SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of May_____,
2015, by and among Tauriga Sciences, Inc., a Florida corporation with
headquarters located at 39 Old Ridgebury Road, Danbury, CT 06810 (the
“Company”), and each investor identified on the signature pages hereto
(individually, an “Investor” and collectively, the “Investors”).

 

****PLEASE SEE FINAL PAGE FOR INVESTOR SUBSCRIPTION, SIGNATURE, and COMPANY
ACCEPTANCE

 

OFFERING TERMS: COMMITMENT SHARES (BONUS SHARES): 1 cent per share per every
$5,000 USD invested ($5,000 USD is minimum investment accepted by Company) or
500,000 shares of the Company’s common stock, par value $0.001 (“Common Stock”)
for an investment of $5,000.

 

6 month term loan (debenture to mature on December 1, 2015) — Unless the
purchase price is repaid as discuss below, each Investor Shall receive on
maturity date, December 1, 2015, an amount of shares equal to a 20% discount to
the preceding three Trading Days VWAP. on that Maturity Date.

 

However, the Company reserves the right to repay debenture at any point on or
before close of business (as defined as 6 pm EST) on November 30, 2015 as
discussed below.

 

If Company repays debenture on or before close of business August 31, 2015, then
full repayment shall be defined as purchase price PLUS 10% cash interest. For
purposes of clarity, $50,000 USD Investor would receive cash payment of $55,000
USD.

 

If Company repays debenture on or before close of business November 30, 2015,
then full repayment shall be defined as purchase price plus 20% cash interest.
For purposes of clarity, $50,000 USD Investor would receive cash payment of
$60,000 USD.

 

NOTE: All commitment (BONUS) shares shall be fully earned and vested upon
signing of this subscription agreement and subsequent funding. These shares are
fully earned regardless of whether or not company repays debenture for cash or
debenture converts into shares on Maturity Date of December 1, 2015. However
these commitment shares are subject to Rule 144 as defined in the Securities Act
of 1933, as amended (“Securities Act”).

 

 

 

  

The Company shall deliver any and all commitment shares within 120 days of the
execution of this debenture agreement in order to allow the Company to increase
the number of its authorized shares of Common Stock (the “Authorized Increase”).

 

In the event that the Company opts to allow debenture to convert into shares at
Maturity Date (December 1, 2015), the Company shall notify all note holders via
email on November 30, 2015 after close of business as to the VWAP price utilized
and the number of shares each note holder shall receive.

 

Raise Parameters: UP TO $300,000 USD

 

A. The Company and each Investor are executing and delivering this Agreement in
reliance upon the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of
Regulation D (“Regulation D”) as promulgated by the United States Securities and
Exchange Commission (the “SEC”) under the Securities Act.

 

B. Each Investor, severally and not jointly, wishes to purchase, and the Company
wishes to sell, upon the terms and conditions stated in this Agreement, (i) that
aggregate number of shares of the common stock, par value $0.00001 per share, of
the Company (the “Common Stock”), set forth on such Investor’s signature page to
this Agreement (which aggregate amount for all Investors shall collectively be
referred to herein as the “Common Shares”).

 

C. The Common Shares, issued or issuable pursuant to this Agreement are
collectively are referred to herein as the “Securities.”

 

D. Please refer to investment banking agreement between Tauriga Sciences, Inc.
and Dragoon Capital, Inc. for investor protection provision.

 

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 the Investors agree
as follows:

 

 

 

 

DEFINITIONS

 

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

 

“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.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Best Efforts” means the efforts that a prudent person desirous of achieving a
result would use in similar circumstances to ensure that such result is achieved
as expeditiously as practical; provided, however, that an obligation to use Best
Efforts under this Agreement does not require the Company to dispose of or make
any change to its business, expend any material funds or incur any other
material burden.

 

“Business Day” means any day other than Saturday, Sunday, any day which shall be
a federal legal holiday in the United States or any day on which banking
institutions in The State of New York are authorized or required by law or other
governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

 

“Closing Date” means the date and time of the Closing and shall be on such date
and time as is mutually agreed to by the Company and each Investor.

 

“Closing Price” means, for any date, the closing price per share of the Common
Stock for such date (or, if not a Trading Day, the nearest preceding date that
is a Trading Day) on the primary Eligible Market or exchange or quotation system
on which the Common Stock is then listed or quoted.

 

“Company” has the meaning set forth in the Preamble.

 

“Company Counsel” means Quick Law Group, counsel to the Company.

 

“Common Shares” has the meaning set forth in the Preamble.

 

“Common Stock” has the meaning set forth in the Preamble.

 

 

 

 

 

“Contingent Obligation” has the meaning set forth in Section 3.1(aa).

 

“Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for Common Stock.

 

“Disclosure Materials” has the meaning set forth in Section 3.1(f).

 

“8-K Filing” has the meaning set forth in Section 4.5.

 

“Eligible Market” means any of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ
Capital Market or OTC Bulletin Board.

 

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

 

“GAAP” has the meaning set forth in Section 3.1(g).

 

“Indebtedness” has the meaning set forth in Section 3.1(aa).

 

“Insolvent” has the meaning set forth in Section 3.1(h).

 

“Intellectual Property Rights” has the meaning set forth in Section 3.1(t).

 

“Investor” has the meaning set forth in the Preamble.

 

“Lien” means any lien, charge, claim, security interest, encumbrance, right of
first refusal or other restriction.

