Exhibit 10.1

 

EXECUTION VERSION

 

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), is dated as of April 10,
2013, by and between Optionable, Inc., a Delaware corporation (the “Company”),
and the subscribers set forth on the signature pages affixed hereto (each a
“Subscriber” and collectively, the “Subscribers”).

WHEREAS:

A.     The Company and the Subscribers are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the provisions of Section 4(a)(2) and/or Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “1933 Act”); and

B.     The parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to the Subscribers, as
provided herein, and the Subscribers shall purchase an aggregate of 35,500,000
shares (the “Common Shares”) of the Company’s common stock, $0.0001 par value
per share (the “Common Stock”), at a per share price of $0.02 (the “Per Share
Purchase Price”) for an aggregate purchase price of $710,000.00 (the “Purchase
Price”). The Common Shares are sometimes referred to herein as the “Securities.”
The issuance and sale of the Common Shares is referred to herein as the
“Offering”.

C.     NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Subscribers hereby
agree as follows:

1.     Closing. Subject to the satisfaction or waiver of the terms and
conditions of this Agreement, the purchase and sale of the Shares shall take
place immediately following the execution and delivery of this Agreement by the
Company and the Subscribers (which time and date are designated as the “Closing
Date”). Such purchase and sale is referred to herein as the “Closing.” There
shall be only one Closing.

2.     Closing Conditions. The Closing hereunder is subject to the following
conditions being met:

(a)     each Subscriber’s representations and warranties being accurate and true
in all material respects as of the Closing Date (unless as of a specific date
therein in which case they shall be accurate and true as of such date);

(b)     the performance in all material respects of all obligations, covenants
and agreements of each Subscriber and the Company that are required to be
performed at or prior to the Closing Date;

(c)     the Company shall have delivered to the Subscribers, (i) this Agreement
executed on behalf of the Company, (ii) a legal opinion of the Company’s counsel
substantially in the form of Exhibit A attached hereto, and (iii) a certificate
from an authorized officer attesting that all of the Company’s representation
and warranties herein are accurate and true in all material respects as of the
Closing Date (unless as of a specific date therein in which case they shall be
accurate and true as of such date); and

(d)     each Subscriber shall have (i) delivered to the Company this Agreement
executed on behalf of such Subscriber, and (ii) paid such Subscriber’s pro rata
share of the Purchase Price by wire transfer of immediately available funds, in
the amounts and to the accounts designated in writing by the Company pursuant to
the funds flow memorandum delivered by the Company to the Subscribers (the
“Funds Flow Memorandum”).

 

 
 

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3.     Issuance of Common Shares. On the Closing Date and against receipt of the
Purchase Price payable pursuant to Section 2(d) from each Subscriber (which each
Subscriber agrees to pay subject to the Company’s satisfaction of the conditions
set forth in Section 2(a) through (c)), the Company shall deliver, or cause to
be delivered, to each such Subscriber, a stock certificate of the Company,
registered in the name of such Subscriber, for the number of shares of Common
Stock equal to the number of “Common Shares” set forth opposite such
Subscriber’s name on the signature pages hereto.

4.     Subscriber Representations and Warranties. Each of the Subscribers hereby
severally and not jointly represents and warrants to and agrees with the Company
that:

(a)     Organization and Standing of the Subscriber. Such Subscriber, if an
entity, is a corporation, partnership or other entity duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the requisite
corporate power to own its assets and to carry on its business.

(b)     Authorization and Power. Such Subscriber has the requisite legal
capacity, power and authority to enter into, and perform under, this Agreement
and to perform under the other Transaction Documents as defined in Section 5(c),
and to purchase the Securities being sold to such Subscriber hereunder and
thereunder. The execution, delivery and performance of this Agreement and
performance under the other Transaction Documents by such Subscriber and the
consummation by such Subscriber of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate, partnership or
similar action on the part of such Subscriber and no further consent or
authorization is required. This Agreement has been duly authorized, executed and
delivered. This Agreement will be, valid and binding obligation of such
Subscriber, enforceable against such Subscriber in accordance with the terms
thereof.

(c)     No Conflicts. The execution, delivery and performance of this Agreement
and performance under the other Transaction Documents and the consummation by
such Subscriber of the transactions contemplated hereby and thereby or relating
hereto or thereto do not and will not (i) result in a violation of such
Subscriber’s charter documents, bylaws or other organizational documents, if
applicable, (ii) conflict with nor constitute a default (or an event which with
notice or lapse of time or both would become a default) under any agreement to
which such Subscriber is a party, nor (iii) result in a violation of any law,
rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to such Subscriber or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a material adverse effect on such Subscriber). Such Subscriber
is not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement or
perform under the other Transaction Documents nor to purchase the Securities in
accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, such Subscriber is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.

(d)     Information on Company. Such Subscriber has been furnished with or has
had access to the EDGAR Website of the Commission to the Company’s filings made
with the Commission during the period from January 1, 2011 through the tenth
business day preceding the Closing Date (hereinafter referred to collectively as
the “Reports”). Subscribers are not deemed to have any knowledge of any
information not included in the Reports unless such information is delivered in
the manner described in the next sentence. In addition, such Subscriber may have
received in writing from the Company such other information concerning its
operations, financial condition and other matters as such Subscriber has
requested in writing, identified thereon as OTHER WRITTEN INFORMATION (such
other information is collectively, the “Other Written Information”), and
considered all factors such Subscriber deems material in deciding on the
advisability of investing in the Securities. Such Subscriber was afforded (i)
the opportunity to ask such questions as such Subscriber deemed necessary of,
and to receive answers from, representatives of the Company concerning the
merits and risks of acquiring the Securities; (ii) the right of access to
information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable
such Subscriber to evaluate the Securities; 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 acquiring the Securities.

 

 
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(e)     Information on Subscriber. Such Subscriber is an “accredited investor,”
as such term is defined in Regulation D promulgated by the Commission under the
1933 Act, is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of United
States publicly-owned companies in private placements in the past and, with its
representatives, has such knowledge and experience in financial, tax and other
business matters as to enable such Subscriber to utilize the information made
available by the Company to evaluate the merits and risks of and to make an
informed investment decision with respect to the proposed purchase, which
represents a speculative investment. Such Subscriber has the authority and is
duly and legally qualified to purchase and own the Securities. Such Subscriber
is able to bear the risk of such investment for an indefinite period and to
afford a complete loss thereof. Such Subscriber has provided the information in
the Accredited Investor Questionnaire attached hereto as Exhibit B (the
“Investor Questionnaire”). The information set forth on the signature pages
hereto and the Investor Questionnaire regarding such Subscriber is true and
complete in all respects.

