Exhibit 10.1
SERIES
H CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
THIS
SERIES H CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”)
is made and entered into as of __________, 2013, by and among NatureWell Incorporated, a Delaware
corporation, and its subsidiaries, successors in interest to NatureWell Incorporated and its subsidiaries (collectively, the “Company”),
and the Investors listed on Exhibit A attached hereto (who shall execute this Agreement and who are collectively referred
to as the “Investors”, together
with the Company, sometimes referred to as the “Parties”).
RECITALS
WHEREAS,
the Company and the Investors are executing and delivering this Agreement in reliance upon an exemption from securities
registration pursuant to Section 4(2) and/or Rule 506 of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Securities
Act”);
WHEREAS,
the Company desires to authorize, issue and sell shares of its Series H Convertible Preferred Stock, $0.01 par value per
share (the “Series H Stock”) and
Warrants (the “Warrants”) to the
Investors, and the Investors desire to purchase shares of the Series H Stock and Warrants, all on the terms and subject to the
conditions herein set forth;
WHEREAS,
on March 13, 2013, the Company entered into an Agreement and Plan of Merger (the “Merger”) with Brazil Interactive
Media, Inc. (“BIMI”) whereby the Company acquired all of the issued and outstanding shares of Common Stock of BIMI,
pursuant to the terms and conditions of that agreement. As a result of the Merger, the Company is, as of the date of this Agreement,
taking steps to change its name to “Brazil Interactive Media, Inc.”; and
NOW,
THEREFORE, for and in consideration of the foregoing premises, the mutual covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1.
Authorization of Securities. The Company has authorized the number of shares of Series H Stock as provided herein,
which shall be entitled to the rights, privileges and preferences set forth in the Company’s Articles of Incorporation as
modified by the Certificate of Designation (Exhibit C) for the Series H Stock that has been filed by the Company with the
Delaware Secretary of State on or before the Closing. As used in this Agreement, the term “Preferred
Stock” shall mean the shares of Series H Stock issued and outstanding immediately after the closing described
in Section 3 hereof and all shares of Series H Stock issued in exchange or substitution therefor. The Series H Stock shall
be convertible into shares of the Common Stock, $0.0001 par value per share (the “Common
Stock”), as set forth in the Articles of Incorporation. As soon as practicable after Closing, the Company
shall authorize and reserve a sufficient number of its previously authorized but unissued shares of Common Stock to satisfy the
rights of conversion and purchase of the holders of the Series H Stock. Any shares of Common Stock issuable upon conversion of
the Series H Stock, when issued, shall be referred to as “Conversion
Shares”.
2. Sale
and Purchase of Shares of the Series H Stock. Subject to the terms and conditions herein, the Company agrees to
sell to the Investors, and each of the Investors severally agrees to purchase from the Company on the date hereof in accordance
with this Agreement, the number of shares of Series H Stock
set forth opposite such Investor’s
name on Exhibit A at a purchase price of One Hundred Dollars ($100.00) per share (the “Purchase
Commitment”). The Company’s agreement with each Investor is a separate agreement, and the sale of the Series
H Stock to each Investor is a separate sale. The Company agrees to accept the Note delivered by Dutchess Opportunity Fund II LP
as a portion of the total purchase price for that Investor’s Purchase Commitment.
| 2.1. | Warrant.
As an inducement
to purchase the Series
H Stock, the Investor
is entitled to receive
a Warrant (Exhibit
D) which provides
the Investor with the
right to purchase additional
shares of the Common
Stock.
The Company shall authorize
and reserve a sufficient
number of its previously
authorized but unissued
shares of Common Stock
to satisfy the rights
of exercise and purchase
of the holders of the
Warrant. |
3. The Closing. The
closing of the sale of the Series H Stock shall take place at 10:00 a.m. local time at the offices of the Company on March 21,
2013, or at such other place or different time or day as may be mutually acceptable to the Investors and the Company (the “Closing”).
The date and time on which the Closing occurs shall be referred to as the “Closing
Date”. On the Closing Date, the Company shall deliver to each of the Investors purchasing shares of the Series
H Stock on such date a stock certificate for the number of shares of Series H Stock being acquired by such Investor, which shares
shall be registered in the Investor’s name or as otherwise designated by the Investor. At the Closing, each Investor shall
pay to the Company the purchase price for the Purchase Commitment set forth on Exhibit A by wire transfer of immediately
available funds or bank or cashier’s check payable to the Company.
4.
Representations and Warranties by the Company. As a material inducement to each of the Investors to enter into
this Agreement and to purchase the number of shares of the Series H Stock set forth after such Investor’s name on Schedule
I, with the understanding that each Investor will be relying thereon in consummating the transactions contemplated hereunder,
the Company hereby represents and warrants to each Investor that, except as set forth (i) in the Disclosure Schedule attached
hereto and prepared and delivered by the Company to the Investors on the date hereof (the “Disclosure
Schedule”), or (ii) the SEC Documents (as defined herein), the statements contained in this Section 4 are
true and correct. The Disclosure Schedule is arranged in sections corresponding to the sections and subsections of this Section
4:
| 4.1. | Organization,
Qualification and Power.
The Company is a corporation
duly organized, validly
existing and in good
standing under the laws
of its jurisdiction
of incorporation, and
has all requisite corporate
power and authority,
and all governmental
licenses, governmental
authorizations, governmental
consents and governmental
approvals, required
to carry on its business
as now conducted and
to own, lease and operate
the assets and properties
of the Company as now
owned, leased and operated.
The Company is duly
qualified or licensed
to do business as a
foreign corporation
and is in good standing
in every jurisdiction
in which the character
or location of its properties
and assets owned, leased
or operated by the Company
or the nature of the
business conducted by
the Company requires
such qualification or
licensing, except where
the failure to be so
qualified, licensed
or in good standing
in such other jurisdiction
could not, individually
or in the aggregate,
have a Material Adverse
Effect (as defined herein)
on the Company. The
Company has heretofore
delivered to the Investors
complete and accurate
copies of its Articles
of Incorporation and
Bylaws, as currently
in effect. The Company
has previously delivered
to the Investors a complete
and accurate list of
all jurisdictions in
which the Company is
qualified or licensed
to do business as of
the date hereof. |
| 4.2. | Authorization;
Enforcement.
The Company has full
power and authority
to enter into this Agreement,
the related Security
Agreement, any and all
agreements referenced
herein or therein, and
all agreements and documents
related to the foregoing
(collectively, the “Transaction
Documents”)
and to carry out the
transactions contemplated
in the Transaction Documents.
The Board of Directors
of the Company and the
Company’s stockholders
have taken all action
required by law, the
Company’s charter
documents and otherwise
to duly and validly
authorize and approve
the execution, delivery
and performance by the
Company of the Transaction
Documents and the consummation
by the Company of the
transactions contemplated
in the Transaction Documents
and no other corporate
proceedings on the part
of the Company are necessary
to authorize the Transaction
Documents or to consummate
the transactions contemplated
thereby. The affirmative
vote of holders of at
least a majority of
the outstanding shares
of the Company’s
(a) Common Stock,
voting as separate classes,
were the only votes
of the holders of any
class or series of the
Company’s capital
stock necessary to approve
and adopt the Transaction
Documents and to consummate
the transaction contemplated
thereby. The Transaction
Documents have been
duly and validly executed
and delivered by the
Company and constitute
the legal, valid and
binding obligations
of the Company, enforceable
against it in accordance
with their respective
terms, subject to laws
of general application
relating to bankruptcy,
insolvency, reorganization,
moratorium or other
similar laws affecting
creditors’ rights
generally and rules
of law governing specific
performance, injunctive
relief or other equitable
remedies. |
| 4.3. | Capitalization
of the Company.
The Company has authorized
(a) 4,980,000,000 shares
of Common Stock, of
which 2,452,818,045
shares are issued and
outstanding, and (b)
30,000 shares of Series
H Stock, none of which
are issued and outstanding
(together with the Common
Stock, the “Capital
Stock”).
All of the issued and
outstanding shares of
the Capital Stock are
duly authorized, validly
issued, fully paid,
non-assessable and,
except for the Series
H Stock, free of preemptive
rights. There are no
outstanding obligations
of the Company to repurchase,
redeem or otherwise
acquire any of its securities.
Except as set forth
on Schedule III, there
are no stockholder agreements,
voting trusts or other
agreements or understandings
to which the Company
is a party or by which
it is bound relating
to the voting or registration
of any shares of Capital
Stock. As of the date
hereof, (i) there are
no outstanding options,
warrants, scrip, rights
to subscribe to, calls
or commitments of any
character whatsoever
relating to, or securities
or rights convertible
into, any shares of
capital stock of the
Company or any of its
subsidiaries, or contracts,
commitments, understandings
or arrangements by which
the Company or any of
its subsidiaries is
or may become bound
to issue additional
shares of capital stock
of the Company or any
of its subsidiaries
or options, warrants,
scrip, rights to subscribe
to, calls or commitments
of any character whatsoever
relating to, or securities
or rights convertible
into, any shares of
capital stock of the
Company or any of its
subsidiaries, (ii) there
are no outstanding debt
securities, (iii) there
are no agreements or
arrangements under which
the Company or any of
its subsidiaries is
obligated to register
the sale of any of their
securities under the
Securities Act, and
(iv) there are no outstanding
registration statements
and there are no outstanding
comment letters from
the Commission or any
other regulatory |
agency. There are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Preferred Stock as
described in this Agreement.
| 4.4. | Non-Contravention.
