SUBSCRIPTION AGREEMENT ENHANCE SKIN PRODUCTS INC. Please review, sign on page S-1, and return to: ENHANCE SKIN PRODUCTS INC. Denver, Colorado 80246
SUBSCRIPTION
AGREEMENT
Please
review, sign on page S-1, and return to:
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This
Securities Purchase Agreement (this “Agreement”)
is
dated as of August 14, 2008, by and among Enhance Skin Products Inc., a Nevada
corporation (the “Company”),
and
the purchasers identified on the signature pages hereto (each a “Purchaser”
and
collectively the “Purchasers”);
and
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated
thereunder, the Company desires to issue and sell to the Purchasers, and each
Purchaser, severally and not jointly, desires to purchase from the Company,
up
to an aggregate of $1,500,000 of Units of the Company’s Common Stock and
Warrants, as more fully described in this Agreement;
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agrees as
follows:
ARTICLE
I.
DEFINITIONS
1.1 Definitions.
In
addition to the terms defined elsewhere in this Agreement, for all purposes
of
this Agreement, the following terms have the meanings indicated in this Section
1.1:
“Affiliate”
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144. With respect to a Purchaser,
any
investment fund or managed account that is managed on a discretionary basis
by
the same investment manager as such Purchaser will be deemed to be an Affiliate
of such Purchaser.
“Business
Day”
means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to
close.
“Closing”
means
the closing of the purchase and sale of the Units pursuant to Section
2.2.
“Closing
Date”
means
the date of a Closing.
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
the common stock of the Company, $0.001 par value per share, and any securities
into which such common stock may hereafter be reclassified.
“Material
Adverse Effect”
shall
have the meaning ascribed to such term in Section 3.1(b).
“Maximum
Offering Amount”
shall
have the meaning ascribed to such term in Section 2.1.
“Per
Unit Purchase Price”
means
$2.00 per Unit, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.
“Person”
means
an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Purchase
Agreement”
shall
have the meaning ascribed to such term in Section 3.1(g).
“Rule
144,”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rules may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Securities”
means
the Units, the Shares, the Warrants and the Warrant Shares.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shares”
means
the shares of Common Stock issued or issuable to each Purchaser pursuant to
this
Agreement other than the shares of Common Stock issuable pursuant to Section
4.9.
“Subscription
Amount”
means,
as to each Purchaser and the Closing, the amounts set forth below such
Purchaser’s signature block on the signature page hereto, in United States
dollars and in immediately available funds.
“Transaction
Documents”
means
this Agreement, the Warrants and any other documents or agreements executed
in
connection with the transactions contemplated hereunder.
“Units”
means
the units of the Company, each consisting of two shares of Common Stock and
one
Warrant.
“Warrants”
means
the Common Stock Purchase Warrants, in the form of Exhibit A,
issuable to the Purchasers at the Closing, exercisable as set forth therein
and
at an exercise price equal to $1.40 per share, subject to adjustment
therein.
“Warrant
Shares”
means
the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE
II.
PURCHASE
AND SALE
2.1 Purchase
and Sale. At
the
Closing (as defined below), the Purchasers shall purchase, severally and not
jointly, and the Company shall issue and sell, in the aggregate, up to
$1,500,000 (the “Maximum Offering Amount”) of Units. Each Purchaser shall
purchase from the Company, and the Company shall issue and sell to each
Purchaser, a number of Units equal to such Purchaser’s Subscription Amount
divided by the Per Unit Purchase Price.
2.2 Closing. The
Closing (the “Closing”) is expected to be on the date hereof.
(a) Upon
satisfaction of the conditions set forth in Section 2.3, the Closing shall
occur
at the offices of the Company, or such other location as the parties shall
mutually agree.
(b) Purchaser
understands and acknowledges that this Agreement is part of a proposed placement
by the Company of up to the Maximum Offering Amount. No minimum amount of
Securities must be sold before a Closing may take place.
2.3 Closing
Conditions.
(a) At
Closing, the Company shall deliver or cause to be delivered to each Purchaser
the following:
(i) this
Agreement duly executed by the Company;
(ii) certificates
evidencing the number of Shares and Warrants equal to such Purchaser’s
Subscription Amount divided by the Per Unit Purchase Price, registered in the
name of such Purchaser; and
(b) At
or
prior to the Closing each Purchaser shall deliver or cause to be delivered
to
the Company the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount by wire transfer or check to the account of the
Company.
