Exhibit 10.5

 

QPAGOS CORPORATION

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of May __, 2015, by and between QPAGOS Corporation, a Delaware corporation
(the “Company”), and the investors set forth on the signature pages affixed
hereto (each, an “Investor” and, collectively, the “Investors”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to exemptions from registration under the Securities Act (as defined
below), the Company desires to issue and sell to each Investor, and each
Investor, severally and not jointly, desires to purchase from the Company, a
minimum of 400,000 Units (the “Units”) (aggregate gross proceeds of $500,000) up
to a maximum of an aggregate of 4,000,000 Units (aggregate gross proceeds of
$5,000,000), each Unit being offered at a price of $1.25 per Unit and each Unit
consisting of one share of the Company’s common stock, par value $.001 (the
“Common Stock”) and a five year warrant (the “Warrant”) to purchase one share of
the Company’s Common Stock at an exercise price of $1.25 per share (the Shares
and the Warrants comprising the Units being hereinafter collectively referred to
as the “Securities”), upon the terms and conditions set forth in this Agreement;
and

 

WHEREAS, in connection with the Investors’ purchase of the Units, the Investors
will be subject to certain restrictions on the transfer of the Securities, all
as more fully set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree to the sale and purchase
of the Units as set forth herein.

 

1.          Definitions.

 

For purposes of this Agreement, the terms set forth below shall have the
corresponding meanings provided below.

 

“Affiliate” shall mean, with respect to any specified Person (as defined below),
(i) if such Person is an individual, the spouse, heirs, executors, or legal
representatives of such individual, or any trusts for the benefit of such
individual or such individual’s spouse and/or lineal descendants, or (ii)
otherwise, another Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Person specified. As used in this definition, “control” shall mean the
possession, directly or indirectly, of the sole and unilateral power to cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities or by contract or other written instrument.

 

“Business Day” shall mean any day on which banks located in New York City are
not required or authorized by law to remain closed.

 

“Claims” as defined in Section 5.1 hereof.

 

“Closing” and “Closing Date” as defined in Section 2.2 (c) hereof.

 

“Common Stock” as defined in the recitals above.

 

“Company Financial Statements” as defined in Section 4.5(a) hereof.

 

 

 

 

“Company’s Knowledge” shall mean the actual knowledge of the Chief Executive
Officer (as defined in Rule 405 under the Securities Act).

 

“Company’s Permits” as defined in Section 4.6 hereof.

 

“Escrow Account,” “Escrow Agent” and “Escrow Agreement”) shall mean the escrow
account established by the Company with Signature Bank, New York, New York
serving as escrow agent, which escrow (as more particularly described in Section
2.3 hereof) shall be conducted pursuant to the terms of an escrow agreement
entered into by the Company, the escrow agent and the Placement Agent.

 

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

 

“First Closing” and “First Closing Date” as defined in Section 2.2(a) hereof.

 

“Indemnified Person” as defined in Section 5.2 hereof.

 

“Intellectual Property Rights” as defined in Section 4.14 hereof.

 

“Investor Questionnaire” shall mean the questionnaire required to be completed
by all Investors.

 

“Liens” shall mean any mortgage, lien, title claim, assignment, encumbrance,
security interest, adverse claim, contract of sale, restriction on use or
transfer or other defect of title of any kind.

 

“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the Company and its Subsidiaries taken as a whole;
(ii) the transactions contemplated hereby or in any of the Transaction
Documents; or (iii) the ability of the Company to perform its obligations under
the Transaction Documents (as defined below).

 

“Person” shall mean an individual, entity, corporation, partnership,
association, limited liability company, limited liability partnership,
joint-stock company, trust or unincorporated organization.

 

“Placement Agent” shall mean Paulson Investment Company, LLC, an Oregon limited
liability company.

 

“Purchase Price” shall mean up to $5,000,000.

 

“Purchaser Party” as defined in Section 5.1 hereof.

 

“Registrable Securities” shall mean: (i) the shares of common stock underlying
the Units; (ii) any shares of Common Stock issued as a dividend on the Common
Stock; (iii) the Warrant Shares; and (iv) the shares of Common Stock issuable
upon exercise of the warrants issuable to the Placement Agent in partial payment
of its services rendered in offering of the Units and theWarrant Shares issuable
upon exercise of the Warrants included in the Units; provided, that a security
shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement or Rule 144 under the Securities Act or (B) such security
becoming eligible for sale by the holder thereof without any restriction
pursuant to Rule 144 (including, without limitation, volume restrictions) and
without the need for current public information required by Rule 144(c)(1) (or
Rule 144(i)(2), if applicable).

 

“Registration Rights Agreement” shall mean the agreement to be entered into
between the Company and the Investors for filing by the Company of a
registration statement under the Securities Act that covers the resale of any of
the Registrable Securities.

 

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“Regulation D” as defined in Section 3.7 hereof.

 

“Regulation S” as defined in Section 6.1(e) hereof.

 

“Rule 144” as defined in Section 6.1(c) hereof.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Subsequent Closing” and “Subsequent Closing Date” as defined in Section 2.2(b)
hereof.