Neither the execution,
delivery and performance
by the Company of the
Transaction Documents
nor the consummation
of the transactions
contemplated therein
will (i) contravene
or conflict with the
charter documents of
the Company, (ii) contravene
or conflict with or
constitute a violation
of any provision of
any Applicable Law (as
defined herein) binding
upon or applicable to
the Company or any of
the Company’s
assets, (iii) result
in the creation or imposition
of any Lien (as defined
herein) on any of the
Company’s assets,
other than Permitted
Liens (as defined herein),
(iv) be in conflict
with, constitute (with
or without due notice
or lapse of time or
both) a default under,
result in the loss of
any material benefit
under, or give rise
to any right of termination,
cancellation, increased
payments or acceleration
under any terms, conditions
or provisions of any
material note, bond,
lease, mortgage, indenture,
license, contract, franchise,
permit, instrument or
other agreement or obligation
to which the Company
is a party, or by which
any of its properties
or assets may be bound,
or (v) to the knowledge
of the Company, disrupt
or impair any business
relationship with any
material supplier, customer,
distributor, sales representative
or employee of the Company.
Neither the Company
nor its subsidiaries
is in violation of any
term of or in default
under its charter documents
or any material contract,
agreement, mortgage,
indebtedness, indenture,
instrument, judgment,
decree or order or any
statute, rule or regulation
applicable to the Company
or its subsidiaries.
The business of the
Company and its subsidiaries
is not being conducted,
and shall not be conducted
in violation of any
material law, ordinance,
or regulation of any
governmental entity.
Except as specifically
contemplated by this
Agreement and as required
under the Securities
Act and any Applicable
Law, the Company is
not required to obtain
any consent, authorization
or order of, or make
any filing or registration
with, any court or governmental
agency in order for
it to execute, deliver
or perform any of its
obligations under or
contemplated by the
Transaction Documents
in accordance with the
terms thereof. All consents,
authorizations, orders,
filings and registrations
which the Company is
required to obtain pursuant
to the preceding sentence
have been obtained or
effected on or prior
to the date hereof.
The Company and its
subsidiaries are unaware
of any facts or circumstance,
which might give rise
to any of the foregoing. |
| 4.5. | Consents
and Approvals.
No consent, approval,
order or authorization
of or from, or registration,
notification, declaration
or filing with (hereinafter
sometimes separately
referred to as a “Consent”
and sometimes
collectively as “Consents”),
any Person, including,
without limitation,
any Governmental Authority
(as defined herein),
is required in connection
with the execution,
delivery or performance
of the Transaction Documents
by the Company or the
consummation by the
Company of the transactions
contemplated therein.
To the knowledge of
the Company, there are
no facts relating to
the identity or circumstances
of the Company that
would prevent or materially
delay obtaining any
of the Consents. |
| 4.6. | Financial
Statements; Undisclosed
Liabilities. |
| (a) | The Company has previously delivered
to the Investors complete and accurate copies of the audited balance
sheet and income statements of the Company as of December 31,
2013 (the “Latest
Financial Statements”). The Latest Financial
Statements are based upon the information contained in the books
and records of the Company and fairly and accurately present the
financial condition of the Company as of the dates thereof and
results of operations for the periods referred to therein. The
Latest Financial Statements have been prepared in accordance with
GAAP (as defined herein) applicable to unaudited interim financial
statements (and thus may not contain all notes and may not contain
prior period comparative data which are required for compliance
with GAAP), and reflect all adjustments necessary to a fair and
accurate statement of the financial condition and results of operations
of the Company for the interim periods presented. |
| (b) | All accounts, books and ledgers related to the business of the Company and its subsidiaries are
properly and accurately kept, are complete in all material respects, and there are no material inaccuracies or discrepancies of
any kind contained or reflected therein. Neither the Company nor its subsidiaries have any of its material records, systems, controls,
data, or information recorded, stored, maintained, operated or otherwise wholly or partly dependent upon or held by any means (including
any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and
therefrom) are not under the exclusive ownership (excluding licensed software programs) and direct control of the Company or its
subsidiaries. |
| (c) | Except as and to the extent reflected in the Latest Balance Sheet, the Company does not have any
Liabilities (as defined herein) of any nature (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or
to become due, whether known or unknown, and regardless of when asserted), other than Liabilities incurred in the Ordinary Course
of Business (as defined herein) since the date of the Latest Balance Sheet and Liabilities arising in connection with this Agreement
and the transactions contemplated herein. |
| 4.7. | Assets and Properties. |
| (a) | Except as previously disclosed in the SEC Filings, the Company has good and valid right, title
and interest in and to or, in the case of leased properties or properties held under license, good and valid leasehold or license
interests in, all of their assets and properties, including, but not limited to, all of the machinery, equipment, terminals, computers,
vehicles, and all other assets and properties (real, personal or mixed, tangible or intangible) |
| | reflected in the Latest Balance Sheet and all of the assets purchased or otherwise acquired since the date
of the Latest Balance Sheet, except those assets and properties disposed of in the Company’s ordinary course of business
after the date of the Latest Balance Sheet. The Company holds title to each such property and asset free and clear of all Liens,
except Permitted Liens, and is in sole possession of, and has sole control of, its material assets. |
| (b) | Except as previously disclosed in the SEC Filings, the material equipment owed by the Company has
been properly maintained and is in good operating condition and repair and is adequate for the uses for which they are currently
being put by the Company, normal wear and tear excepted. To the knowledge of the Company, no such asset is in need of maintenance
or repair, except for routine maintenance and repairs that are in the ordinary course. |
| (c) | Except as previously disclosed in the SEC Filings, the Company owns or has the right to use all
material property, real or personal, tangible or intangible, which is necessary for the operation of its business in substantially
the same manner as it has been conducted during the period covered by the Latest Balance Sheet. |
| 4.8. | Compliance
with Applicable Laws.
The Company has not
violated or infringed,
nor is it in violation
or infringement of,
any Applicable Law or
any order, writ, injunction
or decree of any Governmental
Authority in connection
with its activities.
The Company, and its
officers, directors,
agents and employees,
have complied with all
Applicable Laws. No
claims have been filed
against the Company
alleging a violation
of any Applicable Law. |
| 4.9. | Permits.
The Company has conducted
its business in compliance
with all material terms
and conditions of all
licenses, permits, quotas,
authorizations, registrations
and other approvals
that are necessary to
the operation of, or
relate solely to, the
Company’s business
(collectively, the “Permits”).
Each Permit is valid
and in full force and
effect and none of the
Permits will be terminated,
revoked, modified or
become terminable or
impaired in any respect
for any reason, except
as would not have a
Material Adverse Effect. |
| 4.10. | Receivables.
The accounts receivable
and other receivables
reflected on the Latest
Balance Sheet, and
those arising after
the date thereof, are
valid receivables that
have arisen from bona
fide transactions in
the Company’s
ordinary course of
business, are not subject
to valid counterclaims
or setoffs, and are
collectible in accordance
with their terms, except
as and to the extent
of the bad debt allowance
reflected on the Latest
Balance Sheet. |
| 4.11. | Litigation.
There are no (a) actions,
suits, claims, hearings,
arbitrations, proceedings
(public or private)
or governmental investigations
that have been brought
by or against any Governmental
Authority or any other
Person, nor any investigations
or reviews by any Governmental
Authority against or
affecting the Company,
pending or, to the
Company’s knowledge,
threatened, against
or by |
the
Company or any of its assets or which seek to enjoin or rescind the transactions contemplated by this Agreement; or (b) existing
orders, judgments or decrees of any Governmental Authority naming the Company as an affected party or otherwise affecting any of
the assets or the business of the Company except as set forth in Schedule 3.
| 4.12. | Contracts.
None of the Company’s
contracts, including
those for real property
for any and all tangible
property, guarantees,
non-compete agreements
and all consulting
or agency agreements
contain a provision
requiring the consent
of any party with respect
to the consummation
of the transaction
contemplated herein.
No notice of default
or indemnification
arising under any Scheduled
Contract has been delivered
to or by the Company.
Each Scheduled Contract
is a legal, valid and
binding obligation
of the Company, and
each other party thereto,
enforceable against
each such party thereto
in accordance with
its terms, except as
may be limited by applicable
bankruptcy, insolvency,
reorganization, moratorium
or similar laws affecting
creditors’ rights
generally and subject
to general principles
of equity, and neither
the Company nor, to
the Company’s
knowledge, the other
party thereto is in
breach, violation or
default thereunder.
The Company is not
a party to and is not
bound by any contract,
agreement or any other
instrument that currently
has or would have a
Material Adverse Effect. |
| 4.13. | Labor
and Employment Matters.
The Company has previously
delivered to the Investors
a complete and accurate
list of all current
employees, officers
and directors of the
Company, which list
includes their base
salaries and bonus.
All employees of the
Company are employed
on an at-will basis.
Neither the Company
nor any of its subsidiaries
is involved in any
labor dispute nor,
to the knowledge of
the Company or any
of its subsidiaries,
is any such dispute
threatened. None of
the Company’s
or its subsidiaries’
employees is a member
of a union and the
Company and its subsidiaries
believe that their
relations with their
employees are good. |
| 4.14. | Intellectual
Property. |
| (a) | The Company has previously delivered to the Investors a complete and accurate list and brief description
or other identification of all Intellectual Property that are, as of the date hereof, owned, possessed, licensed or used by the
Company. |
| (b) | The Company owns the entire right, title and interest in and to all of the Intellectual Property
purported to be owned by the Company, free and clear of all Liens other than Permitted Liens, and has the right to use all Intellectual
Property used by it. |
| (c) | The Company owns or possesses adequate licenses or other rights to use all Intellectual Property
necessary to conduct its business as now conducted, and none of these licenses or other rights are subject to termination, cancellation,
or change in terms as a result of this Agreement. |
| (d) | All Intellectual Property owned or held by any employee or consultant of the Company that is related
to or necessary to the |
products and
business of the Company, as currently carried on, has been duly and effectively transferred to the Company.
| (e) | None of the Intellectual Property owned or used by the Company infringes on the valid and enforceable
intellectual property rights of any other Person; (ii) all of the Intellectual Property owned or used by the Company is valid,
subsisting, and enforceable; (iii) there are no claims, demands or proceedings outstanding, pending or, to the knowledge of the
Company, threatened by any Person contesting or challenging the Company’s right to use any of the Intellectual Property;
(iv) the Company has not entered into any agreement to indemnify any other Person against any charge of infringement of any Intellectual
Property, except indemnities agreed to in the Company’s ordinary course of business consistent with past practice in connection
with the sale, delivery or transfer of the Company’s products and services or included as part of the Company’s license
agreements; and (v) there is no material Intellectual Property owned by a third-party which the Company is using without license
to do so. |
| 4.15. | Tax
Matters.