(c) All
representations and warranties of the other party contained herein shall remain
true and correct as of the Closing Date.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except
as
set forth in the SEC Reports or under the corresponding section of the
Disclosure Schedules delivered concurrently herewith, the Company hereby makes
the following representations and warranties as of the date hereof and as of
the
Closing Date to each Purchaser:
(a) Organization
and Qualification.
The
Company is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation
or
organization (as applicable), with the requisite power and authority to own
and
use its properties and assets and to carry on its business as currently
conducted. The Company is not in violation of any of the provisions of its
certificate or articles of incorporation, bylaws or other organizational or
charter documents. The Company is duly qualified to conduct business and is
in
good standing as a foreign corporation or other entity in each jurisdiction
in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in
good
standing, as the case may be, would not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability
of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business or financial condition of the Company and the
Subsidiaries, taken as a whole, or (iii) adversely impair the Company’s ability
to perform in any material respect on a timely basis its obligations under
any
Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”).
(b) Authorization;
Enforcement.
The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company in connection therewith. Each Transaction
Document has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company enforceable against the Company
in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other
equitable remedies.
(c) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby
do
not and will not (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company debt or otherwise)
or
other understanding to which the Company is a party or by which any property
or
asset of the Company is bound or affected, or (iii) result in a violation of
any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by which
any
property or asset of the Company is bound or affected; except in the case of
each of clauses (ii) and (iii), such as would not have or reasonably be expected
to result in a Material Adverse Effect.
(d) Filings,
Consents and Approvals.
The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or
other federal, state, local or other governmental authority or other Person
in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (a) such as have already been obtained or
such
exemptive filings as are required to be made under applicable securities laws
and (b) such other filings as may be required following the Closing Date under
the Securities Act, the Exchange Act and corporate law.
(e) Issuance
of the Securities.
The
Securities are duly authorized and, when issued and paid for in accordance
with
the Transaction Documents, will be duly and validly issued, fully paid and
nonassessable. The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to this Agreement
and the Warrants.
3.2 Representations
and Warranties of the Purchasers. Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
as of the date hereof and as of the Closing Date to the Company as
follows:
(a) Organization;
Authority.
Such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate or partnership power and authority to enter into and to consummate
the
transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations thereunder. The execution, delivery and performance by
such
Purchaser of the transactions contemplated by this Agreement has been duly
authorized by all necessary corporate action on the part of such Purchaser.
Each
Transaction Document to which it is party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with terms hereof,
will constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms.
(b) Investment
Intent.
Such
Purchaser understands that the Securities are “restricted securities” and have
not been registered under the Securities Act or any applicable state securities
law and is acquiring the Securities as principal for its own account for
investment purposes only and not with a view to or for distributing or reselling
such Securities or any part thereof, has no present intention of distributing
any of such Securities and has no arrangement or understanding with any other
persons regarding the distribution of such Securities (this representation
and
warranty not limiting such Purchaser’s right to sell the Securities pursuant to
the Registration Statement or otherwise in compliance with applicable federal
and state securities laws). Such Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of
the
Securities.
(c) Purchaser
Status.
At the
time such Purchaser was offered the Securities, it was, and at the date hereof
it is an “accredited investor” as defined in Rule 501(a) under the Securities
Act. Such Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act.
(d) Experience
of such Purchaser.
Such
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters
so as
to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such
investment.
(e) General
Solicitation.
Such
Purchaser is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in
any
newspaper, magazine or similar media or broadcast over television or radio
or
presented at any seminar or any other general solicitation or general
advertisement.
(f) Access
to Information.
Such
Purchaser acknowledges that it has reviewed the Transaction Documents and is
familiar with and understands the terms of the Offering and has been afforded
(i) the reasonable opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning
the
terms and conditions of the offering of the Securities and the merits and risks
of investing in the Securities; (ii) access to information about the Company
and
the Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment.
(g) International
Actions.
