EXHIBIT 10.1
 

VIRTUAL PIGGY, INC.

_______________________________________

Securities Purchase Agreement

_____________________________________________

 

April 5, 2012

Units Comprised of
Shares of Common Stock
and Warrants
 
 
 

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CONFIDENTIAL INFORMATION
 
THE OFFEREE, BY ACCEPTING THE SECURITIES PURCHASE AGREEMENT, AND ANY OTHER
DOCUMENTS RELATING TO THE COMPANY’S PROPOSED OFFERING OF UNITS COMPRISED SHARES
OF COMMON STOCK AND WARRANTS, ACKNOWLEDGES AND AGREES THAT: (I) THE FORGOING
DOCUMENTS HAVE BEEN FURNISHED TO THE OFFEREE ON A CONFIDENTIAL BASIS SOLELY FOR
THE PURPOSE OF ENABLING THE OFFEREE TO EVALUATE THE OFFERING; (II) THAT THE
OFFEREE MAY NOT FURTHER DISTRIBUTE THE FORGOING DOCUMENTS WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY, EXCEPT TO THE OFFEREE’S LEGAL, FINANCIAL OR
OTHER PERSONAL ADVISORS, IF ANY, WHO WILL USE THE FORGOING DOCUMENTS ON THE
OFFEREE’S BEHALF SOLELY FOR PURPOSES OF EVALUATING THE OFFERING; (III) ANY
REPRODUCTION OR DISTRIBUTION OF THE FORGOING DOCUMENTS, IN WHOLE OR IN PART, OR
THE DIRECT OR INDIRECT DISCLOSURE OF THE CONTENTS OF THE FORGOING DOCUMENTS FOR
ANY OTHER PURPOSE WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS
PROHIBITED; AND (IV) THE OFFEREE SHALL BE BOUND BY ALL TERMS AND CONDITIONS
SPECIFIED IN THE FORGOING DOCUMENTS.

NOTICE TO OFFEREES
 
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER THE APPLICABLE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION.  THIS SECURITIES PURCHASE AGREEMENT
DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL.
 
THE SECURITIES ARE BEING SOLD FOR INVESTMENT PURPOSES ONLY, WITHOUT A VIEW TO
RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE TRANSFERRED, RESOLD OR OFFERED
FOR RESALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND EFFECTIVE REGISTRATION OR QUALIFICATION UNDER THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, OR THE AVAILABILITY OF AN
EXEMPTION THEREFROM.
 
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR THE SECURITIES COMMISSION OR
OTHER REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION HAS APPROVED OR
DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
SECURITIES PURCHASE AGREEMENT OR ANY OTHER DOCUMENT RELATED TO THIS
OFFERING.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
 
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ANY INVESTMENT IN THE SECURITIES OFFERED HEREBY SPECULATIVE, INVOLVES A HIGH
DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY SOPHISTICATED INVESTORS WHO ARE
PREPARED TO BEAR THE ECONOMIC RISK OF SUCH INVESTMENT FOR AN INDEFINITE PERIOD
AND BE ABLE TO WITHSTAND A TOTAL LOSS OF INVESTMENT.  INVESTORS SHOULD CAREFULLY
REVIEW THE SECURITIES PURCHASE AGREEMENT AND THE EXHIBITS HERETO, IN ADDITION TO
THEIR OWN INVESTIGATION AND DUE DILIGENCE OF THE COMPANY AND THE TERMS OF THIS
OFFERING.
 
YOU SHOULD ASSUME THAT THE INFORMATION CONTAINED IN THIS SECURITIES PURCHASE
AGREEMENT, INCLUDING THE EXHIBITS ATTACHED HERETO, IS ACCURATE AS OF THE DATE ON
THE FRONT OF THIS SECURITIES PURCHASE AGREEMENT, REGARDLESS OF THE TIME OF
DELIVERY OF THIS SECURITIES PURCHASE AGREEMENT OR OF ANY SALE OF SECURITIES
HEREUNDER.  NEITHER THE DELIVERY OF THIS SECURITIES PURCHASE AGREEMENT NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF.
 
THIS SECURITIES PURCHASE AGREEMENT DOES NOT PURPORT TO BE ALL-INCLUSIVE OR TO
CONTAIN ALL OF THE INFORMATION THAT A PROSPECTIVE INVESTOR MAY DESIRE IN
INVESTIGATING THE COMPANY.  EACH INVESTOR MUST CONDUCT AND RELY ON ITS OWN
EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED, IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE
SECURITIES.  CERTAIN PROVISIONS OF VARIOUS AGREEMENTS AND DOCUMENTS ARE
SUMMARIZED IN THIS SECURITIES PURCHASE AGREEMENT, PROSPECTIVE INVESTORS SHOULD
NOT ASSUME THAT THE SUMMARIES ARE COMPLETE AND SUCH SUMMARIES ARE QUALIFIED IN
THEIR ENTIRETY BY REFERENCE TO THE COMPLETE TEXT OF SUCH AGREEMENTS AND
DOCUMENTS.
 
