BPK RESOURCES, INC.
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Securities Purchase Agreement
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Units Comprised of
Convertible Notes and
Warrants
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CONFIDENTIAL
CONFIDENTIAL INFORMATION
THE OFFEREE, BY ACCEPTING THE SECURITIES PURCHASE AGREEMENT AND THE OTHER
OFFERING DOCUMENTS RELATING TO THE COMPANY'S PROPOSED OFFERING OF UNITS
COMPRISED OF NOTES CONVERTIBLE INTO SHARES OF ITS COMMON STOCK AND WARRANTS TO
ACQUIRE SHARES OF ITS COMMON STOCK, ACKNOWLEDGES AND AGREES THAT: (I) THE
OFFERING DOCUMENTS HAVE BEEN FURNISHED TO THE OFFEREE ON A CONFIDENTIAL BASIS
SOLELY FOR THE PURPOSE OF ENABLING THE OFFEREE TO EVALUATE THE OFFERING; (II)
THAT THE OFFEREE MAY NOT FURTHER DISTRIBUTE THE OFFERING DOCUMENTS WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMPANY, EXCEPT TO THE OFFEREE'S LEGAL, FINANCIAL
OR OTHER PERSONAL ADVISORS, IF ANY, WHO WILL USE THE OFFERING DOCUMENTS ON THE
OFFEREE'S BEHALF SOLELY FOR PURPOSES OF EVALUATING THE OFFERING; (III) ANY
REPRODUCTION OR DISTRIBUTION OF THE OFFERING DOCUMENTS, IN WHOLE OR IN PART, OR
THE DIRECT OR INDIRECT DISCLOSURE OF THE CONTENTS OF THE OFFERING DOCUMENTS FOR
ANY OTHER PURPOSE WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS
PROHIBITED; AND (IV) THE OFFEREE SHALL BE BOUND BY ALL TERMS AND CONDITIONS
SPECIFIED IN THE OFFERING DOCUMENTS.
NOTICE TO OFFEREES
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER THE
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THIS SECURITIES
PURCHASE AGREEMENT AND THE OTHER OFFERING DOCUMENTS DO NOT CONSTITUTE AN OFFER
TO SELL OR SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THE SECURITIES ARE BEING SOLD FOR INVESTMENT PURPOSES ONLY, WITHOUT A VIEW
TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE TRANSFERRED, RESOLD OR OFFERED
FOR RESALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND EFFECTIVE REGISTRATION OR QUALIFICATION UNDER THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, OR THE AVAILABILITY OF AN
EXEMPTION THEREFROM.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR THE SECURITIES
COMMISSION OR OTHER REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS SECURITIES PURCHASE AGREEMENT OR ANY OF THE OTHER OFFERING
DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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ADDITIONAL INFORMATION
BPK Resources, Inc. (the "Company") files annual, quarterly and current
reports, proxy statements and other information with the Securities and Exchange
Commission (the "SEC") under the Securities Exchange Act of 1934, as amended.
Reports, statements or other information that we file with the SEC are available
to the public at the SEC's Website at ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇. The following
documents that we have previously filed with the SEC are incorporated by
reference into this agreement:
o Quarterly Report on Form 10-QSB for the fiscal quarters ended March
31, June 30 and September 30, 2005;
o Current Reports on Form 8-K dated December 26, 2004, June 23, 2005
and June 24, 2005;
o Annual Report on Form 10-KSB for the fiscal year ended December 31,
2004, as amended; and
o Any reports on Form 8-K filed with the SEC after February 1, 2006
and before the date this agreement is executed.
The information incorporated by reference into this agreement is an important
part of this agreement. Any statement contained in a document incorporated by
reference into this agreement shall be deemed to be modified or superseded for
the purposes of this agreement to the extent that a statement contained herein
or in any other subsequently filed document modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this agreement.
The Company will provide to each person to whom this agreement is sent,
upon the written or oral request of such person, a copy of any or all of the
documents referred to above that have been incorporated by reference into this
agreement but not delivered with this agreement. You may make such requests at
no cost to you by writing or telephoning us at the following address or number:
BPK Resources, Inc.
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▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
(▇▇▇) ▇▇▇-▇▇▇▇
You should rely only on the information contained in this agreement or
incorporated by reference into this agreement. The Company has not authorized
anyone to provide you with different information. You should not assume that the
information in this agreement is accurate as of any date other than the date
this agreement is sent to you for review or that the information incorporated by
reference into this agreement is accurate as of any date other than the date set
forth on the front of the document containing such information.
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CONFIDENTIAL
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated
_______________, 2006, by and between BPK Resources, Inc., a Nevada corporation
(the "Company"), and the purchaser or purchasers identified on the signature
page hereof ("Purchaser").
R E C I T A L S:
WHEREAS, Purchaser desires to purchase and the Company desires to sell
units comprised of notes convertible into shares of common stock and warrants to
acquire shares of common stock on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises hereof and the agreements
set forth herein below, the parties hereto hereby agree as follows:
1. The Offering.
(a) Private Offering. The securities offered by this Agreement are
being offered in a private offering (the "Offering") of notes (the "Convertible
Notes") convertible into shares of the Company's common stock, $.001 par value
per share (the "Common Stock"), and warrants (the "Warrants") to acquire up to
5,000,000 shares of Common Stock. The Convertible Notes and Warrants will be
sold in units (the "Units") comprised of one (1) Convertible Note and one (1)
Warrant. Units comprising up to $750,000 of Convertible Notes will be sold in
the Offering; provided, however, that in the event of any over-allotments of
Units during the offering period, the Company reserves the right to sell in
excess of $750,000 of Convertible Notes to cover such over-allotments. The Units
will be sold on a reasonable "best efforts" basis at a purchase price of $50,000
per Unit ("Purchase Price") pursuant to Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act"), and/or Rule 506 of Regulation D
thereunder. The Units are being offered solely to a limited number of
"accredited investors" as that term is defined in Rule 501(a) of the Securities
Act during an offering period that commenced on February 1, 2006 and terminates
at the sole discretion of the Company.