 

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

 

“Material Adverse Effect” means (i) a material adverse effect on the results of
operations, assets, business, prospects or financial condition of the Company or
(ii) material and adverse impairment of the Company’s ability to perform its
obligations under any of the Transaction Documents, provided, that none of the
following alone shall be deemed, in and of itself, to constitute a Material
Adverse Effect: (i) a change in the market price or trading volume of the Common
Stock or (ii) changes in general economic conditions or changes affecting the
industry in which the Company operates generally (as opposed to Company-specific
changes) so long as such changes do not have a disproportionate effect on the
Company.

 

“Material Permits” has the meaning set forth in Section 3.1(v).

 

“Options” means any outstanding rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

 

 

 

  

“Person” has the meaning set forth in Section 3.1(aa).

 

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

 

“Regulation D” has the meaning set forth in the Preamble.

 

“Rule 144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424,
respectively, promulgated by the SEC pursuant to the Securities Act, as such
Rules may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“SEC” has the meaning set forth in the Preamble.

 

“SEC Reports” has the meaning set forth in Section 3.1(f).

 

“Securities” has the meaning set forth in the Preamble.

 

“Securities Act” has the meaning set forth in the Preamble.

 

“Shares” means shares of the Company’s Common Stock.

 

“Short Sales” has the meaning set forth in Section 3.2(h).

 

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed or quoted on a Trading Market (other than the OTC Bulletin Board), a day
on which the Common Stock is traded in the over-the-counter market, as reported
by the OTC Bulletin Board, or (iii) if the Common Stock is not listed or quoted
on any Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means whichever of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed
or quoted for trading on the date in question.

 

“Transaction” has the meaning set forth in Section 3.2(h).

 

“Transaction Documents” means this Agreement, the schedules and exhibits
attached hereto, and the Transfer Agent Instructions.

 

 

 

  

“Transfer Agent” means ClearTrust LLC, 16540 Pointe Village Dr., Suite 206,
Lutz, Florida 33558, or any successor transfer agent for the Company.

 

“Transfer Agent Instructions” means, with respect to the Company, the
Irrevocable Transfer Agent Instructions, in the form of Exhibit C, executed by
the Company and delivered to and acknowledged in writing by the Transfer Agent.

 

“VWAP” means, for the Common Stock, the dollar volume-weighted average price for
such security on the principal trading market for the Company’s securities in
the United States during the period beginning at 9:30:01 a.m., New York time,
and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its
“Volume at Price” function or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average of the
highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in “OTC Pink” by Pink OTC Markets Inc.
(formerly Pink Sheets LLC), and any successor thereto. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.

 

PURCHASE AND SALE

 

Closing. Subject to the terms and conditions set forth in this Agreement, at the
Closing the Company shall issue and sell to each Investor, and each Investor
shall, severally and not jointly, purchase from the Company, such number of
Common Shares for the price set forth on such Investor’s signature page to this
Agreement. The date and time of the Closing and shall be 11:00 a.m., New York
City Time, on the Closing Date. The Closing shall take place at the offices of
the Company’s Counsel.

 

Closing Deliveries.

 

At the Closing, the Company shall deliver or cause to be delivered to each
Investor the following:

 

a copy of the Company’s irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver, within 120 days, one or more stock
certificates, free and clear of all restrictive and other legends (except as
expressly provided in Section 4.1(b) hereof), evidencing such number of Common
Shares set forth on such Investor’s signature page to this Agreement, registered
in the name of such Investor;

 

duly executed Transfer Agent Instructions acknowledged by the Company’s transfer
agent;

 

 

 

  

(v) a certificate of the Secretary of the Company, dated as of the Closing Date,
(a) certifying the resolutions adopted by the Board of Directors of the Company
approving the transactions contemplated by this Agreement and the other
Transaction Documents and the issuance of the Securities, (b) certifying the
current versions of the certificate of incorporation, as amended and by-laws of
the Company and (c) certifying as to the signatures and authority of persons
signing the Transaction Documents and related documents on behalf of the
Company; and

 

(vi) a certificate of the Chief Executive Officer or Chief Financial Officer of
the Company, dated as of the Closing Date, certifying to the fulfillment of the
conditions specified in Section 5.1(a) and (b).

 

At the Closing, each Investor shall deliver or cause to be delivered to the
Company the purchase price set forth on such Investor’s signature page to this
Agreement in United States dollars and in immediately available funds, by wire
transfer to an account designated in writing to such Investor by the Company for
such purpose.

 

REPRESENTATIONS AND WARRANTIES

 

Representations and Warranties of the Company. The Company hereby represents and
warrants to the Investors as follows:

 

Organization and Qualification. The Company is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with the requisite legal authority to own and use its properties
and assets and to carry on its business as currently conducted. The Company is
not in violation of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter documents.
The Company is duly qualified to do business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

 

Authorization; Enforcement. The Company has the requisite corporate authority to
enter into and to consummate the transactions contemplated by each of the
Transaction Documents to which it is a party and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of each of the
Transaction Documents to which it is a party by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company and no
further consent or action is required by the Company, its Board of Directors or
its stockholders. Each of the Transaction Documents to which it is a party has
been (or upon delivery will be) duly executed by the Company and is, or 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, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

 

 

  

No Conflicts. The execution, delivery and performance of the Transaction
Documents to which it is a party by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby do not, and will
not, (i) conflict with or violate any provision of the Company’s certificate or
articles of incorporation, bylaws or other organizational or charter documents
(except as it relates to the Authorized Increase), (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, except to the extent that such conflict, default, termination,
amendment, acceleration or cancellation right would not reasonably be expected
to have a Material Adverse Effect, 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,
assuming the accuracy of the representations and warranties of the Investors set
forth in Section 3.2 hereof, federal and state securities laws and regulations
and the rules and regulations of any self-regulatory organization to which the
Company or its securities are subject, including all applicable Trading
Markets), or by which any property or asset of the Company is bound or affected,
except to the extent that such violation would not reasonably be expected to
have a Material Adverse Effect.