 
 
 
 
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FORWARD LOOKING STATEMENTS
 
All statements contained herein other than statements of historical facts are
forward-looking statements within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995.  We have attempted to
identify any forward-looking statements by using words such as “anticipates,”
“believes,” “could,” “expects,” “intends,” “may,” “should” and other similar
expressions. These statements are based upon our current expectations and speak
only as of the date hereof.  Although we believe that the expectations reflected
in our forward-looking statements are reasonable, we can give no assurance that
such expectations will prove to be correct.  Such statements are not guarantees
of future performance or events and are subject to known and unknown risks and
uncertainties that could cause our actual results, events or financial position
to differ materially and adversely from those expressed in such forward-looking
statements.  Such factors include, but are not limited to, our ability to raise
additional capital, the absence of any operating history or revenue, our ability
to attract and retain qualified personnel, our dependence on third party
developers who we can not control, our ability to develop and introduce a new
service to the market in a timely manner, market acceptance of our services, our
limited experience in a relatively new industry, the ability to successfully
develop licensing programs and generate business, rapid technological change in
relevant markets, unexpected network interruptions or security breaches, changes
in demand for current and future intellectual property rights, legislative,
regulatory and competitive developments addressing licensing and enforcement of
patents and/or intellectual property, intense competition with larger companies,
general economic conditions, and other factors disclosed in our annual report on
Form 10-K for the year ended December 31, 2011 and other filings with the
SEC.  We undertake no obligation to revise or update any forward-looking
statements for any reason.
 
 
 
 
 
 
 
 
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ADDITIONAL INFORMATION
 
Virtual Piggy, Inc. (the “Company”) files annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange
Commission (the “SEC”) under the Securities Exchange Act of 1934, as
amended.  Reports, statements or other information that we file with the SEC are
available to the public at the SEC’s Website at http://www.sec.gov.  The
following documents that we have previously filed with the SEC are incorporated
by reference into this Agreement:
 
 
·
Annual Report on SEC Form 10-K for the year ended December 31, 2011;

 
 
·
Any Annual Report on SEC Form 10-K, Quarterly Report on Form 10-Q, or Current
Report on SEC Form 8-K filed with the SEC after March 28, 2012 and before the
date this agreement is executed.

 
The information incorporated by reference into this agreement is an important
part of this Agreement. Any statement contained in a document incorporated by
reference into this Agreement shall be deemed to be modified or superseded for
the purposes of this Agreement to the extent that a statement contained herein
or in any other subsequently filed document modifies or supersedes such
statement.  Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Agreement.

The Company will provide to each person to whom this Agreement is sent, upon the
written or oral request of such person, a copy of any or all of the documents
referred to above that have been incorporated by reference into this agreement
but not delivered with this agreement.  You may make such requests at no cost to
you by writing or telephoning us at the following address or number:

Virtual Piggy, Inc.
15 West Highland Avenue
Philadelphia, Pennsylvania  19118
Attention: Chief Executive Officer
(215) 247-5500

You should rely only on the information contained in this Agreement or
incorporated by reference into this Agreement.  The Company has not authorized
anyone to provide you with different information.  You should not assume that
the information in this Agreement is accurate as of any date other than the date
on the cover of this Agreement or that the information incorporated by reference
into this Agreement is accurate as of any date other than the date set forth on
the front of the document containing such information.
 
 
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CONFIDENTIAL

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated on and as of the
latest date set forth on the signature page hereto, by and between Virtual
Piggy, Inc., a Delaware corporation (the “Company”), and the purchaser
identified on the signature page hereof (“Purchaser”).
 
R E C I T A L S:

WHEREAS, Purchaser desires to purchase and the Company desires to sell
securities on the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the premises hereof and the agreements set
forth herein below, the parties hereto hereby agree as follows:
 
1.          The Offering.
 
(a)             Private Offering.  The securities offered by this Agreement are
being offered in a private offering (the “Offering”) of up to $3,500,000,
consisting of up to 10,000,000 shares (the “Shares”) of the Company’s Common
Stock, $0.0001 par value per share (the “Common Stock”), and warrants in the
form attached hereto as Exhibit A (the “Warrants”) to purchase up to 5,000,000
shares of the Company’s Common Stock, provided that the Offering may be
increased, in the sole discretion of the Company, by up to an additional
$500,000 to cover over-allotments.  The Shares and Warrants will be sold in
units (the “Units”) with each Unit comprised of Two (2) Shares and One (1)
Warrant at a purchase price of $0.70 (the “Purchase Price”) per Unit.  The Units
will be sold on a reasonable “best efforts” basis pursuant to Section 4(2) of
the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506
of Regulation D thereunder.  The Shares and the Warrants and shares of Common
Stock issuable upon exercise of the Warrants (the “Warrant Shares”) are
hereinafter referred to collectively as the “Securities.” The Units are being
offered solely to a limited number of “accredited investors” as that term is
defined in Rule 501(a) of the Securities Act during an offering period (the
“Offering Period”) commencing April 5, 2012 and terminating not later than June
5, 2012, unless extended by the Company in its sole discretion for up to an
additional forty five-day period (the “Termination Date”).  The Offering may be
terminated by the Company at any time in its sole discretion.  
 