The Company has, or
will have prior to
Closing (a) properly
completed and filed
on a timely basis all
tax returns (federal,
provincial, state,
county, local and other)
relating to all excise,
payroll, real estate,
capital stock, intangible,
value-added, income,
sales, use, service,
employment, property
and, without limitation
of the foregoing, all
other taxes of every
kind and nature which
the Company is required
to file in connection
with its business prior
to the Closing Date
(i.e., the due date
for such tax return
being on or before
the Closing Date) and
for which the non-payment
of, or failure to file,
could result in a Lien
on any of the Company’s
assets, or result in
the Investors becoming
liable or responsible
therefor, and (b) paid
in full all Taxes (as
defined herein), interest,
penalties, assessments
or deficiencies shown
to be due to any taxing
authority on such returns.
The Company is not
currently the beneficiary
of any extension of
time within which to
file any such return.
The Company is not
a party to any pending
or, to the knowledge
of the Company, any
threatened action or
proceeding against
the Company for the
assessment or collection
of Taxes by any Governmental
Authority, and there
is no basis for any
such action or proceeding.
There are no audits
pending with respect
to any liabilities
for Taxes of the Company. |
| 4.16. | Indemnification,
Guarantee or Assumption
of Liability Obligations.
The Company is not
a party to any Contract
that contains any provisions
requiring the Company
to indemnify, guarantee
or assume liabilities
of any Person. There
is no event, circumstance
or other basis that
could give rise to
any indemnification,
guarantee or assumption
of liabilities obligation
of the Company to its
officers and directors
under the Company’s
Articles of Incorporation,
Bylaws, similar governing
documents, or any Contract
between the Company
and any of its officers
or directors or to
any other Person under
any Contract. |
| 4.17. | Employee
Benefit Plans.
The Company does not
have any liability
arising directly or
indirectly under Section
412 of the Code, or
Section 302 of Title
IV of ERISA. The Company
does not have any liability
arising directly or
indirectly to |
or with respect to any “multiemployer
plan” within the meaning of Section 4001(a)(3) of ERISA. The Company does not have any liability arising under the Consolidated
Omnibus Reconciliation Act of 1985, as amended, Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA. Nothing
has occurred or failed to occur with respect to any Company Pension Plan that could result in any liability to the Investors.
| 4.18. | Disclosure.
No representation or
warranty by the Company
in this Agreement and
no statement contained
or to be contained
in any document, certificate
or other writing furnished
or to be furnished
by the Company to the
Investors, contains
or will contain any
untrue statement of
a material fact or
omits or will omit
to state any material
fact necessary in order
to make the statements
therein, in the light
of the circumstances
under which they were
made, not misleading.
There is no fact that
has not been disclosed
to the Investors of
which any officer or
director of the Company
is aware which has
or could reasonably
be expected to have
a Material Adverse
Effect. |
| 4.19. | Investigation
by the Investors.
Notwithstanding anything
to the contrary in
this Agreement, (i)
no investigation by
the Investors shall
affect the representations
and warranties of the
Company under any of
the Transaction Documents
or contained in any
other writing to be
furnished to the Investors
in connection with
the transactions contemplated
thereunder, and (ii)
such representations
and warranties shall
not be affected or
deemed waived by reason
of the fact that the
Investors knew or should
have known that any
of the same is or might
be inaccurate in any
respect. |
| 4.20. | Environmental
Laws.
The Company and its
subsidiaries are (i)
in compliance with
any and all applicable
foreign, federal, state
and local laws and
regulations relating
to the protection of
human health and safety,
the environment or
hazardous or toxic
substances or wastes,
pollutants or contaminants
(“Environmental
Laws”),
(ii) have received
all Permits, licenses
or other approvals
required of them under
applicable Environmental
Laws to conduct their
respective businesses,
and (iii) are in compliance
with all terms and
conditions of any such
Permit, license or
approval. |
| 4.21. | Insurance.
The
Company and each of
its subsidiaries are
insured by insurers
of recognized financial
responsibility against
such losses and risks
and in such amounts
as management of the
Company believes to
be prudent and customary
in the businesses in
which the Company and
its subsidiaries are
engaged. Neither the
Company nor any such
subsidiary has been
refused any insurance
coverage sought or
applied for and neither
the Company nor any
such subsidiary has
any reason to believe
that it will not be
able to renew its existing
insurance coverage
as and when such coverage
expires or to obtain
similar coverage from
similar insurers as
may be necessary to
continue its business
at a cost that would
not materially and
adversely affect the
condition, financial
or otherwise, or the
earnings, business
or operations of the
Company and its subsidiaries,
taken as a whole. |
| 4.22. | Regulatory
Permits.
The Company and its
subsidiaries possess
all material certificates,
authorizations and
permits issued by the
appropriate federal,
state or foreign regulatory
authorities necessary
to conduct their respective
businesses, |
and neither the Company nor any
such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization
or permit.
| 4.23. | Internal
Accounting Controls.
The
Company and each of
its subsidiaries maintain
a system of internal
accounting controls
sufficient to provide
reasonable assurance
that (i) transactions
are executed in accordance
with management’s
general or specific
authorizations, (ii)
transactions are recorded
as necessary to permit
preparation of financial
statements in conformity
with generally accepted
accounting principles
and to maintain asset
accountability, and
(iii) the recorded
amounts for assets
is compared with the
existing assets at
reasonable intervals
and appropriate action
is taken with respect
to any differences. |
| 4.24. | SEC
Documents: Financial
Statements.
Since
September 30, 2012,
the Company has filed
all reports, schedules,
forms, statements and
other documents required
to be filed by it with
the Commission under
the Securities Exchange
Act of 1934, as amended
(the “Exchange
Act”)
(all of the foregoing
filed prior to the
date hereof or amended
after the date hereof
and all exhibits included
therein and financial
statements and schedules
thereto and documents
incorporated by reference
therein, being hereinafter
referred to as the
“SEC
Documents”).
The Company has delivered
to the Investors or
their representatives,
or made available through
the Commission’s
website at ▇▇▇.▇▇▇.▇▇▇.,
complete and accurate
copies of the SEC Documents.
As of their respective
dates, the financial
statements of the Company
disclosed in the SEC
Documents (the “Financial
Statements”)
complied as to form
in all material respects
with applicable accounting
requirements and the
published rules and
regulations of the
Commission with respect
thereto. Such financial
statements have been
prepared in accordance
with generally accepted
accounting principles,
consistently applied,
during the periods
involved (except (i)
as may be otherwise
indicated in such Financial
Statements or the notes
thereto, or (ii) in
the case of unaudited
interim statements,
to the extent they
may exclude footnotes
or may be condensed
or summary statements)
and, fairly present
in all material respects
the financial position
of the Company as of
the dates thereof and
the results of its
operations and cash
flows for the periods
then ended (subject,
in the case of unaudited
statements, to normal
year-end audit adjustments).
No other information
provided by or on behalf
of the Company to the
Investor which is not
included in the SEC
Documents, including,
without limitation,
information referred
to in the Transaction
Documents, contains
any untrue statement
of a material fact
or omits to state any
material fact necessary
in order to make the
statements therein,
in the light of the
circumstances under
which they were made,
not misleading. |
| 4.25. | 10(b)-5.
The
SEC Documents do not
include any untrue
statements of material
fact, nor do they omit
to state any material
fact required to be
stated therein necessary
to make the statements
made, in light of the
circumstances under
which they were made,
not misleading. |
| 4.26. | Acknowledgment
Regarding Investor’s
Purchase of the Preferred
Stock.
The Company acknowledges
and agrees that the
Investors are acting
solely in the capacity
of an arm’s-length
purchaser with respect
to the Transaction
Documents and the transactions
contemplated thereby.
The Company further
acknowledges |
that the Investors are not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by the Investors or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to such Investor’s
purchase of the Preferred Stock or the Conversion Shares. The Company further represents to the Investor that the Company’s
decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.
| 4.27. | No
General Solicitation.
None
of the Company, its
subsidiaries or Affiliates
(as defined herein),
nor any person acting
on its or their behalf,
has engaged in any
form of general solicitation
or general advertising
(within the meaning
of Regulation D under
the Securities Act)
in connection with
the offer or sale of
the Preferred Stock. |
| 4.28. | No
Integrated Offering.
None
of the Company, its
subsidiaries or Affiliates,
nor any person acting
on its or their behalf
has, directly or indirectly,
made any offers or
sales of any security
or solicited any offers
to buy any security,
under circumstances
that would require
registration of the
Preferred Stock under
the Securities Act
or cause this offering
of the Preferred Stock
to be integrated with
prior offerings by
the Company for purposes
of the Securities Act. |
| 4.29. | Certain
Transactions.
