AMENDED AND RESTATED STOCK SUBSCRIPTION AND SHARE TRANSFER AGREEMENT
Exhibit
10.1
AMENDED
AND RESTATED STOCK SUBSCRIPTION
AND
SHARE TRANSFER AGREEMENT
THIS
AMENDED AND RESTATED STOCK SUBSCRIPTION AGREEMENT AND SHARE TRANSFER AGREEMENT
(this “Agreement”)
is
made and entered into effective as of December 29, 2006, by and between New
World Brands, Inc., a Delaware corporation (the “Company”),
P&S Spirit, LLC, a Nevada limited liability company (the “Subscriber”),
and
▇▇▇▇▇ ▇▇▇▇▇▇ (“▇. ▇▇▇▇▇▇”) and ▇▇▇▇ ▇▇▇▇▇▇ (“▇. ▇▇▇▇▇▇”, and together with ▇.
▇▇▇▇▇▇ the “Kamrats”).
RECITALS:
On
December 29, 2006, the Company and the Subscriber entered into a Stock
Subscription Agreement (the “Original
Subscription Agreement”),
which
the parties hereto now desire to amend and restate in its entirety, effective
as
of the date of the execution thereof.
Pursuant
to the terms and conditions of hereof, the Company desires to issue and sell,
and the Subscriber desires to purchase, shares of Series A Convertible Preferred
Stock, par value $0.01 per share, of the Company (the “Series
A Preferred Stock”),
as
well as warrants (“Warrants”) to purchase additional shares of Series A
Preferred Stock, on the terms and subject to the conditions set forth
herein.
The
Subscriber’s agreement to enter into this Agreement is conditioned upon
achieving a certain proportional stock ownership. The Kamrats and the Subscriber
believe that it is in their interests as shareholders to facilitate the
Subscriber’s investment in the Company at a price both advantageous to the
Company and acceptable to the Subscriber. To accommodate those ends, the
parties
have agreed that the Kamrats will transfer a total of 3,827,655 shares of
Qualmax Common Stock (as defined below) to the Subscriber. In addition, to
accommodate the Kamrats’ willingness to transfer the Qualmax Common Stock to the
Subscriber, the Company has agreed to issue to the Kamrats a Warrant
representing the right to purchase 9.300378 shares of Series A Preferred
Stock
(convertible into 27,777,778 shares of the Company’s common stock, par value
$0.01/share). ▇. ▇▇▇▇▇▇ owns a total of 6,221,053 shares of common stock,
par
value $0.001 per share (the “Qualmax
Common Stock”),
of Qualmax, Inc., a Delaware corporation (“Qualmax”),
and
▇. ▇▇▇▇▇▇ owns a total of 6,328,153 shares of Qualmax Common Stock. Qualmax,
in
turn, owns 100 shares of Series A Preferred Stock, which shares of Series
A
Preferred Stock represent, immediately prior to the consummation of the
transactions contemplated by the Subscription Agreement, approximately 86%
of
the voting power of the outstanding shares of capital stock of the
Company.
NOW
THEREFORE, in consideration of the premises and of the mutual covenants and
conditions herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
amend and restate the Original Subscription Agreement in its entirety as
follows.
1. Purchase
of Shares and Warrants.
(a) Tranche
A Shares and Warrants.
At the
Tranche A Closing (as defined below), the Company irrevocably agrees to issue
and sell to the Subscriber, and the Subscriber
irrevocably
agrees to purchase from the Company, a total of 11.160454 shares of Series
A
Preferred Stock (the “Tranche
A Shares”,
which
shares are convertible into 33,333,333 shares of common stock, par value
$0.01
per share (the “Common
Stock”),
of
the Company), at a purchase price of $268,806.27 per share, for an aggregate
purchase price of Three Million Dollars ($3,000,000) (the “Tranche
A Purchase Price”).
In
addition, in consideration for the Subscriber’s payment of the Tranche A
Purchase Price, at the Trance A Closing the Company agrees issue to the
Subscriber a warrant to purchase a total of 9.300378
shares
of Series A Preferred Stock (convertible into 27,777,778
shares
of Common Stock) at a price per share of $268,806.27 (the “Tranche A Subscriber
Warrants”).
(b) Tranche
B-1 Shares.
Subject
to Sections
1(e)
and
1(f)
hereof
and the satisfaction of the other conditions set forth in Section
2(b)
hereof,
in the event the Company’s consolidated unaudited financial statements as filed
on Form 10-QSB (or, Form 10-Q, if applicable) for the second quarter ending
June
30, 2007 reflect EBITDA of: (A) $543,000 or greater for the three month period
ending June 30, 2007; or (B) $618,000 or greater for the six month period
ending
June 30, 2007 (the “Tranche
B-1 Closing Condition”),
then
at the Tranche B-1 Closing (as defined below), the Company irrevocably agrees
to
issue and sell to the Subscriber, and the Subscriber irrevocably agrees to
purchase, a total of 3.720151 shares of Series A Preferred Stock (the
“Tranche
B-1 Preferred Shares”),
at a
purchase price of $268,806.27 per share, convertible into 11,111,111 shares
of
Common Stock, for a total purchase price of One Million Dollars ($1,000,000)
(the “Tranche
B-1 Purchase Price”);
provided,
however,
in the
event that prior to the satisfaction of the Tranche B-1 Closing Condition,
the
certificate of incorporation of the Company has been amended to cause the
automatic conversion of the issued and outstanding shares of Series A Preferred
Stock into shares of Common Stock, in lieu of the purchase and sale of the
Tranche B-1 Preferred Shares at the Tranche B-1 Closing, the Company shall
issue
and sell to the Subscriber, and the Subscriber shall purchase from the Company,
a total of 11,111,111 shares of Common Stock (the “Tranche
B-1 Common Shares”),
at a
purchase price of $0.09 per share. The Tranche B-1 Preferred Shares or Tranche
B-1 Common Shares issued to the Subscriber at the Tranche B-1 Closing may
hereinafter be referred to separately as the “Tranche
B-1 Shares”.
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(c) Tranche
B-2 Shares.