(b)             No Minimum Offering Amount.  Funds shall be released to the
Company upon the Company’s execution of this Agreement and the Company is not
required to raise any minimum amount of proceeds prior to executing this
Agreement or any similar agreement with other investors and obtaining such
funds.  Because there is no minimum amount of subscriptions which the Company
must receive before accepting funds in the Offering, Purchaser will not be
assured that the Company will have sufficient funds to execute its business plan
or satisfy its working capital requirements and will bear the risk that the
Company will be unable to secure the funds necessary to meet its current and
anticipated financial obligations.  
 
 
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(c)             Placement Agent Fees.  The Company reserves the right to pay in
cash placement and finders’ fees in connection with the sale of the Units in an
amount up to five percent (5%) of the Purchase Price of such Units.
 
(e)           Use of Proceeds. Assuming the Company raises $3,500,000, the net
proceeds to the Company are estimated to be approximately $3,325,000 (after
deducting the maximum amount of broker dealer and finders’ fees and offering
expenses payable by the Company estimated at $175,000).  The Company intends to
use the net proceeds for general working capital purposes.
 
 
2.          Sale and Purchase of Securities.
 
(a)Purchase and Sale.  Subject to the terms and conditions hereof, the Company
agrees to sell, and Purchaser irrevocably subscribes for and agrees to purchase,
the number of Units set forth on the signature page of this Agreement at a
purchase price of $0.70 per Unit. The aggregate purchase price for the Units
shall be as set forth on the signature page hereto (the “Aggregate Purchase
Price”) and shall be payable upon execution hereof by check or wire transfer of
immediately available funds as set forth below.
 
(b)Subscription Procedure.  In order to purchase Units, Purchaser shall deliver
to the Company at 15 West Highland Avenue, Philadelphia, Pennsylvania  19118,
Attention: Chief Executive Officer: (i) one completed and duly executed copy of
this Agreement; and (ii) immediately available funds, or a certified check or
bank check, in an amount equal to the Aggregate Purchase Price.  Execution and
delivery of this Agreement shall constitute an irrevocable subscription for that
number of Units set forth on the signature page hereto.  Payment for the Units
may be made by wire transfer to:  
 

 
xxx
xxx
xxx
Phone: xxx-xxx-xxx
          SWIF Code:
Routing/ABA Number:
Beneficiary
Account Number:
xxx
xxx
Virtual Piggy, Inc.
xxx

or by check made payable to:  “Virtual Piggy, Inc.”  Receipt by the Company of
funds wired, or deposit and collection by the Company of the check tendered
herewith, will not constitute acceptance of this Agreement by the Company.  The
Units subscribed for will not be deemed to be issued to, or owned by, Purchaser
until the Company has executed this Agreement.  All funds tendered by Purchaser
will be held by the Company pending acceptance or rejection of this Agreement by
the Company and the closing of Purchaser’s purchase of Units.  This Agreement
will either be accepted by the Company, in whole or in part, in its sole
discretion, or rejected by the Company as promptly as practicable.  If this
Agreement is accepted only in part, Purchaser agrees to purchase such smaller
number of Units as the Company determines to sell to Purchaser.  If this
Agreement is rejected for any reason, including the termination of the Offering
by the Company, this Agreement and all funds tendered herewith will be promptly
returned to Purchaser, without interest or deduction of any kind, and this
Agreement will be void and of no further force or effect.
 
 
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(c)Closing.  Subscriptions will be accepted by the Company in its sole
discretion until the Termination Date.  Upon the Company’s execution of this
Agreement, the subscription evidenced hereby, if not previously rejected by the
Company, will, in reliance upon Purchaser’s representations and warranties
contained herein, be accepted, in whole or in part, by the Company.  If
Purchaser’s subscription is accepted only in part, this Agreement will be marked
to indicate such fact, and the Company will return to Purchaser the portion of
the funds tendered by Purchaser representing the unaccepted portion of
Purchaser’s subscription, without interest or deduction of any kind.  Upon
acceptance of this Agreement, in whole or in part, by the Company, the Company
will issue the certificates for the Sharers and the Warrants to Purchaser.  
 
3.             Representations and Warranties of Purchaser.  Purchaser
represents and warrants to the Company as follows:
 
(a)      Organization and Qualification.  
 
(i)           If Purchaser is an entity, Purchaser is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, with the corporate or other entity power and authority to own and
operate its business as presently conducted, except where the failure to be or
have any of the foregoing would not have a material adverse effect on Purchaser,
and Purchaser is duly qualified as a foreign corporation or other entity to do
business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of their activities makes
such qualification necessary, except for such failures to be so qualified or in
good standing as would not have a material adverse effect on it.
 
(ii)           If Purchaser is an entity, the address of its principal place of
business is as set forth on the signature page hereto, and if Purchaser is an
individual, the address of its principal residence is as set forth on the
signature page hereto.
 
(b)     Authority; Validity and Effect of Agreement.  
 
(i)           If Purchaser is an entity, Purchaser has the requisite corporate
or other entity power and authority to execute and deliver this Agreement and
any documents contemplated hereby (collectively, the “Transaction Documents”)
and perform its obligations under the Transaction Documents.  The execution and
delivery of each Transaction Document by Purchaser, the performance by Purchaser
of its obligations thereunder, and all other necessary corporate or other entity
action on the part of Purchaser have been duly authorized by its board of
directors or similar governing body, and no other corporate or other entity
proceedings on the part of Purchaser is necessary for Purchaser to execute and
deliver the Transaction Documents and perform its obligations thereunder.
 
