SECURITIES PURCHASE AGREEMENT
THIS SUBSCRIPTION AGREEMENT
(this “Agreement”), is
made as of April 17, 2008, by and among Davi Skin, Inc., a Nevada corporation
(the “Company”), and
_______________(“Subscriber”).
WHEREAS, the Company and the
Subscriber are executing and delivering this Agreement in reliance upon an
exemption from securities registration afforded by the provisions of Section
4(2) and/or Regulation D (“Regulation D”) as promulgated
under the Securities Act of 1933, as amended (the “1933 Act”); and
WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company
shall issue and sell to the Subscriber, and the Subscribers shall purchase, (a)
250,000 shares of Series A Preferred Stock, par value $.001 per share of the
Company, (the “Preferred
Stock”), at a purchase price of $1.00 per share, pursuant to a
Certificate of Designation to be approved by the Company and filed with the
Secretary of State of Nevada designating the rights and privileges of the
Preferred Stock, substantially in the form as annexed hereto as Exhibit
A (the “Certificate”) and (b) Series
A-1 Warrants to purchase common stock, par value $0.001 (the “Common Stock”) of the Company
(the “Warrant Shares”),
at an exercise price of $.15 per share, subject to adjustment (the “Exercise Price”), in
substantially the form as annexed hereto as Exhibit
B (the “Investor
Warrants”) (all such transactions, collectively, the “Offering”). The
Preferred Stock, Additional Shares (as hereinafter defined), the Investor
Warrants and the Warrant Shares are collectively referred to herein as the
“Securities”;
and
WHEREAS, simultaneously with
the Closing the Company is delivering a Registration Rights Agreement in the
form as annexed hereto as Exhibit
C (the “Registration
Rights Agreement”), a Stock Escrow Agreement substantially in the form as
annexed hereto as Exhibit
D (the “Escrow
Agreement”), and the Company’s principal officer is delivering an
Irrevocable Voting Proxy and Trust Agreement in the form as annexed as Exhibit
E (the “Proxy
Agreement”);
WHEREAS, the Subscriber or its
assigns shall have the exclusive right, but not obligation, up to an acquire an
additional 350,000 shares of Preferred Stock at the Purchase Price set forth
herein in one or more future closings; and
WHEREAS, the Company is
granting a right of first offer and registration rights to the Subscriber with
respect to all transactions consummated within 12 months of the Initial Closing
(as hereinafter defined) of the sale of Preferred Stock hereby; and
NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Subscribers hereby agree as follows:
1. Purchase and Sale of
Preferred Stock.
1.1. Sale and Issuance of
Preferred Stock.
(a) The
Company shall adopt and file with the Secretary of State of the State of Nevada
on or before the Initial Closing (as defined below) the Certificate in the form
of Exhibit
A attached to this Agreement.
(b) Subject
to the terms and conditions of this Agreement, Subscriber agrees to purchase at
the Closing and the Company agrees to sell and issue to each Subscriber at the
Closing units consisting of 250,000 shares of Preferred Stock and Investor
Warrants, at a purchase price of $1.00 per Unit (or an aggregate of
$250,000). At each Closing, the Company shall deliver to each
Subscriber, among other closing documents mentioned herein, a certificate
representing the Preferred Stock being purchased by such Subscriber at such
Closing against payment of the purchase price therefore by check payable to the
Company, by wire transfer to a bank account designated by the
Company.
1.2. Additional
Shares. After the Initial Closing, the Subscriber or its
assigns shall have the sole and exclusive right, but not obligation, to acquire
at their sole and absolute discretion and from time to time in whole or in part,
up to an additional 350,000 shares of Series A Preferred Stock, on the same
terms and conditions as those contained in this Agreement, (subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or similar recapitalization affecting such shares) of Series A
Preferred Stock (the “Additional Shares”), provided
that (i) such right to acquire Additional Shares is delivered by fax, email or
overnight courier or by hand, to the Company or its representatives, prior to
one year after the Initial Closing, (ii) each the Subscriber execute and deliver
a notice to the Company and tender the funds for such Additional Shares (and in
the event of the exercise of this right in whole or in part by an assignee of
Subscriber, then such assignee shall execute and be bound by this Agreement) and
(iii) the Purchase Price for any Additional Shares shall be the adjusted Series
A Preferred Stock Original Issuance Price as set forth in the Certificate and
shall be reflected at each closing in subsequent series, (i.e. Series X-0,
Xxxxxx X-0, Series A-3) until an aggregate of 600,000 shares of Series A
Preferred Stock are sold. In the event that notice is given by
Subscriber or its assigns to the Company to acquire any Additional Shares, then
the Company shall sell such shares to Subscriber or its Assigns in a subsequent
Closing at the adjusted Series A Original Issuance Price. For
avoidance of doubt, any representation, warranty or covenant of the Company
hereby to the “Preferred Stock” shall be deemed to include and encompass the
Additional Shares if and when such shares are acquired by
Subscriber.
1.3 Use of Proceeds. In
accordance with the directions of the Company’s Board of Directors, the Company
shall use the proceeds from the sale of the Preferred Shares (including any
Additional Shares) in accordance with Schedule
1.3 annexed hereto.
