SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
October 19, 2005, by and among Radiate Research, Inc., a Canadian Federal
corporation (the "Company"), and the subscribers identified on the signature
page hereto (each a "Subscriber" and collectively "Subscribers").
WHEREAS, the Company and the Subscribers are executing and delivering
this Agreement in reliance upon one or more of the exemptions from securities
registration afforded by the United States Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "U.S. 1933
Act").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the
Subscribers, as provided herein, and the Subscribers, in the aggregate, shall
purchase up to $105,000 (the "Purchase Price") of shares of the Company's common
stock, no par value (the "Common Stock") at a per share purchase price equal to
$0.075 ("Purchase Price"); and share purchase warrants (the "Warrants"), in the
forms attached hereto as Exhibit A and Exhibit B, to purchase shares of Common
Stock (the "Warrant Shares"). $21,000 of the Purchase Price shall be payable on
the Initial Closing Date ("Initial Closing Purchase Price"). $84,000 of the
Purchase Price will be payable within five (5) business days after the actual
filing ("Actual Filing Date") of the Registration Statement as defined in
Section 11.1 of this Agreement ("Second Closing Purchase Price"). The shares of
Common Stock (the "Shares"), the Warrants and the Warrant Shares are
collectively referred to herein as the "Securities" and the offering and sale of
the Securities is referred to herein as the "Offering."; and
WHEREAS, the aggregate proceeds of the sale of the Shares and the
Warrants contemplated hereby shall be held in escrow and paid out pursuant to
the terms of a Funds Escrow Agreement to be executed by the parties
substantially in the form attached hereto as Exhibit C (the "Escrow Agreement").
NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Subscribers hereby
agree as follows:
1. Initial Closing. Subject to the satisfaction or waiver of the terms
and conditions of this Agreement, on the Initial Closing Date, each Subscriber
shall purchase and the Company shall sell to each Subscriber Shares and Warrants
in the amount designated on the signature page hereto ("Initial Closing Shares
and Warrants"). The aggregate amount of the Shares and Warrants to be purchased
by the Subscribers on the Initial Closing Date shall, in the aggregate, be equal
to the Initial Closing Purchase Price. The Initial Closing Date shall be the
date that subscriber funds representing the net amount due the Company from the
Initial Closing Purchase Price of the Offering is transmitted by wire transfer
or otherwise to or for the benefit of the Company.
2. Second Closing.
(a) Second Closing. The closing date in relation to the Second
Closing Purchase Price shall be the fifth (5th) business day after the
Actual Filing Date (the "Second Closing Date"). Subject to the
satisfaction or waiver of the terms and conditions of this Agreement on
the Second Closing Date, each Subscriber shall purchase and the Company
shall sell to each Subscriber Shares and Warrants in the amount
designated on the signature page hereto ("Second Closing Shares and
Warrants"). The aggregate Purchase Price of the Second Closing Shares
and Warrants for all Subscribers shall be equal to the Second Closing
Purchase Price. The Second Closing Shares and Warrants shall be
identical to the Shares and Warrants issuable on the Initial Closing
Date except that the number of Shares and Warrants issued shall be
equitably adjusted to offset the effect of stock splits, stock
dividends, pro rata distributions of property or equity interests to
the Company's shareholders after the Initial Closing Date.
(b) Conditions to Second Closing. The occurrence of the Second
Closing is expressly contingent on (i) the truth and accuracy, on the
Effective Date, Actual Filing Date and the Second Closing Date of the
representations and warranties of the Company and Subscriber contained
in this Agreement, (ii) continued compliance with the covenants of the
Company set forth in this Agreement, (iii) the non-occurrence of any
Event of Default (as defined in the Shares and Warrants) or other
default by the Company of its obligations and undertakings contained in
this Agreement, (iv) the delivery on the Second Closing Date of Second
Closing Shares and Warrants, and (v) the delivery of the Second Closing
Warrants for which the Shares issuable upon exercise have been included
in the Registration Statement which must be filed as of the Second
Closing Date. The exercise prices of the Warrants issuable on the
Second Closing Date shall be adjusted to offset the effect of stock
splits, stock dividends, pro rata distributions of property or equity
interests to the Company's shareholders after the Initial Closing Date.
(c) Second Closing Deliveries. On the Second Closing Date, the
Company will deliver the Second Closing Shares and Second Closing
Warrants to the Escrow Agent and each Subscriber will deliver his
portion of the respective Purchase Price to the Escrow Agent. On the
Second Closing Date, the Company will deliver a certificate ("Second
Closing Certificate") signed by its chief executive officer or chief
financial officer (i) representing the truth and accuracy of all the
representations and warranties made by the Company contained in this
Agreement, as of the Initial Closing Date, the Actual Filing Date, and
the Second Closing Date, as if such representations and warranties were
made and given on all such dates, (ii) adopting the covenants and
conditions set forth in Sections 9,10,11, and 12 of this Agreement in
relation to the Second Closing Shares and Second Closing Warrants,
(iii) representing the timely compliance by the Company with the
Company's registration requirements set forth in Section 11 of this
Agreement, and (iv) certifying that an Event of Default has not
occurred. A legal opinion nearly identical to the legal opinion
referred to in Section 6 of this Agreement shall be delivered to each
Subscriber at the Second Closing in relation to the Company, Second
Closing Shares, and Second Closing Warrants ("Second Closing Legal
Opinion"). The Second Closing Legal Opinion must also state that all of
the Registrable Securities have been included for registration in a
registration statement as of the Actual Filing Date and Second Closing
Date.
3. Warrants.
(a) A Warrants. On each Closing Date the Company will issue
and deliver Warrants to the Subscribers. Class A Warrant will be issued
in the amount designated on the signature page hereto. The per Warrant
Share exercise price to acquire a Warrant Share upon exercise of a
Class A Warrant shall be $.075. The Class A Warrants shall be
exercisable until three (3) years after the Closing Date. The Warrants
will be subject to Call by the Company as described in Exhibit A.
(b) B Warrants. On each Closing Date the Company will issue
Class B Warrants to the Subscribers. Class B Warrants will be issued in
the amount designated on the signature page hereto. The per Warrant
Share exercise price to acquire a Warrant Share upon exercise of a
Class B Warrant shall be $.075. The Class B Warrants shall be
exercisable until three (3) days. The B Warrants will be subject to
Call as described in Exhibit B hereto.
4. Subscriber's Representations and Warranties. Each Subscriber hereby
represents and warrants to and agrees with the Company only as to such
Subscriber that:
(a) Information on Company. The Subscriber has received in
writing from the Company such information concerning its operations,
financial condition and other matters as the Subscriber has requested
in writing (such other information is collectively, the "Other Written
Information"), and considered all factors the Subscriber deems material
in deciding on the advisability of investing in the Securities.
(b) Information on Subscriber. The Subscriber is, and will be
at the time of the conversion of the Shares and exercise of any of the
Warrants, an "accredited investor", as such term is defined in Rule 501
of Regulation D and a "Non-U.S. Person" as such term is defined in Rule
902(k) of Regulation S, both promulgated by the Commission under the
U.S. 1933 Act, is experienced in investments and business matters, has
made investments of a speculative nature and has purchased securities
of United States publicly-owned companies in private placements in the
past and, with its representatives, has such knowledge and experience
in financial, tax and other business matters as to enable the
Subscriber to utilize the information made available by the Company to
evaluate the merits and risks of and to make an informed investment
decision with respect to the proposed purchase, which represents a
speculative investment. The Subscriber has the authority and is duly
and legally qualified to purchase and own the Securities. The
Subscriber is able to bear the risk of such investment for an
indefinite period and to afford a complete loss thereof. The
information set forth on the signature page hereto regarding the
Subscriber is accurate.
(c) Purchase of Common Stock and Warrants. On each Closing
Date, the Subscriber will purchase the Shares and Warrants as principal
for its own account for investment only and not with a view toward, or
for resale in connection with, the public sale or any distribution
thereof.
(d) Compliance with Securities Act. The Subscriber understands
and agrees that the Securities have not been registered under the U.S.
1933 Act or any applicable state securities laws, by reason of their
issuance in a transaction that does not require registration under the
U.S. 1933 Act (based in part on the accuracy of the representations and
warranties of Subscriber contained herein), and that such Securities
must be held indefinitely unless a subsequent disposition is registered
under the U.S. 1933 Act or any applicable state securities laws or is
exempt from such registration.
(e) Shares Legend. The Shares and the Warrant Shares shall
bear the following or similar legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED.
THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO RADIATE RESEARCH, INC. THAT SUCH REGISTRATION
IS NOT REQUIRED."
(f) Warrants Legend. The Warrants shall bear the following or
similar legend:
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE
COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE SECURITIES LAW
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO RADIATE
RESEARCH, INC. THAT SUCH REGISTRATION IS NOT REQUIRED."
(g) Communication of Offer. The offer to sell the Securities
was directly communicated to the Subscriber by the Company. At no time
was the Subscriber presented with or solicited by any leaflet,
newspaper or magazine article, radio or television advertisement, or
any other form of general advertising or solicited or invited to attend
a promotional meeting otherwise than in connection and concurrently
with such communicated offer.
(h) Authority; Enforceability. This Agreement and other
agreements delivered together with this Agreement or in connection
herewith have been duly authorized, executed and delivered by the
Subscriber and are valid and binding agreements enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights
generally and to general principles of equity; and Subscriber has full
corporate power and authority necessary to enter into this Agreement
and such other agreements and to perform its obligations hereunder and
under all other agreements entered into by the Subscriber relating
hereto.
(i) Restricted Securities. Subscriber understands that the
Securities have not been registered under the U.S. 1933 Act and such
Subscriber will not sell, offer to sell, assign, pledge, hypothecate or
otherwise transfer any of the Securities unless (i) pursuant to an
effective registration statement under the U.S. 1933 Act, (ii) such
Subscriber provides the Company with an opinion of counsel, in a form
reasonably acceptable to the Company, to the effect that a sale,
assignment or transfer of the Securities may be made without
registration under the U.S. 1933 Act, or (iii) Subscriber provides the
Company with reasonable assurances (in the form of seller and broker
representation letters) that the Shares or the Warrant Shares, as the
case may be, can be sold pursuant to (A) Rule 144 promulgated under the
U.S. 1933 Act, (B) Rule 144(k) promulgated under the U.S. 1933 Act, of
(C) Regulation S promulgated under the U.S. 1933 Act, in each case
following the applicable holding period set forth therein.
Notwithstanding anything to the contrary contained in this Agreement,
such Subscriber may transfer (without restriction and without the need
for an opinion of counsel) the Securities to its Affiliates (as defined
below) provided that each such Affiliate is an "accredited investor"
under Regulation D and such Affiliate agrees to be bound by the terms
and conditions of this Agreement.
For the purposes of this Agreement, an "Affiliate" of any
person or entity means any other person or entity directly or
indirectly controlling, controlled by or under direct or indirect
common control with such person or entity. For purposes of this
definition, "control" means the power to direct the management and
policies of such person or firm, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
(j) No United States Governmental Review. Each Subscriber
understands that no United States federal or state agency or any other
governmental or state agency has passed on or made recommendations or
endorsement of the Securities or the suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the
merits of the offering of the Securities.
(k) No Canadian Governmental Review. Each Subscriber
understands that no Canadian federal or provincial agency or any other
governmental or state agency has passed on or made recommendations or
endorsement of the Securities or the suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the
merits of the offering of the Securities.
(l) No Prior Short Selling. Each Subscriber represents and
warrants to the Company that as of the date the Subscriber became aware
of the offering of the Securities, such Subscriber and such
Subscriber's Affiliates have not, directly or indirectly had any (i)
"short" position (as such term is employed in Rule 3b-3 of the
Securities and Exchange Act of 1934) in the Common Stock, or (ii) a
hedged position which would establish a net short position with respect
to the Common Stock.
(m) Correctness of Representations. Each Subscriber represents
as to such Subscriber that the foregoing representations and warranties
are true and correct as of the date hereof and, unless a Subscriber
otherwise notifies the Company prior to each Closing Date shall be true
and correct as of each Closing Date.
(n) Survival. The foregoing representations and warranties
shall survive the Second Closing Date for a period of two years.
3. Company Representations and Warranties. The Company represents and
warrants to and agrees with each Subscriber that:
(a) Due Incorporation. The Company and each of its
subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the respective jurisdictions of their
incorporation and have the requisite corporate power to own their
properties and to carry on their business as now being conducted. The
Company and each of its subsidiaries is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction
where the nature of the business conducted or property owned by it
makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a Material Adverse
Effect. For purpose of this Agreement, a "material adverse effect"
shall mean a material adverse effect on the financial condition,
results of operations, properties or business of the Company taken as a
whole.
