SHARE PURCHASE AGREEMENT And PURCHASER QUESTIONAIRE POWER3 MEDICAL PRODUCTS, INC.
And
PURCHASER QUESTIONAIRE
POWER3 MEDICAL
PRODUCTS, INC.
DATE
POWER3 MEDICAL PRODUCTS, INC.
THIS
SHARE PURCHASE AGREEMENT (the “Agreement”) is
entered into as of DATE by and among Power3 Medical Products, Inc., a New York
Corporation (the “Company”)
and
the purchasers identified on Exhibit
A on
the
date hereof (which entities are hereinafter collectively referred to as the
“ Purchasers”
and
each individually as, a “ Purchaser”). The Company is
issuing investment shares (“Shares”) each consisting of one
(1) Common stock share (the “Common Shares”)
of the
Corporation. The investors shall be issued common stock purchase warrants (the
“Warrants”)
in an
amount equal to Forty percent (40%) of the number of common shares issued at
Closing together with the Common Shares (the “Units”)
on the
following terms (the “Offering”):
The
purchase price for each Share shall be Ten Cents ($0.10).
The
exercise price of the Warrants shall be Fifteen Cents ($0.15)
The
Warrants shall have a term of three (3) years from Closing.
The
Shares may also be referred to as the “Securities”
RISK FACTORS
The Purchaser acknowledges and understands
that, because of the speculative nature of this investment, he can lose the
entire value of his investment. The purchaser also understands that the Shares
will not be registered and therefore not freely tradable. Further, the Purchaser
understands that the Company is in default upon certain of its debts, if not
resolved, could have material adverse effects on the going concern status of
the
Company. For additional Risk Factors, see SEC Form 10-KSB, as of 12/31/06.
The
Company represents and warrants that the Risk Factors that will appear in its
12/31/07, when filed with the SEC, will be the same as those that are in the
attached 12/31/06 Form 10-KSB, and further, that, as of the date of this
Agreement, no additional Risk Factors would need to be added.
BACKGROUND
A. The
Company engages in the early detection, monitoring and targeting of diseases
through the analysis of proteins. Proteomics is the study and analysis of
proteins. The Company’s business objective is to commercialize its intellectual
property by focusing on disease diagnosis, protein and biomarkers identification
and drug resistance in the areas of cancers, neurodegenerative and neuromuscular
diseases (collectively, the “Business”). For a
further description of the business, see SEC Form 10-KSB attached.
B The
Company has authorized 35,000,000 Common Shares for sale and issuance to the
Purchasers pursuant to this Agreement.
C. Each
Purchaser desires to purchase the Shares set forth opposite its name on
Exhibit
A attached
hereto on the terms and conditions set forth herein.
D The
Company desires to issue and sell the Shares to each Purchaser on the terms
and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
1. AGREEMENT
TO SELL AND PURCHASE.
1.1. Authorization
of Shares.
On or
prior to the Closing (as defined in Section 2.1 below), the Company shall have
authorized the sale and issuance of up to 35,000,000 Common Shares.
1.2. Sale
and Purchase.
Subject
to the terms and conditions hereof without any adjustment to the Purchase Price
or delivery of any additional consideration, and in reliance upon the
representations, warranties and covenants contained herein, at the Closing,
the
Company hereby agrees to issue and sell to each Purchaser ,and each Purchaser,
subject to the terms and conditions hereof and in reliance upon the
representations, warranties and covenants contained herein, agrees to purchase
from the Company, the number of Shares set forth opposite such
Purchaser’s name.
1.3. Placement Agent Compensation.
Upon
the
occurrence of each Closing (as hereinafter defined), the Company shall pay
to
the Placement Agent: (i) a placement agent fee in cash in an amount equal to
8.0% of the total gross proceeds received by the Company from the sale of the
Securities, (ii) Warrants to purchase a number of shares of common stock of
the
Company equal to twelve and a half percent (12.5%) of the number of Securities
sold by the Company in the offering at an exercise price equal to the sale
price
of the Shares and for a term of five years (the “Placement Agent Warrants”), and
(iii) a 1% non-accountable expense allowance.
2. CLOSING,
DELIVERY AND PAYMENT.
2.1. Closing.
The
closing of the sale and purchase of the number of shares (the “Closing”),
shall
take place at the Company’s office.
2.2. Delivery;
Payment. At
the
Closing, subject to the terms and conditions hereof, the Company will deliver
to
the Purchasers certificates representing the number of Shares to be purchased
at
the Closing by the Purchasers, against payment of the full amount of the
Purchase Price therefore in cash by wire transfer of immediately available
funds
made payable to the order of the Company or as it shall direct. Unless otherwise
requested by any Purchaser, each Purchaser will receive at the Closing, as
applicable, one (1) certificate registered in its name, for the (restricted)
Common Shares purchased by it.
2.3. Use
of
Proceeds.
The
proceeds received by the Company at the Closing shall be used for general
corporate purposes.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Purchasers that the statements
made in this Section 3 are true and correct. As used herein, the term
“Knowledge”
means
the knowledge of any officer of the Company, following such inquiries and
investigations as would be deemed appropriate by a reasonable businessperson
in
the software industry in the prudent management of his or her business
affairs.
3.1. Organization,
Good Standing and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the Securities Exchange Act of 1934. The Company has all requisite
corporate power and authority to own and operate its properties and assets,
to
execute and deliver this Agreement, and, to the extent applicable, to issue
and
sell the Securities, and to carry out the provisions of this Agreement and
the
Certificate and to carry on its business as currently conducted and as currently
proposed to be conducted.
3.2. Subsidiaries.
The
Company does not have any Subsidiaries (as defined herein) other than those
identified on Schedule
3.2.
The
Company does not own any ownership interest or profits interest in any other
corporation, limited liability company, limited partnership or similar entity.
Except as set forth on Schedule
3.2,
the
Company is not a participant in any joint venture, partnership or similar
arrangement. For the purpose of this Agreement, “Subsidiaries”
means,
with respect to any Person (as defined below) (including the Company), any
corporation, partnership, association or other business entity of which more
than 50% of the issued and outstanding stock or equivalent thereof having
ordinary voting power is owned or controlled by such Person, by one or more
Subsidiaries or by such Person and one or more Subsidiaries of such Person.
For
purposes of this Agreement, “Person”
means
any individual, corporation, partnership, firm, joint venture, association,
limited liability company, limited liability partnership, joint-stock company,
trust, unincorporated organization or governmental entity.
3.3. Capitalization;
Voting Rights.