(i) Each Convertible Note is convertible into that number of
shares of Common Stock equal to the face amount of the Convertible Note, plus
any accrued but unpaid interest thereon, divided by $0.15 (the "Conversion
Price"). The terms of the Convertible Note are set forth in the Form of
Convertible Note attached hereto and made a part hereof as Exhibit B.
(ii) Each Warrant is initially exercisable into 333,333 shares
of Common Stock (determined by dividing the face amount of the Convertible Note
by the Conversion Price) at an exercise price of $0.27 per share. The terms of
the Warrant are set forth in the Form of Warrant, attached hereto and made a
part hereof as Exhibit C. The Convertible Notes, the Warrants and shares of
Common Stock issuable upon conversion of the Convertible Notes or exercise of
the Warrants are hereinafter referred to collectively as the "Securities."
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(b) Use of Proceeds. Assuming the Company raises $750,000, the net
proceeds to the Company are estimated to be approximately $655,000 (after
deducting offering expenses payable by the Company estimated at $5,000 and
assuming payment of the maximum amount of placement agent and finders fees of up
to $90,000). The Company intends to use the net proceeds to make a secured loan
to Graphite Technology Group, Inc. ("GTG") as well as for general working
capital purposes.
(c) Placement Agent and Finders Fees. The Company reserves the right
to pay cash fees to agents, brokers, dealers and finders in connection with the
sale of the Securities in an amount equal to up to twelve percent (12%) of the
Purchase Price of such Securities (of which two percent (2%) represents such
agent's, broker's, dealer's or finder's non accountable expense allowance) and
to issue warrants to such persons to purchase shares of Common Stock equal to up
to fifteen percent (15%) of the number of the shares of Common Stock issuable
upon exercise of all Convertible Notes, at an exercise price of $0.27 per share,
which terminate three (3) years after the date of issuance.
(d) Graphite Technology Group, Inc. The Company has entered into a
Letter of Intent (the "LOI") with GTG to acquire all of the issued and
outstanding stock of GTG. The LOI is not binding and any transaction between the
Company and GTG will be subject to the negotiation and execution of a definitive
agreement acceptable to the Company and GTG. The LOI and a brief description of
GTG are attached hereto as Exhibit A. The Company makes no representations or
warranties herein as to whether the transactions contemplated under the LOI will
be consummated and, if so, the effect those transactions will have on the
Company.
2. Sale and Purchase of Securities.
(a) Sale and Purchase of Securities. Subject to the terms and
conditions hereof, the Company agrees to sell, and Purchaser irrevocably
subscribes for and agrees to purchase, the number of Units set forth on the
signature page of this Agreement at a purchase price of $50,000 per Unit. The
aggregate purchase price for the Units shall be as set forth on the signature
page hereto (the "Purchase Price") and shall be payable upon execution hereof by
check or wire transfer of immediately available funds.
(b) Subscription Procedure. In order to purchase Units, Purchaser
shall deliver to the Company, at its principal executive office identified in
Section 16 hereof: (i) one completed and duly executed copy of this Agreement;
and (ii) immediately available funds, or a certified check or bank check, in an
amount equal to the Purchase Price. Execution and delivery of this Agreement
shall constitute an irrevocable subscription for that number of Units set forth
on the signature page hereto. The minimum investment that may be made by a
Purchaser is $50,000, although the Company may, in its sole discretion, accept
subscriptions for a number of Units at a lesser amount. Payment for the
Securities may be made by wire transfer to:
Sovereign Bank
Wyomissing, PA
ABA# 231 372 691
For Credit to: BPK Resources, Inc.
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Account# 236 103 5871
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or by check made payable to: BPK Resources, Inc., c/o ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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wired, or deposit and collection by the Company of the check tendered herewith,
will not constitute acceptance of this Agreement by the Company. The Units
subscribed for will not be deemed to be issued to, or owned by, Purchaser until
the Company has executed this Agreement. All funds tendered by Purchaser will be
held by the Company pending acceptance or rejection of this Agreement by the
Company and the closing of Purchaser's purchase of Units. This Agreement will
either be accepted by the Company, in whole or in part, in its sole discretion,
or rejected by the Company as promptly as practicable. If this Agreement is
accepted only in part, Purchaser agrees to purchase such smaller number of Units
as the Company determines to sell to Purchaser. If this Agreement is rejected
for any reason, including the termination of the Offering by the Company, this
Agreement and all funds tendered herewith will be promptly returned to
Purchaser, without interest or deduction of any kind, and this Agreement will be
void and of no further force or effect.
(c) Closing. Subscriptions will be accepted by the Company in its
sole discretion. Upon the Company's execution of this Agreement, the
subscription evidenced hereby, if not previously rejected by the Company, will,
in reliance upon Purchaser's representations and warranties contained herein, be
accepted, in whole or in part, by the Company. If Purchaser's subscription is
accepted only in part, this Agreement will be marked to indicate such fact, and
the Company will return to Purchaser the portion of the funds tendered by
Purchaser representing the unaccepted portion of Purchaser's subscription,
without interest or deduction of any kind. Upon acceptance of this Agreement in
whole or in part by the Company, the Company will issue certificates for the
Shares to Purchaser, together with a copy of Purchaser's executed Agreement
countersigned by the Company and a Warrant ("Warrant Certificate") executed by
the Company.
3. Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Company as follows:
(a) Organization and Qualification.
(i) If Purchaser is an entity, Purchaser is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, with the corporate or other entity power and authority to own and
operate its business as presently conducted, except where the failure to be or
have any of the foregoing would not have a material adverse effect on Purchaser,
and Purchaser is duly qualified as a foreign corporation or other entity to do
business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of their activities makes
such qualification necessary, except for such failures to be so qualified or in
good standing as would not have a material adverse effect on it.
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(ii) If Purchaser is an entity, the address of its principal
place of business is as set forth on the signature page hereto, and if Purchaser
is an individual, the address of its principal residence is as set forth on the
signature page hereto.
(b) Authority; Validity and Effect of Agreement.
(i) If Purchaser is an entity, Purchaser has the requisite
corporate or other entity power and authority to execute and deliver this
Agreement and perform its obligations under this Agreement. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and all other necessary corporate or other entity action
on the part of Purchaser have been duly authorized by its board of directors or
similar governing body, and no other corporate or other entity proceedings on
the part of Purchaser is necessary for Purchaser to execute and deliver this
Agreement and perform its obligations hereunder.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by Purchaser and, assuming it has been duly and validly
executed and delivered by the Company, constitutes a legal, valid and binding
obligation of Purchaser, in accordance with its terms.
(c) No Conflict; Required Filings and Consents. Neither the
execution and delivery of this Agreement by Purchaser nor the performance by
Purchaser of its obligations hereunder will: (i) if Purchaser is an entity,
conflict with Purchaser's articles of incorporation or bylaws, or other similar
organizational documents; (ii) violate any statute, law, ordinance, rule or
regulation, applicable to Purchaser or any of the properties or assets of
Purchaser; or (iii) violate, breach, be in conflict with or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or permit the termination of any provision of, or result in the
termination of, the acceleration of the maturity of, or the acceleration of the
performance of any obligation of Purchaser under, or result in the creation or
imposition of any lien upon any properties, assets or business of Purchaser
under, any material contract or any order, judgment or decree to which Purchaser
is a party or by which it or any of its assets or properties is bound or
encumbered except, in the case of clauses (ii) and (iii), for such violations,
breaches, conflicts, defaults or other occurrences which, individually or in the
aggregate, would not have a material adverse effect on its obligation to perform
its covenants under this Agreement.
(d) Accredited Investor. Purchaser is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D under the Securities Act. If
Purchaser is an entity, Purchaser was not formed for the specific purpose of
acquiring the Securities, and, if it was, all of Purchaser's equity owners are
"accredited investors" as defined above.
(e) No Government Review. Purchaser understands that neither the
United States Securities and Exchange Commission ("SEC") nor any securities
commission or other governmental authority of any state, country or other
jurisdiction has approved the issuance of the Securities or passed upon or
endorsed the merits of the Securities, this Agreement, the Convertible Note, the
Warrant Certificate or any of the other documents relating to the proposed
Offering (collectively, the "Offering Documents"), or confirmed the accuracy of,
determined the adequacy of, or reviewed this Agreement, the Convertible Note,
the Warrant Certificate or the other Offering Documents.
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(f) Investment Intent. The Securities are being acquired for the
Purchaser's own account for investment purposes only, not as a nominee or agent
and not with a view to the resale or distribution of any part thereof, and
Purchaser has no present intention of selling, granting any participation in or
otherwise distributing the same. By executing this Agreement, Purchaser further
represents that Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or third person with respect to any of the Securities.
(g) Restrictions on Transfer. Purchaser understands that the
Securities are "restricted securities" as such term is defined in Rule 144 under
the Securities Act and have not been registered under the Securities Act or
registered or qualified under any state securities law, and may not be, directly
or indirectly, sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act and
registration or qualification under applicable state securities laws or the
availability of an exemption therefrom. In any case where such an exemption is
relied upon by Purchaser from the registration requirements of the Securities
Act and the registration or qualification requirements of such state securities
laws, Purchaser shall furnish the Company with an opinion of counsel stating
that the proposed sale or other disposition of such securities may be effected
without registration under the Securities Act and will not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and opinion to be
satisfactory to the Company. Purchaser acknowledges that it is able to bear the
economic risks of an investment in the Securities for an indefinite period of
time, and that its overall commitment to investments that are not readily
marketable is not disproportionate to its net worth.
(h) Investment Experience. Purchaser has such knowledge,
sophistication and experience in financial, tax and business matters in general,
and investments in securities in particular, that it is capable of evaluating
the merits and risks of this investment in the Securities, and Purchaser has
made such investigations in connection herewith as it deemed necessary or
desirable so as to make an informed investment decision without relying upon the
Company for legal or tax advice related to this investment. In making its
decision to acquire the Securities, Purchaser has not relied upon any
information other than information provided to Purchaser by the Company or its
representatives and contained herein and in the other Offering Documents.
(i) Access to Information. Purchaser acknowledges that it has had
access to and has reviewed all documents and records relating to the Company,
including, but not limited to, the Company's Quarterly Report on Form 10-QSB for
the fiscal quarter ended September 30, 2005 and the Company's Annual Report on
Form 10-KSB, as amended, for the fiscal year ended December 31, 2004, that it
has deemed necessary in order to make an informed investment decision with
respect to an investment in the Securities; that it has had the opportunity to
ask representatives of the Company certain questions and request certain
additional information regarding the terms and conditions of such investment and
the finances, operations, business and prospects of the Company and has had any
and all such questions and requests answered to its satisfaction; and that it
understands the risks and other considerations relating to such investment.