(b) Outstanding Stock. All issued and outstanding shares of
capital stock of the Company and each of its subsidiaries have been
duly authorized and validly issued and are fully paid and
non-assessable.
(c) Authority; Enforceability. This Agreement, the Shares, the
Warrants, the Escrow Agreement and any other agreements delivered
together with this Agreement or in connection herewith (collectively
"Transaction Documents") have been duly authorized, executed and
delivered by the Company and are valid and binding agreements
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights generally and to general principles of equity. The Company has
full corporate power and authority necessary to enter into and deliver
the Transaction Documents and to perform its obligations thereunder.
(d) Additional Issuances. There are no outstanding agreements
or preemptive or similar rights affecting the Company's common stock or
equity and no outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of any shares of
common stock or equity of the Company or other equity interest in any
of the subsidiaries of the Company except as described on Schedule
3(d).
(e) Consents. No consent, approval, authorization or order of
any court, governmental agency or body or arbitrator having
jurisdiction over the Company, or any of its Affiliates, the National
Association of Securities Dealers, Inc. ("NASD"), Pink Sheets LLC
("Pink Sheets") or the Company's shareholders is required for the
execution by the Company of the Transaction Documents and compliance
and performance by the Company of its obligations under the Transaction
Documents, including, without limitation, the issuance and sale of the
Securities.
(f) No Violation or Conflict. Assuming the representations and
warranties of the Subscribers in Section 6 are true and correct,
neither the issuance and sale of the Securities nor the performance of
the Company's obligations under this Agreement and all other agreements
entered into by the Company relating thereto by the Company will:
(i) violate, conflict with, result in a breach of, or
constitute a default (or an event which with the giving of
notice or the lapse of time or both would be reasonably likely
to constitute a default) under (A) the articles or certificate
of incorporation, charter or bylaws of the Company, (B) to the
Company's knowledge, any decree, judgment, order, law, treaty,
rule, regulation or determination applicable to the Company of
any court, governmental agency or body, or arbitrator having
jurisdiction over the Company or any of its subsidiaries or
over the properties or assets of the Company or any of its
Affiliates, (C) the terms of any bond, debenture, note or any
other evidence of indebtedness, or any agreement, stock option
or other similar plan, indenture, lease, mortgage, deed of
trust or other instrument to which the Company or any of its
Affiliates or subsidiaries is a party, by which the Company or
any of its Affiliates or subsidiaries is bound, or to which
any of the properties of the Company or any of its Affiliates
or subsidiaries is subject, or (D) the terms of any "lock-up"
or similar provision of any underwriting or similar agreement
to which the Company, or any of its Affiliates or subsidiaries
is a party except the violation, conflict, breach, or default
of which would not have a Material Adverse Effect on the
Company; or
(ii) result in the creation or imposition of any
lien, charge or encumbrance upon the Securities or any of the
assets of the Company, its subsidiaries or any of its
Affiliates; or
(iii) result in the activation of any anti-dilution
rights or a reset or repricing of any debt or security
instrument of any other creditor or equity holder of the
Company, nor result in the acceleration of the due date of any
obligation of the Company; or
(iv) result in the activation of any piggy-back
registration rights of any person or entity holding securities
of the Company or having the right to receive securities of
the Company.
(g) The Securities. The Securities upon issuance:
(i) are, or will be, free and clear of any security
interests, liens, claims or other encumbrances, subject to
restrictions upon transfer under the U.S. 1933 Act and any
applicable state securities laws;
(ii) have been, or will be, duly and validly
authorized and on the date of conversion of the Shares and
upon exercise of the Warrants, the Shares and Warrant Shares
will be duly and validly issued, fully paid and non-assessable
(and if registered pursuant to the U.S. 1933 Act, and resold
pursuant to an effective registration statement will be free
trading and unrestricted, provided that each Subscriber
complies with the prospectus delivery requirements of the X.X.
0000 Xxx);
(iii) will not have been issued or sold in violation
of any preemptive or other similar rights of the holders of
any securities of the Company; and
(iv) will not subject the holders thereof to personal
liability by reason of being such holders.
(h) Litigation. There is no pending or, to the best knowledge
of the Company, threatened action, suit, proceeding or investigation
before any court, governmental agency or body, or arbitrator having
jurisdiction over the Company, or any of its Affiliates that would
affect the execution by the Company or the performance by the Company
of its obligations under the Transaction Documents. Except as disclosed
in the Other Written Information, there is no pending or, to the best
knowledge of the Company, basis for or threatened action, suit,
proceeding or investigation before any court, governmental agency or
body, or arbitrator having jurisdiction over the Company, or any of its
Affiliates which litigation if adversely determined would have a
Material Adverse Effect on the Company.
(i) Not a Reporting Company. The Company is a privately-held
company that is not subject to reporting obligations pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended (the
"U.S. 1934 Act") and does not have a class of common shares registered
pursuant to Section 12(g) of the U.S. 1934 Act. Pursuant to the
provisions of the U.S. 1934 Act, the Company is not required to file
reports or other materials with the Commission during the preceding
twelve months.
(j) No Market Manipulation. The Company has not taken, and
will not take, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock of the Company to
facilitate the sale or resale of the Securities or affect the price at
which the Securities may be issued or resold.
(k) Information Concerning Company. The Other Written
Information contains all material information relating to the Company
and its operations and financial condition as of their respective dates
which information is required to be disclosed therein. Since the date
of the financial statements included in the Other Written Information,
and except as modified in the Other Written Information or in the
Schedules hereto, there has been no material adverse change in the
Company's business, financial condition or affairs not disclosed in the
Other Written Information. The Other Written Information do not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances when made.
(l) Stop Transfer. Prior to the Effective Date, the
Securities, when issued, will be restricted securities. The Company
will not issue any stop transfer order or other order impeding the
sale, resale or delivery of any of the Securities, except as may be
required by any applicable federal or state securities laws and unless
contemporaneous notice of such instruction is given to the Subscriber.
(m) Defaults. Except as described on Schedule 3(m), the
Company is not in violation of its articles of incorporation or bylaws.
The Company is (i) not in default under or in violation of any other
material agreement or instrument to which it is a party or by which it
or any of its properties are bound or affected, which default or
violation would have a Material Adverse Effect on the Company, (ii) not
in default with respect to any order of any court, arbitrator or
governmental body or subject to or party to any order of any court or
governmental authority arising out of any action, suit or proceeding
under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition or similar matters, or (iii) to
its knowledge not in violation of any statute, rule or regulation of
any governmental authority which violation would have a Material
Adverse Effect on the Company.
(n) No Integrated Offering. Neither the Company, nor any of
its Affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that would
cause the offer of the Securities pursuant to this Agreement to be
integrated with prior offerings by the Company for purposes of the U.S.
1933 Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of the NASD or Pink
Sheets. Nor will the Company or any of its Affiliates or subsidiaries
take any action or steps that would cause the offer of the Securities
to be integrated with other offerings. The Company will not conduct any
offering other than the transactions contemplated hereby that will be
integrated with the offer or issuance of the Securities.
(o) No General Solicitation. Neither the Company, nor any of
its Affiliates, nor to its knowledge, any person acting on its or their
behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the U.S. 1933
Act) in connection with the offer or sale of the Securities.
(p) Listing. The Company's common stock is not quoted on the
OTC Bulletin Board or Pink Sheets. The Company has not received any
oral or written notice that its common stock is not eligible nor will
become ineligible for quotation on the OTC Bulletin Board or Pink
Sheets nor that its common stock does not meet all requirements for
such quotation and the Company satisfies all the requirements for the
quotation of its common stock on the OTC Bulletin Board or Pink Sheets.
(q) No Undisclosed Liabilities. The Company has no liabilities
or obligations which are material, individually or in the aggregate,
which are not disclosed in the Other Written Information, other than
those incurred in the ordinary course of the Company's businesses since
May 31, 2005 and which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect other than as
set forth in Schedule 3(q).
(r) No Undisclosed Events or Circumstances. Since May 31,
2005, no event or circumstance has occurred or exists with respect to
the Company or its businesses, properties, operations or financial
condition, that, under applicable law, rule or regulation, requires
public disclosure or announcement prior to the date hereof by the
Company but which has not been so publicly announced or disclosed in
the Other Written Information.
(s) Capitalization. The authorized and outstanding capital stock of the
Company as of the date of this Agreement and the Closing Date are set
forth on Schedule 3(s). Except as set forth in the Other Written
Information and Schedule 3(d), there are no options, warrants, or
rights to subscribe to, securities, rights or obligations convertible
into or exchangeable for or giving any right to subscribe for any
shares of capital stock of the Company. All of the outstanding shares
of Common Stock of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable.
(t) Dilution. The Company's executive officers and directors understand
the nature of the Securities being sold hereby and
recognize that the issuance of the Securities will have a potential
dilutive effect on the equity holdings of other holders
of the Company's equity or rights to receive equity of the Company.
The board of directors of the Company has concluded,
in its good faith business judgment, that the issuance of the
Securities is in the best interests of the Company. The
Company specifically acknowledges that its obligation to issue the
Shares upon conversion of the Shares, and the Warrant
Shares upon exercise of the Warrants is binding upon the Company and
enforceable regardless of the dilution such issuance
may have on the ownership interests of other shareholders of the
Company or parties entitled to receive equity of the
Company.
(u) No Disagreements with Accountants and Lawyers. There are no
disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and
lawyers formerly or presently employed by the Company, including but
not limited to disputes or conflicts over payment owed to such
accountants and lawyers.
(v) Investment Company. The Company is not an Affiliate of an
"investment company" within the meaning of the U.S. Investment Company
Act of 1940, as amended.
(w) Correctness of Representations. The Company represents
that the foregoing representations and warranties are true and correct
as of the date hereof in all material respects, and, unless the Company
otherwise notifies the Subscribers prior to each Closing Date, shall be
true and correct in all material respects as of each Closing Date.
(x) Survival. The foregoing representations and warranties
shall survive the Second Closing Date for a period of two years.
6. (a) Exempt Offering - United States. The offer and issuance of the
Securities to the Subscribers is being made pursuant to the exemption from the
registration provisions of the U.S. 1933 Act including Section 4(2) and Section
4(6) of the U.S. 1933 Act, Rule 506 of Regulation D and Rule 903 of Regulation S
promulgated thereunder. On the Closing Date, the Company will provide an opinion
reasonably acceptable to Subscriber from the Company's legal counsel opining on
the availability of an exemption from registration under the U.S. 1933 Act as it
relates to the offer and issuance of the Securities and other matters reasonably
requested by Subscribers. A form of the legal opinion is annexed hereto as
Exhibit D. The Company will provide, at the Company's expense, such other legal
opinions in the future as are reasonably necessary for the issuance and resale
of the Common Stock issuable upon conversion of the Shares and exercise of the
Warrants.
(b) Exempt Offering - Canada. The Securities of the Company offered
pursuant to this Agreement are being privately offered to purchasers who are
"accredited Investors," pursuant to prospectus and registration exemptions and
requirements of Rule 45-501 implemented by the Ontario Securities Commission,
and revised multilateral instrument 45-103 implemented by the regulatory
authorities in Alberta, British Columbia, Manitoba, Newfoundland and Labrador,
Northwest Territories, Nova Scotia, Nunavut, Xxxxxx Xxxxxx Island and
Saskatchewan. This Agreement is restricted to "accredited investors" for units
under such securities legislation.
7. Exercise of Warrants. The Warrants shall be exercisable by the
Subscribers as Described in Exhibit A and Exhibit B respectively.
8. Finder/Legal Fees and Audit Fees.
(a) Finder's Fee. The Company on the one hand, and each
Subscriber (for himself only) on the other hand, agree to indemnify the
other against and hold the other harmless from any and all liabilities
to any persons claiming brokerage commissions or finder's fees other
than the finder identified on Schedule 8 hereto (each a "Finder") on
account of services purported to have been rendered on behalf of the
indemnifying party in connection with this Agreement or the
transactions contemplated hereby and arising out of such party's
actions.
(b) Legal Fees. The Company shall pay to Xxxxx X. Xxxxx, P.C.
a fee of $30,000 ("Legal Fees") to cover Registration Expenses
described in Section 11.5. Ten Thousand Dollars ($10,000) will be
payable on the Initial Closing Date, $10,000 shall be payable on the
Second Closing Date, and $10,000 will be paid on the Effective Date.