The
authorized capital stock of the Company, immediately prior to the Closing,
consists of: (i) 108,491,470 Class A Common Shares outstanding, plus
(ii)
10,960,526 additional shares upon conversion of convertible debentures and
notes, which would reduce the Company’s debt by $0.4 million (plus another
4,705,882 that could be issued, subject to a dispute with two convertible
debenture holders) , plus (iii) 29,174,369 additional shares upon exercise
of
warrants and options, plus (iv) approximately 16,000,000 additional shares
if
management elects to covert its $1,899,816 of debt to the Company. Upon
consummation of the purchase and sale of the Securities contemplated by this
Agreement, all issued and outstanding shares of the Company’s Common Shares
issued pursuant to this Agreement will be: (a) duly authorized, validly issued,
fully paid and nonassessable, (b) issued in compliance with all applicable
state
and federal laws concerning the issuance of securities, and (c) free of any
liens or encumbrances other than liens and encumbrances created by or imposed
upon the Purchasers. The issuance and sale of the Securities will not obligate
the Company to issue shares of Common Shares or other securities to any Person
(other than the Securities and the Company’s obligation to issue to the
Placement Agent warrants representing the right to purchase an aggregate of
12.5% of the number of Shares issued pursuant to this Agreement) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. All of the
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. No further approval or authorization of any stockholder,
the Board of Directors of the Company or others is required for the issuance
and
sale of the Securities. Except as described in the SEC Reports, there are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders. A complete list of stockholders of the Company that are officers,
directors and individuals holding more than 5% of the outstanding Common Shares
is included in the SEC Reports.
3.4. Authorization;
Binding Obligations.
All
corporate actions by or on behalf of the Company necessary for the authorization
of this Agreement, the performance of all obligations of the Company hereunder
and thereunder at the Closing and the authorization, sale, issuance and delivery
of the Securities and the authorization and reservation of the Underlying
Securities pursuant to the Certificate have been taken or will be taken prior
to
the Closing. This Agreement (assuming due execution and delivery by the
Purchasers), when executed and delivered, will be valid and binding obligations
of the Company enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws related to or affecting
creditors rights generally. The sale of Securities is not subject to any
preemptive rights or rights of first refusal that have not been properly waived.
The execution, delivery and performance of, and the consummation of the
transactions contemplated by, this Agreement, including without limitation
the
sale, issuance and delivery of the Securities, have not resulted and will not
result in (a) any violation of, or default under, or conflict with, or
constitute, with or without the passage of time or the giving of notice or
both,
any violation of, or default under or give rise to any right of termination,
cancellation or acceleration under (i) any term or provision of (A) the
Certificate or bylaws, (B) any written contract, agreement, instrument,
arrangement or understanding of the Company or any oral contract, agreement,
instrument, arrangement or understanding that is legally binding on the Company,
or (C) any judgment, order, writ, injunction or decree or any court, government
agency or instrumentality of any arbitrator, in each case, to which the Company
is a party or by which it or any of its properties or assets are bound or (ii)
any statute, rule or regulation applicable to the Company or any of its
properties or assets or (b) the creation of any mortgage, lien, pledge,
encumbrance or charge upon any of the properties or assets of the
Company.
3.5. Financial
Statements.
The
Company has filed all reports required to be filed by it under the Securities
Act and the Securities Exchange Act of 1934, as amended (“Exchange
Act”),
including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the
date
hereof (or such shorter period as the Company was required by law to file such
material) (the foregoing materials being collectively referred to herein as
the
“SEC
Reports”)
in
accordance with the time requirements of the Securities Act and the Exchange
Act. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act and
the rules and regulations of the Commission promulgated hereunder, and none
of
the SEC Reports, when filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company has advised the Purchasers
that a correct and complete copy of each of the SEC Reports (together with
all
exhibits and schedules thereto and as amended to date) is available at
▇▇▇▇://▇▇▇.▇▇▇.▇▇▇,
a
website maintained by the Commission where Investor may view the SEC Reports.
The financial statements of the Company included in the SEC Reports (the
"Financial
Statements")
comply
in all material respects with applicable accounting requirements and the rules
and regulations of the Commission with respect thereto as in effect at the
time
of filing. Such financial statements have been prepared in all material respects
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto, and fairly present in all material respects the financial position
of
the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then
ended.
3.6. Liabilities.
The
Company does not have any debts, obligations or liabilities individually in
excess of $25,000 or in excess of $250,000 in the aggregate (contingent or
otherwise) required to be disclosed in the Financial Statements under GAAP
that
are not disclosed in the Financial Statements, except for debts, obligations,
or
liabilities arising in the ordinary course of business since September 30,
2007
(the "Statement
Date").
The
Company is not a guarantor or indemnitor of any indebtedness of any other
Person.
3.7. Agreements;
Action.
(a)
There
are no oral or written agreements, understandings, instruments, contracts,
proposed transactions (for which term sheets have been issued), judgments,
orders, writs or decrees to which the Company is a party or by which it is
bound
which may relate to (i) obligations (contingent or otherwise) of, or payments
to, the Company in excess of $25,000 (other than obligations of, or payments
to,
the Company arising from purchase or sale agreements (including subscription
arrangements) entered into in the ordinary course of business), (ii) provisions
materially adversely affecting or restricting the development, presentation
or
delivery of the Company’s products or services, including all agreements
relating to the receipt or provision of substantive content or other information
by the Company, or (iii) indemnification by the Company with respect to
infringements of proprietary rights.
(b)
Since
the Statement Date, the Company has not (i) declared or paid any dividends,
or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or
any
other liabilities (other than with respect to accounts payable and other
obligations incurred in the ordinary course of business) individually in excess
of $25,000 or, in the case of indebtedness and/or liabilities individually
less
than $25,000, in excess of $50,000 in the aggregate, (iii) made any loans or
advances to any person, other than ordinary advances for travel expenses and
similar reimbursable business expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights having a fair market value in excess
of
$25,000.
(c)
For
the purposes of subsections (a) and (b) above, all indebtedness, liabilities,
agreements, understandings, instruments, contracts and proposed transactions
involving the same person or entity (including persons or entities that, to
the
Company’s Knowledge are affiliated therewith) shall be aggregated for the
purpose of meeting the individual minimum dollar amounts of such
subsections.
3.8. Obligations
to Related Parties.
There
are written agreements, understandings or proposed transactions between the
Company, on the one hand, and the Company’s officers and directors, ▇▇▇▇▇▇ ▇.
▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, for pledging their respective shares directly
attributable to ongoing corporate finance activities. The total owed to Messrs
Rash and Goldknopf is $1,899,816 or approximately 16,000,000 shares. ▇▇. ▇▇▇▇
intends to convert his debt, approximately one half of the $1.9 million, into
9,914,500 of these shares by June 30, 2008. ▇▇. ▇▇▇▇▇▇▇▇▇ has the option through
2008 to decide upon conversion or repayment. Other customary arrangements
include reimbursement for reasonable expenses incurred on behalf of the Company;
and for other standard employee benefits made generally available to all
Employees (including stock option agreements outstanding under any stock option
plan approved by the Board of Directors of the Company). None of the officers,
directors or stockholders of the Company or any members of their immediate
families are indebted to the Company or, to the Company’s Knowledge, have any
direct or indirect ownership interest in any firm or corporation with which
the
Company is affiliated or with which the Company has a business relationship,
or
any firm or corporation which competes with the Company. To the Company’s
Knowledge, no officer or director or any stockholder of the Company or any
member of their respective immediate families, has, directly or indirectly,
an
interest in any contract with the Company (other than such contracts as relate
to any such person’s ownership of capital stock or other securities of the
Company). To the Company’s Knowledge, there is no familial or other significant
business relationship that exists between or among any Employee of the Company
and any customer, supplier, vendor or contractor of the Company. For purposes
of
this Agreement, “Employee”
shall
mean any person employed by the Company, whether directly or indirectly, by
lease or co-employment arrangement with a third-party or otherwise.
3.9. Changes.
Since
the September 30, 2007 (the “Statement Date”), there has not been:
(a)
Any
change in the assets, liabilities, financial condition, operations or, to the
Knowledge of the Company, any prospects of the Company, which individually
or in
the aggregate has had or is reasonably likely to have a material adverse effect
on the assets, liabilities, financial condition, operations or prospects of
the
Company;
(b)
The
Company has not received notification of any impending resignation of employment
from any such officer;
(c)
Any
material change in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
(d)
Any
damage, destruction or loss adversely affecting the properties, Business or
financial condition of the Company, or to the Company’s Knowledge, its
prospects, whether or not covered by insurance, with a fair market value of
at
least $25,000, in each instance, or more than $50,000 in the
aggregate;
(e)
Any
waiver by the Company of a valuable right or of a debt in excess of $25,000
owed
to it;
(f)
Any
change in any compensation arrangement or agreement with any Employee, officer,
director or stockholder of the Company that would increase the cost of any
such
agreement or arrangement to the Company by more than $10,000 in each
instance;
(g)
To
the Company’s Knowledge, any labor organization activity of the Employees of the
company,
(h)
Any
change in any agreement to which the Company is a party or by which it is bound
that materially adversely affects the business, assets, liabilities, financial
condition or operations of the Company or, to the Company’s Knowledge, its
prospects; or
(i)
Any
other event or condition of any character that, either individually or
cumulatively, has materially and adversely affected the business, assets,
liabilities, financial condition or operations of the Company or, to the
Company’s Knowledge, its prospects.
3.10. Title
to Properties and Assets; Liens, etc.
The
Company has good and marketable title to its properties and assets, including
the properties and assets reflected in the most recent balance sheet included
in
the Financial Statements, and good title to its leasehold estates, in each
case
subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than
(a) those resulting from taxes
which have not yet become delinquent, (b) minor liens and encumbrances which
do
not detract from the value of the property subject thereto or impair the
operations of the Company, and (c) those that have otherwise arisen in the
ordinary course of business. All facilities, machinery, equipment, fixtures,
vehicles
and other properties owned, leased or used by the Company are in good operating
condition and repair and are fit and usable for the purposes for which they
are
being used. The Company is in material compliance with all terms of each lease
to which it is a party or is otherwise bound.
3.11. Intellectual
Property.
(a)
The
Company owns or possesses sufficient legal rights to use all patents,
applications for patents, trademarks, trademark registrations, applications
for
trademark registrations, service marks, trade names, copyrights, trade secrets,
computer software and applications, product related artwork and know-how
(including any registrations and applications for registration thereof),
licenses, information and other proprietary rights and processes (collectively,
“Intellectual
Property”),
necessary for the Business, and Company’s use of the Company Intellectual
Property has not and, to the Company’s Knowledge, will not constitute any
infringement of the rights of any other person or entity. All registrations
and
applications for registration of Company Intellectual Property and applications
in process for Company Intellectual Property are identified and constitute
all
of the Intellectual Property used in connection with the Business. There is
a
licensing agreement with Biosite, where as Biosite has paid and licensed four
(4) of the Company’s proprietary proteomic biomarkers. The Company is also in
discussion with Neogenomics concerning a possible extension to an agreement
that
expired November 16, 2007 and there can be no assurance that Power3 will agree
to an extension of the agreement. The agreement would provide for Neogenomics,
Inc. to have the right to purchase 20% of the Company for $0.20 per share or
$20,000,000.00 USD on a fully-diluted basis, whichever is less, and up to
another 40% of the Company (a total of 60%) to purchase from November 16, 2007
through May 16, 2008 for $0.40 per share or $40,000,000.00 USD on a
fully-diluted basis, whichever is less, or between May 17, 2008 and November
15,
2008 for $0.50 per share or $50,000,000.00 USD on a fully-diluted basis,
whichever is less, to license on a non-exclusive basis select proteomic
biomarkers from the Company. Both the Company and Neogenomics, Inc. will
subsequently establish a joint-ventured (JV) Contract Research Organization
(CRO) upon option execution of Neogenomics, Inc. to purchase 20% of the Company.
The JV will license the technology. The Company will own up to 40% of the joint
ventured CRO. The Company continues to explore further licensing opportunities
with both diagnostic and therapeutic companies to generate revenues from their
intellectual property. The Company has not received any communications alleging
that it has violated or, by conducting its Business, would violate any of the
patents, trademarks, service marks, trade names, copyrights or trade secrets
or
other proprietary rights of any other person or entity.
(b)
To
the Company’s Knowledge, it is not necessary to the Business to utilize any
inventions, trade secrets or proprietary information of any of its Employees
made prior to their employment by the Company, except for inventions, trade
secrets or proprietary information that have been assigned to the
Company.
(c)
Since
the Statement Date, there has not been any sale, assignment or transfer of
any
patents, trademarks, copyrights, trade secrets or other intangible assets of
the
Company.
3.12. Compliance
with Other Instruments.