2. Closing. The
consummation of the transactions contemplated herein (the “Initial Closing”) shall take
place at the offices of Xxxxxxx Xxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000, upon the satisfaction of all conditions to Closing set forth
in this Agreement, at a date and time acceptable to the parties (the date on
which the actual Closing takes place shall be referred to as the “Closing
Date”). Thereafter, additional closings (the “Additional Closing” and the
date thereof shall be the “Additional Closing Date” and, each closing date and
Closing are sometimes referred to herein as a “Closing Date” and Closing,
respectively) may take place from time to time at the discretion of the
Subscriber or its assigns.
2.1 Closing Deliveries by
Company. At each Closing, the Company shall have approved and
filed the Certificate with the State of Nevada and delivered those closing
documents and instruments required by Section 10
below.
2.2 Closing Deliveries by Proxy
Parties. At each Closing, the Proxy Parties (as defined below)
shall deliver to Subscriber the Proxy Agreements, all, duly authorized,
approved, executed and delivered as set forth in Section 10 below. The “Proxy Parties” shall include
(i) Xxx Xxxxxxx, an individual; (ii) Xxxxxx Xxxxx, an individual; and (iii) Xxxx
XxXxxx, an individual.
2.3 Closing Deliveries by
Subscriber. At each Closing, Subscriber shall deliver to
the Company its respective portion of the Purchase Price in immediately
available funds and this Agreement.
3. Subscriber’s Representations and
Warranties. Each Subscriber hereby represents and warrants to
and agrees with the Company, severally and not jointly, only as to such
Subscriber that:
(a) Organization and Standing of
the Subscribers. If the Subscriber is an entity, such
Subscriber is a corporation, partnership or other entity duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.
(b) Authorization and
Power. Such Subscriber has the requisite power and authority
to enter into and perform this Agreement and to purchase the Securities being
sold to it hereunder. The execution, delivery and performance of this
Agreement by such Subscriber and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate or partnership action on the part of the Subscribers, and no further
consent or authorization of such Subscriber or its board of directors,
stockholders, partners, members or managers, as the case may be, is
required.
(c) No
Conflicts. The execution, delivery and performance of this
Agreement and the consummation by such Subscriber of the transactions
contemplated hereby, do not conflict with such Subscriber’s charter documents or
bylaws or other organizational documents. Subscriber is not required
to obtain any consent, authorization or order of, or make any filing, notice
filing or registration with, any court or governmental agency or creditor in
order for it to execute, deliver or perform any of its obligations under this
Agreement.
(d) Information on
Company. Such Subscriber has reviewed and relied upon the accuracy of the
“SEC Documents” (as
defined in Section 5(h) hereof) and has been afforded (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the “Subsidiaries” (as defined in
Section 5(u) hereof) and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate the investment in the Securities; and (iii) the opportunity to
obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Subscriber or its representatives or counsel shall modify, amend or affect such
Subscriber’s right to rely on the truth, accuracy and completeness of the SEC
Documents (subject to a re-audit of the Company’s financial statements currently
being conducted) and the Company’s representations and warranties contained in
this Agreement.
(e) Information on
Subscriber. The Subscriber is an “accredited investor”, as such
term is defined in Regulation D promulgated under the 1933 Act, is experienced
in investments and business matters, and, with its representatives, has such
knowledge and experience in financial, tax and other business matters as to
enable the Subscriber to utilize the information made available by the Company
to evaluate the merits and risks of and to make an informed investment decision
with respect to the proposed purchase of the Securities. The
information set forth on the signature page hereto regarding the Subscriber is
accurate. Such Subscriber is not a registered broker-dealer under
Section 15 of the Securities Exchange Act of 1934, as amended (the “1934 Act”). Such
Subscriber does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities.
(f) Investment Intent.
Such Subscriber is acquiring the Securities as principal for its own account for
investment purposes only and not with a view to or for distributing or reselling
such Securities or any part thereof, without prejudice, however, to such
Subscriber’s right at all times to sell or otherwise dispose of all or any part
of such Securities in compliance with applicable federal and state securities
laws. Subject to the immediately preceding sentence, nothing
contained herein shall be deemed a representation or warranty by such Subscriber
to hold the Securities for any period of time.
(g) Legends. Each
Subscriber understands that the certificates or other instruments representing
the Securities shall bear a restrictive legend in substantially the
following form:
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 THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF
COUNSEL, IN A GENERALLY ACCEPTABLE FORM TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
(h) Communication of
Offer. The offer to sell the Securities was directly communicated to such
Subscriber by the Company and/or its agents. At no time was such
Subscriber presented with or solicited by any leaflet, newspaper or magazine
article, spam or “mass” email, radio or television advertisement, or any other
form of general advertising or solicited or invited to attend a promotional
meeting otherwise than in connection and concurrently with such communicated
offer. Notwithstanding anything to the contrary contained in this
Agreement, the Company acknowledges and agrees that such Subscriber may transfer
the Securities to its Affiliates (as defined below) provided that each such
Affiliate is an “accredited
investor” under Regulation D and such Affiliate agrees to be bound by the
terms and conditions of this Agreement and Security Agreements. For
the purposes of this Agreement, an “Affiliate” of any person or
entity means any other person or entity directly or indirectly controlling,
controlled by or under direct or indirect common control with such person or
entity. For purposes of this definition, “control” means the power to
direct the management and policies of such person or firm, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
(i) Enforceability. This
Agreement has been duly authorized and executed by such Subscriber and, when
delivered by the Subscriber, will become Subscriber’s valid and binding
agreement enforceable against Subscriber in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
generally and to general principles of equity.