 

“Subsidiaries” shall mean any corporation or other entity or organization,
whether incorporated or unincorporated, in which the Company owns, directly or
indirectly, any equity or other ownership interest or otherwise controls through
contract or otherwise.

 

“Transaction Documents” shall mean this Agreement, the Escrow Agreement and the
Registration Rights Agreement.

 

“Units” as defined in the recitals above.

 

“Warrant” as defined in the recitals above.

 

“Warrant Shares” shall mean any shares of Common Stock underlying the Warrants.

 

2.          Sale and Purchase of Units.

 

2.1.          Subscription for Units by Investors. Subject to the terms and
conditions of this Agreement, on the Closing Date (as hereinafter defined) each
of the Investors shall severally, and not jointly, purchase, and the Company
shall sell and issue to the Investors, in exchange for the portion of the
Purchase Price to be paid by each of them, the Units, in the respective amounts
set forth on the signature pages attached hereto.

 

2.2           Closings.

 

(a)          First Closing. Subject to the terms and conditions set forth in
this Agreement, the Company shall issue and sell to each Investor participating
in the First Closing (as defined below), and each such Investor shall, severally
and not jointly, purchase from the Company on the First Closing Date, such
number of Units set forth on the signature pages attached hereto(the “First
Closing”); provided, however, that the First Closing shall not occur until
subscriptions for gross proceeds of at least $500,000 have been received from
Investors by the Company, and such subscription funds shall have been received
by the Escrow Agent and are available for distribution pursuant to joint escrow
instructions signed by the Company and the Placement Agent. The date of the
First Closing is hereinafter referred to as the “First Closing Date.” If the
minimum amount of $500,000 is raised by July 31, 2015, then the offering will
remain open until the earlier of the receipt and acceptance of subscriptions for
$5,000,000 in gross proceeds orSeptember 30, 2015, unless extended an additional
30 days at the election of the Company and the Placement Agent. If the minimum
amount of $500,000 is not raised by July 31, 2015, then the offering will
terminate on July 31, 2015, and all funds received in escrow will be returned to
the Investors without interest thereon.

 

(b)         Subsequent Closing(s). The Company agrees to issue and sell to each
Investor listed on the Subsequent Closing Schedule of Investors, and each
Investor agrees, severally and not jointly, to purchase from the Company on such
Subsequent Closing Date such number of Units set forth on the signature pages
attached hereto (a “Subsequent Closing”). There may be more than one Subsequent
Closing; provided, however, that the last Subsequent Closing shall be held no
later than September 30, 2015 (subject to the right of the Company and the
Placement Agent to extend the offering for an additional 30 days without notice
to or consent of the Investors). The date of any Subsequent Closing is
hereinafter referred to as a “Subsequent Closing Date.” Notwithstanding the
foregoing, the maximum number of Units to be sold at the First Closing and all
Subsequent Closings shall not exceed 4,000,000 in the aggregate.

 

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(c)          Closing. The First Closing and any applicable Subsequent Closings
are each referred to in this Agreement as a “Closing.” The First Closing Date
and any Subsequent Closing Dates are sometimes referred to herein as a “Closing
Date.” All Closings shall occur at the offices of Gracin & Marlow, LLP, counsel
to the Company, at The Chrysler Building, 405 Lexington Avenue, 26th Floor, New
York, New York 10174, or remotely via the exchange of documents and signatures.

 

2.3.         Closing Deliveries. At each Closing, the Company shall deliver to
the Investors, against delivery by the Investor of the Purchase Price (as
provided below): (i) duly issued certificates representing the Common Stock and
Warrants comprising the purchased Units, unless, at the Placement Agent’s
request, the physical delivery of the Common Stock and Warrants so purchased is
deferred until the final Closing; (ii) this Agreement duly executed by the
Company; and (iii) the Registration Rights Agreement duly executed by the
Company. At each Closing, each Investor shall deliver or cause to be delivered
to the Company: (w) this Agreement duly executed by the Investor; (x) the
Registration Rights Agreement duly executed by the Investor; (y) a fully
completed and duly executed Investor Questionnaire; and (z) the Purchase Price
set forth in its counterpart signature page annexed hereto by paying United
States dollars via bank, certified or personal check which has cleared prior to
the applicable Closing Date or in immediately available funds, by wire transfer
to the following escrow account:

 

3.          Representations, Warranties and Acknowledgments of the Investors.

 

Each Investor, severally and not jointly, represents and warrants to the Company
as to such Investor that:

 

3.1           Authorization. The execution, delivery and performance by the
Investor of the Transaction Documents and the Investor Questionnaire to which
such Investor is a party or has executed have been duly authorized and will each
constitute the valid and legally binding obligation of such Investor,
enforceable against such Investor in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally. The execution, delivery and performance by the
Investor of this Agreement and the Registration Rights Agreement and the
consummation by the Investor of the transactions contemplated hereby and thereby
will not: (i) result in a violation of the organizational documents of the
Investor, if the Investor is an entity; (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
such Investor is a party; or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws) applicable to such Investor, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Investor to perform its obligations
hereunder.