The
Company is not in violation or default of any term of the Certificate or its
Bylaws (in each case, as amended to date), or of any provision of any mortgage,
indenture, contract, agreement, instrument or contract to which it is party
or
by which it is bound or of any judgment, decree, order, writ or any statute,
rule, regulation, order or restriction of any domestic or foreign government
or
any instrumentality or agency thereof applicable to the Company which
individually or in the aggregate is reasonably likely to materially and
adversely affect the business, assets, liabilities, financial condition,
operations or prospects of the Company, other than approximately $423,000 USD
of
convertible debentures which is disclosed in the Company’s most recent 10-QSB
filing.
3.13. Litigation.
There
is no action, suit or proceeding pending or, to the Company’s Knowledge, any
threatened action, suit or proceeding against the Company or any investigation
of the Company nor is the Company aware that there is any basis for any of
the
foregoing that, individually or in the aggregate, if determined adversely to
the
Company, would reasonably be expected to have a Material Adverse Effect or
materially and adversely affect the ability of the Company to perform its
obligations. There is however on going litigation that is defined and contained
within the Company’s most recent 10- QSB dated September 30, 2007. The Company
is not a party or subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality. There
is no action, suit, proceeding or investigation by the Company currently pending
or that the Company intends to initiate.
3.14. Tax
Returns and Payments.
(a) the
Company has timely filed or caused to be filed all tax returns (federal, state
and local) required to be filed by it (“Tax
Returns”)
and
(b) all taxes shown to be due and payable on such Tax Returns, and any written
assessments imposed on the Company in respect of any taxable period ending
on or
before the Closing have been paid or will be paid prior to the time they become
delinquent or are being contested in good faith. The Company has not been
advised in writing and has no Knowledge of any deficiency, assessment or
proposed adjustment to its federal, state or local taxes.
3.15. Real
Property Holding Corporation.
The
Company is not, and has never been, a “United States real property holding
corporation” as that term is defined in Section 897 of the Internal Revenue Code
of 1986, as amended (the “Code”).
3.16. Employees.
(a)
(i)
the Company has no, and never has had any, collective bargaining agreements
with
any of its employees; (ii) there is no labor union organizing activity pending
or, to the Company’s Knowledge, threatened with respect to the Company; (iii) no
employee has or is subject to any agreement or contract (including, without
limitation, licenses, covenants or commitments of any nature) regarding his
employment; (iv) to the Company’s Knowledge, none of its Employees is subject to
any judgment, decree or order of any court or governmental agency, that would
interfere with his or her duties to the Company or that would conflict with
the
Business as currently conducted; (v) to the Company’s Knowledge, no employee,
nor any consultant with whom the Company has contracted, is in violation of
any
term of any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or
to
contract with, the Company; (vi) to the Company’s Knowledge, the continued
employment by the Company of its present employees, and the
performance
of the Company’s contracts with any independent contractors, will not result in
any violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual
to
be employed by, or to contract with, the Company, and the Company has not
received any written notice alleging that such violation has occurred; and
(vii)
the Company does not have any present intention to terminate the employment
of
any officer or key employee.
(b)
The
Company has not received written notice and has no Knowledge of any outstanding
or threatened claims against the Company or any affiliate (whether under federal
or state law, under any employment agreement, or otherwise) asserted by any
present or former Employee of the Company that, individually or in the
aggregate, if determined adversely to the Company, would reasonably be expected
to have a Material Adverse Effect or materially and adversely affect the ability
of the Company to perform its obligations. To the Company’s Knowledge it is not
in material violation of any law, ordinance or governmental rule or regulation
concerning immigration or the employment of persons other than U.S.
citizens.
3.17. Designation
of Intellectual Property Rights.
Each
current employee, officer and director of the Company have executed a
proprietary information and inventions agreement (the
“Designation
of Intellectual Property Rights”).
No
current employee, officer and director of the Company has excluded works or
inventions made prior to his or her employment with the Company from his or
her
assignment of inventions pursuant to such employee, officer or director’s
Proprietary Information and Inventions Agreement.
3.18. Obligations
of Management.
Each
officer of the Company is a full-time employee of the Company and is currently
devoting one hundred percent (100%) of his or her business time to the conduct
of the business of the Company. The Company has not received notice that any
officer or key employee of the Company is planning to work less than full time
at the Company in the future.
3.19. Real
Property.
The
Company has no interest in any real estate, except that the Company leases
the
property at its office in The Woodlands, TX (the “Leased
Real Property”).
The
Leased Real Property is adequate for the operations of the Business as currently
conducted and as contemplated to be conducted as of the Closing. The Company
has
paid all amounts due and has not received written notice and has no Knowledge
that it is in default under the Real Property Lease and there exists no
condition or event, which, with the passage of time, giving of notice or both,
could reasonably be expected to give rise to a default under or breach of the
Real Property Lease.
3.20. Offering
Valid.
Assuming the accuracy of the representations and warranties of the Purchasers
contained in Section 4.2 hereof, the offer, sale and issuance of the Securities
pursuant to this Agreement will be exempt from the registration requirements
of
the Securities Act of 1933 (the “Securities
Act”)
will
have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements
of
all applicable state securities laws. As to the states where the purchasers
reside, the Company will file all applicable blue sky forms and subsequently
file FORM D with the states and the SEC.
3.21. Full
Disclosure.
The
representations, warranties and other statements contained in this Agreement,
the Schedules and Exhibits hereto do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading.
3.22. Insurance,
The
Company’s insurance policies and binders are valid and in full force and effect.
The Company is not in default with respect to any provision contained in any
such policy or binder and has not failed to give any notice or present any
claim
of which it has notice under any such policy or binder in a timely fashion.
Except in the ordinary course of business, the Company has not received or
given
a notice of cancellation or non renewal with respect to any such policy or
binder. None of the applications for such policies or binders contain any
material inaccuracy, and all premiums for such policies and binders have been
paid when due. The Company has no Knowledge of any state of facts or the
occurrence of any event that is reasonably likely to form the basis for any
claim against it not fully covered by its policies
3.23. Investment
Company Act.
The
Company is not an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.
3.24. Foreign
Payments; Undisclosed Contract Terms.
(a)
The
Company has not, with respect to the Business, made any offer, payment, promise
to pay or authorization for the payment of money or an offer, gift, promise
to
give, or authorization for the giving of anything of value to any person in
violation of the Foreign Corrupt Practices Act of 1977, as amended and the
rules
and regulations promulgated thereunder.