 

The Securities. Subject to the Authorized Increase, the Securities 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
nonassessable, free and clear of all Liens and will not be subject to preemptive
or similar rights of stockholders (other than those imposed by the Investors).

 

Capitalization. The aggregate number of shares and type of all authorized,
issued and outstanding classes of capital stock, options and other securities of
the Company (whether or not presently convertible into or exercisable or
exchangeable for shares of capital stock of the Company) is set forth in the SEC
Reports (as defined below). All outstanding shares of capital stock are duly
authorized, validly issued, fully paid and nonassessable and have been issued in
compliance in all material respects with all applicable securities laws.

 

 

 

  

SEC Reports; Financial Statements. Except as set forth on Schedule 3.1(g), the
Company has filed all reports required to be filed by it under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the 12 months
preceding the date hereof on a timely basis or has received a valid extension of
such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension and has filed all reports required to be filed by it under
the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof. Such reports required to be filed by the
Company under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, together with any materials filed or furnished by the Company under the
Exchange Act, whether or not any such reports were required being collectively
referred to herein as the “SEC Reports” and, together with this Agreement and
the Schedules to this Agreement, the “Disclosure Materials”. As of their
respective dates (or, if amended or superseded by a filing prior to the Closing
Date, then on the date of such filing), the SEC Reports filed by the Company
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the SEC promulgated
thereunder, and none of the SEC Reports, when filed (or, if amended or
superseded by a filing prior to the Closing Date, then on the date of such
filing) by the Company, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto as in effect at the time of filing (or, if amended or superseded by a
filing prior to the Closing Date, then on the date of such filing). Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements, the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP or may be condensed or
summary statements, and fairly present in all material respects the consolidated
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, to normal, year-end audit adjustments. All
material agreements to which the Company is a party or to which the property or
assets of the Company are subject are included as part of or identified in the
SEC Reports, to the extent such agreements are required to be included or
identified pursuant to the rules and regulations of the SEC.

 

 

 

  

Material Changes; Undisclosed Events, Liabilities or Developments; Solvency.
Since the date of the latest audited financial statements included within the
SEC Reports, except as disclosed in the SEC Reports or in Schedule 3.1(h)
hereto, (i) there has been no event, occurrence or development that,
individually or in the aggregate, has had or that would result in a Material
Adverse Effect, (ii) the Company has not incurred any material liabilities 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 or required to
be disclosed in filings made with the SEC, (iii) the Company has not altered its
method of accounting or changed its auditors, except as disclosed in its SEC
Reports, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders, in their capacities as such, or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company
stock-based plans. The Company has not taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a
creditor to do so. The Company is not as of the date hereof, and after giving
effect to the transactions contemplated hereby to occur at the applicable
Closing, will not be Insolvent (as defined below). For purposes of this Section
3.1(h), “Insolvent” means (i) the present fair saleable value of the Company’s
assets is less than the amount required to pay the Company’s total Indebtedness
(as defined in Section 3.1(aa)), (ii) the Company is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, (iii) the Company intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) the Company has unreasonably small capital with which
to conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.

 

Absence of Litigation. Except as disclosed in the SEC Reports, there is no
action, suit, claim, or Proceeding, or, to the Company’s knowledge, inquiry or
investigation, before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company that could, individually or
in the aggregate, to have a Material Adverse Effect.

 

Compliance. Except as would not, individually or in the aggregate, reasonably be
expected to have or result in a Material Adverse Effect, (i) the Company is not
in default under or in violation of, nor has the Company received written 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 or instrument to
which it is a party or by which it or any of its properties is bound, (ii) the
Company is not in violation of any order of any court, arbitrator or
governmental body, or (iii) the Company is not in violation of any statute, rule
or regulation of any governmental authority.

 

Title to Assets. The Company does not own real property. The Company has good
and marketable title in all personal property owned by them that is material to
the business of the Company, in each case free and clear of all Liens, except
for Liens that do not, individually or in the aggregate, have or result in a
Material Adverse Effect. Any real property and facilities held under lease by
the Company is held by it under valid, subsisting and enforceable leases of
which the Company is in material compliance.

 

 

 

  

No General Solicitation. Neither the Company, nor any of its Affiliates, nor any
Person acting on its or their behalf, has engaged in any form of unlawful
general solicitation or general advertising (within the meaning of Regulation D)
in connection with the offer or sale of the Securities. The Company shall be
responsible for the payment of any financial advisory fees, or brokers’
commission (other than for persons engaged by any Investor or its investment
advisor) relating to or arising out of the issuance of the Securities pursuant
to this Agreement. The Company shall pay, and hold each Investor harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim for fees arising out of the issuance of the Securities
pursuant to this Agreement.

 

Private Placement; Investment Company; U.S. Real Property Holding Corporation.
Neither the Company nor any of its Affiliates nor, any Person acting on the
Company’s behalf has, directly or indirectly, at any time within the past six
months, made any offer or sale of any security or solicitation of any offer to
buy any security under circumstances that would (i) eliminate the availability
of the exemption from registration under Regulation D under the Securities Act
in connection with the offer and sale by the Company of the Securities as
contemplated hereby or (ii) cause the offering of the Securities pursuant to the
Transaction Documents to be integrated with prior offerings by the Company for
purposes of any applicable law, regulation or stockholder approval provisions,
including, without limitation, under the rules and regulations of any Trading
Market. Assuming the accuracy of the representations and warranties of the
Investors set forth in Section 3.2, no registration under the Securities Act is
required for the offer and sale of the Securities by the Company to the
Investors as contemplated hereby. The sale and issuance of the Securities
hereunder does not contravene the rules and regulations of any Trading Market on
which the Common Stock is listed or quoted. The Company is not required to be
registered as, and is not an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. The Company is not
required to be registered as a United States real property holding corporation
within the meaning of the Foreign Investment in Real Property Tax Act of 1980.

