NOTE AND PURCHASE AGREEMENT

 

This Note and Purchase Agreement (this “Agreement”) is dated as of July 3,  2019
among PARALLAX HEALTH SCIENCES, INC., a Nevada corporation with its principal
place of business located at 1327 Ocean Avenue Suite B, Santa Monica CA 90401
(the “Company”), and                                     and the other
purchasers, if any, identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities of
the Company as more fully described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

 

ARTICLE I

DEFINITIONS

 

1.1Definitions. In addition to the terms defined elsewhere in this Agreement,
the following terms have the meanings indicated in this Section 1.1: 

 

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the
Securities Act.

 

“Closings” means the Initial Closing and each Subsequent Closing.

 

“Closing Date” means the date of (i) the Initial Closing; and (ii) each
Subsequent Closing, respectively.

 

“Commission” means the Securities and Exchange Commission.

 

“Shares” means the Common Stock of the Company.

 

“Disclosure Schedules” shall have the meaning ascribed to such term in
Section 3.1 hereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h) hereof.

 

“Closing” shall have the meaning ascribed to such term in Section 2.1.

 

“Liens” shall mean any mortgages, claims, pledges, liens, taxes, charges,
security interests, limitations, exceptions, restrictions, liabilities,
obligations and contingencies or other encumbrances of any kind.

 

“Loan Amount” means, as to each Purchaser, the aggregate amount to be borrowed
by the Company hereunder and evidenced by the Notes as specified below such
Purchaser’s name on the signature page of this Agreement and next to the
heading.

 

“Losses” means any and all losses, claims, damages, liabilities, settlement
costs and expenses, including without limitation costs of preparation and
reasonable attorneys’ fees.

 

“Material Adverse Effect” shall mean any event, change, occurrence, circumstance
or effect or series of the foregoing that is materially adverse to (i) the
business, operations, assets, financial condition, results of operations or
prospects of the Company or (ii) the ability of the Company to perform its
obligations under the Transaction Documents.

 

“Notes” shall mean the Senior Secured Convertible Notes issued to the Purchasers
pursuant to this Agreement, in the form attached hereto as Exhibit A-1.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

 

“Securities” means the Notes and the Shares.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security Agreement” shall mean the Security Agreement issued to the Purchasers
pursuant to this Agreement, in the form attached hereto as Exhibit A-2.

 

“Subsequent Closing” shall have the meaning ascribed to such term in
Section 2.1.

 

“Trading Day” means any day during which the Trading Market shall be open for
business.

 

“Transaction Documents” means this Agreement, the Notes, and the Security
Agreement.

ARTICLE II

PURCHASE AND ISSUANCE

 

2.1 Closing. The Company agrees to borrow the Loan Amount from, and issue a
corresponding Note equal to the Loan Amount to the Purchaser, and, subject to
the terms and conditions contained herein, each such Purchaser severally agrees
to loan to the Company the Loan Amount set forth on the signature page to this
Agreement. The closing (the “Closing”) of the transaction hereunder shall take
place at the offices of Company Counsel after the receipt by the Company of an
aggregate Loan Amount from Purchasers of at least $220,000 and after it has been
determined that all conditions in this Agreement have been met. As additional
consideration for entering into this Agreement, the Company shall issue to Buyer
Four Hundred Thousand (400,000) shares of restricted common stock (the
"Commitment Shares") upon execution of this Agreement.     

 

2.2 Conditions to Closing. The Closing shall be subject to the following
conditions and deliveries being met on such Closing’s Closing Date:

 

(a) At or prior to the Closing, unless otherwise indicated below, the Company
shall deliver or cause to be delivered to each Purchaser participating in such
Closing the following:

(i) a Senior Secured Promissory Note evidencing the Loan Amount loaned by the
Purchaser, registered in the name of such Purchaser, duly executed by the
Company; 

(ii)a Security Agreement, duly executed by the Company;  

(iii)this Agreement, duly executed by the Company.  