 

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3.2           Purchase Entirely for Own Account. The Investor understands that
the Securities are “restricted securities” and have not been registered under
the Securities Act or any applicable state securities law. The Securities to be
received by each Investor hereunder will be acquired for such Investor’s own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the Securities Act, and such
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same in violation of the Securities Act, without
prejudice, however, to such Investor’s right at all times to sell or otherwise
dispose of all or any part of such Securities in compliance with applicable
federal and state securities laws. Nothing contained herein shall be deemed a
representation or warranty by such Investor to hold the Securities for any
period of time. Such Investor is not a broker-dealer registered with the
Securities and Exchange Commission under the Exchange Act or an entity engaged
in a business that would require it to be so registered. Such Investor is
acquiring the Securities hereunder in the ordinary course of its business. The
Investor understands that he, she or it may not be able to sell any of the
Securities without prior registration of the Common Stock that is issued as part
of the Unit or the shares of common stock underlying the Warrants under the
Securities Act or the existence of an exemption from such registration
requirement.

 

3.3.          Investment Experience. The Investor acknowledges that the purchase
of the Units is a highly speculative investment and that he, she or it can bear
the economic risk and complete loss of his, hers or its investment in the Units
and has such knowledge and experience in financial or business matters such that
he, she or it is capable of evaluating the merits and risks of the investment
therein as contemplated hereby.

 

3.4          Disclosure of Information. The Investor has had an opportunity to
receive all information related to the Company and the Securities requested by
it and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and conditions of the offering of the Units.
Neither such inquiries nor any other due diligence investigation conducted by
such Investor shall modify, amend or affect such Investor’s right to rely on the
Company’s representations and warranties contained in this Agreement. The
Investor acknowledges that it has reviewed the Company’s Private Placement
Memorandum in evaluating the investment in the Units. Without limiting the
generality of the foregoing, the Investor acknowledges that it has reviewed the
risk factors in the Private Placement Memorandum.

 

3.5           Dilution. The Investor acknowledges that there may be future
substantial dilution to holders of the Company’s Common Stock when additional
equity or convertible debt securities are sold.

 

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

 

3.7           Legends. It is understood that, except as provided below,
certificates evidencing the Securities may bear the following or any similar
legend:

 

(a)         “The securities represented hereby may not be transferred unless (i)
such securities have been registered for sale pursuant to the Securities Act of
1933, as amended; (ii) such securities may be sold pursuant to an available
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act; or (iii) the Company has received an opinion
of counsel reasonably satisfactory to it that such transfer may lawfully be made
without registration under the Securities Act of 1933 or qualification under
applicable state securities laws.”

 

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(b)          If required by the authorities of any state in connection with the
issuance of sale of the Securities, the legend required by such state authority.

 

3.8           Investor Status. The Investor acknowledges that the Securities are
being offered only to investors who are “Accredited Investors” as defined in
Rule 501(a) of Regulation D, as amended, under the Securities Act (“Regulation
D”). The Investor hereby confirms that it is an Accredited Investor and is not a
“bad actor” as defined in Rule 506(d) of Regulation D. Further, the Investor has
completed and returned the Investor Questionnaire accompanying this Agreement
providing evidence of such qualification. The Investor is not a registered
broker dealer registered under Section 15(a) of the Exchange Act, or a member of
the Financial Industry Regulatory Authority Inc. (“FINRA”), or an entity engaged
in the business of being a broker-dealer.

 

3.9           No General Solicitation. The Investor did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation.

 

3.10         Brokers and Finders. No Investor will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or any other
Investor, for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of such
Investor.

 

3.11         Residency. The Investor’s residence (if an individual) or office in
which its investment decision with respect to the Units was made (if an entity)
are located at the address immediately below such Investor’s name on its
signature page hereto.

 

3.12         Disclosure; Material Non-public Information.

 

(a)          The Investor, by executing this Securities Purchase Agreement,
acknowledges that the undersigned has read the following investor notice:

 

NO OFFERING LITERATURE OR ADVERTISING, IN WHATEVER FORM, MAY BE RELIED ON BY
INVESTORS IN EVALUATING THE OFFERING OF THESE SECURITIES OTHER THAN THE PRIVATE
PLACEMENT MEMORANDUM DATED MAY 1, 2015 SUPPLIED BY THE COMPANY AND THE COMPANY’S
REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN. NO INFORMATION PROVIDED TO
PROSPECTIVE INVESTORS IN ANY OTHER FORMAT OR THROUGH ANY OTHER FORUM, INCLUDING,
WITHOUT LIMITATION, ANY WEBINAR, POWERPOINT PRESENTATION, EXECUTIVE SUMMARY OR
OTHERWISE, INCLUDING, WITHOUT LIMITATION, PROJECTIONS, SHALL BE CONSIDERED PART
OF THE TRANSACTION DOCUMENTS AND IS NOT TO BE RELIED UPON IN CONNECTION WITH ANY
INVESTMENT DECISION. NO PERSON HAS BEEN AUTHORIZED TO MAKE REPRESENTATIONS, OR
GIVE ANY INFORMATION, WITH RESPECT TO THESE SECURITIES, EXCEPT THE INFORMATION
CONTAINED IN THE TRANSACTION DOCUMENTS, AND ANY INFORMATION OTHER THAN THAT
CONTAINED THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY OF ITS REPRESENTATIVES OR AFFILIATES.

