EXHIBIT 10.6

 

 

Subscription Agreement No.:____________

 

Name:_____________________________

 

Date:_____________________________

 

GYROTRON TECHNOLOGY, INC.

 

SUBSCRIPTION AGREEMENT

 

SERIES A2 PREFERRED STOCK

 

Gyrotron Technology, Inc.3412 Progress Drive

Bensalem, Pennsylvania 19020 

Gentlemen:

 

1. Subscription.

 

(a) The undersigned subscriber (the “Subscriber”), intending to be legally
bound, hereby irrevocably subscribes to purchase from Gyrotron Technology, Inc.,
a Delaware corporation (the “Company”) _______ units (the “Units”) each
consisting of (i) one share of 10% Convertible Redeemable Series A2 Preferred
Stock, par value $0.001 per share (the “Series A2 Preferred Stock” or the
“Shares”), of the Company, and (ii) twenty five warrants (the “Warrants”), each
to acquire one share of common stock, par value $0.001 per share of the Company
(each, a “Common Share”), expiring 12/15/16 with an exercise price of $1.00 per
Common Share, at a price of $35.00 per Unit, plus accrued dividends, if any; all
as set forth on the signature page hereof. The form of Certificate of
Designation (“COD”) for the Series A2 Preferred Stock, and the Warrant Agreement
for the Warrants are attached as Exhibit B and C respectively and all references
to their terms are qualified in their entirety by reference to said exhibits.

 

This subscription is made in accordance with and subject to the terms and
conditions described in this Subscription Agreement (this “Agreement).

 

The Shares that are the subject of this Agreement are part of an offering of
Units by the Company (the “Offering”), on a best efforts basis. There are 8,750
shares of Series A2 Preferred Stock authorized. The number of Units that the
Company may offer and/or sell is at the Company’s discretion. Currently the
Company plans to offer $300,000 of units.

 

The Company may use broker-dealers and other agents to offer and sell the Units,
and/or finders identify and introduce potential subscribers to the Company.
Compensation may be paid to these persons in the amount of (i) up to 6% of the
gross proceeds to the Company of the Units that they have placed, to be paid in
cash and/or in Units, and (ii) up to 4% of the number of Warrants purchased
hereunder as part of the Units. in additional Warrants

 

 
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The Company may, and intends to offer and sell the Units to officers, directors
and current shareholders of the Company, as well as other accredited investors
or non-US persons. The Company may terminate the Offering at any time without
prior notice. Also, the Company, in its sole discretion, may accept or reject
this subscription for Shares and Warrants in whole or in part for any reason,
but the Company will issue Shares and Warrants in respect of all subscriptions
accepted prior to such termination. If the Company decides to reject this
subscription, it will do so promptly following its receipt and will return the
Subscriber’s funds without interest as soon as practicable.

 

The Series A2 Preferred Stock pro forma begin to accrue dividends as of March
31, 2015. In lieu of requesting payment in the amount of dividends accrued
through the date of delivery of the Subscriber’s subscription payment, the
Company will withhold from the dividend payments otherwise payable to a
Subscriber the amount of the dividends accrued through the date of delivery of
the subscription payment.

 

THE SHARES AND THE WARRANTS BEING OFFERED HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY APPLICABLE STATE OR OTHER REGULATORY
AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT AND THE EXHIBITS
THERETO OR ENDORSED THE MERITS OF THE OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.

 

THE SHARES AND THE WARRANTS ARE OFFERED PURSUANT TO EXEMPTIONS PROVIDED BY THE
SECURITIES ACT, CERTAIN STATE SECURITIES LAWS AND CERTAIN RULES AND REGULATIONS
PROMULGATED PURSUANT THERETO. NEITHER THE SHARES AND THE WARRANTS NOR ANY
INTEREST THEREIN MAY BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND COMPLIANCE WITH
ANY APPLICABLE STATE OR OTHER SECURITIES LAWS OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENT AND COMPLIANCE, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

 

The Subscriber understands that the Shares and the Warrants are being issued
pursuant to the exemption from the registration requirements of the Securities
Act, provided by Section 4(2) of such Act, or Regulation D promulgated
thereunder, or both. As such, the Shares and the Warrants are only being offered
and sold to investors who qualify as “accredited investors,” and the Company is
relying on the representations made by the Subscriber in this Agreement that the
Subscriber qualifies as such an accredited investor. The Shares and the Warrants
are “restricted securities” for purposes of the United States securities laws
and cannot be transferred except as permitted under these laws.