Subject
to Sections
1(e)
and
1(f)
hereof
and the satisfaction of the other conditions set forth in Section
2(c)
hereof,
in the event the Company’s consolidated unaudited financial statements as filed
on Form 10-QSB (or, Form 10-Q, if applicable) for the third quarter ending
September 30, 2007 reflect EBITDA of: (A) $885,000 or greater for the three
month period ending September 30, 2007; or (B) $1,503,000 or greater for
the
nine month period ending September 30, 2007 (the “Tranche
B-2 Closing Condition”),
then
at the Tranche B-2 Closing (as defined below), the Company irrevocably agrees
to
issue and sell to the Subscriber, and the Subscriber irrevocably agrees to
purchase, a total of 3.720151 shares of Series A Preferred Stock (the
“Tranche
B-2 Preferred Shares”),
at a
purchase price of $268,806.27 per share, convertible into 11,111,111 shares
of
Common Stock, for a total purchase price of One Million Dollars ($1,000,000)
(the “Tranche
B-2 Purchase Price”);
provided,
however,
in the
event that prior to the satisfaction of the Tranche B-2 Closing Condition,
the
certificate of incorporation of the Company has been amended to cause the
automatic conversion of the issued and outstanding shares of Series A Preferred
Stock into shares of Common Stock, in lieu of the purchase and sale of the
Tranche B-2 Preferred Shares at the Tranche B-2 Closing, the Company shall
issue
and sell to the Subscriber, and the Subscriber shall purchase from the Company,
a total of 11,111,111 shares of Common Stock (the “Tranche
B-2 Common Shares”),
at a
purchase price of $0.09 per share. The Tranche B-2 Preferred Shares or Tranche
B-2 Common Shares issued to the Subscriber at the Tranche B-2 Closing may
hereinafter be referred to separately as the “Tranche
B-2 Shares”
and,
together with the Tranche B-1 Shares, the “Tranche
B Shares”.
(d) Aggregate
Tranche B Shares.
If the
Tranche B-1 Closing Condition is not achieved, but the Tranche B-2 Closing
Condition is achieved, then at the Tranche B-2 Closing (as defined below),
the
Company irrevocably agrees to issue and sell to the Subscriber, and the
Subscriber irrevocably agrees to purchase, a total of 7.440303 shares of
Series
A Preferred Stock (the “Aggregate
Tranche B Preferred Shares”),
at a
purchase price of $268,806.27 per share, convertible into 22,222,222 shares
of
Common Stock, for a total purchase price of Two Million Dollars ($2,000,000)
(the “Aggregate
Tranche B Purchase Price”);
provided,
however,
in the
event that prior to the satisfaction of the Tranche B-2 Closing Condition,
the
certificate of incorporation of the Company has been amended to cause the
automatic conversion of the issued and outstanding shares of Series A Preferred
Stock into shares of Common Stock, in lieu of the purchase and sale of the
Aggregate Tranche B Preferred Shares at the Tranche B-2 Closing, the Company
shall issue and sell to the Subscriber, and the Subscriber shall purchase
from
the Company, a total of 22,222,222 shares of Common Stock (the “Aggregate
Tranche B Common Shares”),
at a
purchase price of $0.09 per share. The Aggregate Tranche B Preferred Shares
or
Aggregate Tranche B Common Shares issued to the Subscriber at the Tranche
B-2
Closing may hereinafter be referred to separately as the “Aggregate
Tranche B Shares”.
(e) Optional
Purchases by the Subscriber.
(i)
In
the
event the Tranche B-1 Closing Condition is not satisfied, the Subscriber
shall
have the option, but not the obligation, to purchase the Tranche B-1 Preferred
Shares (or the Tranche B-1 Common Shares, if applicable), at the Tranche
B-1
Purchase Price in the manner set forth in Section
1(b)
above.
The election of the
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Subscriber
to purchase shares pursuant to this Section
1(e)(i)
shall be
made by providing written notice (an “Election
Notice”)
to the
Company no later than ten (10) days after the Company has filed a Form 10-QSB
(or, Form 10-Q, if applicable) for the period ending June 30, 2007 indicating
whether or not the Subscriber elects to exercise any of its rights under
this
Section
1 (e)(i).
(ii) In
the
event: (A) the Tranche B-1 Closing Condition is satisfied but the Tranche
B-2
Closing Condition is not satisfied, the Subscriber shall have the option,
but
not the obligation, to purchase the Tranche B-2 Preferred Shares (or the
Tranche
B-2 Common Shares, if applicable), at the Tranche B-2 Purchase Price in the
manner set forth in Section
1(c)
above;
or (B) neither the Tranche B-1 Closing Condition nor the Tranche B-2 Closing
Condition is satisfied, the Subscriber shall have the option, but not the
obligation, to purchase the Aggregate Tranche B Preferred Shares (or the
Aggregate Tranche B Common Shares, if applicable), at the Aggregate Tranche
B
Purchase Price in the manner set forth in Section
1(d)
above.
The election of the Subscriber to purchase shares pursuant to clauses (ii)(A)
or
(ii)(B) above shall be made by providing an Election Notice to the Company
no
later than ten (10) days after the Company has filed a Form 10-QSB (or, Form
10-Q, if applicable) for the period ending September 30, 2007 indicating
whether
or not the Subscriber elects to exercise any of its rights under this clause
(e)(ii).
(f) EBITDA.
For
purposes of Sections
1(b)
and
(c)
hereof:
(i) the term “EBITDA”
means
earnings before interest, taxes, depreciation and amortization, as determined
in
accordance with the Company’s consolidated unaudited financial statement for the
relevant period, prepared in accordance with GAAP consistently applied; and
(ii)
the Tranche B-1 Closing Condition and Tranche B-2 Closing Condition, as
applicable, shall be deemed to have been satisfied upon delivery by the Company
to the Subscriber of financial statements as filed on the applicable Form
10-QSB
(or Form 10-Q if applicable) and evidencing the satisfaction of the Tranche
B-1
Closing Condition and Tranche B-2 Closing Condition, as applicable.
Notwithstanding anything contained herein to the contrary, the EBITDA targets
provide for in Sections
1(b)
and
(c)
will be
subject to a margin of error of $100,000, meaning that EBITDA results within
$100,000 of the target will be treated as reaching the target for purposes
of
satisfying the Tranche B-1 Closing Condition and/or the Tranche B-2 Closing
Condition, as applicable.
2. Closings.
(a) Tranche
A Closing.
The
purchase and sale of the Tranche A Shares and the Warrants shall be effective
on
the date hereof at 3:00 p.m. (EST), remotely at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, 1177 Avenue of the Americas, New York, New York on
the date hereof (the “Tranche
A Closing”).