 

(b)          The Investor, by executing a copy of this Agreement, also
acknowledges the following:

 

THE UNDERSIGNED AGREES WITH THE COMPANY TO NOT, DIRECTLY OR INDIRECTLY THROUGH
AFFILIATES OR OTHERWISE, PURCHASE OR SELL ANY SHARES OF THE COMPANY’S COMMON
STOCK OR SECURITIES CONVERTIBLE INTO COMMON STOCK AT ANY TIME THAT THE
UNDERSIGNED POSSESSES MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY.

 

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(c)         No aspect of this offering has been reviewed by the United States
Securities and Exchange Commission or the securities regulatory authorities of
any state and that none of the offering materials nor any other written
materials furnished by the Company and used in connection with this offering has
been reviewed by any federal or state securities regulatory bodies or authority.

 

4.         Representations and Warranties of the Company.

 

The Company represents, warrants and covenants to the Investors that:

 

4.1.          Organization; Execution, Delivery and Performance.

 

(a) The Company and each of its Subsidiaries, is a corporation or other entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized, with full power and
authority (corporate and other) to own, lease, use and operate its properties
and to carry on its business as and where now owned, leased, used, operated and
conducted. The Company is duly qualified as a foreign corporation to do business
and is in good standing in every jurisdiction in which its ownership or use of
property or the nature of the business conducted by it makes such qualification
necessary except where the failure to be so qualified or in good standing would
not have a Material Adverse Effect.

 

(b)(i)          The Company has all requisite corporate power and authority to
enter into and perform the Transaction Documents to be entered into by the
Company and to consummate the transactions contemplated hereby and thereby and
to issue the Securities, in accordance with the terms hereof and thereof; (ii)
the execution and delivery of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including without limitation, the issuance of the Securities) 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 stockholders, is
required; (iii) each of the Transaction Documents has been duly executed and
delivered by the Company by its authorized representative, and such authorized
representative is a true and official representative with authority to sign each
such document and the other documents or certificates executed in connection
herewith and bind the Company accordingly; and (iv) each of the Transaction
Documents constitutes, and upon execution and delivery thereof by the Company
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except to the
extent limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights
and general principles of equity that restrict the availability of equitable or
legal remedies.

 

4.2.         Securities Duly Authorized. The shares of Common Stock to be issued
to each such Investor pursuant to this Agreement, when issued and delivered in
accordance with the terms of this Agreement, will be duly and validly issued and
will be fully paid and non-assessable and free from all taxes or liens with
respect to the issue thereof and shall not be subject to preemptive rights or
other similar rights of stockholders of the Company. The Warrants to be issued
to each such Investor, when issued in accordance with the terms of this
Agreement, will be legal, valid and binding obligations of the Company
enforceable in accordance with their terms. The shares of Common Stock issuable
upon exercise of the Warrants in accordance with their terms will be duly and
validly issued and fully paid and non-assessable. Subject to the accuracy of the
representations and warranties of the Investors to this Agreement, the offer and
issuance by the Company of the Securities is exempt from registration under the
Securities Act.

 

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4.3           No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not: (i) conflict with or
result in a violation of any provision of the Certificate of Incorporation or
By-laws; or (ii) violate or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which with notice or lapse of
time or both could become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture, patent, patent license or instrument to which the Company or any of
its Subsidiaries is a party, except for possible violations, conflicts or
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect; or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations
and regulations of any self-regulatory organizations to which the Company or its
securities are subject) applicable to the Company or any of its Subsidiaries or
by which any property or asset of the Company or any of its Subsidiaries is
bound or affected. Neither the Company nor any of its Subsidiaries is in default
(and no event has occurred which with notice or lapse of time or both could put
the Company or any of its Subsidiaries in default) under, and neither the
Company nor any of its Subsidiaries has taken any action or failed to take any
action that would give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party or by which any property or
assets of the Company or any of its Subsidiaries is bound or affected, or for
possible defaults as would not, individually or in the aggregate, have a
Material Adverse Effect. The businesses of the Company and its Subsidiaries are
not being conducted in violation of any law, rule, ordinance or regulation of
any governmental entity, except for possible violations which would not,
individually or in the aggregate, have a Material Adverse Effect. Except as
required under the Securities Act, the Exchange Act, and any applicable state
securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency, regulatory agency, self regulatory organization or stock
market or any third party in order for it to execute, deliver or perform any of
its obligations under this Agreement or to issue and sell the Securities in
accordance with the terms hereof. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof.