(f)     Purchase of Securities. On the Closing Date, such Subscriber will
purchase the Securities for such Subscriber’s own account for investment only
and not with a view toward, or for resale in connection with, the public sale or
any distribution thereof.

(g)     Compliance with Securities Act; Reliance on Exemptions. Such Subscriber
understands and agrees that the Securities have not been registered under the
1933 Act or any applicable state securities laws, by reason of their issuance in
a transaction that does not require registration under the 1933 Act, and that
such Securities must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration. Such Subscriber understands and agrees that the
Securities are being offered and sold to such Subscriber in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and regulations and that the Company is relying in part upon the
truth and accuracy of, and such Subscriber’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Subscriber set forth herein in order to determine the availability of such
exemptions and the eligibility of such Subscriber to acquire the Securities.

(h)     Communication of Offer. Such Subscriber is not purchasing the Securities
as a result of any “general solicitation” or “general advertising,” as such
terms are defined in Regulation D, which includes, but is not limited to, any
advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or on the internet or
broadcast over television, radio or the internet or presented at any seminar or
any other general solicitation or general advertisement (“General
Solicitation”).

 

 
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(i)     Restricted Securities. Such Subscriber understands that the Securities
have not been registered under the 1933 Act and such Subscriber will not sell,
offer to sell, assign, pledge, hypothecate or otherwise transfer any of the
Securities unless pursuant to an effective registration statement under the 1933
Act, or unless an exemption from registration is available. Notwithstanding
anything to the contrary contained in this Agreement, such Subscriber may
transfer (without restriction and without the need for an opinion of counsel)
the Securities to its Affiliates (as defined below) provided that each such
Affiliate is an “accredited investor” under Regulation D and such Affiliate
agrees to be bound by the terms and conditions of this Agreement. For the
purposes of this Agreement, an “Affiliate” of any Person means any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Person. Affiliate includes each Subsidiary of the
Company. For the purposes of this Agreement, a “Person” means an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind. For purposes of this
definition, “control” means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

(j)     No Governmental Review. Such Subscriber understands that no United
States federal or state agency or any other governmental or state agency has
passed on or made recommendations or endorsement of the Securities or the
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the Offering.

(k)     Survival. The foregoing representations and warranties shall survive the
Closing Date.

5.     Company Representations and Warranties. The Company represents and
warrants to and agrees with each Subscriber that:

(a)     Due Incorporation. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to
carry on its business as presently conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
where the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have a Material Adverse Effect. For purposes of this
Agreement, a “Material Adverse Effect” shall mean a material adverse effect on
the financial condition, results of operations, prospects, properties or
business of the Company and its Subsidiaries taken as a whole. For purposes of
this Agreement, “Subsidiary” means, with respect to any entity at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity of which more than
30% of (i) the outstanding capital stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the board of
directors or other managing body of such entity, (ii) in the case of a
partnership or limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (iii) in the case of a
trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association, joint venture, or other entity that
is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such entity. As of the Closing Date, all
of the Company’s Subsidiaries, if any, and the Company’s other ownership
interests therein are set forth on Schedule 5(a). The Company represents that it
owns all of the equity of the Subsidiaries and rights to receive equity of the
Subsidiaries set forth on Schedule 5(a), free and clear of all liens,
encumbrances and claims, except as set forth on Schedule 5(a). No person or
entity other than the Company has the right to receive any equity interest in
the Subsidiaries.

(b)     Outstanding Stock. All issued and outstanding shares of capital stock
and equity interests in the Company have been duly authorized and validly issued
and are fully paid and non-assessable.

 

 
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(c)     Authority; Enforceability. This Agreement and any other agreements
delivered or required to be delivered together with or pursuant to this
Agreement or in connection herewith (collectively “Transaction Documents”) have
been duly authorized, executed and delivered by the Company and are valid and
binding agreements of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights generally and to general principles of equity. The Company has
full corporate power and authority necessary to enter into and deliver the
Transaction Documents and to perform its obligations thereunder.

(d)     Capitalization and Additional Issuances. The authorized and outstanding
capital stock of the Company on a fully diluted basis and all outstanding rights
to acquire or receive, directly or indirectly, any equity or “Common Stock
Equivalents” of the Company or any Subsidiary as of the date of this Agreement
and the Closing Date (not including the Securities) are set forth on Schedule
5(d). Except as set forth on Schedule 5(d), there are no options, warrants, or
rights to subscribe to, securities, rights, understandings or obligations
convertible into or exchangeable for or granting any right to subscribe for any
shares of capital stock or other equity interest or other outstanding Common
Stock Equivalent of the Company. The only officer, director, employee and
consultant stock option or stock incentive plan or similar plan currently in
effect or contemplated by the Company (as the same may be amended only to extend
the expiration of the term of the plan) is described on Schedule 5(d). Except as
set forth on Schedule 5(d), there are no preemptive rights, rights of first
refusal, rights of participation or any similar right to participate in the
transactions contemplated by the Transaction Documents. For the purposes of this
Agreement, “Common Stock Equivalent” means any securities of the Company which
would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock.

(e)     Consents. No consent, approval, authorization or order of (i) any court,
governmental agency or body or arbitrator having jurisdiction over the Company,
(ii) the OTC Markets QB (“OTCQB”) or (iii) the Company’s stockholders is
required for the execution by the Company of the Transaction Documents and
compliance and performance by the Company of its obligations under the
Transaction Documents, including, without limitation, the issuance and sale of
the Securities. The Transaction Documents and the Company’s performance of its
obligations thereunder have been approved by the Company’s board of directors in
accordance with the Company’s certificate of incorporation and applicable law.
Any such qualifications and filings will, in the case of qualifications, be
effective upon Closing and will, in the case of filings, be made within the time
prescribed by law.