The
obligations of the Company to issue and sell, and of the Subscriber to purchase,
the Tranche A Shares at the Tranche A Closing shall be conditioned on the
following:
(i) the
Subscriber shall deliver, or cause to be delivered, to the Company:
(A)
a
counterpart signature page to this Agreement executed by a duly authorized
officer of the Subscriber;
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(B)
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the
Tranche A Purchase Price, in immediately available funds by wire
transfer
to an account designated by the Company in writing to the
Subscriber;
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(C)
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a
counterpart signature page to the Amended and Restated Voting Agreement,
in the form attached as Exhibit
A
hereto (the “Voting
Agreement”),
executed by a duly authorized officer of the Subscriber, ▇▇▇▇▇▇
and ▇▇▇▇▇▇
▇▇▇▇▇▇, TBTE ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and Oregon Spirit, LLC (collectively,
the
“Subscriber
Affiliates”);
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(D)
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a
counterpart signature page to the Amended and Restated Lock-Up
Agreement,
in the form attached as Exhibit
B
hereto (the “Lock-Up
Agreement”
and, together with the Voting Agreement, the “Ancillary
Agreements”),
executed by a duly authorized officer of the Subscriber and each
other
Passen Holder (as defined in the Lock-Up Agreement);
and
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(E)
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a
counterpart signature page to the Amended and Restated Escrow Agreement,
a
copy of which shall also be delivered to the escrow agent thereunder,
in
the form attached as Exhibit
C
hereto (the “Escrow
Agreement”
and, together with the Voting Agreement and the Lock-Up Agreement,
the
“Ancillary
Agreements”),
executed by a duly authorized officer of the Subscriber;
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(F)
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the
stock certificate representing the Tranche A Shares issued pursuant
to the
Original Subscription Agreement, which stock certificate will be
cancelled
by the Company; and
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(iii) the
Company shall deliver, or cause to be delivered, to the Subscriber:
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(A)
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a
counterpart signature page to this Agreement executed by a duly
authorized
officer of the Company;
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(B)
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a
counterpart signature page to the Voting Agreement, executed by
a duly
authorized officer of the Company, Qualmax, Inc., M. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (collectively, the “Qualmax
Affiliates”);
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(C)
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a
counterpart signature page to the Lock-Up Agreement, executed by
a duly
authorized officer of the Company and each Qualmax Holder (as defined
in
the Lock-Up Agreement);
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(D)
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a
counterpart signature page to the Escrow Agreement, a copy of which
shall
also be delivered to the escrow agent thereunder, executed by a
duly
authorized officer of the Company, together with delivery to the
escrow
agent of one or more stock certificates representing the Tranche
B-1
Shares and Tranche B-2 Shares;
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(E)
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a
stock certificate representing the Tranche A Shares executed by
a duly
authorized officer of the Company pursuant to the terms of this
Agreement;
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(F)
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a
counterpart signature page to the Warrant Agreement, in the form
attached
as Exhibit
D
hereto (the “Warrant
Agreement”),
executed by a duly authorized officer of the Subscriber, which
Warrant
Agreement shall represent the rights of the Subscriber in respect
of the
Warrants; and
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(G)
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a
certificate copy of the Certificate of Amendment to the Certificate
of
Designation, Preferences and Rights of the Series A Preferred Stock,
in
the form attached as Exhibit
E
hereto, evidencing the increase of the authorized number of shares
of
Series A Preferred Stock from 100 to
200.
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(b) Tranche
B-1 Closing.
The
purchase and sale of the Tranche B-1 Shares, if applicable, shall take place
at
3:00 p.m. (EST), remotely at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, 1177 Avenue of the Americas, New York, New York no later than five (5)
business days following the satisfaction, or waiver, of the Tranche B-1 Closing
Condition (the “Tranche
B-1 Closing”)
and
subject to delivery and/or receipt of the following:
(i) the
Subscriber shall deliver, or cause to be delivered, to the Company: (A) the
Tranche B-1 Purchase Price, in immediately available funds by wire transfer
to
an account designated by the Company in writing to the Subscriber; and (B)
a
certificate executed by a duly authorized officer of the Subscriber certifying
that the representations and warranties made by the Subscriber in Section
3
hereof
are true and correct in all material respect as of the date of the Tranche
B-1
Closing (except to the extent a representation or warranty is expressly limited
by its terms to another date); and
(ii) the
Company shall deliver, or cause to be delivered, to the Subscriber: (A) in
accordance with the terms of the Escrow Agreement, a stock certificate
representing the Tranche B-1 Shares purchased at the Tranche B Closing;
and (B) a certificate executed by a duly authorized officer of the Company
certifying that (i) the representations and warranties made by the Company
in
Section
4
hereof
are true and correct in all material respect as of the date of the Tranche
B-1
Closing (except to the extent a representation or warranty is expressly limited
by its terms to another date), and (ii) there shall have been no material
adverse change in the business, condition (financial or otherwise),
assets,
6
liabilities
(contingent or otherwise), operations or results of operations of the Company
since the date of this Agreement.
(c) Tranche
B-2 Closing.
The
purchase and sale of the Tranche B-2 Shares, or, if applicable, the Aggregate
Tranche B Shares, shall take place at 3:00 p.m. (EST), remotely at the offices
of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, 1177 Avenue of the Americas, New
York, New York no later than five (5) business days following the satisfaction,
or waiver, of the Tranche B-2 Closing Condition, or the receipt of an Election
Notice from the Subscriber, as applicable (the “Tranche
B-2 Closing”)
and
subject to delivery and/or receipt of the following:
(i) the
Subscriber shall deliver, or cause to be delivered, to the Company: (A) the
Tranche B-2 Purchase Price or the Aggregate Tranche B Purchase Price, as
applicable, in immediately available funds by wire transfer to an account
designated by the Company in writing to the Subscriber; and (B) a certificate
executed by a duly authorized officer of the Subscriber certifying that the
representations and warranties made by the Subscriber in Section
3
hereof
are true and correct in all material respect as of the date of the Tranche
B-2
Closing (except to the extent a representation or warranty is expressly limited
by its terms to another date); and
(ii) the
Company shall deliver, or cause to be delivered, to the Subscriber: (A) in
accordance with the terms of the Escrow Agreement, a stock certificate
representing the Tranche B-2 Shares, or the Aggregate Tranche B Shares, as
applicable, purchased at the Tranche B-2 Closing; and (B) a certificate executed
by a duly authorized officer of the Company certifying that (i) the
representations and warranties made by the Company in Section
4
hereof
are true and correct in all material respect as of the date of the Tranche
B-2
Closing (except to the extent a representation or warranty is expressly limited
by its terms to another date), and (ii) there shall have been no material
adverse change in the business, condition (financial or otherwise), assets,
liabilities (contingent or otherwise), operations or results of operations
of
the Company since the date of the Tranche B-1 Closing.