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(j) Reliance on Representations. Purchaser understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of the federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities. Purchaser represents and warrants to the
Company that any information that Purchaser has heretofore furnished or
furnishes herewith to the Company is complete and accurate, and further
represents and warrants that it will notify and supply corrective information to
the Company immediately upon the occurrence of any change therein occurring
prior to the Company's issuance of the Securities. Within five (5) days after
receipt of a request from the Company, Purchaser will provide such information
and deliver such documents as may reasonably be necessary to comply with any and
all laws and regulations to which the Company is subject.
(k) No General Solicitation. Purchaser is unaware of, and in
deciding to participate in the Offering is in no way relying upon, and did not
become aware of the Offering through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media, or broadcast over television or radio or the
internet, in connection with the Offering.
(l) Placement and Finder's Fees. No agent, broker, investment
banker, finder, financial advisor or other person acting on behalf of Purchaser
or under its authority is or will be entitled to any broker's or finder's fee or
any other commission or similar fee, directly or indirectly, in connection with
the Offering, and no person is entitled to any fee or commission or like payment
in respect thereof based in any way on agreements, arrangements or understanding
made by or on behalf of Purchaser.
(m) Investment Risks. Purchaser understands that purchasing
Securities in the Offering will subject Purchaser to certain risks, including,
but not limited to, those set forth in the Summary Investment Memorandum and
each of the following:
(i) At this time, the Company has nominal operations and
assets and therefore is considered a shell corporation under applicable rules of
the Securities Exchange Act of 1934, as amended.
(ii) The offering price of the Securities offered hereby has
been determined solely by the Company and does not necessarily bear any
relationship to the value of the Company's assets, current or potential earnings
of the Company, or any other recognized criteria used for measuring value, and
therefore, there can be no assurance that the offering price of the Units is
representative of the actual value of the underlying Securities.
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(iii) In order to pursue the acquisition of GTG or for other
corporate purposes, the Company expects to issue additional shares of Common
Stock, securities exercisable or convertible into shares of Common Stock, or
debt. Such securities may be issued for a purchase price consisting of cash,
services or other consideration that may be materially different than the
purchase price of the Units. The issuance of any such securities may result in
substantial dilution to the relative ownership interests of the Company's
existing shareholders and substantial reduction in net book value per share.
Additional equity securities may have rights, preferences and privileges senior
to those of the holders of Common Stock, and any debt financing may involve
restrictive covenants that may limit the Company's operating flexibility.
(iv) An investment in the Securities may involve certain
material legal, accounting and federal and state tax consequences. Purchaser
should consult with its legal counsel, accountant and/or business adviser as to
the legal, accounting, tax and related matters accompanying such an investment.
(n) Legends. The certificates and agreements evidencing the
Securities shall have endorsed thereon the following legend (and appropriate
notations thereof will be made in the Company's stock transfer books), and stop
transfer instructions reflecting these restrictions on transfer will be placed
with the transfer agent of the Securities:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE. THE SECURITIES REPRESENTED HEREBY HAVE BEEN TAKEN BY THE
REGISTERED OWNER FOR INVESTMENT, AND WITHOUT A VIEW TO RESALE OR
DISTRIBUTION THEREOF, AND MAY NOT BE SOLD, TRANSFERRED OR DISPOSED
OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF
1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER
APPLICABLE SECURITIES LAWS.
4. Representations and Warranties of the Company. The Company represents
and warrants to Purchaser as follows:
(a) Organization and Qualification. The Company is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, with the corporate power and authority to own and
operate its business as presently conducted, except where the failure to be or
have any of the foregoing would not have a material adverse effect on the
Company. The Company is duly qualified as a foreign corporation or other entity
to do business and is in good standing in each jurisdiction where the character
of its properties owned or held under lease or the nature of their activities
makes such qualification necessary, except for such failures to be so qualified
or in good standing as would not have a material adverse effect on the Company.
(b) Authority; Validity and Effect of Agreement.
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(i) The Company has the requisite corporate power and
authority to execute and deliver this Agreement, perform its obligations under
this Agreement, and conduct the Offering. The execution and delivery of this
Agreement by the Company, the performance by the Company of its obligations
hereunder, the Offering and all other necessary corporate action on the part of
the Company have been duly authorized by its board of directors, and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or the Offering. This Agreement has been duly and validly executed and
delivered by the Company and, assuming that it has been duly authorized,
executed and delivered by Purchaser, constitutes a legal, valid and binding
obligation of the Company, in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(ii) The Shares have been duly authorized and, when issued and
paid for in accordance with this Agreement, will be validly issued, fully paid
and non-assessable shares of Common Stock with no personal liability resulting
solely from the ownership of such shares and will be free and clear of all
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company. The shares of Common Stock issuable upon exercise of the Warrants when
issued and paid for in accordance with the Warrants, will be duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock with no
personal liability resulting solely from the ownership of such shares and will
be free and clear of all liens, charges, restrictions, claims and in
encumbrances imposed by or through the Company.
