the Issuer’s
Common Stock short or engage in any hedging transactions in the Issuer’s Common Stock, either
directly or indirectly, through its affiliates, principals, agents or advisors.
(j) The Purchaser is aware of the restrictions of transferability of both the Notes and the
Warrants, and the shares of Common Stock issuable upon conversion of the Notes or exercise of the
Warrants, and further understands and acknowledges that any certificates evidencing the Notes, the
Warrants or the shares of Common Stock issuable upon conversion of the Notes or exercise of the
Warrants will bear the legends in substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED FOR SALE UNDER ANY STATE SECURITIES LAWS
(COLLECTIVELY, “SECURITIES LAWS”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS REGISTERED OR QUALIFIED FOR SALE UNDER ALL APPLICABLE SECURITIES LAWS OR UNLESS, IN
THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER, IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER, ANY SUCH OFFER, SALE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION OR
QUALIFICATION REQUIREMENTS OF SUCH SECURITIES LAWS.
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(k) The Purchaser understands and acknowledges that following the purchase of the Notes, the
Warrants and any shares of Common Stock issuable upon conversion of the Notes or exercise of the
Warrants, each may only be disposed of pursuant to either (i) an effective registration statement
under the Securities Act or (ii) an exemption from the registration requirements of the Securities
Act.
(l) The Purchaser understands and acknowledges that the Issuer has neither filed such a
registration statement with the SEC or any state authorities nor agreed to do so, nor contemplates
doing so in the future for the transactions contemplated by this Agreement or the other Transaction
Documents, and in the absence of such a registration statement or exemption, the undersigned may
have to hold the Notes, the Warrants and any shares of Common Stock issuable upon conversion of the
Notes or exercise of the Warrants, indefinitely and may be unable to liquidate any of them in case
of an emergency.
(m) The Purchaser is purchasing the Notes and Warrants, and will acquire any shares of Common
Stock issuable upon conversion of the Notes or exercise of the Warrants, for its own account for
investment purposes and not with a view towards distribution and agrees to resell or otherwise
dispose of any of the Notes or the Warrants, or any shares of Common Stock issuable upon conversion
of the Notes or exercise of the Warrants, in accordance with the registration provisions of the
Securities Act (or pursuant to an exemption from such registration provisions).
(n) The Purchaser is not and will not be required to be registered as a “dealer” under the
Exchange Act, either as a result of its execution and performance of its obligations under this
Agreement or otherwise.
(p) The Purchaser understands that it is liable for its own tax liabilities and has obtained
no tax advice from the Issuer in connection with the purchase of the Securities.
(q) The Purchaser will not pay or receive any finder’s fee or commission in respect of the
consummation of the transactions contemplated by this Agreement.
3. Issuer’s Representations, Warranties and Covenants. The Issuer represents and
warrants to the Purchaser that:
(a) The Issuer is a corporation duly organized and validly existing in good standing under the
laws of the State of Nevada, and has the requisite corporate power and authorization to own its
properties and to carry on its business as now being conducted.
(b) (i) The Issuer has the requisite corporate power and authority to enter into and perform
this Agreement, and each of the other agreements entered into by the parties hereto in connection
with the transactions contemplated by the Transaction Documents, and to issue the Notes and
Warrants in accordance with the terms hereof and thereof.
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(ii) the execution and delivery of the Transaction Documents by the Issuer and the
consummation by it of the transactions contemplated hereby and thereby, including without
limitation the reservation for issuance and the issuance of the Notes and Warrants pursuant to this
Agreement, have been duly and validly authorized by the Issuer’s Board of Directors and no further
consent or authorization is required by the Issuer, its Board of Directors, or its shareholders.
(iii) The Transaction Documents have been duly and validly executed and delivered by the
Issuer.
(iv) The Transaction Documents, and each of them, constitutes the valid and binding obligation
of the Issuer enforceable against the Issuer in accordance with their respective 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 creditors’ rights and remedies.
(c) The execution, delivery and performance of the Transaction Documents by the Issuer and the
consummation by the Issuer of the transactions contemplated thereby will not conflict with or
constitute a default under any agreement or instrument to which the Issuer is a party or under any
organizational documents of the Purchaser.