 

 
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(b) The Subscriber is delivering (i) two executed copies of the signature page
of this Agreement (including Exhibit A), and (ii) the subscription payment, in
the form of:

 

(x) a check payable to “Gyrotron Technology, Inc.” to:

 

Gyrotron Technology, Inc.

3412 Progress Drive 

Bensalem, Pennsylvania 19020

Attention:  Vlad Sklyar; or

 

(y) a wire transfer to “Gyrotron Technology, Inc.”,

 

Wire Transfer Instructions to the Company:

 

Bank: Wells Fargo Bank. 

Account Name: 

 

 

Swift WFBIUS6S 

Gyrotron Technology Inc. 

 

 

ABA No.: 121000248 

Ref: Series A2 Units;

 

Account No.:  8788010547

 

 

or (z) by agreeing to accept Units for funds previously advanced to the Company
or other amounts due Subscriber from Company.

 

If this subscription is accepted by the Company, in whole or in part, then, as
soon as practicable following the acceptance, the Company will deliver to the
Subscriber a certificate representing the Shares and the Warrants that the
Subscriber has subscribed for and a fully executed copy of this Agreement. The
Company may in its sole discretion reject any Subscription.

 

 (c) The Subscriber may not withdraw this subscription or any amount paid
pursuant thereto.

 

2. Conditions. It is understood and agreed that this subscription is made
subject to all terms and conditions set forth in this Agreement, including those
set forth in Section 1 above.

 

 
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3.  Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with the Subscriber as follows, in each case as of the
date hereof and in all material respects as of the date of any closing, except
for any changes resulting solely from the Offering:

 

(a) The Company is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation with full power and authority
to own, lease, license and use its properties and assets and to carry out the
business in which it is engaged. The Company is duly qualified to transact the
business in which it is engaged and is in good standing as a foreign corporation
in every jurisdiction in which its ownership, leasing, licensing or use of
property or assets or the conduct of its business makes such qualification
necessary, except where the failure to be so qualified would not have a material
adverse effect on the Company.

 

(b) Except as described herein or in the documents filed by the Company with the
Securities and Exchange Commission, there is no commitment, plan or arrangement
to issue, and no outstanding option, warrant or other right calling for the
issuance of, any share of capital stock of the Company or any security or other
instrument which by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company. The Company may in the ordinary
course pay bonuses in stock or issue options to employees. The Company is
currently seeking to raise additional capital on the same terms as are offered
herein.

 

(c) The Company has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement and to issue and sell the Shares
and the Warrants.

 

All necessary proceedings of the Company have been duly taken to authorize the
execution, delivery, and performance of this Agreement. This Agreement has been
duly authorized by the Company and, when executed and delivered by the Company
will constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.

 

(d) No consent of any party to any contract, agreement, instrument, lease,
license, arrangement or understanding to which the Company or any of its
subsidiaries is a party or to which any of their respective properties or assets
are subject is required for the execution, delivery or performance by the
Company of any of this Agreement or the issuance and sale of the Shares or the
Warrants.

 

(e) The execution, delivery and performance of this Agreement and the issuance
and sale of the Shares and the Warrants will not violate or result in a breach
of, or entitle any party (with or without the giving of notice or the passage of
time or both) to terminate or call a default under any contract or agreement to
which the Company is a party or violate or result in a breach of any term of the
certificate of incorporation or by-laws of the Company, or violate any law,
rule, regulation, order, judgment or decree binding upon, the Company or any of
its subsidiaries, or to which any of their respective operations, businesses,
properties or assets are subject, the breach, termination or violation of which,
or default under which, would have a material adverse effect on the operations,
business, properties or assets of the Company.