(f)     No Violation or Conflict. Assuming the representations and warranties of
the Subscriber in Section 4 are true and correct, neither the issuance nor the
sale of the Securities nor the performance of the Company’s obligations under
the Transaction Documents by the Company, will:

(i)     violate, conflict with, result in a breach of, or constitute a default
(or an event which with the giving of notice or the lapse of time or both would
be reasonably likely to constitute a default) under (A) the articles or
certificate of incorporation, charter or bylaws of the Company, (B) to the
Company’s knowledge, any decree, judgment, order, law, treaty, rule, regulation
or determination applicable to the Company of any court, governmental agency or
body, or arbitrator having jurisdiction over the Company or over the properties
or assets of the Company, (C) the terms of any bond, debenture, note or any
other evidence of indebtedness, or any agreement, stock option or other similar
plan, indenture, lease, mortgage, deed of trust or other instrument to which the
Company is a party, by which the Company is bound, or to which any of the
properties of the Company is subject, or (D) the terms of any “lock-up” or
similar provision of any underwriting or similar agreement to which the Company
is a party, except in each case the violation, conflict, breach, or default of
which would not have a Material Adverse Effect; or

 

 
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(ii)     result in the creation or imposition of any lien, charge or encumbrance
upon the Securities or any of the assets of the Company except (A) in favor of
each Subscriber as described herein or (B) the restrictions on transfer on the
Securities that may arise under Section 2 and the voting requirements with
respect to the Securities that may arise under Sections 5(a) and 5(b) of that
certain Investor Rights Agreement, dated as of April 10, 2007 (the “Investor
Rights Agreement”), by and among the Company and the other parties named
therein; or

(iii)     result in the activation of any rights of first refusal, participation
rights, pre-emptive rights, anti-dilution rights or a reset or repricing of any
debt, equity or security instrument of any creditor or equity holder of the
Company, or the holder of the right to receive any debt, equity or security
instrument of the Company nor result in the acceleration of the due date of any
obligation of the Company; or

(iv)     result in the triggering of any piggy-back or other registration rights
of any person or entity holding securities of the Company or having the right to
receive securities of the Company.

 

(g)     The Securities. The Securities upon issuance in accordance with the
terms of the Transaction Documents:

(i)     will be, free and clear of any security interests, liens, claims or
other encumbrances, subject to (A) restrictions upon transfer under (i) the 1933
Act and any applicable state securities laws, (ii) as provided in the
Transaction Documents or (iii) Section 2 of the Investor Rights Agreement and
(B) voting requirements under Sections 5(a) and 5(b) of the Investor Rights
Agreement;

(ii)     will be duly and validly issued, fully paid and non-assessable;

(iii)     will not have been issued or sold in violation of any preemptive or
other similar rights of the holders of any securities of the Company or rights
to acquire securities of the Company;

(iv)     will not subject the holders thereof to personal liability by reason of
being such holders; and

(v)     assuming the representations and warranties of the Subscribers as set
forth in Section 4 hereof are true and correct, will not result in a violation
of Section 5 under the 1933 Act.

(h)     Litigation. Except as disclosed in the Reports, there is no pending or,
to the knowledge of the Company, threatened action, suit, proceeding or
investigation before any court, governmental agency or body, or arbitrator
having jurisdiction over the Company (“Litigation”) that would affect the
execution by the Company or the performance by the Company of its obligations
under the Transaction Documents. Except as disclosed in the Reports, there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding
or investigation before any court, governmental agency or body, or arbitrator
having jurisdiction over the Company, which litigation if adversely determined
would have a Material Adverse Effect.

 

 
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(i)     No Undisclosed Events or Circumstances. Since December 31, 2011, except
as disclosed in the Reports or the Other Written Information, no event or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, operations or financial condition, that, under
applicable law, rule or regulation, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed in the Reports.

(j)     No Market Manipulation. The Company and its officers and directors have
not taken directly or indirectly, any action designed to, or that would
reasonably be expected to, cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Securities
or affect the price at which the Securities may be issued or resold.

(k)     Information Concerning Company. As of the date of this Agreement and the
Closing Date, the Reports and Other Written Information contain all material
information relating to the Company and its operations and financial condition
as of their respective dates required to be disclosed therein. Since December
31, 2011, and except as disclosed in the Reports or modified in the Reports and
Other Written Information or in the Schedules hereto, there has been no Material
Adverse Effect relating to the Company’s business, financial condition or
affairs. The Reports and Other Written Information including the financial
statements included therein do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, taken as a whole, not misleading in light of the
circumstances and when made. The financial statements of the Company included in
the Reports comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”) applied on a consistent basis
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements), and fairly present in all material respects
the financial position of the Company and Subsidiaries as of 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).

(l)     Defaults. The Company is not in violation of its articles of
incorporation or bylaws. The Company is (i) not in default under or in violation
of any other material agreement or instrument to which it is a party or by which
it or any of its properties are bound or affected, which default or violation
would have a Material Adverse Effect, (ii) not in default with respect to any
order of any court, arbitrator or governmental body or subject to or party to
any order of any court or governmental authority arising out of any action, suit
or proceeding under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition or similar matters, or (iii) to the
Company’s knowledge, not in violation of any statute, rule or regulation of any
governmental authority which violation would have a Material Adverse Effect.

(m)     No Integrated Offering. Neither the Company, nor any of its officers or
directors, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security of the Company nor solicited
any offers to buy any security of the Company under circumstances that would
cause the offer of the Securities pursuant to this Agreement to be integrated
with prior offerings by the Company for purposes of the 1933 Act or any
applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of the OTCQB. No prior offering will impair the
exemptions relied upon in this Offering or the Company’s ability to timely
comply with its obligations hereunder. Neither the Company nor any of its
officers or directors will take any action or suffer any inaction or conduct any
offering other than the transactions contemplated hereby that may be integrated
with the offer or issuance of the Securities or that would impair the exemptions
relied upon in this Offering or the Company’s ability to timely comply with its
obligations hereunder.

 

 
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(n)     No General Solicitation. Neither the Company, nor any of its officers or
directors, nor to its knowledge, any Person acting on its or their behalf, has
engaged in any form of General Solicitation in connection with the offer or sale
of the Securities.

(o)     No Undisclosed Liabilities. The Company has no liabilities or
obligations which are material, individually or in the aggregate, except (i) to
the extent described in the Reports or the Other Written Information or (ii)
incurred in the ordinary course of the Company businesses since December 31,
2011 and which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.