Such portions of the Legal Fees will be payable out of funds held
pursuant to the Escrow Agreement.
(c) Audit Fees. The Company shall pay to Xxxxxx & Xxxxxx, PC,
Registered Certified Public Accountants, a fee of $10,000 ("Audit Fee")
to audit the financial statements of the Company. The Audit Fee will be
payable on the Initial Closing Date out of funds held pursuant to the
Escrow Agreement.
9. Covenants of the Company. The Company covenants and agrees with the
Subscribers as follows:
(a) Stop Orders. The Company will advise the Subscribers,
promptly after it receives notice of issuance by the Commission, any
state securities commission or any other regulatory authority of any
stop order or of any order preventing or suspending any offering of any
securities of the Company, or of the suspension of the qualification of
the Common Stock of the Company for offering or sale in any
jurisdiction, or the initiation of any proceeding for any such purpose.
(b) Listing. The Company shall promptly secure the listing of
the shares of Common Stock and the Warrant Shares upon each national
securities exchange, or automated quotation system upon which they are
or become eligible for listing (subject to official notice of issuance)
and shall maintain such listing so long as any Warrants are
outstanding. The Company will maintain the listing of its Common Stock
on the American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National
Market System, OTC Bulletin Board, Pink Sheets, or New York Stock
Exchange (whichever of the foregoing is at the time the principal
trading exchange or market for the Common Stock (the "Principal
Market")), and will comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules of
the Principal Market, as applicable. The Company will provide the
Subscribers copies of all notices it receives notifying the Company of
the threatened and actual delisting of the Common Stock from any
Principal Market. As of the date of this Agreement and the Closing
Date, the Bulletin Board will be the Principal Market.
(c) Market Regulations. The Company shall notify the
Commission, the Principal Market and applicable state authorities, in
accordance with their requirements, of the transactions contemplated by
this Agreement, and shall take all other necessary action and
proceedings as may be required and permitted by applicable law, rule
and regulation, for the legal and valid issuance of the Securities to
the Subscribers and promptly provide copies thereof to Subscriber.
(d) Reporting Requirements. From the date of this Agreement
and until the sooner of (i) two (2) years after the Second Closing
Date, or (ii) until all the Shares and Warrant Shares have been resold
or transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume limitation,
the Company will (v) cause its Common Stock to continue to be
registered under Section 12(b) or 12(g) of the U.S. 1934 Act, (x)
comply in all respects with its reporting and filing obligations under
the U.S. 1934 Act, (y) comply with all reporting requirements that are
applicable to an issuer with a class of shares registered pursuant to
Section 12(b) or 12(g) of the U.S. 1934 Act, as applicable, and (z)
comply with all requirements related to any registration statement
filed pursuant to this Agreement. The Company will use its best efforts
not to take any action or file any document (whether or not permitted
by the U.S. 1933 Act or the X.X. 0000 Xxx or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its
reporting and filing obligations under said acts until two (2) years
after the Second Closing Date. Until the earlier of the resale of the
Common Stock and the Warrant Shares by each Subscriber or two (2) years
after the Warrants have been exercised, the Company will use its best
efforts to continue the listing or quotation of the Common Stock on the
Principal Market or other market with the reasonable consent of
Subscribers holding a majority of the Shares and Warrant Shares, and
will comply in all respects with the Company's reporting, filing and
other obligations under the bylaws or rules of the Principal Market.
The Company agrees to timely file a Form D with respect to the
Securities if required under Regulation D and to provide a copy thereof
to each Subscriber promptly after such filing.
(e) Use of Proceeds. The Company undertakes to use the
proceeds of the Subscribers' funds for the purposes set forth on
Schedule 9(e) hereto. Except as set forth on Schedule 9(e), the
Purchase Price may not and will not be used for accrued and unpaid
officer and director salaries, payment of financing related debt,
redemption of outstanding redeemable Shares or equity instruments of
the Company nor non-trade obligations outstanding on the Closing Date.
(f) Reservation. Prior to the Closing Date, the Company
undertakes to reserve, pro rata, on behalf of each holder of Shares or
Warrant, from its authorized but unissued common stock, a number of
common shares equal to one hundred percent (100%) of the amount of
Common Stock necessary to allow each holder of Shares to be able to
convert all such outstanding Shares and interest and reserve the amount
of Warrant Shares issuable upon exercise of the Warrants. Failure to
have sufficient shares reserved pursuant to this Section 10(f) for
three (3) consecutive business days or ten (10) days in the aggregate
shall be a material default of the Company's obligations under this
Agreement.
(g) Taxes. From the date of this Agreement and until the
sooner of (i) two (2) years after the Second Closing Date, or (ii)
until all the Shares and Warrant Shares have been resold or transferred
by all the Subscribers pursuant to the Registration Statement or
pursuant to Rule 144, without regard to volume limitations, the Company
will promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and governmental
charges or levies imposed upon the income, profits, property or
business of the Company; provided, however, that any such tax,
assessment, charge or levy need not be paid if the validity thereof
shall currently be contested in good faith by appropriate proceedings
and if the Company shall have set aside on its books adequate reserves
with respect thereto, and provided, further, that the Company will pay
all such taxes, assessments, charges or levies forthwith upon the
commencement of proceedings to foreclose any lien which may have
attached as security therefore.
(h) Insurance. From the date of this Agreement and until the
sooner of (i) two (2) years after the Second Closing Date, or (ii)
until all the Shares and Warrant Shares have been resold or transferred
by all the Subscribers pursuant to the Registration Statement or
pursuant to Rule 144, without regard to volume limitations, the Company
will keep its assets which are of an insurable character insured by
financially sound and reputable insurers against loss or damage by
fire, explosion and other risks customarily insured against by
companies in the Company's line of business, in amounts sufficient to
prevent the Company from becoming a co-insurer and not in any event
less than one hundred percent (100%) of the insurable value of the
property insured; and the Company will maintain, with financially sound
and reputable insurers, insurance against other hazards and risks and
liability to persons and property to the extent and in the manner
customary for companies in similar businesses similarly situated and to
the extent available on commercially reasonable terms.
(i) Books and Records. From the date of this Agreement and
until the sooner of (i) two (2) years after the Second Closing Date, or
(ii) until all the Shares and Warrant Shares have been resold or
transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume
limitations, the Company will keep true records and books of account in
which full, true and correct entries will be made of all dealings or
transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.
(j) Governmental Authorities. From the date of this Agreement
and until the sooner of (i) two (2) years after the Second Closing
Date, or (ii) until all the Shares and Warrant Shares have been resold
or transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume
limitations, the Company shall duly observe and conform in all material
respects to all valid requirements of governmental authorities relating
to the conduct of its business or to its properties or assets.
(k) Intellectual Property. From the date of this Agreement and
until the sooner of (i) two (2) years after the Second Closing Date, or
(ii) until all the Shares and Warrant Shares have been resold or
transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume
limitations, the Company shall maintain in full force and effect its
corporate existence, rights and franchises and all licenses and other
rights to use intellectual property owned or possessed by it and
reasonably deemed to be necessary to the conduct of its business.
(l) Properties. From the date of this Agreement and until the
sooner of (i) two (2) years after the Second Closing Date, or (ii)
until all the Shares and Warrant Shares have been resold or transferred
by all the Subscribers pursuant to the Registration Statement or
pursuant to Rule 144, without regard to volume limitation, the Company
will keep its properties in good repair, working order and condition,
reasonable wear and tear excepted, and from time to time make all
necessary and proper repairs, renewals, replacements, additions and
improvements thereto; and the Company will at all times comply with
each provision of all leases to which it is a party or under which it
occupies property if the breach of such provision could reasonably be
expected to have a Material Adverse Effect.
(m) Confidentiality/Public Announcement. From the date of this
Agreement and until the sooner of (i) two (2) years after the Second
Closing Date, or (ii) until all the Shares and Warrant Shares have been
resold or transferred by all the Subscribers pursuant to the
Registration Statement or pursuant to Rule 144, without regard to
volume limitations, the Company agrees that except in connection with a
Form 8-K or the Registration Statement, it will not disclose publicly
or privately the identity of the Subscribers unless expressly agreed to
in writing by a Subscriber or only to the extent required by law and
then only upon five days prior notice to Subscriber. In any event and
subject to the foregoing, the Company undertakes to file a Form 8-K or
make a public announcement describing the Offering not later than the
first business day after each Closing Date. In the Form 8-K or public
announcement, the Company will specifically disclose the amount of
common stock outstanding immediately after each Closing. A form of the
proposed Form 8-K or public announcement to be employed in connection
with each Closing Date is annexed hereto as Exhibit E.
(n) Further Registration Statements. Except for a registration
statement filed on behalf of the Subscribers pursuant to Section 11 of
this Agreement or in connection with the securities identified on
Schedule 11.1 hereto, the Company will not file any registration
statements, including but not limited to Form S-8, with the Commission
or with state regulatory authorities without the consent of the
Subscriber until one hundred and eighty (180) days after the Actual
Filing Date during which such Registration Statement shall have been
current and available for use in connection with the public resale of
the Shares and Warrant Shares ("Exclusion Period").
(o) Issuance of Common Stock. If at any time after the Initial
Closing until 180 days after the Second Closing Date, the Company shall
issue, or agree to issue, shares of Common Stock, other than shares of
Common Stock issued upon exercise of then outstanding Warrants, without
the written consent of a majority of the Subscribers, then the Company
shall issue ratably to the Subscribers the number of shares of Common
Stock equal to four hundred percent (400%) of the number of shares
issued or agreed to be issued.
(p) Issuance of Other Securities. If, at any time after the
Initial Closing the Company shall issue any securities which are
convertible into or exchangeable for Common Stock ("Convertible
Securities"), either (i) at a conversion or exchange rate based on a
discount from the market price of the Common Stock at the time of
conversion or exercise or (ii) with a fixed conversion or exercise
price less than the Purchase Price, then, at the Holder's option: (x)
in the case of clause (i), the Purchase Price in respect of any Common
Stock after such issuance shall be calculated utilizing the greatest
discount applicable to any such Convertible Securities, to the extent
such calculation would result in a lower Purchase Price; and (y) in the
case of clause (ii), the Purchase Price will be reduced to such lesser
conversion or exercise price, to the extent that this would result in a
lower Purchase Price.
(q) Blackout. The Company undertakes and covenants that until
the first to occur of (i) the end of the Exclusion Period, or (ii)
until all the Shares and Warrant Shares have been resold pursuant to a
registration statement or Rule 144, the Company will not enter into any
acquisition, merger, exchange or sale or other transaction that could
have the effect of delaying the effectiveness of any pending
registration statement or causing an already effective registration
statement to no longer be effective or current for a period of fifteen
(15) or more days.
(r) Non-Public Information. The Company covenants and agrees
that neither it nor any other Person acting on its behalf will provide
any Subscriber or its agents or counsel with any information that the
Company believes constitutes material non-public information, unless
prior thereto such Subscriber shall have agreed in writing to receive
such information. The Company understands and confirms that each
Subscriber shall be relying on the foregoing representations in
effecting transactions in securities of the Company.
10. Covenants of the Company and Subscriber Regarding Indemnification.
(a) The Company agrees to indemnify, hold harmless, reimburse
and defend the Subscribers, the Subscribers' officers, directors,
agents, Affiliates, control persons, and principal shareholders,
against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed
upon the Subscriber or any such person which results, arises out of or
is based upon (i) any material misrepresentation by Company or breach
of any warranty by Company in this Agreement or in any Exhibits or
Schedules attached hereto, or other agreement delivered pursuant
hereto; or (ii) after any applicable notice and/or cure periods, any
breach or default in performance by the Company of any covenant or
undertaking to be performed by the Company hereunder, or any other
agreement entered into by the Company and Subscriber relating hereto.
(b) Each Subscriber agrees to indemnify, hold harmless,
reimburse and defend the Company and each of the Company's officers,
directors, agents, Affiliates, control persons against any claim, cost,
expense, liability, obligation, loss or damage (including reasonable
legal fees) of any nature, incurred by or imposed upon the Company or
any such person which results, arises out of or is based upon (i) any
material misrepresentation by such Subscriber in this Agreement or in
any Exhibits or Schedules attached hereto, or other agreement delivered
pursuant hereto; or (ii) after any applicable notice and/or cure
periods, any breach or default in performance by such Subscriber of any
covenant or undertaking to be performed by such Subscriber hereunder,
or any other agreement entered into by the Company and Subscribers,
relating hereto.
