STANDBY EQUITY DISTRIBUTION AGREEMENT
Exhibit
10.9
THIS
AGREEMENT
dated as
of the 14th day of June 2006 (the “Agreement”) between CORNELL
CAPITAL PARTNERS, LP,
a
Delaware limited partnership (the “Investor”), and SEREFEX
CORPORATION,
a
corporation organized and existing under the laws of the State of Delaware
(the
“Company”).
WHEREAS,
the
parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Investor, from time to time
as
provided herein, and the Investor shall purchase from the Company up to Five
Million Dollars ($5,000,000) of the Company’s common stock, par value
$0.0001 per share (the “Common Stock”); and
WHEREAS,
such
investments will be made in reliance upon the provisions of Regulation D
(“Regulation D”) of the Securities Act of 1933, as amended, and the regulations
promulgated thereunder (the “Securities Act”), and 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 investments to be made hereunder.
WHEREAS,
the
Company has engaged Newbridge Securities Corporation (the “Placement
Agent”), to act as the Company’s exclusive placement agent in connection with
the sale of the Company’s Common Stock to the Investor hereunder pursuant to the
Placement Agent Agreement dated the date hereof by and among the Company, the
Placement Agent and the Investor (the “Placement Agent Agreement”).
ARTICLE
I.
Section
1.1. “Advance”
shall mean the portion of the Commitment Amount requested by the Company in
the
Advance Notice.
Section
1.2. “Advance
Date” shall mean the first (1st)
Trading
Day after expiration of the applicable Pricing Period for each
Advance.
Section
1.3. “Advance
Notice” shall mean a written notice in the form of Exhibit A attached hereto to
the Investor executed by an officer of the Company and setting forth the Advance
amount that the Company requests from the Investor.
Section
1.4. “Advance
Notice Date” shall mean each date the Company delivers (in accordance with
Section 2.2(b) of this Agreement) to the Investor an Advance Notice requiring
the Investor to advance funds to the Company, subject to the terms of this
Agreement. No Advance Notice Date shall be less than five (5) Trading Days
after
the prior Advance Notice Date.
Section
1.5. “Bid
Price” shall mean, on any date, the closing bid price (as reported by Bloomberg
L.P.) of the Common Stock on the Principal Market or if the Common Stock is
not
traded on a Principal Market, the highest reported bid price for the Common
Stock, as furnished by the National Association of Securities Dealers,
Inc.
Section
1.6. “Closing”
shall mean one of the closings of a purchase and sale of Common Stock pursuant
to Section 2.3.
Section
1.7. “Commitment
Amount” shall mean the aggregate amount of up to Five Million
Dollars ($5,000,000) which the Investor has agreed to provide to the
Company in order to purchase the Company’s Common Stock pursuant to the terms
and conditions of this Agreement.
1
Section
1.8. “Commitment
Period” shall mean the period commencing on the earlier to occur of (i) the
Effective Date, or (ii) such earlier date as the Company and the Investor may
mutually agree in writing, and expiring on the earliest to occur of (x) the
date
on which the Investor shall have made payment of Advances pursuant to this
Agreement in the aggregate amount of the Commitment Amount, (y) the date this
Agreement is terminated pursuant to Section 10.2 or (z) the date occurring
twenty-four (24) months after the Effective Date.
Section
1.9. “Common
Stock” shall mean the Company’s common stock, par value $0.0001 per
share.
Section
1.10. “Condition
Satisfaction Date” shall have the meaning set forth in
Section 7.2.
Section
1.11. “Damages”
shall mean any loss, claim, damage, liability, costs and expenses (including,
without limitation, reasonable attorney’s fees and disbursements and costs and
expenses of expert witnesses and investigation).
Section
1.12. “Effective
Date” shall mean the date on which the SEC first declares effective a
Registration Statement registering the resale of the Registrable Securities
as
set forth in Section 7.2(a).
Section
1.13. Intentionally
Omitted.
Section
1.14. “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
Section
1.15. “Material
Adverse Effect” shall mean any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company
to
enter into and perform any of its obligations under this Agreement or the
Registration Rights Agreement in any material respect.
Section
1.16. “Market
Price” shall mean the lowest VWAP of the Common Stock during the Pricing
Period.