(b)
There
are no understandings, arrangements, agreements, provisions, conditions or
terms
relating to, and there have been no payments made to any person or entity in
connection with any agreement, contract, commitment, lease or other contractual
undertaking of the Company which are not expressly set forth in such contractual
undertaking.
3.25. No
Broker.
The
Company has not employed any broker or finder, or incurred any liability for
any
brokerage or finders fees or any similar fees or commissions in connection
with
the transactions contemplated by this Agreement.
4. REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS.
Each
Purchaser hereby severally, and not jointly, represents and warrants to the
Company as follows:
4.1. Requisite
Power and Authority.
Such
Purchaser has all necessary power and authority under all applicable provisions
of law to execute and deliver this Agreement, to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder. All
actions on such Purchaser’s part required for the lawful execution and delivery
of this Agreement, the consummation of the transactions contemplated hereby
and
thereby and the performance of all obligations of such Purchaser hereunder
and
thereunder, have been or will be effectively taken prior to the Closing. Upon
its execution and delivery, this Agreement will be valid and binding obligations
of such Purchaser, enforceable in accordance with its terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors’ rights,
(b) general principles of equity that restrict the availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification
provisions of this Agreement may be limited by applicable laws.
4.2.
Investment
Representations. Such Purchaser understands that the Securities have not
been registered under the Securities Act, under any state securities laws or
under securities laws of any other jurisdiction. Such Purchaser also understands
that the Securities are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon such Purchaser’s
representations contained in this Agreement. Such Purchaser hereby represents
and warrants as follows:
(a)
Purchasers Bear Economic Risk. Such Purchaser has substantial experience
in evaluating and investing in private placement transactions of securities
in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect
its
own interests. Such Purchaser is capable of bearing the economic risk of this
investment indefinitely and is able to bear a complete loss of its investment
in
the Company. Such Purchaser also represents it has not been organized for the
purpose of acquiring the Securities.
(b)
Acquisition for Own Account. Such Purchaser is acquiring the Securities
for its own account, not as nominee or agent, for investment only, and not
with
a view towards their resale or distribution or any part thereof, and such
Purchaser has no present intention of selling, granting any participation in
or
otherwise distributing the same. By executing this Agreement, such Purchaser
further represents that such Purchaser does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of
the
Securities.
(c)
Purchasers Can Protect Its Interest. Such Purchaser represents that by
reason of its, or of its management’s, business or financial experience, such
Purchaser has the capacity to protect its own interests in connection with
the
transactions contemplated in this Agreement. Further, such Purchaser is aware
of
no publication of any advertisement in connection with the transactions
contemplated in the
(d)
Accredited Investor. Such Purchaser is an “accredited investor” within
the meaning of Regulation D under the Securities Act. and within the meaning
of
National Instrument 45-106 Prospectus and Registration Exemptions and has
executed and delivered to the Company the Accredited Investor Form attached
herewith as Exhibit B.
(e)
Rule 144. Such Purchaser acknowledges and agrees that the Securities must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Such
Purchaser has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act as in effect from time to time, which permits limited
resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the
resale
4.2. Investment
Representations. Such Purchaser understands that the Securities have not
been registered under the Securities Act, under any state securities laws or
under securities laws of any
other
jurisdiction. Such Purchaser also understands that the Securities are being
offered and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon such Purchaser’s representations contained in
this Agreement. Such Purchaser hereby represents and warrants as
follows:
(a)
Purchasers Bear Economic Risk. Such Purchaser has substantial experience
in evaluating and investing in private placement transactions of securities
in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect
its
own interests. Such Purchaser is capable of bearing the economic risk of this
investment indefinitely and is able to bear a complete loss of its investment
in
the Company. Such Purchaser also represents it has not been organized for the
purpose of acquiring the Securities.
(b)
Acquisition for Own Account. Such Purchaser is acquiring the Securities
for its own account, not as nominee or agent, for investment only, and not
with
a view towards their resale or distribution or any part thereof, and such
Purchaser has no present intention of selling, granting any participation in
or
otherwise distributing the same. By executing this Agreement, such Purchaser
further represents that such Purchaser does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of
the
Securities.
(c)
Purchasers Can Protect Its Interest. Such Purchaser represents that by
reason of its, or of its management’s, business or financial experience, such
Purchaser has the capacity to protect its own interests in connection with
the
transactions contemplated in this Agreement. Further, such Purchaser is aware
of
no publication of any advertisement in connection with the transactions
contemplated in the Agreement.
(d)
Accredited Investor. Such Purchaser is an “accredited investor” within
the meaning of Regulation D under the Securities Act. and within the meaning
of
National Instrument 45-106 Prospectus and Registration Exemptions and has
executed and delivered to the Company the Accredited Investor Form attached
herewith as Exhibit B.
(e)
Rule 144. Such Purchaser acknowledges and agrees that the Securities must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Such
Purchaser has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act as in effect from time to time, which permits limited
resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the
resale
occurring
following the required holding period under Rule 144 and the number of shares
being sold during any three-month period not exceeding specified
limitations.
(f)
Residence. The office or offices of such Purchaser in which its
investment decision was made is located at the address or addresses of such
Purchaser set forth on Exhibit A.
(g)
Discussions with the Company. Such Purchaser has had an opportunity to
discuss the Company’s business, management and financial affairs with the
Company’s management. Such Purchaser has had an opportunity to ask questions of
and receive answers from, officers of the Company. Purchaser received from
the
Company all information requested by such Purchaser in connection with this
Agreement, and the transactions contemplated hereby.
(h)
Money Laundering. The funds which will be advanced by the Purchaser to
the Agent hereunder and the Purchaser acknowledges that the Company may in
the
future be required by law to disclose the Purchaser's name and other information
relating to this Subscription Agreement and the Purchaser's subscription
hereunder, on a confidential basis. To the best of its knowledge (a) none of
the
subscription funds to be provided by the Purchaser (i) have been or will be
derived from or related to any activity that is deemed criminal under the laws
of the United States, or any other jurisdiction, or (ii) are being tendered
on
behalf of a person or entity who has not been identified to the Purchaser,
and
(b) the Purchaser shall promptly notify the Company if the Purchaser discovers
that any of such representations ceases to be true, and to provide the Company
with appropriate information in connection therewith.
4.3. Transfer
Restrictions. Such Purchaser acknowledges and agrees that the Securities are
subject to restrictions on transfer as set forth in state and federal securities
laws and that appropriate legends will be place on certificates representing
such shares.