(c) In no event shall the liability of any Subscriber or
permitted successor hereunder or under any other agreement delivered in
connection herewith be greater in amount than the dollar amount of the
net proceeds actually received by such Subscriber upon the sale of
Registrable Securities (as defined herein).
(d) The procedures set forth in Section 11.6 shall apply to
the indemnification set forth in Sections 10(a) and 10(b) above.
11.1. Registration Rights. The Company shall file with the
Commission not later than forty-five (45) days after the Closing Date
(the "Filing Date"), and cause to be declared effective within one
hundred and twenty (120) days after the Closing Date (the "Effective
Date"), a Form F-1 registration statement (the "Registration
Statement") (or such other form that it is eligible to use) in order to
register the Registrable Securities for resale and distribution under
the X.X. 0000 Xxx. The Company will register not less than a number of
shares of common stock in the aforedescribed registration statement
that is equal to 100% of the Shares issuable upon conversion of the
Shares and all of the Warrant Shares issuable pursuant to this
Agreement. The Registrable Securities shall be reserved and set aside
exclusively for the benefit of each Subscriber and Warrant holder, pro
rata, and not issued, employed or reserved for anyone other than each
such Subscriber and Warrant holder. The Registration Statement will
immediately be amended or additional registration statements will be
immediately filed by the Company as necessary to register additional
shares of Common Stock to allow the public resale of all Common Stock
included in and issuable by virtue of the Registrable Securities.
Without the written consent of the Subscriber, no securities of the
Company other than the Registrable Securities will be included in the
Registration Statement except as disclosed on Schedule 11.1. It shall
be deemed a Non-Registration Event if at any time after the Actual
Filing Date the Company has registered for unrestricted resale on
behalf of the Subscriber fewer than 100% of the amount of Common Shares
issuable upon full conversion of all sums due under the Shares and 100%
of the Warrant Shares issuable upon exercise of the Warrants.
11.2. Registration Procedures. The Company will, as expeditiously as
possible:
(a) subject to the timelines provided in this Agreement,
prepare and file with the Commission a registration statement required
by Section 11, with respect to such securities and use its best efforts
to cause such registration statement to become and remain effective for
the period of the distribution contemplated thereby (determined as
herein provided), and promptly provide to the holders of the
Registrable Securities copies of all filings and Commission letters of
comment and notify Subscribers and Xxxxxxxx & Co, 00 Xxxxxxxx Xxxxxx,
Xxxxxx X0X 0XX (by telecopier 011 44 207 355 4975 and by email to
XXxxxxxxx@xxxxxxxxxxxxx.xxx)) within two (2) hours of (i) notice that
the Commission has no comments or no further comments on the
Registration Statement, and (ii) the declaration of effectiveness of
the registration statement, (failure to timely provide notice as
required by this Section 11.2(g) shall be a material breach of the
Company's obligation and an Event of Default as defined in the Shares);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective until such registration statement has been
effective for a period of two (2) years, and comply with the provisions
of the U.S. 1933 Act with respect to the disposition of all of the
Registrable Securities covered by such registration statement in
accordance with the Sellers' intended method of disposition set forth
in such registration statement for such period;
(c) furnish to the Sellers, at the Company's expense, such
number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale
or their disposition of the securities covered by such registration
statement;
(d) use its best efforts to register or qualify the Sellers'
Registrable Securities covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the Sellers
shall request in writing, provided, however, that the Company shall not
for any such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;
(e) if applicable, list the Registrable Securities covered by
such registration statement with any securities exchange on which the
Common Stock of the Company is then listed;
(f) immediately notify the Sellers when a prospectus relating
thereto is required to be delivered under the U.S. 1933 Act, of the
happening of any event of which the Company has knowledge as a result
of which the prospectus contained in such registration statement, as
then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and
(g) provided same would not be in violation of the provision
of Regulation FD under the U.S. 1934 Act, make available for inspection
by the Sellers, and any attorney, accountant or other agent retained by
the Seller or underwriter, all publicly available, non-confidential
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors
and employees to supply all publicly available, non-confidential
information reasonably requested by the seller, attorney, accountant or
agent in connection with such registration statement.
11.3. Provision of Documents. In connection with each registration
described in this Section 11, each Seller will furnish to the Company in writing
such information and representation letters with respect to itself and the
proposed distribution by it as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.
11.4. Non-Registration Events. The Company and the Subscribers agree
that the Sellers will suffer damages if the Registration Statement is not filed
by the Filing Date and not declared effective by the Commission by the Effective
Date, and maintained in the manner and within the time periods contemplated by
Section 11 hereof, and it would not be feasible to ascertain the extent of such
damages with precision. Accordingly, if (i) the Registration Statement is not
filed on or before the Filing Date, (ii) is not declared effective on or before
the sooner of the Effective Date, or within three (3) business days of receipt
by the Company of a written or oral communication from the Commission that the
Registration Statement will not be reviewed or that the Commission has no
further comments, or (iii) any registration statement described in Section 11.1
is filed and declared effective but shall thereafter cease to be effective
(without being succeeded within fifteen (15) business days by an effective
replacement or amended registration statement) for a period of time which shall
exceed 30 days in the aggregate per year (defined as a period of 365 days
commencing on the date the Registration Statement is declared effective) or more
than 20 consecutive days (each such event referred to in clauses (i), (ii),
(iii) and (iv) of this Section 11.4 is referred to herein as a "Non-Registration
Event"), then the Company shall deliver to the holder of Registrable Securities,
as Liquidated Damages, an amount equal to one and one-half percent (1.5%) for
each thirty days or part thereof during the initial sixty (60) days of the
pendency of such Non-Registration Event and two percent (2%) for each thirty
(30) days or part thereof, thereafter of the Purchase Price of the Shares owned
of record by such holder which are subject to such Non-Registration Event.
Liquidated Damages accruing pursuant to a Non-Registration Event described in
Section 11.4(ii) which is cured within thirty (30) days shall be waived, and
such Non-Registration Event shall be deemed not to have occurred. The Company
must pay the Liquidated Damages in cash within ten (10) days after the end of
each thirty (30) day period or shorter part thereof for which Liquidated Damages
are payable. In the event a Registration Statement is filed by the Filing Date
but is withdrawn prior to being declared effective by the Commission, then such
Registration Statement will be deemed to have not been filed.
11.5. Expenses. All expenses incurred by the Company in complying with
Section 11, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses (including reasonable counsel
fees) incurred in connection with complying with state securities or "blue sky"
laws, fees of the National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars, costs of insurance and fee of one
counsel for all Sellers (in an amount not to exceed $30,000) are called
"Registration Expenses." All underwriting discounts and selling commissions
applicable to the sale of Registrable Securities, including any fees and
disbursements of any additional counsel to the Seller, are called "Selling
Expenses." The Company will pay all Registration Expenses in connection with the
registration statement under Section 11. Selling Expenses in connection with
each registration statement under Section 11 shall be borne by the Seller and
may be apportioned among the Sellers in proportion to the number of shares sold
by the Seller relative to the number of shares sold under such registration
statement or as all Sellers thereunder may agree.
11.6. Indemnification and Contribution.
(a) In the event of a registration of any Registrable
Securities under the U.S. 1933 Act pursuant to Section 11, the Company
will, to the extent permitted by law, indemnify and hold harmless the
Seller, each officer of the Seller, each director of the Seller, each
underwriter of such Registrable Securities thereunder and each other
person, if any, who controls such Seller or underwriter within the
meaning of the U.S. 1933 Act, against any losses, claims, damages or
liabilities, joint or several, to which the Seller, or such underwriter
or controlling person may become subject under the U.S. 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
any registration statement under which such Registrable Securities was
registered under the U.S. 1933 Act pursuant to Section 11, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances when made, and will subject to
the provisions of Section 11.6(c) reimburse the Seller, each such
underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable to the Seller
to the extent that any such damages arise out of or are based upon an
untrue statement or omission made in any preliminary prospectus if (i)
the Seller failed to send or deliver a copy of the final prospectus
delivered by the Company to the Seller with or prior to the delivery of
written confirmation of the sale by the Seller to the person asserting
the claim from which such damages arise, (ii) the final prospectus
would have corrected such untrue statement or alleged untrue statement
or such omission or alleged omission, or (iii) to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such
Seller, or any such controlling person in writing specifically for use
in such registration statement or prospectus.
(b) In connection with registration of the Registrable
Securities under the U.S. 1933 Act pursuant to Section 11, each Seller
severally but not jointly will, to the extent permitted by law,
indemnify and hold harmless the Company, and each person, if any, who
controls the Company within the meaning of the U.S. 1933 Act, each
officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each person who controls
any underwriter within the meaning of the U.S. 1933 Act, against all
losses, claims, damages or liabilities, joint or several, to which the
Company or such officer, director, underwriter or controlling person
may become subject under the U.S. 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under
the U.S. 1933 Act pursuant to Section 11, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that the Seller
will be liable hereunder in any such case if and only to the extent
that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with
information pertaining to such Seller, as such, furnished in writing to
the Company by such Seller specifically for use in such registration
statement or prospectus, and provided, further, however, that the
liability of the Seller hereunder shall be limited to the net proceeds
actually received by the Seller from the sale of Registrable Securities
covered by such registration statement.
(c) Promptly after receipt by an indemnified party hereunder
of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing
thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to such indemnified
party other than under this Section 11.6(c) and shall only relieve it
from any liability which it may have to such indemnified party under
this Section 11.6(c), except and only if and to the extent the
indemnifying party is prejudiced by such omission. In case any such
action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof with
counsel satisfactory to such indemnified party, and, after notice from
the indemnifying party to such indemnified party of its election so to
assume and undertake the defense thereof, the indemnifying party shall
not be liable to such indemnified party under this Section 11.6(c) for
any legal expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be reasonable defenses
available to it which are different from or additional to those
available to the indemnifying party or if the interests of the
indemnified party reasonably may be deemed to conflict with the
interests of the indemnifying party, the indemnified parties, as a
group, shall have the right to select one separate counsel and to
assume such legal defenses and otherwise to participate in the defense
of such action, with the reasonable expenses and fees of such separate
counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution in
the event of joint liability under the U.S. 1933 Act in any case in
which either (i) a Seller, or any controlling person of a Seller, makes
a claim for indemnification pursuant to this Section 11.6 but it is
judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or
the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section
11.6 provides for indemnification in such case, or (ii) contribution
under the X.X. 0000 Xxx may be required on the part of the Seller or
controlling person of the Seller in circumstances for which
indemnification is not provided under this Section 11.6; then, and in
each such case, the Company and the Seller will contribute to the
aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that the
Seller is responsible only for the portion represented by the
percentage that the public offering price of its securities offered by
the registration statement bears to the public offering price of all
securities offered by such registration statement, provided, however,
that, in any such case, (y) the Seller will not be required to
contribute any amount in excess of the public offering price of all
such securities sold by it pursuant to such registration statement; and
(z) no person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the U.S. 1933 Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
11.7. Delivery of Unlegended Shares.
(a) Within five (5) business days (such fifth (5th) business
day being the "Unlegended Shares Delivery Date") after the business day
on which the Company has received (i) a notice that Registrable
Securities have been sold either pursuant to the Registration Statement
or Rule 144 under the U.S. 1933 Act, (ii) a representation that the
prospectus delivery requirements, or the requirements of Rule 144, as
applicable, have been satisfied, and (iii) the original share
certificates representing the shares of Common Stock that have been
sold, and (iv) in the case of sales under Rule 144, customary
representation letters of the Subscriber and/or Subscriber's broker
regarding compliance with the requirements of Rule 144, the Company at
its expense, (y) shall deliver, and shall cause legal counsel selected
by the Company to deliver, to its transfer agent (with copies to
Subscriber) an appropriate instruction and opinion of such counsel,
directing the delivery of shares of Common Stock without any legends
including the legend set forth in Section 6(e) above, issuable pursuant
to any effective and current Registration Statement described in
Section 11 of this Agreement or pursuant to Rule 144 under the U.S.
1933 Act (the "Unlegended Shares"); and (z) cause the transmission of
the certificates representing the Unlegended Shares together with a
legended certificate representing the balance of the unsold shares of
Common Stock, if any, to the Subscriber at the address specified in the
notice of sale, via express courier, by electronic transfer or
otherwise on or before the Unlegended Shares Delivery Date. Transfer
fees shall be the responsibility of the Seller.