Section
1.17. “Maximum
Advance Amount” shall be Three Hundred Thousand Dollars ($300,000) per
Advance Notice.
Section
1.18. “NASD”
shall mean the National Association of Securities Dealers, Inc.
Section
1.19. “Person”
shall mean an individual, a corporation, a partnership, an association, a trust
or other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.
Section
1.20. “Placement
Agent” shall mean Newbridge Securities Corporation, a registered
broker-dealer.
Section
1.21. “Pricing
Period” shall mean the five (5) consecutive Trading Days after the Advance
Notice Date.
Section
1.22. “Principal
Market” shall mean the Nasdaq National Market, the Nasdaq Capital Market, the
American Stock Exchange, the OTC Bulletin Board or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock.
Section
1.23. “Purchase
Price” shall be set at ninety five percent (95%) of the Market Price during the
Pricing Period.
Section
1.24. “Registrable
Securities” shall mean the shares of Common Stock to be issued
hereunder (i)
in
respect of which the Registration Statement has not been declared effective
by
the SEC, (ii) which have not been sold under circumstances meeting all of the
applicable conditions of Rule 144 (or any similar provision then in force)
under
the Securities Act (“Rule 144”) or (iii) which have not been otherwise
transferred to a holder who may trade such shares without restriction under
the
Securities Act, and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive
legend.
Section
1.25. “Registration
Rights Agreement” shall mean the Registration Rights Agreement dated the date
hereof, regarding the filing of the Registration Statement for the resale of
the
Registrable Securities, entered into between the Company and the
Investor.
2
Section
1.26. “Registration
Statement” shall mean a registration statement on Form S-1 or SB-2 (if use of
such form is then available to the Company pursuant to the rules of the SEC
and,
if not, on such other form promulgated by the SEC for which the Company then
qualifies and which counsel for the Company shall deem appropriate, and which
form shall be available for the resale of the Registrable Securities to be
registered thereunder in accordance with the provisions of this Agreement and
the Registration Rights Agreement, and in accordance with the intended method
of
distribution of such securities), for the registration of the resale by the
Investor of the Registrable Securities under the Securities Act.
Section
1.27. “Regulation
D” shall have the meaning set forth in the recitals of this
Agreement.
Section
1.28. “SEC”
shall mean the United States Securities and Exchange Commission.
Section
1.29. “Securities
Act” shall have the meaning set forth in the recitals of this
Agreement.
Section
1.30. “SEC
Documents” shall mean Annual Reports on Form 10-KSB, Quarterly Reports on Form
10-QSB, Current Reports on Form 8-K and Proxy Statements of the Company as
supplemented to the date hereof, filed by the Company for a period of at least
twelve (12) months immediately preceding the date hereof or the Advance Date,
as
the case may be, until such time as the Company no longer has an obligation
to
maintain the effectiveness of a Registration Statement as set forth in the
Registration Rights Agreement.
Section
1.31. “Trading
Day” shall mean any day during which the New York Stock Exchange shall be open
for business.
Section
1.32. “VWAP”
shall mean the volume weighted average price of the Company’s Common Stock as
quoted by Bloomberg, LP.
ARTICLE
II.
Section
2.1. Advances.
Subject
to the terms and conditions of this Agreement (including, without limitation,
the provisions of Article VII hereof), the Company, at its sole and exclusive
option, may issue and sell to the Investor, and the Investor shall purchase
from
the Company, shares of the Company’s Common Stock by the delivery, in the
Company’s sole discretion, of Advance Notices. The number of shares of Common
Stock that the Investor shall purchase pursuant to each Advance shall be
determined by dividing the amount of the Advance by the Purchase Price. No
fractional shares shall be issued. Fractional shares shall be rounded to the
next higher whole number of shares. The aggregate maximum amount of all Advances
that the Investor shall be obligated to make under this Agreement shall not
exceed the Commitment Amount.
Section
2.2. Mechanics.
(a) Advance
Notice. At any time during the Commitment Period, the Company may require the
Investor to purchase shares of Common Stock by delivering an Advance Notice
to
the Investor, subject to the conditions set forth in Section 7.2; provided,
however, the amount for each Advance as designated by the Company in the
applicable Advance Notice shall not be more than the Maximum Advance Amount
and
the aggregate amount of the Advances pursuant to this Agreement shall not exceed
the Commitment Amount. The Company acknowledges that the Investor may sell
shares of the Company’s Common Stock corresponding with a particular Advance
Notice after the Advance Notice is received by the Investor. There shall be
a
minimum of five (5) Trading Days between each Advance Notice Date.