4.4. Litigation.
There is no action, suit, proceeding or investigation pending, or to each
Purchaser’s knowledge, currently threatened against such Purchaser which, if
adversely determined, would, individually or in the aggregate, have a material
adverse effect on the ability of such Purchaser to perform its obligations
under
this Agreement and to consummate the transactions contemplated hereby and
thereby.
4.5. No
Broker. No Purchaser has employed any broker or finder, or incurred any
liability for any brokerage or finders fees or any similar fees or commissions
in connection with the transactions contemplated by this Agreement.
4.6. No
Conflict. The execution, delivery and performance of, and the consummation
of the transactions contemplated by this Agreement have not resulted in any
violation of, or default under, or conflict with, or constitute, with or without
the passage of time, the giving of notice or both, any violation of, or default
under (i) any term or provision of (A) the Purchaser’s organizational documents
or (B) any judgment, order, writ, injunction or decree of any court, government
agency or instrumentality of any arbitrator, in each case, to which the
Purchaser is a party or by which it or its properties or assets are bound or
(ii) any statute, rule or regulation applicable to the Purchaser in the context
of the types of transactions contemplated by this Agreement.
4.7. Consents
and Approvals. No consent, approval, waiver or authorization of, or
designation, declaration or filing with, any court, governmental authority
or
instrumentality or arbitrator or any other person or entity is required in
connection with the valid execution, delivery and performance of, and the
consummation of the transactions contemplated by, this Agreement by or on behalf
of the Purchasers, including without limitation, the purchase of the Shares,
except such consents as have been obtained and such filings as have been made
prior to the Closing and any notices of sale required to be filed with the
Securities and Exchange Commission under the Securities Act or such post-closing
filings as may be required under applicable state securities laws.
5.
CONDITIONS TO CLOSING
5.1. Conditions
to Purchasers’ Obligations at the Closings. The obligation of the Purchasers
to consummate the transactions contemplated herein to be consummated on the
Closing Date is subject to the satisfaction, on or prior to the Closing Date
of
the conditions set forth below and applicable thereto, any of which may be
waived in writing by that Purchaser:
(a)
Representations and Warranties; Performance of Obligations. Each of the
representations and warranties of the Company contained herein shall be true
and
correct on and as of the Closing Date. The Company shall have performed and
complied with the covenants and provisions of this Agreement required to be
performed or complied with by it at or prior to the Closing Date. The Purchasers
shall have received certificates of the Company dated as of the Closing Date
signed by an officer of the Company, certifying as to the fulfillment of the
conditions set forth in this Section 5.1 and the truth and accuracy of the
representations and warranties as of the Closing Date.
(b)
Issuance in Compliance with Laws. On the Closing Date, the sale and
issuance of the Securities shall be legally permitted by all laws and
regulations to which any of the Purchasers and the Company are
subject.
(c)
Filings, Consents, Permits, and Waivers. The Company and the Purchasers
shall have made all filings and obtained any and all, permits and waivers
necessary for consummation of the transactions contemplated by the
Agreement
(d)
Reservation of Certain Shares. The Shares shall have been duly authorized
and reserved for issuance.
(e)
Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closings and all documents
and instruments incident to such transactions shall be reasonably satisfactory
in substance and form to the Purchasers and its counsel, and the Purchasers
and
their counsel shall have received all such counterpart originals or certified
or
other copies of such documents as they may reasonably request.
(f)
Proceedings and Litigation. No action, suit or proceeding shall have been
commenced by any governmental authority against any party hereto seeking to
restrain or delay the purchase and sale of Shares or the other transactions
contemplated by this Agreement.
(g)
Due Diligence. The Purchasers shall have completed, to their
satisfaction, a due diligence investigation of the Company and its properties
and assets.
(h)
No
Material Adverse Change. There shall have been no material adverse change to
the business, financial condition or prospects of the Company.
(i)
Payment of Purchase Price. Each Purchaser shall have delivered to the
Company the portion of the Purchase Price allocated to such Purchaser’s Shares,
in the amount set forth opposite such Purchaser’s name on Exhibit
A.
(j)
Delivery of Documents at the Closing. The Company shall have executed and
delivered to the Purchasers the following documents, to be held in escrow
pending the Closing, on or prior to the Closing Date:
(i) Certificates.
Certificates representing the Securities to be purchased and sold on the Closing
Date bearing the legends required to be placed on such
certificates;
(ii) Secretary’s
Certificate. (A) Copies of resolutions by the Board of
Directors authorizing and approving this Agreement, the issuance and delivery
of
the Shares and copies of resolutions by the stockholders of the Company
authorizing and approving the transactions contemplated by this Agreement;
and
(B) certifying as to the incumbency of the officers executing this Agreement
and
any other documents contemplated by this Agreement; and
5.2. Conditions
to Company’s Obligations at the Closing. The obligations of the Company to
consummate the transactions contemplated herein to be consummated on the Closing
Date is subject to the satisfaction, on or prior to the Closing Date of the
conditions set forth below and expressly applicable thereto, any of which may
be
waived in writing by the Company:
(a)
Representations and Warranties; Performance of Obligations. Each of the
representations and warranties contained herein shall be true and correct on
and
as of the Closing Date. The Company shall have performed and complied with
the
covenants and provisions of this Agreement required to be performed or complied
with by them at or prior to the Closing Date.
(b)
Issuance in Compliance with Laws. On the Closing Date, the sale and
issuance of the Shares and the proposed issuance of the Conversion Shares shall
be legally permitted by all laws and regulations to which the Purchasers and
the
Company are subject.
(c)
Filings, Consents, Permits, and Waivers. The Company and the Purchasers
shall have made all filings and obtained any and all consents, permits and
waivers necessary for consummation of the transactions contemplated by this
Agreement.
(d)
Proceedings and Litigation. No action, suit or proceeding shall have been
commenced by any governmental authority against any party hereto seeking to
restrain or delay the purchase and sale of Shares or the other transactions
contemplated by this Agreement.
6.
COVENANTS OF THE PARTIES.
6.1. Commercially
Reasonable Efforts. Upon the terms and subject to the conditions set forth
in this Agreement, the parties shall use their good faith commercially
reasonable efforts to take, or cause to be taken, without any party being
obligated to incur any material internal costs or make any payment or payments
to any third party or parties which, individually or in the aggregate, are
material and are not otherwise legally required to be made, all actions, and
to
do or cause to be done, and to assist and cooperate with the other parties
in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Closing and the
other
transactions contemplated hereunder, including (a) obtaining all required
consents, (b) defending any litigation or claims challenging this Agreement
or
the consummation of any of the transactions contemplated hereunder, including,
if the circumstances warrant, seeking to have any stay or temporary restraining
court
order vacated or reversed, and (c) the execution and delivery of any additional
documents, agreements and instruments (in form and substance reasonably
satisfactory to the parties) necessary to consummate the transactions
contemplated hereunder and to fully carry out the purposes of this Agreement.