(d) The
Company shall use the cash proceeds received in connection with the sale
and
issuance of the shares of Series A Preferred Stock, or Common Stock, hereunder
for
working
capital and other purposes generally consistent with the use of proceeds
illustration attached as Annex
A
hereto,
as the same may be approved and modified by the board of directors of the
Company from and after the Tranche A Closing. The Company agrees to repay
from
the proceeds received from the Tranche A Purchase Price, the principal amount
of
the loan made by Oregon Spirit, LLC to the Company on December 1, 2006 in
the
amount of $500,000 at the Tranche A Closing (the “Oregon
Loan”),
at
which time any and all obligations, including accrued
and unpaid interest, due and payable in respect of the Oregon Loan shall
be
satisfied in full and the Company shall have no further obligation to make
payments in respect thereof.
3. Share
Transfer by Kamrats, Warrants Issued to Kamrats.
At the
Tranche A Closing, in addition to the foregoing, the Company shall issue
to the
Kamrats certain Warrants, and the Kamrats will transfer the Qualmax Transfer
Shares (as defined below) to the Subscriber, as follows:
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(a) Kamrat
Warrants.
The
Company shall issue at the Tranche A Closing to each of ▇. ▇▇▇▇▇▇ and ▇.
▇▇▇▇▇▇
a Warrant to purchase a total of 4.650189
shares
of Series A Preferred Stock (convertible into 13,888,889
shares
of Common Stock) at a price per share of $268,806.27 (in total the “Kamrat
Warrants”),
and
at the Tranche A Closing shall deliver to the Kamrats a counterpart signature
page to the Kamrat Warrant Agreement, in the form attached as Exhibit
D
hereto
(the “Kamrat Warrant
Agreement”),
executed by a duly authorized officer of the Company, which Kamrat Warrant
Agreement shall represent the rights of the Kamrats in respect of the
Warrants.
(b) Qualmax
Transfer Shares.
The
Kamrats will transfer at the Tranche A Closing a total of 3,827,655 shares
of
their Qualmax Common Stock (the “Qualmax
Transfer Shares”)
to the
Subscriber, and promptly after closing shall deliver to the Subscriber a
copy of
a letter of instruction executed by a duly authorized officer of Qualmax
to
Qualmax’s transfer agent directing the issuance of a stock certificate
representing the Qualmax Transfer Shares executed by a duly authorized officer
of Qualmax, pursuant to the terms of this Agreement.
(c) Post-Merger
Share Adjustment.
In the
event of a merger between Qualmax and the Company, or a share exchange or
any
other event as a result of which Qualmax shareholders receive shares of the
Company’s stock in exchange for all of their Qualmax shares (the “Merger”),
the
number of shares of Qualmax Common Stock (issued immediately prior to the
Merger) transferred or transferable to the Subscriber pursuant to this
Section
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shall be
increased or decreased, if necessary, and Qualmax and/or Company shares
transferred between the Subscriber and the Kamrats accordingly, in order
to
provide that, immediately after the Merger:
(i)
the
sum
of all shares of the Company’s stock (on an as converted basis, adjusted for
splits, stock dividends, and the like) (A) held by each of ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the “Kamrat
Family”)
at the
time of the Tranche A Closing, and shares issuable upon exercise of the Warrant
by the Kamrats, and (B) issued or distributed to the Kamrat Family, or any
of
them, as a result of the Merger, is equal to
(ii)
the
sum
of (A) 7,500,000 (that number representing the shares of the Company’s common
stock acquired by Oregon Spirit, LLC on September 14, 2006), (B) the number
of
shares of shares of the Company’s common stock into which the shares of Qualmax
Common Stock transferred or transferable to the Subscriber pursuant to
Section
1
above
(including any Tranche B Shares, as defined in the Subscription Agreement,
even
if unissued) are convertible, (C) or issuable
upon exercise of the Tranche A Subscriber Warrant by the Subscriber, and
(D) all
shares of the Company’s stock issued or distributed to ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Oregon
Spirit, LLC, Passen Investments, LLC, ▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D., or any affiliate
of
any of the foregoing, as a result of the Merger (for purposes of clarification,
the sum determined pursuant to this Section 3(c)(ii) shall not
include
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the
9,750,000 shares of the Company’s common stock that are owned by ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇, TBTE, as of the date of this Agreement).
(d) Representations
and Warranties of the Kamrats to the Subscriber.
Each of
the Kamrats (each a “Kamrat Party”) represents and warrants to the Subscriber as
to himself, as follows:
(i)
Such
Kamrat Party has full legal capacity to enter into and carry out his obligations
under this Agreement.
(ii)
Such
Kamrat Party owns of record and beneficially, and has good and valid title
to
and the right to convey and deliver to the
Subscriber,
the
shares of Qualmax Common Stock delivered by such Kamrat Party hereunder,
free
and clear of any liens, claims or encumbrances (collectively, “Liens”).
(iii)
This
Agreement has been duly executed and delivered by such Kamrat Party and
constitutes the legal, valid and binding obligation of such Kamrat Party,
enforceable against such Kamrat Party in accordance with its terms.
(iv)
Neither
the execution, delivery or performance of this Agreement by such Kamrat Party,
nor the consummation of the transactions contemplated hereby, violates or
conflicts with, creates a default under or a Lien upon any of such Kamrat
Party’s assets or properties pursuant to, or requires the consent, approval or
order of any government or governmental agency or other person or entity
under
(i) any note, indenture, lease, license or other material agreement to which
the
undersigned is a party or by which it or any of its assets or properties
is
bound or (ii) any statute, law, rule, regulation or court decree binding
upon or
applicable to such Kamrat Party or such Kamrat Party’s assets or
properties.
(v)
The
Kamrat Party
is
acquiring the Kamrat Warrants for its own account, for investment, and not
(i)
in connection with the offer or sale of such Kamrat Warrants, or any interest
therein, to others, (ii) with a view to the distribution of such shares of
Kamrat Warrants, or any interest therein, within the meaning of the Act and
(iii) with a view to underwriting any such distribution, and the
Kamrat Party
agrees
not to engage in conduct which may violate the registration requirements
of the
Act or any state securities laws.The
Kamrat Party
understands that the Warrants, or underlying shares, have not been registered
under the Act or any state securities laws, and that the Warrants, or underlying
shares, may not be transferred or sold unless such registration is then
effective or an exemption from such registration is then available.