3
(a) |
Company’s
Obligations Upon Closing.
|
(i) The
Company shall deliver to the Investor the shares of Common Stock applicable
to
the Advance in accordance with Section 2.3. The certificates evidencing such
shares shall be free of restrictive legends.
(ii) the
Company’s Registration Statement with respect to the resale of the shares of
Common Stock delivered in connection with the Advance shall have been declared
effective by the SEC;
(iii) the
Company shall have obtained all material permits and qualifications required
by
any applicable state for the offer and sale of the Registrable Securities,
or
shall have the availability of exemptions therefrom. The sale and issuance
of
the Registrable Securities shall be legally permitted by all laws and
regulations to which the Company is subject;
(iv) the
Company shall have filed with the SEC in a timely manner all reports, notices
and other documents required of a “reporting company” under the Exchange Act and
applicable Commission regulations;
(v) the
fees
as set forth in Section 12.4 below shall have been paid or can be withheld
as
provided in Section 2.3; and
(vi) The
Company’s transfer agent shall be DWAC eligible.
(b) Investor’s
Obligations Upon Closing.
Upon
receipt of the shares referenced in Section 2.3(a)(i) above and provided the
Company is in compliance with its obligations in Section 2.3, the Investor
shall
deliver to the Company the amount of the Advance specified in the Advance Notice
by wire transfer of immediately available funds.
4
ARTICLE
III.
Investor
hereby represents and warrants to, and agrees with, the Company that the
following are true and correct as of the date hereof and as of each Advance
Date:
Section
3.2. Evaluation
of Risks. The Investor has such knowledge and experience in financial, tax
and
business matters as to be capable of evaluating the merits and risks of, and
bearing the economic risks entailed by, an investment in the Company and of
protecting its interests in connection with this transaction. It recognizes
that
its investment in the Company involves a high degree of risk.
Section
3.5. Accredited
Investor. The Investor is an “Accredited Investor” as that term is defined in
Rule 501(a)(3) of Regulation D of the Securities Act.
5
Section
3.8. Registration
Rights Agreement. The parties have entered into the Registration Rights
Agreement dated the date hereof.
Section
3.10. Not
an
Affiliate. The Investor is not an officer, director or a person that directly,
or indirectly through one or more intermediaries, controls or is controlled
by,
or is under common control with the Company or any “Affiliate” of the Company
(as that term is defined in Rule 405 of the Securities Act).
Section
3.11. Trading
Activities. The Investor’s trading activities with respect to the Company’s
Common Stock shall be in compliance with all applicable federal and state
securities laws, rules and regulations and the rules and regulations of the
Principal Market on which the Company’s Common Stock is listed or traded.
Neither
the Investor nor its affiliates has an open short position in the Common Stock
of the Company, the Investor agrees that it shall not, and that it will cause
its affiliates not to, engage in any short sales of or hedging transactions
with
respect to the Common Stock, provided
that the
Company acknowledges and agrees that upon receipt of an Advance Notice the
Investor has the right to sell the shares to be issued to the Investor pursuant
to the Advance Notice
during
the applicable Pricing Period.
ARTICLE
IV.
Except
as
stated below, on the disclosure schedules attached hereto or in the SEC
Documents (as defined herein), the Company hereby represents and warrants to,
and covenants with, the Investor that the following are true and correct as
of
the date hereof:
6
7
8
9
Section
4.24. Opinion
of Counsel. Investor shall receive an opinion letter from counsel to the Company
on the date hereof.
10
ARTICLE
V.