 
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(ii)             Each of the Transaction Documents has been duly and validly
authorized, executed and delivered by Purchaser and, assuming each has been duly
and validly executed and delivered by the Company, each constitutes a legal,
valid and binding obligation of Purchaser, in accordance with its terms.
 
(c)No Conflict; Required Filings and Consents.  Neither the execution and
delivery of the Transaction Documents by Purchaser nor the performance by
Purchaser of its obligations, thereunder will: (i) if Purchaser is an entity,
conflict with Purchaser’s articles of incorporation or bylaws, or other similar
organizational documents; (ii) violate any statute, law, ordinance, rule or
regulation, applicable to Purchaser or any of the properties or assets of
Purchaser; or (iii) violate, breach, be in conflict with or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or permit the termination of any provision of, or result in the
termination of, the acceleration of the maturity of, or the acceleration of the
performance of any obligation of Purchaser under, or result in the creation or
imposition of any lien upon any properties, assets or business of Purchaser
under, any material contract or any order, judgment or decree to which Purchaser
is a party or by which it or any of its assets or properties is bound or
encumbered except, in the case of clauses (ii) and (iii), for such violations,
breaches, conflicts, defaults or other occurrences which, individually or in the
aggregate, would not have a material adverse effect on its obligation to perform
its covenants under this Agreement.
 
(d)Accredited Investor.  Purchaser is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D under the Securities Act.  If Purchaser
is an entity, Purchaser was not formed for the specific purpose of acquiring the
Securities, and, if it was, all of Purchaser’s equity owners are “accredited
investors” as defined above.
 
(e)No Government Review.  Purchaser understands that neither the United States
Securities and Exchange Commission (“SEC”) nor any securities commission or
other governmental authority of any state, country or other jurisdiction has
approved the issuance of the Units or passed upon or endorsed the merits of this
Agreement, the Warrants, the Shares, or any of the other documents relating to
the proposed Offering, or confirmed the accuracy of, determined the adequacy of,
or reviewed this Agreement, the Warrants, the Shares or such other documents.
 
(f)Investment Intent.  The Securities are being acquired for the Purchaser’s own
account for investment purposes only, not as a nominee or agent and not with a
view to the resale or distribution of any part thereof, and Purchaser has no
present intention of selling, granting any participation in or otherwise
distributing the same.  By executing this Agreement, Purchaser further
represents that Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or third person with respect to any of the Securities.
 
 
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(g)Restrictions on Transfer.  Purchaser understands that the Securities are
“restricted securities” as such term is defined in Rule 144 under the Securities
Act and have not been registered under the Securities Act or registered or
qualified under any state securities law, and may not be, directly or
indirectly, sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act and
registration or qualification under applicable state securities laws or the
availability of an exemption therefrom.  In any case where such an exemption is
relied upon by Purchaser from the registration requirements of the Securities
Act and the registration or qualification requirements of such state securities
laws, Purchaser shall furnish the Company with an opinion of counsel stating
that the proposed sale or other disposition of such securities may be effected
without registration under the Securities Act and will not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and opinion to be
satisfactory to the Company.  Purchaser acknowledges that it is able to bear the
economic risks of an investment in the Securities for an indefinite period of
time, and that its overall commitment to investments that are not readily
marketable is not disproportionate to its net worth.
 
(h)Investment Experience.  Purchaser has such knowledge, sophistication and
experience in financial, tax and business matters in general, and investments in
securities in particular, that it is capable of evaluating the merits and risks
of this investment in the Securities, and Purchaser has made such investigations
in connection herewith as it deemed necessary or desirable so as to make an
informed investment decision without relying upon the Company for legal or tax
advice related to this investment.  In making its decision to acquire the
Securities, Purchaser has not relied upon any information other than information
provided to Purchaser by the Company or its representatives and contained
herein.
 
(i)Access to Information.  Purchaser acknowledges that it has had access to and
has reviewed all documents and records relating to the Company, including, but
not limited to, the Company’s Annual Report on SEC Form 10-K for the year ended
December 31, 2011, any Annual Report on SEC Form 10-K, Quarterly Report on SEC
Form 10-Q, or Current Report on SEC Form 8-K filed with the SEC after March 28,
2012 and before the date this Agreement is executed (as such documents have been
amended since the date of their filing, collectively, the “Company SEC
Documents”), that it has deemed necessary in order to make an informed
investment decision with respect to an investment in the Securities; that it has
had the opportunity to ask representatives of the Company certain questions and
request certain additional information regarding the terms and conditions of
such investment and the finances, operations, business and prospects of the
Company and has had any and all such questions and requests answered to its
satisfaction; and that it understands the risks and other considerations
relating to such investment.  Purchaser understands any statement contained in
the Company SEC Documents shall be deemed to be modified or superseded for the
purposes of this Agreement to the extent that a statement contained herein or in
any other document subsequently filed with the SEC modifies or supersedes such
statement.  
 
