Exhibit 10.1
INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT (the "Agreement"), dated as of July 20, 2015 (the
"Effective Date"), is entered into by and between Empire Global Corp. (the
"Company"), a Delaware corporation, with its principal executive offices at
Suite 701 - 130 Adelaide St. W., Toronto, Ontario M5H 2K4, and Tangiers
Investment Group, LLC (the "Investor"), a Delaware limited liability company,
with its principal executive offices at 2251 San Diego Ave. #B150, San Diego, CA
92110.
RECITALS:
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Investor shall invest up to Five Million
Dollars ($5,000,000) (the "Commitment Amount") to purchase the Company's
common stock, par value of $0.0001 per share (the "Common Stock");
WHEREAS, such investments will be made in reliance upon the exemption from
securities registration afforded by Section 4(a)(2) of the Securities Act
of 1933, as amended (the "1933 Act"), Rule 506 of Regulation D promulgated
by the SEC under the 1933 Act, and/or upon such other exemption from the
registration requirements of the 1933 Act as may be available with respect
to any or all of the investments in Common Stock to be made hereunder; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement") pursuant to which the Company has agreed to
provide certain registration rights under the 1933 Act, and the rules and
regulations promulgated thereunder, and applicable state securities laws.
NOW THEREFORE, in consideration of the foregoing recitals, which shall be
considered an integral part of this Agreement, the covenants and agreements
set forth hereafter, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company and the
Investor hereby agree as follows:
SECTION I
DEFINITIONS
For all purposes of and under this Agreement, the following terms shall have the
respective meanings below, and such meanings shall be equally applicable to the
singular and plural forms of such defined terms.
"1933 Act" shall have the meaning set forth in the recitals.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the SEC thereunder,
all as the same will then be in effect.
"Affiliate" shall have the meaning set forth in Section 5.7.
"Agreement" shall have the meaning set forth in the preamble.
"Articles of Incorporation" shall have the meaning set forth in Section 4.3.
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"By-laws" shall have the meaning set forth in Section 4.3.
"Certificate" shall have the meaning set forth in Section 2.5.
"Closing" shall have the meaning set forth in Section 2.5.
"Closing Date" shall have the meaning set forth in Section 2.5.
"Commitment Fee Debenture" shall have the meaning set forth in Section 11.17
"Commitment Amount" shall have the meaning set forth in the recitals.
"Common Stock" shall have the meaning set forth in the recitals.
"Company" shall have the meaning set forth in the preamble.
"Control" or "Controls" shall have the meaning set forth in Section 5.7.
"DTC" shall have the meaning set forth in Section 2.5.
"DWAC" shall mean Deposit and Withdrawal at Custodian service provided by the
Depository Trust Company.
"Effective Date" shall mean the date the SEC declares effective under the 1933
Act the Registration Statement covering the Securities.
"Environmental Laws" shall have the meaning set forth in Section 4.13.
"Effective Date" shall have the meaning set forth in the preamble.
"FAST" shall have the meaning set forth in Section 2.5.
"Indemnified Liabilities" shall have the meaning set forth in Section 10.
"Indemnitees" shall have the meaning set forth in Section 10.
"Indemnitor" shall have the meaning set forth in Section 10.
"Investor" shall have the meaning set forth in the preamble.
"Material Adverse Effect" shall have the meaning set forth in Section 4.1.
"Maximum Common Stock Issuance" shall have the meaning set forth in Section 2.6.
"Open Period" shall mean the period beginning on and including the Trading Day
immediately following the Effective Date and ending on the earlier to occur of
(i) the date which is thirty-six (36) months from the Effective Date; or (ii)
termination of the Agreement in accordance with Section 8.
"PCAOB" shall have the meaning set forth in Section 4.6.
"Pricing Period" shall mean, with respect to a particular Put Notice, the five
(5) consecutive Trading Days immediately succeeding the applicable Put Notice
Date.
"Principal Market" shall mean the New York Stock Exchange, the NYSE MKT, the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the OTC Bulletin Board or the OTC Markets Group, whichever is the
principal market on which the Common Stock is traded.
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"Purchase Amount" shall mean the total amount being paid by the Investor on a
particular Closing Date to purchase the Securities.
"Purchase Price" shall mean the 80% of the lowest trading price of the Common
Stock during the Pricing Period applicable to the Put Notice, provided, however,
an additional 10% will be added to the discount of each Put if (i) the Company
is not DWAC eligible and (ii) an additional 10% will be added to the discount of
each Put if the Company is under DTC "chill" status on the applicable Put Notice
Date.
"Put" shall have the meaning set forth in Section 2.2.
"Put Amount" shall have the meaning set forth in Section 2.3.
"Put Notice" shall mean a written notice sent to the Investor by the Company
stating the Put Amount in U.S. dollars that the Company intends to sell to the
Investor pursuant to the terms of the Agreement and stating the current number
of Shares issued and outstanding on such date.
"Put Notice Date" shall mean the Trading Day on which the Investor receives a
Put Notice, determined as follows: a Put Notice shall be deemed delivered on
(a) the Trading Day it is received by electronic mail or otherwise by the
Investor if such notice is received prior to 9:30 a.m. (Pacific time), or (b)
the immediately succeeding Trading Day if it is received by electronic mail or
otherwise after 9:30 a.m. (Pacific time) on a Trading Day. No Put Notice may be
deemed delivered on a day that is not a Trading Day.
"Put Settlement Sheet" shall mean a written letter to the Company by the
Investor, evidencing acceptance of the Put and providing instructions for
delivery of the Securities to the Investor.
"Put Shares Due" shall mean the Shares to be sold to the Investor pursuant to
the Put.
"Registered Offering Transaction Documents" shall mean this Agreement and the
Registration Rights Agreement between the Company and the Investor as of the
date herewith.
"Registration Rights Agreement" shall have the meaning set forth in the
recitals.
"Registration Statement" means the registration statement of the Company filed
under the 1933 Act covering the resale of the Securities issuable hereunder by
the Investor, in the manner described in such Registration Statement.
"Related Party" shall have the meaning set forth in Section 5.7.
"Resolutions" shall have the meaning set forth in Section 7.5.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"SEC Documents" shall have the meaning set forth in Section 4.6.
"Securities" shall mean the shares of Common Stock issued pursuant to the terms
of the Agreement.
"Shares" shall mean the shares of the Company's Common Stock.
"Subsidiaries" shall have the meaning set forth in Section 4.1.
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"Trading Day" shall mean any day on which the Principal Market for the Common
Stock is open for trading, from the hours of 9:30 am until 4:00 pm.
"VWAP" means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted for trading as reported by (i) Bloomberg
Financial L.P. or (ii) Stock Charts/Quote Media if the Investor does not
promptly provide the Company the Bloomberg quote/pricing charts for the days
involved upon the Company's request (based on a Trading Day from 9:30 a.m. (New
York City time) to 4:02 p.m. (New York City time)) and (b) in all other cases,
the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Investor and reasonably acceptable to
the Company.