Except
for arm’s-length
transactions pursuant
to which the Company
makes payments in the
ordinary course of
business upon terms
no less favorable than
the Company could obtain
from third parties
and other than the
grant of stock options
disclosed in the SEC
Documents, none of
the officers, directors,
or employees of the
Company, its subsidiaries
or Affiliates is presently
a party to any transaction
with the Company, its
subsidiaries or Affiliates
(other than for services
as employees, officers
and directors), including
any contract, agreement
or other arrangement
providing for the furnishing
of services to or by,
providing for rental
of real or personal
property to or from,
or otherwise requiring
payments to or from
any officer, director
or such employee or,
to the knowledge of
the Company, any corporation,
partnership, trust
or other entity in
which any officer,
director, or any such
employee has a substantial
interest or is an officer,
director, trustee or
partner. |
| 4.30. | Fees
and Rights of First
Refusal.
The Company is not
obligated to offer
the securities offered
hereunder on a right
of first refusal basis
or otherwise to any
third parties, including
but not limited to,
current or former shareholders
of the Company, its
subsidiaries, Affiliates,
underwriters, brokers,
agents or other third
parties. |
| 4.31. | No
Material Adverse Breaches,
etc.
None of the Company,
its subsidiaries or
Affiliates is subject
to any charter, corporate
or other legal restriction,
or any judgment, decree,
order, rule or regulation
which in the judgment
of the Company’s
officers has or is
expected in the future
to have a Material
Adverse Effect on the
business, properties,
operations, financial
condition, results
of operations or prospects
of the Company or its
subsidiaries. None
of the Company, its
subsidiaries or Affiliates
is in breach of any
contract or agreement
which breach, in the
judgment of the Company’s
officers, has or is
expected to |
have a Material Adverse Effect
on the business, properties, operations, financial condition, results of operations or prospects of the Company or its subsidiaries.
5. Representations
of the Investors. Each of the Investors severally represents to the Company for such Investor that:
| 5.1. | Investment
Intent.
The shares of the Series
H Stock and the Conversion
Shares into which such
shares may be converted
that are being acquired
by the Investor are
being purchased for
investment for the Investor’s
own account and not
with the view to, or
for resale in connection
with, any distribution
or public offering thereof.
The Investor has no
present plan or intention
to engage in a sale,
exchange, transfer,
distribution, redemption,
reduction in any way
of the Investor’s
risk of ownership by
short sale or otherwise,
or other disposition,
directly or indirectly
of the Series H Stock
being acquired by the
Investor pursuant to
the Transaction Documents
or the Conversion Shares
into which such shares
may be converted. The
Investor is able to
bear the economic risk
of its investment and
has the knowledge and
experience in financial
and business matters
that it is capable of
evaluating the merits
and risks (including
tax considerations)
of its investment, including
the high degree of risk
of loss of the Investor’s
entire investment herein. |
| 5.2. | Restrictions
on Resale, Rule 144.
The Investor understands
that the shares of the
Series H Stock have
not been registered
under the Securities
Act or any state securities
laws by reason of their
contemplated issuance
in transactions exempt
from the registration
requirements of the
Securities Act pursuant
to Section 4(2) thereof
or Rule 504, 505 or
506 promulgated under
the Securities Act and
applicable state securities
laws, and that the reliance
of the Company and others
upon these exemptions
is predicated in part
upon this representation
by the Investor. The
Investor further understands
that the Series H Stock
may not be transferred
or resold without (i) registration
under the Securities
Act and any applicable
state securities laws,
or (ii) an exemption
from the requirements
of the Securities Act
and applicable state
securities laws. The
Investor also understands
that the Conversion
Shares will be issued
without prior registration
thereof under the Securities
Act or applicable state
securities laws in reliance
upon Section 4(2) of
the Securities Act and
transactional exemptions
from registration under
applicable state securities
laws based upon appropriate
representations of the
Investor. As such, the
Conversion Shares will
be subject to transfer
restrictions similar
to restrictions applicable
to the Series H Stock.
The Investor understands
that (i) an exemption
from such registration
is not presently available
pursuant to Rule 144
promulgated under the
Securities Act by the
Commission, (ii) the
Company has made no
commitment to become
eligible for Rule 144,
and (iii) in any
event the Investor may
not sell any securities
acquired hereunder pursuant
to Rule 144 prior to
the expiration of a
one-year period (or
such other period as
the Commission may hereafter
adopt) after the Investor
has acquired such securities.
The Investor understands
that any sales pursuant
to Rule 144 can be made
only in full compliance
with the provisions
of Rule 144. |
| 5.3. | Location
of Principal Office,
Qualification as an
Accredited Investor,
etc.
The state in which the
Investor’s principal
office (or domicile,
if the Investor is an
individual) is located
is the state set forth
in the Investor’s
address on Schedule
I. The Investor
by execution of this
Agreement hereby represents
that |
he, she or it qualifies as an
“accredited investor” for purposes of Regulation D promulgated under the Securities Act. The Investor (i) is an investor
in securities of companies in the development stage and acknowledges that it is able to fend for itself, and bear the loss of its
entire investment in the Series H Stock, and (ii) has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment to be made by it pursuant to this Agreement. If other than an individual,
the Investor also represents it has not been organized solely for the purpose of acquiring the Series H Stock or the Conversion
Shares.
| 5.4. | Acts
and Proceedings.
The Investor has full
power and authority
to enter into and perform
under the Transaction
Documents in accordance
with their respective
terms. The Transaction
Documents have been
duly authorized by all
necessary action on
the part of the Investor,
has been duly executed
and delivered by the
Investor, and is a valid
and binding agreement
of the Investor and
enforceable against
the Investor in accordance
with their terms, except
as enforceability may
be limited by bankruptcy,
insolvency, moratorium,
reorganization or other
similar laws affecting
the enforcement of creditors’
rights generally and
to judicial limitations
on the remedy of specific
enforcement and other
equitable remedies. |
| 5.5. | Exculpation
Among Investors.
The Investor acknowledges
that in making the decision
to invest in the Company,
the Investor is not
relying on any other
Investor or upon any
person, firm or company,
other than the Company
and its officers, employees
and/or directors. The
Investor agrees that
none of any of the other
Investors, nor their
partners, employees,
officers or controlling
persons, shall be liable
for any actions taken
by the Investor, or
omitted to be taken
by the Investor, in
connection with such
investment. |
| 5.6. | Disclosure
of Information.
The Investor represents
that the Company has
made available to the
Investor at a reasonable
time prior to the execution
of the Transaction Documents
the opportunity to ask
questions and receive
answers from the Company’s
management concerning
the Company’s
business, management
and financial affairs,
the terms and conditions
of the offering of the
Series H Stock and to
obtain any additional
information (that the
Company possesses or
can acquire without
unreasonable effort
or expense) as may be
necessary to verify
the accuracy of information
furnished to such Investor.
Investor further represents
that it, except as otherwise
provided by law, is
entering into the Transaction
Documents and is acquiring
the Series H Stock without
any representation or
warranty, express or
implied, by the Company
or any of its officers,
directors, employees
or affiliated, except
as expressly set forth
in this Agreement. The
foregoing, however,
does not limit or modify
the representations
and warranties of the
Company in the Transaction
Documents or the right
of the Investors to
rely thereon. |
| 5.7. | Legend;
Stop Transfer.
The Series H Stock,
and any Conversion Shares
issued upon conversion
thereof, shall bear
a legend substantially
similar to the following: |
THE SECURITIES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”),
OR APPLICABLE BLUE SKY LAWS, AND ARE SUBJECT TO CERTAIN INVESTMENT REPRESENTATIONS. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR
SALE OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT AND SUCH APPLICABLE BLUE SKY LAWS, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
The Company shall make a notation
regarding the restrictions on transfer of the Series H Stock and any such Conversion Shares in its books and the Series H Stock
and any such Conversion Shares shall be transferred on the books of the Company only if transferred or sold pursuant to an effective
registration statement under the Securities Act covering the securities to be transferred or an opinion of counsel satisfactory
to the Company that such registration is not required.
Any legend endorsed on a certificate
pursuant to this Section 5.7 shall be removed, and the Company shall issue a certificate without such legend to the holder
of such security, if such security is being disposed of pursuant to a registration under the Securities Act or pursuant to Rule
144 or any similar rule then in effect or if such holder provides the Company with an opinion of counsel satisfactory to the Company
to the effect that a transfer of such securities may be made without registration. In addition, if the holder of such securities
delivers to the Company an opinion of such counsel to the effect that no subsequent transfer of such securities will require registration
under the Securities Act, the Company will promptly upon such contemplated transfer deliver new certificates evidencing such security
that do not bear the legend set forth in this Section 5.7.
| 5.8. | No
Brokers or Finders.
No person, firm or corporation
has or will have, as
a result of any contractual
undertaking by the Investor,
any right, interest
or valid claim against
the Investor or the
Company for any commission,
fee or other compensation
as a finder or broker,
or in any similar capacity,
in connection with the
transactions contemplated
by the Transaction Documents.
Each responsible Investor
will indemnify and hold
the Company harmless
against any and all
liability with respect
to any such commission,
fee or other compensation
which may be payable
or determined to be
payable. |
| 5.9. | No
Governmental Review.
Each
Investor understands
that no United States
federal or state agency
or any other government
or governmental agency
has passed on or made
any recommendation or
endorsement of the Preferred
Stock or the Conversion
Shares, or the fairness
or suitability of the
investment in the Preferred
Stock or the Conversion
Shares, nor have such
authorities passed upon
or endorsed the merits
of the offering of the
Preferred Stock or the
Conversion Shares. |
| 5.10. | Receipt
of Documents.
Each
Investor and his or
its counsel has received
and read in their entirety:
(i) the Transaction
Documents and each
representation, warranty
and covenant set forth
therein; (ii) all due
diligence and other
information necessary
to verify the accuracy
and completeness of
such representations,
warranties and covenants;
(iii) the Company’s
Form 10-K for the |
fiscal year ended June 30, 2012
(iv) the Company’s Form 10-Q for the fiscal quarter ended September 30, 2012; and (v) answers to all questions each Investor
submitted to the Company regarding an investment in the Company and each Investor has relied on the information contained therein
and has not been furnished any other documents, literature, memorandum or prospectus.
| 5.11. | Due
Formation of Corporate
and Other Investors.
