SUBSCRIPTION AGREEMENT

 

This Subscription Agreement dated as of June , 2016 (the “Agreement”), is
entered into between Zhenli Xu (the “Subscriber”), and Event Cardio Group Inc.,
a Nevada corporation (the “Company”)

 

Preliminary Statement

 

Subscriber desires to purchase, and the Company is willing to sell to the
Subscriber, upon the terms and conditions stated in this Agreement, 2,500,000
shares (the “Shares”) of its common stock, par value $0.001 per share (the
“Common Stock”), together with warrants (the “Warrants”) to purchase an
additional 833,333 shares of common stock (“the “Warrant Shares”), for a total
purchase price of $(US) 375,000 (the “Purchase Price”). The Warrants, in the
form annexed hereto as Exhibit A, may be exercised for a period commencing on
the date of issuance and ending on December 31, 2019, at an initial exercise
price of $US 0.25 per share. The Shares, Warrants and shares of Common Stock
issuable upon exercise of the Warrants (the “Warrant Shares”) are referred to
collectively herein as the “Securities.”

 

The Company and the Subscriber are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Regulation
S, as promulgated by the United States Securities and Exchange Commission under
United States Securities Act of 1933, as amended (the “Securities Act”).

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter set forth, and intending to be legally bound, the parties
hereby agree as follows:

 

ARTICLE I

PURCHASE OF SECURITIES

 

Section 1.1 Purchase of the Securities. Subject to the terms and conditions of
this Agreement, the Subscriber agrees to purchase from the Company, and the
Company agrees to issue and sell to the Subscriber, the Shares and Warrants for
the Purchase Price.

 

Section 1.2 Payment. Payment of the Purchase Price shall be made on or before
June 17, 2016 by wire transfer of immediately available funds to an account
designated by the Company. Upon receipt of payment the Company will deliver to
the Subscriber one or more certificates evidencing the Warrants and instruct its
transfer agent to deliver to the Subscriber promptly thereafter one or more
certificates evidencing the Shares. The Company shall have the right to
terminate this Agreement if it has not received the Purchase Price by June 17,
2016, in which case this Agreement shall have no further force or effect, and
the Company shall have no obligation to issue the Shares or Warrants.

 

 

 

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Subscriber that:

 

Section 2.1 Organization, Good Standing and Authority. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada and has the requisite corporate power and
authorization to own its properties and to carry on its business as now being
conducted.

 

Section 2.2 Due Execution and Delivery; Valid and Binding Agreement. The
execution and delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby have been duly authorized by the
Company’s Board of Directors and no further consent or authorization of the
Company, its Board of Directors, or its shareholders is required. This Agreement
has been duly executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms.

 

 

 

 

Section 2.3 Issuance of Securities. The issuance of the Securities in accordance
with the terms of this Agreement has been duly authorized and, upon issuance in
accordance with the terms hereof, shall be validly issued and free from all
taxes, liens and charges with respect to the issue thereof and the Shares, and
the Warrant Shares issuable upon exercise of the Warrants in accordance with the
terms thereof, shall be fully paid and non-assessable with the Subscriber being
entitled to all rights accorded to a holder of Common Stock. Assuming the
accuracy of the representations and warranties of the Subscriber in Section 3.3
hereof, the offer and issuance by the Company of the Securities is exempt from
registration under the Securities Act.

 

 Section 2.4 SEC Reports.   The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as the Company was
required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) 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.  As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, 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 Commission with
respect thereto as in effect at the time of 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 or
the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries 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,
immaterial, year-end audit adjustments.

 

Section 2.5 Capitalization. The Company’s authorized capital consists of
300,000,000 shares of Common Stock and 10,000,000 shares of preferred stock,
undesignated as to series. No shares of preferred stock have been issued or are
outstanding.

 

Section 2.6 Use of Proceeds. The proceeds from the sale of the Securities will
be used to commence manufacture of the Company’s NowCardio and for working
capital.

  

ARTICLE III

SUBSCRIBER’S REPRESENTATIONS AND WARRANTIES

 

The Subscriber hereby represents and warrants to the Company:

 

Section 3.1 Authorization. The Subscriber has full power and authority to enter
into this Agreement. This Agreement, when executed and delivered by the
Subscriber, will constitute a valid and legally binding obligation of the
Subscriber, enforceable in accordance with the terms hereof.

 

Section 3.2 No Public Sale or Distribution. The Subscriber is acquiring the
Securities 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 or exempted under the Securities
Act and the Subscriber does not have a present arrangement to effect any
distribution of the Securities, to or through any person or entity. The
Subscriber does not presently have any agreement or understanding, directly or
indirectly, with any person to distribute any of the Securities.

 

 

 

 

Section 3.3 Regulation S Exemption. (a) The Subscriber understands that the
Securities are being offered and sold in reliance on an exemption from the
registration requirements of United States federal and state securities laws
under Regulation S promulgated under the Securities Act and that the Company is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of the Subscriber set forth
herein in order to determine the applicability of such exemptions and the
suitability of the Investor to acquire the Securities. In this regard, the
Subscriber represents, warrants and agrees that:

(a) The Subscriber is not a U.S. Person (as defined in the Securities Act) and
is not an affiliate (as defined in Rule 501(b) under the Securities Act) of the
Company and is not acquiring the Shares for the account or benefit of a U.S.
Person.

 

(b) At the time of the origination of contact concerning this Agreement and the
date of the execution and delivery of this Agreement, the Subscriber was outside
of the United States.