"Waiting Period" shall have the meaning set forth in Section 2.3.
SECTION II
PURCHASE AND SALE OF COMMON STOCK
2.1 PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions set
forth herein, the Company shall issue and sell to the Investor, and the
Investor shall purchase from the Company, up to that number of Shares
having an aggregate Purchase Price of Five Million Dollars ($5,000,000).
2.2 DELIVERY OF PUT NOTICES. Subject to the terms and conditions of the
Registered Offering Transaction Documents, and from time to time during
the Open Period, the Company may, in its sole discretion, deliver a Put
Notice to the Investor which states the dollar amount (designated in U.S.
Dollars), which the Company intends to sell to the Investor on a Closing
Date (the "Put"). The Put Notice shall be in the form attached hereto as
Exhibit B and incorporated herein by reference. Upon receipt of the Put
Notice, the Investor shall deliver to the Company a Put Settlement Sheet
on the Put Notice Date. The Put Settlement Sheet shall be in the form
attached hereto as Exhibit C and incorporated herein by reference.
2.3 PUT RESTRICTION. The maximum amount that the Company shall be entitled to
Put to the Investor per any applicable Put Notice (the "Put Amount") shall
be equal to one hundred percent (100%) of the average of the daily trading
dollar volume (U.S. market only) of the Common Stock for the ten (10)
consecutive Trading Days immediately prior to the applicable Put Notice
Date so long as such amount does not exceed an accumulative amount per
month of $150,000 unless a prior approval of the Investor is obtained by
the Company from the Investor. The minimum Put Amount shall be equal to
$5,000. During the Open Period, the Company shall not be entitled to
submit a Put Notice until after the previous Closing has been completed.
Notwithstanding the foregoing, the Company may not deliver a Put Notice on
or earlier of the tenth (10th) Trading Day immediately following the
preceding Put Notice Date (the "Waiting Period") unless a written waiver
to deliver Put Notice during the Waiting Period is obtained by the Company
from the Investor in advance.
2.4 CONDITIONS TO INVESTOR'S OBLIGATION TO PURCHASE SHARES. Notwithstanding
anything to the contrary in this Agreement, the Company shall not be
entitled to deliver a Put Notice and the Investor shall not be obligated
to purchase any Shares at a Closing unless each of the following
conditions are satisfied:
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i. a Registration Statement shall have been declared effective and shall
remain effective and available for the resale of all the Put Shares
Due at all times until the Closing with respect to the applicable Put
Notice;
ii. at all times during the period beginning on the related Put Notice
Date and ending on and including the related Closing Date, the Common
Stock shall have been listed or quoted for trading on the Principal
Market and shall not have been suspended from trading thereon during
the Pricing Period and the Company shall not have been notified of
any pending or threatened proceeding or other action to suspend the
trading of the Common Stock;
iii. the Company has complied with its obligations and is otherwise not in
material breach of or in material default under, this Agreement, the
Registration Rights Agreement or any other agreement executed in
connection herewith which has not been cured prior to delivery to the
Investor of the applicable Put Notice;
iv. no injunction shall have been issued and remain in force, or action
commenced by a governmental authority which has not been stayed or
abandoned, prohibiting the purchase or the issuance of the
Securities; and
v. the issuance of the Securities will not violate any shareholder
approval requirements of the Principal Market.
If any of the events described in clauses (i) through (v) above occurs
during a Pricing Period, then the Investor shall have no obligation to
purchase the Put Amount of Common Stock set forth in the applicable Put
Notice.
2.5 MECHANICS OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction
of the conditions set forth in Sections 2.6, 7 and 8 of this Agreement,
the closing of the purchase by the Investor of Securities (a "Closing")
shall occur on the date which is no earlier than five (5) Trading Days
prior to and no later than seven (7) Trading Days following the applicable
Put Notice Date (each a "Closing Date"). On each such Closing Date, if the
Company's transfer agent is participating in The Depository Trust Company
("DTC") Fast Automated Securities Transfer ("FAST") program and that the
Securities are eligible for inclusion in the FAST program, the Company
shall use all commercially reasonable efforts to cause its transfer agent
to electronically transmit the Securities to be issued to the Investor on
such date by crediting the account of the Investor's prime broker (as
specified by the Investor in a Put Settlement Sheet) with DTC through its
DWAC service. If the Company is not DWAC eligible or the Company is under
DTC "chill" on such Closing Date, the Company shall deliver to the
Investor pursuant to this Agreement, certificates representing the
Securities to be issued to the Investor on such date and registered in the
name of the Investor (the "Certificate"). On such Closing Date, after
receipt of confirmation of delivery of such Securities to the Investor,
the Investor shall disburse the funds constituting the Purchase Amount to
the Company's designated account by wire transfer of (i) immediately
available funds if the Investor receives the Securities by 9:30 a.m.
(Pacific time) or (ii) next day available funds if the Investor receives
the Securities thereafter.
2.6 OVERALL LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained
herein to the contrary, if during the Open Period the Company becomes
listed on an exchange that limits the number of shares of Common Stock
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that may be issued without shareholder approval, then the number of Shares
issuable by the Company and purchasable by the Investor, shall not exceed
that number of the shares of Common Stock that may be issuable without
shareholder approval (the "Maximum Common Stock Issuance"). If such
issuance of shares of Common Stock could cause a delisting on the
Principal Market, then the Maximum Common Stock Issuance shall first be
approved by the Company's shareholders in accordance with applicable law
and the By-laws and the Articles of Incorporation of the Company, if such
issuance of shares of Common Stock could cause a delisting on the
Principal Market. The parties understand and agree that the Company's
failure to seek or obtain such shareholder approval shall in no way
adversely affect the validity and due authorization of the issuance and
sale of Securities or the Investor's obligation in accordance with the
terms and conditions hereof to purchase a number of Shares in the
aggregate up to the Maximum Common Stock Issuance limitation, and that
such approval pertains only to the applicability of the Maximum Common
Stock Issuance limitation provided in this Section 2.6.
2.7 LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the
contrary in this Agreement, in no event shall the Investor be entitled to
purchase that number of Shares, which when added to the sum of the number
of shares of Common Stock beneficially owned (as such term is defined
under Section 13(d) and Rule 13d-3 of the 1934 Act), by the Investor,
would exceed 9.99% of the number of shares of Common Stock outstanding on
the Closing Date, as determined in accordance with Rule 13d-1(j) of the
1934 Act.
SECTION III
INVESTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
The Investor represents and warrants to the Company, and covenants, that:
3.1 SOPHISTICATED INVESTOR. The Investor has, by reason of its business and
financial experience, such knowledge, sophistication and experience in
financial and business matters and in making investment decisions of this
type that it is capable of (i) evaluating the merits and risks of an
investment in the Securities and making an informed investment decision;
(ii) protecting its own interest; and (iii) bearing the economic risk of
such investment for an indefinite period of time.