(p)     Dilution. The Company’s executive officers and directors understand the
nature of the Securities being sold hereby and recognize that the issuance of
the Securities will have a potential dilutive effect on the equity holdings of
other holders of the Company’s equity or rights to receive equity of the
Company. The Company’s Board of Directors has concluded, in its good faith
business judgment that the issuance of the Securities is in the best interests
of the Company.

(q)     No Disagreements with Accountants. There are no material disagreements
of any kind presently existing, or reasonably anticipated by the Company to
arise between the Company and the accountants previously and presently employed
by the Company, including but not limited to disputes or conflicts over payment
owed to such accountants, nor have there been any such disagreements during the
two years prior to the Closing Date.

(r)     Investment Company. The Company is not an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

(s)     Foreign Corrupt Practices. Neither the Company, nor to the knowledge of
the Company, any agent or other Person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any Person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

(t)     Reporting Company/Shell Company. The Company is a publicly-held company
that files periodic and other reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”) and the Common
Stock is registered pursuant to Section 12(g) of the 1934 Act. Pursuant to the
provisions of the 1934 Act, the Company has timely filed all reports and other
materials required to be filed thereunder with the Commission during the
preceding twelve months. As of the Closing Date, the Company is not and was not
a “shell company” nor a “former shell company” as those terms are employed in
Rule 144 promulgated by the Commission pursuant to the 1933 Act, as such Rule
may be amended or interpreted from time to time (“Rule 144”). The Company has
never been an issuer subject to Rule 144(i) under the 1934 Act.

(u)     Listing. The Common Stock is quoted on the OTCQB under the symbol OPBL.
The Company has not received any written notice that the Common Stock is not
eligible nor will become ineligible for quotation on the OTCQB nor that the
Common Stock does not meet all requirements for the continuation of such
quotation and the Company satisfies all the requirements on issuers for the
continued quotation of its Common Stock on the OTCQB.

 

 
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(v)     DTC Status. The Company’s transfer agent (the “Transfer Agent”) is a
participant in and the Common Stock is eligible for transfer pursuant to the
Depository Trust Company Automated Securities Transfer Program. The name,
address, telephone number, fax number, contact person and email address of the
Transfer Agent is set forth on Schedule 5(v) hereto.

(w)     Anti-Takeover Provisions. The Company and its Board of Directors will
have taken as of the Closing Date all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s articles of incorporation (or
similar charter documents) or the laws of its jurisdiction of incorporation that
are or could become applicable to the Subscribers as a result of the Subscribers
and the Company fulfilling their obligations or exercising their rights under
the Transaction Documents, including, without limitation, as a result of the
Company’s issuance of the Securities and the Subscribers’ ownership of the
Securities.

(x)     Title to Assets. The Company has good and marketable title to all of its
real and personal property reflected in the Reports, free and clear of any
mortgages, pledges, charges, liens, security interests or other encumbrances,
except for those that, individually or in the aggregate, do not cause and are
not reasonably likely to cause a Material Adverse Effect. All leases of the
Company are valid and subsisting and in full force and effect.

(y)     Compliance with Law. The business of the Company has been and is
presently being conducted in accordance with all applicable federal, state,
local and foreign governmental laws, rules, regulations and ordinances, except
for such noncompliance that, individually or in the aggregate, would not cause a
Material Adverse Effect. The Company has all franchises, permits, licenses,
consents and other governmental or regulatory authorizations and approvals
necessary for the conduct of its business as now being conducted by it unless
the failure to possess such franchises, permits, licenses, consents and other
governmental or regulatory authorizations and approvals, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

(z)     Taxes. The Company has accurately prepared and filed all federal, state,
foreign and other tax returns required by law to be filed by it, has paid or
made provisions for the payment of all taxes shown to be due and all additional
assessments, and adequate provisions have been and are reflected in the
financial statements of the Company for all current taxes and other charges to
which the Company is subject and that are not currently due and payable. None of
the federal income tax returns of the Company have been audited by the Internal
Revenue Service (the “IRS”). The Company has no knowledge of any additional
assessments, adjustments or contingent tax liability (whether federal or state)
of any nature whatsoever, whether pending or threatened against the Company for
any completed tax period, nor of any basis for any such assessment, adjustment
or contingency.

(aa)     Books and Record Internal Accounting Controls. The books and records of
the Company accurately reflect in all material respects the information relating
to the business of the Company, the location and collection of their assets, and
the nature of all transactions giving rise to the obligations or accounts
receivable of the Company. The Company maintains a system of internal accounting
controls sufficient, in the judgment of the Company, to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate actions are taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed
such disclosure controls and procedures to ensure that material information
relating to the Company is made known to the certifying officers by others
within those entities.

 

 
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(bb)     Material Agreements. The Company is not a party to any written or oral
contract, instrument, agreement, commitment, obligation, plan or arrangement, a
copy of which would be required to be filed with the Commission as an exhibit to
a registration statement on Form S-1 or applicable form (collectively, “Material
Agreements”) if the Company was registering securities under the Securities Act
that has not been filed with the Commission. The Company has in all material
respects performed all the obligations required to be performed by them to date
under the foregoing agreements, has received no notice of default and is not in
default under any Material Agreement now in effect, the result of which could
cause a Material Adverse Effect. No written or oral contract, instrument,
agreement, commitment, obligation, plan or arrangement of the Company limits or
shall limit the payment of dividends on the Common Stock.

(cc)     Transactions with Affiliates. Except as set forth in the Reports, there
are no loans, leases, agreements, contracts, royalty agreements, management
contracts or arrangements or other continuing transactions between (i) the
Company on the one hand, and (ii) on the other hand, any officer or director of
the Company.

(dd)     Sarbanes-Oxley Act. The Company is in material compliance with the
applicable provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”), and the rules and regulations promulgated thereunder that are effective,
and intends to comply with other applicable provisions of the Sarbanes-Oxley Act
and the rules and regulations promulgated thereunder upon the effectiveness of
such provisions.

(ee)     Off-Balance Sheet Arrangements. There is no transaction, arrangement,
or other relationship between the Company and an unconsolidated or other off
balance sheet entity that is not disclosed in its financial statements that
should be disclosed in accordance with GAAP and that would be reasonably likely
to have a Material Adverse Effect.