4. Closing and Deliverables.
(a) Provided that the Issuer shall have received on or prior to June 13, 2007 copies of this
Agreement executed by each respective Purchaser providing that the total Commitments equal or
exceed $150,000, there shall be a closing or closings (each, a “Closing”) at which:
(i) each Purchaser shall deliver to the Issuer immediately available funds, by wire transfer
to the Issuer’s account at the Bank of America, 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx 00000, Routing Number 0000-0000-0 , Account Number 06687-19702, in an amount of equal to
the amount of such Purchaser’s Commitment as set forth on beside name of such Purchaser on such
Purchaser’s signature page hereto; and
(ii) the Issuer shall deliver to the Purchaser (x) a Note, in the face amount equal to 110% of
the Purchaser’s Commitment and (y) a Warrant to purchase the Exercisable Amount of the Issuer’s
Common Stock at the Exercise Price.
The Issuer may continue to accept Commitments from Purchasers and issue and sell Securities to
Purchasers at Closings on the terms and subject to the conditions set forth in this Agreement until
(i) the aggregate amount of the Commitments equals $500,000 or (ii) June 19, 2007, whichever shall
first occur.
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5. Miscellaneous.
(a). Each party shall pay the fees and expenses of its own advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of the Transactions Documents.
(b) 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 signature.
(c) The headings of this Agreement are for convenience of reference and shall not form part
of, or affect the interpretation of, this Agreement. Whenever required by the context of this
Agreement, the singular shall include the plural and neutral shall include the masculine and
feminine.
(d) 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.
(e) This Agreement is the final agreement between the Purchasers and the Issuer with respect
to the terms and conditions set forth herein, and, the terms of this Agreement may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.
No provision of this Agreement may be amended other than by an instrument in writing signed by the
Purchaser sand the Issuer or, and no provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought.
(f) Any notices or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the sending party); or
(iii) one (1) day after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the
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party to receive the same. The addresses and facsimile numbers for such communications shall be:
If to the Issuer:
Save the World Air, Inc.
0000 Xxxxxxxxxx Xxxx.
Xxxxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
0000 Xxxxxxxxxx Xxxx.
Xxxxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxx Xxxxxx, Esq.
SEC Law Firm
00000 Xxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SEC Law Firm
00000 Xxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to a Purchaser:
To the address set forth on the Purchaser’s signature page hereto.
Each party shall provide five (5) days prior written notice to the other party of any change in
address or facsimile number.
(g) This Agreement may not be assigned.
(h) This Agreement is intended for the benefit of the parties hereto and is not for the
benefit of, nor may any provision hereof be enforced by, any other person.
(i) The representations and warranties of the Purchaser and the Issuer contained herein shall
survive each of the Closings and the termination of this Agreement and the other Transaction
Documents.
(j) The Purchaser and the Issuer shall consult with each other in issuing any press releases
or otherwise making public statements with respect to the transactions contemplated hereby and no
party shall issue any such press release or otherwise make any such public statement without the
prior consent of the other party, which consent shall not be unreasonably withheld or delayed,
except that no prior consent shall be required if such disclosure is required by law or the rules
and regulations of the SEC.
(k). 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,
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certificates, instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the other Transaction
Documents and the consummation of the transactions contemplated hereby and thereby.
(l) 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, as the parties mutually agree that each has had a full and fair opportunity to review
this Agreement and the other Transaction Documents and seek the advice of counsel on it and them.
(m) The Purchaser and the Issuer each shall have all rights and remedies set forth in this
Agreement and all rights and remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which the Purchaser has by law. Any person having
any rights under any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by reason of any
default or breach of any provision of this Agreement, including the recovery of reasonable
attorneys fees and costs, and to exercise all other rights granted by law.
(n) This Agreement and the other Transaction Documents shall be construed and
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governed by the laws of the State of California with respect to agreements wholly performed
therein, and without regard to the doctrine known as conflicts of law.
IN WITNESS WHEREOF the Purchasers and the Issuer have executed this Agreement as of the date
first above written.
THE ISSUER
SAVE THE WORLD AIR, INC.
SAVE THE WORLD AIR, INC.
By: |
||||||
| Xxxxx X. XxXxxxxx | ||||||
| Its: Chief Executive Officer | ||||||
| THE PURCHASER | ||||||
| Name | Amount of Commitment | |||||
| Address | Social Security Number | |||||
| Address | ||||||
| Phone Number | Fax Number | |||||
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