 

 
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4. Representations, Warranties and Covenants of the Subscriber. The Subscriber
hereby represents and warrants to, and agrees with, the Company as follows:

 

(a) The Subscriber is an “Accredited Investor” as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act, and as specifically
indicated in Exhibit A to this Agreement, or the Subscriber is not a “US Person”
as that term is defined in Regulation S promulgated under the Securities Act.

 

(b) If a natural person, the Subscriber is: a bona fide resident of the state or
non-United States jurisdiction contained in the address set forth on the
signature page of this Agreement as the Subscriber’s home address; at least 21
years of age; and legally competent to execute this Agreement. If an entity, the
Subscriber has its principal offices or principal place of business in the state
or non-United States jurisdiction contained in the address set forth on the
signature page of this Agreement, the individual signing on behalf of the
Subscriber is duly authorized to execute this Agreement.

 

(c) This Agreement has been duly executed and delivered by the Subscriber and
constitutes the legal, valid and binding obligation of the Subscriber,
enforceable against the Subscriber in accordance with its terms.

 

(d) Neither the execution, delivery or performance of this Agreement by the
Subscriber violates or conflicts with, creates (with or without the giving of
notice or the lapse of time, or both) a default under or a lien or encumbrance
upon any of the Subscriber’s assets or properties pursuant to, or requires the
consent, approval or order of any government or governmental agency or other
person or entity under (i) any note, indenture, lease, license or other material
agreement to which the Subscriber is a party or by which it or any of its assets
or properties is bound or (ii) any statute, law, rule, regulation or court
decree binding upon or applicable to the Subscriber or its assets or properties.
If the Subscriber is not a natural person, the execution, delivery and
performance by the Subscriber of this Agreement, and all other documents
relating to an investment by Subscriber in the Shares, have been duly authorized
by all necessary corporate or other action on behalf of the Subscriber and such
execution, delivery and performance does not and will not constitute a breach or
violation of, or default under, the charter or by-laws or equivalent governing
documents of the Subscriber.

 

(e) The Subscriber has received, read carefully and is familiar with this
Agreement; the Certificate of Designation for the Series A2 Preferred Stock; and
the form of Warrant.

 

(f) The Subscriber, together with its professional advisor, is familiar with the
Company’s business, plans and financial condition, the terms of the Offering and
any other matters relating to the Offering; the Subscriber has received all
materials which have been requested by the Subscriber; has had a reasonable
opportunity to ask questions of the Company and its representatives; and the
Company has answered to the satisfaction of the Subscriber all inquiries that
the Subscriber or the Subscriber’s representatives have put to it. The
Subscriber has had access to all additional information that the Subscriber has
deemed necessary to verify the accuracy of the information set forth in this
Agreement, and the filings made by the Company with the Securities and Exchange
Commission, and has taken all the steps necessary to evaluate the merits and
risks of an investment as proposed under this Agreement.

 

 
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(g) The Subscriber acknowledges that this subscription is and shall be
irrevocable and this subscription and the agreements contained herein shall
survive the insolvency, death or disability of the Subscriber (as applicable),
except that the Subscriber shall have no obligation hereunder in the event that
its subscription is for any reason rejected or the Offering is cancelled or
terminated by the Company, which the Company reserves the right to do in its
sole and absolute discretion and for any reason.

 

(h) The Subscriber or the Subscriber’s purchaser representative has such
knowledge and experience in finance, securities, taxation, investments and other
business matters so as to be able to protect the interests of the Subscriber in
connection with this transaction.

 

(i) The Subscriber understands the various risks of an investment in the Company
as proposed herein and can afford to bear such risks, including, without
limitation, the risks of losing the entire investment.

 

(j) The Subscriber acknowledges that no market for the Shares presently exists
and none is expected to develop in the future, that the Common Shares which the
Shares are convertible into have a very limited market, and that the Subscriber
may find it impossible to liquidate the investment at a time when it may be
desirable to do so, or at any other time.