The
Investor and the Company represent to the other the following with respect
to
itself:
Section
5.1. Indemnification.
(a) In
consideration of the Investor’s execution and delivery of this Agreement, and in
addition to all of the Company’s other obligations under this Agreement, the
Company shall defend, protect, indemnify and hold harmless the Investor, and
all
of its officers, directors, partners, employees and agents (including, without
limitation, those retained in connection with the transactions contemplated
by
this Agreement) (collectively, the “Investor Indemnitees”) from and against any
and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Investor Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by
the Investor Indemnitees or any of them as a result of, or arising out of,
or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in this Agreement or the Registration Rights
Agreement or any other certificate, instrument or document contemplated hereby
or thereby, (b) any breach of any covenant, agreement or obligation of the
Company contained in this Agreement or the Registration Rights Agreement or
any
other certificate, instrument or document contemplated hereby or thereby, or
(c)
any cause of action, suit or claim brought or made against such Investor
Indemnitee not arising out of any action or inaction of an Investor Indemnitee,
and arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement or any other instrument, document or agreement
executed pursuant hereto by any of the Investor Indemnitees. To the extent
that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities, which is permissible under applicable
law.
(b) In
consideration of the Company’s execution and delivery of this Agreement, and in
addition to all of the Investor’s other obligations under this Agreement, the
Investor shall defend, protect, indemnify and hold harmless the Company and
all
of its officers, directors, shareholders, employees and agents (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the “Company Indemnitees”) from
and against any and all Indemnified Liabilities incurred by the Company
Indemnitees or any of them as a result of, or arising out of, or relating to
(a)
any misrepresentation or breach of any representation or warranty made by the
Investor in this Agreement, the Registration Rights Agreement, or any instrument
or document contemplated hereby or thereby executed by the Investor, (b) any
breach of any covenant, agreement or obligation of the Investor(s) contained
in
this Agreement, the Registration Rights Agreement or any other certificate,
instrument or document contemplated hereby or thereby executed by the Investor,
or (c) any cause of action, suit or claim brought or made against such Company
Indemnitee based on misrepresentations or due to a breach by the Investor and
arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement or any other instrument, document or agreement
executed pursuant hereto by any of the Company Indemnitees. To the extent that
the foregoing undertaking by the Investor may be unenforceable for any reason,
the Investor shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities, which is permissible under applicable
law.
(c) The
obligations of the parties to indemnify or make contribution under this Section
5.1 shall survive termination.
11
ARTICLE
VI.
Section
6.7. Restriction
on Sale of Capital Stock. During the Commitment Period, the Company shall not,
without the prior written consent of the Investor, (i) issue or sell any Common
Stock or Preferred Stock without consideration or for a consideration per share
less than the Bid Price of the Common Stock determined
immediately prior to its issuance, (ii) issue or sell any
Preferred Stock
warrant, option, right, contract, call, or other security or instrument granting
the holder thereof the right to acquire Common Stock without consideration
or
for a consideration per share less than the Bid
Price
of the Common Stock determined
immediately prior to its issuance, or (iii) file any registration statement
on
Form S-8. Notwithstanding the forgoing, the Company shall be entitled to issue
up to 5,000,000 shares to its Chief Financial Officer for services rendered.
12
Section
6.9. Issuance
of the Company’s Common Stock. The sale of the shares of Common Stock shall be
made in accordance with the provisions and requirements of Regulation D and
any applicable state securities law.
Section
6.11. Market
Activities. The
Company will not, directly or indirectly, (i) take any action designed to cause
or result in, or that constitutes or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the Company
to
facilitate the sale or resale of the Common Stock or (ii) sell, bid for or
purchase the Common Stock, or pay anyone any compensation for soliciting
purchases of the Common Stock.
ARTICLE
VII.
(a) Accuracy
of the Investor’s Representations and Warranties. The representations and
warranties of the Investor shall be true and correct in all material
respects.
(b) Performance
by the Investor. The Investor shall have performed, satisfied and complied
in
all respects with all covenants, agreements and conditions required by this
Agreement and the Registration Rights Agreement to be performed, satisfied
or
complied with by the Investor at or prior to such Closing.