 
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(j)            Reliance on Representations.  Purchaser understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of the federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities.  Purchaser represents and warrants to the
Company that any information that Purchaser has heretofore furnished or
furnishes herewith to the Company is complete and accurate, and further
represents and warrants that it will notify and supply corrective information to
the Company immediately upon the occurrence of any change therein occurring
prior to the Company’s issuance of the Securities.  Within five (5) days after
receipt of a request from the Company, Purchaser will provide such information
and deliver such documents as may reasonably be necessary to comply with any and
all laws and regulations to which the Company is subject.
 
(k)           No General Solicitation.  Purchaser is unaware of, and in deciding
to participate in the Offering is in no way relying upon, and did not become
aware of the Offering through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media, or broadcast over television or radio or the
internet, in connection with the Offering.
 
(l)       Placement and Finder’s Fees.  No agent, broker, investment banker,
finder, financial advisor or other person acting on behalf of Purchaser or under
its authority is or will be entitled to any broker’s or finder’s fee or any
other commission or similar fee, directly or indirectly, in connection with the
Offering, and no person is entitled to any fee or commission or like payment in
respect thereof based in any way on agreements, arrangements or understanding
made by or on behalf of Purchaser.
 
(m)     Investment Risks.  Purchaser understands that purchasing Securities in
the Offering will subject Purchaser to certain risks, including, but not limited
to, those set forth in the Company SEC Documents as well as each of the
following:
 
(i)             The offering price of the Securities offered hereby has been
determined solely by the Company and does not necessarily bear any relationship
to the value of the Company’s assets, current or potential earnings of the
Company, or any other recognized criteria used for measuring value and,
therefore, there can be no assurance that the offering price of the Securities
is representative of the actual value of the Securities.
 
(ii)             In order to capitalize the Company, execute its business plan,
and for other corporate purposes, the Company has issued, and expects to issue
additional shares of Common Stock, securities exercisable or convertible into
shares of Common Stock, or debt.  Such securities have been and may be issued
for a purchase price consisting of cash, services or other consideration that
may be materially different than the purchase price of the Units.  The issuance
of any such securities may result in substantial dilution to the relative
ownership interests of the Company’s existing shareholders and substantial
reduction in net book value per share.  Additional equity securities may have
rights, preferences and privileges senior to those of the holders of Common
Stock, and any debt financing may involve restrictive covenants that may limit
the Company’s operating flexibility.
 
 
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(iii)             An investment in the Securities may involve certain material
legal, accounting and federal and state tax consequences.  Purchaser should
consult with its legal counsel, accountant and/or business adviser as to the
legal, accounting, tax and related matters accompanying such an investment.
 
(iv)             There is no minimum amount required to be raised in this
Offering and, therefore, the Company may not generate enough net proceeds from
this Offering to execute its business plan or satisfy its working capital
requirements.
 
(n)      Legends.  The certificates and agreements evidencing the Securities
shall have endorsed thereon the following legend (and appropriate notations
thereof will be made in the Company’s stock transfer books), and stop transfer
instructions reflecting these restrictions on transfer will be placed with the
transfer agent of the Shares:
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND
WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF
1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
SECURITIES LAWS.

(o)           Purchaser is directed to review the U.S. Treasury Department’s
Office of Foreign Assets Control (“OFAC”) website at www.treas.gov. before
making the following representations.  Purchaser represents that no part of the
Aggregate Purchase Price set forth on the signature page hereto was directly or
indirectly derived from activities that may contravene federal, state or
international laws and regulations, including anti-money laundering laws and
regulations. Federal regulations and executive orders administered by OFAC
prohibit, among other things, the engagement in transaction with, and the
provision of services to, certain foreign countries, territories, entities and
individuals.  The lists of OFAC prohibited countries, territories, persons and
entities can be found at the OFAC website. In addition, the programs
administered by OFAC prohibit dealing with individuals or entities in certain
countries regardless of whether such individuals or entities appear on the OFAC
lists.  Purchaser hereby represents that none of the following is named on the
OFAC list, nor is a person or entity prohibited under the OFAC programs: (i) the
Purchaser, (ii) any person controlling or controlled by the Purchaser, (iii) if
the undersigned is an entity, any person having a beneficial interest in the
Purchaser, or (iv) any person for whom the undersigned is acting as agent or
nominee in connection with this investment. The Purchaser understands and
acknowledges that, by law, the Company may be required to disclose the identity
of the Purchaser to OFAC.
 
 
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(p)           The Purchaser acknowledges that due to anti-money laundering
regulations within their respective jurisdictions, the Company  and/or any
person acting on behalf of the Company may require further documentation
verifying the Purchaser’s identity and the source of funds used to purchase
Units before this Agreement can be accepted.   The Purchaser further agrees to
provide the Company at any time with such information as the Company determines
to be necessary and appropriate to verify compliance with the anti-money
laundering regulations of any applicable jurisdiction or to respond to requests
for information concerning the identity of the Purchaser from any governmental
authority, self-regulatory organization or financial institution in connection
with its anti-money laundering compliance procedures, and to update such
information as necessary.
 
