Exhibit 10.88

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION Agreement (this “Agreement”) is made as of July 3, 2014 by,
and between CNS Response, Inc., a Delaware corporation (the “Company”), and the
investor(s) listed on Schedule A hereto (each, an “Investor,” and collectively,
the “Investors”).

 

WITNESSETH

 

In consideration for the mutual promises and covenants herein, the parties agree
as follows:

 

WHEREAS, the Company is offering, in a private placement, up to $1.0 million of
its Common Stock (“Common Stock”), par value $0.001 per share (the “Shares”) for
$0.25 per share in a private placement to accredited investors pursuant to a
Confidential Offering Memorandum dated July 3, 2014; and

 

WHEREAS, the undersigned desires to subscribe for and purchase the number of
Shares set forth on Schedule A hereto.

 

Section 1 – Purchase and Sale of SHARES

 

1.1          Purchase and Sale of Shares. The Company has authorized the
issuance and sale, in accordance with the terms hereof, of shares of Common
Stock, in the aggregate amount of up to $1,000,000 (the “Shares Cap Amount”),
subject to increase at the discretion of the Board of Directors of the Company
(the “Board”). On the terms and subject to the conditions set forth in this
Agreement, at the Closings (as defined below), the Company agrees to issue to
each Investor, and the Investor agrees to purchase from the Company, in the
amount set forth on Schedule A. The Company will sell Shares to more than one
Investor, each of whom will enter into Subscription Agreement substantially
identical to this one.

 

1.2          Closings.

 

(a)          Initial Closing. The initial purchase and sale of the Shares shall
take place at a closing (the “Initial Closing”) which shall take place remotely
via exchange of documents and signatures at 10:00 a.m. Eastern Time on the
business day immediately following execution and delivery of this Agreement, or
at such other place and time as may be agreed to among the Company and the
Investors. At the Initial Closing, the Company shall deliver to each of the
Investors purchasing Shares for cash at such initial closing a certificate or
certification representing such number of Shares as is set forth opposite such
Investor’s name on Schedule A hereto against receipt of a check subject to
collection or a wire transfer in immediately available funds of the purchase
price, to an account designated by the Company.

 

 

 

  

(b)          Additional Closings. The Company shall have the right, on one or
more occasions, to hold additional closings (each, an “Additional Closing,” and,
collectively with the Initial Closing, the “Closings,” and individually, a
“Closing”), pursuant to which it shall have the right to issue and sell
additional Shares to additional Investors or existing Investors (provided that
no Additional Closings shall take place later than July 31, 2014, unless
extended by the Board or upon the withdrawal of this offering by the Board,
whichever occurs sooner). At each Additional Closing, the Company shall deliver
to each Investor purchasing Shares at such additional closing a certificate or
certification representing such number of Shares as is set forth opposite such
Investor’s name on Schedule A hereto against receipt of a check subject to
collection or a wire transfer in immediately available funds of the purchase
price, to an account designated by the Company. By receiving Shares at an
Additional Closing, each Investor so receiving Shares thereby represents that
its representations and warranties contained in Section 3 are true and correct
as of the date of such Additional Closing. The aggregate principal amount of
Shares that may be issued at Closings hereunder shall, in no event exceed the
Board approved Share Cap Amount.

 

The obligation of each Investor to purchase and pay cash for the Shares to be
delivered at a Closing is, unless waived by such Investor, subject to the
condition that the Company’s representations and warranties contained in Section
2 are true, complete and correct on and as of such Closing date. The obligation
of the Company to sell and issue Shares to be delivered at a Closing is, unless
waived by the Company, subject to the condition that the relevant Investor’s
representations and warranties contained in Section 3 are true, complete and
correct on and as of the Closing Date.

 

Section 2 - Representations and Warranties

of the Company

 

The Company represents and warrants to each Investor as follows:

 

2.1         Existence of Company. The Company is a duly organized Delaware
corporation. The Company is validly existing in all jurisdictions where it
conducts its business.

 

2.2          Authority to Execute. The execution, delivery and performance by
the Company of this Agreement and the issuance of the Shares are within the
Company’s corporate powers, have been duly authorized by all necessary corporate
action, do not and will not conflict with any provision of law or organizational
document of the Company (including its Certificate of Incorporation or Bylaws)
or of any agreement or contractual restrictions binding upon or affecting the
Company or any of its property and need no further stockholder or creditor
consent.

