Contract
EXHIBIT
10.3
COMMON
STOCK PURCHASE AGREEMENT
This
Common Stock Purchase Agreement (the "Agreement") is dated as of April
29,
2006 by and among friendlyway Corporation, a corporation organized under
the
laws of the State of Nevada (the "Company") (OTCBB: "FDWY") and
_________________ (or its assigns). (the "Purchaser").
WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Purchaser and the Purchaser
shall purchase
of the
Company's common stock (the "Common Stock"); and
WHEREAS,
such purchase and sale will be made in reliance upon the provisions of Section
4(2) and Rule 506 of Regulation D ("Regulation D") of the United States
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act"), or upon such other exemption from the
registration requirements of the Securities Act as may be available with
respect
to any or all of the purchases of Common Stock to be made
hereunder.
NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE
I
Purchase
and Sale of Stock
Section
1.1 Purchase
and Sale of Common Shares.
Upon
the following terms and subject to the conditions contained herein, the Company
shall, on the date hereof, issue and sell to the Purchaser, and the Purchaser
shall purchase from the Company, an aggregate of ________ shares of Common
Stock
(the "Common Shares"), for
a
total consideration of $_____________.
Section
1.2 Closing.
The
closing of the purchase and sale of the Common Shares (the "Closing") to
be
acquired by the Purchaser from the
Company shall take place at the offices of Seller on the
date
hereof (the "Closing Date").
ARTICLE
II
Representations
and Warranties
Section
2.1 Representations
and Warranties of the Company.
In
order to induce the Purchaser to enter into this Agreement and to purchase
the
Common Shares, the Company hereby makes the following representations and
warranties to the Purchaser:
(a) Organization,
Good Standing and Power.
The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization and
has
the requisite corporate power to own, lease and operate its properties and
assets and
to
conduct
its business as it is now being conducted and to enter into this Agreement
and
to perform its obligations hereunder.
(b) Authorization;
Enforcement.
The
Company has the requisite corporate power and authority to enter into and
perform this Agreement and
to
issue and sell the Common Shares in accordance with the terms hereof. The
execution, delivery and performance of this Agreement by the Company and
the
consummation by it of the transactions contemplated hereby have been duly
and
validly authorized by all necessary corporate action, and no further consent
or
authorization of the Company or its Board of Directors or stockholders is
required. This Agreement has been duly executed and delivered by the Company.
This Agreement constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by other equitable principles of general
application.
(c) Issuance
of Shares.
The
Common Shares to be issued at the Closing have been duly authorized by all
necessary corporate action and, when paid for or issued in accordance with
the
terms hereof, the Common Shares shall be validly issued and outstanding,
fully
paid and nonassessable.
(d) No
Conflicts.
The
execution, delivery and performance of this Agreement by the Company and
the
consummation by the Company of the transactions contemplated herein and therein
do not and will not (i) violate any provision of the Company’s Certificate of
Incorporation ("Articles") or Bylaws, (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, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation
to
which the Company is a party or by which any of its properties or assets
are
bound, (iii) create or impose a lien, mortgage, security interest, charge
or
encumbrance of any nature whatsoever on any property of the Company under
any
agreement or any commitment to which the Company is a party or by which the
Company is bound or by which any of its properties or assets are bound, or
(iv)
result in a violation of any rule, regulation, order, judgment or decree
applicable to the Company or by which any property or asset of the Company
is
bound or affected, except, in all cases other than violations pursuant to
clause
(i) above, for such conflicts, defaults, terminations, amendments, acceleration,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect.
"Material Adverse Effect" shall mean any effect on the business, operations,
properties, prospects, or financial condition of the Company that is material
and adverse to the Company and its subsidiaries and affiliates, taken as
a
whole.
(f) Certain
Fees.
The
Company has not employed any broker or finder or incurred any liability for
any
brokerage or investment banking fees, commissions, finders' or structuring
fees,
financial advisory fees or other similar fees in connection with this
Agreement.
Section
2.2 Representations
and Warranties of the Purchaser.
The
Purchaser hereby makes the following representations and warranties to the
Company:
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(a) Organization
and Standing of the Purchaser.
The
purchaser is an individual purchasing for his personal investment.
(b) Authorization
and Power.