(j) Group. Subscriber,
together with any other shareholders or affiliates of Subscriber, is not part of
a “Group” (as defined in Schedule 13 and Section 13 of the 0000 Xxx) and is not
acting in concert with any person or persons as part of a Group with respect to
the acquisition or holding of the Securities or any other securities of the
Company, and does not have any agreement or understanding with any other person
relating to the sale or voting of securities held by Subscriber or such other
persons. In each case, a Group for the foregoing purposes shall only
be deemed to exist if said Group beneficially owns or controls 5% or more (as
defined in Rule 13(d) of the 0000 Xxx) of the voting securities of the
Company.
(k) Funds. The
Subscriber has taken such measures as are required by law to assure that the
funds used to pay to the Company the purchase price as set forth on the
signature pages hereto are derived: (i) from transactions that do not violate
United States law nor, to the extent such funds originate outside the United
States, do not violate the laws of the jurisdiction in which they originated;
and (ii) from permissible sources under United States law and to the extent such
funds originate outside the United States, under the laws of the jurisdiction in
which they originated.
(l) Patriot Act and No
Prohibited Investment. The Subscriber is in compliance with any and
all applicable provisions of the Patriot Act including, without limitation,
amendments to the Bank Secrecy Act. If the Subscriber is a Financial
Institution, it has established and is in compliance with all procedures
required by the Subscriber and the Bank Secrecy Act. Subscriber
hereby represents and warrants that the proposed investment in the Company is
being made on its own behalf and does not directly or indirectly contravene
United States federal, state, local or international laws or regulations
applicable to Subscriber, including anti-money laundering laws (a "Prohibited Investment").
Federal regulations and Executive Orders administered by the U.S. Treasury
Department's Office of Foreign Assets Control ("OFAC") prohibit, among other
things, the engagement in transactions with, and the provision of services to,
certain foreign countries, territories, entities and individuals. The lists of
OFAC prohibited countries, territories, persons and entities can be found on the
OFAC website at <xxx.xxxxx.xxx/xxxx>. Subscriber hereby
represents and warrants that it is not a country, territory, person or entity
named on an OFAC list, nor is Subscriber a natural person or entity with whom
dealings are prohibited under any OFAC regulations.
4. Company Representations and
Warranties. Except as set forth in the Schedule of Exceptions
attached hereto as Schedule 4 (the
“Schedule of
Exceptions”), the Company represents and warrants to and agrees with each
Subscriber that:
(a) Due Incorporation.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, and has the requisite corporate
power to own its properties and to carry on its business as disclosed in the
Latest SEC Documents (as defined in Section 4(h)). The Company is
duly qualified as a foreign corporation to do business and is in good standing
in each jurisdiction where the nature of the business conducted or property
owned by it makes such qualification necessary, other than those jurisdictions
in which the failure to so qualify would not have or be reasonably likely to
have a Material Adverse Effect. For purpose of this Agreement, a
“Material Adverse
Effect” shall mean any of (i) a material and adverse effect on the
legality, validity or enforceability of any of this Agreement (ii) a material
and adverse effect on the results of operations, assets, prospects, business or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or (iii) an adverse impairment to the Company’s ability to perform on a
timely basis its obligations under this Agreement.
(b) Capitalization. The
authorized capital stock of the Company, other than the Conversion Shares (as
defined in Section
10 below), consists of
90,000,000 shares of Common Stock, par value $.001 per share, of which 24,265,708 shares are issued
and outstanding as of the date hereof, and 10,000,000 shares of “blank
check” preferred stock of which 600,000 shares have been designated as “Series A
Preferred Stock” and reserved for issuance to Subscriber hereby in one or more
series. In addition, at Closing, the Certificate will have been
duly authorized and filed. Except as disclosed in the Latest
SEC Documents (as defined in Section 4(h)), no shares of Common Stock or
Preferred Stock are subject to preemptive rights or any other similar rights or
any liens or encumbrances suffered or permitted by the Company or, the existence
of any such rights will be waived prior to Closing. Except as
disclosed in the SEC Documents, as of the date of this Agreement, (i) there are
no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, (ii) there
are no outstanding debt securities and (iii) there are no agreements or
arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act and (iv) except
as set forth on Schedule 4(b), there are no outstanding registration statements
and there are no outstanding comment letters from the Securities and Exchange
Commission (the “Commission”) or any other
regulatory agency. There are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
any of the Securities as described in this Agreement (except, to the extent, if
any, that such rights are understood prior to Closing). The Company
has reserved for issuance all of the Conversion Shares upon conversion of the
Preferred Stock, all of which have been duly deposited into escrow in accordance
with the Escrow Agreement along with appropriate stock transfer
documentation.