 

2.3         No Stockholder Approval Required. No approval of the Company’s
stockholders is required for (i) the entry by the Company into this Agreement,
or (ii) the issuance of the Shares contemplated by this Agreement.

 

2.4         Valid Issuance. The Shares will be, validly issued, fully paid and
nonassessable and free of restrictions on transfer other than restrictions on
transfer under, applicable state and federal securities laws and liens or
encumbrances created by or imposed by the Investor. Assuming the accuracy of the
representations of the Investor in Section 3 of this Agreement, and the Shares
will be issued in compliance with all applicable federal and state securities
laws.

 

 

 

  

2.5         Binding Obligation. This Agreement is, a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium, reorganization and similar laws affecting creditors’
rights generally and to general equitable principles.

 

2.6         Litigation. Other than the litigation disclosed in the Company’s
most recent SEC Reports (as defined below), no litigation or governmental
proceeding is pending or threatened against the Company which may have a
materially adverse effect on the financial condition, operations or prospects of
the Company, and to the knowledge of the Company, no basis therefore exists.

 

2.7         Intellectual Property. To the best of the Company’s knowledge, the
Company owns or possesses sufficient legal rights to all patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information and
other proprietary rights and processes necessary for its business as now
conducted and as presently proposed to be conducted, without any known
infringement of the rights of others. There are no outstanding options, licenses
or agreements of any kind relating to the foregoing proprietary rights, nor is
the Company bound by or a party to any options, licenses or agreements of any
kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes of any other person or entity other than such licenses or
agreements arising from the purchase of “off the shelf” or standard products.

 

2.8         SEC Reports. The Company has filed all forms, reports, schedules,
proxy statements, registration statements and other documents (including all
exhibits thereto) required to be filed by it with the U.S Securities and
Exchange Commission (the “SEC”) pursuant to the federal securities laws and the
SEC rules and regulations thereunder, together with all certifications required
pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) (as they
have been amended since the time of their filing, including all exhibits
thereto, the “SEC Reports”). Each of the SEC Reports complied in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended (the “Securities Act”) and the Securities Exchange Act of 1934, as
amended, the Sarbanes-Oxley Act and the rules and regulations of the SEC under
all of the foregoing. None of the SEC Reports contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

Section 3 - Representations and Warranties

of the Investors

 

Each Investor represents and warrants to the Company as follows:

 

3.1         Authorization; Binding Obligations. The Investor has full power and
authority to enter into this Agreement and this Agreement constitutes a valid
and legally binding obligation of the Investor, enforceable against the Investor
in accordance with its terms, subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency, moratorium, reorganization and similar laws
affecting creditors’ rights generally and to general equitable principles.

 

 

 

  

3.2         Accredited Investor. The Investor is an “accredited investor” within
the meaning of SEC Rule 501 of Regulation D promulgated under the Securities
Act.

 

3.3         Investment for Own Account. The Shares are being acquired for his,
her or its own account, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act.

 

3.4         Knowledge and Experience. The Investor has such knowledge and
experience in financial and business matters that (s)he is capable of evaluating
the merits and risks of an investment in the Shares and of making an informed
investment decision with respect thereto, has the ability and capacity to
protect his/her interests and can bear the economic risk of the acceptance of
the Shares, including a total loss of his/her investment.

 

3.5        Opportunity to Ask Questions. The Investor has had the opportunity to
ask questions and receive answers from the Company or any authorized person
acting on its behalf concerning the Company and its business and to obtain any
additional information, to the extent possessed by the Company (or to the extent
it could have been acquired by the Company without unreasonable effort or
expense) necessary to verify the accuracy of the information received by the
Investor. In connection therewith, the Investor acknowledges that (s)he has had
the opportunity to discuss the Company’s business, management and financial
affairs with the Company’s management or any authorized person acting on its
behalf.