The
Purchaser has the requisite power and authority to enter into and perform
this
Agreement and to purchase the Common Shares being sold to it hereunder. The
execution, delivery and performance of this Agreement by the Purchaser and
the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action and no further consent or
authorization of the Purchaser or its Board of Directors, stockholders,
members, managers or partners, as the case may be, is required. This Agreement
has been duly executed and delivered by the Purchaser on the Closing Date.
This
Agreement constitutes a valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms, except as
such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, or similar laws
relating to, or affecting generally the enforcement of, creditors' rights
or
remedies or by other equitable principles of general application.
(c) No
Conflicts.
The
execution, delivery and performance of this Agreement and
the
consummation by the Purchaser of the transactions contemplated herein do
not and
will not (i) result in a violation of the
Purchaser’s charter documents, bylaws, partnership agreement, operating
agreement or other organizational documents, or (ii) conflict with, 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 the Purchaser is a party of by which the Purchaser is
bound,
or result in a violation of any law, rule, or regulation, or any order, judgment
or decree of any court or governmental agency applicable to the Purchaser
or its
properties (except for such conflicts, defaults and violations as would not,
individually or in the aggregate, have a material adverse effect on the
Purchaser).
(d) Acquisition
for Investment.
The
Purchaser is purchasing the Common Shares solely for its own account for
the
purpose of investment and not with a view to or for sale in connection with
distribution. The Purchaser does not have a present intention to sell the
Common
Shares, nor a present arrangement (whether or not legally
binding) or intention to effect any distribution of the Common Shares to
or
through any person or entity. The Purchaser acknowledges that it is able
to bear
the financial risks associated with an investment in the Common Shares and
that
it has been given full access to such records of the Company and to the officers
of the Company as it has deemed necessary or appropriate to conduct its due
diligence investigation.
(e) Accredited
Purchasers.
The
Purchaser is an "accredited investor" as defined in Regulation D promulgated
under the Securities Act.
The
Purchaser has such knowledge and experience in financial and business matters
that the Purchaser is capable of evaluating the merits and risks of the
Purchaser's investment in the Company.
(f) Rule
144.
The
Purchaser understands that the Common Shares must be held indefinitely unless
such Shares are registered under the Securities Act or an exemption from
registration is available. The Purchaser acknowledges that the Purchaser
is
familiar with Rule 144 of the rules and regulations of the Securities and
Exchange Commission (“SEC”), as amended, promulgated pursuant to the Securities
Act ("Rule 144"), and that the Purchaser has been advised that Rule 144 permits
resales only under certain circumstances. The Purchaser understands that
to the
extent that Rule 144 is not available, the Purchaser will be unable to sell
any
Shares without either registration under the Securities Act or the existence
of
another exemption from such registration requirement.
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(g) No
Broker-Dealer Affiliation.
The
Purchasers is not a broker-dealer registered with the Commission or an affiliate
(as such term is defined in Rule 144(a) promulgated under the Securities
Act) of
a broker-dealer registered with the Commission.
(h) General.
The
Purchaser understands that the Common Shares are being offered and sold in
reliance on a transactional exemption from the registration requirement of
federal
and state securities laws and the Company is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understandings of the Purchaser set forth herein in order to determine the
applicability of such exemptions and the suitability of such Purchaser to
acquire the Common Shares. The Purchaser understands that no United States
federal or state agency or any government or governmental agency has passed
upon
or made any recommendation or endorsement of the Common Shares.
(i) No
General Solicitation.
The
Purchaser acknowledges that the Common Shares were not offered to the Purchaser
by means of any form of general or public solicitation or general advertising,
or publicly disseminated advertisements or sales literature, including (i)
any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or radio,
or
(ii) any seminar or meeting to which the Purchaser was invited by any of
the
foregoing means of communications.
(j) No
Commissions or Similar Fees.
In
connection with the purchase of the Common Shares by the Purchaser, the
Purchaser has not and will not pay, and has no knowledge of the payment of,
any
commission or other direct or indirect remuneration to any person or entity
for
soliciting or otherwise coordinating the purchase of such securities, except
to
such persons or entities as are duly licensed and/or registered to engage
in
securities offering and selling activities (or are exempt from such licensing
and/or registration requirements) under applicable federal laws and the laws
of
the state(s) in which such activities have taken place in connection with
the
transaction contemplated by this Agreement.