(ff)     Material Non-Public Information. Except with respect to the
transactions contemplated hereby that will be publicly disclosed or with respect
to any Other Written Information, the Company has not provided any Subscriber or
its agents or counsel with any information that the Company believes constitutes
material non-public information.

(gg)     Money Laundering. The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Subsidiary, threatened.

(hh)     Office of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).

 

 
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(ii)     Company Predecessor and Subsidiaries. The Company makes each of the
representations contained in Sections 5(a), (b), (d), (f), (h), (i), (k), (l),
(o), (q), (s), (w), (y), (z), (aa), (bb), (cc), (dd), (ee), (ff), (gg) and (hh)
of this Agreement, as same relate or could be applicable to each Subsidiary, if
any. All representations made by or relating to the Company of a historical or
prospective nature and all covenants and undertakings described in Section 7
shall relate, apply and refer to the Company and Subsidiaries and their
predecessors and successors.

(jj)     Correctness of Representations. The Company represents that the
foregoing representations and warranties are true and correct as of the date
hereof in all material respects, and, unless the Company otherwise notifies the
Subscribers in writing prior to the Closing Date, shall be true and correct in
all material respects as of the Closing Date; provided, that, if such
representation or warranty is made as of a different date, in which case such
representation or warranty shall be true as of such date.

(kk)     Survival. The foregoing representations and warranties shall survive
the Closing Date.

6.     Regulation D Offering/Legal Opinion. The offer and issuance of the
Securities to the Subscribers is being made pursuant to the exemption from the
registration provisions of the 1933 Act afforded by Section 4(a)(2) and/or Rule
506 of Regulation D promulgated thereunder. On the Closing Date, the Company
will provide an opinion reasonably acceptable to the Subscribers from the
Company’s legal counsel opining on the availability of an exemption from
registration under the 1933 Act as it relates to the offer and issuance of the
Securities and the other matters set forth on Exhibit A hereto.

7.     Covenants of the Company. The Company covenants and agrees with the
Subscribers as follows:

(a)     Transfer Restrictions.

(i)     The Securities may only be disposed of in compliance with state and
federal securities laws. In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the Company
or to an Affiliate of a Subscriber or in connection with a pledge as
contemplated in Section 7(a)(ii), the Company may require the transferor thereof
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 of such
transferred Securities under the 1933 Act. As a condition of transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights and obligations of a Subscriber under this Agreement.

(ii)     The Subscribers agree to the imprinting, so long as is required by this
Section 7(a), of a legend on any of the Securities in the following form:

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

 

 

 
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The Company acknowledges and agrees that a Subscriber may from time to time
pledge pursuant to 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
1933 Act and who agrees to be bound by the provisions of this Agreement and, if
required under the terms of such arrangement, such Subscriber may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge
or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in
connection therewith. Further, no notice shall be required of such pledge. At
the appropriate Subscriber’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.

(iii)     Certificates evidencing the Common Shares shall not contain any legend
(including the legend set forth in Section 7(a)(ii) hereof), (A) following any
sale of such Common Shares pursuant to Rule 144, or (B) if such Common Shares
are eligible for sale under Rule 144, without the requirement for the Company to
be in compliance with the current public information required under Rule 144 as
to such Common Shares and without volume or manner-of-sale restrictions, or (C)
following any sale of such Common Shares, pursuant to the plan of distribution
in an effective registration statement (in compliance with any prospectus
delivery requirements), or (D) if such legend is not required under applicable
requirements of the 1933 Act (including judicial interpretations and
pronouncements issued by the staff of the Commission) (the “Removal Date”). The
Company shall cause its counsel to issue a legal opinion to the Transfer Agent
promptly after the Removal Date if required by the Transfer Agent to effect the
removal of the legend hereunder. The Company agrees that following the Removal
Date, it will, not later than five (5) trading days following the delivery by a
Subscriber to the Company or the Transfer Agent of a certificate representing
Common Shares issued with a restrictive legend, together with any reasonable
certifications requested by the Company, the Company’s counsel or the Transfer
Agent (such fifth (5th) trading day, the “Legend Removal Date”), deliver or
cause to be delivered to such Subscriber a certificate representing such shares
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 7. Certificates
for Securities subject to legend removal hereunder shall be transmitted by the
Transfer Agent to the Subscriber by crediting the account of the Subscriber’s
prime broker with the Depository Trust Company System as directed by such
Subscriber if the Transfer Agent is then a participant in such system and either
(i) there is an effective registration statement permitting the resale of such
Securities by the Subscriber (and the Subscriber provides the Company or the
Company’s counsel with any requested certifications with respect to future sales
of such Securities) or (ii) the shares are eligible for resale by the Subscriber
without volume limitations and may be sold without the requirement for the
Company to be in compliance with Rule 144(c)(1) of the 1933 Act.

 

 
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(iv)     In addition to any other rights available to a Subscriber, if the
Company fails to deliver to a Subscriber unlegended Common Shares as required
pursuant to this Agreement and after the Legend Removal Date such Subscriber, or
a broker on such Subscriber’s behalf, purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
such Subscriber of the Common Shares that such Subscriber was entitled to
receive from the Company (a “Buy-In”), then the Company shall promptly pay in
cash to such Subscriber (in addition to any remedies available to or elected by
such Subscriber) the amount by which (A) such Subscriber’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (B) the aggregate purchase price of the Common Shares
delivered to the Company for reissuance as unlegended shares (which amount shall
be paid as liquidated damages and not as a penalty). For example, if a
Subscriber purchases shares of Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to Common Shares delivered to the Company
for reissuance as unlegended shares having an aggregate purchase price of
$10,000, the Company shall be required to pay the Subscriber $1,000, plus
interest. The Subscriber shall provide the Company written notice indicating the
amounts payable to the Subscriber in respect of the Buy-In. For purposes of this
Agreement, the “purchase price” of a Common Share shall be the Per Share
Purchase Price as same may be adjusted.

(b)     Furnishing of Information; Public Information. Until the earlier of the
time that (A) no Subscriber owns any Securities, or (B) five (5) years after the
Closing Date (such earliest occurrence, the “End Date”), the Company covenants
to maintain the registration of the Common Stock under Section 12(b) or 12(g) of
the 1934 Act and 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 1934 Act even if the Company is
not then subject to the reporting requirements of the 1934 Act.