(b) In lieu of delivering physical certificates representing
the Unlegended Shares, if the Company's transfer agent is participating
in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer program, upon request of a Subscriber, so long as the
certificates therefor do not bear a legend and the Subscriber is not
obligated to return such certificate for the placement of a legend
thereon, the Company shall cause its transfer agent to electronically
transmit the Unlegended Shares by crediting the account of Subscriber's
prime Broker with DTC through its Deposit Withdrawal Agent Commission
system. Such delivery must be made on or before the Unlegended Shares
Delivery Date.
(c) The Company understands that a delay in the delivery of
the Unlegended Shares pursuant to Section 11 hereof later than two
business days after the Unlegended Shares Delivery Date could result in
economic loss to a Subscriber. As compensation to a Subscriber for such
loss, the Company agrees to pay late payment fees (as liquidated
damages and not as a penalty) to the Subscriber for late delivery of
Unlegended Shares in the amount of $100 per business day after the
Delivery Date for each $10,000 of purchase price of the Unlegended
Shares subject to the delivery default. If during any 360 day period,
the Company fails to deliver Unlegended Shares as required by this
Section 11.7 for an aggregate of thirty (30) days, then each Subscriber
or assignee holding Securities subject to such default may, at its
option, require the Company to redeem all or any portion of the Shares
and Warrant Shares subject to such default at a price per share equal
to 130% of the Purchase Price of such Common Stock and Warrant Shares.
The Company shall pay any payments incurred under this Section in
immediately available funds upon demand.
(d) In addition to any other rights available to a Subscriber,
if the Company fails to deliver to a Subscriber Unlegended Shares as
required pursuant to this Agreement, within seven (7) business days
after the Unlegended Shares Delivery Date and the Subscriber purchases
(in an open market transaction or otherwise) shares of common stock to
deliver in satisfaction of a sale by such Subscriber of the shares of
Common Stock which the Subscriber was entitled to receive from the
Company (a "Buy-In"), then the Company shall pay in cash to the
Subscriber (in addition to any remedies available to or elected by the
Subscriber) the amount by which (A) the Subscriber's total purchase
price (including brokerage commissions, if any) for the shares of
common stock so purchased exceeds (B) the aggregate purchase price of
the shares of Common Stock delivered to the Company for reissuance as
Unlegended Shares, together with interest thereon at a rate of 15% per
annum, accruing until such amount and any accrued interest thereon is
paid in full (which amount shall be paid as liquidated damages and not
as a penalty). For example, if a Subscriber purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to $10,000 of purchase price of shares of Common Stock
delivered to the Company for reissuance as Unlegended Shares, the
Company shall be required to pay the Subscriber $1,000, plus interest.
The Subscriber shall provide the Company written notice indicating the
amounts payable to the Subscriber in respect of the Buy-In.
(e) In the event a Subscriber shall request delivery of
Unlegended Shares as described in Section 11.7(e) and the Company is
required to deliver such Unlegended Shares pursuant to Section 11.7(e),
the Company may not refuse to deliver Unlegended Shares based on any
claim that such Subscriber or any one associated or affiliated with
such Subscriber has been engaged in any violation of law, or for any
other reason, unless, an injunction or temporary restraining order from
a court, on notice, restraining and or enjoining delivery of such
Unlegended Shares or exercise of all or part of said Warrant shall have
been sought and obtained and the Company has posted a surety bond for
the benefit of such Subscriber in the amount of 130% of the amount of
the aggregate purchase price of the Common Stock and Warrant Shares
which are subject to the injunction or temporary restraining order,
which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall
be payable to such Subscriber to the extent Subscriber obtains judgment
in Subscriber's favor.
12. (a) Right of First Refusal. Until the Registration Statement has
been effective for the public resale of the Shares and Warrant Shares for two
hundred and twenty (220) days, the Subscribers shall be given not less than
seven (7) business days prior written notice of any proposed sale by the Company
of its common stock or other securities or debt obligations, except in
connection with (i) employee stock options or compensation plans, (ii) as full
or partial consideration in connection with any merger, consolidation or
purchase of substantially all of the securities or assets of any corporation or
other entity, or (iii) as has been described in the Other Written Information
filed with the Commission or delivered to the Subscribers prior to the Closing
Date (collectively "Excepted Issuances"). The Subscribers who exercise their
rights pursuant to this Section 14(a) shall have the right during the seven (7)
business days following receipt of the notice to purchase such offered common
stock, debt or other securities in accordance with the terms and conditions set
forth in the notice of sale in the same proportion to each other as their
purchase of Shares in the Offering. No additional Finder's Fees will be payable
as a result of such transaction. In the event such terms and conditions are
modified during the notice period, the Subscribers shall be given prompt notice
of such modification and shall have the right during the original notice period
or for a period of seven (7) business days following the notice of modification,
whichever is longer, to exercise such right.
(b) Offering Restrictions. From the date of this Agreement and until
the end of the Exclusion Period, except in connection with the Excepted
Issuances, or the unsold portion of the Offering, the Company will not enter
into any agreement to, nor issue any equity, convertible debt or other
securities convertible into common stock without the prior written consent of
the Subscribers, which consent may be withheld for any reason.
(c) Favored Nations Provision. Other than the Excepted Issuances, if at
any time Shares are outstanding, if the Company shall offer, issue or agree to
issue any common stock or securities convertible into or exercisable for shares
of common stock (or modify any of the foregoing which may be outstanding at any
time prior to a Closing Date) to any person or entity at a price per share or
conversion or exercise price per share which shall be less than the Purchase
Price, without the consent of each Subscriber holding Shares and/or Shares, then
the Company shall issue, for each such occasion, additional shares of Common
Stock to each Subscriber so that the average per share purchase price of the
shares of Common Stock issued to the Subscriber (of only the Common Stock or
Warrant Shares still owned by the Subscriber) is equal to such other lower price
per share and the Purchase Price shall automatically be reduced to such other
lower price per share. The delivery to the Subscriber of the additional shares
of Common Stock shall be not later than the closing date of the transaction
giving rise to the requirement to issue additional shares of Common Stock. The
Subscriber is granted the registration rights described in Section 11 hereof in
relation to such additional shares of Common Stock except that the Filing Date
and Effective Date vis-a-vis such additional common shares shall be,
respectively, the sixtieth (60th) and one hundred and twentieth (120th) date
after the closing date giving rise to the requirement to issue the additional
shares of Common Stock. For purposes of the issuance and adjustment described in
this paragraph, the issuance of any security of the Company carrying the right
to convert such security into shares of Common Stock or of any warrant, right or
option to purchase Common Stock shall result in the issuance of the additional
shares of Common Stock upon the issuance of such convertible security, warrant,
right or option and again upon any subsequent issuances of shares of Common
Stock upon exercise of such conversion or purchase rights if such issuance is at
a price lower than the then Purchase Price. The rights of the Subscriber set
forth in this Section 14 are in addition to any other rights the Subscriber has
pursuant to this Agreement and any other agreement referred to or entered into
in connection herewith.
(d) Maximum Exercise of Rights. In the event the exercise of the rights
described in Sections 14(a) and 14(c) would result in the issuance of an amount
of common stock of the Company that would exceed the maximum amount that may be
issued to a Subscriber calculated in the manner described in Section 9.3 of this
Agreement, then the issuance of such additional shares of common stock of the
Company to such Subscriber will be deferred in whole or in part until such time
as such Subscriber is able to beneficially own such common stock without
exceeding the maximum amount set forth calculated in the manner described in
Section 9.3 of this Agreement. The determination of when such common stock may
be issued shall be made by each Subscriber as to only such Subscriber.
13. Miscellaneous.
(a) Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be
(i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered
by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set
forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the
address or number designated below (if delivered on a business day
during normal business hours where such notice is to be received), or
the first business day following such delivery (if delivered other than
on a business day during normal business hours where such notice is to
be received) or (b) on the second business day following the date of
mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: (i) if to the
Company, to: Radiate Research, Inc., 000 Xxxxx Xxxx, Xxxxx 000, Xxxxxx,
Xxxxxxx X0X 0X0 Xxxxxx, Telephone: (000) 000-0000, Attn: Xxxxx
Xxxxxxxxx, President and Chief Executive Officer, telecopier: (613)
599-8067, with a copy by telecopier only to: Sonfield & Sonfield,
Attorneys at Law, 000 Xxxxx Xxxx Xxx Xxxx, Xxxxxxx, Xxxxx 00000, (by
telecopier: 000-000-0000 and by email to Xxxxxx@Xxxxxxxx.xxx), (ii) if
to the Purchasers, to: the one or more addresses and telecopier numbers
indicated on the signature pages hereto, with an additional copy by
telecopier only to: Xxxxx Xxxxxxxx, Esq., Xxxxxxxx & Co, 00 Xxxxxxxx
Xxxxxx, Xxxxxx X0X 0XX (by telecopier 011 44 207 355 4975 and by email
to XXxxxxxxx@xxxxxxxxxxxxx.xxx), and (iii) if to the Finder, to: the
one or more addresses and telecopier numbers indicated on Schedule 8
hereto.
(b) Closing. The consummation of the transactions contemplated
herein shall take place at the offices of Sonfield & Sonfield, 000
Xxxxx Xxxx Xxx Xxxx, Xxxxxxx, Xxxxx 00000, upon the satisfaction of all
conditions to Closing set forth in this Agreement. Each of the Initial
Closing Date and Second Closing Date is referred to as a "Closing
Date".
(c) Entire Agreement; Assignment. This Agreement and other
documents delivered in connection herewith represent the entire
agreement between the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by both parties.
Neither the Company nor the Subscribers have relied on any
representations not contained or referred to in this Agreement and the
documents delivered herewith. No right or obligation of either party
shall be assigned by that party without prior notice to and the written
consent of the other party.
(d) Counterparts/Execution. 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 signature
and delivered by facsimile transmission.
(e) Law Governing this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of
New York 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 New York or in the federal courts located in the state of New
York. The parties and the individuals executing this Agreement and
other agreements referred to herein or delivered in connection herewith
on behalf of the Company agree to submit to the jurisdiction of such
courts and waive trial by jury. 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.
(f) Specific Enforcement, Consent to Jurisdiction. The Company
and Subscriber acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity. Subject to Section 15(e)
hereof, each of the Company, Subscriber and any signator hereto in his
personal capacity hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction in New York of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the
suit, action or proceeding is improper. Nothing in this Section shall
affect or limit any right to serve process in any other manner
permitted by law.
(g) Independent Nature of Subscribers. The Company
acknowledges that the obligations of each Subscriber under the
Transaction Documents are several and not joint with the obligations of
any other Subscriber, and no Subscriber shall be responsible in any way
for the performance of the obligations of any other Subscriber under
the Transaction Documents. The Company acknowledges that the decision
of each Subscriber to purchase Securities has been made by such
Subscriber independently of any other Subscriber and independently of
any information, materials, statements or opinions as to the business,
affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the
Company which may have been made or given by any other Subscriber or by
any agent or employee of any other Subscriber, and no Subscriber or any
of its agents or employees shall have any liability to any Subscriber
(or any other person) relating to or arising from any such information,
materials, statements or opinions. The Company acknowledges that
nothing contained in any Transaction Document, and no action taken by
any Subscriber pursuant hereto or thereto (including, but not limited
to, the (i) inclusion of a Subscriber in the F-1 Registration Statement
and (ii) review by, and consent to, such Registration Statement by a
Subscriber) shall be deemed to constitute the Subscribers as a
partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Subscribers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Company
acknowledges that each Subscriber shall be entitled to independently
protect and enforce its rights, including without limitation, the
rights arising out of the Transaction Documents, and it shall not be
necessary for any other Subscriber to be joined as an additional party
in any proceeding for such purpose. The Company acknowledges that it
has elected to provide all Subscribers with the same terms and
Transaction Documents for the convenience of the Company and not
because Company was required or requested to do so by the Subscribers.
The Company acknowledges that such procedure with respect to the
Transaction Documents in no way creates a presumption that the
Subscribers are in any way acting in concert or as a group with respect
to the Transaction Documents or the transactions contemplated thereby.