Such
Purchaser acknowledges, represents and agrees that no action has been or will
be
taken in any jurisdiction outside the United States by the Company
or any
other agent on behalf of such Purchaser that would permit an offering of the
Securities, or possession or distribution of offering materials in connection
with the issue of the Securities, in any jurisdiction outside the United States.
If such Purchaser is located outside the United States, it has or will take
all
actions necessary for the sale of the Securities to comply with all applicable
laws and regulations in each foreign jurisdiction in which it purchases, offers,
sells or delivers Securities or has in its possession or distributes any
offering material, in all cases at its own expense.
(h) Registration
Required.
Such
Purchaser hereby covenants with the Company not to make any sale of the Shares,
the Warrants and the Warrant Shares without complying with the provisions
hereof, and such Purchaser acknowledges that the certificates evidencing the
Shares will be imprinted with a legend that prohibits their transfer, except
in
accordance therewith, as set forth below:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT
(OR
ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES),
OR
(iii) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT
AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
(i) No
Tax
or Legal Advice.
Purchaser has carefully considered and has discussed with Purchaser’s legal,
tax, accounting and financial advisors, to the extent Purchaser has deemed
necessary, the suitability of this investment and the transactions contemplated
by this Agreement for the Purchaser’s particular federal, state, local and
foreign tax and financial situation and has independently determined that this
investment and the transactions contemplated by this Agreement are a suitable
investment for Purchaser. Purchaser has relied solely on such advisors and
not
on any statement or representation of the Company or any of its agents. Such
Purchaser understands that nothing in this Agreement, any other Transaction
Document or any other materials presented to such Purchaser in connection with
the purchase and sale of the Securities constitutes legal, tax or investment
advice. Purchaser understands that Purchaser (and not the Company) shall be
responsible for Purchaser’s own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
(j) Placement
Fee. Such
Purchaser represents and warrants that, other than the fee payable to Phoenix
Alliance Corp., no finder, broker, agent, financial advisor or other
intermediary, nor any purchaser representative or any broker-dealer acting
as a
broker, is entitled to any compensation in connection with the transactions
contemplated by this Agreement
ARTICLE
IV.
UNDERSTANDINGS
Each
Purchaser understands, acknowledges and agrees as follows:
4.1 No
U.S.
federal or state agency or any agency of any other jurisdiction has made any
findings or determinations as the fairness of the terms of the offering for
investment nor any recommendation or endorsement of the Securities or the
Company.
4.2 The
representations, warrants and agreements of the Purchaser and the Company
contained herein shall be true and correct in all material respects on and
as of
the date of the sale of the Securities as if made on and as of such date and
shall survive the execution and delivery of this Agreement and the purchase
of
the Securities.
4.3 In
making
an investment decision, the Purchaser is relying on its own examination of
the
Company and the terms of the offering, including the merits and risks involved.
The Securities being sold hereby have not been recommended by any federal or
state securities commission or regulatory authority. Furthermore, the foregoing
authorities have not confirmed the accuracy or determined the adequacy of this
document. Any representation to the contrary is a criminal offense.
4.4 Purchaser
understands that the Securities are not presently registered and will not be
registered under the Securities Act on the ground that the offering is intended
to be exempt from registration by virtue of Section 4(2) of the Securities
Act
and the provisions of Regulation D promulgated thereunder, which is in part
dependent upon the truth, completeness and accuracy of the statements made
by
the undersigned herein.
4.5 It
is
understood that in order not to jeopardize the offering’s exempt status under
Section 4(2) of the Securities Act and Regulation D, Purchaser may, at the
minimum, be required to fulfill the investor suitability requirements
thereunder.
4.6 Purchaser
acknowledges that there exists no public market for the Securities, that no
public market may develop in the future and, as a result, Purchaser acknowledges
that it will be required to bear the financial risks of this investment for
an
indefinite period of time.
4.7 Purchaser
acknowledges that Phoenix Alliance Corp. shall be entitled to a fee equal to
20%
of the aggregate dollar amount of the Securities sold pursuant to this
Agreement, which fee shall be payable upon Closing from the proceeds of this
offering.
ARTICLE
V.