 

4.4.          Capitalization. As of May 15, 2015, the authorized capital stock
of the Company consists of (i) 50,000,000 shares of Common Stock, of which
20,000,000 shares are outstanding, 10,000,000 shares of Preferred Stock, of
which no shares are outsanding. In the offering contemplated by this Agreement,
up to 4,000,000 shares of Common Stock may be issued and Warrants exercisable
for up to 4,000,000 shares of Common Stock may be issued (exclusive of any
securities to be issued to the Placement Agent). The Company has reserved, and
at all times will keep reserved, a sufficient number of shares of Common Stock
for issuance upon the exercise of the Warrants. Except as described in the
Private Placement Memorandum: (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is
or may become bound to issue additional shares of Common Stock of the Company or
any of its Subsidiaries; (ii) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale
of any of its or their securities under the Securities Act (except for the
registration rights provisions contained herein and in the Registration Rights
Agreement); and (iii) there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing
rights to security holders) that will be triggered by the issuance of the
Securities. All of such outstanding shares of Common Stock are, or upon issuance
will be, duly authorized, validly issued, fully paid and non-assessable. No
shares of Common Stock of the Company are subject to preemptive rights or any
other similar rights of the stockholders of the Company or any Lien imposed
through the actions or failure to act of the Company.

 

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4.5.          Permits; Compliance. The Company and each of its Subsidiaries is
in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the “Company Permits”), and there is
no action pending or, to the Company’s Knowledge, threatened regarding
suspension or cancellation of any of the Company Permits. Neither the Company
nor any of its Subsidiaries is in conflict with, or in default or violation of,
any of the Company Permits, except for any such conflicts, defaults or
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since May 10, 2015, neither the
Company nor any of its Subsidiaries has received any notification with respect
to possible conflicts, defaults or violations of applicable laws, except for
notices relating to possible conflicts, defaults or violations, which conflicts,
defaults or violations would not have a Material Adverse Effect.

 

4.6         Litigation. There is no action, suit, claim, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the Company’s knowledge or
any of its Subsidiaries, threatened against or affecting the Company or any of
its Subsidiaries, or their respective businesses, properties or assets or their
officers or directors in their capacity as such, that would have a Material
Adverse Effect. The Company is unaware of any facts or circumstances which might
give rise to any of the foregoing.

 

4.7          No Material Changes.

 

Since May 10, 2015, except as set forth in the Private Placement Memorandum,
there has not been:

 

(a)          Any material adverse change in the operations or business of the
Company from that described in the Memorandum, or any material transaction or
commitment effected or entered into by the Company outside of the ordinary
course of business;

 

(b)          Any effect, change or circumstance which has had, or could
reasonably be expected to have, a Material Adverse Effect;

 

(c)          Any incurrence of any material liability outside of the ordinary
course of business; or

 

(d)          Any possible effect, change or circumstance which would likely have
or could reasonably be expected to have, a substantial dilutive effect on the
Common Stock, except forcertain highly confidential discussions which the
Company is currently engaged in regarding a possible significant transaction
involving a substantial monetary investment in the Company at a substantial
discount which, if consummated, would likely result in substantial dilution to
the Investor.

 

4.8         No General Solicitation. Neither the Company nor any Person
participating on the Company’s behalf in the transactions contemplated hereby
has conducted any “general solicitation,” as such term is defined in Regulation
D promulgated under the Securities Act, with respect to the Units being offered
hereby.

 

4.9         No Integrated Offering. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers to
buy any security under circumstances that would require registration under the
Securities Act of the issuance of the Securities to the Investors. The issuance
of the Securities to the Investors will not be integrated with any other
issuance of the Company’s securities (past, current or future) for purposes of
any stockholder approval provisions applicable to the Company or its securities.

 

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4.10         No Brokers. Other than the Placement Agent, the Company has taken
no action that would give rise to any claim by any Person for brokerage
commissions, transaction fees or similar payments relating to this Agreement or
the transactions contemplated hereby.

 

4.11         Form D; Blue Sky Laws. The Company agrees to file a Form D with
respect to the Securities as required under Regulation D within 15 days after
the first funds are received in escrow. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Securities for sale to the Investors at the applicable
Closing pursuant to this Agreement under applicable securities or “blue sky”
laws of the states of the United States (or to obtain an exemption from such
qualification).

 

4.12         Disclosure. All disclosure provided to the Investors regarding the
Company and its Subsidiaries, their businesses and the transactions contemplated
hereby, including the schedules to this Agreement, furnished by or on behalf of
the Company or any of its Subsidiaries is true and correct in all material
respects and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
Each press release issued by the Company or any of its Subsidiaries during the
12 months preceding the date of this Agreement did not at the time of release
contain any untrue statement of a material fact or omit 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 are made, not
misleading. No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, liabilities, results of operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure at or
before the date hereof or announcement by the Company but which has not been so
publicly disclosed.