If
the Investors are a
corporation, trust,
partnership or other
entity that is not
an individual person,
it has been formed
and validly exists
and has not been organized
for the specific purpose
of purchasing the Preferred
Stock and is not prohibited
from doing so. |
| 5.12. | No
Legal Advice From the
Company.
Each Investor acknowledges,
that it had the opportunity
to review the Transaction
Documents and the transactions
contemplated thereby
with his or its own
legal counsel and investment
and tax advisors. Each
Investor is relying
solely on such counsel
and advisors and not
on any statements or
representations of
the Company, its subsidiaries,
Affiliates or any of
their respective representatives
or agents for legal,
tax or investment advice
with respect to this
investment, the transactions
contemplated by the
Transaction Documents
or the securities laws
of any jurisdiction.
|
6.
Covenants.
| 6.1. | Best
Efforts.
Each party shall use
its best efforts to
timely satisfy each
of the conditions to
be satisfied by it as
provided in Sections
8 and 9 hereof. |
| 6.2. | Reporting
Status.
Until the earlier of
(i) the date as of which
the Investors may sell
all of the Conversion
Shares without restriction
pursuant to Rule 144(k)
promulgated under the
Securities Act (or successor
thereto), or (ii) the
date on which (A) the
Investors shall have
sold all the Conversion
Shares and (B) none
of the Preferred Stock
are outstanding (the
“Registration
Period”),
the Company shall file
in a timely manner all
reports required to
be filed with the Commission
pursuant to the Exchange
Act and the regulations
of the Commission thereunder,
and the Company shall
not terminate its status
as an issuer required
to file reports under
the Exchange Act even
if the Exchange Act
or the rules and regulations
thereunder would otherwise
permit such termination. |
| 6.3. | Registration
of Shares. As
more fully described
in that Preferred Stock
Registration Rights
Agreement between the
Company and the Investors,
a copy of which is attached
hereto as Exhibit
E, the Company shall
file a registration
statement with the Commission
within forty-five (45)
days following Closing
Date (the “Filing
Date”)
covering the shares
of Common Stock underlying
the Series H Stock.
The Company agrees not
to include any other
shares for registration
in said registration
statement without the
Investors’ written
consent. Subject to
the terms of this Agreement,
the Company shall use
its best efforts to
cause the Registration
Statement to be declared
effective under the
Securities Act as promptly
as possible after the
filing thereof, but
in any event prior to
the applicable Effectiveness
Date, and shall use
its best efforts to
keep such Registration
Statement continuously
effective under the
Securities Act until
all Registrable Securities
covered by such Registration
Statement have been
sold or may be sold
without volume restrictions
pursuant to Rule 144(k)
as determined by the
counsel to the Company
pursuant to a written
opinion letter to such
effect, |
addressed and acceptable to the
Company’s transfer agent and the affected Holders (the “Effectiveness
Period”). The Company shall notify the Investors via facsimile of the effectiveness of the Registration Statement
within one (1) Trading Day of the day that the Company receives notification of the effectiveness from the Commission.
| 6.4. | Reservation
of Shares.
The Company shall take
all action reasonably
necessary to at all
times have authorized,
and reserved for the
purpose of issuance,
such number of shares
of Common Stock as shall
be necessary to effect
the issuance of the
Conversion Shares. If
at any time the Company
does not have available
such shares of Common
Stock as shall from
time-to-time be sufficient
to effect the conversion
of all of the Conversion
Shares, then the Company
and its management shall,
upon the written request
of the Investors, do
the following: (i) call
and hold a special meeting
of the shareholders
within thirty (30) days
of such occurrence for
the sole purpose of
increasing the number
of shares authorized,
(ii) recommend to the
shareholders that they
vote in favor of increasing
the number of shares
of Common Stock authorized,
and (iii) vote all of
their shares in favor
of increasing the number
of authorized shares
of Common Stock. |
| 6.5. | Listings
or Quotation.
If
not already done prior
to the Closing, the
Company shall promptly
secure the listing or
quotation of the Conversion
Shares upon each national
securities exchange,
automated quotation
system or The Financial
Industry Regulatory
Authority’s Over-The-Counter
Bulletin Board (“OTCBB”)
or other market, if
any, upon which shares
of Common Stock are
then listed or quoted.
The Company shall use
its best efforts to
maintain, so long as
any other shares of
Common Stock shall be
so listed, such listing
of all Conversion Shares
from time-to-time issuable
under the terms of this
Agreement. The Company
shall maintain the Common
Stock’s authorization
for quotation on the
OTCBB. |
| 6.6. | Fees
and Expenses.
The
Company shall pay all
costs and expenses incurred
by such party in connection
with the negotiation,
investigation, preparation,
execution and delivery
of the Transaction Documents
and any opinion letters
issued from legal counsel
which refer to the Holder’s
right to sell the Common
Stock. Further, the
Company shall pay all
expenses associated
with the issuance, delivery
and deposit of the Conversion
Shares, including the
deposit of such shares
on behalf of the Investor. |
| 6.7. | Corporate
Existence.
So long as any of the
Preferred Stock remains
outstanding, the Company
shall not directly or
indirectly consummate
any merger, reorganization,
restructuring, reverse
stock split consolidation,
sale of all or substantially
all of the Company’s
assets or any similar
transaction or related
transactions (each such
transaction, an “Organizational
Change”)
unless, prior to the
consummation of an Organizational
Change, the Company
obtains the written
consent of each Investor.
In any such case, the
Company will make appropriate
provision with respect
to such holders’
rights and interests
to insure that the provisions
of this Section 6.7
will thereafter
be applicable to the
Preferred Stock. |
| 6.8. | Transactions
With Affiliates.
So
long as any Preferred
Stock is outstanding,
the Company shall not,
and shall cause each
of its subsidiaries
not to, enter into,
amend, modify or supplement,
or permit any subsidiary
to enter into, amend,
|
modify or supplement any agreement,
transaction, commitment, or arrangement with any of its or any subsidiary’s officers, directors, person who were officers
or directors at any time during the previous two (2) years, stockholders who beneficially own five percent (5%) or more of the
Common Stock, or Affiliates, or with any individual related by blood, marriage, or adoption to any such individual or with any
entity in which any such entity or individual owns a five percent (5%) or more beneficial interest (each a “Related
Party”), except for (i) customary employment arrangements and benefit programs on reasonable terms, (ii)
any investment in an Affiliate of the Company, (iii) any agreement, transaction, commitment, or arrangement on an arms-length
basis on terms no less favorable than terms which would have been obtainable from a person other than such Related Party, (iv)
any agreement, transaction, commitment, or arrangement which is approved by a majority of the disinterested directors of the Company
(for purposes hereof, any director who is also an officer of the Company or any subsidiary of the Company shall not be considered
a disinterested director with respect to any such agreement, transaction, commitment, or arrangement). Notwithstanding the foregoing,
for purposes of this Section 6.8, the Investors and their respective Affiliates shall not be considered Affiliates of the
Company.
| 6.9. | Transfer
Agent. The
Company covenants and
agrees that, in the
event that the Company’s
agency relationship
with the transfer agent
should be terminated
for any reason after
the Closing Date, the
Company shall immediately
appoint a new transfer
agent and shall require
that the new transfer
agent agree to be bound
by the terms of any
transfer agent instructions
issued by the Company
and in place as of the
date hereof. |
| 6.10. | Restriction
on
Issuance
of
the
Capital
Stock.
So
long
as
any
Preferred
Stock
is
outstanding,
the
Company
shall
not,
without
the
prior
written
consent
of
the
Investors,
which
shall
not
be
unreasonably
withheld,
(i)
issue
or
sell
shares
of
Common
Stock
or
Preferred
Stock
without
consideration
or
for
a
consideration
per
share
less
than
the
bid
price
of
the
Common
Stock
determined
immediately
prior
to
its
issuance,
(ii)
issue
any
preferred
stock,
warrant,
option,
right,
contract,
call,
or
other
security
or
instrument
granting
the
holder
thereof
the
right
to
acquire
Common
Stock
without
consideration
or
for
a
consideration
less
than
such
Common
Stock’s
Bid
Price
determined
immediately
prior
to
it’s
issuance,
(iii)
enter
into
any
security
instrument
granting
the
holder
a
security
interest
in
any
and
all
assets
of
the
Company,
or
(iv)
file
any
registration
statement
on
Form
S-8.
|
| 6.11. | Rights
of First Refusal.
So
long as any portion
of Series H Stock is
outstanding, if the
Company intends to
raise additional capital
by the issuance or
sale of Capital Stock
of the Company, including
without limitation
shares of any class
of common stock, any
class of preferred
stock, options, warrants
or any other securities
convertible or exercisable
into shares of common
stock (whether the
offering is conducted
by the Company, underwriter,
placement agent or
any third-party) the
Company shall be obligated
to offer to the Investors
such issuance or sale
of Capital Stock, by
providing in writing
the principal amount
of capital it intends
to raise and outline
of the material terms
of such capital raise,
prior to the offering
such issuance or sale
of Capital Stock to
any third parties including,
but not limited to,
current or former officers
or directors, current
or |
former shareholders and/or investors
of the obligor, underwriters, brokers, agents or other third parties. The Investors shall have ten (10) business days from
receipt of such notice of the sale or issuance of capital stock to accept or reject all or a portion of such capital raising offer.
| 6.12. | Limitation
on Beneficial Ownership.