(vi)
The
Kamrat Party
is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D
promulgated under the Act.
(e). Representations
and Warranties of the Subscriber to the Kamrats.
P&S
represents and warrants to each Kamrat Party, as follows:
9
| (i) |
The
Subscriber
has full limited liability company authority to enter into and
carry out
its obligations under this
Agreement.
|
(ii)
This
Agreement has been duly executed and delivered by The
Subscriber
and
constitutes the legal, valid and binding obligation of The
Subscriber,
enforceable against The
Subscriber
in
accordance with its terms.
(iii)
Neither
the execution, delivery or performance of this Agreement by The
Subscriber,
nor the
consummation of the transactions contemplated hereby, violates or conflicts
with, creates a default under or a Lien upon any of the
Subscriber’s
assets
or properties pursuant to, or requires the consent, approval or order of
any
government or governmental agency or other person or entity under (i) any
note,
indenture, lease, license or other material agreement to which the
Subscriber
is a
party or by which it or any of its assets or properties is bound or (ii)
any
statute, law, rule, regulation or court decree binding upon or applicable
to
the
Subscriber
or its
assets or properties.
(iv)
The
Subscriber
is
acquiring the shares of Qualmax Common Stock transferred under Sections 1(a)
and
(b) hereof for its own account, for investment, and not (i) in connection
with
the offer or sale of such shares of Qualmax Common Stock, or any interest
therein, to others, (ii) with a view to the distribution of such shares of
Qualmax Common Stock, or any interest therein, within the meaning of the
Act and
(iii) with a view to underwriting any such distribution, and the
Subscriber
agrees
not to engage in conduct which may violate the registration requirements
of the
Act or any state securities laws. The
Subscriber
understands that the shares of Qualmax Common Stock have not been registered
under the Act or any state securities laws, and that the shares of Qualmax
Common Stock may not be transferred or sold unless such registration is then
effective or an exemption from such registration is then available.
(v) The
Subscriber
is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D
promulgated under the Act.
4.
Representations and Warranties of the
Subscriber.
The
Subscriber hereby represents and warrants to the Company as of the date hereof
and, except to the extent any representation or warranty is made as of a
particular date, if the Tranche B-1 Closing shall occur, as of the date of
the
Tranche B-1 Closing and if the Tranche B-2 Closing shall occur, the date
of the
Tranche B-2 Closing, as follows:
(a) The
Subscriber is a limited liability company duly organized, validly existing
and
in good standing under the laws of State of Nevada.
(b) The
execution, delivery and performance by the Subscriber of this Agreement and
the
Ancillary Agreements and the consummation by the Subscriber of the transactions
contemplated hereby and thereby are within the powers of the Subscriber and
have
been duly authorized by all necessary action on the part of the Subscriber.
10
This
Agreement and the Ancillary Agreements have been duly executed and delivered
on
behalf of the Subscriber. This Agreement and the Ancillary Agreements constitute
valid and binding agreements of the Subscriber, enforceable against the
Subscriber in accordance with their respective terms.
(c) The
Subscriber understands that the Tranche A Shares, the Tranche B Shares, the
Warrants, the shares of Common Stock issuable upon conversion of the Tranche
A
Shares and, to the extent issued hereunder, the Tranche B Shares, and the
shares
of Series A Stock (or Common Stock) issuable upon exercise of the Warrants
(collectively, the “Securities”),
have
not been registered under the Securities Act of 1933, as amended (the
“Act”)
or any
state securities laws, and are being offered and sold in reliance upon certain
transactional exemptions from the registration provisions of such laws, and
are
characterized as “restricted securities” under the Federal and state securities
laws inasmuch and that under Federal and state securities laws and applicable
regulations, such securities may be resold without registration under the
Act
and applicable state securities laws only in certain limited circumstances.
(d) The
Subscriber is acquiring the Securities for its own account for investment,
not
as nominee or agent, and not with a view to the sale or distribution thereof
or
the granting of any participation therein in violation of the securities
laws,
and has no present intention of distributing or selling to others any of
such
interest or granting any participation therein in violation of the securities
laws. No one else has a beneficial interest in the Securities. The Subscriber
does not intend to and will not resell the Securities unless, at a future
date,
they are registered under the Act or a specific exemption from registration
is
available to the Subscriber in connection with any such resale. The Subscriber
understands that an exemption from such registration may be available pursuant
to Rule 144 promulgated under the Act (“Rule
144”)
by the
Securities and Exchange Commission but that in no event may the Subscriber
sell
the Securities pursuant to Rule 144 prior to the expiration of a one-year
period
after the Subscriber has acquired the Securities and a minimum two-year holding
period may be required in some cases; and that any sales pursuant to Rule
144
can only be made in full compliance with the provisions
thereof.
(e) The
Subscriber is an “accredited investor” as defined in Rule 501(a) of Regulation D
under the Act.
(f) The
Subscriber understands that each certificate representing the Securities
will
bear on its face a legend in substantially the following form:
“THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE. THESE SECURITIES ARE RESTRICTED SECURITIES AS DEFINED IN RULE 144
PROMULGATED UNDER THE ACT AND MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
DISTRIBUTED EXCEPT (A) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, (B) IN COMPLIANCE WITH
RULE
144 AND AN EXEMPTION UNDER APPLICABLE STATE SECURITIES LAWS, OR (C) PURSUANT
TO
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION OR COMPLIANCE IS NOT REQUIRED.”
11
The
Subscriber further understands that the Company may place a stop transfer
order
pertaining to the certificates evidencing the Securities with the transfer
agent
to the same effect as such restrictive legend.
(g) The
Subscriber has such knowledge and experience in financial, taxation, securities,
investments and other business matters that it is capable of evaluating the
merits and risks of the Subscriber’s investment in the Securities or has
obtained the advice of an attorney, certified public accountant or registered
investment advisor with respect to the merits and risks of its investment
in the
Securities. The Subscriber has not relied on the Company or any of its officers,
directors, stockholders or professional advisors for advice as to the economic,
legal or tax consequences of an investment in the Securities. The Subscriber
understands that the Company is subject to all of the risks inherent in a
development stage business and additional risks that are inherent in the
Company’s business, including, without limitation, those set forth in the
Company’s Form 10-KSB for the year ended May 31, 2006 and those set forth in the
Company’s Form 10-QSB for the quarter ended September 30, 2006. The Subscriber
has taken full cognizance of and understands those risks and the effect they
may
have on the Subscriber’s investment.
