SUBSCRIPTION AGREEMENT
SUBSCRIPTION
AGREEMENT
This
Subscription Agreement (this “Agreement”)
is
made and entered into as of the 25th day of November, 2007 by and between
Trulite, Inc., a Delaware corporation (“Trulite”)
and
Contango Venture Capital Corporation (“CVCC”).
RECITALS
A. CVCC
has
lent to Trulite an aggregate of $490,000 pursuant to the terms of the promissory
notes listed on Exhibit
A
attached
hereto (collectively, the “Notes”);
and
B. CVCC
desires to convert the aggregate principal balance of and all accrued but unpaid
interest on the Notes into shares of Trulite Common Stock, $0.0001 par value
per
share (“Common
Stock”)
on the
terms and conditions set forth in this Agreement.
C. Trulite
desires to issue to CVCC shares of its Common Stock in consideration of the
cancellation of the aggregate principal balance of and accrued but unpaid
interest on the Notes 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
CVCC agree as follows:
1. Trulite
shall issue to CVCC a number of shares of Common Stock determined by 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 agreed price per share of Common
Stock of $0.67 per share (collectively, the “Shares”).
2. In
consideration of the receipt of the Shares, on the Effective Date, CVCC shall
surrender to Trulite the Notes.
3. Trulite
hereby represents and warrants to CVCC 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. CVCC
hereby represents, warrants and covenants to Trulite as follows:
(a) CVCC
is
purchasing the Shares for CVCC’s own account, and not for the account of any
other person;
(b) CVCC
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) CVCC
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 CVCC
indefinitely; and (B) CVCC 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.
CVCC
further understands that such exemptions depend on, among other things, the
bona
fide nature of the investment intent of CVCC expressed herein. Pursuant to
the
foregoing, CVCC 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) CVCC
acknowledges and understands that Trulite has a limited operating
history;
(e) Trulite
has made available to CVCC 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 CVCC and are sufficient for
CVCC
to evaluate the merits and risks of the investment;
(f) CVCC
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) CVCC
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 CVCC has requested
or
otherwise needs to evaluate the investment in the Shares.
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 CVCC
complies with all reasonable requests made by Trulite related to the inclusion
of such Shares in such registration statement.
2
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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By:
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Name:
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Title:
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CONTANGO
VENTURE CAPITAL CORPORATION
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By:
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Name:
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Title:
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3
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Date of Note
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Payee
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Aggregate
Principal Amount
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May
30, 2007
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Contango
Venture Capital Corporation
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$ |
240,000
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August
20, 2007
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Contango
Venture Capital Corporation
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$ |
250,000
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