 

(b) At or prior to the Closing, the Purchaser participating in the Closing shall
deliver or cause to be delivered to the Company the following:

(i) such Purchaser’s Loan Amount; and 

(ii) this Agreement, duly executed by such Purchaser; and 

 

(c) It shall be a condition to the obligation of the Company, on the one hand,
to issue and deliver the Notes at a Closing, and of the Purchaser participating
in a Closing, on the other hand, to loan such Loan Amount represented by the
respective Note, that all representations and warranties of the other party(ies)
contained herein shall remain true and correct as of the Closing Date of such
Closing and all covenants and obligations of the other party(ies) shall have
been fully performed or otherwise satisfied or waived if due on or prior to such
date.

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company. The Company hereby makes the
representations and warranties set forth below to each Purchaser:

 

(a)Subsidiaries. The Company has no direct or indirect subsidiaries other than
as disclosed to the Purchasers.  

 

(b)Organization and Qualification. The Company is an entity duly organized,
validly existing and in good standing under the laws of the State of Nevada,
with the requisite power and authority to own and use its properties and assets
and to carry on its business. The Company is not in violation of any of the
provisions of its certificate of organization, operating agreement or other
organizational or charter documents.  

 

(c) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
hereunder or thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby or thereby have been duly authorized by all necessary action
on the part of the Company and no further consent or action is required by the
Company. Each of the Transaction Documents has been (or upon delivery will be)
duly executed by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and general principles of equity. The Company is not in violation of any of the
provisions of its certificate of organization, operating agreement or other
organizational or charter documents except where such violation could not,
individually or in the aggregate, constitute a Material Adverse Effect. 

 

(d)No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated thereby do not and will not: (i) conflict with or violate any
provision of the Company’s certificate of organization, operating agreement or
other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
debt or otherwise) or other understanding to which the Company is a party or by
which any property or asset of the Company is bound or affected, or (iii) result
in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Company
is subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not, individually or in
the aggregate, have or result in a Material Adverse Effect. 

 

(e)Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents.  

 

(f)Issuance of the Notes and Shares. The Notes are duly authorized and, when
issued in accordance with the applicable Transaction Documents, will be duly and
validly issued. The Shares are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly and validly
issued, fully paid and non-assessable, free and clear of all Liens. The Company
has reserved a sufficient number of Shares for issuance upon conversion of the
Notes as described in the Transaction Documents.  

 

(g)Capitalization. The number of Shares issued and outstanding as of May 10,
2019 is 182,924,546. Pursuant to the terms of the Transaction Documents, 400,000
Shares have been reserved for issuance to Purchaser. No Person has any right of
first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents except
for the Purchaser. Except for the Notes, other than as listed in the Form 10-K
for period ended 12-31-18 and filed with the U.S. Securities and Exchange
Commission on March 29, 2019, there are no outstanding options, warrants, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any Shares, or
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to issue additional Shares, or securities or rights
convertible or exchangeable into Shares. The issuance and sale of the Notes and
the Shares will not obligate the Company to issue Shares or other securities to
any Person (other than the Purchaser) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or
reset price under such securities. No further approval or authorization of any
shareholder, the Board of Directors of the Company or others is required for the
issuance and sale of the Notes or Shares.  

 

(h)Financial Statements. Except as otherwise disclosed in writing to the
Purchasers, the Company has filed all reports required to be filed by it with
any government agency on a timely basis or has received a valid extension of
such time of filing. The Company has furnished to the Purchasers its financial
information as requested by the Purchasers (the “Financial Statements”). The
Financial Statements of the Company are consistent with the books, records and
accounts of the Company, which books, records and accounts are accurate and
complete in all material respects, and the Financial Statements comply in all
material respects with applicable accounting requirements and rules. Such
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such Financial Statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, subject to normal year-end adjustments. 

 

(i)Material Changes. Since the date of the Financial Statements except as
disclosed in writing to the Purchaser: (i) there has been no event, occurrence
or development that has had or that could result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP,
(iii) the Company has not altered its method of accounting, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its members or purchased, redeemed or made any agreements to purchase or redeem
any Shares; and (v) there has not been any damage, destruction or loss adversely
affecting the Company or its business, nor any labor trouble, nor any change in
the Company’s financial condition, assets, liabilities, or business which has
been materially adverse.   

 

(j)Litigation. Except as disclosed in the Form 10-K filing for the period ended
12-31-18, there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) or, to the knowledge of the Company, threatened against or affecting
the Company, or any of its properties (collectively, an “Action”).  

