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SECURITIES PURCHASE AGREEMENT (SERIES B)
SECURITIES PURCHASE AGREEMENT
SERIES B
This Securities Purchase Agreement (this “Agreement”) is dated as of March 31, 2016 between Revolutionary Concepts Inc., a Nevada corporation (the “Company”), and each Purchaser identified on Schedule A hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers” or “The Group”).
WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to resolve debt obligations via the conversion of debt to preferred stock, to issue and/or sell to Purchasers, and to enable Purchasers to purchase from the Company, securities of the Company as more fully described in this Agreement; and
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement:
(a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the other Transaction Documents (as applicable), and
(b) the following terms have the meanings set forth in this Section 1.1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Asset” means where the Company acknowledges in its books and records the value, any item of economic value, owned by an individual or corporation, especially that which could be converted to cash.
“Best efforts” means an agreement in which a company or underwriter promises to make a full-fledged attempt to sell as much of an initial public offering as possible to the public, with no guarantee of success.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Cash Equivalent (CE)” means investment securities that are short term (Usual 3 months or less), have high credit quality, and highly liquid investments (where there are buyers and sellers in the market place both readily convertible to know amounts of cash), and they represent insignificant risk of changes in value. Cash Equivalent includes the U.S. Government Treasury bills, bank certificates of deposit, bankers acceptances, corporate commercial paper (preferred shares, common stock, membership interest, convertible notes), and other money market instruments.
“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date” has the meaning set forth in Section 2.1.
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“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such common stock may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiary which would, directly or indirectly, entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time, directly or indirectly, convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company Counsel” means legal representation for the Company.
“Conversion” means the transformation of loans or debt into shares of stock or equity.
“Conversion Date” means an Elective Conversion Date.
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series “A”, “A-1”, “A-2” and “B” Preferred Stock in accordance with the terms of the Certificate of Designation.
“Cross-Receipts” means the cross receipts executed by the Purchaser(s) and the Company, each to be in the form of Exhibit F hereto.
“Disclosure Schedules” shall have the meaning set forth in Section 3.1.
“ Effective Date ” means the earlier of the date that
(a) all of the Registrable Securities (as defined in the Registration Rights Agreement) have been registered for resale by the holders thereof pursuant to a registration statement(s) declared effective by the Commission or
(b) all of the Registrable Securities have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without volume or manner-of-sale restrictions, so long as the Company is current with the public information requirements under Rule 144.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“ Exempt Issuance ” means the issuance of
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in the Company’s Disclosure Schedules, provided that such securities have not been amended on or after the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (it being understood that such securities may be adjusted for anti-dilution purposes in connection with this Agreement),
(c) securities issued pursuant to acquisitions or strategic transactions approved by
(i) a majority of the disinterested directors of the Company, and
(a) securities issued as consideration for
(ii) capital contributions to Revolutionary Concepts, Inc.
“Existing Debt Amount” means with respect to each Purchaser, the amount owed by the Company to such Purchaser under such Purchaser(s) Existing Promissory Note as the Closing, as set forth on Schedule A hereto.
“Existing Promissory Notes” means whereas both Seller and the Purchaser recognize/acknowledge the promissory notes of the company or convertible Promissory Notes used as cash equivalent by Purchaser(s).
“Face Value ” means both The Company and the Purchaser(s) acknowledges the stated value and the original value of promissory note(s), the face value of a loan refers to the principal of the loan, which is the original amount of the loan as detailed in the loan contract, promissory note, or debt instrument. The amount of the obligation or loan constitutes what is due to the promisee. The promissory note itself has no face value. It may or may not be considered legal tender, although it can be transferred from one obligee to another. It does show the amount of the obligation or consideration due to the promisee by the promisor, which all parties have agreed on.
“GAAP (Generally Accepted Accounting Principles)” shall have the meaning ascribed to such term in Section 3.1(h).
“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Limited Liability Company” means LLC or other formation (under the Nevada statues or other) created by the company to conduct related business transactions or operate as a management entity when opportunities arise.
“Lost Note Affidavit and Indemnity Agreement” If necessary, means a Lost Note Affidavit and Indemnity Agreement in a form reasonably acceptable to the Company in the form attached hereto as Exhibit E.
“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Participation Maximum” shall have the meaning ascribed to such term in Section 4.8(a).
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“Payoff Letter” If required, means the payoff letters executed by the Purchasers in favor of the Company, each in the form of Exhibit A hereto, providing for termination and release of all obligations under the applicable Existing Promissory Note and related Loan Documents (as defined in such Payoff Letter).
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement Agents” mean the agents of the Company in the private offer and sale of the Series B Preferred Stock.