ARTICLE
III
Stock
Certificate Legend
Section
3.1 Legend.
Each
certificate representing the Common Shares, as applicable and appropriate,
shall
be stamped or otherwise imprinted with a legend in substantially the following
form (in addition to any legend required by applicable federal, provincial
or
state securities or "blue sky" laws):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT")
OR STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED
OR
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES
ACT
AND UNDER APPLICABLE STATE SECURITIES LAWS OR FRIENDLYWAY, INC. (THE "COMPANY")
SHALL HAVE RECEIVED AN OPINION IN FORM, SCOPE AND SUBSTANCE REASONABLY
ACCEPTABLE TO THE COMPANY, OF COUNSEL, WHO IS REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER
THE PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS IS NOT
REQUIRED.
4
ARTICLE
IV
Miscellaneous
Section
4.1 Fees
and Expenses.
The
Company shall not pay the fees and expenses of Purchaser for its advisors,
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 this Agreement.
Section
4.2 Consent
to Jurisdiction.
Each of
the Company and the Purchaser (i) hereby irrevocably submits to the jurisdiction
of the United States District Court sitting in the Western District of the
State
of Washington and the courts of the State of Washington located in King County
for the purposes of any suit, action or proceeding arising out of or relating
to
this Agreement or the transactions contemplated hereunder or thereunder and
(ii)
hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or
that
the venue of the
suit,
action or proceeding is improper. Each of the Company and the Purchaser consents
to process being served in any such suit, action or proceeding by mailing
a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 4.2 shall
affect
or limit any right to serve process in any other manner permitted by
law.
Section
4.3 Entire
Agreement; Amendment.
This
Agreement contains the entire understanding and agreement of the parties
with
respect to the matters covered hereby and, except as specifically set forth
herein, neither the Company nor the Purchaser makes any representation,
warranty, covenant or undertaking with respect to such
matters, and they supersede all prior understandings and agreements with
respect
to said subject matter, all of which are merged herein. No provision of this
Agreement may be waived or
amended, except by a written instrument signed by the Company and the
Purchaser.
Section
4.4 Notices.
Any
notice, demand, request, waiver or other communication required or permitted
to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery by telex (with correct answer back received), telecopy or facsimile
at
the address or
number
designated below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day following
such
delivery (if delivered other than on a business day during normal business
hours
where such notice is to be received) or (b) on
the
second business day following the date of mailing by express courier service,
fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:
5
If
to the
Company:
Address:
If
to the
Purchaser:
Address:
Any
party
hereto may from time to time change its address for notices by giving at
least
ten (10) days written notice of such changed address to the other party
hereto.
Section
4.5 Waivers.
No
waiver by either party of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver
in
the
future or a waiver of any other provisions, condition or requirement hereof,
nor
shall any delay
or
omission of any party to exercise any right hereunder in any manner impair
the
exercise of any such right accruing to it thereafter.
Section
4.6 Headings.
The
article, section and subsection headings in this Agreement are for convenience
only and shall not constitute a part of this Agreement for any other purpose
and
shall not be deemed to limit or affect any of the provisions
hereof.
Section
4.7 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. Either party hereunder may assign no rights
or
obligations hereto, except that the rights and obligations of the Company
may be
assigned.
Section
4.8 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
other person hereof enforce any provision.
Section
4.9 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Nevada, without giving effect to the choice of law
provisions.
This
Agreement shall not be interpreted or construed with any presumption against
the
party causing this Agreement to be drafted.
Section
4.10 Survival.
The
representations, warranties, agreements and covenants set forth in this
Agreement shall survive the execution and delivery hereof and the Closing
hereunder indefinitely.
Section
4.11 Counterparts.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and shall become effective
when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same
counterpart.
Facsimile execution shall be deemed originals.
6
Section
4.12 Severability.
The
provisions of this Agreement are severable and, in the event that any court
of
competent jurisdiction shall determine
that any one or more of the provisions or part of the provisions contained
in
this Agreement 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 provision or part of a provision of this Agreement,
and this Agreement shall be reformed and construed as if such invalid or
illegal
or unenforceable provision,
or part of such provision, had never been contained herein, so that such
provisions would be valid, legal and enforceable to the maximum extent
possible.
Section
4.13 Further
Assurances.
From
and after the date of this Agreement, upon the request of the Purchaser or
the
Company, each of the Company and the Purchaser shall execute and deliver
such
instruments, documents and other writings as may be reasonably necessary
or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by
their respective authorized officer as of the date first above
written.
friendlyway
CORPORATION
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By:
/s/
Xxxxxxx X.