(h) The
Subscriber has been provided with the opportunity to visit the places of
business of the Company and ask questions of, and receive answers from, the
Company and its officers, employees and agents concerning the business and
financial condition of the Company and the Subscriber has received satisfactory
answers to any such questions and has no further questions at this
time.
(i) The
Subscriber understands that its investment in the Securities and the Company
is
speculative and may remain so for an indefinite period, that substantial
additional investments in the Company may be required and that there is no
assurance that any such additional investments can be obtained, and acknowledges
that it is able to bear the economic risk of its investment in the Securities
should it be determined ultimately to be worthless.
(j) The
Subscriber recognizes the speculative nature and risks of loss associated
with
an investment in the Company and represents that the Securities subscribed
for
constitute an investment which is suitable and consistent with the Subscriber’s
investment program. The Subscriber has the financial ability to bear the
economic risk of its investment in the Securities, including a possible loss
of
its entire investment, has adequate means of providing for its current needs
and
contingencies and has no need to liquidity in its investment in the Company.
The
Subscriber acknowledges that it may find it impossible to liquidate the
investment at a time when it may be desirable to do so, or at any other time.
The Subscriber’s overall commitment to investments which are not readily
marketable is not disproportionate to its net worth and its investment in
the
Company will not cause such overall commitment to become excessive.
12
(k) Neither
the Company nor any person acting on its behalf has offered, offered to sell,
offered for sale or sold to the Subscriber by means of any form of general
solicitation or general advertising.
(l) Neither
the execution, delivery, nor performance of this Agreement or any Ancillary
Agreement by the Subscriber violates or conflicts with, creates (with or
without
the giving of notice or the lapse of time, or both) a default under or a
lien
upon any of the Subscriber’s assets or properties pursuant to, entitles any
party to terminate, or requires the consent, approval or order of any government
or governmental agency or other person or entity under (i) any material
agreement to which the Subscriber is a party or by which the Subscriber or
any
of its properties or assets is bound or (ii) any statute, law, rule, regulation,
order, judgment or decree binding upon or applicable to the Subscriber or
its
assets or properties.
(m) The
Subscriber
has
been advised by the Company and understands that the Securities are being
offered and
issued on the basis of the statutory exemption provided by Section 4(2) of
the
Act and/or Regulation D promulgated under the Act, or both, relating to
transactions by an issuer not involving any public offering, and under similar
exemptions under certain state securities laws; that this transaction has
not
been reviewed by, passed on or submitted to any United States Federal or
state
agency or self-regulatory organization where an exemption is being relied
upon;
and that the Company’s reliance thereon is based in part upon the
representations made by the Subscriber in this Agreement.
(n) There
is
no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of the Subscriber who might
be
entitled to any fee or commission from the Subscriber, the Company or any
of
their respective affiliates upon consummation of the transactions contemplated
by this Agreement or by the Ancillary Agreements.
5.
Representations and Warranties of the Company.
The
Company hereby represents and warrants to the Subscriber as of the date hereof
and, if the Tranche B-1 Closing shall occur, as of the date of the Tranche
B-1
Closing and if the Tranche B-2 Closing shall occur, the date of the Tranche
B-2
Closing, as follows.
(a) The
Company is duly organized, validly existing and in good standing under the
laws
of Delaware with full power and authority to own, lease, license and use
properties and assets and to carry out the business in which it is
engaged.
(b) As
of the
date of this Agreement, the authorized capital of the Company consists of:
(i)
50,000,000 shares of Common Stock, of which 44,303,939 shares of Common Stock
are issued and outstanding; and (b) and 1,000 shares of preferred stock,
$.01
par value per share (“Preferred
Stock”),
of
which 100 shares of Preferred Stock have been designated as Series A Convertible
Preferred Stock, of which all such shares are issued and
outstanding.
13
(c) As
of the
date of this Agreement, and before giving effect to the issuance of the
Securities, there are issued and outstanding options (including both vested
and
unvested), contingent share obligations and warrants to purchase an aggregate
of
5,475,000 shares of Common Stock at various prices and upon various conditions.
Other than as described herein or in the Company’s filings with the U.S.
Securities and Exchange Commission (the “Commission”),
there
are no outstanding rights, agreements, arrangements or understanding to which
the Company is a party (written or oral), granted, entered into, made or
arising
after September 15, 2006, which would obligate the Company to issue any equity
interest, option, warrant, convertible note, or other types of securities
or to
register any shares in a registration statement filed with the Commission,
and
there are no anti-dilution or price adjustment provisions regarding any security
issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Securities.
(d) The
Company has the corporate power to execute, deliver and perform this Agreement
and each Ancillary Agreement to which the Company is a party in the time
and
manner contemplated hereunder and thereunder, and has taken all requisite
corporate action to issue and deliver the Securities to the Subscriber in
the
manner set forth herein.
(e) No
consent of any party to any material contract, agreement, instrument, lease,
license, arrangement or understanding to which the Company or any of its
subsidiaries is a party or to which any of its or their respective properties
or
assets are subject is required for the execution, delivery or performance
by the
Company of this Agreement or the Ancillary Agreements to which the Company
is a
party or the issuance and sale of the Securities on the terms and subject
to the
conditions set forth herein.
(f) The
execution, delivery and performance of this Agreement and each Ancillary
Agreement to which the Company is a party, and the issuance and sale of the
Securities on the terms and subject to the conditions set forth herein, will
not
violate or result in a breach of, or entitle any party (with or without the
giving of notice or the passage of time or both) to terminate or call a default
under any contract or agreement to which the Company is a party
or
violate or result in a breach of any term of the certificate of incorporation
or
bylaws of the Company, or violate any law, rule, regulation, order, judgment
or
decree binding upon, the Company or any of its subsidiaries, or to which
any of
their respective operations, businesses, properties or assets are subject,
except to the extent any such breach, termination, violation or default would
not have a material adverse effect an the operations, business, properties
or
assets of the Company.
(g) The
Securities, upon their issuance and delivery to the Subscriber on the terms
and
subject to the conditions set forth herein, in exchange for payment of the
purchase price applicable thereof, will be duly and validly issued, fully
paid
and non-assessable with no personal liability attaching to the ownership
interest thereof.