3.2 AUTHORIZATION; ENFORCEMENT. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Investor and is a
valid and binding agreement of the Investor enforceable against the
Investor in accordance with its terms, subject as to enforceability to
general principles of equity and to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating
to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.
3.3 SECTION 9 OF THE 1934 ACT. During the term of this Agreement, the
Investor will comply with the provisions of Section 9 of the 1934 Act,
and the rules promulgated thereunder, with respect to transactions
involving the Common Stock. The Investor agrees not to short sell the
Company's stock either directly or indirectly through its affiliates,
principals or advisors, the Common Stock during the term of this
Agreement. The Investor will only sell Company stock that it has in its
possession.
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3.4 ACCREDITED INVESTOR. The Investor is an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D of the 1933 Act.
3.5 NO CONFLICTS. The execution, delivery and performance of the
Registered Offering Transaction Documents by the Investor and the
consummation by the Investor of the transactions contemplated hereby and
thereby will not result in a violation of limited liability company
agreement or other organizational documents of the Investor.
3.6 OPPORTUNITY TO DISCUSS. The Investor has received all materials
relating to the Company's business, finance and operations which it has
requested. The Investor has had an opportunity to discuss the business,
management and financial affairs of the Company with the Company's
management.
3.7 INVESTMENT PURPOSES. The Investor is purchasing the Securities for
its own account for investment purposes and not with a view towards
distribution and agrees to resell or otherwise dispose of the Securities
solely in accordance with the registration provisions of the 1933 Act (or
pursuant to an exemption from such registration provisions).
3.8 NO REGISTRATION AS A DEALER. The Investor is not and will not be
required to be registered as a "dealer" under the 1934 Act, either as a
result of its execution and performance of its obligations under this
Agreement or otherwise.
3.9 GOOD STANDING. The Investor is a limited liability company, duly
organized, validly existing and in good standing in the State of
Delaware.
3.10 TAX LIABILITIES. The Investor understands that it is liable for its
own tax liabilities.
3.11 REGULATION M. The Investor will comply with Regulation M under the
1934 Act, if applicable.
3.12 GENERAL SOLICITATION. The Investor 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.
3.13 TRANSFER RESTRICTIONS. The Securities may only be disposed of in
compliance with federal and state securities laws. In connection with any
transfer of Securities other than pursuant to an effective registration
statement or Rule 144, to the Company or to an affiliate of the Investor,
the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall
be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities
under the 1933 Act; provided, however, that in connection with any
transfer of Securities pursuant to Rule 144, the Company may require the
transferor to provide a customary Rule 144 sellers representation letter.
As a condition of transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and shall have the rights of the
Investor under this Agreement and the Registration Rights Agreement, as
to issued Securities only.
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SECTION IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Schedules attached hereto, or as disclosed on
the Company's SEC Documents, the Company represents and warrants to the
Investor that:
4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized and validly existing in good standing under the laws of the
State of Delaware, and has the requisite corporate power and
authorization to own its properties and to carry on its business as now
being conducted. Both the Company and the companies it owns or controls
("Subsidiaries") are duly qualified to do business and are in good
standing in every jurisdiction in which its ownership of property or the
nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be
in good standing would not have a Material Adverse Effect. As used in
this Agreement, "Material Adverse Effect" means a change, event,
circumstance, effect or state of facts that has had or is reasonably
likely to have, a material adverse effect on the business, properties,
assets, operations, results of operations, financial condition or
prospects of the Company and its Subsidiaries, if any, taken as a whole,
or on the transactions contemplated hereby or by the agreements and
instruments to be entered into in connection herewith, or on the
authority or ability of the Company to perform its obligations under the
Registered Offering Transaction Documents.
4.2 AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.
i. The Company has the requisite corporate power and authority to enter
into and perform the Registered Offering Transaction Documents, and
to issue the Securities in accordance with the terms hereof and
thereof.
ii. The execution and delivery of the Registered Offering Transaction
Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without
limitation the issuance of the Securities pursuant to this
Agreement, have been duly and validly authorized by management of
the Company.
iii. The Registered Offering Transaction Documents have been duly and
validly executed and delivered by the Company.
iv. The Registered Offering Transaction Documents constitute the valid
and binding obligations of the Company enforceable against the
Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally,
the enforcement of creditors' rights and remedies.
4.3 CAPITALIZATION. As of the date hereof, the authorized capital stock
of the Company consists of, 80,000,000 shares of the Common Stock, par
value $0.0001 per share, of which 23,264,800 were issued and outstanding
as of July 15, 2015. All of such outstanding shares have been, or upon
issuance will be, validly issued and are fully paid and non-assessable.
Except as disclosed in the Company's publicly available filings with the
SEC or as otherwise set forth on Schedule 4.3:
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i. no shares of the Company's capital stock are subject to preemptive
rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company;
ii. there are no outstanding debt securities;
iii. there are no outstanding shares of capital stock, options, warrants,
scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or
may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company or any of its
Subsidiaries;
iv. there are no agreements or arrangements under which the Company or
any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act (except the Registration Rights
Agreement);
v. there are no outstanding securities of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its
Subsidiaries;
vi. there are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the
Securities as described in this Agreement;
vii. the Company does not have any stock appreciation rights or "phantom
stock" plans or agreements or any similar plan or agreement; and
viii. there is no dispute as to the classification of any shares of the
Company's capital stock.
The Company has furnished to the Investor, or the Investor has had access
through EDGAR to, true and correct copies of the Company's Articles of
Incorporation, as in effect on the date hereof (the "Articles of
Incorporation"), and the Company's By-laws, as in effect on the date
hereof (the "By-laws"), and the terms of all securities convertible into
or exercisable for Common Stock and the material rights of the holders
thereof in respect thereto.
4.4 ISSUANCE OF SHARES. As of the Effective Date, the Company will have
reserved the amount of Shares included in the Registration Statement for
issuance pursuant to the Registered Offering Transaction Documents, which
will have been duly authorized and reserved (subject to adjustment
pursuant to the Company's covenant set forth in Section 5.5 below)
pursuant to this Agreement. Upon issuance in accordance with this
Agreement, the Securities will be validly issued, fully paid for and
non-assessable and free from all taxes, liens and charges with respect to
the issuance thereof. In the event the Company cannot reserve a
sufficient number of Shares for issuance pursuant to this Agreement, the
Company will use its best efforts to authorize and reserve for issuance
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the number of Shares required for the Company to perform its obligations
hereunder as soon as reasonably practicable.