In
no event shall the
Investor be entitled
to convert or exercise,
as the case may be,
any amount of its Series
H Preferred Stock or
Warrants in excess
of that amount upon
exercise or conversion
of which the sum of
(1) the number of shares
of Common Stock beneficially
owned (as such term
is defined under Section
13(d) and Rule 13d-3
of the Securities Exchange
Act of 1934 (the 1934
Act”)) by the
Investor, and (2) the
number of shares issuable
upon conversion of
the Series H Preferred
Stock then owned by
the Investor, and (3)
the number of shares
issuable upon the exercise
of any Warrants then
owned by Investor,
would result in beneficial
ownership by the Investor
of more than 9.9% of
the outstanding shares
of Common Stock of
the Company, as determined
in accordance with
Rule13d-1(j). Furthermore,
the Company shall not
process any exercise
that would result in
beneficial ownership
by the Investor of
more than 9.9% of the
outstanding shares
of Common Stock of
the Company. |
| 6.13. | Use
of
Proceeds.
The
Company
covenants
and
agrees
to
utilize
the
aggregate
Purchase
Commitment
for
the
purposes
outlined
on
the
Use
of
Proceeds
schedule
attached
hereto
as
Exhibit
F. |
7. Conditions
To The Company’s Obligation To Sell. The
obligation of the Company hereunder to issue and sell the Preferred Stock to the Investors at the Closing(s) is subject to the
satisfaction, at or before the Closing Date(s), of each of the following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole discretion:
| 7.1. | Each Investor shall have executed the Transaction Documents and delivered
them to the Company. |
| 7.2. | The Investors shall have delivered to the Company the Purchase Price
for Preferred Stock in respective amounts as set forth next to each Investor as outlined on Schedule 1 attached hereto,
minus any fees to be paid directly from the proceeds of the Closings as set forth herein, by wire transfer of immediately available
U.S. funds pursuant to the wire instructions provided by the Company. |
| 7.3. | The representations and warranties of the Investors shall be true
and correct in all material respects as of the date when made and as of the Closing Date(s) as though made at that time (except
for representations and warranties that speak as of a specific date), and the Investors shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Investors at or prior to the Closing Date(s). |
8. Conditions
To The Investor’s Obligation To Purchase. The
obligation of the Investors hereunder to purchase the Preferred Stock at the Closing(s) is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that these conditions are for the Investors’ sole
benefit and may be waived by the Investors at any time in their sole discretion:
| 8.1. | The Company shall have executed the Transaction Documents and delivered
the same to the Investors. |
| 8.2. | The Common Stock shall be authorized for quotation on the OTCBB,
trading in the Common Stock shall not have been suspended for any reason, and all the Conversion Shares issuable upon the conversion
of the Preferred Stock shall be approved by the OTCBB. |
| 8.3. | The representations and warranties of the Company shall be true and
correct in all material respects (except to the extent that any of such representations and warranties is already qualified as
to materiality in Section 4 hereof, in which case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by the Transaction Document to be performed, satisfied or complied with
by the Company at or prior to the Closing Date. If requested by the Investor, the Investor shall have received a certificate, executed
by the President of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably
requested by the Investor. |
| 8.4. | The Company shall have delivered to the Investors the Preferred Stock
in the respective amounts set forth opposite each Investors’ name on Schedule 1 attached hereto. |
| 8.5. | The Company shall have delivered to the Investors a certificate of
good standing from the Nevada Secretary of State. |
| 8.6. | The Company shall have delivered to the Investor an acknowledgement,
to the satisfaction of the Investor, from the Company’s independent certified public accountants as to its ability to provide
all consents required in order to file a registration statement in connection with this transaction. |
| 8.7. | The Company shall have reserved out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the Preferred Stock, shares of Common Stock to effect the conversion
of all of the Conversion Shares then outstanding. |
| 8.8. | The Company shall have certified to the Investors that all conditions
to the Closing have been satisfied and that the Company will file a registration statement with the Commission in compliance with
the rules and regulations promulgated by the Commission for filing thereof two (2) business days after the Closing. If requested
by the Investor, the Investor shall have received a certificate, executed by the two officers of the Company, dated as of the Closing
Date, to the foregoing effect. |
| 8.9. | No Events of Default shall have occurred under the Transaction Documents.
|
9. Indemnification.
| 9.1. | In
consideration of the
Investor’s execution
and delivery of this
Agreement and acquiring
the Preferred Stock
and the Conversion Shares
hereunder, and in addition
to all of the Company’s
other obligations under
the Transaction Documents,
the Company shall defend,
protect, indemnify and
hold harmless the Investors
and each other holder
of the Preferred Stock
and the Conversion Shares,
and all of their officers,
directors, employees
and agents (including,
without limitation,
those retained in connection
with the transactions
contemplated by the
Transaction Documents)
(collectively, the “Investor
Indemnitees”)
from and against any
and all actions, causes
of action, suits, claims,
losses, costs, penalties,
fees, liabilities and
damages, and expenses
in connection therewith
(irrespective of whether
any such Investor Indemnitee
is a party to the action
for which indemnification
hereunder is sought),
and including reasonable
attorneys’ fees
and disbursements (the
“Indemnified
Liabilities”),
incurred by the Investor
Indemnitees or any of
them as a result of,
or arising out of, or
relating to (a) any
misrepresentation or
breach of any representation
or warranty made by
the Company in the Transaction
Documents or any other
certificate, instrument
or document contemplated
thereby, (b) any breach
of any covenant, agreement
or obligation of the
Company contained in
the Transaction Documents
or any other certificate,
instrument or document
contemplated thereby,
or (c) any cause of
action, suit or claim
brought or made against
such Indemnitee and
arising out of or resulting
from the execution,
delivery, performance
or enforcement of the
Transaction Documents
or any other instrument,
document or agreement
executed pursuant thereto
by any of the parties
thereto, any transaction
financed or to be financed
in whole or in part,
directly or indirectly,
with the proceeds of
the issuance of the
Preferred Stock or the
Conversion Shares or
the status of the Investor
or holder of the Preferred
Stock or the Conversion
Shares. To the extent
that the foregoing undertaking
by the Company may be
unenforceable for any
reason, the Company
shall make the maximum
contribution to the
payment and satisfaction
of each of the Indemnified
Liabilities, which is
permissible under applicable
law. |
| 9.2. | In
consideration of the
Company’s execution
and delivery of the
Transaction Documents,
and in addition to all
of the Investor’s
other obligations under
the Transaction Documents,
the Investor shall defend,
protect, indemnify and
hold harmless the Company
and all of its officers,
directors, employees
and agents (including,
without limitation,
those retained in connection
with the transactions
contemplated by the
Transaction Documents)
(collectively, the “Company
Indemnitees”)
from and against any
and all Indemnified
Liabilities incurred
by the Indemnitees or
any of them as a result
of, or arising out of,
or relating to (a) any
misrepresentation or
breach of any representation
or warranty made by
the Investors in the
Transaction Documents,
instrument or document
contemplated thereby
or executed by the Investor,
(b) any breach of any
covenant, agreement
or obligation of the
Investors contained
in the Transaction Documents
or any other certificate,
instrument or document
contemplated thereby
or executed by the Investor,
or (c) any cause of
action, suit or claim
brought or made against
such Company Indemnitee
based on material misrepresentations
or due to a material
breach and arising out
of or resulting from
the execution, delivery,
performance or enforcement
of the Transaction Documents
or any other instrument,
document or agreement
executed pursuant thereto
by any of the |
parties thereto. To the extent
that the foregoing undertaking by each Investor may be unenforceable for any reason, each Investor shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.
10. Definitions.
The following terms, as used herein, have the following meanings:
| 10.1. | “Affiliate”
means, with
respect to any person
or entity, another
person or entity that,
directly or indirectly,
(i) has a ten percent
(10%) or more equity
interest in that person
or entity, (ii) has
ten percent (10%) or
more common ownership
with that person or
entity, (iii) controls
that person or entity,
or (iv) shares
common control with
that person or entity.
“Control”
or “controls”
for purposes hereof
means that a person
or entity has the power,
direct or indirect,
to conduct or govern
the policies of another
person or entity. |
| 10.2. | “Agreement”
has the meaning
set forth in the Introduction. |
| 10.3. | “Applicable
Law”
means, with respect
to any Person, any
domestic or foreign,
federal, state or local
common law or duty,
case law or ruling,
statute, law, ordinance,
policy, guidance, rule,
administrative interpretation,
regulation, code, order,
writ, injunction, directive,
judgment, decree or
other requirement of
any Governmental Authority
applicable to such
Person or any of its
Affiliates or Plan
Affiliates or any of
their respective properties,
assets, officers, directors,
employees, consultants
or agents (in connection
with such officer’s,
director’s, employee’s,
consultant’s
or agent’s activities
on behalf of such Person
or any of its Affiliates
or Plan Affiliates). |
| 10.4. | “Capital
Stock”
has the meaning
set forth in Section
4.3 hereof. |
| 10.5. | “Articles
of Incorporation”
means the Company’s
Articles of Incorporation
as filed with the Nevada
Secretary of State,
as may be amended from
time to time. |
| 10.6. | “Closing”
has the meaning
set forth in Section
3 hereof. |
| 10.7. | “Closing
Date”
has
the meaning
set forth in
Section 3
hereof. |
| 10.8. | “Code”
means the Internal
Revenue Code of 1986,
as amended, and the
regulations or other
binding pronouncements
promulgated thereunder. |
| 10.9. | “Common
Stock”
has
the meaning
set forth in
Section 1
hereof. |
| 10.10. | “Company”
has the meaning
set forth in the Introduction. |
| 10.11. | “Compensation
Plan”
means any
material benefit or
arrangement that is
not either a Pension
Plan or a Welfare
Plan, including, without
limitation, (i) each
employment or consulting
agreement, (ii) each
arrangement providing
for insurance coverage
or workers’
compensation benefits,
(iii) each bonus,
incentive bonus or
deferred bonus arrangement,
(iv) each arrangement
providing termination
allowance, severance
or similar benefits,
(v) each equity compensation
plan, (vi) each current
or deferred compensation
agreement, arrangement
or policy, (vii) each
compensation policy
and practice maintained
|
by the Company or any ERISA Affiliate
of the Company covering the employees, former employees, directors and former directors of the Company and the beneficiaries of
any of them, and (viii) each agreement, arrangement or plan that provides for the payment of compensation to any person who provides
services to the Company and who is not an employee, former employee, director or former director of the Company.
