SECURITIES PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (“Agreement”), dated as of the __ day of December,
2008, is entered into by and between ________________, a Delaware limited
liability company (“Purchaser”) and the entities or individuals contained on
Schedule A attached hereto (“Seller” or “Sellers”).
WITNESSETH
THAT:
WHEREAS,
Seller owns and wishes to sell and transfer to Purchaser the
shares (“Shares”) and/or notes (“Notes”) set for opposite Sellers name on
Schedule A. (collectively the Shares and Notes shall be referred to
as “Securities”).
WHEREAS as a material part of
this agreement, and as a specific condition to Purchaser’s obligation to
purchaser the Securities, Sellers and Purchaser have entered into a series of
Indemnification Agreements (“Indemnification Agreement”), in substantially the
same form as attached hereto as Exhibit
B
whereby Sellers and Issuer make certain representations, warranties, covenants
and agreements with regard to the Securities and the Issuer and Sellers agree to
indemnify and hold Purchaser harmless for any damages arising from the breach of
such representations, warranties, covenants and agreements as contained in such
Indemnification Agreement.
WHEREAS, Purchaser and Seller
intend this Agreement and the Indemnification Agreement to be interpreted as a
single fully integrated agreement.
NOW, THEREFORE, in
consideration of the foregoing and mutual covenants set forth below, the parties
hereto agree as follows:
1. PURCHASE
AND SALE OF THE SHARES AND THE NOTE
1.1 Purchase
Price. The aggregate purchase price for the Securities is as
set forth each respective Sellers name as contained on Schedule
A (the “Purchase Price”).
1.3 Transfer of
Title. The sale, assignment, conveyance, transfer, and
delivery by Seller of the Securities shall be made by delivering (x) stock
certificate(s) representing the Shares, together with one or more medallion
guaranteed stock powers duly endorsed to Purchaser and (y) an assignment
and endorsement to Purchaser of the Note, the form of which is attached hereto
as Exhibit A.
1.4 Closing. The
closing of the purchase and sale of the Securities, and the payment by Purchaser
of the Purchase Price (the “Closing”) shall take place on or before December __,
2008, at the offices of the Issuers office, or as counsel for the parties
otherwise may agree, subject to the satisfaction of the Closing Conditions
(hereinafter defined) having been satisfied or waived by the Purchaser. At the
Closing, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto and the Seller shall transfer title to the Securities to the
Purchaser. Upon satisfaction or waiver by the applicable party of the
covenants and conditions contained in the Representation and Warranty Agreement
, the Closing shall occur.
1.5 Deliveries.
(a) On
or prior to the Closing Date, the Seller shall deliver or cause to be delivered
to the Purchaser the following:
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(i) this
Agreement, the Indemnification Agreement and the Transaction Documents duly
executed by Seller;
(ii) certificates
by each Seller representing the Shares along with medallion guaranteed stock
powers;
(iii) Note
payable to Seller in the amounts set forth opposite Sellers name on Schedule A
along with endorsement by Seller as contained in Exhibit A.
(b) On
or prior to the Closing Date, Purchaser shall deliver or cause to be delivered
to the Seller the following:
(i) this
Agreement, the Indemnification Agreement and the Transaction Documents duly
executed by the Purchaser; and
(ii) the
Purchase Price.
(c) On
or prior to the Closing Date, the Issuer shall deliver or cause to be delivered
to Seller the following:
(i) this
Agreement, the Indemnification Agreement, and the Transaction Documents, duly
executed by the Issuer;
(ii) Certificate
from the Issuer’s officers certifying compliance with the representations,
warranties, covenants and conditions contained in Sections 2.2 and 4 of the
Indemnification Agreement; and
(iii) Letter
from Issuer’s accountant a letter, dated the Closing Date, that on the basis of
the limited review, not an audit, of the latest available accounting records of
Issuer, consultations with Issuer and its agents, and other pertinent inquiries
that he may deem necessary, it has no reason to believe that, during the period
from August 31, 2008 to a specified date not more than five business days before
the Closing Date, there was any change in the financial condition or results of
operations of Issuer, except changes incurred in the ordinary and usual course
of business during that period, that in the aggregate is not materially adverse,
and other changes or transactions, if any, contemplated by this Agreement, and
that the prior work product of the Issuer’s accountant is valid and may be
relied upon by Purchaser’s accountant for purposes of drafting the Form 10-KSB
for fiscal year ending February 28, 2009; and
1.6 Closing
Conditions.