(c) 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 Preferred Stock and Investor Warrants, and, upon conversion or
exercise thereof, the Conversion Shares and Warrant Shares, respectively, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement by the Company (or any subsidiary) to which it is a
party and the consummation by it or them of the transactions contemplated hereby
and thereby, including, without limitation, the issuance of the Preferred Stock,
the Conversion Shares, the Investor Warrants and the Warrant Shares and the
reservation for issuance and the issuance of the Conversion Shares and Warrant
Shares issuable upon conversion or exercise thereof (whether in the event of a
mandatory redemption of Preferred Stock or otherwise), have been duly authorized
by the Company’s Board of Directors and no further consent or authorization is
required by the Company, its Board of Directors or its stockholders, (iii) on or
before the Closing Date, this Agreement will have been duly executed
and delivered by the Company, (iv) this Agreement will, when executed and
delivered constitute the valid and binding obligations of the Company,
enforceable against the Company in accordance with their 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.
(d) Consents. No
consent, approval, authorization or order of any court, governmental agency or
body or arbitrator having jurisdiction over the Company, or any of its
Affiliates, or FINRA, the SEC, or the OTC Bulletin Board market system or the
Company’s stockholders, is required for the execution by the Company of this
Agreement to which it is a party and compliance and performance by the Company
of its covenants and obligations under this Agreement, including, without
limitation, the issuance and sale of the Securities.
(e) No Violation or
Conflict. Assuming the representations and warranties of the Subscriber
in Section
3 are
true and correct (except with respect to Section 3(c)),
neither the issuance and sale of the Securities nor the performance of the
Company’s obligations under this Agreement will: (i) violate, conflict with,
result in a breach of, or constitute a default (or an event which with the
giving of notice or the lapse of time or both would be reasonably likely to
constitute a default) under (A) the Articles of Incorporation of the Company as
in effect on the date hereof, including the Certificate (the “Certificate of
Incorporation”), the Bylaws of the Company as in effect on the date
hereof (the “Bylaws”) or
other organizational documents of the Company, (B) any decree, judgment, order,
law, treaty, rule, regulation or determination applicable to the Company of any
court, governmental agency or body, or arbitrator having jurisdiction over the
Company or over the properties or assets of the Company or any of its
Affiliates, (C) the terms of any bond, debenture, note or any other evidence of
indebtedness, or any agreement, stock option or other similar plan, indenture,
lease, mortgage, deed of trust or other instrument to which the Company or any
of its Affiliates is a party, by which the Company or any of its Affiliates is
bound, or to which any of the properties of the Company or any of its Affiliates
is subject, or (D) the terms of any “lock-up” or similar provision
of any underwriting or similar agreement to which the Company, or any of its
Affiliates is a party except the violation, conflict, breach, or default of
which would not have or be reasonably likely to have a Material Adverse Effect;
or (ii) result in the creation or imposition of any lien, charge or encumbrance
upon the Securities or any of the assets of the Company or any of its
Affiliates; or (iii) result in the activation of any anti-dilution rights or a
reset or repricing of any debt or security instrument of any other creditor or
equity holder of the Company, nor result in the acceleration of the due date of
any obligation of the Company; or (iv) result in the activation of any
piggy-back registration rights of any person or entity holding securities of the
Company or having the right to receive securities of the Company.
(f) Issuance of the
Securities. The Securities upon issuance: (i) are free and clear of any
security interests, liens, claims or other encumbrances, subject to restrictions
upon transfer under the 1933 Act and any applicable state securities laws; (ii)
have been duly and validly authorized and on the date exercise of the Investor
Warrants, the Warrant Shares will be duly and validly issued, fully paid and
non-assessable or if registered pursuant to the 1933 Act, and if resold pursuant
to an effective registration statement, will be freely tradable without any
restriction whatsoever; (iii) will not have been issued or sold in violation of
any pre-emptive or other similar rights of the holders of any securities of the
Company; and (iv) will not subject the holders thereof to personal
liability by reason of being such holders.
(g) Litigation. There is
no pending or, to the best knowledge of the Company, threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, or any of its Affiliates that
would affect the execution by the Company or the performance by the Company of
its obligations under the Transaction Documents to which it is a party. Except
as disclosed Schedule 4(g) to the Schedule of Exceptions or as disclosed in the
Latest SEC Documents (as defined in Section 4(h)), there is no pending or, to
the best knowledge of the Company, basis for or threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, or any of its Affiliates which
litigation if adversely determined would have or be reasonably likely to have a
Material Adverse Effect.
(h) SEC
Documents: Financial Statements. Since December 31,
2005, the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Commission under the 1934 Act (all
of the foregoing filed prior to the date hereof or amended after the date hereof
and all exhibits included therein and financial statements and schedules thereto
and documents incorporated by reference therein, being hereinafter referred to
as the “SEC Documents”
and any of the foregoing filed prior to the date hereof for periods ending on or
after December 31, 2006 or amended after the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as the “Latest SEC
Documents”). As of their respective dates, the financial
statements of the Company disclosed in the SEC Documents (the “Financial Statements”) are the
subject of a re-audit by the Company’s current principal
auditors. The Company has not, in the past two years, received any
notice from FINRA, the NASD, the OTC Bulletin Board quotation system or the SEC,
advising the Company that it is in danger of having its securities listed, or
that any late filings of SEC reports by it in the future would endanger the
eligibility of its common stock to remain quoted on the OTC Bulletin Board
quotation or any other quotations service.