 

Registration Rights. Except as described in Schedule 3.1(p), the Company has not
granted or agreed to grant to any Person any rights (including “piggy-back”
registration rights) to have any securities of the Company registered with the
SEC or any other governmental authority that have not expired or been satisfied
or waived.

 

 

 

 

Disclosure. The Company confirms that neither it nor any officers, directors or
Affiliates, has provided any of the Investors (other than any investors who
signed a confidentiality agreement with the Company) or their agents or counsel
with any information that constitutes or might constitute material, nonpublic
information (other than the existence and terms of the issuance of Securities,
as contemplated by this Agreement). The Company understands and confirms that
each of the Investors (other than any investors who signed a confidentiality
agreement with the Company) will rely on the foregoing representations in
effecting transactions in securities of the Company. All disclosure provided by
the Company to the Investors regarding the Company, its business and the
transactions contemplated hereby, including the Schedules to this Agreement
furnished by or on behalf of the Company, are true and correct in all material
respects and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. To
the Company’s knowledge, except for the transactions contemplated by this
Agreement, no event or circumstance has occurred or information exists with
respect to the Company or its businesses, properties, operations or financial
condition, which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed. The Company acknowledges and agrees that no Investor
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those set forth in the Transaction
Documents.

 

Acknowledgment Regarding Investors’ Purchase of Securities. Based upon the
assumption that the transactions contemplated by this Agreement are consummated
in all material respects in conformity with the Transaction Documents, the
Company acknowledges and agrees that each of the Investors is acting solely in
the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby. The Company
further acknowledges that no Investor is acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given by any
Investor or any of their respective representatives or agents in connection with
the Transaction Documents and the transactions contemplated hereby and thereby
is merely incidental to the Investors’ purchase of the Securities. The Company
further represents to each Investor that the Company’s decision to enter into
this Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its advisors and
representatives.

 

Patents and Trademarks. The Company owns, or possesses adequate rights or
licenses to use, all trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and other
intellectual property rights (“Intellectual Property Rights”) necessary to
conduct their respective businesses as now conducted. None of the Company’s
Intellectual Property Rights that is currently material to its business have
expired or terminated, or are expected to expire or terminate within three years
from the date of this Agreement. The Company does not have any knowledge of any
infringement by the Company of Intellectual Property Rights of others. Except as
disclosed in the SEC Reports, there is no claim, action or proceeding being made
or brought, or to the knowledge of the Company, being threatened, against the
Company regarding its Intellectual Property Rights.

 

 

 

  

Insurance. The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses and locations in which the Company is engaged.

 

Regulatory Permits. The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as presently
conducted and described in the SEC Reports (“Material Permits”), except where
the failure to possess such permits does not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect.

 

Sarbanes-Oxley Act. The Company is in compliance in all material respects with
applicable requirements of the Sarbanes-Oxley Act of 2002 and applicable rules
and regulations promulgated by the SEC thereunder, except where such
noncompliance would not have, individually or in the aggregate, a Material
Adverse Effect.

 

Foreign Corrupt Practices. The Company, nor to the knowledge of the Company, any
director, officer, agent, employee or other Person acting on behalf of the
Company has, in the course of its actions for, or on behalf of, the Company (i)
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee or to any foreign or domestic political parties or campaigns from
corporate funds; (iii) violated or is in violation in any material respect of
any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.

 

Labor Matters. The Company is in compliance in all material respects with all
federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

 

Tax Status. The Company (i) has made or filed all foreign, federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision
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 material 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.

 

 

 

  

Representations and Warranties of the Investors. Each Investor hereby, as to
itself only and for no other Investor, represents and warrants to the Company as
follows:

 

Organization; Authority. Such Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate, partnership or other power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The purchase by such Investor of the Securities hereunder has been
duly authorized by all necessary corporate, partnership or other action on the
part of such Investor. This Agreement has been duly executed and delivered by
such Investor and constitutes the valid and binding obligation of such Investor,
enforceable against it in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

No Public Sale or Distribution. Such Investor is (i) acquiring the Common Shares
in the ordinary course of business for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered under the Securities Act or under
an exemption from such registration and in compliance with applicable federal
and state securities laws, and such Investor does not have a present arrangement
to effect any distribution of the Securities to or through any person or entity;
provided, however, that by making the representations herein, such Investor does
not agree to hold any of the Securities for any minimum or other specific term
and reserves the right to dispose of the Securities at any time in accordance
with or pursuant to an exemption under the Securities Act.

 

Investor Status. At the time such Investor was offered the Securities, it was,
at the date hereof it is an “accredited investor” as defined in Rule 501(a)
under the Securities Act or a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act. Such Investor is not a registered broker
dealer registered under Section 15(a) of the Exchange Act, or a member of the
FINRA, Inc. or an entity engaged in the business of being a broker dealer.
Except as otherwise disclosed in writing to the Company on Exhibit A-2 (attached
hereto) on or prior to the date of this Agreement, such Investor is not
affiliated with any broker dealer registered under Section 15(a) of the Exchange
Act, or a member of the FINRA, Inc. or an entity engaged in the business of
being a broker dealer.