(c) No Conflict; Required Filings and Consents. Neither the
execution and delivery of this Agreement by the Company nor the performance by
the Company of its obligations hereunder will: (i) conflict with the Company's
certificate of incorporation or bylaws; (ii) violate any statute, law,
ordinance, rule or regulation, applicable to the Company or any of the
properties or assets of the Company; or (iii) violate, breach, be in conflict
with or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or permit the termination of any
provision of, or result in the termination of, the acceleration of the maturity
of, or the acceleration of the performance of any obligation of the Company, or
result in the creation or imposition of any lien upon any properties, assets or
business of the Company under, any material contract or any order, judgment or
decree to which the Company is a party or by which it or any of its assets or
properties is bound or encumbered except, in the case of clauses (ii) and (iii),
for such violations, breaches, conflicts, defaults or other occurrences which,
individually or in the aggregate, would not have a material adverse effect on
its obligation to perform its covenants under this Agreement.
(d) SEC Reports and Financial Statements. The Company has filed with
the SEC, and has heretofore made available to Purchaser, true and complete
copies of all forms, reports, schedules, statements and other documents required
to be filed by it under the Exchange Act or the Securities Act. In addition, the
Company has incorporated by reference into this Agreement, its Quarterly Report
on Form 10-QSB for the fiscal quarter ended September 30, 2005, its Current
Reports on Form 8-K dated December 26, 2004, and June 23 and June 24, 2005, and
its Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004 (as
such documents have been amended since the date of their filing, collectively,
the "Company SEC Documents"). As of their respective dates or, if amended, as of
the date of the last such amendment, the Company SEC Documents, including any
financial statements or schedules included therein: (i) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading; and (ii)
complied in all material respects with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be, and the applicable
rules and regulations of the SEC thereunder. Each of the financial statements
included in the Company SEC Documents have been prepared from, and are in
accordance with, the books and records of the Company, comply in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the financial position and the results of operations
and cash flows of the Company as of the dates thereof or for the periods
presented therein (subject, in the case of unaudited statements, to normal
year-end audit adjustments not material in amount).
8
5. Indemnification. Purchaser agrees to indemnify, defend and hold
harmless the Company and its respective affiliates and agents from and against
any and all demands, claims, actions or causes of action, judgments,
assessments, losses, liabilities, damages or penalties and reasonable attorneys'
fees and related disbursements incurred by the Company that arise out of or
result from a breach of any representations or warranties made by Purchaser
herein, and Purchaser agrees that in the event of any breach of any
representations or warranties made by Purchaser herein, the Company may, at its
option, forthwith rescind the sale of the Units to Purchaser.
6. Registration Rights. The Company covenants and agrees as follows:
6.1 For the purpose of this Section 6, the following definitions
shall apply:
(a) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC thereunder, all as
the same shall be in effect at the time.
(b) "Person" shall mean an individual, partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
(c) "Register," "registered," and "registration" shall refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or order of
effectiveness of such registration statement or document by the SEC.
(d) "Registration Statement" shall mean any registration
statement of the Company filed with the SEC pursuant to the provisions of
Section 6.2 of this Agreement, which covers the resale of the Restricted Stock
on an appropriate form then permitted by the SEC to be used for such
registration and the sales contemplated to be made thereby under the Securities
Act, or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including any pre- and post-
effective amendments thereto, in each case including the prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
9
(e) "Restricted Stock" shall mean (i) the shares of Common
Stock issuable upon conversion of the Convertible Note; (ii) the shares of
Common Stock issuable upon exercise of the Warrants; and (iii) any additional
shares of Common Stock of the Company issued or issuable after the date hereof
in respect of any of the foregoing securities, by way of a stock dividend or
stock split; provided that as to any particular shares of Restricted Stock, such
securities shall cease to constitute Restricted Stock when (x) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of thereunder, (y) such securities are permitted to be transferred pursuant to
Rule 144(k) (or any successor provision to such rule) under the Securities Act
or (z) such securities are otherwise freely transferable to the public without
further registration under the Securities Act.
(f) "Selling Stockholders" shall mean Purchaser and any other
purchaser of Units in the Offering, and their respective successors and assigns.
6.2. Registration of the Shares.
(a) The Company shall use its reasonable best efforts to
prepare and file with the SEC, within 90 days of the date the Offering is
completed, a Registration Statement under the Act to permit the public sale of
the Restricted Stock, and to cause such Registration Statement to be declared
effective within 150 days of the date the Offering is completed. The Selling
Stockholders shall furnish such information as may be reasonably requested by
the Company in order to include such Restricted Stock in such Registration
Statement. If any Selling Stockholder decides not to include all of its
Restricted Stock in any registration statement thereafter filed by the Company,
such Selling Stockholder shall nevertheless continue to have the right to
include any Restricted Stock in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein. In the
event that any registration pursuant to this Section 6.2(a) is terminated or
withdrawn, the Company shall use its reasonable best efforts to prepare and file
with the SEC, as soon thereafter as practicable, a Registration Statement under
the Securities Act to permit the public sale of the Restricted Stock purchased
hereby.
(b) Notwithstanding anything to the contrary contained herein,
the Company's obligation in Section 6.2(a) above shall extend only to the
inclusion of the Restricted Stock in a Registration Statement. The Company shall
have no obligation to assure the terms and conditions of distribution, to obtain
a commitment from an underwriter relative to the sale of the Restricted Stock or
to otherwise assume any responsibility for the manner, price or terms of the
distribution of the Restricted Stock.