(i) No Market
Manipulation. The Company has not taken, and will not take, directly or
indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Securities or affect the price at
which the Securities may be issued or resold.
(j) Information Concerning
Company. The Subscriber has not been provided with any material
non-public information concerning the Company, except (i) as the terms and
conditions of the transactions contemplated hereby may constitute such
information, or (ii) pursuant to non-disclosure agreements or documents of
similar purpose. The Company understands and confirms that the
Subscriber will rely on the representations and covenants herein effecting
transactions in securities of the Company. All disclosure provided to the
Subscriber regarding the Company, its business and the transactions contemplated
hereby, furnished by or on behalf of the Company (including the Company’s
representations and warranties set forth in this Agreement) are true and correct
in all material respects as of the date thereof and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The SEC Documents contain all material
information relating to the Company and its operations and financial condition
as of their respective dates which information is required to be disclosed
therein, (subject to a re-audit as disclosed in certain SEC Documents) and
disclosed in the Latest SEC Documents which are subject to audit.
(k) Stop Transfer. The
Securities, when issued, will be restricted securities. The Company will not
issue any stop transfer order or other order impeding the sale, resale or
delivery of any of the Securities, except as may be required by any applicable
federal or state securities laws and unless contemporaneous notice of such
instruction is given to the Subscriber.
(l) Defaults. The Company
is not in violation of its Certificate of Incorporation or
Bylaws. The Company is (i) not in default under or in violation of
any agreement or instrument to which it is a party or by which it or any of its
properties are bound or affected, which default or violation would have or be
reasonably likely to have a Material Adverse Effect or which default has not
been waived for purposes of allowing the issuance of the Preferred Stock and
entry into this Agreement, (ii) not in default with respect to any order of any
court, arbitrator or governmental body or subject to or party to any order of
any court or governmental authority arising out of any action, suit or
proceeding under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition or similar matters, or (iii) not in
violation of any statute, rule or regulation of any governmental authority which
violation would have or be reasonably likely to have a Material Adverse
Effect.
(m) 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 cause the offer of the Securities pursuant to this
Agreement to be integrated with prior offerings by the Company for purposes of
the 1933 Act or any applicable stockholder approval
provisions. Neither the Company nor any of its Affiliates will take
any action or steps that would cause the offer or issuance of the Securities to
be integrated with other offerings.
(n) No General Solicitation;
Private Placement. Neither the Company, nor any of its
Affiliates, nor to its knowledge, 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 0000 Xxx) in connection with the offer or sale
of the Securities. Assuming the accuracy of the Subscribers’ representations and
warranties set forth in Sections 3(d)-(f), no registration under the 1933 Act is
required for the offer and sale of the Securities by the Company to the
Subscribers under this Agreement.
(o) Listing. The
Company has not received any oral or written notice that its Common Stock is not
eligible or will become ineligible for quotation on the OTC Bulletin Board, and
there have been no FINRA or similar hearings relating to the listing or
quotation of the Company’s securities on such market or any other market in the
past two years, or that its Common Stock does not meet all
requirements for the continuation of such quotation, and the Company satisfies
all the requirements for the continued listing of its Common Stock on the OTC
Bulletin Board.
(p) No Undisclosed
Liabilities. The Company has no liabilities or obligations
which are material, individually or in the aggregate, which are not disclosed as
of the respective dates as of which the information is given in the SEC
Documents, other than those incurred in the ordinary course of the Company’s
businesses since December 31, 2007 and which, individually or in the aggregate,
would not reasonably be expected to have or be reasonably likely to have a
Material Adverse Effect.
(q) No Undisclosed Events or
Circumstances. Since December 31, 2007, no event or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, operations or financial condition, that, under
applicable law, rule or regulation, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed in the SEC Documents.
(r) Acknowledgment Regarding
Subscribers’ Purchase of the Securities. The Company
acknowledges and agrees that the Subscribers are acting solely in the capacity
of an arm’s length purchaser with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that the
Subscribers are not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by the Subscribers or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to such Subscribers’
purchase of the Securities. The Company further represents to the
Subscribers that the Company’s decision to enter into this Agreement has been
based solely on the independent evaluation by the Company and its
representatives.
(s) No Disagreements with
Accountants and Lawyers. There are no disagreements of any
kind presently existing, or reasonably anticipated by the Company to arise,
between the Company and the accountants (other than those specified designates
with the independent auditors or the Company’s financial statements which have
already been disclosed in the SEC Reports), and lawyers formerly or presently
employed by the Company, including but not limited to disputes or conflicts over
payment owed to such accountants and lawyers.
(t) Omitted.