 

(k) The Subscriber has been advised by the Company that neither the Shares nor
the Warrants being offered (or the Common Shares into which the Shares are
convertible of for which the Warrants are exercisable) have been registered
under the Securities Act, that the Shares and the Warrants will be issued on the
basis of the statutory exemption provided by Section 4(2) of the Securities Act
or Regulation D promulgated thereunder, or both, relating to transactions by an
issuer not involving any public offering and under similar exemptions under
certain state securities laws; that this transaction has not been reviewed by,
passed on or submitted to any United States Federal or state agency or
self-regulatory organization where an exemption is being relied upon; and that
the Company’s reliance thereon is based in part upon the representations made by
the Subscriber in this Agreement.

 

(l) The Subscriber acknowledges that the Subscriber has been informed by the
Company of, or is otherwise familiar with, the nature of the limitations imposed
by the Securities Act and the rules and regulations thereunder on the transfer
of the Shares and the Warrants acquired hereunder (or the Common Shares into
which the Shares are convertible of for which the Warrants are exercisable). In
particular, the Subscriber agrees that no sale, assignment or transfer of any of
the Shares or the Warrants acquired by the Subscriber (or the Common Shares into
which the Shares are convertible of for which the Warrants are exercisable)
shall be valid or effective, and the Company shall not be required to give any
effect to such a sale, assignment or transfer, unless (i) the sale, assignment
or transfer of such Shares or Warrants are registered under the Securities Act,
it being understood that the Shares or the Warrants are not currently registered
for sale and that the Company has no obligation or intention to so register the
Shares or the Warrants, except as contemplated by the terms of this Agreement;
(ii) the Shares (or the Common Shares into which the Shares are convertible of
for which the Warrants are exercisable) are sold, assigned or transferred in
accordance with all the requirements and limitations of Rule 144 under the
Securities Act (it being understood that Rule 144 is not available at the
present time for the sale of the Shares or the Warrants), or (iii) such sale,
assignment or transfer is otherwise exempt from registration under the
Securities Act, including Regulation S promulgated thereunder. The Subscriber
further understands that an opinion of counsel and other documents may be
required to transfer the Shares or the Warrants.

 

 
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(m) The Subscriber acknowledges that the Shares to be acquired will be subject
to a stop transfer order and any certificate or certificates evidencing any
Shares shall bear the following or a substantially similar legend and such other
legends as may be required by state blue sky laws:

 

“THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT.”

 

The Subscriber acknowledges that the Warrants to be acquired will be subject to
a stop transfer order and the certificate or certificates evidencing the
Warrants shall bear the following or a substantially similar legend and such
other legends as may be required by state blue sky laws:

 

“THE WARRANTS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT.”

 

(n) The Subscriber will acquire the Shares and the Warrants for the Subscriber’s
own account (or, if such individual is married, for the joint account of the
Subscriber and the Subscriber’s spouse either in joint tenancy, tenancy by the
entirety or tenancy in common) for investment and not with a view to the sale or
distribution thereof or the granting of any participation therein in violation
of the securities laws, and has no present intention of distributing or selling
to others any of such interest or granting any participation therein in
violation of the securities laws.

 

 
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(o) No representation, guarantee or warranty has been made to the Subscriber by
any broker, the Company, any of the officers, directors, stockholders, partners,
employees or agents of any of them, or any other persons, whether expressly or
by implication, that:

 

(I) the Company or the Subscriber will realize any given percentage of profits
and/or amount or type of consideration, profit or loss as a result of the
Company’s activities or the Subscriber’s investment in the Company; or

 

(II) the past performance or experience of the management of the Company, or of
any other person, will in any way indicate the predictable results of the
ownership of the Shares or the Warrants or of the Company’s activities.

 

(p) The Subscriber is not subscribing for the Shares or the Warrants as a result
of or subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, or presented at any seminar or similar gathering; or any
solicitation of a subscription by a person, other than Company personnel,
previously not known to the undersigned.

 

(q) The Subscriber is not relying on the Company with respect to the tax
considerations or the economic merit of an investment.

 

(r) The Subscriber understands that the net proceeds from all subscriptions paid
and accepted pursuant to the Offering (after deduction for commissions,
discounts and expenses of the Offering) will be used in all material respects to
fund the business and operations of the Company in the discretion of management.