4.5 NO CONFLICTS. The execution, delivery and performance of the
Registered Offering Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby will not (i) result in a violation of the Articles of
Incorporation or the By-laws; or (ii) conflict with, or constitute a
material default (or an event which with notice or lapse of time or both
would become a material default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material
agreement, contract, indenture mortgage, indebtedness or instrument to
which the Company or any of its Subsidiaries is a party, or to the
Company's knowledge result in a violation of any law, rule, regulation,
order, judgment or decree (including United States federal and state
securities laws and regulations and the rules and regulations of the
Principal Market or principal securities exchange or trading market on
which the Common Stock is traded or listed) applicable to the Company or
any of its Subsidiaries or by which any property or asset of the Company
or any of its Subsidiaries is bound or affected. Neither the Company nor
its Subsidiaries is in violation of any term of, or in default under, the
Articles of Incorporation or the By-laws or their organizational charter
or by-laws, respectively, or any contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its
Subsidiaries, except for possible conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations that would not
individually or in the aggregate have or constitute a Material Adverse
Effect. The business of the Company and its Subsidiaries is not being
conducted, and shall not be conducted, in violation of any law, statute,
ordinance, rule, order or regulation of any governmental authority or
agency, regulatory or self-regulatory agency, or court, except for
possible violations the sanctions for which either individually or in the
aggregate would not have a Material Adverse Effect. Except as
specifically contemplated by this Agreement and as required under the
1933 Act or any securities laws of any states, to the Company's
knowledge, the Company is not required to obtain any consent,
authorization, permit or order of, or make any filing or registration
(except the filing of a registration statement as outlined in the
Registration Rights Agreement between the parties) with, any court,
governmental authority or agency, regulatory or self-regulatory agency or
other third party in order for it to execute, deliver or perform any of
its obligations under, or contemplated by, the Registered Offering
Transaction Documents in accordance with the terms hereof or thereof. All
consents, authorizations, permits, orders, filings and registrations
which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof
and are in full force and effect as of the date hereof. The Company and
its Subsidiaries are unaware of any facts or circumstances which might
give rise to any of the foregoing. The Company is not, and will not be,
in violation of the listing requirements of the Principal Market as in
effect on the date hereof and on each of the Closing Dates and is not
aware of any facts which would reasonably lead to delisting of the Common
Stock by the Principal Market in the foreseeable future.
4.6 SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the
Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the
reporting requirements of the 1934 Act (all of the foregoing filed prior
to the date hereof and all exhibits included therein and financial
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statements and schedules thereto and documents incorporated by reference
therein, and amendments thereto, being hereinafter referred to as the
"SEC Documents"). The Company has delivered to the Investor or its
representatives, or they have had access through EDGAR to, true and
complete copies of the SEC Documents. As of their respective filing
dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC or the time they
were amended, if amended, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. As of their respective dates,
the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, by a firm that
is a member of the Public Companies Accounting Oversight Board ("PCAOB")
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may
exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as
of the dates thereof and the results of its operations and cash flows for
the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). No other written information provided
by or on behalf of the Company to the Investor which is not included in
the SEC Documents, including, without limitation, information referred to
in Section 4.3 of this Agreement, contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstance under which they are
or were made, not misleading. The Company's knowledge, neither the
Company nor any of its Subsidiaries or any of their officers, directors,
employees or agents have provided the Investor with any material,
nonpublic information which was not publicly disclosed prior to the date
hereof and any material, nonpublic information provided to the Investor
by the Company or its Subsidiaries or any of their officers, directors,
employees or agents prior to any Closing Date shall be publicly disclosed
by the Company prior to such Closing Date.
4.7 ABSENCE OF CERTAIN CHANGES. Except as otherwise set forth in the SEC
Documents, the Company does not intend to change the business operations
of the Company in any material way. The Company has not taken any steps,
and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company or its Subsidiaries
have any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings.
4.8 ABSENCE OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set
forth in the SEC Documents, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
executive officers of Company or any of its Subsidiaries, threatened
against or affecting the Company, the Common Stock or any of the
Company's Subsidiaries or any of the Company's or the Company's
Subsidiaries' officers or directors in their capacities as such, in which
an adverse decision could have a Material Adverse Effect.
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4.9 ACKNOWLEDGMENT REGARDING INVESTOR'S PURCHASE OF SHARES. The Company
acknowledges and agrees that the Investor is acting solely in the
capacity of an arm's length purchaser with respect to the Registered
Offering Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that the Investor is not
acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Registered Offering Transaction
Documents and the transactions contemplated hereby and thereby and any
advice given by the Investor or any of its respective representatives or
agents in connection with the Registered Offering Transaction Documents
and the transactions contemplated hereby and thereby is merely incidental
to the Investor's purchase of the Securities, and is not being relied on
by the Company. The Company further represents to the Investor that the
Company's decision to enter into the Registered Offering Transaction
Documents has been based solely on the independent evaluation by the
Company and its representatives.
4.10 NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES.
Except as set forth in the SEC Documents or required with respect to the
Registered Offering Transaction Documents, as of the date hereof, no
event, liability, development or circumstance has occurred or exists, or
to the Company's knowledge is contemplated to occur, with respect to the
Company or its Subsidiaries or their respective business, properties,
assets, prospects, operations or financial condition, that would be
required to be disclosed by the Company under applicable securities laws
on a registration statement filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been
publicly announced.
4.11 EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries
is involved in any union labor dispute nor, to the knowledge of the
Company or any of its Subsidiaries, is any such dispute threatened.
Neither the Company nor any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries
believe that relations with their employees are good. No executive
officer (as defined in Rule 501(f) of the 1933 Act) has notified the
Company that such officer intends to leave the Company's employ or
otherwise terminate such officer's employment with the Company.
4.12 INTELLECTUAL PROPERTY RIGHTS. The Company and its Subsidiaries own
or possess adequate rights or licenses to use all trademarks, trade
names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their
respective businesses as now conducted. Except as set forth in the SEC
Documents, none of the Company's trademarks, trade names, service marks,
service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights necessary to conduct
its business as now or as proposed to be conducted have expired or
terminated, or are expected to expire or terminate within two (2) years
from the date of this Agreement. The Company and its Subsidiaries do not
have any knowledge of any infringement by the Company or its Subsidiaries
of trademark, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service mark
registrations, trade secret or other similar rights of others, or of any
such development of similar or identical trade secrets or technical
information by others and, except as set forth in the SEC Documents,
there is no claim, action or proceeding being made or brought against, or
to the Company's knowledge, being threatened against, the Company or its
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Subsidiaries regarding trademark, trade name, patents, patent rights,
invention, copyright, license, service names, service marks, service mark
registrations, trade secret or other infringement; and the Company and
its Subsidiaries are unaware of any facts or circumstances which might
give rise to any of the foregoing. The Company and its Subsidiaries have
taken commercially reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.
4.13 ENVIRONMENTAL LAWS. The Company and its Subsidiaries (i) are, to the
knowledge of the management and directors of the Company and its
Subsidiaries, in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"); (ii) have, to
the knowledge of the management and directors of the Company, received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses as
currently conducted; and (iii) are in compliance, to the knowledge of the
management and directors of the Company, with all terms and conditions of
any such permit, license or approval where, in each of the three (3)
foregoing cases, the failure to so comply would have, individually or in
the aggregate, a Material Adverse Effect.