4.          Representations and Warranties of the Company.  The Company
represents and warrants to Purchaser as follows:
 
(a)             Organization and Qualification.  The Company is duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with the corporate power and authority to own and operate its business as
presently conducted, except where the failure to be or have any of the foregoing
would not have a material adverse effect on the Company.  The Company is duly
qualified as a foreign corporation or other entity to do business and is in good
standing in each jurisdiction where the character of its properties owned or
held under lease or the nature of their activities makes such qualification
necessary, except for such failures to be so qualified or in good standing as
would not have a material adverse effect on the Company.
 
(b)             Authority; Validity and Effect of Agreement.  
 
(i)           The Company has the requisite corporate power and authority to
execute and deliver each of the Transaction Documents, perform its obligations
thereunder, and conduct the Offering.  The execution and delivery of each of the
Transaction Documents by the Company, the performance by the Company of its
obligations thereunder, the transactions contemplated thereby, the Offering, and
all other necessary corporate action on the part of the Company have been duly
authorized by its board of directors, and no other corporate proceedings on the
part of the Company are necessary to authorize each of the Transaction Documents
or the Offering.  Each of the Transaction Documents has been duly and validly
executed and delivered by the Company and, assuming that each has been duly
authorized, executed and delivered by Purchaser, each constitutes a legal, valid
and binding obligation of the Company, in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
 
 
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(ii)           The Securities have been duly authorized and, when issued and
paid for in accordance with this Agreement, will be validly issued, fully paid
and non-assessable with no personal liability resulting solely from the
ownership of such Securities and will be free and clear of all liens, charges,
restrictions, claims and encumbrances imposed by or through the Company.

(c)           No Conflict; Required Filings and Consents.  Neither the execution
and delivery of the Transaction Documents by the Company nor the performance by
the Company of its obligations thereunder will: (i) conflict with the Company’s
certificate of incorporation or bylaws; (ii) violate any statute, law,
ordinance, rule or regulation, applicable to the Company or any of the
properties or assets of the Company; or (iii) violate, breach, be in conflict
with or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or permit the termination of any
provision of, or result in the termination of, the acceleration of the maturity
of, or the acceleration of the performance of any obligation of the Company, or
result in the creation or imposition of any lien upon any properties, assets or
business of the Company under, any material contract or any order, judgment or
decree to which the Company is a party or by which it or any of its assets or
properties is bound or encumbered except, in the case of clauses (ii) and (iii),
for such violations, breaches, conflicts, defaults or other occurrences which,
individually or in the aggregate, would not have a material adverse effect on
its obligation to perform its covenants under this Agreement.
 
(d)           SEC Reports and Financial Statements.  The Company has filed with
the SEC, and has heretofore made available to Purchaser, true and complete
copies of all forms, reports, schedules, statements and other documents required
to be filed by it under the Exchange Act or the Securities Act.  In addition,
the Company has incorporated by reference into this Agreement the Company SEC
Documents.  As of their respective dates or, if amended, as of the date of the
last such amendment, the Company SEC Documents, including any financial
statements or schedules included therein: (i) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading; and (ii)
complied in all material respects with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be, and the applicable
rules and regulations of the SEC thereunder.  Each of the financial statements
included in the Company SEC Documents have been prepared from, and are in
accordance with, the books and records of the Company, comply in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the financial position and the results of operations
and cash flows of the Company as of the dates thereof or for the periods
presented therein (subject, in the case of unaudited statements, to normal
year-end audit adjustments not material in amount).
 
 
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5.          Indemnification.  Purchaser agrees to indemnify, defend and hold
harmless the Company and its respective affiliates and agents from and against
any and all demands, claims, actions or causes of action, judgments,
assessments, losses, liabilities, damages or penalties and reasonable attorneys’
fees and related disbursements incurred by the Company that arise out of or
result from a breach of any representations or warranties made by Purchaser
herein, and Purchaser agrees that in the event of any breach of any
representations or warranties made by Purchaser herein, the Company may, at its
option, forthwith rescind the sale of the Units to Purchaser.
 
6.          Piggyback Registration.
 
(a)           Until the earlier of (i) the date as of which the Purchaser may
sell all of the Registrable Securities owned by Purchaser without restriction
pursuant to Rule 144 (including, without limitation, volume restrictions) and
without the need for current public information required by Rule 144(c)(1) (or
Rule 144(i)(2), if applicable) or (ii) the date on which the Purchaser shall
have sold all of the Registrable Securities owned by Purchaser
(the “Registration Period”), whenever the Company proposes to register any
shares of its Common Stock under the Securities Act (other than a registration
effected solely to implement an employee benefit plan or a transaction to which
Rule 145 of the Securities Act is applicable, or a Registration Statement on
Form S-4, S-8 or any successor form thereto or another form not available for
registering the Securities for sale to the public), whether for its own account
or for the account of one or more stockholders of the Company and the form of
Registration Statement to be used may be used for any registration of Securities
(a “Piggyback Registration”), the Company shall give prompt written notice (in
any event no later than 10 days prior to the filing of such Registration
Statement) to the Purchaser and the other holders of Registrable Securities of
its intention to effect such a registration and, subject to Section 6(b) and
Section 6(c), shall include in such registration all Registrable Securities with
respect to which the Company has received written requests for inclusion from
the holders of Registrable Securities within 5 days after the Company's notice
has been given to each such holder . The Company may postpone or withdraw the
filing or the effectiveness of a Piggyback Registration at any time in its sole
discretion and/or reduce the amount of shares to be included in such
registration as a result of rules, regulations, positions or releases issued or
actions taken by the SEC pursuant to its authority with respect to Rule 415,
promulgated by the SEC under the Securities Act. For purposes of this Section 6,
the term “Registrable Securities” means (x) the Shares, (y) the Warrant Shares,
and (z) any capital stock of the Company issued or issuable with respect to the
Shares or the Warrant Shares including, without limitation, as a result of any
stock split, stock dividend, recapitalization, exchange or similar event or
otherwise.
 