MISCELLANEOUS
5.1 Fees
and Expenses. Except as otherwise set forth in this Agreement, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to
the
negotiation, execution, delivery and performance of this Agreement. The Company
shall pay all stamp and other taxes and duties levied in connection with the
sale of the Securities and will pay the other costs associated with the closing
and documenting this transaction.
5.2 Entire
Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
5.3 Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified
in
this Section prior to 6:30 p.m. (Carson City, Nevada time) on a Business Day,
(b) the next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified
in
this Section on a day that is not a Business Day or later than 6:30 p.m. (Carson
City, Nevada time) on any Business Day, (c) the Business Day following the
date
of mailing, if sent by U.S. nationally recognized overnight courier service,
or
(d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as set forth
on
the signature pages attached hereto.
5.3 Amendments;
Waivers. No provision of this Agreement may be waived or amended except in a
written instrument signed, in the case of an amendment, by the Company and
each
Purchaser or, in the case of a waiver, by the party against whom enforcement
of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be
a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.
5.4 Construction.
The headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. 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.
5.5 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser. Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided such transferee agrees in writing to be bound, with
respect to the transferred Securities, by the provisions hereof that apply
to
the “Purchasers”.
5.6 No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is
not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.
5.7 Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of Nevada,
without regard to the principles of conflicts of law thereof. Each party agrees
that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in Carson City,
Nevada. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Carson City, Nevada
for
the adjudication of any dispute hereunder or in connection herewith or with
any
transaction contemplated hereby or discussed herein (including with respect
to
the enforcement of the any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit
in
any way any right to serve process in any manner permitted by law. Each party
hereto (including its affiliates, agents, officers, directors and employees)
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If either
party shall commence an action or proceeding to enforce any provisions of a
Transaction Document, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.
5.8 Survival.
The representations, warranties, agreements and covenants contained herein
shall
survive for one year after the Closing.
5.9 Execution.
This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original
thereof.
5.10 Severability.
If any provision of this Agreement is held to be invalid or unenforceable in
any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
5.11 Replacement
of Securities. If any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation thereof, or in
lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and customary and reasonable indemnity, if requested.
The
applicants for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs associated with the issuance of such
replacement Securities.
5.12 Remedies.
In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, each of the Purchasers and the Company
will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance
of
any such obligation the defense that a remedy at law would be
adequate.
5.13 Payment
Set Aside. To the extent that the Company makes a payment or payments to any
Purchaser pursuant to any Transaction Document or a Purchaser enforces or
exercises its rights thereunder, and such payment or payments or the proceeds
of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation
or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
5.14 Independent
Nature of Purchasers’ Obligations and Rights.
The
obligations of each Purchaser under any Transaction Document are several and
not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out
of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents. The Company has
elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested
to do so by the Purchasers.
5.15 Irrevocable
Offer. Purchaser
agrees that this Agreement constitutes an irrevocable offer to purchase the
Securities of the Company and that Purchaser cannot cancel, terminate or revoke
this Agreement or any agreement of Purchaser made hereunder. This Agreement
shall survive the death or legal disability of Purchaser and shall be binding
upon Purchaser’s heirs, executors, administrators and
successors.
[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, Purchaser has caused this Agreement to be executed as of the
date indicated below.
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[PURCHASER]
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Address for Notice:
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By:
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Name:
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Fax:
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Title:
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Attn:
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Social
Security Number or Taxpayer
Identification
Number
Subscription
Amount: $
S-1
Subscription
Acceptance:
IN
WITNESS WHEREOF, the Company has caused this Subscription Agreement to be
executed and the foregoing subscription accepted, as of the date indicated
below.
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(f/k/a/
Zeezoo Software Corp.)
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By:
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Name:
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Title:
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Date:
August __, 2008
S-2
EXHIBIT
A
THIS
WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT COVERING SUCH SECURITIES, THE SALE IS
MADE
IN ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT OR THE COMPANY RECEIVES
AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.
FORM
OF
COMMON
STOCK PURCHASE WARRANT
Warrant
No.: ____
August
__, 2008
THIS
CERTIFICATE certifies that _________________________________, having an address
at ______________________________________________, or permitted assignees is
the
registered holder (the “Holder”)
of
this Common Stock Purchase Warrant (the “Warrant”)
to
purchase shares of the common stock, $.001 par value per share (the
“Common
Stock”),
of
Enhance Skin Products Inc., a corporation duly organized and validly existing
under the laws of the State of Nevada (the “Company”).