4.14 TITLE. The Company and its Subsidiaries have good and marketable
title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear
of all liens, encumbrances and defects except such as are described in
the SEC Documents or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its Subsidiaries. Any real
property and facilities held under lease by the Company or any of its
Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by
the Company and its Subsidiaries.
4.15 INSURANCE. Each of the Company's Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company reasonably
believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any of
its Subsidiaries has been refused any insurance coverage sought or
applied for and neither the Company nor its Subsidiaries has any reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect.
4.16 REGULATORY PERMITS. The Company and its Subsidiaries have in full
force and effect all certificates, approvals, authorizations and permits
from the appropriate federal, state, local or foreign regulatory
authorities and comparable foreign regulatory agencies, necessary to own,
lease or operate their respective properties and assets and conduct their
respective businesses in the manner currently being conducted, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, approval, authorization or permit, except for such
certificates, approvals, authorizations or permits which if not obtained,
or such revocations or modifications which, would not have a Material
Adverse Effect.
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4.17 INTERNAL ACCOUNTING CONTROLS. Except as otherwise set forth in the
SEC Documents, the Company and each of its Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles by a firm with
membership to the PCAOB and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. The
Company's management has determined that the Company's internal
accounting controls were not effective as of the date of this Agreement
as further described in the SEC Documents.
4.18 NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of
its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in
the judgment of the Company's officers has or is expected in the future
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is a party to any contract or agreement which in the
judgment of the Company's officers has or is expected to have a Material
Adverse Effect.
4.19 TAX STATUS. The Company and each of its Subsidiaries has made or
filed all United States federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which
it is subject (unless and only to the extent that the Company and each of
its Subsidiaries has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes) and has paid
all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and
has set aside on its books provision reasonably adequate for the payment
of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and
the officers of the Company know of no basis for any such claim.
4.20 CERTAIN TRANSACTIONS. Except as set forth in the SEC Documents and
except for transactions pursuant to which the Company makes payments in
the ordinary course of business upon terms no less favorable than the
Company could obtain from disinterested third parties and other than the
grant of stock options disclosed in the SEC Documents, none of the
officers, directors, or employees of the Company is presently a party to
any transaction with the Company or any of its Subsidiaries (other than
for services as employees, consultants, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company,
any corporation, partnership, trust or other entity in which any officer,
director, or any such employee has a substantial interest or is an
officer, director, trustee or partner, such that disclosure would be
required in the SEC Documents.
4.21 DILUTIVE EFFECT. The Company understands and acknowledges that the
number of shares of Common Stock issuable upon purchases pursuant to this
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Agreement will increase in certain circumstances including, but not
necessarily limited to, the circumstance wherein the trading price of the
Common Stock declines during the period between the Effective Date and
the end of the Open Period. The Company's executive officers and
directors have studied and fully understand the nature of the
transactions contemplated by this Agreement and recognize that they have
a potential dilutive effect on the shareholders of the Company. The board
of directors of the Company has concluded, in its good faith business
judgment, and with full understanding of the implications, that such
issuance is in the best interests of the Company. The Company
specifically acknowledges that, subject to such limitations as are
expressly set forth in the Registered Offering Transaction Documents, its
obligation to issue shares of Common Stock upon purchases pursuant to
this Agreement is absolute and unconditional regardless of the dilutive
effect that such issuance may have on the ownership interests of other
shareholders of the Company.
4.22 LOCK-UP. The Company shall cause its officers, insiders, directors,
and affiliates or other related parties under control of the Company, to
refrain from selling Common Stock during each Pricing Period.
4.23 NO GENERAL SOLICITATION. Neither the Company, nor any of its
affiliates, nor any person acting on its behalf, has engaged in any form
of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Common Stock to
be offered as set forth in this Agreement.
4.24 NO BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No
brokers, finders or financial advisory fees or commissions will be
payable by the Company, its agents or Subsidiaries, with respect to the
transactions contemplated by this Agreement.
SECTION V
COVENANTS OF THE COMPANY
5.1 BEST EFFORTS. The Company shall use all commercially reasonable
efforts to timely satisfy each of the conditions set forth in Section 7
of this Agreement.
5.2 REPORTING STATUS. Until one of the following occurs, the Company
shall file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status, or take an
action or fail to take any action, which would terminate its status as a
reporting company under the 1934 Act: (i) this Agreement terminates
pursuant to Section 8 and the Investor has the right to sell all of the
Securities without volume restrictions pursuant to Rule 144 promulgated
under the 1933 Act, or such other exemption, or (ii) the date on which
the Investor has sold all the Securities and this Agreement has been
terminated pursuant to Section 8.
5.3 USE OF PROCEEDS. The Company will use the proceeds from the sale of
the Securities (excluding amounts paid or to be paid by the Company for
fees as set forth in the Registered Offering Transaction Documents, if
any) for general corporate and working capital purposes and acquisitions
or assets, businesses or operations or for other purposes that the board
of directors of the Company, in its good faith deem to be in the best
interest of the Company.
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5.4 FINANCIAL INFORMATION. During the Open Period, the Company agrees to
make available to the Investor via EDGAR or other electronic means the
following documents and information on the forms set forth: (i) within
five (5) Trading Days after the filing thereof with the SEC, a copy of
its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any
Current Reports on Form 8-K and any Registration Statements or amendments
filed pursuant to the 1933 Act; (ii) copies of any notices and other
information made available or given to the shareholders of the Company
generally, contemporaneously with the making available or giving thereof
to the shareholders; and (iii) within two (2) calendar days of filing or
delivery thereof, copies of all documents filed with, and all
correspondence sent to, the Principal Market, any securities exchange or
market, or the Financial Industry Regulatory Association, unless such
information is material nonpublic information.
5.5 RESERVATION OF SHARES. The Company shall take all action necessary to
at all times have authorized, and reserved the amount of Shares included
in the Registration Statement for issuance pursuant to the Registered
Offering Transaction Documents. In the event that the Company determines
that it does not have a sufficient number of authorized shares of Common
Stock to reserve and keep available for issuance as described in this
Section 5.5, the Company shall use all commercially reasonable efforts to
increase the number of authorized shares of Common Stock by seeking
shareholder approval for the authorization of such additional shares.
5.6 LISTING. The Company shall use all commercially reasonable efforts to
promptly secure and maintain the listing of all of the Registrable
Securities (as defined in the Registration Rights Agreement) on the
Principal Market and each other national securities exchange and
automated quotation system, if any, upon which shares of Common Stock are
then listed (subject to official notice of issuance) and shall maintain,
such listing of all Registrable Securities from time to time issuable
under the terms of the Registered Offering Transaction Documents. Neither
the Company nor any of its Subsidiaries shall take any action which would
be reasonably expected to result in the delisting or suspension of the
Common Stock on the Principal Market (excluding suspensions of not more
than one (1) Trading Day resulting from business announcements by the
Company). The Company shall promptly provide to the Investor copies of
any notices it receives from the Principal Market regarding the continued
eligibility of the Common Stock for listing on such automated quotation
system or securities exchange. The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section
5.6.