 
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(b)           If during the Registration Period, a Piggyback Registration is
initiated as a primary underwritten offering on behalf of the Company and the
managing underwriter advises the Company and the holders of Registrable
Securities (if any holders of Registrable Securities have elected to include
Registrable Securities in such Piggyback Registration) in writing that in its
opinion the number of shares of Common Stock proposed to be included in such
registration, including all Registrable Securities and all other shares of
Common Stock proposed to be included in such underwritten offering, exceeds the
number of shares of Common Stock which can be sold in such offering and/or that
the number of shares of Common Stock proposed to be included in any such
registration would adversely affect the price per share of the Common Stock to
be sold in such offering and/or the Company is unable to include in such
registration all of the Registrable Securities as a result of rules,
regulations, positions or releases issued or actions taken by the SEC pursuant
to its authority with respect to Rule 415, promulgated by the SEC under the
Securities Act, the Company shall include in such registration (i) first, the
number of shares of Common Stock that the Company proposes to sell; (ii) second,
the number of shares of Common Stock required to be included as a result of
contractual demand or mandatory registration rights, allocated among such
holders in such manner as they may agree; (iii) third, the number of shares of
Common Stock requested to be included therein by holders of Registrable
Securities, allocated pro rata among all such holders on the basis of the number
of Registrable Securities owned by each such holder or in such manner as they
may otherwise agree; and (iv) fourth, the number of shares of Common Stock
requested to be included therein by holders of Common Stock (other than holders
of Registrable Securities), allocated among such holders in such manner as they
may agree.

(c)           If during the Registration Period, a Piggyback Registration is
initiated as an underwritten offering on behalf of a holder of Common Stock
other than Registrable Securities, and the managing underwriter advises the
Company in writing that in its opinion the number of shares of Common Stock
proposed to be included in such registration, including all Registrable
Securities and all other shares of Common Stock proposed to be included in such
underwritten offering, exceeds the number of shares of Common Stock which can be
sold in such offering and/or that the number of shares of Common Stock proposed
to be included in any such registration would adversely affect the price per
share of the Common Stock to be sold in such offering and/or the Company is
unable to include in such registration all of the Registrable Securities as a
result of rules, regulations, positions or releases issued or actions taken by
the SEC pursuant to its authority with respect to Rule 415, promulgated by the
SEC under the Securities Act, the Company shall include in such registration (i)
first, the number of shares of Common Stock required to be included as a result
of contractual demand or mandatory registration rights, (ii) second, the number
of shares of Common Stock requested to be included therein by the holder(s)
requesting such registration, allocated among such holders in such manner as
they may agree, (iii) third, by the holders of Registrable Securities, allocated
pro rata among the number of Registrable Securities, as applicable, owned by all
such holders or in such manner as they may otherwise agree; and (iv) fourth, the
number of shares of Common Stock requested to be included therein by other
holders of Common Stock, allocated among such holders in such manner as they may
agree.

(d)           If any Piggyback Registration is initiated as a primary
underwritten offering on behalf of the Company, the Company shall select the
investment banking firm or firms to act as the managing underwriter or
underwriters in connection with such offering.

 
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7.          Confidentiality.  Purchaser acknowledges and agrees that:
 
(a)            Certain of the information contained herein is of a confidential
nature and may be regarded as material non-public information under Regulation
FD of the Securities Act.
 
(b)            This Agreement has been furnished to Purchaser by the Company for
the sole purpose of enabling Purchaser to consider and evaluate an investment in
the Company, and will be kept confidential by Purchaser and not used for any
other purpose.
 
(c)            Until the time the information contained herein has been
adequately disseminated to the public, the existence of this Agreement and the
information contained herein shall not, without the prior written consent of the
Company, be disclosed by Purchaser to any person or entity, other than
Purchaser’s personal financial and legal advisors for the sole purpose of
evaluating an investment in the Company, and Purchaser will not, directly or
indirectly, disclose or permit Purchaser’s personal financial and legal advisors
to disclose, any of such information without the prior written consent of the
Company.
 
(d)            Purchaser shall make its representatives aware of the terms of
this Section 7 and to be responsible for any breach of this Agreement by such
representatives.  
 
(e)            Purchaser shall not, without the prior written consent of the
Company, directly or indirectly, make any statements, public announcements or
release to trade publications or the press with respect to the contents or
subject matter of this Agreement.  
 
(f)             If Purchaser decides to not pursue further investigation of the
Company or to not participate in the Offering, Purchaser will promptly return
this Agreement and any accompanying documentation to the Company.
 