6.3. Registration Procedures. Whenever it is obligated to register
any Restricted Stock pursuant to this Agreement, the Company shall:
10
(a) prepare and file with the SEC a Registration Statement
with respect to the Restricted Stock in the manner set forth in Section 6.2
hereof and use its reasonable best efforts to cause such Registration Statement
to become effective as promptly as possible and to remain effective until the
earlier of: (i) the sale of all shares of Restricted Stock covered thereby, (ii)
the availability under Rule 144(k) for the Selling Stockholder to immediately,
freely resell without restriction all Restricted Stock covered thereby, or (iii)
two (2) years from the date of this Agreement;
(b) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for the period specified in Section 6.3(a)
above and to comply with the provisions of the Act with respect to the
disposition of all Restricted Stock covered by such Registration Statement in
accordance with the intended method of disposition set forth in such
Registration Statement for such period;
(c) furnish to the Selling Stockholders such number of copies
of the Registration Statement and the prospectus included therein (including
each preliminary prospectus) as such person may reasonably request in order to
facilitate the public sale or other disposition of the Restricted Stock covered
by such Registration Statement;
(d) use its reasonable best efforts to register or qualify the
Restricted Stock covered by such Registration Statement under the state
securities laws of such jurisdictions as any Selling Stockholder shall
reasonably request; provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
(e) in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each
Purchaser participating in such underwriting shall also enter into and perform
its obligations under such an agreement, as described in Section 6.2(b);
(f) immediately notify each Selling Stockholder at any time
when a prospectus relating thereto is required to be delivered under the Act, of
the happening of any event as a result of which the prospectus contained in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required or necessary to be
stated therein in order to make the statements contained therein not misleading
in light of the circumstances under which they were made. The Company will use
reasonable efforts to amend or supplement such prospectus in order to cause such
prospectus not to include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made;
(g) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statements as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement;
11
(h) use its reasonable best efforts to list the Restricted
Stock covered by such Registration Statement on each exchange or automated
quotation system on which similar securities issued by the Company are then
listed (with the listing application being made at the time of the filing of
such Registration Statement or as soon thereafter as is reasonably practicable);
(i) notify each Selling Stockholder of any threat by the SEC
or state securities commission to undertake a stop order with respect to sales
under the Registration Statement; and
(j) cooperate in the timely removal of any restrictive legends
from the shares of Restricted Stock in connection with the resale of such shares
covered by an effective Registration Statement.
6.4. Delay of Registration.
(a) The Company and the Selling Stockholders agree that the
Selling Stockholders may suffer damages if the Registration Statement is not
filed on or prior to the date that is 90 days after the date the Offering is
completed (the "Target Filing Date") and maintained in the manner contemplated
herein. The Company and the Selling Stockholders further agree that it would not
be feasible to ascertain the extent of such damages with precision. Accordingly,
if the Registration Statement is not filed on or prior to the Target Filing
Date, the Company shall pay in cash or in shares of Common Stock (at the
Company's option) as liquidated damages for such failure and not as a penalty to
the Selling Stockholders, an amount equal to two percent (3%) of the Purchase
Price and an additional amount equal to one percent (1%) of the Purchase Price
at the end of each subsequent 30-day period during which the Registration
Statement is not filed (the "Late Filing Damages"). Any payments to be made to
the Selling Stockholders pursuant to this Section 6.4(a) shall be due and
payable within three (3) business days of any demand therefor by the Selling
Stockholders. The parties agree that the Late Filing Damages represent the sole
and exclusive remedy, whether at law or in equity, available to the Selling
Stockholders if the Registration Statement is not filed on or prior to the
Target Filing Date. If the Company elects to pay the Late Filing Damages in
shares of Common Stock, such shares of Common Stock shall be valued at the
average closing price of a share of Common Stock on the applicable trading
market for the Common Stock for the 5-trading-day period immediately preceding
the date of demand of such Late Filing Damages.
(b) The Company and the Selling Stockholders agree that the
Selling Stockholders may suffer damages if the Registration Statement is not
declared effective by the SEC on or prior to the date that is 150 days after the
date the Offering is completed (the "Effectiveness Deadline"). The Company and
the Selling Stockholders further agree that it would not be feasible to
ascertain the extent of such damages with precision. Accordingly, if the
Registration Statement is not declared effective by the SEC prior to the
Effectiveness Deadline, the Company shall pay in cash or in shares of Common
Stock (at the Company's option) as liquidated damages for such failure and not
as a penalty to the Selling Stockholders, an amount equal to two percent (3%) of
the Purchase Price and an additional amount equal to one percent (1%) of the
Purchase Price at the end of each subsequent 30-day period during which the
Registration Statement is not declared effective (the "Non-Effectiveness
Damages"). Payments to be made to the Selling Stockholders pursuant to this
Section 6.4(b) shall be due and payable within three (3) business days of any
demand therefor by the Selling Stockholders. The parties agree that the
Non-Effectiveness Damages represent the sole and exclusive remedy, whether at
law or in equity, available to the Selling Stockholders if the Registration
Statement is not declared effective on or prior to the Effectiveness Deadline.
If the Company elects to pay the Non-Effectiveness Damages in shares of Common
Stock, such shares of Common Stock shall be valued at the average closing price
of a share of Common Stock on the applicable trading market for the Common Stock
for the 5-trading-day period immediately preceding the date of demand of such
Non-Effectiveness Damages.
12
(c) No Selling Stockholder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 6.
6.5 Expenses.
(a) For the purposes of this Section 6.5, the term
"Registration Expenses" shall mean: all expenses incurred by the Company in
complying with Section 6.2 of this Agreement, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees under state
securities laws, fees of the National Association of Securities Dealers, Inc.