“Preferred Stock” means shares of Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series B Preferred Stock.
“Pre-Notice” shall have the meaning ascribed to such term in Section 4.8(b).
“Pro Rata Portion” shall have the meaning ascribed to such term in Section 4.8(e).
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.6.
“Registration Rights Agreement” means the Registration Rights Agreement, in the form of Exhibit B hereto, by and among the Company and the Purchasers, providing registration rights with respect to the Underlying Shares held by the Purchasers on the terms and conditions set forth therein.
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares, ignoring any conversion or exercise limits set forth therein and assuming that any previously unconverted shares of Preferred Stock are held until the third anniversary of the Closing Date and all dividends are paid in shares of Common Stock or Preferred Stock until such third anniversary.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities” means the Preferred Stock and the Underlying Shares.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series A Certificate of Designation” means the 10 ½% Series A Convertible Preferred Stock Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Nevada.
“Series A Preferred Stock” means the Company’s 10½% Series A Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Series A Certificate of Designation in the form of Exhibit G attached hereto.
“Series A-1 Certificate of Designation” means the 10 ½% Series A-1 Convertible Preferred Stock Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Nevada, in the form of Exhibit C attached hereto.
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“Series A-1 Preferred Stock ” means the Company’s 10 ½% Series A-1 Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Series A-1 Certificate of Designation.
“Series A-2 Certificate of Designation” means the 10 ½% Series A-2 Convertible Preferred Stock Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Nevada, in the form of Exhibit D attached hereto.
“Series A-2 Preferred Stock” means the Company’s 10 ½% Series A-2 Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Series A-2 Certificate of Designation.
“Series B Certificate of Designation” means the 10 ½% Series B Convertible Preferred Stock Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Nevada, in the form of Exhibit A attached hereto.
“Series B Preferred Stock” means the Company’s 10 ½% Series B Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Series B Certificate of Designation.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
“Stated Value” means Series A Preferred at $0.06 or Series A1 and A2 and Series B Preferred at $1,000 per share, subject to adjustment as provided in the Certificate of Designation of Series A, Series A-1 Certificate of Designation, the Series A-2 Certificate of Designation and Series B Certificate of Designation (as applicable).
“Subsequent Financing” shall have the meaning ascribed to such term in Section 4.8(a).
“Subsequent Financing Notice” shall have the meaning ascribed to such term in Section 4.8(b).
“Subsidiary” shall have the meaning ascribed to such term in Section 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“The Group” refer to Certificate of Designation, Section 1.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market ” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the Toronto Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTC Bulletin Board and the OTC Markets, or any other national or international exchange in which securities, commodities, derivatives and other financial instruments are traded, (or any successors to any of the foregoing).
“Transaction Documents” means this Agreement, the Series A Certificate of Designation, Series A-1 Certificate of Designation, the Series A-2 Certificate of Designation, the Series B Certificate of Designation, the Registration Rights Agreement, all exhibits and schedules thereto and hereto, and any other documents or agreements executed in connection with the transactions contemplated hereunder (including, without limitation, the documents referenced in Section 2.2(c) (ii).
“Transfer Agent” means RCI, the Company or Island Corporate Stock Transfer Inc., the current transfer agent of the Company, with a mailing address of 15500 Roosevelt Blvd, Clearwater, FL 33760, and any successor transfer agent of the Company.
“Underlying Shares” means the shares of Common Stock that are:
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ARTICLE 2
PURCHASE, SALE OR CONVERSION
2.1 Closing.
2.2 Deliveries.
(i) this Agreement and the Registration Rights Agreement, each duly executed by the Company, and
(ii) evidence of the filing and acceptance of the Series B Certificate of Designation from the Secretary of State of Nevada.
(d) And supporting documents for 3rd Party Convertible Notes, and Promissory Notes
2.3 Closing Conditions.
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(iii) The delivery by each Purchaser of the items set forth in Sections 2.2(c) of this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules , which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiary. is the Company’s intent to form subsidiaries.
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(iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(i) the filings required pursuant to Section 4.5 of this Agreement,
(ii) the filings with the Commission pursuant to the Registration Rights Agreement,
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imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to 150% of the shares of Common Stock initially issuable upon conversion of the Preferred Stock issuable hereunder.