(h) The
financial statements and related notes thereto contained in the Company’s
filings with the Commission (the “Company
Financials”)
since
September 15, 2006, are complete in all material respects, comply in all
material respects with the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”),
and
the rules and regulations of the Commission promulgated thereunder and have
been
prepared in accordance with United States
14
generally
accepted accounting principles applied on a basis consistent throughout the
periods indicated and consistent with each other. The Company Financials
present
fairly and accurately the financial condition and operating results of the
Company in all material respects as of the dates and during the periods
indicated therein and are consistent with the books and records of the Company.
Except as set forth in the Company Financials, the Company has no material
liabilities, contingent or otherwise, other than liabilities incurred in
the
normal conduct of business or disclosed on the Company Financials as of
September 30, 2006. Since
September 30, 2006, there has been no change in any accounting policies,
principles, methods or practices, including any change with respect to reserves
(whether for bad debts, contingent liabilities or otherwise) of the
Company.
(i) Since
September 15, 2006, the Company has made all filings with the Commission
that it
has been required to make under the Act and the Exchange Act (the “Commission
Filings”).
As of
their respective filing dates, such filings already filed by the Company
or to
be filed by the Company after the date hereof will comply in all material
respects with the requirements of the Act and the Exchange Act, and the rules
and regulations of the Commission promulgated thereunder, as the case may
be,
and none of the filings with the Commission contained or will contain any
untrue
statement of a material fact or omitted or will omit any material fact required
to be stated therein or necessary to make the statements made therein, in
light
of the circumstances in which they were made, not misleading, except to the
extent such filings have been on or prior to the date of this Agreement
corrected, updated or superseded by a document subsequently filed with
Commission.
(j) Since
September 15, 2006, there has been no material adverse change nor any material
adverse development in the business, properties, operations, financial
condition, outstanding securities or results of operations of the Company,
and
no event has occurred or circumstance exists that is reasonably likely to
result
in such a material adverse change.
(k) Except
as
previously disclosed in the Commission Filings, and except for amounts owed
to
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ or Oregon Spirit, LLC, the Company is not indebted to any
of
the
Company’s stockholders, officers or directors or their Affiliates in any amount
whatsoever (including, without limitation, any salary, deferred compensation
or
rent payable, other than amounts payable for current service to the
Company).
(l) Except
as
previously disclosed in the Commission Filings, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board
or
body, or arbitration tribunal pending or, to the Knowledge of the Company
(as
defined below), threatened, against or affecting the Company, in which an
unfavorable decision, ruling or finding would have a material adverse effect
on
the properties, business, condition (financial or other) or results of
operations of the Company, taken as a whole, or the transactions contemplated
by
this Agreement, or which would adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its obligations
under,
this Agreement.
All
references to the “Knowledge
of the Company”
in
this
Agreement shall mean the actual knowledge of the officers of the Company
or the
knowledge that the Company could reasonably be expected to have, after
reasonable investigation
and due diligence.
15
(m) Except
as
previously disclosed in the Commission Filings, the Company is not in default
in
the performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust or other instrument or
agreement to which it is a party by which it or its property may be
bound.
(n) Except
as
may be reflected on Annex A, the Company has not incurred any liability for
any
finder’s or brokerage fees or agent’s commissions in connection with the
transactions contemplated by this Agreement.
(o) Subject
to the accuracy of the Subscriber’s representations and warranties set forth in
Section
4
hereof,
(i) the offer, sale and issuance of the Securities, (ii) the issuance of
Common
Stock pursuant to the conversion and/or exercise of such securities into
shares
of Common Stock, each as contemplated by this Agreement, are exempt from
the
registration requirements of the Securities Act. The Company agrees that
neither
the Company nor anyone acting on its behalf will offer any of the Series
A
Preferred Stock, or any similar securities for issuance or sale, or solicit
any
offer to acquire any of the same from anyone so as to render the issuance
and
sale of such securities subject to the registration requirements of the
Securities Act. The Company has not offered or sold the Series A Preferred
Stock
by any form of general solicitation or general advertising, as such terms
are
used in Rule 502(c) under the Securities Act.
5. Registration
Rights.
(a) If
at any
time after the date hereof and up to the earlier of (i) such time as the
Subscriber may sell all of the Tranche A Shares, the Tranche B Shares, the
Warrants and the shares of Common Stock issuable upon conversion of the Tranche
A Shares or Tranche B Shares, or upon exercise of the Warrants (as used in
this
Section
5
the
“Shares”)
pursuant to Rule 144 under the Securities Act without limitation as to volume,
(ii) two (2) years following the date hereof and (iii) the Company registering
the Covered Shares (as defined below) for resale under the Securities Exchange
Act of 1934, the Company proposes to register for sale any equity securities
under the Act, it will at such time give written notice to the Subscriber
of its
intention to
do
so.
Upon
written request of the Subscriber given within 15 days after the giving of
any
such notice by the Company, the Company will use its reasonable efforts to
cause
the Shares, if applicable (the “Covered
Shares”),
for
which registration is requested to be promptly registered under the Act as
a
part of the offering being made under the same registration statement proposed
to be filed by the Company; provided,
however,
if the
offering to which the proposed registration statement relates is to be
distributed by or through an underwriter approved by the Company, the Subscriber
may at its option agree to sell the Covered Shares through such underwriter
on
the same terms and conditions as the underwriter agrees to sell the other
securities proposed to be registered, and provided
further,
that,
if such underwriter determines that the inclusion of all such Covered Shares
for
which registration is requested would have an adverse effect on the offering,
then the size of the offering shall be reduced accordingly, and the Subscriber
shall be entitled hereunder to participate in the underwriting and register
the
Covered Shares on a pro rata basis with the Company and any other parties
participating in such offering, or in such other quantity as may be permitted
by
the underwriter.
16
(b) The
Company shall prepare and as promptly as reasonably practicable file with
the
Securities and Exchange Commission (the “Commission”) all amendments,
post-effective amendments and supplements to a registration statement pursuant
to Section 5(a) (and the prospectus used in connection therewith) as may
be
necessary under the Act and the regulations of the Commission to permit the
sale
of the Covered Shares to the public.