("NASD"), fees and expenses of listing shares of Restricted Stock on any
securities exchange or automated quotation system on which the Company's shares
are listed and fees of transfer agents and registrars. The term "Selling
Expenses" shall mean: all underwriting discounts and selling commissions
applicable to the sale of Restricted Stock and all accountable or
non-accountable expenses paid to any underwriter in respect of such sale.
(b) Except as otherwise provided herein, the Company will pay
all Registration Expenses in connection with the Registration Statements filed
pursuant to Section 6.2 of this Agreement. All Selling Expenses in connection
with any Registration Statements filed pursuant to Section 6.2 of this Agreement
shall be borne by the Selling Stockholders, pro rata, on the basis of the number
of shares registered by each Selling Stockholder whose shares of Restricted
Stock are covered by such Registration Statement, or by such persons other than
the Company (except to the extent the Company may be a seller) as they may
agree.
6.6. Obligations of the Selling Stockholders.
(a) In connection with each registration hereunder, each
Selling Stockholder will furnish to the Company in writing such information with
respect to it and the securities held by it and the proposed distribution by it,
as shall be reasonably requested by the Company in order to assure compliance
with applicable federal and state securities laws as a condition precedent to
including the Selling Stockholder's Restricted Stock in the Registration
Statement. Each Selling Stockholder shall also promptly notify the Company of
any changes in such information included in the Registration Statement or
prospectus as a result of which there is an untrue statement of material fact or
an omission to state any material fact required or necessary to be stated
therein in order to make the statements contained therein not misleading in
light of the circumstances under which they were made.
13
(b) In connection with the filing of the Registration
Statement, each Selling Stockholder shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with such Registration Statement or prospectus.
(c) In connection with each registration pursuant to this
Agreement, each Selling Stockholder agrees that it will not effect sales of any
Restricted Stock until notified by the Company of the effectiveness of the
Registration Statement, and thereafter will suspend such sales after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a Registration Statement or prospectus. At the end
of any period during which the Company is obligated to keep a Registration
Statement current, each Selling Stockholder shall discontinue sales of
Restricted Stock pursuant to such Registration Statement upon receipt of notice
from the Company of its intention to remove from registration the Restricted
Stock covered by such Registration Statement that remains unsold, and each
Selling Stockholder shall notify the Company of the number of shares registered
which remain unsold immediately upon receipt of such notice from the Company.
6.7. Information Blackout and Holdbacks.
(a) At any time when a Registration Statement effected
pursuant to Section 6.2 is effective, upon written notice from the Company to
Purchaser that the Company has determined in good faith that the sale of
Restricted Stock pursuant to the Registration Statement would require disclosure
of non-public material information, Purchaser shall suspend sales of Restricted
Stock pursuant to such Registration Statement until such time as the Company
notifies Purchaser that such material information has been disclosed to the
public or has ceased to be material, or that sales pursuant to such Registration
Statement may otherwise be resumed.
(b) Notwithstanding any other provision of this Agreement,
Purchaser shall not effect any public sale or distribution (including sales
pursuant to Rule 144 under the Securities Act), if and when available, of equity
securities of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the thirty (30) days prior to the
commencement of any primary offering to be undertaken by the Company of shares
of its unissued Common Stock ("Primary Offering"), which may also include other
securities, and ending one hundred twenty (120) days after completion of any
such Primary Offering, unless the Company, in the case of a non-underwritten
Primary Offering, or the managing underwriter, in the case of an underwritten
Primary Offering, otherwise agree.
6.8. Indemnification.
14
(a) The Company agrees to indemnify, to the extent permitted
by law, each Selling Stockholder, such Selling Stockholder's respective
partners, officers, directors, underwriters and each Person who controls any
Selling Stockholder (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by (i) any untrue
statement of or alleged untrue statement of material fact contained in the
Registration Statement, prospectus or preliminary prospectus or any amendment or
supplement thereto, (ii) any omission of or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law in connection with the offering covered by such Registration
Statement ("Violations"); provided, however, that the indemnity agreement
contained in this Section 6.8(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company, which consent shall not be
unreasonably withheld, nor shall the Company be liable in for any loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
a Violation which occurs in reliance upon and in conformity with information
furnished to the Company by such Selling Stockholder, partner, officer,
director, underwriter or controlling person of such Selling Stockholder.
(b) To the extent permitted by law, each Selling Stockholder
shall indemnify and hold harmless the Company, each of its directors, its
officers and each person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter and any other Selling Stockholder selling
securities under such registration statement or any of such other Selling
Stockholder's partners, directors or officers or any person who controls such
Selling Stockholder, against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, controlling
person, underwriter or other such Selling Stockholder, or partner, director,
officer or controlling person of such other Selling Stockholder, may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs (i) in reliance
upon and in conformity with information furnished by such Selling Stockholder to
the Company, (ii) as a result of any failure to deliver a copy of the prospectus
relating to such Registration Statement, or (iii) as a result of any disposition
of the Restricted Stock in a manner that fails to comply with the permitted
methods of distribution identified within the Registration Statement; provided,
that in no event shall Selling Stockholder's obligation under this Section
6.8(b) exceed the net proceeds from the sale of Restricted Stock purchased by
Selling Stockholder hereunder.
(c) Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt
notice shall not impair any Person's right to indemnification hereunder to the
extent such failure has not prejudiced the indemnifying party), and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
15
(d) If the indemnification provided for in this Section 6.8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the violation(s) described in Section
6.8(a) that resulted in such loss, claim, damage or liability, as well as any
other relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, that in no event
shall any contribution by a Selling Stockholder hereunder exceed the net
proceeds from the sale of the Restricted Stock purchased by Selling Stockholder
hereunder.