This
Warrant has been issued to the Holder in connection with the private placement
of securities offered pursuant to a subscription agreement, dated as of August
__, 2008 (together with all documents and filings attached thereto, the
“Subscription
Document”).
FOR
VALUE
RECEIVED, the Company hereby certifies that the Holder is entitled to purchase
from the Company ____________ duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock (the “Warrant
Shares”)
at a
purchase price per share of Common Stock equal to $1.40 (the “Warrant
Price”),
and
subject to the terms, conditions and adjustments set forth below in this Warrant
and in the Subscription Document. The person or entity in whose name this
Warrant is registered on the records of the Company regarding registration
and
transfers of this Warrant (the “Warrant
Register”)
is the
owner and holder thereof for all purposes, except as described in Section 8
hereof.
1. Vesting
of Warrant.
This
Warrant shall vest and become exercisable immediately following the Closing
(as
defined in the Subscription Document).
1
2.
Expiration
of Warrant.
This
Warrant shall expire at 5:00 p.m., Nevada local time, on August __, 2010, which
is the second anniversary date of the Closing (the "Expiration
Date").
3. Required
Exercise of Warrant. This
Warrant must be exercised within 10 Business Days (as defined below) of written
notice by the Company to the Holder hereof that the Company has attained
$2,000,000 in sales revenue. If not exercised within such period, this Warrant
will expire worthless.
4. Exercise
of Warrant.
4.1
Manner
of
Exercise. This Warrant may only be exercised by the Holder hereof, in accordance
with the terms and conditions hereof, in whole or in part with respect to any
portion of this Warrant, into shares of Common Stock, during normal business
hours on any day other than a Saturday or a Sunday or a day on which commercial
banking institutions in Carson City, Nevada are authorized by law to be closed
(a “Business
Day”)
on or
prior to the Expiration Date with respect to such portion of this Warrant,
by
surrender of this Warrant to the Company at its office maintained pursuant
to
Section 11.2(a) hereof, accompanied by an exercise notice in substantially
the
form attached to this Warrant as Exhibit A duly executed by or on behalf of
the
Holder together with the payment of the Warrant Price in cash.
4.2 When
Exercise Effective. Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the Business Day on
which
this Warrant shall have been surrendered to the Company as provided in Section
4.1 hereof (“Exercise Date”), and, at such time, the corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or a governmental agency (a “Person”
or
the
“Persons”)
in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon exercise as provided herein shall be deemed to have
become the holder or holders of record thereof.
4.3
Delivery
of Stock Certificates. As soon as practicable after each exercise of this
Warrant, in whole or in part, and in any event within five (5) Business Days
thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered
to
the Holder hereof or, subject to Section 10 hereof, as the Holder (upon payment
by the Holder of any applicable transfer taxes) may direct:
(a)
a
certificate or certificates (with appropriate restrictive legends, as
applicable) for the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock to which the Holder shall be entitled
upon
exercise plus, in lieu of any fractional share to which the Holder would
otherwise be entitled, all issuances of Common Stock shall be rounded up to
the
nearest whole share.
2
(b)
in
case exercise is in part only, a new Warrant of like tenor, dated the date
hereof and calling in the aggregate on the face thereof for the number of shares
of Common Stock equal to the number of shares called for on the face of this
Warrant minus the number of shares designated by the Holder upon exercise as
provided in Section 3.1 hereof (without giving effect to any adjustment
thereof).
4.4 Shares
to
be Fully Paid; Reservation of Shares. The Company covenants and agrees that
all
shares of Common Stock which may be issued upon the exercise of rights presented
by this Warrant will, upon issuance by the Company, be validly issued, fully
paid and nonassessable, and free from preemptive rights and free from all taxes,
liens and charges with respect thereto. The Company further covenants and agrees
that, from and after the date of issuance of the Warrant and during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized, and reserve, free from preemptive
rights, out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the exercise of this Warrant, a sufficient number
of
shares of Common Stock to provide for the exercise of the rights represented
by
this Warrant.