| 10.12. | “Consent”
or
“Consents”
have
the meanings
set forth in
Section
4.5 hereof. |
| 10.13. | “Contracts”
means all
contracts, agreements,
options, leases, licenses,
sales and accepted
purchase orders, commitments
and other instruments
of any kind, whether
written or oral, to
which the Company
is a party on the
Closing Date, including
the Scheduled Contracts. |
| 10.14. | “Conversion
Shares”
has the meaning
set forth in Section
1 hereof. |
| 10.15. | “Disclosure
Schedule”
has the meaning
set forth in Section
4 hereof. |
| 10.16. | “Effective
Date”
has the meaning
set forth in Section
6.3 hereof. |
| 10.17. | “Employee
Benefit Plan”
means all
Pension Plans, Welfare
Plans and Compensation
Plans. |
| 10.18. | “ERISA”
means the
Employee Retirement
Income Security Act
of 1974, as amended. |
| 10.19. | “ERISA
Affiliate”
means any
“person,”
within the meaning
of Section 7701(a)(1)
of the Code, that
together with the
Company is considered
a single employer
pursuant to Section
414(b), (c), (m) or
(o) of the Code or
Section 3(5) or 4001(b)(1)
of ERISA. |
| 10.20. | “Exchange
Act”
means the
Securities Exchange
Act of 1934, as amended. |
| 10.21. | “Filing
Date”
has the meaning
set forth in Section
6.3 hereof. |
| 10.22. | “GAAP”
means generally
accepted accounting
principles in the
United States, consistently
applied. |
| 10.23. | “Governmental
Authority”
means any
foreign, domestic,
federal, territorial,
state or local governmental
authority, quasi-governmental
authority, instrumentality,
court, government
or self-regulatory
organization, commission,
tribunal or organization
or any regulatory,
administrative or
other agency, or any
political or other
subdivision, department
or branch of any of
the foregoing. |
| 10.24. | “Intellectual
Property”
means all
rights in patents,
patent applications,
trademarks (whether
registered or not),
trademark applications,
service ▇▇▇▇ registrations
and service ▇▇▇▇ applications,
trade names, trade
dress, logos, slogans,
tag lines, uniform
resource locators,
Internet domain names,
Internet domain name
applications, corporate
names, copyright applications,
registered copyrighted
works and commercially
significant unregistered
copyrightable works
(including proprietary
software, books, written
materials, prerecorded
|
video or audio tapes, and other
copyrightable works), technology, software, trade secrets, know-how, technical documentation, specifications, data, designs and
other intellectual property and proprietary rights used in or necessary to the conduct of the business of the Company, but excluding
third-party off-the-shelf computer programs.
| 10.25. | “Investors”
has the meaning
set forth in the Introduction. |
| 10.26. | “Latest
Balance Sheet”
has the meaning
set forth in Section
4.6(a) hereof. |
| 10.27. | “Latest
Financial Statements”
has the meaning
set forth in Section 4.6(a)
hereof. |
| 10.28. | “Liability”
or “Liabilities”
means any
liabilities, obligations
or claims of any kind
whatsoever whether
absolute, accrued
or un-accrued, fixed
or contingent, matured
or un-matured, asserted
or unasserted, known
or unknown, direct
or indirect, contingent
or otherwise and whether
due or to become due,
including without
limitation any foreign
or domestic tax liabilities
or deferred tax liabilities
incurred in respect
of or measured by
the Company’s
income, or any other
debts, liabilities
or obligations relating
to or arising out
of any act, omission,
transaction, circumstance,
sale of goods or services,
state of facts or
other condition which
occurred or existed
on or before the date
hereof, whether or
not known, due or
payable, whether or
not the same is required
to be accrued on the
financial statements
or is disclosed on
the Disclosure Schedule. |
| 10.29. | “Lien”
means, with
respect to any asset,
any mortgage, title
defect or objection,
lien, pledge, charge,
security interest,
hypothecation, restriction,
encumbrance, adverse
claim or charge of
any kind in respect
of such asset. |
| 10.30. | “Material
Adverse Effect”
means, with
respect to the Company,
an individual or cumulative
adverse change in
or effect on its business,
customers, customer
relations, operations,
properties, working
capital condition
(financial or otherwise),
assets, properties,
liabilities or prospects
(financial or otherwise)
that (i) is reasonably
expected to be materially
adverse to its business,
properties, working
capital condition
(financial or otherwise),
assets, liabilities
or prospects (financial
or otherwise); or
(ii) would prevent
it from consummating
the transactions contemplated
hereby. |
| 10.31. | “Material
Customers”
has the meaning
set forth in Section
4.17 hereof. |
| 10.32. | “Ordinary
Course of Business”
means any
action taken by the
Company that is (i)
consistent with its
past practices and
is taken in the ordinary
course of its normal
day-to-day operations,
and (ii) not required
to be specifically
authorized by its
Board of Directors. |
| 10.33. | “Penalty
Date”
has the meaning
set forth in Section
6.3 hereof. |
| 10.34. | “Pension
Plan”
means an “employee
pension benefit plan”
as such term is defined
in Sections 3(2) or
3(3) of ERISA and
all other material
employee benefit arrangements
or programs relating
to the Company’s
business, including,
without limitation,
any such arrangements
or programs providing
severance pay, sick
leave, vacation pay,
salary continuation
for disability, retirement
benefits, |
deferred compensation, bonus pay,
incentive pay, stock options, hospitalization insurance, medical insurance and life insurance, sponsored or maintained by the Company
or any Affiliate of the Company or to which the Company or any Affiliate of the Company is obligated to contribute thereunder on
behalf of any current or former employee who performed services with respect to the Company’s business.
| 10.35. | “Permits”
has the meaning
set forth in Section
4.9 hereof. |
| 10.36. | “Permitted
Liens”
means (i)
Liens for Taxes or
governmental assessments,
charges or claims
the payment of which
is not yet due, or
for Taxes the validity
of which are being
contested in good
faith by appropriate
proceedings; (ii) statutory
Liens of landlords
and Liens of carriers,
warehousemen, mechanics,
materialmen and other
similar Persons and
other Liens imposed
by Applicable Law
incurred in the Ordinary
Course of Business
for sums not yet delinquent
or being contested
in good faith; (iii)
Liens relating to
deposits made in the
Ordinary Course of
Business in connection
with workers’
compensation, unemployment
insurance and other
types of Social Security
or to secure the performance
of leases, trade contracts
or other similar agreements;
and (iii) other Liens
set forth on the Disclosure
Schedule; provided,
however, that, with
respect to each of
clauses (i) through
(iii), to the extent
that any such Lien
on that arose prior
to the date of the
Latest Balance Sheet
and relates to, or
secures the payment
of, a Liability that
is required to be
accrued for under
GAAP, such Lien shall
not be a Permitted
Lien unless all such
Liabilities have been
fully accrued or otherwise
reflected on the Latest
Balance Sheet. Notwithstanding
the foregoing, no
Lien arising under
the Code or ERISA
with respect to the
operation, termination,
restoration or funding
of any Employee Benefit
Plan sponsored by,
maintained by or contributed
to by the Company
or any of its ERISA
Affiliates or arising
in connection with
any excise tax or
penalty tax with respect
to such Employee Benefit
Plan shall be a Permitted
Lien. |
| 10.37. | “Person”
means an individual,
corporation, partnership,
limited liability
company, association,
trust, estate or other
entity or organization,
including a Governmental
Authority. |
| 10.38. | “Plan
Affiliate”
means, with
respect to any Person,
any Employee Benefit
Plan sponsored by,
maintained by or contributed
to by such Person,
and with respect to
any Employee Benefit
Plan, any Person sponsoring,
maintaining or contributing
to such plan or arrangement. |
| 10.39. | “Preferred
Stock”
has the meaning
set forth in Section
1 hereof. |
| 10.40. | “Purchase
Commitment”
has the meaning
set forth in Section
2 hereof. |
| 10.41. | “Scheduled
Contracts”
has the meaning
set forth in Section
4.12 hereof. |
| 10.42. | “SEC
Documents”
has the meaning
set forth in Section
4.26 hereof. |
| 10.43. | “Securities
Act”
means the
Securities Act of
1933, as amended. |
| 10.44. | “Series
H Stock”
has the meaning
set forth in the Recitals. |
| 10.45. | “Tax”
or “Taxes”
means all
taxes imposed of any
nature including federal,
state, local or foreign
net income tax, alternative
or add-on minimum
tax, profits or excess
profits tax, franchise
tax, gross income,
adjusted gross income
or gross receipts
tax, employment related
tax (including employee
withholding or employer
payroll tax, FICA
or FUTA), real or
personal property
tax or ad valorem
tax, sales or use
tax, excise tax, stamp
tax or duty, any withholding
or back up withholding
tax, value-added tax,
severance tax, prohibited
transaction tax, premiums
tax, environmental
tax, intangibles tax
or occupation tax,
together with any
interest or any penalty,
addition to tax or
additional amount
imposed by any Governmental
Authority (domestic
or foreign) responsible
for the imposition
of any such tax. The
term Tax shall also
include any Liability
of the Company for
the Taxes of any other
Person under U.S.