Xxxxxxx
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Name: Xxxxxxx
X. Xxxxxxx
Title: Chief
Executive Officer
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PURCHASER:
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________________________________
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Name:
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Attachment
A
ACCREDITED
INVESTOR QUESTIONNAIRE
A
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APPLICABLE
TO INDIVIDUALS ONLY.
Please answer the following questions concerning your financial
condition
as an “accredited investor” (within the meaning of Rule 501 of Regulation
D). If the Investor is more than one individual, each individual
must
initial an answer where the question indicates a “yes” or “no” response,
indicating to which individual it applies. If the Investor is purchasing
jointly with his or her spouse, one answer may be indicated for
the couple
as a whole:
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1.
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Does
your net worth*, or joint net worth with your spouse, exceed
$1,000,000?
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Yes______
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No______
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2. |
Did
you have an individual income ** in excess of $200,000, or joint
income
together with your spouse in excess of $300,000, in each of the
two most
recent years (2004 and 2005) and do you reasonably expect to reach
the
same income level in the current year
(2006)?
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Yes______
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No______
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3. |
Are
you an executive officer or director of Friendlyway,
Inc.
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Yes______
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No______
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* |
For
purposes hereof net worth shall be deemed to include ALL of your
assets,
liquid or illiquid (including such items as home, furnishings,
automobile
and restricted securities) MINUS any liabilities (including such
items as
home mortgages and other debts and
liabilities).
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** |
For
purposes hereof the term “income” is not limited to “adjusted gross
income” as that term is defined for federal income tax purposes, but
rather includes certain items of income which are deducted in computing
“adjusted gross income.” For investors who are salaried employees, the
gross salary of such investor, minus any significant expenses personally
incurred by such investor in connection with earning the salary,
plus any
income from any other source including unearned income, is a fair
measure
of “income” for purposes hereof. For investors who are self-employed,
“income” is generally construed to mean total revenues received during the
calendar year minus significant expenses incurred in connection
with
earning such revenues.
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8
B.
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APPLICABLE
TO CORPORATIONS, PARTNERSHIPS AND OTHER ENTITIES
ONLY:
|
The
Investor is an accredited investor because the Investor falls within at least
one of the following categories (Check all appropriate lines):
______
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(i)
a bank as defined in Section 3(a)(2) of the Securities Act or
a savings
and loan association or other institution as defined in Section
3(a)(5)(A)
of the Securities Act whether acting in its individual or fiduciary
capacity;
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______
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(ii)
a broker-dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended;
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______
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(iii)
an insurance company as defined in Section 2(13) of the Securities
Act.
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______
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(iv)
an investment company registered under the Investment Company
Act of 1940,
as amended (the “Investment Company Act”) or a business development
company as defined in Section 29(a)(48) of the Investment Company
Act;
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______
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(v)
a Small Business Investment Company licensed by the U.S. Small
Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958, as amended;
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______
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(vi)
a plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political
subdivisions,
for the benefit of its employees, where such plan has total assets
in
excess of $5,000,000;
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______
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(vii)
an employee benefit plan within the meaning of Title 1 of the
Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), where the
investment decision is made by a plan fiduciary, as defined in
Section
3(21) of ERISA, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or an employee
benefit plan that has total assets in excess of $5,000,000, or
a
self-directed plan the investment decisions of which are made
solely by
persons that are accredited investors;
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______
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(viii)
a private business development company, as defined in Section
202(a)(22)
of the Investment Advisers Act of 1940, as amended;
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______
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(ix)
an organization described in Section 501(c)(3) of the Internal
Revenue
Code, a corporation, a Massachusetts or similar business trust,
or a
partnership, not formed for the specific purpose of acquiring
the
securities offered, with total assets in excess of
$5,000,000;
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______
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(x)
a trust, with total assets in excess of $5,000,000, not formed
for the
specific purpose of acquiring the securities offered, whose purchase
is
directed by a “sophisticated” person, who has such knowledge and
experience in financial and business matters that he is capable
of
evaluating the merits and risks of the prospective
investment;
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______
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(xi)
an entity in which all of the equity investors are persons or
entities
described above (“accredited investors”). ALL
EQUITY OWNERS MUST COMPLETE PART “A” ABOVE.
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Investor(s):
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Signature
of Investor
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Print
Name of Investor
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Signature
of Co-Investor (if any)
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Print
Name of Co-Investor
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10