4.5 Company
to Reaffirm Obligations. The Company will, at the time of each exercise of
this
Warrant, upon the written request of the Holder hereof, acknowledge in writing
its continuing obligation to afford to the Holder all rights (including without
limitation any rights to registration of the shares of Common Stock issued
upon
exercise) to which the Holder shall continue to be entitled after exercise
in
accordance with the terms of this Warrant; provided,
however,
that if
the Holder shall fail to make a request, the failure shall not affect the
continuing obligation of the Company to afford the rights to such
Holder.
5.
Anti-dilution
Adjustment.
5.1
Stock
Dividends, Stock Splits, Etc. If the Company declares or pays a dividend on
its
Common Stock payable in Common Stock or other securities, or subdivides the
outstanding Common Stock into a greater amount of Common Stock, then upon
exercise of this Warrant, for each Warrant Share acquired, Holder shall receive,
without cost to Holder, the total number and kind of securities to which Holder
would have been entitled had Holder owned the Warrant Shares of record as of
the
date the dividend or subdivision occurred.
5.2 Reclassifications,
Exchange or Substitution. Upon any reclassification, exchange, substitution,
or
other event that results in a change of the number and/or class of the
securities issuable upon exercise of this Warrant, Holder shall be entitled
to
receive, upon exercise of this Warrant, the number and kind of securities and
property that Holder would have received for the Warrant Shares if this Warrant
had been exercised immediately before such reclassification, exchange,
substitution, or other event. The Company or its successor shall promptly issue
to Holder a new Warrant for such new securities or other property. The new
Warrant shall provide for adjustments which shall be as nearly equivalent as
may
be practicable to the adjustments provided for in this Section 4.2, including,
without limitation, adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise of the new Warrant. The provisions
of this Section 5.2 shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events.
3
5.3
Adjustments for Combinations, Etc. If the outstanding shares of Common Stock
are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
5.4
Merger or Consolidation. In case of any consolidation of the Company with,
or
merger of the Company into any other corporation, or in the case of any sale
or
conveyance of all or substantially all of the assets of the Company other than
in connection with a plan of complete liquidation of the Company, then as a
condition of such consolidation, merger or sale or conveyance, adequate
provision will be made whereby the registered holder of the Warrant will have
the right to acquire and receive upon exercise of this Warrant in lieu of the
shares of Common Stock immediately theretofore subject to acquisition upon
the
exercise of this Warrant, such shares of stock, securities or assets as may
be
issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore subject to acquisition and receivable
upon
exercise of this Warrant had such consolidation, merger or sale or conveyance
not taken place. In any such case, the Company will make appropriate provision
to insure that the provisions of this Section 5 hereof will thereafter be
applicable as nearly as may be in relation to any shares of stock or securities
thereafter deliverable upon the exercise of this Warrant.
5.5 No
Fractional Shares. No fractional shares shall be issuable upon exercise of
this
Warrant and the number of Warrant Shares to be issued shall be rounded down
to
the nearest whole share.
6. No
Impairment. The
Company will not, by amendment of its charter or through reorganization,
consolidation, merger, dissolution, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms
of this Warrant but will at all times carry out all such terms and take all
such
action as may be reasonably necessary or appropriate in order to protect the
rights of the holder of this Warrant against impairment.
7. Restrictions
on Transfer.
7.1
Restrictive
Legends. This Warrant and each Warrant issued upon transfer or in substitution
for this Warrant pursuant to Section 10, each certificate for Common Stock
issued upon the exercise of any Warrant and each certificate issued upon the
transfer of any such Common Stock shall be transferable only upon satisfaction
of the conditions specified in this Section 7 and Section 9.4. Each of the
foregoing securities shall be stamped or otherwise imprinted with a legend
reflecting the restrictions on transfer set forth in Section 9 and Section
10.4
hereof and any restrictions required under the Securities Act of 1933, as
amended (the “Act”).
4
7.2 Notice
of
Proposed Transfer; Opinion of Counsel. Prior to any transfer of any securities
which are not registered under an effective registration statement under the
Act
(“Restricted
Securities”),
the
Holder will give written notice to the Company of the Holder's intention to
affect a transfer and to comply in all other respects with this Section 7.2.