 

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

 

 

 

  

Experience of Such Investor. Such Investor, 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 Investor understands that it must bear the
economic risk of this investment in the Securities indefinitely, and is able to
bear such risk and is able to afford a complete loss of such investment.

 

Access to Information. Such Investor acknowledges that it has reviewed the
Disclosure Materials and has been afforded: (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and their respective
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such Investor
or its representatives or counsel shall modify, amend or affect such Investor’s
right to rely on the truth, accuracy and completeness of the Disclosure
Materials and the Company’s representations and warranties contained in the
Transaction Documents. Such Investor acknowledges receipt of copies of or access
to the SEC Reports.

 

No Governmental Review. Such Investor understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.

 

No Conflicts. The execution, delivery and performance by such Investor of this
Agreement and the consummation by such Investor of the transactions contemplated
hereby will not (i) result in a violation of the organizational documents of
such Investor or (ii) conflict with, or constitute a default (or an event which
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 of,
any agreement, indenture or instrument to which such Investor is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such
Investor, except in the case of clauses (ii) and (iii) above, for such that are
not material and do not otherwise affect the ability of such Investor to
consummate the transactions contemplated hereby.

 

 

 

 

Prohibited Transactions; Confidentiality. No Investor, directly or indirectly,
and no Person acting on behalf of or pursuant to any understanding with any
Investor, has engaged in any purchases or sales in the securities, including
derivatives, of the Company (including, without limitation, any Short Sales (a
“Transaction”) involving any of the Company’s securities) since the time that
such Investor was first contacted by the Company, the Agent or any other Person
regarding an investment in the Company. Such Investor covenants that neither it
nor any Person acting on its behalf or pursuant to any understanding with such
Investor will engage, directly or indirectly, in any Transactions in the
securities of the Company (including Short Sales) prior to the time the
transactions contemplated by this Agreement are publicly disclosed. “Short
Sales” include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act and all types of direct
and indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, derivatives and similar arrangements (including on a total return
basis), and sales and other transactions through non-U.S. broker-dealers or
foreign regulated brokers.

 

Restricted Securities. The Investors understand that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances.

 

Legends. It is understood that, except as provided in Section 4.1(b) of this
Agreement, certificates evidencing such Securities may bear the legend set forth
in Section 4.1(b).

 

No Legal, Tax or Investment Advice. Such Investor understands that nothing in
this Agreement or any other materials presented by or on behalf of the Company
to the Investor in connection with the purchase of the Securities constitutes
legal, tax or investment advice. Such Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Securities. Such Investor
understands that the Agent has acted solely as the agent of the Company in this
placement of the Securities, and that the Agent makes no representation or
warranty with regard to the merits of this transaction or as to the accuracy of
any information such Investor may have received in connection therewith. Such
Investor acknowledges that he has not relied on any information or advice
furnished by or on behalf of the Agent.

 

 

 

  

OTHER AGREEMENTS OF THE PARTIES

 

Transfer Restrictions.

 

The Investors covenant that the Securities will only be disposed of pursuant to
an available exemption from the registration requirements of the Securities Act,
and in compliance with any applicable state securities laws. In connection with
any transfer of Securities other than to the Company, or pursuant to Rule 144,
the Company may require the transferor to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration under the Securities Act. Notwithstanding
the foregoing, the Company hereby consents to and agrees to register on the
books of the Company and with its Transfer Agent, without any such legal
opinion, except to the extent that the transfer agent requests such legal
opinion, any transfer of Securities by an Investor to an Affiliate of such
Investor, provided that the transferee certifies to the Company that it is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and
provided that such Affiliate does not request any removal of any existing
legends on any certificate evidencing the Securities.

 

The Investors agree to the imprinting, until no longer required by this Section
4.1(b), of the following legend on any certificate evidencing any of the
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”), OR ANY APPLICABLE STATE SECURITIES LAWS 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 COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
“ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

 

Certificates evidencing the Common Shares shall not be required to contain such
legend or any other legend (i) while a registration statement covering the
resale of the Common Shares is effective under the Securities Act, (ii)
following any sale of such Securities pursuant to Rule 144 if the holder
provides the Company with a legal opinion (and the documents upon which the
legal opinion is based) reasonably acceptable to the Company to the effect that
the Securities can be sold under Rule 144, (iii) if the Securities are eligible
for sale under Rule 144, or (iv) if the holder provides the Company with a legal
opinion (and the documents upon which the legal opinion is based) reasonably
acceptable to the Company to the effect that the legend is not required under
applicable requirements of the Securities Act (including controlling judicial
interpretations and pronouncements issued by the Staff of the SEC). At such time
as a legend is no longer required for certain Securities, the Company will no
later than five (5) Trading Days following the delivery by an Investor to the
Company or the Transfer Agent (if delivery is made to the Transfer Agent a copy
shall be contemporaneously delivered to the Company) of (i) a legended
certificate representing such Securities (and, in the case of a requested
transfer, endorsed or with stock powers attached, signatures guaranteed, and
otherwise in form necessary to affect transfer), and (ii) an opinion of counsel
to the extent required by Section 4.1(a), deliver or cause to be delivered to
such Investor a certificate representing such Securities that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section.