5.7 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause
each of its Subsidiaries not to, enter into, amend, modify or supplement,
or permit any Subsidiary to enter into, amend, modify or supplement, any
agreement, transaction, commitment or arrangement with any of its or any
Subsidiary's officers, directors, persons who were officers or directors
at any time during the previous two (2) years, shareholders who
beneficially own 10% or more of the Common Stock, or Affiliates or with
any individual related by blood, marriage or adoption to any such
individual or with any entity in which any such entity or individual owns
a 10% or more beneficial interest (each a "Related Party"), except for
(i) customary employment arrangements and benefit programs on reasonable
terms, (ii) any agreement, transaction, commitment or arrangement on an
arms-length basis on terms no less favorable than terms which would have
been obtainable from a disinterested third party other than such Related
Party, or (iii) any agreement, transaction, commitment or arrangement
which is approved by a majority of the disinterested directors of the
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Company. For purposes hereof, any director who is also an officer of the
Company or any Subsidiary of the Company shall not be a disinterested
director with respect to any such agreement, transaction, commitment or
arrangement. "Affiliate" for purposes hereof means, with respect to any
person or entity, another person or entity that, directly or indirectly,
(i) has a 10% or more equity interest in that person or entity, (ii) has
10% or more common ownership with that person or entity, (iii) controls
that person or entity, or (iv) is under common control with that person
or entity. "Control" or "Controls" for purposes hereof means that a
person or entity has the power, directly or indirectly, to conduct or
govern the policies of another person or entity.
5.8 FILING OF FORM 8-K. On or before the date which is four (4) Trading
Days after the Effective Date, the Company shall file a Current Report on
Form 8-K with the SEC describing the terms of the transaction
contemplated by the Registered Offering Transaction Documents in the form
required by the 1934 Act, if such filing is required.
5.9 CORPORATE EXISTENCE. The Company shall use all commercially
reasonable efforts to preserve and continue the corporate existence of
the Company.
5.10 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT
TO MAKE A PUT. The Company shall promptly notify the Investor upon the
occurrence of any of the following events in respect of a Registration
Statement or related prospectus in respect of an offering of the
Securities: (i) receipt of any request for additional information by the
SEC or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus; (ii) the
issuance by the SEC or any other federal or state governmental authority
of any stop order suspending the effectiveness of any Registration
Statement or the initiation of any proceedings for that purpose; (iii)
receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Securities
for sale in any jurisdiction or the initiation or notice of any
proceeding for such purpose; (iv) the happening of any event that makes
any statement made in such Registration Statement or related prospectus
or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of
any changes in the Registration Statement, related prospectus or
documents so that, in the case of a Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the related
prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the
Company's reasonable determination that a post-effective amendment or
supplement to the Registration Statement would be appropriate, and the
Company shall promptly make available to Investor any such supplement or
amendment to the related prospectus. The Company shall not deliver to
Investor any Put Notice during the continuation of any of the foregoing
events in this Section 5.10.
5.11 TRANSFER AGENT. Upon effectiveness of the Registration Statement,
and for so long as the Registration Statement is effective, following
delivery of a Put Notice, the Company shall deliver instructions to its
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transfer agent to issue Shares to the Investor that are covered for
resale by the Registration Statement free of restrictive legends.
5.12 ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants
to the Investor that: (i) it is voluntarily entering into this Agreement
of its own freewill, (ii) it is not entering this Agreement under
economic duress, (iii) the terms of this Agreement are reasonable and
fair to the Company, and (iv) the Company has had independent legal
counsel of its own choosing review this Agreement, advise the Company
with respect to this Agreement, and represent the Company in connection
with this Agreement.
SECTION VI
CONDITIONS OF THE COMPANY'S ELECTION TO SELL
There is no obligation hereunder of the Company to issue and sell the
Securities to the Investor. However, an election by the Company to issue
and sell the Securities hereunder, from time to time as permitted
hereunder, is further subject to the satisfaction, at or before each
Closing Date, of each of the following conditions set forth below. These
conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion.
6.1 The Investor shall have executed this Agreement and the Registration
Rights Agreement and delivered the same to the Company.
6.2 The Investor shall have delivered to the Company a Put Settlement
Sheet in the form attached here to as Exhibit C on the Put Notice Date.
6.3 No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by
any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by
this Agreement.
SECTION VII
FURTHER CONDITIONS OF THE INVESTOR'S OBLIGATION TO PURCHASE
The obligation of the Investor hereunder to purchase Securities is
subject to the satisfaction, on or before each Closing Date, of each of
the following conditions set forth below.
7.1 The Company shall have executed the Registered Offering Transaction
Documents and delivered the same to the Investor.
7.2 The Common Stock shall be authorized for quotation on the Principal
Market and trading in the Common Stock shall not have been suspended by
the Principal Market or the SEC, at any time beginning on the date hereof
and through and including the respective Closing Date (excluding
suspensions of not more than one (1) Trading Day resulting from business
announcements by the Company, provided that such suspensions occur prior
to the Company's delivery of the Put Notice related to such Closing).
7.3 The representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of the
applicable Closing Date as though made at that time and the Company shall
have materially performed, satisfied and complied with the covenants,
agreements and conditions required by the Registered Offering Transaction
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Documents to be performed, satisfied or complied with by the Company on
or before such Closing Date. The Investor may request an update as of
such Closing Date regarding the representation contained in Section 4.3.
7.4 The Company shall have executed and delivered to the Investor the
certificates representing, or have executed electronic book-entry
transfer of, the Securities (in such denominations as the Investor shall
request) being purchased by the Investor at such Closing.
7.5 The management of the Company shall have adopted resolutions
consistent with Section 4.2(ii) (the "Resolutions") and such Resolutions
shall not have been materially amended or rescinded prior to such Closing
Date.
7.6 No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by
any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by
this Agreement.
7.7 The Registration Statement shall be effective on each Closing Date
and no stop order suspending the effectiveness of the Registration
statement shall be in effect or to the Company's knowledge shall be
pending or threatened. Furthermore, on each Closing Date (i) neither the
Company nor the Investor shall have received notice that the SEC has
issued or intends to issue a stop order with respect to such Registration
Statement or that the SEC otherwise has suspended or withdrawn the
effectiveness of such Registration Statement, either temporarily or
permanently, or intends or has threatened to do so (unless the SEC's
concerns have been addressed), and (ii) no other suspension of the use or
withdrawal of the effectiveness of such Registration Statement or related
prospectus shall exist.