Each notice (i) shall describe the manner and circumstances of the proposed
transfer, and (ii) shall designate counsel for the Holder giving the notice.
The
Holder giving notice will submit a copy thereof to the counsel designated in
the
notice. The following provisions shall then apply:
(a)
If in
the opinion of counsel for the Holder reasonably satisfactory to the Company
the
proposed transfer may be effected without registration of Restricted Securities
under the Act (which opinion shall state the basis of the legal conclusions
reached therein), the Holder shall thereupon be entitled to transfer the
Restricted Securities in accordance with the terms of the notice delivered
by
the Holder to the Company. Each certificate representing the Restricted
Securities issued upon or in connection with any transfer shall bear the
restrictive legends required by Section 7.1 hereof.
(b)
If
the opinion called for in (a) above is not delivered, the Holder shall not
be
entitled to transfer the Restricted Securities until either (x) receipt by
the
Company of a further notice from such Holder pursuant to the foregoing
provisions of this Section 7.2 and fulfillment of the provisions of clause
(a)
above, or (y) such Restricted Securities have been effectively registered under
the Act.
(c)
Notwithstanding the foregoing, the restrictions imposed upon the transferability
of any of its rights to acquire Common Stock or Common Stock issuable on the
exercise of such rights do not apply to transfers from the beneficial owner
of
any of the aforementioned securities to its nominee or from such nominee to
its
beneficial owner, and shall terminate as to any particular share of Common
Stock
when (1) such security shall have been effectively registered under the
Securities Act and sold by the holder thereof in accordance with such
registration or (2) such security shall have been sold without registration
in
compliance with Rule 144 under the Securities Act, or (3) a letter shall have
been issued to the Holder at its request by the staff of the Securities and
Exchange Commission (the “SEC”)
or a
ruling shall have been issued to the Holder at its request by the SEC stating
that no action shall be recommended by such staff or taken by SEC, as the case
may be, if such security is transferred without registration under the
Securities Act in accordance with the conditions set forth in such letter or
ruling and such letter or ruling specifies that no subsequent restrictions
on
transfer are required. Whenever the restrictions imposed hereunder shall
terminate, as hereinabove provided, the Holder or holder of a share of Common
Stock then outstanding as to which such restrictions have terminated shall
be
entitled to receive from the Company, without expense to such holder, one or
more new certificates for the Warrant or for such shares of Common Stock not
bearing any restrictive legend.
5
8.
Ownership,
Transfer and Substitution of Warrant.
8.1
Ownership
of Warrant. The Company may treat the person in whose name this Warrant is
registered in the Warrant Register maintained pursuant to Section 8.2(b) hereof
as the owner and holder thereof for all purposes, notwithstanding any notice
to
the contrary, except that, if and when any Warrant is properly assigned in
blank, the Company may (but shall not be obligated to) treat the bearer thereof
as the owner of such Warrant for all purposes, notwithstanding any notice to
the
contrary. Subject to Section 7 hereof, this Warrant, if properly assigned,
may
be exercised by a new holder without a new Warrant first having been
issued.
8.2
Office;
Transfer and Exchange of Warrant.
(a)
The
Company will maintain its principal offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ as the office where notices, presentations and demands
in
respect of this Warrant may be made upon it until the Company notifies the
holder of this Warrant of any change of location of the office.
(b)
The
Company shall cause to be kept at its office maintained pursuant to Section
8.2(a) hereof a Warrant Register for the registration and transfer of this
Warrant. The names and addresses of holders of this Warrant, the transfers
thereof and the names and addresses of transferees of this Warrant shall be
registered in such Warrant Register. The Person in whose name any Warrant shall
be so registered shall be deemed and treated as the owner and holder thereof
for
all purposes of this Warrant, and the Company shall not be affected by any
notice or knowledge to the contrary.
(c)
Upon
the
surrender of this Warrant, properly endorsed, for registration of transfer
or
for exchange at the office of the Company maintained pursuant to Section 8.2(a)
hereof, the Company at its expense will (subject to compliance with Section
7
hereof, if applicable) execute and deliver to or upon the order of the Holder
thereof a new Warrant of like tenor, in the name of such holder or as such
holder (upon payment by such holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face thereof for the number of shares
of
Common Stock called for on the face of this Warrant so surrendered.