 

(k)Compliance. The Company is not: (i) in default under or in violation of nor
has the Company received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other
agreement for borrowing to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
or (ii) in violation of any order of any court, arbitrator or governmental
body.  The Company is not: (i) in default under or in violation of, nor has the
Company received notice of a claim that it is in default under or that it is in
violation of, any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), or (ii) in violation of any statute, rule or
regulation of any governmental authority, except in each case as could not,
individually or in the aggregate, have or result in a Material Adverse Effect.
 The operations of the Company are in compliance with all applicable Legal
Requirements (as defined herein), except as could not reasonably be expected to
have a Material Adverse Effect.  As used in this Agreement, “Legal Requirements”
shall mean any federal, state, local or foreign statute, ordinance, code, rule
or regulation, or any governmental order, or any license, franchise, consent,
approval, permit or similar right granted under any of the foregoing, including
those relating to taxation, employment, pollution or protection of the
environment, or the manufacture, handling, transport, use, treatment, storage or
disposal of hazardous substances. 

 

(l)Labor Relations. No labor or employment dispute or problems exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.  The Company is in compliance in all material respects with all
federal and state laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and there are no written claims,
notices, or communications received from federal or state officials in respect
to violations of any such laws which are unremedied. 

 

(m)Regulatory Permits. The Company possesses and validly holds, in full force
and effect, all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to
conduct its business, except where the failure to possess such permits could
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect (“Material Permits”), and the Company has not
received any notice of any actual or possible violation of or failure to comply
with any term or requirement of any Material Permit, or any actual or possible
revocation, withdrawal, suspension, cancellation, termination or modification of
any Material Permit, or any.   

 

(n)Title to Assets. The Company has good and marketable title in fee simple to
all real property owned by them that is material to the business of the Company
free and clear of all Liens, except for Liens as do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company. Any real property and
facilities held under lease by the Company are held under valid, subsisting and
enforceable leases and neither the Company, nor any other party thereto, is in
default under any such lease.  The tangible assets used by the Company in the
operation of its business are in good working condition, ordinary wear and tear
excepted, and are adequate for the conduct of the Company’s business as
currently conducted, and the Company has good, clear and marketable title to, or
a valid leasehold interest in, all of such assets.  

 

(o)Patents and Trademarks. The Company has the rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, licenses and other similar intellectual property rights
necessary or material for use in connection with its business (collectively, the
“Intellectual Property Rights”).  

 

(p)Insurance. The Company has sufficient insurance coverage to fully protect and
reimburse it for, from and against all loss or damage arising from fire, theft
or other casualties, liability for injury to or death of any person,
professional liability claims, and for damage to any property, workers’
compensation, and in general such other insurance as may be usual or customary
for companies similarly situated with the Company in the businesses in which the
Company is engaged. To the Company’s knowledge, such insurance contracts and
policies are accurate and complete. The Company does not have any reason to
believe it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business without a significant increase in cost.
 The Company has not received any notice or other communication regarding any
actual or possible (i) cancellation or invalidation of any insurance policy;
(ii) refusal of any coverage or rejection of any claim under any insurance
policy; or (iii) material adverse adjustment in the amount of the premiums
payable with respect to any insurance policy. 

 

(q)Tax Status. Except as disclosed in writing to the Purchasers, The Company has
accurately prepared in compliance with all Legal Requirements and has made or
filed on or before the applicable due date (including any extensions of such due
date) all federal, state, local and foreign income tax and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject and has paid all taxes and other governmental assessments and charges
that are shown or determined to be due on such returns, reports and declarations
or are otherwise actually due, except those being contested in good faith and
has set aside on its books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any amount claimed to be due by
the taxing authority of any jurisdiction, and the officers of the Company know
of no basis for any such claim. The Company has not executed a waiver with
respect to the statute of limitations relating to the assessment or collection
of any foreign, federal, state or local tax. None of the Company’s tax returns
is presently being audited by any taxing authority and no audit, investigation
or proceeding is pending, or, to the Company’s knowledge, has been threatened
against the Company in respect of any taxes. 