 

(s) The Subscriber acknowledges that the representations, warranties and
agreements made by the Subscriber herein shall survive the execution and
delivery of this Agreement and the purchase of the Shares and the Warrants.

 

(t) The Subscriber has had the opportunity to consult the Subscriber’s own
financial, legal and tax advisors with respect to the economic, legal and tax
consequences of an investment in the Shares and the Warrants and has not relied
on the Company, its officers, directors or professional advisors for advice as
to such consequences.

 

(u) Except as set forth on the signature page hereto, the Subscriber has not
engaged any broker or other person or entity that is entitled to a commission,
fee or other remuneration as a result of the execution, delivery or performance
of this Agreement.

 

(v) For California and Massachusetts individuals: If the Subscriber is a
California resident, such Subscriber’s investment in the Company will not exceed
10% of such Subscriber’s net worth (or joint net worth with his spouse). If the
Subscriber is a Massachusetts resident, such Subscriber’s investment in the
Company will not exceed 25% of such Subscriber’s joint net worth with his spouse
(exclusive of principal residence and its furnishings).

 

 
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5. Indemnification. The Subscriber understands the meaning and legal
consequences of the representations and warranties contained in Section 4
hereof, and agrees to indemnify and hold harmless the Company and each officer,
director, partner, employee, agent and controlling person of each of them, past,
present or future, from and against any and all loss, damage or liability due to
or arising out of a breach of any such representation or warranty by Subscriber.

 

6. Transferability. Neither this Agreement, nor any interest of the Subscriber
herein, shall be assignable or transferable by the Subscriber in whole or in
part except by operation of law. Any attempt to assign or transfer this
agreement or any interest therein other than by operation of law shall be void.
Notwithstanding the foregoing, Subscriber may transfer the securities acquired
hereunder in accordance with the provisions of paragraph 4(l) above.

 

7. Confidentiality. The Subscriber acknowledges and agrees that all confidential
information, written and oral, concerning the Company furnished from time to
time to the Subscriber may not be disclosed, to anyone other than (x) the
Subscriber’s officers, directors, employees, legal counsel, accountants or
authorized agents or advisors who have a need to know such information in
connection with evaluating whether the Subscriber should enter into this
Agreement and acquire the Shares, each of whom have agreed to the provisions of
this Section 7 and (y) other stockholders of the Company and their
representatives who have similarly agreed to the provisions of this Section 7,
except to the extent that (i) the information becomes publicly available other
than as a result of disclosure in violation of the provisions of this Agreement
or (ii) such disclosure is required by law,. The provisions of this Section 7
shall survive the purchase of the Shares and the Warrants and/or the termination
of this Agreement.

 

8.  Registration and Trading. Beginning 9 months from the date hereof, the
Company agrees to pay to the Subscriber ½% per month calculated day-to-day on a
30/360 basis, of the Liquidation Preference of the Shares held by the Subscriber
and acquired pursuant to this Agreement (the “Monthly Payment”), until the date
that both of the following conditions shall be satisfied: (i) the Common Stock
is listed for trading on a national securities exchange, an inter-dealer
automated quotation system of a national association of securities dealers or
listed on the OTC Pinks (or its successor or an equivalent or better regarded
marketplace or listing) and (ii) the Common Shares issuable upon conversion of
the Shares shall be registered under the Securities Act of 1933, as amended (the
“Act”) or the Subscriber is then able to sell such Common Shares under Rule 144
promulgated pursuant to the Act without volume restriction (or the foreign
equivalent of this condition (ii) if the listing in (i) is on a foreign
exchange). The Monthly Fee will be pro-rated if these conditions are satisfied
with respect to only a portion of such Common Shares. The Monthly Payment shall
be due and payable at the end of each month. If at any time during the six-month
period commencing upon the day that both of the above conditions are first
satisfied they are no longer satisfied, then the Company shall again become
obligated to make the Monthly Payment until the above conditions have been
satisfied for a period of six months in aggregate.

 

 
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9. Miscellaneous.

 

(a) This Agreement, including the exhibits hereto, sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements among them concerning such subject matter,
and may be modified only by a written instrument duly executed by the party to
be charged.