8.3
Replacement
of Warrant. Upon receipt of evidence reasonably satisfactory to the Company
of
the loss, theft, destruction or mutilation of this Warrant and, in the case
of
any such loss, theft or destruction of this Warrant, upon delivery of indemnity
reasonably satisfactory to the Company in form and amount or, in the case of
any
mutilation, upon surrender of this Warrant for cancellation at the office of
the
Company maintained pursuant to Section 8.2(a) hereof, the Company at its expense
will execute and deliver, in lieu thereof, a new Warrant of like tenor and
dated
the date hereof.
8.4
Restrictions
on Transfer. In addition to the restrictions on transfer set forth in Section
8
hereof, neither this Warrant nor any portion of this Warrant may be transferred
without the consent of the Company.
6
9.
No
Rights or Liabilities as Stockholder.
No
Holder shall be entitled to vote or receive dividends or be deemed the holder
of
any shares of Common Stock or any other securities of the Company which may
at
any time be issuable on the exercise hereof for any purpose, nor shall anything
contained herein be construed to confer upon the Holder, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, consolidation, merger, conveyance, or otherwise) or to receive notice
of
meetings, or to receive dividends or subscription rights or otherwise until
this
Warrant shall have been exercised and the shares of Common Stock purchasable
upon the exercise hereof shall have become deliverable, as provided herein.
The
Holder will not be entitled to share in the assets of the Company in the event
of a liquidation, dissolution or the winding up of the Company.
10.
Notices
of Record Date, Etc.
In case
the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any stock dividend
or
other non-cash distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or of the
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to
the
registered holder of this Warrant a notice specifying, as the case may be:
(i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation
or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at
the
time deliverable upon the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation
or
winding-up. Such notice shall be mailed at least ten (10) days prior to the
record date or effective date for the event specified in such notice unless
such
prior notice is waived by the registered holder of this Warrant. Provided,
however, that the failure by the Company to provide such notice shall not
invalidate any such action.
11.
Notices.
Any
notice or other communication in connection with this Warrant shall be deemed
to
be given if in writing (or in the form of a facsimile) addressed as hereinafter
provided and actually delivered at said address: (a) if to any Holder, at the
registered address of such holder as set forth in the Warrant Register kept
at
the office of the Company maintained pursuant to Section 8.2(a) hereof, or
(b)
if to the Company, to the attention of its Chief Financial Officer at its office
maintained pursuant to Section 8.2(a) hereof; provided,
however,
that
the exercise of any Warrant shall be effective in the manner provided in Section
3 hereof.
7
12. Payment
of Taxes.
The
Company will pay all documentary stamp taxes attributable to the issuance of
shares of Common Stock underlying this Warrant upon exercise of this Warrant;
provided,
however,
that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the registration of any certificate for shares
of
Common Stock underlying this Warrant in a name other that of the Holder. The
Holder is responsible for all other tax liability that may arise as a result
of
holding or transferring this Warrant or receiving shares of Common Stock
underlying this Warrant upon exercise hereof.
13. Warrant
Agent.
The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or
any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
stockholders services business shall be successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.
14.
Miscellaneous.
This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought. This Warrant shall
be
construed and enforced in accordance with and governed by the laws of the State
of Nevada. The section headings in this Warrant are for purposes of convenience
only and shall not constitute a part hereof.
8
IN
WITNESS WHEREOF, the Company has caused this Common Stock Purchase Warrant
to be
duly executed as of the date first above written.
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ENHANCE
SKIN PRODUCTS
INC.
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By:
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Name:
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Title:
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9
EXHIBIT
A
PURCHASE
FORM
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Dated:____________
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The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No. ___), hereby elects to purchase (check
applicable box):
_________
shares of the Common Stock of Enhance Skin Products Inc. covered by such
Warrant.
The
undersigned herewith makes payment of the full Warrant Price for such shares
at
the price per share provided for in such Warrant. Such payment takes the form
of
(check
applicable box or boxes):
$______
in lawful money of the United States.
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Print or Type Name
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(Signature must conform in all respects to name of holder as specified on the face of Warrant)
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(Street Address)
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(City) (State) (Zip Code)
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10