(c)     Stop Orders. From the date of this Agreement until the End Date, the
Company will (i) provide notice to the Subscribers within twenty-four hours
after it receives notice of issuance by the Commission, any state securities
commission or any other regulatory authority of any stop order or of any order
preventing or suspending any offering of any securities of the Company, or of
the suspension of the qualification of the Common Stock of the Company for
offering or sale in any jurisdiction, or the initiation of any proceeding for
any such purpose and (ii) will not issue any stop transfer order or other order
impeding the sale, resale or delivery of any of the Securities, except as may be
required by any applicable federal or state securities laws and if notice of
such instruction is contemporaneously provided to the Subscribers.

(d)     Listing/Quotation. The Company shall promptly secure the quotation or
listing of the Common Shares upon the OTCQB.

(e)     Market Regulations. If required, the Company shall notify the
Commission, the OTCQB and applicable state authorities, in accordance with their
requirements, of the transactions contemplated by this Agreement, and shall take
all other necessary action and proceedings as may be required and permitted by
applicable law, rule and regulation, for the legal and valid issuance of the
Securities to the Subscribers and promptly provide copies thereof to the
Subscribers.

(f)     Use of Proceeds. As of the date of this Agreement, the Company
anticipates that it will use the proceeds of the Offering for the purposes set
forth on Schedule 7(f). Without the prior consent of Subscribers holding a
majority of the Common Shares then outstanding, the Company will not use any
proceeds of the Offering for the redemption of equity instruments outstanding on
the Closing Date or for the repayment of any debt instruments outstanding on the
Closing Date prior to the maturity thereof.

(g)     Form D; Blue Sky Filings. The Company agrees to timely file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof, promptly upon request of any Purchaser. The Company shall take
such action as the Company shall reasonably determine is necessary in order to
obtain an exemption for, or to qualify the Securities for, sale to the
Purchasers at the Closing under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.

 

 
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(h)     Confidentiality/Public Announcement. Not later than four (4) business
days after the Closing Date, the Company will file a Form 8-K describing the
Offering as required by the 1934 Act. The Form 8-K will disclose the amount of
Common Stock outstanding immediately after the Closing. Upon delivery by the
Company to the Subscribers after the Closing Date of any notice or information,
in writing, electronically or otherwise, and while any Common Shares are held by
any Subscriber, unless the Company has in good faith determined that the matters
relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries, the Company shall within four (4)
business days after any such delivery publicly disclose such material, nonpublic
information on a Report on Form 8-K. In the event that the Company believes that
a notice or communication to a Subscriber contains material, nonpublic
information relating to the Company or its Subsidiaries, except as required to
be delivered in connection with this Agreement, the Company shall so indicate to
the Subscribers prior to delivery of such notice or information. Each Subscriber
will be granted two business days to notify the Company that such Subscriber
elects not to receive such information. In the case that a Subscriber elects not
to receive such information, the Company will not deliver such information to
such Subscriber. In the absence of any such Company indication, the Subscribers
shall be allowed to presume that all matters relating to such notice and
information do not constitute material, nonpublic information relating to the
Company or its Subsidiaries.

(i)     Non-Public Information. The Company covenants and agrees that except for
the Reports, Other Written Information and schedules and exhibits to this
Agreement and the Transaction Documents, which information the Company
undertakes to publicly disclose on the Form 8-K described in Section 7(j) above,
neither it nor any other Person acting on its behalf will at any time provide
any Subscriber or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto such
Subscriber, its agent or counsel shall have agreed in writing to accept such
information as described in Section 7(j) above. The Company understands and
confirms that the Subscribers shall be relying on the foregoing representations
in effecting transactions in securities of the Company. The Company agrees that
any information known to any Subscriber not already made public by the Company
may be made public and disclosed by such Subscriber.

(j)     Board of Directors. Effective immediately upon closing, the Board of
Directors will be composed of the individuals as set forth on Schedule 7(j), and
the officers of the Company will be the persons identified on Schedule 7(j). In
connection with the resignations of those individuals serving as directors,
officers or other employees of the Company to create the vacancies being filled
by the individuals listed on Schedule 7(j), the Company will treat such
resignations as resignations for “Good Reason” pursuant to the Nonstatutory
Stock Option Agreements between the Company and such resigning individuals.

(k)     D&O Insurance. The Company will use its best efforts to maintain and
shall not cancel through March 2014 the Directors’ and Officers’ Insurance
existing as of the date of this Agreement, which is referenced in the Use of
Proceeds schedule, attached as Schedule 7(f) hereto.

(l)     Transition of Books and Records. The Company has used, and will continue
to use, its commercially reasonable efforts to transition its books and records
(including, without limitation, its (i) bank accounts, (ii) financial,
accounting and auditing records, (iii) SEC EDGAR filer codes and (iv) corporate
record books) to the custody and control of the Company’s directors and
executive officers, and other designees of the Subscribers, following the
Closing.

 

 
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8.     Covenants of the Company and the Subscribers Regarding Indemnification.
Subject to the provisions of this Section 8, the Company will indemnify and hold
each Subscriber and its directors, officers, shareholders, members, partners,
employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls such Subscriber (within the meaning of
Section 15 of the 1933 Act and Section 20 of the 1934 Act), and the directors,
officers, shareholders, agents, members, partners or employees (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling
persons (each, a “Subscriber Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Subscriber Party may
suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement or in the other Transaction Documents or (b) any action instituted
against the Subscriber Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Subscriber Party, with respect to any of the transactions contemplated
by the Transaction Documents (unless such action is based upon a breach of such
Subscriber Party’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Subscriber Party
may have with any such stockholder or any violations by such Subscriber Party of
state or federal securities laws or any conduct by such Subscriber Party which
constitutes fraud, gross negligence, willful misconduct or malfeasance). If any
action shall be brought against any Subscriber Party in respect of which
indemnity may be sought pursuant to this Agreement, such Subscriber Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Subscriber Party. Any Subscriber Party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Subscriber Party except to the extent that (i) the employment thereof has
been specifically authorized by the Company in writing, (ii) the Company has
failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of such
Subscriber Party’s counsel, a material conflict on any material issue between
the position of the Company and the position of such Subscriber Party, in which
case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel. The Company will not be liable to any
Subscriber Party under this Agreement (y) for any settlement by a Subscriber
Party effected without the Company’s prior written consent, which shall not be
unreasonably withheld, conditioned or delayed; or (z) to the extent, but only to
the extent that a loss, claim, damage or liability is attributable to any
Subscriber Party’s breach of any of the representations, warranties, covenants
or agreements made by such Subscriber Party in this Agreement or in the other
Transaction Documents. The indemnification required by this Section 8 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are incurred. The
indemnity agreements contained herein shall be in addition to any cause of
action or similar right of any Subscriber Party against the Company or others
and any liabilities the Company may be subject to pursuant to law.