8.          Non-Public Information.  Purchaser acknowledges that certain
information concerning the matters that are the subject matter of this Agreement
constitute material non-public information under United States federal
securities laws, and that United States federal securities laws prohibit any
person who has received material non-public information relating to the Company
from purchasing or selling securities of the Company, or from communicating such
information to any person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell securities of the
Company.  Accordingly, until such time as any such non-public information has
been adequately disseminated to the public, Purchaser shall not purchase or sell
any securities of the Company, or communicate such information to any other
person.
 
9.          Entire Agreement; No Third Party Beneficiaries.  This Agreement
contains the entire agreement between the parties and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereto, and no party shall be liable or bound to
any other party in any manner by any warranties, representations, guarantees or
covenants except as specifically set forth in this Agreement.  Purchaser
acknowledges and agrees that, with the exception of the information contained in
this Agreement, Purchaser did not rely upon any statements or information,
whether oral or written, provided by the Company, or any of its officers,
directors, employees, agents or representatives, in deciding to enter into this
Agreement or purchase the Units.  Nothing in this Agreement, express or implied,
is intended to confer upon any person other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
 
 
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10.          Amendment and Modification.  This Agreement may not be amended,
modified or supplemented except by an instrument or instruments in writing
signed by the Company and the holders of a majority of the Units sold in the
Offering.
 
11.          Extensions and Waivers.  At any time prior to the Closing, the
parties hereto entitled to the benefits of a term or provision may (a) extend
the time for the performance of any of the obligations or other acts of the
parties hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto, or (c) waive compliance with any obligation, covenant, agreement or
condition contained herein.  Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument or
instruments in writing signed by the Company and the holders of a majority of
the Units sold in the Offering.  No failure or delay on the part of any party
hereto in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty, covenant or agreement.
 
12.          Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that no party hereto may assign its rights or
delegate its obligations under this Agreement without the express prior written
consent of the other party hereto.  Except as provided in Section 5, nothing in
this Agreement is intended to confer upon any person not a party hereto (and
their successors and assigns) any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
 
13.          Survival of Representations, Warranties and Covenants.  The
representations and warranties contained herein shall survive the Closing and
shall thereupon terminate 18 months from the Closing, except that the
representations contained in Sections 3(a), 3(b), 4(a), and 4(b) shall survive
indefinitely.  All covenants and agreements contained herein which by their
terms contemplate actions following the Closing shall survive the Closing and
remain in full force and effect in accordance with their terms.  All other
covenants and agreements contained herein shall not survive the Closing and
shall thereupon terminate.
 
14.          Headings; Definitions.  The Section headings contained in this
Agreement are inserted for convenience of reference only and will not affect the
meaning or interpretation of this Agreement.  All references to Sections
contained herein mean Sections of this Agreement unless otherwise stated.  All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms.
 
 
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15.          Severability.  If any provision of this Agreement or the
application thereof to any person or circumstance is held to be invalid or
unenforceable to any extent, the remainder of this Agreement shall remain in
full force and effect and shall be reformed to render the Agreement valid and
enforceable while reflecting to the greatest extent permissible the intent of
the parties.
 
16.          Notices.  All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy,
telefax or other electronic transmission service to the appropriate address or
number as set forth below:
 
If to the Company:
 
Virtual Piggy, Inc.
15 West Highland Avenue
Philadelphia, Pennsylvania  19118
Fax (215) 247-1163
Attention: Chief Executive Officer

with a copy to:
 
Fox Rothschild LLP
997 Lenox Drive
Building 3
Lawrenceville, New Jersey  08648-2311
Fax (609) 896-1469
Attention:  Vincent A. Vietti, Esquire

If to Purchaser:
 
To that address indicated on the signature page hereof.
 
17.          Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania, without regard
to the laws that might otherwise govern under applicable principles of conflicts
of laws thereof, except to the extent that the General Corporation Law of the
State of Delaware shall apply to the internal corporate governance of the
Company.
 
18.          Arbitration.  If a dispute arises as to the interpretation of this
Agreement, it shall be decided in an arbitration proceeding conforming to the
Rules of the American Arbitration Association applicable to commercial
arbitration then in effect at the time of the dispute.  The arbitration shall
take place in Philadelphia, Pennsylvania.  The decision of the arbitrators shall
be conclusively binding upon the parties and final and such decision shall be
enforceable as a judgment in any court of competent jurisdiction. The parties
shall share equally the costs of the arbitration.
 
 
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19.          Counterparts.  This Agreement may be executed and delivered by
facsimile in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same agreement.

[Signature page follows]
 
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have
caused this Agreement to be executed as of the date set forth below.
 
 
 
 
 
Date: ____________________, 2012
 
PURCHASER
 
 
 
______________________________________
 
 
 
By: ___________________________________
Name: _____________________________
Title: ______________________________
Address: ___________________________ 
                          ___________________________ 
 
      Social Security
      or Tax ID No.: _______________________
     
Number of Units Purchased: ____________
 
Aggregate Purchase Price: $___________
 
____ Units @ $0.70 per Unit
 
 
 
Delivery Instructions (if different than Address):
 
____________________________________
____________________________________
____________________________________
 
   
 
 
 
Date:____________________, 2012
VIRTUAL PIGGY, INC.
 
 
 
By: ___________________________________
Name: ______________________________
        Title: _______________________________

 
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