 

 

 

  

If within seven (7) Trading Days after receipt by the Company or its Transfer
Agent of a legended certificate and the other documents as specified in Clauses
(i) and (ii) of the paragraph immediately above, the Company shall fail to cause
to be issued and delivered to such Investor a certificate representing such
Securities that is free from all restrictive and other legends, and if on or
after such Trading Day the Investor purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Investor of shares of Common Stock that the Investor anticipated receiving from
the Company without any restrictive legend (the “Covering Shares”), then the
Company shall, within seven (7) Trading Days after the Investor’s request, pay
cash to the Investor in an amount equal to the excess (if any) of the Investor’s
total purchase price (including brokerage commissions, if any) for the Covering
Shares, over the product of (A) the number of Covering Shares, times (B) the
closing bid price on the date of delivery of such certificate and the other
documents as specified in Clauses (i) and (ii) of the paragraph immediately
above.

 

The Company will not object to and shall permit (except as prohibited by law) an
Investor to pledge or grant a security interest in some or all of the Securities
in connection with a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement,
and if required under the terms of such arrangement, the Company will not object
to and shall permit (except as prohibited by law) such Investor to transfer
pledged or secured Securities to the pledgees or secured parties. Except as
required by law, such a pledge or transfer would not be subject to approval of
the Company, no legal opinion of the pledgee, secured party or pledgor shall be
required in connection therewith (but such legal opinion shall be required in
connection with a subsequent transfer or foreclosure following default by the
Purchaser transferee of the pledge), and no notice shall be required of such
pledge. Each Investor acknowledges that the Company shall not be responsible for
any pledges relating to, or the grant of any security interest in, any of the
Securities or for any agreement, understanding or arrangement between any
Investor and its pledgee or secured party. At the appropriate Investor’s
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with
a pledge or transfer of the Securities.

 

 

 

  

Furnishing of Information. Until the date that any Investor owning Common Shares
may sell all of them under Rule 144(k) of the Securities Act (or any successor
provision), the Company covenants to use its commercially reasonable efforts to
timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act. The Company further covenants that
it will take such further action as any holder of Securities may reasonably
request to satisfy the provisions of this Section 4.2.

 

Integration. The Company shall not, and shall use its commercially reasonable
efforts to ensure that no Affiliate thereof shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Investors or that
would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market.

 

Reservation of Securities. The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations to issue
such Shares under the Transaction Documents. In the event that at any time the
then authorized shares of Common Stock are insufficient for the Company to
satisfy its obligations to issue such Shares under the Transaction Documents,
the Company shall promptly take such actions as may be required to increase the
number of authorized shares.

 

Securities Laws Disclosure; Publicity. The Company shall, at or before 9:30
a.m., New York time, on the first Trading Day following execution of this
Agreement by all of the Investors party to this Agreement, issue a press release
disclosing all material terms of the transactions contemplated hereby. On the
Closing Date, the Company shall file a Current Report on Form 8-K with the SEC
(the “8-K Filing”) describing the terms of the transactions contemplated by the
Transaction Documents and including as exhibits to such Current Report on Form
8-K the Transaction Documents (including the schedules and the names, and
addresses of the Investors and the amount(s) of Securities respectively
purchased) in the form required by the Exchange Act. Thereafter, the Company
shall timely file any filings and notices required by the SEC or applicable law
with respect to the transactions contemplated hereby and provide copies thereof
to the Investors promptly after filing. The Company shall not, nor shall any of
their respective officers, directors, employees and agents, provide any Investor
with any material nonpublic information regarding the Company from and after the
issuance of the above referenced press release without the express written
consent of such Investor.

 

 

 

  

Use of Proceeds. The Company intends to use the net proceeds from the sale of
the Securities to repay certain obligation to prior investors.

 

CONDITIONS

 

Conditions Precedent to the Obligations of the Investors. The obligation of each
Investor to acquire Securities at the Closing is subject to the satisfaction or
waiver by such Investor, at or before the Closing, of each of the following
conditions:

 

Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing as though made on and as of such
date; and

 

Performance. The Company and each other Investor shall have performed, satisfied
and complied in all material respects with all covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by it at or prior to the Closing.

 

No Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock
shall not have been suspended by the SEC or any Trading Market (except for any
suspensions of trading of not more than one Trading Day solely to permit
dissemination of material information regarding the Company) at any time since
the date of execution of this Agreement, and the Common Stock shall have been at
all times since such date listed for trading on a Trading Market.

 

Absence of Litigation. No action, suit or proceeding by or before any court or
any governmental body or authority, against the Company or pertaining to the
transactions contemplated by this Agreement or their consummation, shall have
been instituted on or before the Closing Date, which action, suit or proceeding
would, if determined adversely, have a Material Adverse Effect.

 

Conditions Precedent to the Obligations of the Company. The obligation of the
Company to sell the Securities at the Closing is subject to the satisfaction or
waiver by the Company, at or before the Closing, of each of the following
conditions:

 

Representations and Warranties. The representations and warranties of the
Investors contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date; and

 

 

 

  

Performance. The Investors shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the
Investors at or prior to the Closing.

 

MISCELLANEOUS

 

Termination. This Agreement may be terminated by the Company or any Investor, by
written notice to the other parties, if the Closing has not been consummated by
the third Trading Day following the date of this Agreement; provided that no
such termination will affect the right of any party to sue for any breach by the
other party (or parties).

 

Fees and Expenses. Except as expressly set forth in the Transaction Documents to
the contrary, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the sale and
issuance of the applicable Securities.

 

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. At or
after the Closing, and without further consideration, the Company will execute
and deliver to the Investors such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties
under the Transaction Documents.