[THIS SPACE INTENTIONALLY LEFT BLANK]
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT (A)
Please acknowledge your acceptance of the foregoing Securities Purchase
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
RADIATE RESEARCH, INC.
a Canadian Federal corporation
By:_________________________________
Name:
Title:
Dated: October _____, 2005
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
SUBSCRIBER INITIAL CLOSING WARRANTS ISSUABLE SECOND CLOSING WARRANTS ISSUABLE
SHARES (INITIAL ON INITIAL CLOSING SHARES (SECOND ON SECOND CLOSING
CLOSING PURCHASE DATE CLOSING PURCHASE DATE
PRICE) PRICE)
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
BAYSIDE ASSOCIATES, LTD. 56,000 Shares 80,000 Warrants 224,000 Shares 320,000 Warrants
$4,200USD $16,800USD
By:_______________________________
Xxxxxxxxx Xxxxxxxx,
Authorized Signatory
ADDRESS: Xxxxxxx Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxx Xxxxxx,
Xxxxx, Xxxx Xxxxxx
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT (B)
Please acknowledge your acceptance of the foregoing Securities Purchase
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
RADIATE RESEARCH, INC.
a Canadian Federal corporation
By:_________________________________
Name:
Title:
Dated: October _____, 2005
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
SUBSCRIBER INITIAL CLOSING WARRANTS ISSUABLE SECOND CLOSING WARRANTS ISSUABLE
SHARES (INITIAL ON INITIAL CLOSING SHARES (SECOND ON SECOND CLOSING
CLOSING PURCHASE DATE CLOSING PURCHASE DATE
PRICE) PRICE)
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
MANILLO INVESTORS, LTD. 56,000 Shares 80,000 Warrants 224,000 Shares 320,000 Warrants
$4,200USD $16,800USD
By:_______________________________
Xxxxx Xxxx, Authorized Signatory
ADDRESS: 00 Xxxxxxxx Xxxxxx,
Xxxxxx. X0X 0XX.
Xxxxxx Xxxxxxx
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT (C)
Please acknowledge your acceptance of the foregoing Securities Purchase
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
RADIATE RESEARCH, INC.
a Canadian Federal corporation
By:______________________________
Name:
Title:
Dated: October _____, 2005
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
SUBSCRIBER INITIAL CLOSING WARRANTS ISSUABLE SECOND CLOSING WARRANTS ISSUABLE
SHARES (INITIAL ON INITIAL CLOSING SHARES (SECOND ON SECOND CLOSING
CLOSING PURCHASE DATE CLOSING PURCHASE DATE
PRICE) PRICE)
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
CASTLEGATE GROUP, LTD. 56,000 Shares 80,000 Warrants 224,000 Shares 320,000 Warrants
$4,200USD $16,800USD
By:_______________________________
Xxxxx Xxxxxxxxx,
Authorized Signatory
ADDRESS: Xxxxx 0000x, Xxxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT (D)
Please acknowledge your acceptance of the foregoing Securities Purchase
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
RADIATE RESEARCH, INC.
a Canadian Federal corporation
By:______________________________
Name:
Title:
Dated: October _____, 2005
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
SUBSCRIBER INITIAL CLOSING WARRANTS ISSUABLE SECOND CLOSING WARRANTS ISSUABLE
SHARES (INITIAL ON INITIAL CLOSING SHARES (SECOND ON SECOND CLOSING
CLOSING PURCHASE DATE CLOSING PURCHASE DATE
PRICE) PRICE)
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
KENSINGTON GROUP, LTD. 56,000 Shares 80,000 Warrants 224,000 Shares 320,000 Warrants
$4,200USD $16,800USD
By:_______________________________
Xxxxx Xxxxxxxx,
Authorized Signatory
ADDRESS: 00 Xxxxxxxx Xxxxxx,
Xxxxxx. X0X 0XX.
United Kingdom.
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT (E)
Please acknowledge your acceptance of the foregoing Securities Purchase
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
RADIATE RESEARCH, INC.
a Canadian Federal corporation
By:______________________________
Name:
Title:
Dated: October _____, 2005
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
SUBSCRIBER INITIAL CLOSING WARRANTS ISSUABLE SECOND CLOSING WARRANTS ISSUABLE
SHARES (INITIAL ON INITIAL CLOSING SHARES (SECOND ON SECOND CLOSING
CLOSING PURCHASE DATE CLOSING PURCHASE DATE
PRICE) PRICE)
--------------------------------------------- -------------------- -------------------- ------------------- -------------------
TRUFELLO ASSOCIATES, LTD. 56,000 Shares 80,000 Warrants 224,000 Shares 320,000 Warrants
$4,200USD $16,800USD
By:_______________________________
Xxxxxx Xxxxxxxx,
Authorized Signatory
ADDRESS: Xxxxxxx Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxx Xxxxxx,
Xxxxx, Xxxx Indies.
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Warrant to Purchase 400,000 Shares
Exhibit B Form of Warrant to Purchase 1,600,000 Shares
Exhibit C Escrow Agreement
Exhibit D Form of Legal Opinion
Exhibit E Form of Public Announcement
Schedule 3(d) Additional Issuances
Schedule 3(m) Agreements Under Which the Company is in
Possible Default
Schedule 3(q) Undisclosed Liabilities
Schedule 3(s) Capitalization
Schedule 8 Finder
Schedule 9(e) Use of Proceeds
Schedule 11.1 Other Securities to be Registered
EXHIBIT A
FORM OF WARRANT TO PURCHASE 400,000 SHARES
EXHIBIT B
FORM OF WARRANT TO PURCHASE 1,600,000 SHARES
EXHIBIT C
FORM OF FUNDS ESCROW AGREEMENT
THIS FUNDS ESCROW AGREEMENT (this "Agreement") is made and entered into
as of October ___, 2005 by and among RADIATE RESEARCH, INC., a Canadian Federal
corporation (the "Company"); the investors whose signatures appear herein below,
(collectively, the "Investor"); and SONFIELD & SONFIELD (the "Escrow Agent").
BACKGROUND
WHEREAS, the Company and the Investor have entered into a Securities
Purchase Agreement (the "Securities Purchase Agreement") dated as of the date
hereof, pursuant to which the Investor will purchase the Company's Common Stock,
no par value (the "Common Stock"), at a price per share equal to the Purchase
Price, as that term is defined in the Securities Purchase Agreement, for an
aggregate price of One Hundred Five Thousand U.S. Dollars ($105,000). The
Securities Purchase Agreement provides that on each Closing Date, as that term
is defined in the Securities Purchase Agreement and share purchase warrants
("Warrants"), the Investor shall deposit the Purchase Price in a segregated
escrow account to be held by Escrow Agent and the Company shall deposit shares
of the Company's Common Stock and Warrants, which shall be purchased by the
Investor as set forth in the Securities Purchase Agreement, with the Escrow
Agent, in order to effectuate a disbursement to or for the benefit of the
Company of the Purchase Price by the Escrow Agent and a disbursement to the
Investor of the shares of the Company's Common Stock and Warrants by Escrow
Agent at the several closings to be held as set forth in the Securities Purchase
Agreement (collectively, the "Closing").
WHEREAS, Escrow Agent has agreed to accept, hold, and disburse the
funds and the shares of the Company's Common Stock and Warrants deposited with
it in accordance with the terms of this Agreement.
WHEREAS, in order to establish the escrow of funds and shares to effect
the provisions of the Securities Purchase Agreement, the parties hereto have
entered into this Agreement.
NOW THEREFORE, in consideration of the foregoing, it is hereby agreed
as follows:
1. Definitions. Terms not defined herein shall have the
meanings ascribed to them in the Securities Purchase Agreement. The
following terms shall have the following meanings when used herein:
"Escrow Funds" shall mean the Purchase Price funds
deposited with the Escrow Agent pursuant to this Agreement.
2. Appointment of and Acceptance by Escrow Agent.
a. The Investor and the Company hereby appoint Escrow
Agent to serve as Escrow Agent hereunder. Escrow Agent hereby
accepts such appointment and, upon receipt by wire transfer of
the Escrow Funds in accordance with Section 3 below, agrees to
hold, invest and disburse the Escrow Funds in accordance with
this Agreement.
b. The Investor and the Company hereby appoint the
Escrow Agent to serve as the holder of the shares of the
Company's Common Stock and Warrants which shall be purchased
by the Investor. The Escrow Agent hereby accepts such
appointment and, upon receipt of the certificates representing
of the shares of the Company's Common Stock and Warrants in
accordance with Section 3 below, agrees to hold and disburse
the shares of the Company's Common Stock and Warrants in
accordance with this Agreement.
c. The Investor hereby acknowledges that the Escrow
Agent is counsel to the Company in connection with the
transactions contemplated and referenced herein. The Investor
agrees that in the event of any dispute arising in connection
with this Escrow Agreement or otherwise in connection with any
transaction or agreement contemplated and referenced herein,
the Escrow Agent shall be permitted to continue to represent
the Company and the Investor will not seek to disqualify such
counsel.
3. Creation of Escrow Account.
a. On or prior to the date of this Agreement the
Escrow Agent has established an escrow account for the deposit
of the Escrow Funds that may be commingled with other funds
held in trust or escrow. The Investor will wire funds to the
account of the Escrow Agent as follows:
BANK: Compass Bank
ROUTING #: 000000000
ACCOUNT #: 00000000
NAME ON ACCOUNT: Sonfield & Sonfield Trust Account
b. The Company will deliver Shares of the Company's
Common Stock and Warrants to the Escrow Agent as follows:
Sonfield & Sonfield
000 Xxxxx Xxxx Xxx Xxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx., Esq.
4. The Investor shall promptly deliver all monies for the
payment of the Common Stock and Warrants to the Escrow Agent for
deposit in the Escrow Account.
5. Disbursements from the Escrow Account.
At such time as Escrow Agent has the amount of the
Purchase Price for the Initial Closing or Second Closing and
has received the Common Stock and Warrants certificates from
the Company which are to be issued to the Investor pursuant to
the Securities Purchase Agreement, the Escrow Agent shall pay
out the amounts to the parties specified in Sections 8(b) and
(c) of the Securities Purchase Agreement and deliver the
balance of the Escrow Funds to the Company. In disbursing such
funds, Escrow Agent is authorized to rely upon written
direction from the Company and may accept any signatory from
the Company listed on the signature page to this Agreement and
any signature from the Investor that Escrow Agent already has
on file. Simultaneous with delivery of the Escrow Funds, the
Escrow Agent shall hold the shares of the Company's Common
Stock and Warrants until the Investor directs the Escrow Agent
to make disposition of the shares of Common Stock and
Warrants. In releasing such shares of Common Stock and
Warrants the Escrow Agent is authorized to rely upon written
direction from the Investor and may accept any signatory from
the Investor listed on the signature page to this Agreement
and any signature the Escrow Agent has on file.
At such time as Escrow Agent has received a Notice of
Exercise covering the Warrants issued or issuable for the
Initial or Second Closing and all prior Closings, the Escrow
Agent shall deliver all certificates representing shares of
Common Stock and Warrants, along with the Notice, or Notices,
of Exercise, to the Company's Transfer Agent with instructions
to issue the unrestricted shares of Common Stock and Warrants
and deliver same to the Investor. Upon receipt of oral or
written notice from the Transfer Agent that the shares of
Common Stock and Warrants have been issued, the Escrow Agent
shall wire the Escrow Funds to the Company.
In the event the Escrow Agent does not receive the
amount of the Purchase Price from the Investor or the shares
of Common Stock and Warrants to be purchased by the Investor
from the Company, the Escrow Agent shall notify the Company
and the Investor.
In the event that the Escrow Agent has not received
the Common Stock and Warrants to be purchased by the Investor
from the Company, in no event will the Escrow Funds be
released to the Company until such shares are received by the
Escrow Agent. For purposes of this Agreement, the term "Common
Stock and Warrants certificates" shall mean Common Stock and
Warrants certificates to be purchased pursuant to the
Securities Purchase Agreement.
6. Deposit of Funds. The Escrow Agent is hereby authorized to
deposit the wire transfer proceeds in the Escrow Account.
7. Suspension of Performance: Disbursement into Court. If at
any time, there shall exist any dispute between the Company and the
Investor with respect to holding or disposition of any portion of the
Escrow Funds or the Common Stock and Warrants or any other obligations
of Escrow Agent hereunder, or if at any time Escrow Agent is unable to
determine, to Escrow Agent's sole satisfaction, the proper disposition
of any portion of the Escrow Funds or Escrow Agent's proper actions
with respect to its obligations hereunder, or if the parties have not
within thirty (30) days of the furnishing by Escrow Agent of a notice
of resignation pursuant to Section 9 hereof, appointed a successor
Escrow Agent to act hereunder, then Escrow Agent may, in its sole
discretion, take either or both of the following actions:
a. Suspend the performance of any of its obligations
(including without limitation any disbursement obligations)
under this Escrow Agreement until such dispute or uncertainty
shall be resolved to the sole satisfaction of Escrow Agent or
until a successor Escrow Agent shall be appointed (as the case
may be); provided however, Escrow Agent shall continue to
invest the Escrow Funds in accordance with Section 8 hereof;
and/or
b. Petition (by means of an interpleader action or
any other appropriate method) any court of competent
jurisdiction in any venue convenient to Escrow Agent, for
instructions with respect to such dispute or uncertainty, and
to the extent required by law, pay into such court, for
holding and disposition in accordance with the instructions of
such court, all funds held by it in the Escrow Funds, after
deduction and payment to Escrow Agent of all fees and expenses
(including court costs and attorneys' fees) payable to,
incurred by, or expected to be incurred by Escrow Agent in
connection with performance of its duties and the exercise of
its rights hereunder.
c. Escrow Agent shall have no liability to the
Company, the Investor, or any person with respect to any such
suspension of performance or disbursement into court,
specifically including any liability or claimed liability that
may arise, or be alleged to have arisen, out of or as a result
of any delay in the disbursement of funds held in the Escrow
Funds or any delay in with respect to any other action
required or requested of Escrow Agent.