Treasury Regulations
Section 1.1502-6 (or
similar provisions
of state, local or
foreign law), as a
transferee or successor
by contract or otherwise. |
| 10.46. | “Tax
Return”
means all
returns, declarations,
reports, estimates,
forms, information
returns and statements
or other information
required to be filed
with respect to any
Tax. |
| 10.47. | “Transaction
Documents”
has the meaning
set forth in Section
4.2 hereof. |
| 10.48. | “Welfare
Plan”
means an “employee
welfare benefit plan”
as such term is defined
in Section 3(1) of
ERISA (including without
limitation a plan
excluded from coverage
by Section 4 of ERISA). |
11. Miscellaneous.
| 11.1. | Waivers,
Amendments and Approvals.
In each case in which
approval of the Investors
is required by the
terms of this Agreement,
such requirement shall
be satisfied by a vote
or the written action
of the Investors. With
the written consent
of the Investors, the
obligations of the
Company under this
Agreement may be waived
(either generally or
in a particular instance
and either retroactively
or prospectively) and
with the written approval
of the Investors, the
Company may enter into
a supplementary agreement
for the purpose of
adding any provisions
to or changing in any
manner or eliminating
any of the provisions
of this Agreement;
provided, however,
that no such waiver
or supplemental agreement
shall amend the terms
of the shares of the
Series H Stock as set
forth in the Articles
of Incorporation (any
such amendment to the
terms of the shares
of Series H Stock shall
require the vote of
the holders of shares
of Series H Stock called
for by the Articles
of Incorporation).
|
| 11.2. | Written
Changes, Waivers, etc.
Neither
this Agreement nor
any provision hereof
may be changed, waived,
discharged or terminated
orally, except by a
statement in writing
signed by the party
against which enforcement
of the change, waiver,
discharge or termination
is sought, except to
the extent provided
in Section 11.1
hereof. |
| 11.3. | Notices.
Any and all notices
required or permitted
to be given to a party
pursuant to the provisions
of this Agreement will
be in writing and will
be effective and deemed
to provide such party
sufficient notice under
this |
Agreement on the earliest of the
following: (i) at the time of personal delivery, if delivery is in person; (ii) one (1) business day after deposit with an
express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the
United States, with proof of delivery from the courier requested; or (iii) three (3) business days after deposit in the United
States mail by certified mail (return receipt requested) for United States deliveries. All notices for delivery outside the United
States will be sent by express courier. All notices not delivered personally will be sent with postage and/or other charges prepaid
and properly addressed to the party or parties to be notified at such address or addresses as such party or parties may designate
by one of the indicated means of notice herein to the other party or parties hereto.
| 11.4. | Survival
of Representations,
Warranties, Etc.
All
representations, warranties,
covenants and agreements
contained herein, including
the indemnification
obligations set forth
in Section 9
hereof, shall survive
after the execution
and delivery of this
Agreement or such certificate
or document, as the
case may be, for a
period of two (2) years. |
| 11.5. | Delays
or Omissions.
Except as expressly
provided herein, no
delay or omission to
exercise any right,
power or remedy accruing
to any party under
this Agreement shall
impair any such right,
power or remedy of
such party nor shall
it be construed to
be a waiver of any
such breach or default,
or an acquiescence
thereto, or of a similar
breach or default thereafter
occurring; nor shall
any waiver of any single
breach or default be
deemed a waiver of
any other breach or
default theretofore
or thereafter occurring.
Any waiver, permit,
consent or approval
of any kind or character
on the part of any
party hereto of any
breach or default under
this Agreement, or
any waiver on the part
of any party of any
provisions or conditions
of this Agreement,
must be in writing
and shall be effective
only to the extent
specifically set forth
in such writing. |
| 11.6. | Other
Remedies.
Any and all remedies
herein expressly conferred
upon a party shall
be deemed cumulative
with, and not exclusive
of, any other remedy
conferred hereby or
by law on such party,
and the exercise of
any one remedy shall
not preclude the exercise
of any other. |
| 11.7. | Attorney
Fees.
Should
suit
be
brought
to
enforce
or
interpret
any
part
of
this
Agreement,
the
prevailing
party
shall
be
entitled
to
recover,
as
an
element
of
the
costs
of
suit
and
not
as
damages,
reasonable
attorney
fees
to
be
fixed
by
the
court
(including,
without
limitation,
costs,
expenses
and
fees
on
any
appeal).
The
prevailing
party
shall
be
the
party
entitled
to
recover
its
costs
of
suit,
regardless
of
whether
such
suit
proceeds
to
final
judgment.
A
party
not
entitled
to
recover
its
costs
shall
not
be
entitled
to
recover
attorney
fees.
No
sum
for
attorney
fees
shall
be
counted
in
calculating
the
amount
of
a
judgment
for
purposes
of
determining
if
a
party
is
entitled
to
recover
costs
or
attorney
fees. |
| 11.8. | Entire
Agreement.
This Agreement, the
exhibits hereto, the
documents referenced
herein and the exhibits
thereto, constitute
the entire understanding
and agreement of the
parties hereto with
respect to the subject
matter hereof and thereof
and supersede all prior
and contemporaneous
agreements or understandings,
inducements or conditions,
express or implied,
written or oral, between
the parties with respect
hereto and thereto.
The express terms hereof
|
control and supersede any course
of performance or usage of the trade inconsistent with any of the terms hereof.
| 11.9. | Severability.
Should any one or more
of the provisions of
this Agreement or of
any agreement entered
into pursuant to this
Agreement be determined
to be illegal or unenforceable,
all other provisions
of this Agreement and
of each other agreement
entered into pursuant
to this Agreement,
shall be given effect
separately from the
provision or provisions
determined to be illegal
or unenforceable and
shall not be affected
thereby. The parties
further agree to replace
such void or unenforceable
provision of this Agreement
with a valid and enforceable
provision which will
achieve, to the extent
possible, the economic,
business and other
purposes of the void
or unenforceable provision. |
| 11.10. | Successors
and Assigns; Assignment.
The terms and conditions
of this Agreement
shall inure to the
benefit of and be
binding upon and be
enforceable by the
successors and assigns
of the parties hereto,
including the holder(s)
from time-to-time
of any of the Series
H Stock. This Agreement
is intended for the
benefit of the parties
hereto and their respective
permitted successors
and assigns, and is
not for the benefit
of, nor may any provision
hereof be enforced
by, any other Person.
Notwithstanding anything
in this Agreement
to the contrary, the
Investors may assign
this Agreement, and
all or any of their
rights or obligations
hereunder, to any
person or entity without
the consent of the
Company. The Company
may not assign this
Agreement, or any
of its rights or obligations
hereunder, without
the prior consent
of the Investors,
which consent may
be given or withheld
in the Investors’
sole and absolute
discretion. |
| 11.11. | Governing
Law.
The validity, terms,
performance and enforcement
of this Agreement
shall be governed
and construed by the
provisions hereof
and in accordance
with the laws of the
State of Delaware
applicable to agreements
that are negotiated,
executed, delivered
and performed solely
in the State of Delaware.
|
| 11.12. | Counterparts.
This Agreement may
be executed concurrently
in two or more counterparts,
each of which shall
be deemed an original,
but all of which together
shall constitute one
and the same instrument. |
| 11.13. | Publicity.
The
Company and the Investors
shall have the right
to approve, before
issuance any press
release or any other
public statement with
respect to the transactions
contemplated hereby
made by any party;
provided, however,
that the Company shall
be entitled, without
the prior approval
of the Investors,
to issue any press
release or other public
disclosure with respect
to such transactions
required under applicable
securities or other
laws or regulations
(the Company shall
use its best efforts
to consult the Investors
in connection with
any such press release
or other public disclosure
prior to its release
and Investors shall
be provided with a
copy thereof upon
release thereof). |
| 11.14. | Further
Assurances.
Each
party shall do and
perform, or cause
to be done and performed,
all such further acts
and things, and shall
execute and deliver
all such other agreements,
certificates, instruments
and documents, as
the other party may
reasonably request
in order to carry
out the intent and
accomplish the purposes
of this Agreement
and the consummation
of the transactions
contemplated hereby. |
| 11.15. | No
Strict Construction.
The
language used in this
Agreement will be
deemed to be the language
chosen by the parties
to express their mutual
intent, and no rules
of strict construction
will be applied against
any party. |
| 11.16. | Headings.
The
headings of this Agreement
are for convenience
of reference and shall
not form part of,
or affect the interpretation
of, this Agreement. |
| 11.17. | Disputes
Under the Agreement.
All disputes
arising under this
Agreement shall be
governed by and interpreted
in accordance with
the laws of the Commonwealth
of Massachusetts,
without regard to
principles of conflict
of laws. The parties
to this Agreement
shall submit all disputes
arising under this
Agreement to arbitration
in Boston, Massachusetts
before a single arbitrator
of the American Arbitration
Association (the “AAA”).
The arbitrator shall
be selected by application
of the rules of the
AAA, or by mutual
agreement of the parties,
except that such arbitrator
shall be an attorney
admitted to practice
law in the Commonwealth
of Massachusetts.
No party hereto will
challenge the jurisdiction
or venue provisions
as provided in this
section. Nothing in
this section shall
limit the Holder's
right to obtain an
injunction for a breach
of this Debenture
from a court of law.
Any injunction obtained
shall remain in full
force and effect until
the arbitrator, as
set forth in herein,
fully adjudicates
the dispute. |
[Signature page follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Series H Convertible Preferred Stock Purchase Agreement to be
executed by their respective officers thereunto duly authorized as of the day and year first above written.
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THE COMPANY:
NATUREWELL INCORPORATED. |
| |
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By: ____________________________
Name: ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Chief Executive Officer |