(a) The
obligations of the Purchaser hereunder in connection with the Closing are
subject to the following conditions being met:
(i) the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Seller and the Issuer contained in this Agreement and the
Indemnification Agreement;
(ii) all
obligations, covenants and agreements of the Seller and the Issuer required to
be performed at or prior to the Closing Date shall have been
performed;
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(iii) the
delivery by the Seller and the Issuer of the items set forth in Sections 1.5(a)
and 1.5(c) of this Agreement;
(v) there
shall be no injunction, restraining order or decree of any nature of
any court or government authority of competent jurisdiction that is in effect
that restrains or prohibits the consummation of the transactions contemplated
hereby;
(vi) copies
of the resignations of each of the directors and officers of the
Issuer;
(vii) completion
of due diligence to its satisfaction which shall be determined in its sole and
reasonable discretion;
(viii) the form
and substance of all certificates, instruments, opinions, and other documents
delivered to Purchaser under this Agreement and the Transaction Documents shall
be satisfactory in all respects to Purchaser and Purchaser’s
counsel;
(ix) there
shall have been no Material Adverse Effect with respect to the Issuer since the
date hereof; and
(x) from
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission or the Issuer’s Principal Market (except for
any suspension of trading of limited duration agreed to by the Issuer, which
suspension shall be terminated prior to the Closing), and, at any time prior to
the Closing Date, trading in securities generally as reported by Bloomberg L.P.
shall not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or on any
Principal Market, nor shall a banking moratorium have been declared either by
the United States or New York State authorities nor shall there have occurred
any material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable
judgment of each Purchaser, makes it impracticable or inadvisable to purchase
the Securities at the Closing.
(b) The
obligations of the Seller hereunder in connection with the Closing are subject
to the following conditions being met:
(i) the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Purchaser contained in the Representations and Warranties
Agreement;
(ii) all
obligations, covenants and agreements of the Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and
(iii) the
delivery by the Purchaser of the items set forth in Section 1.5(b) of this
Agreement;
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1.7 Transaction
Documents. For purpose of this Agreements, all documents,
acknowledgments or agreements required to be delivered or provided pursuant to
Section 1.5 are collectively referred to herein as “Transaction
Documents.”
2. REPRESENTATIONS
AND WARRANTIES BY THE SELLER WITH RESPECT TO THE SHARES
2.1 Representations and
Warranties of the Seller.
(a) Title. Seller
has full power and authority to sell and transfer the Securities to Purchaser
without obtaining the waiver, consent, order or approval of (i) any state or
federal governmental authority, (ii) the Issuer, or (iii) any third party or
other person including, but not limited to, other stockholders of the
Issuer.
(b) Reliance on
Exemptions. The Securities are being sold to the Purchaser in
reliance upon specific exemptions from the registration requirements of federal
and state securities laws and each Seller understands that the Purchaser is
relying on the truth and accuracy of the representations and warranties of each
Seller set forth in this Section 2.1 in order to determine the availability of
the exemption to acquire the Securities without registration.
(j) No Short Position in Issuers
Securities. No Seller or any person trading on a Seller’s
behalf or at a Seller’s direction has established or maintained a short position
in the common stock or any other securities of the Issuer as of the trading day
immediately preceding the Closing Date.
(k) Fees. The Seller are
not obligated to pay any compensation or other fee, cost or related expenditure
to any underwriter, broker, agent or Issuer representative in connection with
the sale transactions contemplated hereby.