8. Investment of Escrow Funds. The Escrow Agent shall deposit
the Escrow Funds in a non-interest bearing money market account.
9. Resignation and Removal of Escrow Agent. Escrow Agent may
resign from the performance of its duties hereunder at any time by
giving thirty (30) days' prior written notice to the parties or may be
removed, with or without cause, by the parties, acting jointly, by
furnishing a Joint Written Direction to Escrow Agent, at any time by
the giving of ten (10) days' prior written notice to Escrow Agent as
provided herein below. Upon any such notice of resignation or removal,
the representatives of the Investor and the Company identified in
Sections 13a.(iv) and 13b.(iv), below, jointly shall appoint a
successor Escrow Agent hereunder, which shall be a commercial bank,
trust company or other financial institution with a combined capital
and surplus in excess of US$10,000,000.00. Upon the acceptance in
writing of any appointment of Escrow Agent hereunder by a successor
Escrow Agent, such successor Escrow Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of
the retiring Escrow Agent, and the retiring Escrow Agent shall be
discharged from its duties and obligations under this Escrow Agreement,
but shall not be discharged from any liability for actions taken as
Escrow Agent hereunder prior to such succession. After any retiring
Escrow Agent's resignation or removal, the provisions of this Escrow
Agreement shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Escrow Agent under this Escrow
Agreement. The retiring Escrow Agent shall transmit all records
pertaining to the Escrow Funds and shall pay all funds held by it in
the Escrow Funds to the successor Escrow Agent, after making copies of
such records as the retiring Escrow Agent deems advisable and after
deduction and payment to the retiring Escrow Agent of all fees and
expenses (including court costs and attorneys' fees) payable to,
incurred by, or expected to be incurred by the retiring Escrow Agent in
connection with the performance of its duties and the exercise of its
rights hereunder.
10. Liability of Escrow Agent.
a. Escrow Agent shall have no liability or obligation
with respect to the Escrow Funds except for Escrow Agent's
willful misconduct or gross negligence. Escrow Agent's sole
responsibility shall be for the safekeeping, investment, and
disbursement of the Escrow Funds in accordance with the terms
of this Agreement. Escrow Agent shall have no implied duties
or obligations and shall not be charged with knowledge or
notice or any fact or circumstance not specifically set forth
herein. Escrow Agent may rely upon any instrument, not only as
to its due execution, validity and effectiveness, but also as
to the truth and accuracy of any information contained
therein, which Escrow Agent shall in good faith believe to be
genuine, to have been signed or presented by the person or
parties purporting to sign the same and conform to the
provisions of this Agreement. In no event shall Escrow Agent
be liable for incidental, indirect, special, and consequential
or punitive damages. Escrow Agent shall not be obligated to
take any legal action or commence any proceeding in connection
with the Escrow Funds, any account in which Escrow Funds are
deposited, this Agreement or the Securities Purchase
Agreement, or to appear in, prosecute or defend any such legal
action or proceeding. Escrow Agent may consult legal counsel
selected by it in the event of any dispute or question as to
construction of any of the provisions hereof or of any other
agreement or its duties hereunder, or relating to any dispute
involving any party hereto, and shall incur no liability and
shall be fully indemnified from any liability whatsoever in
acting in accordance with the opinion or instructions of such
counsel. The Company and the Investor jointly and severally
shall promptly pay, upon demand, the reasonable fees and
expenses of any such counsel and Escrow Agent is hereby
authorized to pay such fees and expenses from funds held in
escrow.
b. The Escrow Agent is hereby authorized, in its sole
discretion, to comply with orders issued or process entered by
any court with respect to the Escrow Funds, without
determination by the Escrow Agent of such court's jurisdiction
in the matter. If any portion of the Escrow Funds is at any
time attached, garnished or levied upon under any court order,
or in case the payment, assignment, transfer, conveyance or
delivery of any such property shall be stayed or enjoined by
any court order, or in any case any order judgment or decree
shall be made or entered by any court affecting such property
or any part thereof, then and in any such event, the Escrow
Agent is authorized, in its sole discretion, to rely upon and
comply with any such order, writ judgment or decree which it
is advised by legal counsel selected by it, binding upon it,
without the need for appeal or other action; and if the Escrow
Agent complies with any such order, writ, judgment or decree,
it shall not be liable to any of the parties hereto or to any
other person or entity by reason of such compliance even
though such order, writ judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.
11. Indemnification of Escrow Agent. From and at all times
after the date of this Agreement, the parties jointly and severally,
shall, to the fullest extent permitted by law and to the extent
provided herein, indemnify and hold harmless Escrow Agent and each
director, officer, employee, attorney, agent and affiliate of Escrow
Agent (collectively, the "Indemnified Parties") against any and all
actions, claims (whether or not valid), losses, damages, liabilities,
costs and expenses of any kind or nature whatsoever (including without
limitation reasonable attorney's fees, costs and expenses) incurred by
or asserted against any of the Indemnified Parties from and after the
date hereof, whether direct, indirect or consequential, as a result of
or arising from or in any way relating to any claim, demand, suit,
action, or proceeding (including any inquiry or investigation) by any
person, including without limitation the parties to this Agreement,
whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any person under any statute or regulation,
including, but not limited to, any federal or state securities laws, or
under any common law or equitable cause or otherwise, arising from or
in connection with the negotiation, preparation, execution, performance
or failure of performance of this Agreement or any transaction
contemplated herein, whether or not any such Indemnified Party is a
party to any such action or proceeding, suit or the target of any such
inquiry or investigation; provided, however, that no Indemnified Party
shall have the right to be indemnified hereunder for liability finally
determined by a court of competent jurisdiction, subject to no further
appeal, to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Party. If any such action or claim shall
be brought or asserted against any Indemnified Party, such Indemnified
Party shall promptly notify the Company and the Investor hereunder in
writing, and the and the Company shall assume the defense thereof,
including the employment of counsel and the payment of all expenses.
Such Indemnified Party shall, in its sole discretion, have the right to
employ separate counsel (who may be selected by such Indemnified Party
in its sole discretion) in any such action and to participate and to
participate in the defense thereof, and the fees and expenses of such
counsel shall be paid by such Indemnified Party, except that the
Investor and/or the Company shall be required to pay such fees and
expense if (a) the Investor or the Company agree to pay such fees and
expenses, or (b) the Investor and/or the Company shall fail to assume
the defense of such action or proceeding or shall fail, in the sole
discretion of such Indemnified Party, to employ counsel reasonably
satisfactory to the Indemnified Party in any such action or proceeding,
(c) the Investor and the Company are the plaintiff in any such action
or proceeding or (d) the named or potential parties to any such action
or proceeding (including any potentially impleaded parties) include
both Indemnified Party the Company and/or the Investor and Indemnified
Party shall have been advised by counsel that there may be one or more
legal defenses available to it which are different from or additional
to those available to the Company or the Investor. The Investor and the
Company shall be jointly and severally liable to pay fees and expenses
of counsel pursuant to the preceding sentence, except that any
obligation to pay under clause (a) shall apply only to the party so
agreeing. All such fees and expenses payable by the Company and/or the
Investor pursuant to the foregoing sentence shall be paid from time to
time as incurred, both in advance of and after the final disposition of
such action or claim. The obligations of the parties under this section
shall survive any termination of this Agreement, and resignation or
removal of the Escrow Agent shall be independent of any obligation of
Escrow Agent.
12. Expenses of Escrow Agent. Except as set forth in Section
11, the Company shall reimburse Escrow Agent for all of its reasonable
out-of-pocket expenses, including attorneys' fees, travel expenses,
telephone and facsimile transmission costs, postage (including express
mail and overnight delivery charges), copying charges and the like. All
of the compensation and reimbursement obligations set forth in this
Section shall be payable by the Company, upon demand by Escrow Agent.
The obligations of the Company under this Section shall survive any
termination of this Agreement and the resignation or removal of Escrow
Agent.
13. Warranties.
a. The Investor makes the following representations
and warranties to Sonfield & Sonfield as the Escrow Agent and
Company Counsel:
i. The Investor has full power and authority
to execute and deliver this Agreement and to perform
its obligations hereunder.
ii. This Agreement has been duly approved by
all necessary action of the Investor, including any
necessary approval of the limited partner of the
Investor, has been executed by duly authorized
officers of the Investor, enforceable in accordance
with its terms.
iii. The execution, delivery, and
performance of the Investor of this Agreement will
not violate, conflict with, or cause a default under
the agreement of limited partnership of the Investor,
any applicable law or regulation, any court order or
administrative ruling or degree to which the Investor
is a party or any of its property is subject, or any
agreement, contract, indenture, or other binding
arrangement.
iv. Xxxxx Xxxxxxxx, Esq. has been duly
appointed to act as the representative of the
Investor hereunder and has full power and authority
to execute, deliver, and perform this Agreement, to
amend, modify or waive any provision of this
Agreement and to take all other actions as the
Investor's Representative under this Agreement, all
without further consent or direction from, or notice
to, the Investor or any other party.
v. No party other than the parties hereto
have, or shall have, any lien, claim or security
interest in the Escrow Funds or any part thereof. No
financing statement under the Uniform Commercial Code
is on file in any jurisdiction claiming a security
interest in or describing (whether specifically or
generally) the Escrow Funds or any part thereof.
vi. All of the representations and
warranties of the Investor contained herein are true
and complete as of the date hereof and will be true
and complete at the time of any disbursement from the
Escrow Funds.
b. The Company makes the following representations
and warranties to Escrow Agent and the Investor:
i. The Company is a corporation duly
organized, validly existing, and in good standing
under the Federal laws of the Canada, and has full
power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
ii. This Agreement has been duly approved by
all necessary corporate action of the Company,
including any necessary shareholder approval, has
been executed by duly authorized officers of the
Company, enforceable in accordance with its terms.
iii. The execution, delivery, and
performance by the Company of this Escrow Agreement
is in accordance with the Securities Purchase
Agreement and will not violate, conflict with, or
cause a default under the articles of incorporation
or bylaws of the Company, any applicable law or
regulation, any court order or administrative ruling
or decree to which the Company is a party or any of
its property is subject, or any agreement, contract,
indenture, or other binding arrangement.
iv. Xxxxx Xxxxxxxxx, Esq. has been duly
appointed to act as the representative of the Company
hereunder and has full power and authority to
execute, deliver, and perform this Agreement, to
amend, modify or waive any provision of this
Agreement and to take all other actions as the
Company's Representative under this Agreement, all
without further consent or direction from, or notice
to, the Company or any other party.
v. No party other than the parties hereto
shall have, any lien, claim or security interest in
the Escrow Funds or any part thereof. No financing
statement under the Uniform Commercial Code is on
file in any jurisdiction claiming a security interest
in or describing (whether specifically or generally)
the Escrow Funds or any part thereof.
vi. All of the representations and
warranties of the Company contained herein are true
and complete as of the date hereof and will be true
and complete at the time of any disbursement from the
Escrow Funds.
14. Consent to Jurisdiction and Venue. In the event that any
party hereto commences a lawsuit or other proceeding relating to or
arising from this Agreement, the parties hereto agree that the court in
Houston, Texas shall have the sole and exclusive jurisdiction over any
such proceeding. This court shall be proper venue for any such lawsuit
or judicial proceeding and the parties hereto waive any objection to
such venue. The parties hereto consent to and agree to submit to the
jurisdiction of any of the courts specified herein and agree to accept
the service of process to vest personal jurisdiction over them in any
of these courts.