 

(r)Disclosure.  No representations or warranties made by the Company in this
Agreement or any other Transaction Document, or in any written statement or
certificate furnished or to be furnished by the Company pursuant to this
Agreement or the Transaction Documents, contains or shall contain any untrue
statement of material fact or omits or fails to state a material fact, which
omission or failure makes such Agreement, Transaction Document, statement or
certificate materially misleading or untrue as of the date thereof in light of
the circumstances in which they were made. 

 

(s)Certain Fees. Company has engaged or retained a broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person and
has agreed to pay them commissions or other fees as described in Exhibit C with
respect to the transactions contemplated by this Agreement. 

 

3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for
itself and for no other Purchaser, represents and warrants to the Company as
follows:

 

(a) Organization; Authority. If the Purchaser is not an individual, such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with the requisite
corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations thereunder. If the Purchaser is not an individual, the loan
by such Purchaser of the Loan Amount evidenced by the Notes hereunder has been
duly authorized by all necessary action on the part of such Purchaser. This
Agreement has been duly executed by such Purchaser if the Purchaser is not an
individual, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

 

(b) Investment Intent. Such Purchaser is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof, without prejudice, however, to such Purchaser’s
right, subject to the provisions of this Agreement, at all times to sell or
otherwise dispose of all or any part of such Securities pursuant to an effective
registration statement under the Securities Act or under an exemption from such
registration and in compliance with applicable federal and state securities
laws. Nothing contained herein shall be deemed a representation or warranty by
such Purchaser to hold Securities for any period of time or limit such
Purchaser’s right to sell the Securities pursuant to the Registration Statement
or otherwise in compliance with applicable federal and state securities laws.
Such Purchaser is acquiring the Securities hereunder in the ordinary course of
its business. Such Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities.

 

(c) Purchaser Status. At the time such Purchaser was offered the Securities, it
was, and at the date hereof it is, and currently anticipates that on each date
on which it exercises any Conversion rights it will be, an “accredited investor”
as defined in Rule 501(a) under the Securities Act. If the Purchaser is not an
individual, such Purchaser has not been formed solely for the purpose of
acquiring the Securities. Such Purchaser is not a registered broker-dealer under
Section 15 of the Exchange Act. Each Purchaser has delivered to the Company a
complete and accurate Purchaser Questionnaire, the form of which is attached
hereto as Exhibit B.

 

(d) Experience of such Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

 

(e) General Solicitation. Such Purchaser is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

(f) Disclosure. Such Purchaser has read and reviewed the Executive Summary
attached hereto as Exhibit C. Each Purchaser has had the opportunity to ask
questions of Company representatives regarding the contents of such materials.

 

(h) Tax Advice. The Purchaser has relied on its own analysis and the advice of
its tax or legal advisors. The Purchaser acknowledges that neither the Company
nor the Company Counsel has provided nor intends to provide any advice regarding
the tax consequences of the execution and delivery of the Transaction Documents.

 

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Right to Participate in Future Equity Financings. Following Initial Offering
for a period of sixty days, Purchasers shall have the option purchase Additional
Notes while the Notes are outstanding, upon the same terms and conditions
described in the Transaction Documents.

 

4.2 Transfer Restrictions.

 

(a) The Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144, to the Company or
in a non-sale transaction to an Affiliate of a Purchaser, the Company may
require the transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the Company, the form
and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.

 

(b) Each Purchaser, severally and not jointly with the other Purchasers, agrees
to the imprinting, so long as is required by this Section 4.2(b), of the
following legend on any certificate evidencing Securities:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

 

4.3 Conversion Procedures. The terms of the Notes set forth the totality of the
procedures required of the Purchasers in order to convert the Notes. No
additional legal opinion or other information or instructions shall be required
of the Purchasers to convert their Notes. The Company shall honor conversions of
the Notes and the Warrants and shall deliver Shares in accordance with the
terms, conditions and time periods set forth in the Transaction Documents.

 

4.4 Certain Company Actions Requiring Purchaser Consent. The Company, while the
Notes are outstanding, shall not (i) increase number of authorized shares of
stock; preferred stock or debt or equity; or pay any dividends on common Stock;
(v) sell all or substantially all of its assets or acquire or merge with another
business (except where the Issuer is the survivor); (ii) liquidate or dissolve
the Company or commit any act of insolvency or bankruptcy; (iii) amend the
Articles or Bylaws of the Company (vi) redeem any shares; or issue any
additional shares at a price less than $.10 per share.