6.2. Post-Closing
Filings. In connection with the Closing, the Company and the Purchasers, if
applicable, agree to file all required forms or filings under applicable
securities laws within the time required by such laws.
6.3. Acknowledgement
of Disclosure. Purchaser acknowledges that it has been made available for
his review all public filings with the SEC and any other documentation and
materials that he has reasonably requested. Purchaser has reviewed the attached
SEC Form 10-KSB, dated 12/31/06 and SEC Form 10-QSB, dated 9/30/07.
7.
MISCELLANEOUS.
7.1. Governing
Law. This Agreement shall be governed in all respects by the laws of the
State of Texas without regard to the conflicts of laws principles of any
jurisdiction. No suit, action or proceeding with respect to this Agreement
may
be brought in any court or before any similar authority other than in a court
of
competent jurisdiction in the State of Texas and the parties hereby submits
to
the exclusive jurisdiction of such courts for the purpose of such suit,
proceeding or judgment. Each of the parties hereto hereby irrevocably waives
any
right which it may have had to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority and agreed
not
to claim or plead the same. Each of the parties hereto hereby irrevocably and
unconditionally waives trial by jury in any legal action or proceeding in
relation to this Agreement and for any counterclaim therein.
7.2. Successors
and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors and
permitted assigns of the parties hereto and shall inure to the benefit of and
be
enforceable by each person who shall be a holder of the Shares from time to
time. This Agreement may not be assigned without the prior written consent
of
the other parties hereto, except that each Purchaser may assign its rights
and
obligations hereunder to any affiliate or affiliates without such prior written
consent.
7.3. Entire
Agreement. This Agreement, the Exhibits and Schedules hereto, constitute the
full and entire understanding and agreement between the parties hereto with
regard to the subject matter hereof and thereof and no party hereto shall be
liable or bound to any other party hereto in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein
and
therein.
7.4. Severability.
If any provision of the Agreement is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
7.5. Delays
or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any party, upon any breach, default or noncompliance by another
party under this Agreement shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. Any waiver, permit, consent
or
approval of any kind or character on any Purchaser’s part of any breach, default
or noncompliance under this Agreement or any waiver on such party’s part of any
provisions or conditions of the Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, Bylaws, or otherwise afforded to any
party, shall be cumulative and not alternative.
7.6. Notices.
All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be
notified; (b) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient, and if not, then on the next business day;
(c)
five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (d) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address as set forth on the signature page hereof and to the Purchasers
at the address set forth on Exhibit A attached hereto or at such other address
as the Company or the Purchasers may designate by ten (10) days advance written
notice to the other parties hereto.
7.7. Titles
and Subtitles. The titles of the sections and subsections of the Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement.
7.8. Counterparts
Execution by Facsimile Signature. This Agreement may be executed in any
number of counterparts (including execution by facsimile), each of which shall
be an original, but all of which together shall constitute one instrument.
This
Agreement may be executed by facsimile signature(s) which shall be binding
on
the party delivering same, to be followed by delivery of originally executed
signature pages.
7.9. Acknowledgment.
Any investigation or other examination that may have been made at any time
by or
on behalf of a party to whom representations and warranties are made in this
Agreement shall not limit, diminish, supersede, act as a waiver of, or in any
other way affect the representations, warranties and indemnities contained
in
this Agreement, and the respective parties may rely on the representations,
warranties and indemnities made to them in this Agreement irrespective of and
notwithstanding any information obtained by them in the course of any
investigation, examination or otherwise, whether before or after the
Closings.
7.10. Publicity.
Except as otherwise required by law or applicable stock exchange rules, no
announcement or other disclosure, public or otherwise, concerning the
transactions contemplated by this Agreement shall be made, either directly
or
indirectly, by any party hereto which mentions another party (or parties) hereto
without the prior written consent of such other party (or parties), which
consent shall not be unreasonably withheld, delayed or
conditioned.
7.11. Exculpation
by Purchasers. Each Purchaser acknowledges that it is not relying upon any
person, firm or corporation, other than the Company and its officers and
directors, in making its investment or decision to invest in the
Company.
7.12. No
Third Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
7.13. Pronouns.
All pronouns contained herein, and any variations thereof shall be deemed to
refer to the masculine, feminine or neutral, singular or plural, as to the
identity of the parties hereto may require.
IN
WITNESS WHEREOF, the parties hereto have executed this Share
Purchase
Agreement
as of the date set forth in the first paragraph hereof.
| COMPANY: | PURCHASERS: | |
| POWER3 MEDICAL Products, INC. | By: | |
|
By:______________________________________
|
By:
_________________________________
|
|
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:
Chairman and CEO
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
281-466-1600
|
Name:
Title:
Address
Attn:
Tel:
Fax:
Email:
|
with
a
copy to:
SHARE
PURCHASE AGREEMENT EXHIBIT A
SCHEDULE
OF PURCHASERS
| Column A | Column B | ||||||
|
Name
of Purchaser
|
Number of Shares
to be Purchased
|
Total Purchase
Price Amount
|
|||||
|
TOTAL
|
|||||||
[Signature
Page to Stock Purchase Agreement]
ACCREDITED
INVESTOR QUESTIONNAIRE
EXHIBIT
B
Dear
Purchaser/Investor:
The
information contained in this questionnaire is being furnished to Power3 Medical
Products, Inc. (the “Company”) in order that the Company may determine whether
offers for the purchase and sale of the Company’s securities (the “Securities”)
may be made to you, as an investor, in light of the requirements of Regulation
D
promulgated under the Securities Act of 1933, as amended (the “Act”) and certain
exemptions contained in state securities laws. You understand that the
information is needed for the Company to determine whether it has reasonable
grounds to believe that you are an “accredited investor” as that term is defined
in Regulation D and that you have such knowledge and experience in financial,
investment and business matters that you are capable of evaluating the merits
and risks of the investment in the Securities. You understand that (a) the
Company will rely on the information contained herein for purposes of such
determination, (b) the Securities may not be registered under the Act, (c)
the
Securities will not be registered under the securities laws of any state, and
(d) this questionnaire is not an offer to purchase the Securities or any other
securities in any case where such offer would not be legally
permitted.