 

4.13         Intellectual Property Rights. The Company and its Subsidiaries own
or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, original works, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property
Rights”) necessary to conduct their respective businesses as now conducted and
as presently proposed to be conducted. None of the Company’s or its
Subsidiaries’ Intellectual Property Rights have expired, terminated or been
abandoned, or are expected to expire, terminate or be abandoned, within two
years from the date of this Agreement. To the Company’s Knowledge, there has not
been any infringement by the Company or any of its Subsidiaries of Intellectual
Property Rights of others. Except as set forth in the Private Placement
Memorndum, there is no claim, action or proceeding being made or brought, or to
the Company’s Knowledge, being threatened, against the Company or any of its
Subsidiaries regarding their Intellectual Property Rights. The Company is not
aware of any facts or circumstances which might give rise to any of the
foregoing infringements or Claims. The Company and each of its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their Intellectual Property Rights, except where failure to take
such measures would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

 

4.14         Tax Status. Except for occurrences that would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, the Company and each of its Subsidiaries (i) has timely made or
filed all foreign, federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject; (ii) has
timely paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith; and (iii) has set
aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Company and its Subsidiaries know of no basis for any such claim.

 

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4.15         Investment Company Act Status. The Company and its Subsidiaries are
not, and after giving effect to the offering and sale of the Units and the
application of the proceeds thereof will not be, required to register as an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended.

 

4.16         No Bad Actor Disqualification or Disclosure. Except as may be
disclosed in the PPM, neither the Company nor any predecessor of the Company,
any Company director, executive officer or beneficial owner of 20% or more of
the Company’s outstanding voting equity securities is a “bad actor” as that term
is defined in Rule 506(d) of Regulation D.

 

5.          Indemnification.

 

5.1           Indemnification by the Company. (a) In addition to the indemnity
provided in the Registration Rights Agreement, the Company will indemnify and
hold each Investor and, if applicable, its directors, officers, stockholders,
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 Investor
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, stockholders, 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 person (each, a “Purchaser 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 (“Claims”) that any such Purchaser Party may suffer or incur as a
result of any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction
Documents. The Company will not be liable to any Purchaser Party under this
Agreement to the extent, but only to the extent that a Claim is attributable to
any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the
other Transaction Documents; provided that such a claim for indemnification
relating to any breach of any of the representations or warranties made by the
Company in this Agreement is made within one year from the Closing.

 

5.2         Promptly after receipt by any Person (the “Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 5.1, such Indemnified
Person shall promptly notify the Company in writing, and the Company shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided, however, that the failure of any Indemnified Person
so to notify the Company shall not relieve the Company of its obligations
hereunder except to the extent that the Company is actually and materially and
adversely prejudiced by such failure to notify. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel; (ii) the Company shall have failed promptly to
assume the defense of such proceeding and to employ counsel reasonably
satisfactory to such Indemnified Person in such proceeding; or (iii) in the
reasonable judgment of counsel to such Indemnified Person, representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. The Company shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned. Without the prior written consent of the Indemnified Person, which
consent shall not be unreasonably withheld, delayed or conditioned, the Company
shall not effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Person
from all liability arising out of such proceeding.

 

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6.          Transfer Restrictions.

 

6.1.          Transfer or Resale. Each Investor understands that:

 

Except as provided in the Registration Rights Agreement, the sale or resale of
all or any portion of the Securities has not been and is not being registered
under the Securities Act or any applicable state securities laws, and all or any
portion of the Securities may not be transferred unless:

 

(a)          the Securities are sold pursuant to an effective registration
statement under the Securities Act;

 

(b)          the Investor shall have delivered to the Company a customary
opinion of counsel that shall be in form, substance and scope reasonably
acceptable to the Company, to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration;

 

(c)         the Securities are sold or transferred to an “affiliate” (as defined
in Rule 144 (or any successor rule) as promulgated under the Securities Act
(“Rule 144”)) of the Investor who agrees to sell or otherwise transfer the
Securities only in accordance with this Section 6.1 and who is an Accredited
Investor;

 

(d)         the Securities are sold pursuant to Rule 144; or

 

(e)         the Securities are sold pursuant to Regulation S (or any successor
rule) as promulgated under the Securities Act (“Regulation S”);

 

and, in each case, the Investor shall have delivered to the Company, at the cost
of the Investor, a customary opinion of counsel, in form, substance and scope
reasonably acceptable to the Company. Notwithstanding the foregoing or anything
else contained herein to the contrary, the Securities may be pledged as
collateral in connection with a bona fide margin account or other lending
arrangement.

 

7.          Conditions to Closing of the Investors.

 

The obligation of each Investor hereunder to purchase the Units at the Closing
is subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for each Investor’s
sole benefit and may be waived by such Investor at any time in its sole
discretion by providing the Company with prior written notice thereof:

 

7.1         Representations, Warranties and Covenants. The representations and
warranties of the Company shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though originally made at
that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct in all material respects as of such date),
and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.

 

7.2           Consents. The Company shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities.

 

7.3         Delivery by Company. The Company shall have duly executed and
delivered to each Investor (a) each of the other Transaction Documents; (b)a
certificate evidencing the number of shares of Common Stock as is set forth on
the signature page hereby being purchased by such Investor at the Closing
pursuant to this Agreement; and (c) the Warrants relating to such shares (i.e.,
a Warrant for one share of the Company’s Common Stock for every share of Common
Stock purchased in the offering). The foregoing notwithstanding, the Investor
acknowledges that no Securities will be issued until the final Closing.