15. Notice. All notices and other communications hereunder
shall be in writing and shall be deemed to have been validly served,
given or delivered five (5) days after deposit in the United States
mail, by certified mail with return receipt requested and postage
prepaid, when delivered personally, one (1) day delivery to any
overnight courier, or when transmitted by facsimile transmission and
addressed to the party to be notified as follows:
If to Investor, to: The Address on the Signature
Page to this Agreement
If to Escrow Agent, to: Sonfield & Sonfield
000 Xxxxx Xxxx Xxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
Telephone (000) 000-0000
Facsimile: (000) 000-0000
If to Company, to: Radiate Research, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX X0X 0X0
XXXXXX
Attn: Xxxxx Xxxxxxxxx, President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
Or to such other address as each party may designate for
itself by like notice.
16. Amendments or Waiver. This Agreement may be changed,
waived, discharged or terminated only by a writing signed by the
parties of the Escrow Agent. No delay or omission by any party in
exercising any right with respect hereto shall operate as waiver. A
waiver on any one occasion shall not be construed as a bar to, or
waiver of, any right or remedy on any future occasion.
17. Severability. To the extent any provision of this
Agreement is prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition, or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
18. Governing Law. This Agreement shall be construed and
interpreted in accordance with the internal laws of Ontario, Canada
without giving effect to the conflict of laws principles thereof.
19. Entire Agreement. This Agreement constitutes the entire
Agreement between the parties relating to the holding, investment, and
disbursement of the Escrow Funds and sets forth in their entirety the
obligations and duties of the Escrow Agent with respect to the Escrow
Funds.
20. Binding Effect. All of the terms of this Agreement, as
amended from time to time, shall be binding upon, inure to the benefit
of and be enforceable by the respective heirs, successors and assigns
of the Investor, the Company, or the Escrow Agent.
21. Execution of Counterparts. This Agreement and any Joint
Written Direction may be executed in counter parts, which when so
executed shall constitute one and same agreement or direction.
22. Termination. Upon the first to occur of the termination of
the Securities Purchase Agreement dated the date hereof or the
disbursement of all amounts in the Escrow Funds and Common Stock and
Warrants into court pursuant to Section 7 hereof, this Agreement shall
terminate and Escrow Agent shall have no further obligation or
liability whatsoever with respect to this Agreement or the Escrow Funds
or Common Stock and Warrants.
SIGNATURE PAGE TO FUNDS ESCROW AGREEMENT
IN WITNESS WHEREOF the parties have hereunto set their hands and seals
the day and year above set forth.
Please acknowledge your acceptance of the foregoing Funds Escrow
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
RADIATE RESEARCH, INC.
By:________________________________
Xxxxx Xxxxxxxxx, President Chief Executive Officer
MANILLO INVESTORS, LTD.
By:______________________________________
Xxxxx Xxxx, Authorized Signatory
ADDRESS: 00 Xxxxxxxx Xxxxxx,
Xxxxxx. X0X 0XX.
Xxxxxx Xxxxxxx
BAYSIDE ASSOCIATES, LTD.
By:______________________________________
Xxxxxxxxx Xxxxxxxx, Authorized Signatory
ADDRESS: Xxxxxxx Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxx Xxxxxx,
Xxxxx, Xxxx Xxxxxx
CASTLEGATE GROUP, LTD.
By:______________________________________
Xxxxx Xxxxxxxxx, Authorized Signatory
ADDRESS: Xxxxx 0000x, Xxxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
KENSINGTON GROUP, LTD.
By:______________________________________
Xxxxx Xxxxxxxx, Authorized Signatory
ADDRESS: 00 Xxxxxxxx Xxxxxx,
Xxxxxx. X0X 0XX.
United Kingdom.
TRUFELLO ASSOCIATES, LTD.
By:______________________________________
Xxxxxx Xxxxxxxx, Authorized Signatory
ADDRESS: Xxxxxxx Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxx Xxxxxx,
Xxxxx, Xxxx Xxxxxx.
SONFIELD & SONFIELD
Escrow Agent
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxx, Xx., Managing Director
EXHIBIT D
FORM OF LEGAL OPINION
SONFIELD & SONFIELD
000 Xxxxx Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
Xxxxxx X. Xxxxxxxx, Xx.
Managing Director
xxxxxx@xxxxxxxx.xxx
xxx.xxxxxxxx.xxx
October ___, 2005
Kensington Group, Ltd.
00 Xxxxxxxx Xxxxxx,
Xxxxxx. X0X 0XX.
United Kingdom.
Ladies and Gentlemen:
We are counsel for Radiate Research, Inc., a Federal Canadian
corporation (the "Company"), in connection with the preparation of the
Securities Purchase Agreement (the "Purchase Agreement") as to which this
opinion is a part. This opinion is furnished to you pursuant to Section 6 of the
Purchase Agreement. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned to such terms in the Purchase
Agreement.
The Purchase Agreement relates to the purchase of common stock of the
Company ("Common Stock") and share purchase warrants ("Warrants") in the form
attached to the Purchase Agreement as Exhibit "A," and Exhibit "B" respectively,
(together with any Common Stock issued upon exercise of the Warrants, upon the
terms and subject to the limitations and conditions set forth in the Amended and
Restated Articles of Incorporation attached to the Purchase Agreement as Exhibit
"A." The Common Stock, Warrants and Common Stock issuable upon exercise of the
Warrants are collectively referred to herein as "Securities"
In connection with rendering our opinion as set forth below, we have
reviewed and examined originals or copies of the following documents:
(a) The Purchase Agreement;
(b) The Warrants;
(c) Resolutions of the Board of Directors of the Company
authorizing the execution and delivery of the Purchase Agreement and
the Securities; and
(d) The Funds Escrow Agreement.
The Purchase Agreement, Funds Escrow Agreement and the Purchase
Agreement are herein referred to collectively as the "Transaction Agreements."
We have also examined and considered such corporate records, certificates, and
other statements of corporate officers of the Company and matters of law as we
have deemed appropriate as a basis for our opinions set forth below.
The opinions expressed herein are subject to the following assumptions,
limitations, qualification, and exceptions:
(a) We have assumed the genuineness of all signatures, the
authenticity of all Transaction Agreements submitted to us as
originals, the conformity with originals of all Transaction Agreements
submitted to us as copies, the authenticity of certificates of public
officials, and the due authorization, execution, and delivery of all
Transaction Agreements (except the due authorization, execution, and
delivery by the Company of the Transaction Agreements).
(b) In examining agreements (including the Transaction
Agreements) executed by parties other than the Company (the "Other
Parties"), we have assumed that each Other Party has the legal right,
capacity, and power to enter into, enforce and perform all of its
obligations under such agreements. Furthermore, we have assumed the due
authorization by each of the Other Parties of all requisite action and
the due execution and delivery of such agreements by each of the Other
Parties, and that such agreements are valid and binding upon each of
the Other Parties and are enforceable against each Other Party in
accordance with their terms.
(c) As to our opinion regarding the valid existence and good
standing of the Company, we have relied solely upon a certificate of
good standing from the law firm of Marlay & Ford, LLP, the Company's
Canadian counsel, and certificates of officers of the Company.
For purposes of factual matters relevant to the opinions expressed
herein, we have relied on (to the extent we have deemed necessary) (a) the
representations and warranties of the Company contained in the Transaction
Agreements and (b) certificates of public officials and the Company's transfer
agent and statements and certificates of the officers of the Company. Wherever
any statement herein with respect to the existence or absence of facts is
qualified by the phrase "to our knowledge" or similar phrase, it is intended to
indicate that after a review of (i) the representations and warranties of the
Company contained in the Transaction Agreements, (ii) certificates of public
officials and the Company's transfer agent and statements and certificates of
the officers of the Company, (iii) the Resolutions of the Board of Directors,
and (iv) the Material Agreements, during the course of our representation of the
Company through the date hereof, no information that would give us current
actual knowledge of the inaccuracy of such statement has come to the attention
of those attorneys in this firm who have represented the Company in connection
with the Transaction Agreements and the transaction contemplated thereby. Except
to the extent expressly set forth herein, we have not undertaken any independent
investigation to determine the existence or absence of any fact, and no
inference as to our knowledge of the existence or absence of any fact should be
drawn from our representation of the Company or our rendering of the opinion set
forth below.
Based upon the foregoing and subject to the assumptions, limitations,
qualifications, and exceptions stated herein, we are of the opinion that as of
the date hereof:
(a) The Company is a corporation validly existing and in good
standing under the Canada Business Corporations Act, and is duly
qualified as a foreign corporation to do business and is in good
standing in each jurisdiction in which the nature of the business
conducted by it makes such qualification necessary and in which the
failure to so qualify would have a material adverse effect on the
business, operations, financial condition, or results of operations of
the Company taken as a whole (a "Material Adverse Effect").
(b) (i)The Company has the requisite corporate power and
authority to execute, deliver, and perform the Transaction Agreements;
(ii) the execution and delivery of the Transaction Agreements by the
Company and the consummation by it of the transactions contemplated
thereby have been duly authorized by the Company's Board of Directors;
(iii) the Transaction Agreements have been duly executed and delivered
by the Company; and (iv) the Transaction Agreements constitute valid
and binding obligations of the Company enforceable against the Company
in accordance with their terms except to the extent that enforcement is
limited by applicable bankruptcy, reorganization, insolvency,
moratorium, or similar laws affecting creditors' rights and remedies
generally and except as may be limited by the exercise of judicial
discretion in applying general principles of equity, including specific
performance, (regardless whether the Purchase Agreement is considered
in a proceeding in equity or at law).
(c) Assuming Purchaser's representations, warranties, and
covenants set forth in the Transaction Agreements are true and correct,
the Common Stock and the shares of Common Stock issuable upon its
conversion may be issued to you without registration under the U.S.
1933 Act, the securities laws of any state of the United States, or the
Trust Indenture Act of 1939.
(d) The execution, delivery, and performance by the Company of
the Transaction Agreements, the consummation by the Company of the
transactions contemplated thereby and compliance by the Company with
the terms thereof does not (a) violate, conflict with, or constitute a
default (or an event that with notice or lapse of time or both would
become a default) under (i) the Certificate of Incorporation or Bylaws
of the Company, (ii) the Material Agreements, or (b) result, in any
violation of any law, applicable to the Company that in our experience
normally is applicable to transactions of the type contemplated by the
Transaction Agreements, or any judgments, orders and decrees of which
we are aware.
(e) To our knowledge, there is no action, suit, proceeding,
inquiry, or investigation before or by any court, public board or body,
or any governmental agency or self-regulatory organization pending or
threatened against or affecting the Company.
(f) We are members of the Bar of the State of Texas. The
opinions herein are limited to the federal laws of the United States,
and we express no opinion as to the effect of the matters covered by
this opinion of the laws of any other jurisdiction.
This opinion is furnished as of the date hereof and we assume no
obligation to update this Opinion or to advise you of any events, circumstances,
or developments that occur or are otherwise brought to our attention subsequent
to the date hereof. This opinion is furnished to you solely for your benefit in
connection with the transactions contemplated by the Transaction Agreements and
may not be used, circulated, quoted, or otherwise referred to, or relied upon,
by any other person (other than the Affiliates (as defined below) of the
addressee of this opinion who shall upon a transfer of the Common Stock to such
Affiliate be entitled to rely on this opinion as if they were the addressee
hereof) or for any other purpose without our express prior written consent.
Except, however, this Opinion may be relied upon by the transfer agent of any of
the Company's securities for the purpose of issuing certificates representing
Common Stock, Warrants and Common Stock issuable upon exercise of the Warrants.
This opinion is expressly limited to the matters set forth above and we render
no opinion, whether by implication or otherwise, as to any other matters. As
used in this opinion, the term "Affiliate" means with respect to any person or
any entity which controls, is controlled by, or is under common control with,
such person. The term "control" means the power, directly or indirectly,
including through contract, to direct investment decisions including the
acquisition, disposition, and voting of securities. We hereby consent to the
inclusion of this opinion as an Exhibit to the Purchase Agreement.
Very truly yours,
Sonfield & Sonfield
EXHIBIT E
FORM OF PUBLIC ANNOUNCEMENT
SCHEDULE 3(d)
ADDITIONAL ISSUANCES
SCHEDULE 3(m)
AGREEMENTS UNDER WHICH THE COMPANY IS IN POSSSIBLE DEFAULT
SCHEDULE 3(q)
UNDISCLOSED LIABILITIES
SCHEDULE 3(s)
CAPITALIZATION
SCHEDULE 8
FINDER
None
SCHEDULE 9(e)
USE OF PROCEEDS
SCHEDULE 11.1
OTHER SECURITIES TO BE REGISTERED