The company is currently cooperating in an SEC inquiry and various restatements of previous filings have been requested. To the best of the companies and managements knowledge and in accordance with GAAP, all previous statements are true and accurate. The company relies heavily on accounting and auditing professionals to assure the accuracy of related financial reports however previously filed financial statements of the Company included in the SEC Reports were not in compliance in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. To the best of the Company’s knowledge, such financial statements were prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, however the financial statements fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
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(ii) the Company has not incurred any liabilities (contingent or otherwise) other than
(i) the Company has not altered its method of accounting,
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adversely affect or challenge the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. The Commission issued a 10 day suspension of the Company’s trading beginning @ 9:30am on June 17, 2015 and ending @ 11:59pm on June 30, 2015. The Company has engaged a new accounting firm and has identified a new auditing firm to assist in restating previous filings. The company will remain on the gray sheets until these objectives are completed.
(i) any judgment, decree or order of any court, arbitrator or governmental body or
(i) transactions are executed in accordance with management’s general or specific authorizations,
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Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “ Evaluation Date ”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, severally and not jointly, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):
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(i) an “accredited investor” as defined in Rule 501 under the Securities Act or
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ARTICLE 4
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
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EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge.
(ii) following any sale of such Underlying Shares pursuant to Rule 144,
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4.2 Furnishing of Information. Until the time that no Purchaser owns any Securities, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act. As long as any Purchaser owns any Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities, including without limitation, under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act, including without limitation, within the requirements of the exemption provided by Rule 144.
4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
4.4 Conversion Procedure. The form of Notice of Conversion included in the Series B Certificate of Designation sets forth the totality of the procedures required of the Purchasers in order to convert the Preferred Stock. No additional legal opinion, other information or instructions shall be required of the Purchasers to convert their Preferred Stock. The Company shall honor irrevocable, conversions of the Series B Preferred Stock and shall deliver irrevocably, Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
4.5 Securities Laws Disclosure; Publicity. The Company shall, in accordance with applicable federal securities law, issue a Current Report on Form 8-K and press release disclosing the material terms of the transactions contemplated hereby, and including the Transaction Documents as exhibits thereto. From and after the issuance of such press release, the Company shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its subsidiary, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except:
(a) as required by federal securities law in connection with
(i) any registration statement contemplated by the Registration Rights Agreement and
(ii) the filing of final Transaction Documents (including signature pages thereto) with the Commission; and
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(b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this Section 4.5 .
4.6 Indemnification of Purchasers. Subject to the provisions of this Section 4.6, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.
4.7 Reservation and Listing of Securities.
(i) the Required Minimum on such date, minus
(c) The Company shall, if applicable:
(iii) provide to the Purchasers evidence of such listing or quotation and
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4.8 Participation in Future Financing.
(g) Notwithstanding the foregoing, this Section 4.8 shall not apply in respect of
(i) an Exempt Issuance or
(ii) an underwritten public offering of Common Stock.
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4.9 Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.
4.10 Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5, provided that in no event shall such period extend beyond February 29, 2016. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.5, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that
(i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5,
(ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5 and
(iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiary after the issuance of the initial press release as described in Section 4.5 . Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
4.11 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.
ARTICLE 5
MISCELLANEOUS
5.1 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, 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. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.2 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and
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understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of:
(a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(c) the second (2 ND )Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or
(d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
5.4 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and each Purchaser. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. The parties agree and acknowledge that this Section 5.4 relates solely to waivers, modifications, supplements and amendments to this Agreement, and not to any other Transaction Document.
5.5 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9 and Section 3.2.
5.8 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THE TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY AGREES THAT ALL LEGAL PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENTS (WHETHER BROUGHT AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN NEVADA FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
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CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER OR IS AN INCONVENIENT VENUE FOR SUCH PROCEEDING. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. IF EITHER PARTY SHALL COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS OF THE TRANSACTION DOCUMENTS, THEN, IN ADDITION TO THE OBLIGATIONS OF THE COMPANY UNDER SECTION 4.6, THE PREVAILING PARTY IN SUCH ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE ATTORNEYS’ FEES AND OTHER COSTS AND EXPENSES INCURRED WITH THE INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR PROCEEDING.
5.9 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.10 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
5.11 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.12 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefore, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.13 Remedies.
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agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
5.14 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.
5.15 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.16 Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.17 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
IN WITNESS WHEREOF, the Company and the Purchaser have duly executed this Purchase Agreement to be effective as of the date first written above.
COMPANY REVOLUTIONARY CONCEPTS, INC.
By: ________________________________
RONALD CARTER
Its: President & CEO
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PURCHASER
THE GROUP
BY: _________________________
ERNEST DELONG
Trustee
PURCHASER or CONVERSION RECIPENT
By:_______________________________
Ronald Carter
PURCHASER or CONVERSION RECIPIENT
By:_____________________________
Garry Stevenson
PURCHASER or CONVERSION RECIPENT
By:______________________________
Bethiel Tesfassiliassie
PURCHASER or CONVERSION RECIPIENT
By:________________________________
Solomon RC Ali
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