 

4.5  Use of Proceeds. The Company shall use the net proceeds from the issuance
of the Notes hereunder as set forth in Exhibit D.

 

4.6 Confidentiality. Each Purchaser agrees that he, she or it will keep
confidential and will not disclose, divulge or use for any purpose other than to
monitor his, her or its investment in the Company any confidential, proprietary
or secret information which such Purchaser may obtain from the Company pursuant
to financial statements, reports and other materials submitted by the Company to
such Purchaser pursuant to this Agreement or otherwise (“Confidential
Information”), unless such Confidential Information is known, or until such
Confidential Information becomes known, to the public (other than as a result of
a breach of this Section 4.6 by such Purchaser); provided, however, that a
Purchaser may disclose Confidential Information (i) to his, her or its
attorneys, accountants, consultants, and other professionals to the extent
necessary to obtain their services in connection with monitoring his, her or its
investment in the Company, or (ii) as may otherwise be required by law, provided
that the Purchaser takes reasonable steps to minimize the extent of any such
required disclosure.

 

4.7 Financial Statements.  The Company will deliver copies of its regularly
prepared financial statements to the Purchasers promptly after they become
available. At a minimum, the Company will deliver its regularly prepared annual
financial statements to the Purchasers within 90 days following the end of each
fiscal year.

 

ARTICLE V

MISCELLANEOUS

 

5.1 Fees and Expenses. The parties shall be responsible for their own legal and
other expenses, if any, in connection with this transaction.

 

5.2 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

 

5.3 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile or electronic mail at the
facsimile number or the electronic mail address specified on the signature page
attached hereto prior to 6:00 p.m. PST time on a Trading Day and, with respect
to a notice delivered via facsimile, an electronic confirmation of delivery is
received by the sender, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile or electronic mail at
the facsimile number or electronic mail address specified in this Section on a
day that is not a Trading Day or later than 6:00 p.m. PST on any Trading Day,
(c) the next Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The addresses for such
notices and communications are those set forth on the signature pages hereof, or
such other address as may be designated in writing hereafter, in the same
manner, by such Person.

 

5.4 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed by the Company and the Purchaser. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.

 

5.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

5.6 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns provided
however, that the Company may not assign this Agreement or any of the
Transaction Documents without the prior written consent of the Purchaser.

 

5.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

5.8 Governing Law; Venue; Waiver of Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in New York. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in New York, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The parties hereby waive all rights to a trial by jury. If
either party shall commence an action or proceeding to enforce any provisions of
the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.

 

5.9  Survival. The representations and warranties contained herein shall survive
for a period of two years following the Closing.

 

5.10 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) such document with the same force and effect as if such facsimile
signature page were an original thereof.

 

5.11 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefore, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

5.12 Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.

 

5.13 Independent Nature of Purchasers’ Obligations and Rights. The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under any
Transaction Document. Nothing contained herein or in any Transaction Document,
and no action taken by any Purchaser pursuant thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in their review
and negotiation of the Transaction Documents. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience
of the Company and not because it was required or requested to do so by the
Purchasers.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Note and Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

PARALLAX HEALTH SCIENCES, INC

 

 

 

By: /s/ Paul R. Arena 

     Paul R. Arena, CEO

 

Address for Notice:

 

PARALLAX HEALTH SCIENCES, INC.

1327 Ocean Avenue, Suite B

Santa Monica CA 90401

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PURCHASER SIGNATURE PAGES

TO NOTE AND PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned have caused this Note and Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

 

Name of Investing Entity:

 

Signature of Authorized Signatory of Investing Entity:

 

Name of Authorized Signatory if not an Individual:

 

Title of Authorized Signatory if not an Individual:  

 

Email Address of Authorized Entity or Individual:

 

Address for Notice of Investing Entity or Individual:

 

Loan Amount:

 

EIN or SSN Number: [PROVIDE THIS UNDER SEPARATE COVER]

 

 

 

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EXHIBIT A -1

FORM OF SENIOR SECURED PROMISSORY NOTE

 

EXHIBIT A -2

FORM OF SECURITY AGREEMENT