SUBSCRIPTION AGREEMENT
THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
This
Subscription Agreement (“Agreement”) is entered into
as of April 23, 2008, by and among Vanguard Minerals Corporation (“Vanguard” or the "Company");
and the purchasers listed on Schedule A of this Agreement (individually, a “Purchaser” and collectively,
the “Purchasers”).
WHEREAS,
Vanguard desires to issue and sell, and Purchaser desires to purchase, the
number of shares of Vanguard’s Common Stock, par value $0.001 per share (the
“Common Stock”), that
would be issuable based on the purchase amount set forth opposite the name of
each Purchaser on Schedule A hereto, as
determined under Section 1.4 hereof;
NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the parties hereto, intending to be legally bound hereby, agree
as follows:
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ARTICLE
I
PURCHASE
AND SALE OF SHARES
Section 1.1
Purchase
and Sale. Vanguard hereby sells, assigns,
transfers and delivers to Purchaser the number of shares of Common Stock set
forth opposite the name of each Purchaser on Schedule
A, and the Purchaser
hereby purchases from Vanguard the number of shares of Common Stock for the
aggregate purchase price set forth opposite the name of each Purchaser under the
heading “Total Purchase Price” on Schedule
A.
Section 1.2 Deliveries on Behalf of
Vanguard. Vanguard hereby delivers to each Purchaser; one or more
certificates representing the number of Shares based on the purchase amount
opposite the name of such entity or individual on Schedule A and as
determined under Section 1.4 hereof.
Section 1.3 Deliveries by the
Purchasers. Each Purchaser listed on Schedule A hereby
delivers to Vanguard a check or wire transfer of immediately available funds of
the aggregate purchase price set forth opposite the name of such Purchaser under
the heading “Total Purchase Price” on Schedule A
hereto.
Section
1.4. Delayed Issuance-Conversion
Price. The Company acknowledges that payment in full for the
shares has been made and that the conversion price per share of the subscription
amount will be determined pursuant to this paragraph. The number of
shares issued to any Purchaser shall be equal to a 50% discount to the closing
price of the Company's stock as quoted on the OTC bulletin board on the day of
issuance. The shares may be issued anytime by the Company up until
the second anniversary of this Agreement, at which time all the shares must be
issued hereunder. The minimum conversion price shall be $0.004 per
share. No shares shall be issued under this Agreement such that any
Purchaser would own, together with any other shares of the Company presently
owned or hereafter acquired or owned within the proceeding 120 days, more than
4.99% of the Company's issued and outstanding shares.
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ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Section 2.1 Each
of the Purchasers, severally but not jointly, represents and warrants, as to
such Purchaser only, to Vanguard that such Purchaser:
(a) has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of its investment in the Shares
contemplated hereby, and the Purchaser’s financial situation is such that the
Purchaser is able to bear indefinitely the economic risk of such
investment;
(b) has
had the opportunity to meet with certain of Vanguard’s officers and
representatives to discuss Vanguard’s business, assets, liabilities and
financial condition;
(c) is
acquiring the Shares for its own account for investment purposes only, and not
with a view to, or for resale in connection with, any distribution thereof
within the meaning of the Securities Act of 1933 as amended, and the regulations
promulgated thereunder (the “Securities Act”);
(d) understands
that the Shares have not been registered under the Securities Act and cannot be
sold unless subsequently registered under the Securities Act or pursuant to an
exemption therefrom and further understands that availability of an exemption
may depend on factors over which the Purchaser has no control;
(e) is
an “accredited investor” within the meaning of Rule 501 of Regulation D
under the Securities Act, or if not such an “accredited investor”, has notified
Vanguard of this fact in writing;
(f)
is not relying upon any information, other than that contained in this
Agreement and the results of the Purchaser’s own independent
investigation;
(g)
if not a natural person, is a limited liability company or limited
partnership, as applicable, duly organized, validly existing and in good
standing under the laws of its state of organization;
(h) has
the power and authority to execute and deliver this Agreement and to perform and
consummate the transactions contemplated hereby. The Purchaser has taken all
actions necessary to authorize the execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Purchaser. This Agreement constitutes the legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its respective terms, except as the enforceability thereof may
be limited by general principles of equity applicable to bankruptcy, insolvency,
reorganization or similar laws generally.
Section 2.2 The
Company hereby makes the following representations and warranties to each
Purchaser:
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada. The Company has the corporate power and
authority to carry on its business as now conducted and presently proposed
to be conducted and to carry out the transactions contemplated by this
Agreement.
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(b) Immediately
prior to the date hereof (i) the authorized capital stock of the Company
consists of 500,000,000 shares of common stock and no shares of preferred stock,
(ii)of which 80,549,666 shares of common stock are issued and
outstanding..
(c) Immediately
prior to the date hereof, the Company does not have outstanding any stock or
securities convertible or exchangeable for any shares of its capital stock, nor
does it have outstanding any rights or options to subscribe for or to purchase
any capital stock or any stock or securities convertible into or exchangeable
for any capital stock or any agreement related thereto, except as entered into
concurrently as of the date hereof or except as disclosed in the Company’s
filings with the Securities and Exchange Commission.
(d) The
Shares of the Company will be and all of the outstanding shares of the Company’s
capital stock have been duly authorized, validly issued, fully paid and
non-assessable.
(e) The
Company has made available to the Purchaser true and complete copies of its
articles of incorporation and bylaws as in effect on the date
hereof.
(f)
The execution, delivery and performance of this Agreement and all other
agreements and transactions contemplated hereby and thereby have been duly
authorized by the Company. This Agreement constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms, subject to
the availability of equitable remedies and to the laws of bankruptcy and other
similar laws affecting creditors’ rights generally. The execution and delivery
by the Company of this Agreement and all other agreements and instruments
contemplated hereby to be executed by the Company and the offering, sale and
issuance of the Shares hereunder, does not and will not (i) conflict with
or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) result in the creation of any
lien, security interest, charge or encumbrance upon the Company’s capital stock
or assets pursuant to, (iv) give any third party the right to accelerate
any obligation under, (v) result in a violation of or (vi) require any
authorization, consent, approval, exemption or other action by or notice to any
court or administrative or governmental body (other than in connection with
certain state and federal securities laws) pursuant to, the certificate of
incorporation or the bylaws, or any law, statute, rule, regulation, instrument,
order, judgment or decree to which the Company is subject or any agreement or
instrument to which the Company is a party.
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ARTICLE
III
MISCELLANEOUS
Section 3.1 Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same Agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered to
each party.
Section 3.2
Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada.
[Signature
Pages Follow]
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Vanguard
Minerals Corporation
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By:
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Name: Xxxxxxxx
Xxxxxxxx
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Title:
President and Chief Executive
Officer
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Signature
Page to Subscription Agreement
X_____________________________________
Signature of Purchaser
Print
Name of Purchaser: _______________________________
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Schedule
A
Shareholder Total
Purchase Price
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