(c) In
the
event of the participation of the Subscriber in a registration as set forth
in
Section 5(a), the Subscriber shall promptly furnish to the Company such
information as the Company may reasonably request and as shall be required
in
connection with the registration and related proceedings, and shall represent
to
the accuracy of such information. In addition, the Subscriber agrees to enter
into any customary documents or other agreements with the Company or the
underwriters in connection with the registration and related proceedings,
to
contain such representations and warranties and such other terms as are
customarily contained in such agreements (including, without limitation,
customary indemnification provisions), provided
that the
Subscriber shall not be required to make any representations, warranties
or
agreements other than representations, warranties or agreements regarding
the
Subscriber, the Subscriber’s intended method of distribution, and any other
representations, warranties or agreements required by law.
6. Survival
of Agreements.
All
covenants, agreements, representations and warranties made herein shall survive
execution
and
delivery of this Agreement and the purchase of the Securities
hereunder.
7. Notices.
Unless
otherwise specifically provided herein, all notices or other communications
under this Agreement shall be effective only if in writing and delivered
by
hand, delivered by telecopier, or mailed by overnight courier
service:
(a) if
to the
Company or Qualmax, addressed to its principal executive offices at ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attn: General Counsel, with a copy to
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇;
(b) if
to the
Subscriber, TBTE or Oregon Spirit, addressed to ▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D., with
a
copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Dorf & ▇▇▇▇▇▇▇, LLC, ▇
▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇
▇.
▇▇▇▇▇, Esquire; and
(c) if
to any
Kamrat Party, addressed to the Kamrat party care of Qualmax, Inc. at its
principal executive offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: General Counsel, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇.
8. Modifications;
Waiver.
No
modification or waiver of any provision of this Agreement or consent to any
departure therefrom shall be effective unless in writing and approved by
all of
the parties hereto.
9. Entire
Agreement.
This
Agreement contains the entire agreement between the parties with respect
to the
transactions contemplated hereby, and supersedes all negotiations, agreements,
representations, warranties, commitments, whether in writing or oral, prior
to
the date hereof, including the Original Subscription Agreement.
17
10. Successors
and Assigns.
All of
the terms of this Agreement shall be binding upon and inure to the benefit
of
and be enforceable by the respective successors and permitted assigns of
the
parties hereto. Notwithstanding the foregoing, the Subscriber may not assign
its
rights under this Agreement without the written consent of the Company;
provided,
however,
the
Subscriber may assign its rights under this Agreement, to ▇▇▇▇▇▇ ▇▇▇▇▇▇,
M.D.
(“Passen”),
or to
▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D. (“▇▇▇▇▇▇”)
any
member of the immediate family or either, trusts for which either and/or
members
of his immediate family are the sole beneficiaries, and business entities
wholly
owned by either and/or members of his immediate family, without the consent
of
the Company.
11. Execution
and Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered shall be deemed an original, and such counterparts
together shall constitute one instrument. Each party shall receive a duplicate
original of the counterpart copy or copies executed by it. Facsimile
transmission of any signed original counterpart and/or retransmission of
any
signed facsimile transmission shall be deemed the same as the delivery of
an
original.
12. Governing
Law and Forum.
This
Agreement shall be governed by the laws of the State of Florida without regard
to its principles of conflicts of laws.
13. Severability.
In the
event any provision of this Agreement or the application of such provision
to
any party shall be held by a court of competent jurisdiction to be contrary
to
law, the remaining provisions of this Agreement shall remain in full force
and
effect.
14. Expenses.
Each
party hereto shall bear the fees, costs and expenses incurred by such party
in
the preparation, negotiation, execution and delivery of this Agreement and
the
Ancillary Agreements.
15. Specific
Performance.
Each
party acknowledges that irreparable damage would occur to the other parties
hereto in the event that any of the provisions of this Agreement or the
Ancillary Agreements were not performed by such party in accordance with
their
specific terms or were otherwise breached by such party and that money damages
would not provide an adequate remedy to the non-breaching parties. It is
accordingly agreed that the non-breaching parties hereto shall be entitled
to an
injunction and other equitable remedies to prevent breaches by the breaching
party of this Agreement and any Ancillary Agreement and to enforce specifically
the terms and provisions hereof or thereof in any court of the United States
or
any state thereof or any other court having jurisdiction, this being in addition
to any other remedy to which such non-breaching parties may be entitled at
law
or in equity or otherwise.
16. Mutual
Drafting.
The
parties hereto are sophisticated and have been represented by lawyers who
have
carefully negotiated the provisions hereof and each Ancillary Agreement.
As a
consequence, the parties do not intend that the presumptions of any laws
or
rules relating to the interpretation of contracts against the drafter of
any
particular clause should be applied to this Agreement or any Ancillary Agreement
and therefore waive their effects.
18
17. Confidentiality.
The
Subscriber acknowledges that in connection with the execution and delivery
of
this Agreement and the transactions contemplated hereby, it has received,
and
may in the future receive, material non-public information concerning the
Company and its financial condition, prospects and/or results of operations
(“Confidential
Information”).
The
Subscriber covenants and agrees that it will not use, reproduce, distribute
and/or disclose (orally or in writing), any Confidential Information, in
whole
or in part, except to its advisors and representatives and solely for the
purpose of evaluating its purchase of the shares of Series A Preferred Stock
and/or Common Stock, as applicable, hereunder. Any information provided to
the
Subscriber will not be considered “Confidential Information” if and to the
extent such information is or becomes publicly available through no fault
of the
Subscriber or as a result of the Subscriber being legally compelled to disclose
such information pursuant to any court or other government order or any other
applicable legal procedure; provided,
however,
that if
the Subscriber is legally compelled to disclose any such information pursuant
to
any court or other government order or any other applicable legal procedure,
it
shall provide the Company with prompt notice of any such request or order
in
time sufficient to enable the Company to seek an appropriate protective order
and shall provide the Company with reasonable assistance in obtaining such
protective order.
[signature
pages follow]
19
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement by persons
thereunto duly authorized, effective as of the date first above
written.
THE
SUBSCRIBER:
P&S
SPIRIT, LLC
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇,
M.D.
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇, M.D.
Title: Manager
Address:
▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THE
COMPANY:
NEW
WORLD BRANDS, INC.
By:
/s/
M. ▇▇▇▇▇
▇▇▇▇▇▇
Name: M.
▇▇▇▇▇ ▇▇▇▇▇▇
Title: CEO
Address:
▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
THE
KAMRATS:
/s/
M.
▇▇▇▇▇
▇▇▇▇▇▇
M.
▇▇▇▇▇
▇▇▇▇▇▇
/s/
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
20