7.8 At the time of each Closing, the Registration Statement (including
information or documents incorporated by reference therein) and any
amendments or supplements thereto shall not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading
or which would require public disclosure or an update supplement to the
prospectus.
7.9 If applicable, the shareholders of the Company shall have approved
the issuance of any Shares in excess of the Maximum Common Stock Issuance
in accordance with Section 2.6 or the Company shall have obtained
appropriate approval pursuant to the requirements of Delaware law and the
Company's Articles of Incorporation and By-laws.
7.10 The conditions to such Closing set forth in Section 2.4 shall have
been satisfied on or before such Closing Date.
7.11 The Company shall have certified to the Investor the number of
Shares of Common Stock outstanding when a Put Notice is given to the
Investor. The Company's delivery of a Put Notice to the Investor
constitutes the Company's certification of the existence of the necessary
number of shares of Common Stock reserved for issuance.
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SECTION VIII
TERMINATION
This Agreement shall terminate upon any of the following events:
i. when the Investor has purchased an aggregate of Five Million Dollars
($5,000,000) in the Common Stock of the Company pursuant to this
Agreement;
ii. on the date which is thirty-six (36) months after the Effective
Date; or
iii. at such time that the Registration Statement is no longer in effect;
or
iv. at any time at the election of the Company upon 15 days written
notice.
Any and all shares, or penalties, if any, due under this Agreement shall be
immediately payable and due upon termination of this Agreement.
SECTION IX
SUSPENSION
This Agreement shall be suspended upon any of the following events, and shall
remain suspended until such event is rectified:
i. The trading of the Common Stock is suspended by the SEC, the
Principal Market or FINRA for a period of two (2) consecutive Trading
Days during the Open Period; or,
ii. The Common Stock ceases to be registered under the 1934 Act or
listed or traded on the Principal Market or the Registration Statement
is no longer effective (except as permitted hereunder).
Immediately upon the occurrence of one of the above-described events, the
Company shall send written notice of such event to the Investor.
SECTION X
INDEMNIFICATION
In consideration of the parties mutual obligations set forth in the Registered
Offering Transaction Documents, each of the parties (in such capacity, an
"Indemnitor") shall defend, protect, indemnify and hold harmless the other and
all of the other party's shareholders, officers, directors, employees, counsel,
and direct or indirect investors and any of the foregoing person's agents or
other representatives (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) (collectively,
the "Indemnitees") from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and damages, and
reasonable expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by any Indemnitee as a result of, or
arising out of, or relating to ( i) any misrepresentation or breach of any
representation or warranty made by the Indemnitor or any other certificate,
instrument or document contemplated hereby or thereby; (ii) any breach of any
covenant, agreement or obligation of the Indemnitor contained in the Registered
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Offering Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby; or (iii) any cause of action, suit or claim
brought or made against such Indemnitee by a third party and arising out of or
resulting from the execution, delivery, performance or enforcement of the
Registered Offering Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, except insofar as any such
misrepresentation, breach or any untrue statement, alleged untrue statement,
omission or alleged omission is made in reliance upon and in conformity with
information furnished to Indemnitor which is specifically intended for use in
the preparation of any such Registration Statement, preliminary prospectus,
prospectus or amendments to the prospectus. To the extent that the foregoing
undertaking by the Indemnitor may be unenforceable for any reason, the
Indemnitor shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law. The indemnity provisions contained herein shall be in addition to any cause
of action or similar rights Indemnitor may have, and any liabilities the
Indemnitor or the Indemnitees may be subject to.
SECTION XI
MISCELLANEOUS
11.1 LAW GOVERNING THIS AGREEMENT. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without
regard to principles of conflicts of laws. Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of California located
in San Diego County, California or in the federal courts located in San
Diego County, California. The parties to this Agreement hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens. The parties
executing this Agreement and other agreements referred to herein or
delivered in connection herewith agree to submit to the in personam
jurisdiction of such courts. The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs. In
the event that any provision of this Agreement or any other agreement
delivered in connection herewith is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision of any
agreement. Each party hereby irrevocably waives personal service of
process and consents to process being served in any suit, action or
proceeding in connection with this Agreement or any other Transaction
Documents 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 other manner permitted by law.
11.2 LEGAL FEES; AND MISCELLANEOUS FEES. Except as otherwise set forth in
the Registered Offering Transaction Documents (including but not limited
to Section 5 of the Registration Rights 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, preparation, execution, delivery and performance of
this Agreement. Any attorneys' fees and expenses incurred by either the
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Company or the Investor in connection with the preparation, negotiation,
execution and delivery of any amendments to this Agreement or relating to
the enforcement of the rights of any party, after the occurrence of any
breach of the terms of this Agreement by another party or any default by
another party in respect of the transactions contemplated hereunder,
shall be paid on demand by the party which breached the Agreement and/or
defaulted, as the case may be. The Company shall pay all stamp and other
taxes and duties levied in connection with the issuance of any
Securities.
11.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument. This Agreement may be executed by facsimile transmission,
PDF, electronic signature or other similar electronic means with the same
force and effect as if such signature page were an original thereof.
11.4 HEADINGS; SINGULAR/PLURAL. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Whenever required by the context of
this Agreement, the singular shall include the plural and masculine shall
include the feminine.
11.5 SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remainder of this
Agreement in that jurisdiction or the validity or enforceability of any
provision of this Agreement in any other jurisdiction.
11.6 ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the FINAL AGREEMENT
between the Company and the Investor with respect to the terms and
conditions set forth herein, and, the terms of this Agreement may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the Parties.
11.7 NOTICES. Any notices or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will
be deemed to have been delivered (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by electronic mail (provided
confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one (1) day after
deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses
and email addresses for such communications shall be:
If to the Company: Empire Global Corp.
Suite 701 - 130 Adelaide St. W.,
Toronto, Ontario M5H 2K4
Attn: Michele Ciavarella
Email: ceo.emgl@emglcorp.com
If to the Investor: Tangiers Investment Group, LLC
2251 San Diego Ave., #B150
San Diego, California 92110
Attn: Robert Papiri
Email: admin@tangierscapital.com
Each party shall provide five (5) business days prior written notice to the
other party of any change in address or email address.
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11.8 NO ASSIGNMENT. This Agreement may not be assigned.
11.9 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
11.10 SURVIVAL. The representations and warranties of the Company and the
Investor contained in Sections 3 and 4, the agreements and covenants set
forth in Section 5, the indemnification provisions set forth in Section
10 and this Section 11, shall survive each of the Closings and the
termination of this Agreement.
11.11 PUBLICITY. The Company and the Investor shall consult with each
other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and no party shall
issue any such press release or otherwise make any such public statement
without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law, as determined solely by
the Company in consultation with its counsel. The Investor acknowledges
that this Agreement and all or part of the Registered Offering
Transaction Documents may be deemed to be "material contracts" as that
term is defined by Item 601(b)(10) of Regulation S-K, and that the
Company may therefore be required to file such documents as exhibits to
reports or registration statements filed under the 1933 Act or the 1934
Act. The Investor further agrees that the status of such documents and
materials as material contracts shall be determined solely by the
Company, in consultation with its counsel.