 

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 email at the facsimile number or
email address specified in this Section prior to 6:30 p.m. (New York City time)
on a Trading Day, (b) the next Trading Day after the date of transmission, if
such notice or communication is delivered via facsimile or email at the
facsimile number or email address specified in this Section on a day that is not
a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day,
(c) the Trading Day following the date of deposit with a nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given. The addresses, facsimile numbers and email
addresses for such notices and communications are those set forth on the
signature pages hereof, or such other address or facsimile number as may be
designated in writing hereafter, in the same manner, by any such Person.

 

 

 

  

Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the
Company and each of the Investors or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. 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 any party to exercise any right hereunder in any
manner impair the exercise of any such right.

 

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.

 

Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. The Company
may not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Investors. Any Investor may assign its rights under
this Agreement to any Person to whom such Investor assigns or transfers any
Securities, provided (i) such transferor agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company after such assignment, (ii) the Company is furnished with written
notice of the name and address of such transferee or assignee, (iii) following
such transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, (iv) such transferee agrees in writing to be bound, with
respect to the transferred Securities, by the provisions hereof that apply to
the “Investors” and (v) such transfer shall have been made in accordance with
the applicable requirements of this Agreement and with all laws applicable
thereto.

 

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.

 

 

 

  

Governing Law; Venue; Waiver of Jury Trial. THE CORPORATE LAWS OF THE STATE OF
NEW YORK SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY
AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY AND
INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN
FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY INVESTOR
HEREUNDER, 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 WAIVE, AND AGREE NOT TO ASSERT IN
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY INVESTOR, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. 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 COMPANY AND INVESTORS
HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

 

Survival. The representations and warranties, agreements and covenants contained
herein shall survive the Closing.

 

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 or email attachment, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or
email-attached signature page were an original thereof.

 

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 therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

 

 

  

Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Investor exercises a right, election, demand or option
owed to such Investor by the Company under a Transaction Document and the
Company does not timely perform its related obligations within the periods
therein provided, then, prior to the performance by the Company of the Company’s
related obligation, such Investor may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights.

 

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 the execution by the holder
thereof of a customary lost certificate affidavit of that fact and an agreement
to indemnify and hold harmless the Company for any losses in connection
therewith. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Securities.

 

Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Investors and the
Company will be entitled to seek specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation (other than in connection with any
action for a temporary restraining order) the defense that a remedy at law would
be adequate.

 

Payment Set Aside. To the extent that the Company makes a payment or payments to
any Investor hereunder or any Investor enforces or exercises its rights
hereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company by a
trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

 

Adjustments in Share Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof, each
reference in any Transaction Document to a number of shares or a price per share
shall be amended to appropriately account for such event.

 

 

 

  

Independent Nature of Investors’ Obligations and Rights. The obligations of each
Investor under any Transaction Document are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under any
Transaction Documents. The decision of each Investor to purchase Securities
pursuant to this Agreement has been made by such Investor independently of any
other Investor and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company which may have been made or given by any other Investor
or by any agent or employee of any other Investor, and no Investor or any of its
agents or employees shall have any liability to any other Investor (or any other
person) relating to or arising from any such information, materials, statements
or opinions. Nothing contained herein or in any Transaction Document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Document. Each Investor acknowledges that no
other Investor has acted as agent for such Investor in connection with making
its investment hereunder and that no other Investor will be acting as agent of
such Investor in connection with monitoring its investment hereunder. Each
Investor 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
Investor to be joined as an additional party in any Proceeding for such purpose.

 

 

 

  

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

 

  TAURIGA SCIENCES, INC.       By:     Name: Dr. Stella M. Sung   Title: Chief
Executive Officer         Address for Notice:         Tauriga Sciences, Inc.  
39 Old Ridgebury Road, Suite C4   Danbury, CT 06180   Attn: Seth M. Shaw  
Telephone: 514-840-3697   Fax: 514-221-3336         With a copy to:        
Quick Law Group, PC   Attn: Jeff Quick   1035 Pearl Street, Suite 403   Boulder,
CO 80302   (720) 259-3393 (office)   (303) 845-7315 (fax)

 

 

 

 

COMPANY SIGNATURE PAGE

 

 

 

 

 

 

 

 

Exhibit A-1

 

Tauriga Sciences, Inc.

 

STOCK CERTIFICATE QUESTIONNAIRE

 

Please provide us with the following information:

 

  1. The exact name that the Securities are to be registered in (this is the
name that will appear on the stock certificate(s)). You may use a nominee name
if appropriate:                     2.  The relationship between the Investor of
the Securities and the Registered Holder listed in response to item 1 above:    
                3. The mailing address, telephone and telecopy number and email
address of the Registered Holder listed in response to item 1 above:            
        4.  The Tax Identification Number of the Registered Holder listed in
response to item 1 above:                  

 

 

 

  

Exhibit A-2

 

Tauriga Sciences, Inc.

 

CERTIFICATE FOR CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY,

TRUST, FOUNDATION AND JOINT INVESTORS

 

If the Investor is a corporation, partnership, limited liability company, trust,
pension plan, foundation, joint Investor (other than a married couple) or other
entity, an authorized officer, partner, or trustee must complete, date and sign
this Certificate.

 

CERTIFICATE

 

The undersigned certifies that the representations and responses below are true
and accurate:

 

(a) The Investor has been duly formed and is validly existing and has full power
and authority to invest in the Company. The person signing on behalf of the
undersigned has the authority to execute and deliver the Securities Purchase
Agreement on behalf of the Investor and to take other actions with respect
thereto.

 

(b) Indicate the form of entity of the undersigned:

 

____  Limited Partnership

 

____  General Partnership

 

____  Limited Liability Company

 

____  Corporation

 

____  Revocable Trust (identify each grantor and indicate under what
circumstances the trust is revocable by the grantor):

 

(Continue on a separate piece of paper, if necessary.)