Section
7.2. Conditions
Precedent to the Right of the Company to Deliver an Advance Notice. The right
of
the Company to deliver an Advance Notice is subject to the fulfillment by the
Company, on such Advance Notice (a “Condition Satisfaction Date”), of each of
the following conditions:
(a) Registration
of the Common Stock with the SEC. The Company shall have filed with the SEC
a
Registration Statement with respect to the resale of the Registrable Securities
in accordance with the terms of the Registration Rights Agreement. As set forth
in the Registration Rights Agreement, the Registration Statement shall have
previously become effective and shall remain effective on each Condition
Satisfaction Date and (i) neither the Company nor the Investor shall have
received notice that the SEC has issued or intends to issue a stop order with
respect to the Registration Statement or that the SEC otherwise has suspended
or
withdrawn the effectiveness of the Registration Statement, either temporarily
or
permanently, or intends or has threatened to do so (unless the SEC’s concerns
have been addressed and the Investor is reasonably satisfied that the SEC no
longer is considering or intends to take such action), and (ii) no other
suspension of the use or withdrawal of the effectiveness of the Registration
Statement or related prospectus shall exist. The Registration Statement must
have been declared effective by the SEC prior to the first Advance Notice
Date.
13
(b) Authority.
The Company shall have obtained all permits and qualifications required by
any
applicable state in accordance with the Registration Rights Agreement for the
offer and sale of the shares of Common Stock, or shall have the availability
of
exemptions therefrom. The sale and issuance of the shares of Common Stock shall
be legally permitted by all laws and regulations to which the Company is
subject.
(c) Fundamental
Changes. There shall not exist any fundamental changes to the information set
forth in the Registration Statement which would require the Company to file
a
post-effective amendment to the Registration Statement.
(d) Performance
by the Company. The Company shall have performed, satisfied and complied in
all
material respects with all covenants, agreements and conditions required by
this
Agreement and the Registration Rights Agreement to be performed, satisfied
or
complied with by the Company at or prior to each Condition Satisfaction
Date.
(e) No
Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits or
directly and adversely affects any of the transactions contemplated by this
Agreement, and no proceeding shall have been commenced that may have the effect
of prohibiting or adversely affecting any of the transactions contemplated
by
this Agreement.
(f) No
Suspension of Trading in or Delisting of Common Stock. The trading of the Common
Stock is not suspended by the SEC or the Principal Market (if the Common Stock
is traded on a Principal Market). The issuance of shares of Common Stock with
respect to the applicable Closing, if any, shall not violate the shareholder
approval requirements of the Principal Market (if the Common Stock is traded
on
a Principal Market). The Company shall not have received any notice threatening
the continued listing of the Common Stock on the Principal Market (if the Common
Stock is traded on a Principal Market).
(g) Maximum
Advance Amount. The amount of an Advance requested by the Company shall not
exceed the Maximum Advance Amount. In addition, in no event shall the number
of
shares issuable to the Investor pursuant to an Advance cause the aggregate
number of shares of Common Stock beneficially owned by the Investor and its
affiliates to exceed nine and 9/10 percent (9.9%) of the then outstanding Common
Stock of the Company. For the purposes of this section beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange
Act.
(h) No
Knowledge. The Company has no knowledge of any event which would be more likely
than not to have the effect of causing such Registration Statement to be
suspended or otherwise ineffective.
(i) Executed
Advance Notice. The Investor shall have received the Advance Notice executed
by
an officer of the Company and the representations contained in such Advance
Notice shall be true and correct as of each Condition Satisfaction
Date.
14
ARTICLE
VIII.
Section
8.1. Non-Disclosure
of Non-Public Information.
(a) The
Company covenants and agrees that it shall refrain from disclosing, and shall
cause its officers, directors, employees and agents to refrain from disclosing,
any material non-public information to the Investor without also disseminating
such information to the public, unless prior to disclosure of such information
the Company identifies such information as being material non-public information
and provides the Investor with the opportunity to accept or refuse to accept
such material non-public information for review.
(b) Nothing
herein shall require the Company to disclose non-public information to the
Investor or its advisors or representatives, and the Company represents that
it
does not disseminate non-public information to any investors who purchase stock
in the Company in a public offering, to money managers or to securities
analysts, provided, however, that notwithstanding anything herein to the
contrary, the Company will, as hereinabove provided, immediately notify the
advisors and representatives of the Investor and, if any, underwriters, of
any
event or the existence of any circumstance (without any obligation to disclose
the specific event or circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the Company specifically
or
generally during the course of due diligence by such persons or entities),
which, if not disclosed in the prospectus included in the Registration Statement
would cause such prospectus to include a material misstatement or to omit a
material fact required to be stated therein in order to make the statements,
therein, in light of the circumstances in which they were made, not misleading.