(v) Title to
Assets. The Company and its subsidiaries have good and
marketable title in fee simple to all real property owned by them that is
material to their respective businesses and good and marketable title in all
personal property owned by them that is material to their respective businesses,
in each case free and clear of all liens, except for liens as do not materially
affect the actual value of such property and do not materially interfere with
the use made and proposed to be made of such property by the Company and its
Subsidiaries. Any real property and facilities held under lease by the Company
and its Subsidiaries are held by them under valid, subsisting and enforceable
leases of which the Company and its Subsidiaries are in compliance, except as
could not, individually or in the aggregate, have or be reasonably likely to
have a Material Adverse Effect.
(w) Patents and
Trademarks. The Company and its subsidiaries have, or have rights to use,
in accordance with applicable U.S. or foreign laws where it transacts business,
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights that are
necessary or material for use in connection with their respective businesses as
described in the Latest SEC Documents and which the failure to so have could,
individually or in the aggregate, have or be reasonably likely to have a
Material Adverse Effect (collectively, the “Intellectual Property
Rights”). Neither the Company nor any Subsidiary has received
a written notice that the Intellectual Property Rights used by the Company or
any Subsidiary violates or infringes upon the rights of any
person. To the knowledge of the Company, there is no
existing infringement by another person of any of the Intellectual Property
Rights.
(x) Solvency. Based
on the financial condition of the Company as of the Closing Date (and assuming
that the Closing shall have occurred), (i) the Company’s fair saleable value of
its assets exceeds the amount that will be required to be paid on or in respect
of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid. The Company will not incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of
cash to be payable on or in respect of its debt).
(y) Compliance with
Law. The Company and its subsidiaries are conducting business
in all material respects in compliance with all applicable laws and
orders. The Company and the Subsidiaries hold all permits of all
governmental authorities that by the nature of the operations of the business
conducted by it or the ownership of the assets owned by it are permits required
to conduct the operation and ownership thereof in the manner currently conducted
or to use such assets in the manner currently utilized in the business, except
for such permits, if any, as to which the failure to hold are not reasonably
likely to have a Material Adverse Effect.
(z) 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. The Company and its Subsidiaries have
not been notified by any governmental authority that any such environmental
permits will be modified, suspended or revoked or cannot be renewed in the
ordinary course of business consistent with past practice. There are
no present or past environmental conditions at any property owned, leased or
used by the Company or any Subsidiary. There is no pending or, to the
best knowledge of the Company, threatened environmental claim against the
Company or any Subsidiary relating to their business or the properties owned,
leased or used thereby, or against any entity relating to the business of the
Company or such properties, for which the Company or any Subsidiary may have any
liability. There are no hazardous materials or other conditions at,
under or emanating from, and there has been no release at, on or adjoining, any
real property currently or formerly owned, operated or leased by the Company or
any Subsidiary or their respective predecessors in interest that would
reasonably be expected to give rise to an environmental claim against or
liability of any of the foregoing under any Environmental
Law. Neither the Company nor any Subsidiary has assumed,
contractually or by operation of applicable law, any liabilities of any third
party under any Environmental Law.
(aa) Tax
Status. Except as set forth in the SEC Documents, the Company
and each of its Subsidiaries has made and filed through December 31, 2007 (and
has valid extensions for all applicable periods thereafter) 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,
in each case, except where the failure to make such filing or payment or set
aside such amount would not, individually or in the aggregate, have or be
reasonably likely to have a Material Adverse Effect.
(bb) Certain
Transactions. Except as set forth in the Latest SEC Documents,
and except for arm’s length transactions pursuant to which the Company makes
payments in the ordinary course of business upon terms no less favorable than
the Company could obtain from third parties and other than the grant of stock
options disclosed in the Latest SEC Documents, none of the officers, directors,
or employees of the Company or any Subsidiary is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director trustee or partner.
5. Exempt Offering. The offer and
issuance of the Securities to the Subscribers is being made pursuant to the
exemption from the registration provisions of the 1933 Act afforded by Section
4(2) of the 1933
Act and/or Rule 506 of Regulation D promulgated thereunder. The Company will
provide, at the Company’s expense, such legal opinions in the future as are
reasonably necessary for the issuance and resale of the Warrant Shares issuable
upon the due exercise of the Investor Warrants.
6. Broker/Legal
Fees. The Company on the one hand, and each Subscriber (for
itself only) on the other hand, agree to indemnify the other against and hold
the other harmless from any and all liabilities to any persons claiming
brokerage commissions or finder’s fees on account of services purported to have
been rendered on behalf of the indemnifying party in connection with this
Agreement or the transactions contemplated hereby and arising out of such
party’s actions.
7. Covenants of the Company. The
Company covenants and agrees with the Subscriber as follows:
(a) Listing. The
Company will maintain the listing of its Common Stock on the OTC Bulletin board
or any other national exchange or listing system, whichever of the foregoing
is at the time the principal trading exchange or market for the Common Stock
(the “Principal
Market”), and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Principal Market,
as applicable.
(b) Market Regulations.
The Company shall notify the Commission, the Principal Market and applicable
state authorities, in accordance with their requirements, of the transactions
contemplated by this Agreement, and shall take all other necessary action and
proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Securities to the
Subscribers and promptly provide copies thereof to Subscriber.