 

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7.5           No Material Adverse Effect. Since the date of first execution of
this Agreement, no event or series of events shall have occurred that reasonably
would have or result in a Material Adverse Effect.

 

7.6           No Prohibition. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

 

7.7           Other Documents. The Company shall have delivered to such Investor
such other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as the Placement Agent, such Investor or its
counsel may reasonably request.

 

8.             Conditions to Closing of the Company.

 

The obligations of the Company to effect the transactions contemplated by this
Agreement with each Investor are subject to the fulfillment at or prior to each
Closing Date of the conditions listed below.

 

8.1.         Representations and Warranties. The representations and warranties
made by such Investor in Section 3 shall be true and correct in all material
respects at the time of Closing as if made on and as of such date, and the
Investor shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Investor at or prior to the Closing Date.

 

8.2           Corporate Proceedings. If the Investor is an entity, all corporate
and other proceedings required to be undertaken by such Investor in connection
with the transactions contemplated hereby shall have occurred and all documents
and instruments incident to such proceedings shall be reasonably satisfactory in
substance and form to the Company.

 

8.3           Delivery by the Investor. The Investor shall have duly executed
and delivered to the Company (a) each of the other Transaction Documents and the
Investor Questionnaire and (b) the purchase price.

 

8.4           No Prohibition. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

 

8.5         Other Documents. The Investor shall have delivered to the Company
such other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as the Company or its counsel may reasonably
request.

 

9              Miscellaneous.

 

9.1.          Compensation of Placement Agent. Each Investor acknowledges that
it is aware that the Placement Agent will receive from the Company, in
consideration for its services as financial advisor and placement agent in
respect of the transactions contemplated hereby: (a) a commission success fee
equal to 10% of the Purchase Price of the Units sold at each Closing, payable in
cash; (b) a non-accountable expense allowance equal to 3% of the Purchase Price
of the Units sold at each Closing, less the $20,000 advance previously delivered
by the Company in respect of same, payable in cash; and (c) five-year warrants
to purchase such number of units equal to 15% of the number of Units sold in
this offering, at an exercise price equal to the $1.25 per unit. In addition,
the Placement Agent received a right of first refusal to participate as
placement agent or managing underwriter in any subsequent financings of equity
or debt securities by the Company (if a placement agent or underwriter is to be
used in such financing) for 12 months following the last Closing hereunder if
the Placement Agent raises at least $3,000,000 in this offering from investors
first introduced to the Company by the Placement Agent. The executed placement
agent agreement between the Company and the Placement Agent, a copy of which is
available to the Investor upon request, contains additional rights and terms not
enumerated herein.

 

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9.2.          Rule 506(e) of Regulation D Disclosure. Each Investor acknowledges
that it is aware that the Managing Partner in the Paulson Investment Company,
LLC’s New York office, Robert J. Setteducati, entered into a final settlement
with the Massachusetts Securities Division in 2001 pursuant to which he agreed,
among other things, never to seek to register with the Massachusetts Securities
Division in any capacity. The settlement resolved allegations by the
Massachusetts Securities Division that Mr. Setteducati failed to adequately
supervise employees at a prior brokerage firm.

 

9.3           Notices. All notices, requests, demands and other communications
provided in connection with this Agreement shall be in writing and shall be
deemed to have been duly given at the time when hand delivered, delivered by
express courier, or sent by facsimile (with receipt confirmed by the sender’s
transmitting device) in accordance with the contact information provided below
or such other contact information as the parties may have duly provided by
notice.

 

The Company:

With a copy to:

 

    QPAGOS Corporation Gracin & Marlow, LLP Paseo de la Reforma 404 Piso 15 PH
405 Lexington Avenue, 26th Floor Col. Juárez, Del. Cuauhtémoc New York, New York
10174 México, D.F. C.P. 06600 Attention: Leslie Marlow, Esq. Attention: Gaston
Pereira Telephone: (212) 907-6457 Telephone: Facsimile: (212) 208-4657
Facsimile:  

 

The Investors:

 

As per the contact information provided on the signature pages hereof.

 

The Placement Agent With a copy to:     Paulson Investment Company, LLC Murphy &
Weiner, P.C. 1001 SW 5th Avenue, Suite 1460 430 Cambridge Avenue, Suite 100
Portland, OR 97204 Palo Alto, CA 94306 Telephone: (503) 243-6000 Attention:
Debra K. Weiner, Esq. Facsimile: (503) 248-2391 Telephone: (650) 218-9818  
Facsimile: (650) 323-1108

 

9.4         Survival of Representations and Warranties. Each party hereto
covenants and agrees that the representations and warranties of such party
contained in this Agreement shall survive the Closing. Each Investor shall be
responsible only for its own representations, warranties, agreements and
covenants hereunder.

 

9.5         Confidentiality After the Date Hereof. Each Investor, severally and
not jointly with the other Investors, covenants that until such time as the
transactions contemplated by this Agreement and such other material non-public
information related to the Company in possession of the Investor are publicly
disclosed by the Company, such Investor will maintain the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

 

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9.6           Entire Agreement. This Agreement contains the entire agreement
between the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter contained herein.

 

9.7           Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and, except for: (i) Persons entitled to indemnification pursuant to
Section 5.1; (ii) the Placement Agent and its designees, successors and assigns;
and (iii) other registered broker-dealers, if any, who are specifically agreed
to be and acknowledged by each party as third party beneficiaries hereof, is not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

9.8           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 any Investor shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.

 

Notwithstanding the foregoing, but subject to the provisions of Section 6.1
hereof, any Investor may, without the consent of the Company, assign its rights
hereunder to any Person that purchases Units or the shares or warrants included
therein or issuable upon exercise thereof in a private transaction from an
Investor or to any of its “affiliates,” as that term is defined under the
Exchange Act or any subsequent Person acquiring such Units or shares in
accordance herewith.

 

9.9         Binding Effect; Benefits. This Agreement and all the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns; nothing in this Agreement,
expressed or implied, is intended to confer on any Persons other than the
parties hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.

 

9.10         Amendment; Waivers. All modifications, amendments or waivers to
this Agreement shall require the written consent of each of (i) the Company and
(ii) a majority-in-interest of the Investors (based on the number of Units
purchased hereunder).

 

9.11         Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without giving effect to
the conflict of law provisions thereof, and the parties hereto.

 

9.12         Arbitration. Each Investor and the Company agree that they shall
resolve all disputes, controversies and differences which may arise between
them, out of or in relation to or in connection with this Agreement, after
discussion in good faith attempting to reach an amicable solution. Provided that
such disputes, controversies and differences remain unsettled after discussion
between the parties, both parties agree that those unsettled matter(s) shall be
finally settled by arbitration in New York, New York in accordance with the
latest Rules of the American Arbitration Association. Such arbitration shall be
conducted by three arbitrators appointed as follows: each party will appoint one
arbitrator and the appointed arbitrators shall appoint a third arbitrator. If
within 30 days after confirmation of the last appointed arbitrator, such
arbitrators have failed to agree upon a chairman, then the chairman will be
appointed by the American Arbitration Association. The decision of the tribunal
shall be final and may not be appealed. The arbitral tribunal may, in its
discretion award fees and costs as part of its award. Judgment on the arbitral
award may be entered by any court of competent jurisdiction, including any court
that has jurisdiction over either party or any of their assets. At the request
of any party, the arbitration proceeding shall be conducted in the utmost
secrecy subject to a requirement of law to disclose. In such case, all
documents, testimony and records shall be received, heard and maintained by the
arbitrators in secrecy, available for inspection only by any party and by their
attorneys and experts who shall agree, in advance and in writing, to receive all
such information in secrecy.

 

 15 

 

 

9.13         Further Assurances. Each party hereto shall do and perform or cause
to be done and performed all such further acts and shall execute and deliver all
such other agreements, certificates, instruments and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 

9.14         Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile, which shall be deemed an original.

 

IN WITNESS WHEREOF, the undersigned Investors and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first above
written.

 

  QPAGOS CORPORATION             By:       Name: Gaston Pereira     Title:
President and Chief Executive Officer  

 

INVESTORS:

 

The Investors executing the Signature Page in the form attached hereto as Annex
A and delivering the same to the Company or its agents shall be deemed to have
executed this Agreement and agreed to the terms hereof.

 

 16 

 

 

Annex A
Securities Purchase Agreement
Investor Counterpart Signature Page

 

The undersigned, desiring to: (i) enter into this Securities Purchase Agreement
dated as of May __, 2015 (the “Agreement”), with the undersigned, QPAGOS
Corporation, a Delaware corporation (the “Company”), in or substantially in the
form furnished to the undersigned and (ii) purchase the number of Units as set
forth below, hereby agrees to purchase the Units from the Company as of the
Closing and further agrees to join the Agreement as a party thereto, with all
the rights and privileges appertaining thereto, and to be bound in all respects
by the terms and conditions thereof. The undersigned specifically acknowledges
having read the representations in the Agreement section entitled
“Representations, Warranties and Acknowledgments of the Investors,” and hereby
represents that the statements contained therein are complete and accurate with
respect to the undersigned as an Investor.

 

All Investors: Name of Investor:       Address:   If an entity:

 

  Print Name of Entity:           By:   Name:   Title:

 

    If an individual: Telephone No.:           Print Name:   Facsimile No.:    
      Signature:           Email Address:   If joint individuals:          
Print Name:               Signature:  

 

The Investor hereby elects to purchase ____________ Units (each Unit consisting
of one share of Common Stock and one five-year Warrant exercisable at an
exercise price of $1.25 per share entitling the holder to purchase one share of
Common Stock) at a purchase price of $1.25 per Unit under the Securities
Purchase Agreement for a total Purchase Price of $__________ (to be completed by
Investor).

 

 1