Nothing contained in this Section 8.2 shall be construed to mean that such
persons or entities other than the Investor (without the written consent of
the
Investor prior to disclosure of such information) may not obtain non-public
information in the course of conducting due diligence in accordance with the
terms of this Agreement and nothing herein shall prevent any such persons or
entities from notifying the Company of their opinion that based on such due
diligence by such persons or entities, that the Registration Statement contains
an untrue statement of material fact or omits a material fact required to be
stated in the Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they were made, not
misleading.
ARTICLE
IX.
Section
9.1. Governing
Law. This Agreement shall be governed by and interpreted in accordance with
the
laws of the State of New Jersey without regard to the principles of conflict
of
laws. The parties further agree that any action between them shall be heard
in
Xxxxxx County, New Jersey, and expressly consent to the jurisdiction and venue
of the Superior Court of New Jersey, sitting in Xxxxxx County, New Jersey and
the United States District Court of New Jersey, sitting in Newark, New Jersey,
for the adjudication of any civil action asserted pursuant to this
paragraph.
ARTICLE
X.
Section
10.1. Assignment.
Neither this Agreement nor any rights of the Company hereunder may be assigned
to any other Person.
Section
10.2. Termination.
(a) The
obligations of the Investor to make Advances under Article II hereof shall
terminate twenty-four (24) months after the Effective Date.
(b) The
obligation of the Investor to make an Advance to the Company pursuant to this
Agreement shall terminate permanently (including with respect to an Advance
Date
that has not yet occurred) in the event that (i) there shall occur any stop
order or suspension of the effectiveness of the Registration Statement for
an
aggregate of fifty (50) Trading Days, other than due to the acts of the
Investor, during the Commitment Period, or (ii) the Company shall at any time
fail materially to comply with the requirements of Article VI and such failure
is not cured within thirty (30) days after receipt of written notice from the
Investor, provided, however, that this termination provision shall not apply
to
any period commencing upon the filing of a post-effective amendment to such
Registration Statement and ending upon the date on which such post effective
amendment is declared effective by the SEC.
15
ARTICLE
XI.
If
to the Company, to:
|
Serefex
Corporation
|
0000
Xxxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx X
|
|
Xxxxxx,
Xxxxxxx 00000
|
|
Attention: Xxxxx
X. Xxxx
|
|
Telephone: (000)
000-0000
|
|
Facsimile: (000)
000-0000
|
|
With
a copy to:
|
Williams,
Schifino, Mangioni and Steady P.A.
|
Xxx
Xxxxx Xxxx Xxxxxx, Xxxxx 000
|
|
Xxxxx,
Xxxxxxx 00000
|
|
Attention:
Xxxxxxx Xxxxxxxx
|
|
Telephone: (000)
000-0000
|
|
Facsimile: (000)
000-0000
|
|
If
to the Investor(s):
|
Cornell
Capital Partners, LP
|
000
Xxxxxx Xxxxxx -Xxxxx 0000
|
|
Xxxxxx
Xxxx, XX 00000
|
|
Attention: Xxxx
Xxxxxx
|
|
Portfolio
Manager
|
|
Telephone: (000)
000-0000
|
|
Facsimile: (000)
000-0000
|
|
With
a Copy to:
|
Xxxxx
Xxxxxxxx, Esq.
|
000
Xxxxxx Xxxxxx - Xxxxx 0000
|
|
Xxxxxx
Xxxx, XX 00000
|
|
Telephone: (000)
000-0000
|
|
Facsimile: (000)
000-0000
|
Each
party shall provide five (5) days’ prior written notice to the other party of
any change in address or facsimile number.
16
ARTICLE
XII.
(b) Due
Diligence Fee. Company has paid the Investor a non-refundable due diligence
fee
of Five Thousand Dollars ($5,000) upon submission of the due diligence documents
to the Investor.
(c) Commitment
Fees.
(i) On
each
Advance Date the Company shall pay to the Investor, directly out of the gross
proceeds of each Advance, an amount equal to five percent (5%) of the amount
of
each Advance. The Company hereby agrees that if such payment, as is described
above, is not made by the Company on the Advance Date, such payment shall be
made as outlined and mandated by Section 2.3 of this Agreement.