(c) Reservation. Prior
to the Closing Date, the Company undertakes to reserve from its authorized but
unissued shares of Common Stock, a number of such shares equal to (i) 100% of
the number of Warrant Shares as are issuable upon exercise of the Investor
Warrants and (ii) 10% of the maximum number of Conversion Shares as may be
issued upon conversion in the event of a mandatory conversion. Failure to have
sufficient shares reserved pursuant to this Section 9(d) for three (3)
consecutive business days or ten (10) days in the aggregate shall be a material
default of the Company’s obligations under this Agreement and the Preferred
Stock.
(d) Books and
Records. From the date of this Agreement and until the later
of (i) two (2) years after the Closing Date, or (ii) until all the Preferred
Stock have been converted and Conversion Shares resold or transferred by all
Subscriber or are eligible for resale pursuant Rule 144, without regard to
volume limitations, the Company will keep true records and books of account in
which full, true and correct entries will be made of all dealings or
transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent
basis.
(e) Reasonable Best
Efforts. Each party shall use its reasonable best efforts
timely to satisfy each of the conditions to be satisfied by it as provided in
Sections 11 and 12 of this Agreement.
8. Covenants of the Company Regarding
Indemnification.
(a) The
Company agrees to indemnify, hold harmless, reimburse and defend the subscriber,
the subscriber’s officers, directors, agents, Affiliates, control persons, and
principal stockholders or, equity holders, against any actual: claim, cost,
expense, liability, obligation, loss or damage (including reasonable legal fees)
of any nature, incurred by or imposed upon the Subscriber or any such person
which results, arises out of or is based upon (i) any material misrepresentation
by Company or breach of any warranty made by the Company in this Agreement or in
any Exhibits or Schedules attached hereto or (ii) after any applicable notice
and/or cure periods, any breach or default in performance by the Company of any
covenant or undertaking to be performed by the Company hereunder.
9. Conditions to the Company’s
Obligation to Sell. The obligation of the Company hereunder to
issue and sell the Preferred Stock and Additional Shares, if any are requested
to be purchased, and Investor Warrants to the Subscriber at any Closing, is
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions, provided that these conditions are for the Company’s
benefit and may be waived by the Company at any time in its sole
discretion:
(a) The
Subscriber(s) shall have executed this Agreement and any of the other
transaction documents to which it is a party, and delivered it to the Company,
or, in the case of additional shares, a notice demanding such Subscriber’s right
to acquire Additional Shares stating the amount of Additional Shares being
subscribed for and the closing date therefore.
(b) The
Subscriber shall have delivered to the Company the Purchase Price and by wire
transfer of immediately available U.S. funds pursuant to the wire instructions
provided by the Company.
(c) The
representations and warranties of the Subscriber(s) shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date), and the Subscriber shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Subscriber on or before the Closing Date.
10. Conditions to the Subscribers’
Obligation to Purchase. The obligation of the Subscriber
hereunder to subscribe for the Preferred Stock to be sold at the Initial Closing
or any subsequent closing, and Investor Warrants to be sold at Initial Closing
or any subsequent closing is subject to the satisfaction, on or before the
Closing Date, of each of the following conditions, any which may be waived at
Subscriber’s sole and absolute discretion:
(a) The
Certificate shall have been duly authorized and approved and filed with the
State of Nevada, and in full force and effect;
(b) Certificates
representing the Preferred Stock shall be executed and delivered to each
Subscriber,
(c) The
Company shall have approved, authorized executed and delivered:
(i) the Escrow Agreement to
the agent for the Subscribers set forth therein (the “Agent”) along with the
25,000,000 shares of Common Stock, par value $.001 of the Company for issuance
upon conversion of the Preferred Stock, based on the adjusted Conversion Price
(as defined in the Certificate) (the “Escrow Shares”) and shall have
reserved such shares plus any other shares that may be issuable upon conversion
of the Preferred Stock for issuance thereon (the “Conversion
Shares”),
(ii) Investor
Warrants to purchase such number of Warrant Shares as equals .95 times the
number of Conversion Shares into which the Preferred Stock issued is convertible
into,
(iii) A
Registration Rights Agreement with respect to all of the Conversion Shares and
Warrant Shares,
all duly authorized, approved, executed
and delivered by the Company, and a as well as a legal opinion from counsel to
the Company, as reasonably approved by the Subscriber’s, which shall contain
customary opinions relating to enforceability, validity, due authority, no
conflicts of laws of all agreements and securities issued as well as the valid
and fully paid issuance of Preferred Stock and all other securities contemplated
hereby (the “Opinion”).
(d) The
Common Stock shall be authorized for quotation on the OTC Bulletin Board and
trading in the Common Stock shall not have been suspended for any
reason.
(e) The
representations and warranties of the Company shall be true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality, in which case, such
representations and warranties shall be true and correct without further
qualification) as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company on or prior to the Closing Date. If requested by the
Subscribers, the Subscribers shall have received a certificate, executed by the
President and the Treasurer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by
the Subscribers.
(g) The
Proxy Parties shall have duly executed and delivered the Proxy
Agreement.
(h) The
Company shall have reserved out of its authorized and unissued Common Stock,
solely for the purpose of effecting exercise of the Investor Warrants, that
number of shares of Common Stock as shall be equal to 100% of the number of shares
of Common Stock required to effect the exercise of all the Investor Warrants to
be outstanding immediately following the Closing Date.