 

 
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9.     Miscellaneous.

(a)     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) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery or telegram, 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 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 third (3rd) 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: (1) if to the
Company, to: Optionable, Inc., 55 St. Marks Place, Suite 4, New York, NY 10003,
Attn: Chief Executive Officer, with a copy to (which copy shall not constitute
notice to the Company): Hand Baldachin & Amburgey LLP, 8 West 40th Street, 12th
Floor, New York, NY 10018, Attn: David C. Amburgey, Esq., and (2) if to the
Subscribers, to: the addresses indicated on the signature pages hereto, with an
additional copy by fax only to (which copy shall not constitute notice to any
such Subscriber): Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream,
New York 11581, facsimile: (212) 697-3575.

(b)     Entire Agreement; Assignment. This Agreement and other documents
delivered in connection herewith represent the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by a writing executed by both parties. All exhibits and schedules attached
hereto or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Neither the Company nor the
Subscribers has relied on any representations not contained or referred to in
this Agreement and the documents delivered herewith. 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 each Subscriber
(other than by merger). Any Subscriber may assign any or all of its rights under
this Agreement to any Person to whom such Subscriber assigns or transfers any
Securities, provided that the Company is provided prompt written notice of such
assignment and, unless such assignment or transfer occurs after the legend set
forth in Section 7(a)(ii) has been or may be removed or in connection with which
the Securities will be issued or reissued without such legend, such transferee
agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Subscribers.”

(c)     Amendments; Waivers. Except as otherwise set forth herein, no provision
of this Agreement may be waived, modified, supplemented or amended except in a
written instrument signed, by the Company and the Subscribers holding a majority
in interest of the Common Shares then outstanding; provided that none of the
Closing conditions in Section 2 that need to be satisfied by the Company nor any
accrued interest or damages due a Subscriber hereunder may be waived, modified,
supplemented or amended as against any one Subscriber without the prior written
consent of such Subscriber; and provided, further than all waivers,
modifications, supplements or amendments effected by less than all Subscribers
impact all Subscribers in the same fashion. 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.

(d)     Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile signature and delivered by electronic transmission.

 

 
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(e)     Law Governing this Agreement; Consent to Jurisdiction. This Agreement
and the other Transaction Documents 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 concerning the transactions
contemplated by this Agreement and the other Transaction Documents shall be
brought in the state courts or federal courts located in New York County, New
York. The parties to this Agreement hereby irrevocably waive any objection to
jurisdiction and venue of any action instituted in compliance with this Section
9(e) and shall not assert any defense based on lack of jurisdiction or venue or
based upon forum non conveniens. The parties executing this Agreement agree,
with respect to the Transaction Documents, to submit to the in personam
jurisdiction of such courts and hereby irrevocably waive trial by jury. The
prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs.

(f)     Specific Enforcement. The Company and the Subscribers acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.

(g)     Calendar Days. All references to “days” in the Transaction Documents
shall mean calendar days unless otherwise stated. The terms “business days” and
“trading days” shall mean days that the New York Stock Exchange is open for
trading for three or more hours. Time periods shall be determined as if the
relevant action, calculation or time period were occurring in New York City. Any
deadline that falls on a non-business day in any of the Transaction Documents
shall be automatically extended to the next business day and interest, if any,
shall be calculated and payable through such extended period.

(h)     Captions: Certain Definitions. The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.

(i)     Severability. In the event that any term or provision of this Agreement
shall be finally determined to be superseded, invalid, illegal or otherwise
unenforceable pursuant to applicable law by an authority having jurisdiction and
venue, that determination shall not impair or otherwise affect the validity,
legality or enforceability: (i) by or before that authority of the remaining
terms and provisions of this Agreement, which shall be enforced as if the
unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.

(j)     Successor Laws. References in the Transaction Documents to laws, rules,
regulations and forms shall also include successors to such laws, rules,
regulations and forms. A successor rule to Rule 144(b)(1)(i) shall include any
rule effective after the Closing Date that would be available to a non-Affiliate
of the Company for the sale of Common Stock not subject to volume restrictions
and after a six month holding period.

(k)     Damages. In the event a Subscriber is entitled to receive any liquidated
or other damages pursuant to the Transactions Documents, the Subscriber may
elect to receive the greater of actual damages or such liquidated damages. In
the event a Subscriber is granted rights under different sections of the
Transaction Documents relating to the same subject matter or which may be
exercised contemporaneously, or pursuant to which damages or remedies are
different, such Subscriber is granted the right in such Subscriber’s absolute
discretion to proceed under such section as such Subscriber elects.

 

 
17 

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(l)     Independent Nature of Subscribers. The Company acknowledges that the
obligations of each Subscriber under the Transaction Documents are several and
not joint with the obligations of any other Subscriber, and no Subscriber shall
be responsible in any way for the performance of the obligations of any other
Subscriber under the Transaction Documents. The Company acknowledges that each
Subscriber has represented that the decision of each Subscriber to purchase
Securities has been made by such Subscriber independently of any other
Subscriber 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
Subscriber or by any agent or employee of any other Subscriber, and no
Subscriber or any of its agents or employees shall have any liability to any
other Subscriber (or any other person) relating to or arising from any such
information, materials, statements or opinions. The Company acknowledges that
nothing contained in any Transaction Document, and no action taken by any
Subscriber pursuant hereto or thereto shall be deemed to constitute the
Subscribers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Subscribers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. The Company acknowledges that it has
elected to provide all Subscribers with the same terms and Transaction Documents
for the convenience of the Company and not because the Company was required or
requested to do so by the Subscribers. The Company acknowledges that such
procedure with respect to the Transaction Documents in no way creates a
presumption that the Subscribers are in any way acting in concert or as a group
with respect to the Transaction Documents or the transactions contemplated
thereby.