 

(c) The Subscriber will not, during the period commencing on the date of
issuance of the Securities and ending on the first anniversary of such date, or
such shorter period as may be permitted by Regulation S or other applicable
securities law (the “Restricted Period”), offer, sell, pledge or otherwise
transfer the Securities in the United States, or to a U.S. Person for the
account or for the benefit of a U.S. Person, or otherwise in a manner that is
not in compliance with Regulation S.

 

(d) The Subscriber will, after expiration of the Restricted Period, offer, sell,
pledge or otherwise transfer the Securities only pursuant to registration under
the Securities Act or an available exemption therefrom and, in accordance with
all applicable state and foreign securities laws.

 

(e) The Subscriber was not in the United States, engaged in, and prior to the
expiration of the Restricted Period will not engage in, any short selling of or
any hedging transaction with respect to the Securities, including without
limitation, any put, call or other option transaction, option writing or equity
swap.

 

(f) Neither the Subscriber nor or any person acting on its behalf has engaged,
nor will engage, in any directed selling efforts to a U.S. Person with respect
to the Securities and the Subscriber and any person acting on his behalf have
complied and will comply with the “offering restrictions” requirements of
Regulation S under the Securities Act.

 

(g) The transactions contemplated by this Agreement have not been pre-arranged
with a buyer located in the United States or with a U.S. Person, and are not
part of a plan or scheme to evade the registration requirements of the
Securities Act.

 

(h) Neither the Subscriber nor any person acting on its behalf has undertaken or
carried out any activity for the purpose of, or that could reasonably be
expected to have the effect of, conditioning the market in the United States,
its territories or possessions, for any of the Securities. The Subscriber agrees
not to cause any advertisement of the Securities to be published in any
newspaper or periodical or posted in any public place and not to issue any
circular relating to the Securities, except such advertisements that include the
statements required by Regulation S under the Securities Act, and only offshore
and not in the U.S. or its territories, and only in compliance with any local
applicable securities laws.

 

(i) Each certificate representing the Securities shall be endorsed with the
following legends, in addition to any other legend required to be placed thereon
by applicable federal or state securities laws:

 

(A) “THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE
SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S
PROMULGATED UNDER THE SECURITIES ACT.”

 

 

 

 

(B) “TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT,
OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

 

(q) The Subscriber consents to the Company making a notation on its records or
giving instructions to any transfer agent of the Company, if any, in order to
implement the restrictions on transfer of the Securities set forth in this
Section.

 

Section 3.4 Reliance on Exemptions. The Subscriber understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
the Subscriber's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Subscriber set forth herein in order
to determine the availability of such exemptions and the eligibility of the
Subscriber to acquire the Securities. Further, if this transaction is not being
conducted in accordance with Regulation S and Subscriber is an accredited
investor, in lieu of the legends set forth above, the certificates representing
the Securities will have a restrictive “Securities Act” legend imprinted thereon

 

Section 3.5 Information. The Subscriber has been furnished with or has had
access at the EDGAR Website of the Securities and Exchange Commission to the SEC
Reports.  In addition, the Subscriber has received in writing from the Company
such other information concerning its operations, financial condition and other
matters as the Subscriber has requested in writing and considered all factors
the Subscriber deems material in deciding on the advisability of investing in
the Securities. Subscriber has carefully read, and understands the information
in the SEC Reports. Neither such inquiries nor any other due diligence
investigations conducted by the Subscriber or its advisors, if any, or its
representatives shall modify, amend or affect the Subscriber's right to rely on
the Company's representations and warranties contained herein. The Subscriber
understands that its investment in the Securities involves a high degree of risk
and is able to afford a complete loss of such investment. The Subscriber has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the
Securities.

 

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1 Governing Law; Jurisdiction and Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of laws. Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state and county of New York. The parties to this
Agreement hereby irrevocably waive any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. The Company and
Subscriber waive trial by jury. The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs. In the
event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement. Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement 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 other manner permitted by
law.

 

Section 4.2 Entire Agreement; Amendments. This Agreement (including the exhibits
and schedules annexed hereto) contains the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Subscriber
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the parties.

 

 

 

 

Section 4.3 Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
delivered by reputable air courier service with charges prepaid, or (iii)
transmitted by electronic mail with a copy sent by overnight courier, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by electronic mail (assuming the courier copy is also served), at
the address designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:

 

If to the Company:

EVENT CARDIO GROUP INC.

7694 Colony Palm Drive

Boynton Beach, Florida 33436

Attn: John Bentivoglio

Chief Executive Officer

e-mail: johnb@eventcardiogroup.com.

 

If to the Subscriber: to the address specified on the signature page hereof.

 

Each party shall provide notice to the other party of any change in address.

 

Section 4.4 No Broker of Finder. Each party represents and warrants to the other
that no person or entity is entitled to any broker’s finder’s or similar fee in
connection with the transaction contemplated hereby.

 

Section 4.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor the Subscriber shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.

 

Section 4.6 Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

Section 4.7 Severability. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

 

Section 4.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.

 

 

Section 4.9 Headings. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.

 

 

 

[Signature Page is on the Following Page]

 

 

 

Signature Page to Subscription Agreement

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.

 

EVENT CARDIO GROUP, INC.

 

 

By: /s/ John Bentivoglio

John Bentivoglio

President and CEO

 

/s/Zhenli Xu

Zhenli Xu

 

 

Address: 3-120 Dianye Avenue

Economic Development Zone

Weifang, Shangdong

China 261000