(i) The
Subscriber shall have received the Opinion.
(j) The
Subscriber shall have completed a due diligence review of the Company to their
sole satisfaction.
At any
Subsequent Closing for Additional Shares, each of the Additional Shares and
Investor Warrants as well as a new Opinion, shall be delivered and the foregoing
agreements shall be amended and restated as necessary and delivered to
Subscriber reflecting the Additional Shares and additional Investor Warrants
(provided that no additional Escrow Shares need be deposited).
11. Miscellaneous.
(a) Notices. All notices,
demands, requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise specified herein,
shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram, confirmed email (with a hard copy by mail or fax) or
facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other
communication required or permitted to be given hereunder shall be deemed
effective (i) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, 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 (ii) 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:
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If to the Company, to:
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If to the Subscriber, to:
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(b) Entire Agreement;
Assignment. This Agreement and other documents delivered in connection
herewith represent the entire agreement between the parties hereto with respect
to the subject matter hereof. No right or obligation of the Company shall be
assigned without prior notice to and the written consent of the
Subscriber.
(c) Amendments; Waivers; No
Additional Consideration. No provision of this Agreement may be waived or
amended except in a written instrument signed by the Company and the Subscribers
(or transferees of Securities) holding a majority in interest of the Preferred
Stock, or upon execution hereof by Existing Investors desiring to exercise their
Participation Rights. No waiver 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 subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.
(d) Counterparts/Execution.
This Agreement may be executed in any number of counterparts and by the
different signatories hereto on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument. This Agreement may be executed by
facsimile signature and delivered by facsimile transmission.
(e) Law Governing this
Agreement. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws principles that would result in the application of the substantive laws of
another jurisdiction. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. The parties and the individuals executing this Agreement and other
agreements referred to herein or delivered in connection herewith on behalf of
the Company agree to submit to the jurisdiction of such courts and waive trial
by jury. The prevailing party shall be entitled to recover from the other party
its reasonable attorney’s fees and costs. In the event that any provision of
this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any
agreement.
(f) Specific Enforcement,
Consent to Jurisdiction. The Company and Subscribers acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to one or more preliminary and final injunctions to
prevent or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which any of them may be entitled by law or equity. Subject to
Section 13(e) hereof, each of the Company, Subscriber and any signatory hereto
in his personal capacity 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 in New York 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. Nothing in this Section shall affect or limit any right
to serve process in any other manner permitted by law.
(g) Independent Nature of
Subscribers. The Company acknowledges that the obligations of each
Subscriber under this Agreement are several and not joint with the obligations
of any other Subscriber, and no Subscriber shall be responsible in any way for
the performance of the obligations of any other Subscriber under this Agreement.
The Company acknowledges that each Subscriber has represented that the decision
of each Subscriber to purchase Securities has been made by such Subscriber
independently of any other Subscriber or other person of entity and
independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company which
may have been made or given by any other Subscriber or by any agent or employee
of any other Subscriber, and no Subscriber or any of its agents or employees
shall have any liability to any other Subscriber (or any other person) relating
to or arising from any such information, materials, statements or opinions. The
Company acknowledges that nothing contained in this Agreement, and no action
taken by any Subscriber pursuant hereto or thereto shall be deemed to constitute
the Subscribers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Subscribers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement. The Company acknowledges that each
Subscriber shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement, and it
shall not be necessary for any other Subscriber to be joined as an additional
party in any proceeding for such purpose. The Company and each
Subscriber acknowledges that it has elected to provide all Subscribers with the
same terms and this Agreement for the convenience of the Company and not because
Company was required or requested to do so by the Subscribers. The Company
acknowledges that such procedure with respect to this Agreement in no way
creates a presumption that the Subscribers are in any way acting in concert or
as a group with respect to this Agreement uments or the transactions
contemplated hereby.
(h) Business/Calendar
Days. Unless otherwise indicated, references to days in this Agreement
will refer to calendar days.
(i) Termination. In
the event that the Closing shall not have occurred with respect to the on or
before ten (10) business days from the date hereof due to the Company’s or the
Subscribers’ failure to satisfy the conditions set forth in Sections 11 and 12
above (and the non-breaching party’s failure to waive such unsatisfied
condition(s)), the non-breaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such
date without liability of any party to any other party.
[THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
LIST
OF EXHIBITS & SCHEDULES
Exhibits
Exhibit
A Certificate
of Designation
Exhibit
B Form
of Investor Warrant
Exhibit
C Registration
Rights Agreement
Exhibit
D Escrow
Agreement
Exhibit
E Form
of Irrevocable Voting Proxy and Trust Agreement
Schedule
1.3 Use
of Proceeds
SIGNATURE
PAGE TO SUBSCRIPTION AGREEMENT
The
parties hereby acknowledge their acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
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COMPANY
a
Nevada corporation
/s/ Xxx Xxxxxxx
_________________________
By:
Xxx Xxxxxxx
Its:
President and Chief Executive Officer
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SUBSCRIBER
_________________________
By:
Its:
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