Information
contained in this questionnaire will be kept confidential by the Company and
its
agents, employees or representatives. You understand, however, that the Company
may have the need to present it to such parties as it deems advisable in order
to establish the applicability under any federal or state securities laws of
an
exemption from registration.
In
accordance with the foregoing, the following representations and information
are
hereby made and furnished by the investor:
Please
answer all questions. If the answer is “none” or “not applicable,” please so
state.
INFORMATION
REQUIRED OF EACH INVESTOR:
| 1. |
A.
If
Investor is an
Individual:
|
Name:
_________________________________________________ Age: ____________
Social
Security Number: ________________________No. of Dependents:
____________
Marital
Status: ______________________________________Citizenship:
____________
| B. |
If
Investor is an entity:
|
Name:
______________________________________________
EIN:
_______________________________________________
[Signature
Page to Stock Purchase Agreement]
| 2. |
A.
If
Investor is an
Individual:
|
Home
Address and telephone
number:________________________________________
_______________________________________________________________________
Business
Address and telephone
number:_______________________________________
_______________________________________________________________________
| B. |
If
Investor is an
entity:
|
Corporate
Address and telephone number:______________________________________
________________________________________________________________________
| 3. |
A.
If
Investor is an
Individual:
|
State
in
which the investor:
is
licensed to
drive.
is
registered to vote_______________________________________________
| B. |
If
Investor is an entity:
|
State
in
which the investor:
files
income tax
returns.
has
principal place of
business.
| 4. |
Employer
and
position:
|
| 5. |
Business
or professional education and the degrees received are as
follows:
|
|
School
|
Degree
|
Year
Received
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
| 6. |
6.
If
Investor is an entity:
|
Provide
the total assets of the entity as of a recent date:
Assets:
$________________________.
Date:
___________________________.
| 7. |
If
Investor is an
Individual:
|
|
Individual
income during 2006:
|
$________________
|
||
|
(exclusive
of spouse’s income)
|
|||
|
(b)
|
Individual
income during 2007:
|
$________________
|
|
|
(exclusive
of spouse’s income)
|
|||
|
(c)
|
Estimated
income during 2008:
|
$________________
|
|
|
(exclusive
of spouse’s income)
|
|||
|
(d)
|
Joint
income, with spouse 2006
|
$________________
|
|
|
2007
|
$________________
|
||
|
Estimated
joint income, with
|
|||
|
spouse,
during 2008
|
$________________
|
| 8. |
Estimated
net worth
|
| (may include joint net worth with spouse) |
$________________
|
||
|
|
|
|
|
| 9. |
Is
the investor involved in any litigation, which, if an adverse decision
occurred, would materially affect the investor’s financial
condition?
|
Yes
____
No ____
If
yes,
please provide details:
| 10. |
The
investor is an experienced and sophisticated investor or is advised
by a
qualified investment advisor, all as required under the securities
laws
and regulations.
|
Yes
____ No
__
|
11.
|
The
investor understands the full nature and risk of an investment in
the
Securities and can afford the complete loss of the entire investment
in
the Securities.
|
Yes
____ No
____
| 12. |
The
investor is able to bear the economic risk of an investment in the
Securities for an indefinite period of time and understands that
an
investment in the Securities may be illiquid. Yes
____ No
__
|
|
13.
|
Does
the investor have any other investments or contingent liabilities
that the
investor reasonably anticipates could cause the need for sudden cash
requirements in excess of cash readily available to the investor?
Yes
____ No ____
|
If
yes,
please explain:
________________________________________________________________
| 14. |
Please
describe the investor’s experience as an investor (including amounts
invested) in securities, particularly investments in non-marketable
and
tax incentive securities.
|
&#
160;
|
15.
|
Has
the investor participated in other private placements of securities?
|
Yes
____
No ____
If
yes,
please provide details:
|
16.
|
In
evaluating the merits and risks of this investment, does the investor
intend to rely upon the advice of the investor’s attorney, accountant, or
other advisor?
|
Yes
____
No ____
| 17. |
If
the investor is an entity, was it formed for the specific purpose
of
acquiring the securities offered? Yes ____ No
____
|
Please
indicate the date of incorporation/organization ____
The
investor understands that Company will be relying on the accuracy and
completeness of the investor’s responses to the foregoing questions and the
investor represents and warrants to the Company as follows:
|
(i)
|
The
answers to the above questions are complete and correct and may be
relied
upon by the Company whether or not the offering in which the investor
proposes to participate is exempt from registration under the Act
and the
securities laws of certain states;
|
| (ii) |
The
investor will notify the Company immediately of any material change
in any
statement made herein occurring prior to the closing of any purchase
by
the investor of the Securities; and
|
|
(iii)
|
The
investor or its management, in case of an entity, has sufficient
knowledge
and experience in financial, investment and business matters to evaluate
the merits and risks of the prospective investment; the investor
is able
to bear the economic risk of the investment in the Securities and
currently could afford a complete loss of such
investment.
|
[Signature
Page to Stock Purchase Agreement]
IN
WITNESS WHEREOF, the undersigned has executed this Accredited Investor
Questionnaire this ______ day of _______________, 2008, and declares under
oath
that it is truthful and correct to the best of the undersigned’s
knowledge.
Signature
of the Investor or Authorized Signatory of
Investor:____________________________
Name
of
Investor: ____________________________________________________
Name
of
Authorized Signatory: _________________________________________
Title
of
Authorized Signatory:
__________________________________________
SCHEDULE
TO
The
Company has issued Share Purchase Agreements to the following Investors. The
terms of the Share Purchase Agreement issued by the Company to each of the
following holders are identical except for
|
Date
Agreement
Signed
|
Investor
Name
|
Investor
Address
|
Shares
Purchased
|
|||
|
2/7/2008
|
▇▇▇▇▇▇▇,
▇▇▇▇▇
|
▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ #▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
|
200,000
|
|||
|
2/15/2008
|
▇▇▇▇▇▇,
▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
50,000
|
|||
|
2/5/2008
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
1,000,000
|
|||
|
2/13/2008
|
▇▇▇▇▇▇,
▇▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
100,000
|
|||
|
2/12/2008
|
▇▇▇▇▇▇,
▇▇▇▇▇▇▇
|
▇.▇.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
100,000
|
|||
|
2/29/2008
|
▇▇▇▇▇▇,
▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
24,000
|