(ii) Upon
the
execution of this Agreement the Company shall issue to the Investor 2,666,667
shares
of
Common Stock (the “Investor’s Shares”) (an amount equal to Two Hundred Forty
Thousand Dollars ($240,000) worth of Common Stock).
17
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
18
IN
WITNESS WHEREOF,
the
parties hereto have caused this Standby Equity Distribution Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first
set
forth above.
COMPANY:
|
|
Serefex
Corporation
|
|
By:
|
|
Name: Xxxxx
Xxxx
|
|
Title: Chief
Executive Officer
|
|
INVESTOR:
|
|
Cornell
Capital Partners, LP
|
|
By: Yorkville
Advisors, LLC
|
|
Its: General
Partner
|
|
By:
|
|
Name: Xxxx
Xxxxxx
|
|
Title: Portfolio
Manager
|
|
19
EXHIBIT
A
ADVANCE
NOTICE
SEREFEX
CORPORATION
The
undersigned, _______________________ hereby certifies, with respect to the
sale
of shares of Common Stock of SEREFEX
CORPORATION
(the
“Company”) issuable in connection with this Advance Notice, delivered pursuant
to the Standby Equity Distribution Agreement (the “Agreement”), as follows:
1. The
undersigned is the duly elected ______________ of the Company.
2. There
are
no fundamental changes to the information set forth in the Registration
Statement which would require the Company to file a post effective amendment
to
the Registration Statement.
3.
The
Company has performed in all material respects all covenants and agreements
to
be performed by the Company and has complied in all material respects with
all
obligations and conditions contained in the Agreement on or prior to the Advance
Notice Date, and shall continue to perform in all material respects all
covenants and agreements to be performed by the Company through the applicable
Advance Date. All conditions to the delivery of this Advance Notice are
satisfied as of the date hereof.
4. The
undersigned hereby represents, warrants and covenants that it has made all
filings (“SEC Filings”) required to be made by it pursuant to applicable
securities laws (including, without limitation, all filings required under
the
Securities Exchange Act of 1934, which include Forms 10-Q or 10-QSB, 00-X xx
00-XXX, 0-X, xxx.). All SEC Filings and other public disclosures made by the
Company, including, without limitation, all press releases, analysts meetings
and calls, etc. (collectively, the “Public Disclosures”), have been reviewed and
approved for release by the Company’s attorneys and, if containing financial
information, the Company’s independent certified public accountants. None of the
Company’s Public Disclosures contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading.
5. The
Advance requested is _____________________.
The
undersigned has executed this Certificate this ____ day of
_________________.
SEREFEX
CORPORATION
By:_____________________
Name:___________________
Title:____________________
20
SCHEDULE
2.4
SEREFEX
CORPORATION
The
undersigned hereby agrees that for a period commencing on June ___, 2006 and
expiring on the termination of the Standby Equity Distribution Agreement dated
June ___, 2005 between the Serefex Corporation (the “Company”) and the Cornell
Capital Partners, LP (the “Investor”) (the “Lock-up Period”), he, she or it will
not, directly or indirectly, without the prior written consent of the Investor,
issue, offer, agree or offer to sell, sell, grant an option for the purchase
or
sale of, pledge, assign, hypothecate, distribute or otherwise encumber or
dispose of any securities of the Company, including common stock or options,
rights, warrants or other securities underlying, convertible into, exchangeable
or exercisable for or evidencing any right to purchase or subscribe for any
common stock (whether or not beneficially owned by the undersigned), or any
beneficial interest therein (collectively, the “Securities”) except in
accordance with the volume limitations set forth in Rule 144(e) of the General
Rules and Regulations under the Securities Act of 1933, as amended.
In
order
to enable the aforesaid covenants to be enforced, the undersigned hereby
consents to the placing of legends and/or stop-transfer orders with the transfer
agent of the Company’s securities with respect to any of the Securities
registered in the name of the undersigned or beneficially owned by the
undersigned, and the undersigned hereby confirms the undersigned’s investment in
the Company.
Dated:
_______________, 2006
Signature
Name:
____________________________________
Address:
City,
State, Zip Code:
Print
Social Security Number
or
Taxpayer I.D. Number
21