 

____  Other type of Trust (indicate type of trust and, for trusts other than
pension trusts, name the grantors and beneficiaries):             

 

                                  

 

(Continue on a separate piece of paper, if necessary.)

 

 

 

  

____  Other form of organization (indicate form of organization (
                            ).

 

(c) Indicate the approximate date the undersigned entity was formed: ________

 

(d) In order for the Company to offer and sell the Securities in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable
to you as an investor in the Company.

 

___  1. A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity;

 

___  2. A broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934;

 

___  3. An insurance company as defined in Section 2(13) of the Securities Act;

 

___  4. An investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48) of that
Act;

 

___  5. 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;

 

___  6. 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;

 

___  7. An employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act, 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;

 

___  8. A private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940;

 

 

 

  

___ 9. Any partnership or corporation or any organization described in Section
501(c)(3) of the Internal Revenue Code or similar business trust, not formed for
the specific purpose of acquiring the Shares, with total assets in excess of
$5,000,000;

 

___ 10. A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of the Exchange Act;

 

___ 11. An entity in which all of the equity owners qualify under any of the
above subparagraphs. If the undersigned belongs to this investor category only,
list the equity owners of the undersigned, and the investor category which each
such equity owner satisfies:

 

(Continue on a separate piece of paper, if necessary.)

 

Please set forth in the space provided below the (i) states, if any, in the U.S.
in which you maintained your principal office during the past two years and the
dates during which you maintained your office in each state, (ii) state(s), if
any, in which you are incorporated or otherwise organized and (iii) state(s), if
any, in which you pay income taxes.

 

(i):     (ii):     (iii):  

 

 

 

 

Exhibit C

 

COMPANY TRANSFER AGENT INSTRUCTIONS

 

ClearTrust LLC

16540 Pointe Village Dr., Suite 206

Lutz, Florida 33558

 

Attention: [Representative]

 

Ladies and Gentlemen:

 

Reference is made to that certain Securities Purchase Agreement, dated as of May
[_____], 2015 (the “Agreement”), by and among Tauriga Sciences, Inc., a Florida
corporation (the “Company”), and the investors named on the Schedule of
Investors attached thereto (collectively, the “Holders”), pursuant to which the
Company is issuing to the Holders shares (the “Common Shares”) of Common Stock
of the Company, par value $0.00001 per share (the “Common Stock”).

 

In connection with the consummation of the transactions contemplated by the
Agreement, this letter shall serve as our irrevocable authorization and
direction to you:

 

(i) to issue an aggregate number of shares of our Common Stock in the names and
denominations set forth on Annex I attached hereto. The certificates should bear
the legend set forth on Annex II attached hereto and “stop transfer”
instructions should be placed against their subsequent transfer. Kindly deliver
the certificates to the respective delivery addresses set forth on Annex I via
hand delivery or overnight courier. We confirm that these shares will be validly
issued, fully paid and non-assessable upon issuance.

 

(ii) to issue (provided that you are the transfer agent of the Company at such
time) certificates for shares of Common Stock upon transfer or resale of the
Common Shares and receipt by you of certificate(s) for the Common Shares so
transferred or sold (duly endorsed or accompanied by stock powers duly endorsed,
in each case with signatures guaranteed and otherwise in form eligible for
transfer); and

 

You acknowledge and agree that so long as you have previously received written
confirmation from the Company’s legal counsel that the Common Shares are
eligible for sale in conformity with Rule 144 under the Securities Act (“Rule
144”), unless otherwise required by law, within five (5) business days of your
receipt of certificates representing the Common Shares, you shall issue the
certificates representing the Common Shares to the Holders or their transferees,
as the case may be, registered in the names of such Holders or transferees, as
the case may be, and such certificates shall not bear any legend restricting
transfer of the Common Shares thereby and should not be subject to any
stop-transfer restriction. Any certificates tendered for transfer shall be
endorsed or with stock powers attached, signatures guaranteed, and otherwise in
form necessary to affect transfer.

 

 

 

  

Please be advised that the Holders are relying upon this letter as an inducement
to enter into the Agreement and, accordingly, each Holder is a third party
beneficiary to these instructions.

 

Please execute this letter in the space indicated to acknowledge your agreement
to act in accordance with these instructions. Should you have any questions
concerning this matter, please contact our counsel, Mr. Jeff Quick, at (720)
259-3393.

 

  Very truly yours,       TAURIGA SCIENCES, INC:       ACCEPTANCE SIGNATURE    
  X       Dr. Stella M. Sung       Title: Chief Executive officer

 

THE FOREGOING INSTRUCTIONS ARE

 

ACKNOWLEDGED AND AGREED TO

 

this ________ day of May, 2015

 

Accredited Individual, Corporate Entity, or Institutional Investor:

 

x_________________________________ Print Name

 

x_________________________________ Address (2 Lines)

 

x_________________________________

 

x_________________________________ Social Security # or TIN #

 

x_________________________________ Number of Commitment Shares @ Price of
$0.0100 USD (Simply divide amount invested into debenture by 0.01)

 

x_________________________________ SIGNATURE OF INVESTOR

 

 

 

  

Please SEE WIRE INSTRUNCTIONS BELOW:

 

Bank Name:SIL VLY BANK SJ  3003 Tasman Drive  Santa Clara, CA 95054    Account
Name:Tauriga Sciences, Inc.  39 Old Ridgebury Rd, Suite C4  Danbury, CT 06810   
Account Number:3301086068    ABA:121 140 399