(l) Due Authorization; Valid
Issuance. The Securities are duly authorized and, when issued
to the Seller were duly and validly issued, fully paid and non-assessable. The
Shares are and will be on the Closing Date free and clear of any Liens and,
based upon each Seller’s representations in this Agreement, will be sold and
delivered in compliance with all applicable federal and state securities
laws. At the time the Shares were issued and fully paid, the Issuer
had a specific business plan and was not a “blank check company” as defined
under Rule 419 promulgated under the Securities Act of 1933, as
amended.
(m) No Other
Agreements. The Seller have not, directly or indirectly,
entered into any agreement with or granted any right to other persons relating
to the terms or conditions of the transactions contemplated by this
Agreement.
(n) Power of
Attorney. Each Seller has previously authorized, and hereby
reauthorizes Xxxxxxx Xxxxxx to act as his or her representative in delivering
negotiable shares to the Purchaser and to receive his or her allocable portion
of the Purchase Price (to be paid in accordance with written instructions to be
provided by such representative to Purchaser). The said representative shall pay
the appropriate and agreed costs and expenses incurred by Seller, and distribute
the balance in accordance with the Seller’s respective ownership interest in
Issuer in proportion to all Seller interests. Seller will save and
hold harmless Purchaser from any costs, damages or liabilities arising from its
reliance on this representation.
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3. SURVIVAL
OF REPRESENTATIONS; INDEMNIFICATION
3.1 Survival of
Representations. Regardless of any investigation at any time
made by or on behalf of any party hereto or of any information any party may
have in respect thereof, all covenants, agreements, representations and
warranties made in the Indemnification Agreement, hereunder or pursuant hereto
or in connection with the transaction contemplated hereby shall survive the
execution and delivery of this Agreement and continue in effect for 18 months
after the execution and delivery of this Agreement (the “Survival Period”),
except that Seller’ title representations in Section 2.1 shall survive for the
period that is permitted for third-party claims by the applicable statute of
limitations.
3.2 Indemnification.
(a) Seller,
jointly and severely, agree to indemnify Purchaser, and hold it harmless from
and in respect of any assessment, loss, damage, liability, cost and expense
(including, without limitation, interest, penalties, and reasonable attorneys’
fees) imposed upon or incurred by Purchaser resulting from (i) any breach of
representation or warranty, in any material respect, made by Seller or the
Issuer in this Agreement or the Indemnification Agreement, and in any
certificate delivered by Seller or the Issuer pursuant to this Agreement or the
Indemnification Agreement, (ii) any breach by Seller or the Issuer of any
covenant, obligation or other agreement made by Seller or the Issuer in this
Agreement or the Indemnification Agreement, and (iii) a third-party claim based
on any acts or omissions by Seller or the Issuer through and including the
Closing Date; provided, however, that in the event of a third-party claim
brought against Purchaser based upon Section 3.2 during the Survival Period, the
Survival Period shall be extended up to applicable expiration of statute of
limitations for any such respective claim.
(b) If
any claim, action or proceeding is brought against the Purchaser arising out of
a claim that is the subject of indemnification under this Agreement, the
Purchaser shall provide the Sellers prompt written notice of the same, together
with the basis for seeking indemnification (the “Indemnification Notice”).
Upon receipt of an Indemnification Notice by the Sellers, each Seller shall
inform the Purchaser (delivering the Indemnification Notice), within 5 business
days after receipt of the Indemnification Notice, whether such Seller elects to
compromise or defend such claim, action or proceeding. Each Seller
shall have the right, at its option, to compromise the claim, at its own
expense. In the event the Sellers elect to defend, the Purchaser shall
have the right to control the defense of any claim brought against him or her
that is the subject of this indemnification. All costs and expenses
incurred, including legal fees, in connection with the compromise or defense of
any claim shall be paid by the Indemnifying Party.
4. MISCELLANEOUS
4.1 Expenses. There
shall be no fees or expenses incurred by the Purchaser in connection with the
transaction contemplated by this Agreement.
