forth herein below, the parties hereto hereby agree as follows:
1.
THE OFFERING.
(A)
PRIVATE OFFERING.
THE SECURITIES OFFERED BY THIS
AGREEMENT ARE BEING OFFERED IN A PRIVATE OFFERING (THE "OFFERING") OF 10%
CONVERTIBLE DEBENTURES IN THE AGGREGATE PRINCIPAL AMOUNT OF UP TO $3,000,000 IN
THE FORM ATTACHED HERETO AS EXHIBIT A (THE "DEBENTURES"), AND UP TO 750,000
SHARES OF THE COMPANY'S COMMON STOCK, PAR VALUE $0.0001 PER SHARE (THE
"SHARES").
THE DEBENTURES AND SHARES WILL BE SOLD IN UNITS (THE "UNITS") WITH
EACH UNIT COMPRISED OF $50,000 PRINCIPAL AMOUNT OF DEBENTURES AND 12,500 SHARES
AT A PURCHASE PRICE OF $50,000 (THE "PURCHASE PRICE") PER UNIT.
THE UNITS WILL
BE SOLD ON A REASONABLE "BEST EFFORTS" BASIS PURSUANT TO SECTION 4(2) OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND/OR RULE 506 OF
REGULATION D THEREUNDER.
THE DEBENTURES AND SHARES ARE HEREINAFTER REFERRED TO
COLLECTIVELY AS THE "SECURITIES." THE UNITS ARE BEING OFFERED SOLELY TO A
LIMITED NUMBER OF "ACCREDITED INVESTORS" AS THAT TERM IS DEFINED IN RULE 501(A)
OF THE SECURITIES ACT DURING AN OFFERING PERIOD (THE "OFFERING PERIOD")
COMMENCING NOVEMBER 16, 2012 AND TERMINATING NOT LATER THAN FEBRUARY 28, 2013,
UNLESS EXTENDED BY THE COMPANY IN ITS SOLE DISCRETION FOR UP TO AN ADDITIONAL
THIRTY-DAY PERIOD (THE "TERMINATION DATE").
THE OFFERING MAY BE TERMINATED BY
THE COMPANY AT ANY TIME IN ITS SOLE DISCRETION.
(B)
NO MINIMUM OFFERING AMOUNT.
FUNDS SHALL BE RELEASED TO THE
COMPANY UPON THE COMPANY'S EXECUTION OF THIS AGREEMENT AND THE COMPANY IS NOT
REQUIRED TO RAISE ANY MINIMUM AMOUNT OF PROCEEDS PRIOR TO EXECUTING THIS
AGREEMENT OR ANY SIMILAR AGREEMENT WITH OTHER INVESTORS AND OBTAINING SUCH
FUNDS.
BECAUSE THERE IS NO MINIMUM AMOUNT OF SUBSCRIPTIONS WHICH THE COMPANY
MUST RECEIVE BEFORE ACCEPTING FUNDS IN THE OFFERING, PURCHASER WILL NOT BE
ASSURED THAT THE COMPANY WILL HAVE SUFFICIENT FUNDS TO EXECUTE ITS BUSINESS PLAN
OR SATISFY ITS WORKING CAPITAL REQUIREMENTS AND WILL BEAR THE RISK THAT THE
COMPANY WILL BE UNABLE TO SECURE THE FUNDS NECESSARY TO MEET ITS CURRENT AND
ANTICIPATED FINANCIAL OBLIGATIONS.
1
(C)
PLACEMENT AGENT FEES.
THE COMPANY RESERVES THE RIGHT TO
PAY CASH FEES TO BROKER DEALERS REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED (THE "EXCHANGE ACT"), IN CONNECTION WITH THE SALE OF THE UNITS
IN AN AMOUNT UP TO SIX PERCENT (6%) OF THE PURCHASE PRICE OF SUCH UNITS.
(e)
Use
of Proceeds. Assuming the Company raises $3,000,000, the net
proceeds to the Company are estimated to be approximately $2,800,000 (after
deducting offering expenses and placement agent fees payable by the Company
estimated at $200,000).
The Company intends to use the net proceeds for general
working capital purposes.
2.
SALE AND PURCHASE OF SECURITIES.
(A)
PURCHASE AND SALE.
SUBJECT TO THE TERMS AND CONDITIONS
HEREOF, THE COMPANY AGREES TO SELL, AND PURCHASER IRREVOCABLY SUBSCRIBES FOR AND
AGREES TO PURCHASE, THE NUMBER OF UNITS SET FORTH ON THE SIGNATURE PAGE OF THIS
AGREEMENT AT A PURCHASE PRICE OF $50,000 PER UNIT. THE AGGREGATE