Exhibit A
SECURITIES PURCHASE AGREEMENT
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THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of March
22, 2007, by and among DMI BIOSCIENCES, INC., a Colorado corporation (the
"Company"), and COGENCO INTERNATIONAL, INC. (the "Buyer"). Each of the foregoing
is a "Party" and collectively they are the "Parties."
RECITALS
A. The Company and the Buyer are executing and delivering this Agreement in
reliance upon an exemption from securities registration pursuant to Section 4(2)
and/or Rule 506 of Regulation D ("Regulation D") as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Securities Act");
B. The Buyer has invested $100,000 to purchase 100,000 shares of the
Company's common stock (the "Common Stock") for a price of $1.00 per share. This
Agreement confirms that transaction.
NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Buyer hereby agree as
follows:
1. PURCHASE AND SALE OF COMMON STOCK.
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(a) Purchase of Common Stock. The Buyer has invested $100,000 to
purchase 100,000 shares of the Company's common stock (the "Common Stock") for a
price of $1.00 per share. The Company acknowledges receipt of $100,000.
(b) Closing Date. The Closing for each purchase will occur as the
Buyer pays funds to the Company.
(c) Adjustment. To the extent that the Company completes a stock
split, reverse stock split, or stock dividend, the number of shares to be
purchased by the Buyer and the purchase price to be paid by the Buyer will be
appropriately adjusted.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
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The Buyer represents and warrants that:
(a) Investment Purpose. The Buyer has acquired the Common Stock
for its own account for investment only and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the Securities Act; provided,
however, that by making the representations herein, the Buyer reserves the right
to dispose of the Common Stock at any time in accordance with all applicable
legal requirements.
(b) Reliance on Exemptions. The Buyer understands that the Common
Stock was offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire such securities.
(c) Information. The Buyer and its advisors (and his or, its
counsel), if any, have been furnished with all materials relating to the
business, finances and operations of the Company and information he deemed
material to making an informed investment decision regarding his purchase of the
Common Stock which have been requested by the Buyer. The Buyer and its advisors,
if any, have been afforded the opportunity to ask questions of the Company and
its management. Neither such inquiries nor any other due diligence
investigations conducted by the Buyer or its advisors, if any, or its
representatives shall modify, amend or affect the Buyer's right to rely on the
Company's representations and warranties contained in Section 3 below. The Buyer
understands that its investment in the Common Stock involves a high degree of
risk. The Buyer is in a position regarding the Company, which, based upon
employment, family relationship or economic bargaining power, enabled and
enables the Buyer to obtain information from the Company in order to evaluate
the merits and risks of this investment. The Buyer has sought such accounting,
legal and tax advice, as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Common Stock.
(d) Transfer or Resale. The Buyer understands that: (i) the
Common Stock have not been, and are not being, registered under the Securities
Act or any state securities laws, and may not be offered for sale, sold,
assigned or transferred unless (A) subsequently registered thereunder, or (B)
the Buyer shall have delivered to the Company an opinion of counsel, in a
generally acceptable form, to the effect that such securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an
exemption from such registration requirements; and (ii) neither the Company nor
any other person is under any obligation to register such securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder. The Company reserves the right to place
stop transfer instructions against the shares and certificates for the Common
Stock.
(e) Legends. The Buyer understands that the certificates or other
instruments representing the Common Stock shall bear a restrictive legend in
substantially the following form (and a stop transfer order may be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
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THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.
(f) Authorization, Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of the Buyer and is a valid
and binding agreement of the Buyer enforceable in accordance with its terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
(g) Good Funds. All purchase payments transferred or that may be
transferred to the Company pursuant to this Agreement originated directly from a
bank or brokerage account in the name of the Buyer located within the United
States of America or another Compliant Jurisdiction as defined in by the
Financial Action Task Force on Money Laundering (found at
xxxx://xxx.xxxx.xxx/xxxx/).
(h) No Legal Advice From the Company. The Buyer acknowledges,
that it had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with his or its own legal counsel and investment
and tax advisors. The Buyer is relying solely on such counsel and advisors and
not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by this Agreement or the
securities laws of any jurisdiction.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants as of the date hereof to the Buyer
that, except as disclosed in the attached schedules:
(a) Organization and Qualification. The Company and its
subsidiaries are corporations duly organized and validly existing in good
standing under the laws of the jurisdiction in which they are incorporated, and
have the requisite corporate power to own their properties and to carry on their
business as now being conducted. Each of the Company and its subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(b) Authorization, Enforcement, Compliance with Other
Instruments. (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement and to issue the Common Stock in
accordance with the terms hereof, (ii) the execution and delivery of this
Agreement by the Company and the completion by it of the transactions
contemplated hereby, including, without limitation, the issuance of the Common
Stock have been duly authorized by the Company's Board of Directors and no
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further consent or authorization is required by the Company, its Board of
Directors or its stockholders, (iii) this Agreement has been duly executed and
delivered by the Company, (iv) this Agreement constitutes the valid and binding
obligations of the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors' rights and remedies.
(c) Issuance of Securities. The Common Stock has been duly
authorized and reserved for issuance and is duly issued, fully paid and
nonassessable.
(d) No Conflicts.