 

(b) Except as otherwise specifically provided herein, any notice or other
communication required or permitted to be given hereunder shall be in writing
and shall be mailed by certified mail, return receipt requested, or by Federal
Express, Express Mail or similar overnight delivery or courier service or
delivered (in person or by telecopy, telex or similar telecommunications
equipment) against receipt to the party to whom it is to be given,

 

(i) if to the Company:

 

Gyrotron Technology, Inc.

3412 Progress Drive 

Bensalem, Pennsylvania 19020

Attention: Vlad Sklyar

Fax: (215) 244-4742

Confirm: (215) 244- 4740

 

with a copy to:

 

David Lubin 

David Lubin & Associates, PLLC 

108 S. Franklin Ave, Suite 10 

Valley Stream, NY 11580 

(516) 887-8200 

fax: (516) 887-8250

 

(ii) if to the Subscriber, at the address set forth on the signature page
hereof,

 

or in either case, to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section 9(b). Any notice given
by means permitted by this Section 9(b) shall be deemed given at the time of
receipt thereof at the address specified in this Section 9(b).

 

(c) This Agreement shall be binding upon and inure to the benefit of the parties
hereto, the successors and assigns of the Company, and the permitted successors,
assigns, heirs and personal representatives of the Subscriber, not including,
however, any transferees of the Shares.

 

 
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(d) The headings in this Agreement are solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.

 

(e) This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

 

(f) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to principles governing
conflicts of law that would defer to the substantive law of another
jurisdiction. The parties hereby irrevocably consent to resolve any disputes in
connection with, arising out of, or relating to this agreement by arbitration in
New York City in front of three arbitrators with each party picking one
arbitrator and the two selected arbitrators picking a third. Without limiting
the foregoing, no action or proceeding in connection with, arising out of, or
relating to this agreement shall be brought by the parties hereto in any court
other than the courts of the State of New York or any federal court located in
such State.

 

(g) This Agreement does not create, and shall not be construed as creating, any
rights enforceable by any person not a party to this Agreement (except as
specifically provided in this Agreement).

 

9. Most Favored Nation.

 

(a) If prior to 12/31/16 the Company conducts and subsequently closes (whether
prior to or after 12/31/16) a financing or a series of related financings (other
than a financing or other transaction which is included within any of the Exempt
Issuances (as defined below)), whose terms were substantially negotiated prior
to 12/31/16 that could reasonably be deemed to have terms and conditions more
favorable than the terms provided for herein, in all such cases with gross cash
proceeds in excess of $50,000 (each such financing a "New Financing"), then the
undersigned shall have the right (“MFN Right”) to exchange (any such exchange
being an "MFN Exchange") all or any part of the units purchased hereunder by the
undersigned and still held by the undersigned valued at $35 per unit and any
dividends accrued thereon valued at the accrued amount, for securities offered
in the New Financing at the same price and on the same terms and conditions
offered in the New Financing. The MFN Right shall permanently terminate if for a
period of 20 consecutive trading days (i) the Common Stock is listed for trading
on a national securities exchange, an inter-dealer automated quotation system of
a national association of securities dealers or listed on “OTC Pinks” (or its
successor or an equivalent or better regarded marketplace or listing) and (ii)
the Common Shares issuable upon conversion of the Shares shall have been
registered under the Securities Act of 1933, as amended (the “Act”) or the
Subscriber is then able to sell such Common Shares under Rule 144 promulgated
pursuant to the Act without volume restriction (or the foreign equivalent of
this condition (ii) if the listing in (i) is on a foreign exchange) and (iii) on
each of those 20 days the price of the Company’s common stock closes at or above
$0.80 (as adjusted for splits etc.), and (iv) the average closing price for
those 20 days equals or exceeds $1.00 (as adjusted).