11.12 EXCLUSIVITY. The Company shall not pursue an equity line
transaction similar to the transactions contemplated in this Agreement
with any other person or entity until the earlier of (i) the Effective
Date and (ii) termination of this Agreement in accordance with Section 8.
11.13 FURTHER ASSURANCES. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
11.14 NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any
party, as the parties mutually agree that each has had a full and fair
opportunity to review this Agreement and seek the advice of counsel on
it.
11.15 REMEDIES. The Investor shall have all rights and remedies set forth
in this Agreement and the Registration Rights Agreement and all rights
and remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which the Investor has
by law. Any person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without
posting a bond or other security), to recover damages by reason of any
default or breach of any provision of this Agreement, including the
recovery of reasonable attorneys fees and costs, and to exercise all
other rights granted by law.
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11.16 PAYMENT SET ASIDE. To the extent that the Company makes a payment
or payments to the Investor hereunder or under the Registration Rights
Agreement or the Investor enforces or exercises its rights hereunder or
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.
11.17 COMMITMENT FEE. Upon the date of execution of this Agreement, the
Company shall be required to issue to the Purchaser one percent (1%) of
the total Commitment Amount in the form of a twelve (12) month zero
percent (0%) interest convertible debenture as a commitment fee (the
"Commitment Fee Debenture"). The Commitment Fee Debenture shall be
convertible into shares of the Company's Common stock at the lower of
$.50 or eighty five percent (85%) of the closing bid price of the
Company's common stock on the date on which Holder elects to convert all
or part of the Note. If the Company is placed on "chilled" status with
DTC, the discount shall be increased by ten percent (10%) until such
chill is remedied. If the Company is not DWAC eligible through their
Transfer Agent and DTC FAST system, the discount will be increased by
five percent (5%). In the case of both, the discount shall be a
cumulative fifteen percent (15%).
SECTION XII
NON-DISCLOSURE OF NON-PUBLIC INFORMATION
The Company shall not disclose non-public information to the Investor, its
advisors, or its representatives. Nothing in the Registered Offering Transaction
Documents shall require or be deemed to require the Company to disclose
non-public information to the Investor or its advisors or representatives, and
the Company represents that it does not disseminate non-public information to
any investors who purchase stock in the Company in a public offering, to money
managers or to securities analysts, provided, however, that notwithstanding
anything herein to the contrary, the Company will, as hereinabove provided,
immediately notify the advisors and representatives of the Investor and, if any,
underwriters, of any event or the existence of any circumstance (without any
obligation to disclose the specific event or circumstance) of which it becomes
aware, constituting non-public information (whether or not requested of the
Company specifically or generally during the course of due diligence by such
persons or entities), which, if not disclosed in the prospectus included in the
Registration Statement would cause such prospectus to include a material
misstatement or to omit a material fact required to be stated therein in order
to make the statements, therein, in light of the circumstances in which they
were made, not misleading. Nothing contained in this Section 12 shall be
construed to mean that such persons or entities other than the Investor (without
the written consent of the Investor prior to disclosure of such information) may
not obtain non-public information in the course of conducting due diligence in
accordance with the terms of this Agreement and nothing herein shall prevent any
such persons or entities from notifying the Company of their opinion that based
on such due diligence by such persons or entities, that the Registration
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Statement contains an untrue statement of material fact or omits a material fact
required to be stated in the Registration Statement or necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading.
SECTION XIII
ACKNOWLEDGEMENTS OF THE PARTIES
Notwithstanding anything in this Agreement to the contrary, the parties hereto
hereby acknowledge and agree to the following: (i) the Investor makes no
representations or covenants that it will not engage in trading in the
securities of the Company, other than the Investor will not short or pre-sell,
either directly or indirectly through its affiliates, principals or advisors,
the Common Stock at any time during the Open Period; (ii) the Company shall
comply with its obligations under Section 5.8 in a timely manner; (iii) the
Company has not and shall not provide material non-public information to the
Investor unless prior thereto the Investor shall have executed a written
agreement regarding the confidentiality and use of such information; and (iv)
the Company understands and confirms that the Investor will be relying on the
acknowledgements set forth in clauses (i) through (iii) above if the Investor
effects any transactions in the securities of the Company.
[Signature Page Follows]
Your signature on this Signature Page evidences your agreement to be bound by
the terms and conditions of the Investment Agreement as of the date first
written above. The undersigned signatory hereby certifies that he has read and
understands the Investment Agreement, and the representations made by the
undersigned in this Investment Agreement are true and accurate, and agrees to be
bound by its terms. TANGIERS INVESTMENT GROUP, LLC
By: /s/ Robert Papiri
_________________________________
Name: Robert Papiri
Title: Managing Member
EMPIRE GLOBAL CORP.
By: /s/ Michele Ciavarella
__________________________________
Name: Michele Ciavarella
Title: Chairman and CEO
[SIGNATURE PAGE OF INVESTMENT AGREEMENT]
LIST OF EXHIBITS
EXHIBIT A Registration Rights Agreement
EXHIBIT B Put Notice
EXHIBIT C Put Settlement Sheet
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT See attached.
See attached.
EXHIBIT B
FORM OF PUT NOTICE
Date: __________
RE: Put Notice Number ______
Dear Mr. ____________ ,
This is to inform you that as of today, Empire Global Corp, a Delaware
corporation (the "Company"), hereby elects to exercise its right pursuant to the
Investment Agreement to require Tangiers Investment Group, LLC to purchase
shares of its common stock. The Company hereby certifies that:
The amount of this put is $___________.
The Pricing Period runs from _______________ until _______________.
The Purchase Price is: $_______________.
The number of Put Shares Due:___________________.
The current number of shares of common stock issued and outstanding is:
_______________________.
The number of shares currently available for resale on the S-1 is: ___________ .
Regards,
EMPIRE GLOBAL CORP.
By: __________________
Name: __________________
Title: __________________
EXHIBIT C
PUT SETTLEMENT SHEET
Date: ________________
Dear Mr. ________,
Pursuant to the Put given by NAME to Tangiers Investment Group, LLC. ("TIG") on
_________________ 201_, we are now submitting the amount of shares of common
stock for you to issue to TIG.
Please have a certificate bearing no restrictive legend totaling __________
shares issued to TIG immediately and send via DWAC to the following account:
[INSERT]
If not DWAC eligible, please send FedEx Priority Overnight to:
[INSERT ADDRESS]
Once these shares are received by us, we will have the funds wired to
the Company.
Regards,
TANGIERS INVESTMENT GROUP, LLC
By: _________________________________
Name: Robert Papiri
Title: Managing Member
SCHEDULE 4.3
See attached.