4.2 Further
Assurances. From time to time, at a party’s request and
without further consideration, the other party, at the requesting party’s
expense, will execute and transfer such documents and will take such action as
may reasonably be requested in order to effectively consummate the transactions
contemplated herein.
4.3 Parties in
Interest. All the terms and provisions of this Agreement shall
be binding upon, shall inure to the benefit of, and shall be enforceable by the
prospective heirs, beneficiaries, representatives, successors and assigns of the
parties hereto.
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4.4 Entire Agreement. This
Agreement and the Indemnification Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter
hereof. This Agreement shall not be amended except by a writing
signed by both parties or their respective successors or assigns.
4.5 Headings. The
section and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretations of
this Agreement.
4.6 Governing
Law. For all purposes this Agreement will be governed
exclusively by and construed and enforced in accordance with the laws of the
State of California and the Courts prevailing in the State of California, County
of Los Angeles.
4.7 Notices. All
notices, requests, demands, and other communication hereunder shall be in
writing and shall be deemed to have been duly given if delivered or mailed
(registered or certified mail, postage prepaid, return receipt requested) as
follows:
If to
Seller: as contained on Schedule A.
If to
Purchaser: _____________________
5.8 Effect. In
the event any portion of this Agreement is deemed to be null and void under any
state, provincial, or federal law, all other portions and provisions not deemed
void or voidable shall be given full force and effect.
5.9 Counterparts. This
Agreement may be executed in one or more counterparts and by transmission of a
facsimile or digital image containing the signature of an authorized person,
each of which shall be deemed and accepted as an original, and all of which
together shall constitute a single instrument. Each party represents
and warrants that the person executing on behalf of such party has been duly
authorized to execute this Agreement.
5.10 Transfer. This
Agreement will constitute, and may be presented to the Issuer’s transfer agent
and registrar as, Seller’s irrevocable authorization to transfer the record
ownership of the Shares to the Purchaser on the books of the
Issuer.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
Seller, the Purchaser and the Issuer on the date first written
above.
SELLER:
_________________________________
PURCHASER:
By:
____________________________
Name:
Title:
Managing Member
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EXHIBIT
A
ASSIGNMENT OF PROMISSORY
NOTE
THIS ASSIGNMENT OF PROMISSORY NOTE
(this “Assignment”) is made this 11th day of December
2008, by Xxxxxxxx Xxxxxx (“Assignor”), to [________]. (the
“Assignee”).
RECITALS
WHEREAS, Assignor is the owner
and holder of a certain Promissory Note made by Photovoltaic Solar Cells, Inc.
(the “Issuer”), as borrower, to Assignor, as lender, having a principal balance
as of December 11, 2008 of not less than $49,100, (the “Note”);
and
WHEREAS, Assignor and Assignee
are parties to that certain Securities Purchase Agreement (the “SPA”), dated as
of the date hereof, pursuant to which Assignor has agreed, among other things,
to sell and transfer to Assignee all of Assignor’s right, title and interest in,
to and under the Note, subject to the terms, covenants and conditions contained
in the SPA;
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Assignment. Assignor,
as of the date hereof, assigns, transfers and conveys to the Assignee all of
Assignor's right, title and interest in and to the Note.
2. Representation
and Warranty. Assignor represents and warrants to Assignee
that the outstanding principal balance of the Note as of December 11, 2008 is
$49,100.
3. Assumption. Assignee
accepts the foregoing assignment and assumes the Note as of the date
hereof.
4. Entire
Agreement. This Assignment, together with the SPA, contains
the entire understanding of the parties hereto in respect of the transactions
described herein. There are no restrictions, promises, representations and
warranties, covenants or undertakings as to such transactions other than those
expressly set forth or referred to herein or in such other agreements dated the
date hereof.
IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the day and year first above written.
Assignor:
____________________________
Xxxxxxxx
Xxxxxx
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Exhibit
B
Form of
Indemnification Agreement
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