 

An “Exempt Issuance” shall mean any of the following transactions: (i) any
shares of Common Stock to be sold by the Company at a price per share of $0.70
(as adjusted) or more, (ii) non-convertible financings , (iii) shares or options
representing up to 1,000,000 of the shares of Common Stock (as adjusted for
stock splits, combinations and similar events) in the aggregate, to be issued to
employees, directors or service providers that have been approved by the Board,
(iv) any shares or other convertible securities issued in connection with
acquisitions, mergers or other consolidations or issued to a non-financial
strategic investor not affiliated with the Company or any of its affiliates, or
(v) any shares or options issued to a commercial financing source in connection
with a financing to the Company which are issued at nominal consideration

 

(b) The Company covenants and agrees to promptly give written notice (an “MFN
Notice”) to the undersigned of the terms and conditions of any such New
Financing. On or prior to the expiration of the twenty (20) business day period
(the “MFN Review Period”) after the undersigned has received the MFN Notice, the
undersigned shall notify the Company in writing (the "MFN Response") specifying
whether it elects to conduct an MFN Exchange. If the undersigned fails to send
an MFN Response prior to the expiration of the MFN Review Period, the
undersigned shall be deemed to have waived its rights under this Section solely
with respect to the MFN Exchange specified in the MFN Notice relating to such
MFN Review Period.

 

(c) Each potential MFN Exchange shall be communicated to the undersigned in
accordance with this Section until such time as the undersigned elects to
conduct an MFN Exchange. Once the undersigned elects to conduct an MFN Exchange,
the undersigned shall have no further right to receive notice of or to conduct
any future MFN Exchange under this Section. The Company and the undersigned
shall cooperate to promptly cancel the Shares being exchanged and to promptly
enter into such agreements, certificates, instruments and other documents that
are necessary to reflect an MFN Exchange that the undersigned elects to conduct.

 

 [Signature page follows]

 

 
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SIGNATURE PAGE

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year this subscription has been accepted by the Company as set forth
below. 

 

Units Subscribed For:    Print Name of Subscriber           By:       

(Signature of Subscriber or
Authorized Signatory)

 

Social Security Number or other

 

Taxpayer Identification Number

Address:

 

 

Telephone:

 

Fax:

 

  

If the Shares will be held as joint tenants, tenants in common, or community
property, please complete the following:

 

              Print name of spouse or other co-subscriber               
Signature of spouse or other co-subscriber    Print manner in which Shares and
Warrant will be held

 

If the Shares and the Warrants have been purchased through a broker or other
intermediary, please identify such entity:

 

____________________________________________________

 

[Please complete Exhibit A for each subscriber.]

 

 
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ACCEPTANCE OF SUBSCRIPTION

 

        Name of Subscriber           ACCEPTED BY:                 GYROTRON
TECHNOLOGY, INC.      

 

       

By:

      Name:           Title:                

  

Date: ,_________________ 2015

 

Funds Received: ________________, 2015

 

Accepted for ____________ Units

 

 
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EXHIBIT A

ACCREDITED INVESTOR STATUS

 

The oversigned subscriber represents that it is an Accredited Investor on the
basis that it is (check one):

 

_____(i) A bank as defined in Section 3(a)(2) of the Act, or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act,
whether acting in its individual or fiduciary capacity; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Company Act of 1940 (the “Investment Company
Act”) or a business development company as defined in Section 2(a)(48) of the
Investment Company Act; a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 (“ERISA”), if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA,
which is either a bank, savings and loan association, insurance company, or
registered investment advisor, or if the employee benefit plan has total assets
in excess of $5,000,000 or, if a self-directed plan, with investment decisions
made solely by persons that are accredited investors.

 

_____(ii) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.

 

_____(iii) An organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.

 

_____(iv) A director or executive officer of the Company.

 

_____(v) A natural person whose individual net worth, or joint net worth with
that person’s spouse, at the time of his or her purchase exceeds $1,000,000
excluding his/their principal residence.

 

_____(vi) A natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person’s spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year.

 

_____(vii) A trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) (i.e., a
person who has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of the prospective
investment).

 

_____(viii) An entity in which all of the equity owners are accredited
investors. (If this alternative is checked, the Subscriber must identify each
equity owner and provide statements signed by each demonstrating how each is
qualified as an accredited investor. Further, the Subscriber represents that it
has made such investigation as is reasonably necessary in order to verify the
accuracy of this alternative.

 

 

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