(m)     Equal Treatment. No consideration shall be offered or paid to any person
to amend or consent to a waiver or modification of any provision of the
Transaction Documents unless the same consideration is also offered and paid to
all the Subscribers and their permitted successors and assigns.

(n)     Certain Fees. No brokerage or finder’s fees or commissions are or will
be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other person with respect to
the transactions contemplated by the Transaction Documents. The Subscribers
shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of any persons for fees of a type contemplated in this
Section 9(n) that may be due in connection with the transactions contemplated by
the Transaction Documents other than as a result of an agreement or other
arrangement entered into by a Subscriber with a third party broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
person with respect to such Subscriber’s activities in connection with the
transactions contemplated by the Transaction Documents. The payments pursuant to
Section 2(d)(ii) in accordance with the Funds Flow Memorandum shall include a
payment to Grushko & Mittman, P.C. of the amount set forth on Schedule 7(f) as
reimbursement for legal fees and expenses rendered to Subscribers in connection
with the transactions described in the Transaction Documents.

 

[Signature Pages Follow]

  

 
18 

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COMPANY SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

 

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.

 

 

OPTIONABLE, INC.

          By:

  /s/ Brad O’Sullivan

     

Brad O’Sullivan

     

Chief Executive Officer

 

 

 
 

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 SUBSCRIBER SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

 

Please acknowledge your acceptance of the foregoing Securities Purchase
Agreement by signing and returning a copy to the undersigned together with the
completed Investor Questionnaire, whereupon this Agreement shall become a
binding agreement between us. Your signature below also constitutes your
signature to the Investor Questionnaire you have delivered to the Company as of
the date indicated below.

 

Name of Subscriber:

 

Signature of Authorized Signatory of Subscriber:

 

Name of Authorized Signatory:

 

Title of Authorized Signatory:

 

Subscriber Address for Notices:

 

 

 

 

 

 

 

Facsimile: 

 

Subscriber’s Social Security Number or
Tax Identification Number (as applicable):  

 

Purchase Price:

 

 

Common Shares to be purchased:

 

 
 

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LIST OF SCHEDULES AND EXHIBITS

 

         

SCHEDULES

    

       

Schedule 5(a)

 

Subsidiaries

             

Schedule 5(d)

    

Capitalization

    

       

Schedule 5(v)

    

Transfer Agent

    

           

Schedule 7(f)

 

Use of Proceeds

             

Schedule 7(j)

 

Board of Directors and Officers

                       

EXHIBITS

    

       

Exhibit A

Form of Legal Opinion

Exhibit B

    

Form of Investor Questionnaire

    

       

 

 

 
 

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 EXHIBIT A

 

FORM OF LEGAL OPINION

 

1.

The Company is a corporation validly existing and in good standing under the
laws of the State of Delaware, and has the requisite corporate power and
authority to enter into and perform its obligations under the Purchase
Agreement, and to carry out the transactions contemplated thereby.

 

2.

The execution and delivery by the Company of the Purchase Agreement, and the
consummation by the Company of the transactions contemplated thereby, have been
duly authorized by all necessary corporate action (including stockholder action)
on the part of the Company. The Purchase Agreement has been duly executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.

 

3.

The Shares have been duly authorized for issuance and, when issued and delivered
to the Subscriber against payment therefor as provided in the Purchase
Agreement, will be validly issued, fully paid and nonassessable.

 

4.

The execution and delivery by the Company of the Purchase Agreement, and the
consummation by the Company of the transactions contemplated thereby, do not
violate the provisions of the Certificate of Incorporation or the By-Laws.

 

5.

Based in part on the representations of the Subscribers in Section 4 of the
Purchase Agreement, the offer, issuance and sale of the Shares by the Company to
the Subscriber pursuant to the Purchase Agreement are exempt from registration
under the Securities Act.

 

6.

Insofar as any Subscriber will become an “interested stockholder” of the Company
for purposes of Section 203 of the Delaware General Corporation Law as a result
of the transactions contemplated by the Purchase Agreement, the Board of
Directors of the Company has approved such transactions for purposes of Section
203(a)(1) of the Delaware General Corporation Law.

 

 

 
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 EXHIBIT B

 

FORM OF INVESTOR QUESTIONNAIRE

 

To:

Optionable, Inc. (the “Company”)

55 St. Marks Place, Suite 4

New York, NY 10003

 

 

  The information in this Accredited Investor Questionnaire (this
“Questionnaire”) is being furnished to allow the Company to confirm that the
undersigned is an “accredited investor,” as defined in Rule 501(a) of the
Securities Act of 1933, as amended (the “Securities Act”).

 

By signing the Securities Purchase Agreement to which this Questionnaire is
attached, you will be authorizing the Company to provide a completed copy of
this Questionnaire to such parties as the Company deems appropriate in order to
ensure that the offer and sale of the Company’s securities will not result in a
violation of the Securities Act or the securities laws of any state and that you
otherwise satisfy the suitability standards applicable to purchasers of the
Securities. All potential investors must answer all questions and complete this
Questionnaire in full.

 

I.      The undersigned hereby represents that he, she or it is (please initial
each category applicable to you in the space provided):

 

_____

(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, as amended;

_____

(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 adviser, 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;

 

 
B-1 

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_____

(9)

An organization described in Section 501(c)(3) of the Internal Revenue Code, a
Massachusetts or similar business trust, or a partnership, not formed for the
specific purpose of acquiring the Securities, 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 who has such knowledge and experience in financial and business matters
that such person is capable of evaluating the merits and risks of investing in
the Company;

_____

(11)

A natural person whose individual net worth (total assets minus total
liabilities), or joint net worth with that person’s spouse, at the time of his
purchase exceeds $1,000,000, excluding the value of the primary residence of
such person;

_____

(12)

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

_____

(13)

An executive officer or director of the Company;

_____

(14)

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
below the equity owners of the undersigned, and the investor category which each
such equity owner satisfies.

 

 

II.      Exceptions to the representations and warranties made in Section 4(e)
of the Securities Purchase Agreement (if no exceptions, write “none” – if left
blank, the response will be deemed to be “none”):

 

 

 

 

 

Name of Subscriber:  

 

 

Address:

 

 

 

 

Fax No.: 

 

 

 

(Signature)

 

Date:

 

B-2