(e) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of securities.
The Company also agrees to make such provisions as are reasonably requested by
any indemnified party for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
7. Confidentiality. Purchaser acknowledges and agrees that:
(a) All of the information contained herein and in the other
Offering Documents is of a confidential nature and may be regarded as material
non-public information under Regulation FD of the Securities Act.
(b) This Agreement and the other Offering Documents have been
furnished to Purchaser by the Company for the sole purpose of enabling Purchaser
to consider and evaluate an investment in the Company, and will be kept
confidential by Purchaser and not used for any other purpose.
(c) The existence of this Agreement and the information contained
herein shall not, without the prior written consent of the Company, be disclosed
by Purchaser to any person or entity, other than Purchaser's personal financial
and legal advisors for the sole purpose of evaluating an investment in the
Company, and Purchaser will not, directly or indirectly, disclose or permit
Purchaser's personal financial and legal advisors to disclose, any of such
information without the prior written consent of the Company.
16
(d) Purchaser shall make its representatives aware of the terms of
this section and to be responsible for any breach of this Agreement by such
representatives.
(e) Purchaser shall not, without the prior written consent of the
Company, directly or indirectly, make any statements, public announcements or
release to trade publications or the press with respect to the subject matter of
this Agreement and the other Offering Documents.
(f) If Purchaser decides to not pursue further investigation of the
Company or to not participate in the Offering, Purchaser will promptly return
this Agreement, the other Offering Documents and any accompanying documentation
to the Company.
8. Non-Public Information. Purchaser acknowledges that information
concerning the matters that are the subject matter of this Agreement may
constitute material non-public information under United States federal
securities laws, and that United States federal securities laws prohibit any
person who has received material non-public information relating to the Company
from purchasing or selling securities of the Company, or from communicating such
information to any person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell securities of the
Company. Accordingly, until such time as any such non-public information has
been adequately disseminated to the public, Purchaser shall not purchase or sell
any securities of the Company, or communicate such information to any other
person.
9. Entire Agreement. This Agreement contains the entire agreement between
the parties and supercedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereto, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, guarantees or covenants except as specifically set
forth in this Agreement. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
10. Amendment and Modification. This Agreement may not be amended,
modified or supplemented except by an instrument or instruments in writing
signed by the party against whom enforcement of any such amendment, modification
or supplement is sought.
11. Extensions and Waivers. At any time prior to the Closing, the parties
hereto entitled to the benefits of a term or provision may (a) extend the time
for the performance of any of the obligations or other acts of the parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto, or (c) waive compliance with any obligation, covenant, agreement or
condition contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument or
instruments in writing signed by the party against whom enforcement of any such
extension or waiver is sought. No failure or delay on the part of any party
hereto in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty, covenant or agreement.
17
12. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, provided, however, that no party hereto may assign its rights or
delegate its obligations under this Agreement without the express prior written
consent of the other party hereto. Except as provided in Sections 5 and 6,
nothing in this Agreement is intended to confer upon any person not a party
hereto (and their successors and assigns) any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
13. Survival of Representations, Warranties and Covenants. The
representations and warranties contained herein shall survive the Closing and
shall thereupon terminate 18 months from the Closing, except that the
representations contained in Sections 3(a), 3(b), 4(a), and 4(b) shall survive
indefinitely. All covenants and agreements contained herein which by their terms
contemplate actions following the Closing shall survive the Closing and remain
in full force and effect in accordance with their terms. All other covenants and
agreements contained herein shall not survive the Closing and shall thereupon
terminate.
14. Headings; Definitions. The Section headings contained in this
Agreement are inserted for convenience of reference only and will not affect the
meaning or interpretation of this Agreement. All references to Sections
contained herein mean Sections of this Agreement unless otherwise stated. All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms
15. Severability. If any provision of this Agreement or the application
thereof to any person or circumstance is held to be invalid or unenforceable to
any extent, the remainder of this Agreement shall remain in full force and
effect and shall be reformed to render the Agreement valid and enforceable while
reflecting to the greatest extent permissible the intent of the parties.
16. Notices. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy,
telefax or other electronic transmission service to the appropriate address or
number as set forth below:
If to the Company:
BPK Resources, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
Fox Rothschild LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
18
If to Purchaser:
To that address indicated on the signature page hereof.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without regard to the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof, except to the extent that the General Corporation Law of the State of
Nevada shall apply to the internal corporate governance of the Company.
18. Arbitration. If a dispute arises as to the interpretation of this
Agreement, it shall be decided in an arbitration proceeding conforming to the
Rules of the American Arbitration Association applicable to commercial
arbitration then in effect at the time of the dispute. The arbitration shall
take place in Princeton, New Jersey. The decision of the arbitrators shall be
conclusively binding upon the parties and final, and such decision shall be
enforceable as a judgment in any court of competent jurisdiction. The parties
shall share equally the costs of the arbitration.
19. Counterparts. This Agreement may be executed and delivered by
facsimile in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same agreement.
19
IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have
caused this Agreement to be executed as of the date set forth below.
PURCHASER
Date: ____________________ ________________________
By: ______________________
Name: ____________________
Title: ___________________
Address:___________________________
___________________________________
___________________________________
Social Security
or Tax ID No.: ____________________
Number of Units Purchased: ________
Purchase Price: $___________
____ Units @ $50,000 per Unit
BPK RESOURCES, INC.
Date:____________________
By: _____________________
Name: _________________
Title: ___________________
20