 

3.6.        Receipt of Information. The Investor has received and reviewed all
of the information concerning the Company and the Shares, both written and oral,
that the Investor desires. Without limiting the generality of the foregoing, the
Investor has been furnished with or has had the opportunity to acquire, and to
review: all information, both written and oral, that the Investor desires with
respect to the Company’s business, management, financial affairs and prospects.
In determining whether to make this investment, the Investor has relied solely
on his/her own knowledge and understanding of the Company and its business and
prospects based upon the Investor’s own due diligence investigations and the
Company’s filings with the SEC.

 

Section 4 - Miscellaneous

 

4.1          No Waiver; Cumulative Remedies. No failure or delay on the part of
any party to this Agreement in exercising any right or remedy under, or pursuant
to, this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, remedy or power preclude other or further
exercise thereof, or the exercise of any other right, remedy or power. The
remedies in this Agreement are cumulative and are not exclusive of any remedies
provided by law.

 

4.2          Amendments and Waivers. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended (either retroactively
or prospectively) with the written consent of the Company and the Investor. Any
amendment effected in accordance with this Section 4.2 shall be binding upon
each Investor, each future holder of Shares and the Company.

 

 

 

  

4.3          Notices, Etc. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person; sent by facsimile
transmission; sent by electronic mail; duly sent by first class registered or
certified mail, return receipt requested, postage prepaid; or duly sent by
overnight delivery service (e.g., Federal Express) addressed to such party (i)
if to the Company, at the address, fax number or electronic mail address, as
applicable, set forth on the signature page hereof or (ii) if to an Investor, at
the address, fax number or electronic mail address, as applicable, set forth on
Schedule A hereto, or at such other address, fax number or electronic mail
address as may hereafter be designated in writing by the addressee to the
sender. All such notices, advises and communications shall be deemed to have
been received: (a) in the case of personal delivery, on the date of such
delivery; (b) in the case of facsimile or electronic mail transmission, on the
date of transmission; and (c) in the case of mailing or delivery by service, on
the date of delivery as shown on the return receipt or delivery service
statement.

 

4.4          Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to the
conflicts of law provisions of the State of California or of any other state.
The Company and each Investor consent to personal jurisdiction in Orange County,
California.

 

4.5          Severability. If any term in this Agreement is held to be illegal
or unenforceable, the remaining portions of this Agreement shall not be
affected, and this Agreement shall be construed and enforced as if this
Agreement did not contain the term held to be illegal or unenforceable.

 

4.6          Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and each Investor and their respective successors and
assigns.

 

4.7          Transfer of Shares. Notwithstanding the legend required to be
placed on the Shares by applicable law, no registration statement or opinion of
counsel shall be necessary: (a) for a transfer of Shares to the respective
estate of each Investor or for a transfer of Shares by gift, will or intestate
succession of each Investor to his or her spouse or to the siblings, lineal
descendants or ancestors each Investor or his or her spouse, if the transferee
agrees in writing to be subject to the terms hereof to the same extent as if he
or she were the original Investor hereunder; or (b) for a transfer of Shares
pursuant to SEC Rule 144 or any successor rule, or for a transfer of Shares
pursuant to a registration statement declared effective by the SEC under the
Securities Act relating to the Shares.

 

4.8          Survival of Representations, Warranties and Covenants. The
representations and warranties of the parties contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement
indefinitely, and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of the other parties. The covenants
of the parties contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement until such time as the Notes have been
paid in full.

 

 

 

  

4.9          California Commissioner of Corporations. THE SALE OF THE SHARES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SHARES OR PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SHARES
PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SHARES IS EXEMPT FROM
QUALIFICATIONS BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON
SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date first written above.

 

  CNS RESPONSE, INC.       By:       Name: Paul Buck     Title: Chief Financial
Officer

 

Address/Fax Number/E-mail Address for Notice:

 

85 Enterprise, Suite 410

Aliso Viejo, CA 92656

Fax: (866) 867 4446

pbuck@cnsresponse.com

 

  INVESTOR:       By:       Name:           Title:

 

 

 

  

SCHEDULE A

 

Name, Address, Fax Number, E-Mail Address and Tax ID Number of Investor  

Aggregate Purchase Price 

 

 

Name:_________________________________

 

Address:_______________________________

 

______________________________________

 

Fax:__________________________________

 

Email:_________________________________

 

Tax ID:________________________________

 

 

 

 

$______________________

TOTAL: