Document:

Unassociated Document

Exhibit 10.18

EMPLOYMENT AGREEMENT

This is an Employment Agreement ("Agreement") dated this 16th of March, 2011, by and between MedPro Safety Products, Inc., a Nevada corporation, ("Company"), and Carsie Garyen Denning, presently residing in Lexington, Kentucky ("Executive").

RECITALS

	
A.

	
Whereas, Company presently employs Executive and Executive and Company now desire to enter into this Agreement to reflect the terms and conditions of Executive’s continued employment with Company as its Executive Vice President; and

	
B.

	
Whereas, Executive desires to accept such continued employment on the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the foregoing and of the covenants and conditions herein contained, the parties hereto agree as follows:

1.           Employment.  Company hereby agrees to continue to employ Executive, and Executive hereby accepts such continued employment by Company, upon the terms and conditions set forth in this Agreement.

 

2.           Term.  The term of this Agreement shall be the thirty-six (36) consecutive month year period commencing January 1, 2011 (“Effective Date”), and ending on December 31, 2013 (the “Term”), unless terminated sooner pursuant to Paragraphs 9 and 10 below. After the Term, this Agreement shall be automatically renewed for additional twelve (12) consecutive month periods (the “Additional Term(s)”), unless Company or Executive provides prior written notice of its or his intention for this Agreement not to be renewed, which written notice shall be provided not less than thirty (30) days prior to the expiration of the Term or any Additional
Term.  Any reference to Term herein shall include the initial Term and any Additional Term unless expressly provided to the contrary.

 

3.           Duties.  During the Term, Executive shall hold the position of Executive Vice President for Company and such other affiliates as requested by Company.  Provided, however, Company may alter the title and position held by Executive at any time, in its sole and absolute discretion.  Executive shall perform the duties customary for that position or any other position held by Executive, and such other duties as Company may from time to time reasonably assign to him.  Executive agrees to use his best efforts for the benefit of Company and its affiliates, and throughout the Term shall devote his entire time, attention, and energies to the business
of Company and its affiliates.  Executive shall not, without Company's prior written consent, engage in other business activities during the Term; provided, Executive may invest his assets in such form or manner as will not be adverse to the interests or reputation of Company and will not require any services on his part in the operation of the affairs of the enterprises in which the investments are made.

 

4.           Compensation.  During the Term, Executive's compensation for duties performed under this Agreement shall consist of the following:

 

(a)           An Annual Base Salary of One Hundred and Eighty-Five Thousand and no/100 Dollars ($185,000.00) (“Annual Base Salary”), to be paid in accordance with the customary payroll practices of Company at such times as the CEO or Board of Directors of Company may determine, with any increases as determined by the CEO or Board of Directors of Company in its sole and absolute discretion.

 

(b)           Annual bonus compensation of up to 70% of Executive’s Annual Base Salary, as the CEO or Board of Directors of Company may determine in its sole and absolute discretion.

 

(c)           Company shall withhold from any such amounts payable to Executive any applicable social security, federal, state or local taxes.

 

  

  

  

 

5.           Employee Benefits.  During the Term, Executive shall be eligible for the following benefits:

 

(a)           Executive shall be entitled to participate in employee benefit plans, policies and practices sponsored by Company for the benefit of its employees, upon the same terms and conditions as other employees of Company, including vacation and holiday time; provided nothing in this Agreement shall affect Company’s right to amend, modify or otherwise terminate any such plans, policies and practices in its sole and absolute discretion.

 

(b)           Upon termination of Executive’s employment without “cause” (as defined below), Company shall pay or reimburse Executive for the premiums associated with continued medical coverage under Company’s medical plan should Executive elect to continue such coverage pursuant to the terms of the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended.

 

(c)           Company shall establish and maintain a stock option arrangement for its management group which shall grant Executive options to purchase stock pursuant to the terms and conditions of the arrangement.

 

6.           Reimbursement of Expenses.  Company shall reimburse Executive for all reasonable travel, entertainment, and similar expenses that Executive incurs in promoting the business of Company and its affiliates, subject to policies and directives from Company.

 

7.           Facilities.  Company shall provide Executive with an office, books, stenographic and technical help, and such other facilities, equipment, supplies and services as are suitable to his position and adequate for the performance of his duties.

 

8.           Confidentiality, Nonsolicitation and Noncompetition.

 

(a)           Disclosure of Information.  Executive acknowledges and agrees that Company’s operations, financial reports, customer information, strategic plan, salary and employee information, and other confidential information pertaining to Company’s operations and business affairs, as the same may exist from time-to-time, including but not limited to any information not generally known in the industry in which Company is or may be engaged, are valuable, special and unique assets of Company’s business, and Executive shall not (without Company’s prior written consent), either during Executive’s employment or thereafter, for any reason or purpose
whatsoever, disclose any such information to any person, firm, corporation, association, or other entity.  Company may protect this interest by seeking and obtaining a court injunction.

 

(b)           Return of Materials.  Executive agrees to deliver, within three (3) days after he is no longer affiliated with Company, any and all property of Company, including any Confidential Material (whether made, written or obtained by Executive or others) that is in his possession, custody or control.  Executive agrees that he shall retain no copies of such material.  For purposes of this Agreement, “Confidential Material” shall include, but not be limited to, any writing, computer data, photograph, or other written material or tangible thing, obtained by Executive as a consequence of or through his relationship with Company, and containing any
confidential information, including any information not generally known in the industry in which Company is or may be engaged.  This shall include, without limiting the generality of the foregoing, customer lists, price or fee lists, financial data, forms and manuals, procedures, instructions, records, computer programs, notes, notebooks, and all other material of a trade secret, proprietary, or confidential nature.

 

(c)           Nonsolicitation of Employees, Etc.  Executive hereby covenants and agrees that during the term of Executive’s employment with Company and throughout the Restricted Period, Executive will not, directly or indirectly, solicit, divert, induce, encourage or attempt to solicit, divert, induce or encourage any person who was any employee, agent, consultant, independent contractor, vendor, supplier or service provider of Company or its affiliates at the time of his termination of employment or within six (6) months prior to such termination of employment, to leave or reduce his or her employment, relationship or other arrangement with Company or any of its
affiliates.  Further, during the Restricted Period, Executive shall not directly or indirectly, on behalf of himself or another person or entity, hire, engage the services of, or attempt to hire or engage the services of, any person or entity who was an employee, agent, consultant, independent contractor, vendor, supplier or service provider of Company or its affiliates at the time of Executive’s termination of employment or within six (6) month prior to such termination.

 

  

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(d)           Nonsolicitation of Customers.  Executive hereby covenants and agrees that during the term of Executive’s employment with Company and throughout the Restricted Period, Executive will not, directly or indirectly, solicit, divert, induce, encourage or attempt to solicit, divert, induce or encourage any customer of Company or its affiliates at the time of his termination of employment or within six (6) months prior to such termination of employment, to terminate or reduce the customer’s relationship with Company or any of its affiliates.  Further, during the Restricted Period, Executive shall not directly or indirectly, on behalf of himself or another
person or entity, hire, provide products or services to any person or entity or engage the services of, or attempt to hire or engage the services of, any person or entity who was a customer of Company or its affiliates at the time of Executive’s termination of employment or within six (6) month prior to such termination.

 

(e)           Noncompetition.  Executive hereby covenants and agrees that during the Term of Executive’s employment with Company and throughout the Restricted Period, Executive will not, either directly or indirectly, in any capacity (including, but not limited to, in the capacity as an employer, employee, sole proprietor, principal, partner, member, officer, director, stockholder, consultant, agent, independent contractor or service provider (other than a minority shareholder or other equity interest holder of not more than 1% of a company whose equity interests are publicly traded on a nationally recognized stock exchange or over-the-counter)), on his own behalf or in the
service or on behalf of others, engage in, have any equity or profit interest in, advise, manage, or render or perform services to any business entity or individual engaged in business which is in competition with Company or its affiliates or provides products similar to those provided by Company or its affiliates within any country wherein Company or any of its affiliates has customers, an office, an operation, sells or markets their products or services.

 

(f)           Restricted Period.  For purposes of this Agreement, the “Restricted Period” shall mean the period ending on the later of, (i) the expiration of Executive’s Term of employment as set forth in this Agreement, or (ii) two (2) years after Executive terminates employment  with Company or any of its affiliates.  The running of the Restricted Period shall be tolled for any period during which Executive is in violation of the restrictions set forth herein.

 

(g)           Enforcement.  Executive acknowledges that the duties, obligations and restrictions imposed upon him in this Agreement are special, unique and of an extraordinary character, and that in the event of Executive’s breach or threatened breach of any portion of this Agreement, the damage to Company and its affiliates would be irreparable or could not be adequately measured in money damages.  Executive represents and further acknowledges that any breach or threatened breach of his duties, obligations and restrictions under this Agreement will cause Company and its affiliates immediate and irreparable injury, loss and damage before legal notice can be had upon
Executive, or his attorney, or before a judicial hearing can be held.  Therefore, Executive agrees that Company may protect its interest by seeking and obtaining specific performance or a court injunction (both temporary and permanent), in addition to any provable money damages, costs and reasonable attorneys fees, along with any other remedies they may have at law and equity, for any breach or threatened breach of the Agreement.  Executive also agrees that it is important for any prospective person or business entity entering into an arrangement with Executive which might be impacted by the restrictive covenants set forth herein to be made aware of this Agreement.  Accordingly, Executive further agrees to provide a copy of this Agreement to any person or business entity with whom he considers entering into any arrangement of any nature which would be impacted by this Agreement.   Should Executive fail to provide this information, Executive
further agrees that Company may forward a copy of this Agreement to any person or business entity entering into an arrangement of any nature with Executive which it believes would be impacted by this Agreement and Executive releases Company and its affiliates from any and all claimed liability or damage by virtue of such disclosure.  The provisions of this Paragraph 8 shall survive the termination of this Agreement for any reason, including but not limited to, the expiration of the Term.

 

9.           Death or Disability.  If during the Term, Executive dies or becomes unable to perform his duties hereunder because of “disability,” the Term shall be deemed to have ended and all obligations of Company under this Agreement shall cease immediately; provided Executive or his personal representative shall be entitled to be paid for services rendered up to the time of “disability” or death. Solely as used in this Paragraph, "disability" shall mean Executive's inability (as determined under the long-term disability plan maintained by Company, if applicable, or if not, by a physician mutually selected by the parties) due to illness or physical or mental
incapacity, to adequately and fully perform the duties that Executive was performing for Company when the disability began.  If at any time during the Term, the insurance carrier or administrator of Company’s long-term disability plan or, if applicable, the physician mutually agreed upon by Company and Executive makes a determination with respect to Executive's disability, that determination shall be final, conclusive, and binding upon Company, Executive, and their successors in interest.

 

  

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10.           Termination.  Company may terminate Executive for “cause,” which termination shall be immediate.  Upon such termination for “cause,” the Term shall be deemed to have ended and all obligations of Company under this Agreement shall cease immediately; provided, Executive shall be entitled to be paid for services rendered up to the time of actual termination.  Should Company terminate Executive other than for “cause,” Executive shall continue to be paid his Annual Base Salary (but no other amounts related to any employee benefit plans and no further accrual of vacation, sick or holiday time) until the end of that Term,
even though he is no longer working for Company, which payment shall be specifically conditioned upon and in exchange for any written releases deemed appropriate by Company.  After that Term shall have ended, all obligations of Company under the Agreement shall cease.  Should Executive terminate employment with Company for any reason, that Term shall be deemed to have ended immediately and all obligations of Company under this Agreement shall cease; provided, Company shall be entitled to damages if at least ninety (90) days prior written notice was not provided to Company by Executive.  For purposes of this Agreement, termination by Company of Executive's employment for "cause" shall mean termination upon (a) the willful and continued failure by Executive to perform his duties with Company; or (b) the willful engaging by Executive in misconduct demonstrably injurious to Company; (c) the willful engaging by Executive of fraud or dishonesty; (d) breach
of fiduciary duty involving personal profit; or (e) commission of any federal or state felony or criminal offense.  For purposes of this definition, no act, or failure to act, on Executive's part shall be considered "willful" unless done, or admitted to be done, by Executive not in good faith and without reasonable belief that Executive's action or omission was in the best interest of Company.  Any amounts due the Executive in connection with any unexpired term may be accelerated, without discount, at the discretion of the Executive, upon a change in control of the Company.  A change in control shall, for purposes of this paragraph, be defined as a change in ownership of 50% or more within a 12 month period as a result of a single transaction or a series of transactions with one or more related buyers or a consortium of buyers.  In addition, a change in control shall also include any sale, merger, consolidation or leveraged buyout of the Company
resulting in the Company no longer being public as a standalone company.  Executive shall be indemnified by the Company against any excise taxes (in connection with parachute payments) or additional taxes, other than ordinary income taxes, due to the acceleration of such payments.

 

11.           Resolution of Disputes and Governing Law.  Executive and Company agree that any dispute arising hereunder or out of any further relationship shall, at the option of Company, be resolved by the Fayette Circuit Court, Fayette County, Kentucky, or by binding arbitration in accordance with the rules adopted by the American Arbitration Association (except that such rules shall be modified so that any arbitration award shall be made no later than ninety (90) days after arbitrator(s) are appointed), with any such arbitration proceedings to take pace in Lexington, Kentucky.  If Company should elect to resolve a dispute in the Fayette Circuit Court, such court shall
have exclusive jurisdiction and Executive agree to and does hereby waive the right to a jury trial.  All parties agree that no party shall be entitled to, or recover for, consequential, punitive, exemplary or extraordinary damages.  This Agreement has been negotiated and executed in the Commonwealth of Kentucky and shall be construed and enforced in accordance  with the laws of that state.

 

12.           Parties Affected.  This Agreement shall inure to and shall be binding upon the parties hereto, the successors and assigns of Company, and the heirs and personal representatives of Executive.

 

13.           Notices.  All notices required to be given under the terms of this Agreement shall be in writing, shall be effective upon receipt, and shall be delivered to the addressee in person or mailed by certified mail, return receipt requested, to such person’s last known address as shown from Company’s records.

 

14.           Assignment.  The services to be rendered by Executive under this Agreement are unique and personal, and Executive may not assign any of his rights or delegate any of his duties under this Agreement.  Except as provided in the immediately preceding sen­tence, this Agreement shall benefit Executive and his heirs and per­sonal representatives.

 

  

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15.           Severability and No Violation.  If any provision of this Agreement or its application shall be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of all other applications of that provision and of all other provisions and applications hereof shall not in any way be affected or impaired and such invalid, illegal or unenforceable provision or applications thereof shall be modified to the extent necessary such that it and the Agreement shall then be enforced to the maximum extent allowed by applicable law. Executive represents that in signing this Agreement he will not violate any other agreement to which he is a party.

 

16.           Non-Waiver.  A delay or failure by either party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right.

 

17.           Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same Agreement.

 

18.           Entire Contract.  This Agreement constitutes the entire understanding and agreement between Company and Executive with regard to all matters herein and supersedes any prior agreements and discussions between the parties.  There are no other agreements, conditions or representations, oral or written, expressed or implied with regard thereto.  This Agreement may be amended only in writing, signed by both parties; provided, Company may amend the Agreement as necessary to avoid the Agreement being subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), and the regulations thereunder, or to comply with Section 409A of
the Code and the regulations thereunder if necessary.  Any further agreement of the parties on any matter, including matters unrelated to this Agreement, shall be binding and enforceable only if in writing, signed by both parties.

 

19.           Headings. The headings in this Agreement have been inserted solely for convenience of reference and shall not be considered in the interpretation or construction of this Agreement.

 

IN WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement as of the date set forth in the preamble hereto.

	 	MEDPRO SAFETY PRODUCTS, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ W. Craig Turner	 
	 	 	W. Craig Turner	 
	 	 	 
Chief Executive Officer

	 
	 	 	 	 
	 	 	 	 
	 	 
Executive:

	 
	 	 	 	 
	 	/s/ C. Garyen Denning	 

 

  

-5-SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (the “Agreement”) dated as of March 24, 2011, by and among American Scientific Resources, Incorporated, a Nevada corporation, with headquarters located at 1112 Weston Road, Unit 278, Weston Florida 33326 (the “Company”), and the purchaser identified on the signature page hereto (including its successors and assigns (the “Purchaser”).

 

WHEREAS, the Purchaser desires to purchase from the Company 15,000 shares of the Company’s Common Stock, par value $.0001 (the “Common Stock”), at a per share price of $0.30 (the “Shares”) for an aggregate purchase price of $4,500 as further described herein;

 

WHEREAS, in connection with the purchase of the Shares and additional cash consideration of $55,500, the Company will also issue Purchaser warrants to purchase up to 400,000 shares (“Warrant Shares”) of the Company’s common stock at $0.0001 per share (“Warrants”) in substantially the form attached hereto as Exhibit A;

 

WHEREAS, the Shares and Warrants are collectively referred to as the “Securities”;

 

WHEREAS, the Company desires that Purchaser purchase the Securities; and

 

NOW, THEREFORE, in consideration of the foregoing and on the basis of the respective representations, warranties, covenants, agreements, undertakings and obligations set forth herein, and intending to be legally bound hereby, the parties agree as follows:

 

ARTICLE 1

 

PURCHASE AND SALE OF THE SECURITIES; COVENANTS

1.1           Purchase and Sale of Securities.  Upon the terms and subject to the conditions set forth in this Agreement, the Company agrees to sell, assign, transfer and deliver to Purchaser and Purchaser hereby agrees to purchase at the Closing (as defined in Section 2) and accept delivery from the Company, the Shares and the Warrants free of all liens, pledges, mortgages, security interests, charges, restrictions, adverse claims or other encumbrances of any kind or nature whatsoever, for the consideration specified herein.

 

1.2           Transfer Restrictions.

 

(a)           The Securities may only be disposed of in compliance with state and federal securities laws.

 

(b)           The Purchaser agrees to the imprinting, so long as is required by this Section 1.2, of a legend on any of the Securities in the following form:

 

  

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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.

 

(c)           Certificates evidencing the Shares and Warrant Shares shall not contain any legend (i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Shares or Warrant Shares pursuant to Rule 144 under the Securities Act (“Rule 144”), (iii) if such Shares or Warrant 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 Shares and Warrant Shares and without volume or manner-of-sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities Act.  The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly if required by the Transfer Agent to effect the removal of the legend hereunder.  If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, or if such Shares or Warrant Shares may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144, or if the Shares or Warrant Shares may be sold 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 Shares or Warrant Shares or if such legend is not otherwise required under applicable requirements of the Securities Act then such Warrant Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three trading days following the delivery by the Purchaser to the Company or the Transfer Agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser 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 4.  Certificates for Securities subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser.

 

(d)           In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the volume weighted average price of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per trading day for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by this Agreement, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

  

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1.3           Furnishing of Information; Public Information.

 

(a)           Until the the time that the Purchaser owns no Securities, the Company covenants to make best reasonable efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all periodic reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

(b)           At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate purchase price of such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required  for the Purchasers to transfer the Shares and Warrant Shares pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein as “Public Information Failure Payments.”  Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) business day after the event or failure giving rise to the Public Information Failure Payments is cured.  In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

1.4           Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such information.  The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

1.5           Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the trading market on which it is currently listed, so long as the Purchaser owns any of the Securities, and concurrently with the Closing, if and to the extent required by such trading market to allow the Shares and Warrant Shares to be traded on such trading market, the Company shall apply to list or quote all of the Shares and Warrant Shares on such trading market and promptly secure the listing of all of the Shares and Warrant Shares on such trading market. The Company further agrees, if the Company applies to have the Common Stock traded on any other trading market, and the Purchaser owns any of the Shares or Warrant Shares at such time, it will then include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other trading market as promptly as possible. So long as the Purchaser owns any of the Securities, the Company will then take all action reasonably necessary to continue the listing or quotation and trading of its Common Stock on a trading market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the trading market.

 

  

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1.6           From the date hereof until such time as no Purchaser holds any Securities of the Company, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of Common Stock or securities convertible, exercisable, exchangeable or otherwise into Common Stock for cash consideration (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price.   Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding the foregoing, the Purchaser acknowledges and agrees that the Company is party to an equity purchase agreement, dated as of February 3, 2011, with Southridge Partners II, LP (as the same may be amended from to time, the “Southridge Purchase Agreement”), and any (i) sale of securities of the Company pursuant to or in connection with the Southridge Purchase Agreement, or (ii) entry by the Company into any amendment to the Southridge Purchase Agreement, shall not be deemed to be a violation or breach by the Company of any term or provision of this Agreement; provided, however, the Company agrees that it shall first use 100% of the net proceeds from any sale of securities pursuant to the Southridge Purchase Agreement towards the satisfaction and discharge in full of the $160,000 principal amount of 12% Secured Promissory Notes held by the Purchaser or its Affiliates.

 

ARTICLE 2

 

CLOSING

 

2.1           Closing.  As used herein the Closing Date shall mean the day when all conditions precedent to (i) the Purchaser’s obligations to purchase the Shares and Warrants and (ii) the Company’s obligations to issue the Shares and Warrants has been satisfied or waived. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell the Shares and the Warrants and the Purchaser agrees to purchase the Shares and the Warrants at an aggregate purchase price of $60,000. The closing of the purchase and sale of the Shares and Warrants is referred to herein as the “Closing”.

 

  

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The Closing shall occur on the date of this Agreement at the offices of Sichenzia Ross Friedman Ference LLP, New York, New York 10066, at 10:00 a.m., or at such other time and place as the parties may agree.

 

2.2           Deliveries.

 

(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchaser:

 

(i)   this Agreement duly executed by the Company;

 

(b)  On or prior to the Closing Date, the Purchaser shall deliver or cause  to be delivered to the Company:

 

(i)  this Agreement duly executed by the Purchaser; and

 

(ii) the amount of $60,000 which represents the aggregate purchase price for the Shares and Warrants by wire to the account specified in writing by the Company.

 

2.3         Closing Conditions

 

(a)             The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)          the accuracy in all material respects on the Closing Date of the representations and warranties of the Purchaser contained herein;

 

(ii)         the delivery by the Purchaser of the items set forth in Section 2.2 (b).

 

(b)           The obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)          the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein;

 

(ii)         all obligations, covenants and agreements of the Company required to be performed at or prior to the relevant Closing Date shall been performed;

 

(iii)        the delivery by the Company of the items set forth in Section 2.2 (a); and

 

(iv)        no Material Adverse Effect shall have occurred.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

3.           Representations and Warranties of the Company.  The Company represents and warrants to the Purchaser as follows:

 

  

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(a)           The Company is a corporation duly organized, validly existing, and in good standing under the laws of Nevada, and is qualified in no other state.

(b)           This Agreement has been duly executed and delivered by Company and constitutes the valid, binding and enforceable obligation of Company, subject to the applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and rights of stockholders.

(c)           All representations, covenants and warranties of the Company contained in this Agreement shall be true and correct on and as of the Closing date with the same effect as though the same had been made on and as of such date.

(d)           The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens imposed by the Company other than restrictions on transfer provided for in this Agreement.  The Warrant Shares, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, free and clear of all liens imposed by the Company other than restrictions on transfer provided for in this Agreement.  The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants.

(e)           Since the date of the latest audited financial statements included within the Company’s periodic reports filed with the Securities and Exchange Commission, there has been no event, occurrence or development that has had or that could reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (a “Material Adverse Effect”).

(f)           The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of the Company or any subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any subsidiary is a party or by which any property or asset of the Company or any subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

  

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ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

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

 

(a)  Authority.  This Agreement has been duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)  Own Account.  Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or any applicable state securities law and is acquiring the Securities as principal for Purchaser’s own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities  (this representation and warranty not limiting Purchaser’s right to sell the Securities pursuant to an effective registration statement  or otherwise in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law.

 

(c)  Purchaser Status.  At the time Purchaser was offered the Securities Purchaser was, and as of the date hereof, Purchaser is an “accredited investor” as defined in Rule 501(a) under the Securities Act.  Purchaser has (i) a preexisting personal or business relationship with the Company or one or more of its directors, officers or control persons or (ii) by reason of Purchaser’s business or financial experience Purchaser is capable of evaluating the risks and merits of this investment and of protecting Purchaser’s own interests in connection with an investment in the Securities.

 

(d)  Experience of Purchaser.  Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  Purchaser is able to bear the economic risk of an investment in the Securities, and, at the present time, is able to afford a complete loss of such investment.

 

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

 

  

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(f)  Receipt of Information.  Purchaser believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Securities.  Purchaser further represents that through its representatives it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and the business, properties and financial condition of the Company and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to it or to which it had access.  The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 3 of this Agreement or the right of Purchaser to rely thereon.

ARTICLE 5

 

MISCELLANEOUS

 

5.1           Delivery of Securities.  Within five days of the Closing the Company shall deliver to the Purchaser certificate representing the Shares and Warrants purchased pursuant to this Agreement.

 

5.2           Further Assurances By its signature hereto, each party consents and agrees to all of the transactions contemplated hereby.  Each party hereto shall execute, deliver, file and record any and all instruments, certificates, agreements and other documents, and take any and all other actions, as reasonably requested by any other party hereto in order to consummate the transactions contemplated hereby and, in the case of the Company, to ensure that Purchaser receive in full the benefits of the equity interests to which they are entitled hereby.

 

5.3           Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given or made if (i) sent by registered or certified mail, return receipt requested, postage prepaid, (ii) hand delivered, (iii) sent by prepaid overnight carrier, with a record of receipt or (iv) sent by facsimile (with confirmation of receipt), to the parties at the following address (or at such other addresses as shall be specified by the parties by like notice):

 

(i)           To the Company:

American Scientific Resources, Incorporated

1112 Weston Road, Unit 278

Weston, Florida, 33326

Fax: (954) 659-3412

Attention:  Dr. Christopher Tirotta

With a copy to:

Sichenzia Ross Friedman Ference LLP

61 Broadway

New York 10006

Fax:  (212) 930-9725

Attention:  David B. Manno, Esq.

(ii)          To Purchaser:

Granite Financial Group, LLC

47 Palmitas Street

Suite 100

Solana Beach, CA  92075

 

  

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Each notice or other communication shall be deemed to have been given on the date received.

 

5.4         Entire Agreement.  This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof.

5.5         Headings.  The section and other headings contained in this Agreement are for reference purposes only and shall not be deemed to be a part of this Agreement or to affect the meaning or interpretation of this Agreement.

5.6         Counterparts.  This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

5.7         Governing Law and Jurisdiction.  This Agreement and all issues arising out of this Agreement will be governed by and construed solely and exclusively under and pursuant to the laws of the State of New York as applied to agreements among New York residents entered into and to be performed entirely within New York. Any action brought concerning the transactions contemplated by this Agreement shall be brought only in the civil or state courts of New York or in the federal courts located in the State of New York.  The parties executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the jurisdiction of such courts.

5.8          Severability.  If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term and provision of the Agreement shall be valid and enforced to the fullest extent permitted by law.

5.9          Adjustment of Conversion and Exercise Price.  The Company, the Purchaser and Granite Financial Group, LLC acknowledge and agree that, notwithstanding any provision of any warrant, note or debenture held by Purchaser or Granite  Financial Group, LLC as of the date hereof, the exercise and conversion prices of any such warrants, notes, debentures or other convertible securities held by Purchaser or Daniel Schreiber SEP IRA as of the date hereof, in connection with the issuance of the Shares and the Warrants, are hereby reduced, and only reduced, to equal $0.30, subject to adjustment for reverse and forward stock splits and the like, and the number of shares of Common Stock issuable thereunder shall be proportionally adjusted to maintain the same aggregate exercise price (in the case of warrants) as prior to the adjustments.  This adjustment shall be effective immediately upon the execution of this Agreement without any further action required by the Company, Purchaser or Daniel Schreiber SEP IRA, provided that upon the request of a holder the Company shall promptly issue new certificates evidencing such adjustment.

5.10       Amendments.  This Agreement may not be modified or changed except by an instrument or instruments in writing executed by the parties hereto.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above

 

  

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THE COMPANY:

	  	
AMERICAN SCIENTIFIC RESOURCES, INCORPORATED

	  	
By:

	
/s/ Christopher F. Tirotta, MD , MBA

	  	
Name:  Christopher F. Tirotta, MD, MBA

	  	
Title:  CEO/Chairman

	  	
PURCHASER:

	  	  
	  	
DANIEL SCHRIEBER SEP IRA

	  	  
	  	
By:

	
/s/ Daniel Schreiber

	  
	  	
Name:  /s/ Daniel Schreiber

	  	
Title:  IRA

	  	  
	  	
Solely with respect to Section 5.9:

	  	  
	  	
GRANITE FINANCIAL GROUP, LLC

	  	  
	  	
By:

	
/s/ Daniel Schreiber

	  
	  	
Name:  /s/ Daniel Schreiber

	  	
Title: Pres/CEO

  

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