(1) The execution, delivery and performance of this
Agreement by the Company and the completion by the Company of the transactions
contemplated hereby will not (i) result in a violation of the Articles of
Incorporation, any certificate of designations of any outstanding series of
preferred stock of the Company or the By-laws or (ii) conflict with or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, or result
in a violation of any law, rule, regulation, order, judgment or decree
applicable to the Company or any of its subsidiaries or by which any property or
asset of the Company or any of its subsidiaries is bound or affected.
(2) Neither the Company nor its subsidiaries is in violation
of any term of or in default under its Articles of Incorporation or By-laws or
their organizational charter or by-laws, respectively, or any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
subsidiaries.
(3) The business of the Company and its subsidiaries is not
being conducted, and shall not be conducted in violation of any material law,
ordinance, or regulation of any governmental entity.
(4) Except as specifically contemplated by this Agreement
and as required under the Securities Act and any applicable state securities
laws, the Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under or
contemplated by this Agreement in accordance with the terms hereof. All
consents, authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof. Except as contemplated by this
Agreement, the Company and its subsidiaries are unaware of any facts or
circumstance, which might give rise to any of the foregoing.
(e) Accuracy of Information. The information about the Company
that the Company has provided to the Buyer is accurate and complete in all
material respects. Such information does not include any untrue statements of
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material fact, nor do they omit to state any material fact required to be stated
therein necessary to make the statements made, in light of the circumstances
under which they were made, not misleading.
(f) Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body known to be pending against or
affecting the Company, the Common Stock or any of the Company's subsidiaries,
wherein an unfavorable decision, ruling or finding would (i) have a material
adverse effect on the transactions contemplated hereby (ii) adversely affect the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of the documents
contemplated herein, or (iii) have a material adverse effect on the business,
operations, properties, financial condition or results of operations of the
Company and its subsidiaries taken as a whole.
(g) No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Common Stock.
(h) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
Common Stock under the Securities Act or cause this offering of the Common Stock
to be integrated with prior offerings by the Company for purposes of the
Securities Act where such integration would result in an exemption not being
available for the transactions contemplated herein.
(i) Employee Relations. Neither the Company nor any of its
subsidiaries is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries, is any such dispute threatened. None of the
Company's or its subsidiaries' employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.
(j) Intellectual Property Rights. The Company and its
subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. The Company and its subsidiaries do not have any
knowledge of any infringement by the Company or its subsidiaries of trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service xxxx registrations, trade secret or other
similar rights of others, and, to the knowledge of the Company there is no
claim, action or proceeding being made or brought against, or to the Company's
knowledge, being threatened against, the Company or its subsidiaries regarding
trademark, trade name, patents, patent rights, invention, copyright, license,
service names, service marks, service xxxx registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.
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(k) Environmental Laws. The Company and its subsidiaries are (i)
in compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval.
(l) Insurance. The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
subsidiaries are engaged. Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.
(m) Regulatory Permits. The Company and its subsidiaries possess
all material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.
(n) Tax Status. The Company and each of its subsidiaries has made
and filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject and (unless and
only to the extent that the Company and each of its subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.
4. GOVERNING LAW: MISCELLANEOUS.
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(a) Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Colorado without regard
to the principles of conflict of laws. The parties further agree that any action
between them shall be heard in the District Court of Arapahoe County, Colorado
for the adjudication of any civil action asserted pursuant to this Paragraph.
(b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
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agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event any signature page is
delivered by facsimile transmission, the party using such means of delivery
shall cause four additional original executed signature pages to be physically
delivered to the other party within five days of the execution and delivery
hereof.
(c) Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement, Amendments. This Agreement supersedes all
other prior oral or written agreements between the Buyer, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in writing signed
by the party to be charged with enforcement.
(f) Notices. Any notices, consents, waivers, 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 confirmation of receipt, when sent
by facsimile; (iii) three days after being sent by U.S. certified mail, return
receipt requested, or (iv) one day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to the Company, to: DMI Biosciences, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Buyer: Cogenco International, Inc.
Attention: Xxxxx X. Xxxxxxx, President
0000 Xxxxx Xxxxxxx'x Xxxxx Xxxxxx - Xxxxx 0000
Xxxxxxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxx, Figa & Will, P.C.
0000 Xxxxx Xxxxxxx'x Xxxxx Xxxxxx - Xxxxx 0000
Xxxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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(g) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns. Neither the Company nor any Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party hereto.
(h) No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
(i) Survival. The representations and warranties of the Company
and the Buyer contained in Sections 2 and 3, shall survive through December 31,
2009.
(j) Publicity. The Company and the Buyer shall have the right to
approve, before issuance any press release or any other public statement with
respect to the transactions contemplated hereby made by any party; provided,
however, that the Company shall be entitled, without the prior approval of the
Buyer, to issue any press release or other public disclosure with respect to
such transactions required under applicable securities or other laws or
regulations (the Company shall use its best efforts to consult the Buyer in
connection with any such press release or other public disclosure prior to its
release and Buyer shall be provided with a copy thereof upon release thereof).
(k) Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(l) No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
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IN WITNESS WHEREOF, the Buyers and the Company have caused this
Securities Purchase Agreement to be duly executed on March 28, 2007, as of the
date first written above.
BUYER COMPANY:
COGENCO INTERNATIONAL, INC. DMI BIOSCIENCES, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxxx
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Xxxxx X. Xxxxxxx, President Xxxxx Xxxxxx, President
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