Document:

Exhibit 4.1

 

ADOBE SYSTEMS INCORPORATED

 

Officer’s Certificate

 

January 26, 2015

 

Reference is made to the Indenture dated as of January 25, 2010 (the “Indenture”) by and between Adobe Systems Incorporated (the “Issuer”) and Wells Fargo Bank, National Association, as trustee (the “Trustee”).  The Trustee is the trustee for any and all securities issued under the Indenture.  Pursuant to Section 2.01 and Section 2.03 of the Indenture the undersigned officer does hereby certify, in connection with the issuance of $1,000,000,000 aggregate principal amount of 3.250% Notes due 2025 (the “Notes”), that the terms of the Notes are as follows:

 

Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Indenture.

 

Notes

 

	
Title:
    	
 
    	
3.250%   Notes due 2025
    
	
 
    	
 
    	
 
    
	
Issuer:
    	
 
    	
Adobe   Systems Incorporated
    
	
 
    	
 
    	
 
    
	
Trustee,   Registrar, Transfer Agent, Authenticating Agent, and Paying Agent:
    	
 
    	
Wells   Fargo Bank, National Association
    
	
 
    	
 
    	
 
    
	
Aggregate   Principal Amount at Maturity:
    	
 
    	
$1,000,000,000
    
	
 
    	
 
    	
 
    
	
Principal   Payment Date:
    	
 
    	
February 1,   2025
    
	
 
    	
 
    	
 
    
	
Interest:
    	
 
    	
3.250%   per annum
    
	
 
    	
 
    	
 
    
	
Date   from which Interest will Accrue:
    	
 
    	
January 26,   2015
    
	
 
    	
 
    	
 
    
	
Interest   Payment Dates:
    	
 
    	
February 1   and August 1, commencing on August 1, 2015
    
	
 
    	
 
    	
 
    
	
Redemption:
    	
 
    	
The   Issuer may at its option redeem the Notes in whole or in part, at any time or   from time to time prior to their maturity, on at least 30 days, but not more   than 60 days, prior notice mailed to the registered address of each holder of   the Notes, at a redemption price, calculated by the Issuer, equal to the   greater of:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i)            100% of the principal amount of   the
    

 

 

	
 
    	
 
    	
Notes   being redeemed; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii)           the sum of the present values of   the remaining scheduled payments of principal and interest thereon (exclusive   of interest accrued as of the date of redemption) discounted to the   redemption date on a semiannual basis (assuming a 360-day year consisting of   twelve 30-day months) of the Notes being redeemed at the Treasury Rate (as   defined in the Notes) plus 25 basis points,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
plus,   in each case, accrued and unpaid interest thereon to, but excluding, the date   of redemption.

 

On   or after November 1, 2024, the Issuer may redeem the Notes in whole or   in part at a redemption price equal to 100% of the principal amount thereof   plus accrued and unpaid interest to, but excluding, the date of redemption.
    
	
 
    	
 
    	
 
    
	
Change   of Control Triggering Event:
    	
 
    	
Upon   the occurrence of a Change of Control Triggering Event (as defined in the   form of Notes attached hereto as Exhibit A),   the Issuer will be required to make an offer to purchase the Securities at a   price equal to 101% of their principal amount plus accrued and unpaid   interest to the date of purchase.
    
	
 
    	
 
    	
 
    
	
Conversion:
    	
 
    	
None
    
	
 
    	
 
    	
 
    
	
Sinking   Fund:
    	
 
    	
None
    
	
 
    	
 
    	
 
    
	
Denominations:
    	
 
    	
$2,000   and multiples of $1,000 thereafter
    
	
 
    	
 
    	
 
    
	
Miscellaneous:
    	
 
    	
The   terms of the Notes shall include such other terms as are set forth in the   form of Notes attached hereto as Exhibit A   and in the Indenture.
    

 

Subject to the representations, warranties and covenants described in the Indenture, as amended or supplemented from time to time, the Issuer shall be entitled, subject to authorization by the Board of Directors of the Issuer and an Officer’s Certificate, to issue additional notes from time to time under each series of notes issued hereby.  Any such additional notes shall have identical terms as the Notes issued on the issue date, other than with respect to the date of issuance and the issue price (together the “Additional Notes”).  Any Additional Notes will be issued in accordance with Section 2.03 of the Indenture.

 

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Such officer has read and understands the provisions of the Indenture and the definitions relating thereto.  The statements made in this Officer’s Certificate are based upon the examination of the provisions of the Indenture and upon the relevant books and records of the Issuer.  In such officer’s opinion, such officer has made such examination or investigation as is necessary to enable such officer to express an informed opinion as to whether or not the covenants and conditions of such Indenture relating to the issuance and authentication of the Notes have been complied with.  In such officer’s opinion, such covenants and conditions have been complied with.

 

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IN WITNESS WHEREOF, the undersigned officer of the Issuer has duly executed this certificate as of the date first set forth above.

 

	
 
    	
ADOBE   SYSTEMS INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Mark   Garrett
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President and Chief Financial Officer
    

 

[Signature page to Officer’s Certificate pursuant to the Indenture]

 

 

EXHIBIT A

 

[FORM OF NOTES DUE 2025]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.

 

TRANSFERS OF THIS NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

 

ADOBE SYSTEMS INCORPORATED

3.250% Notes due 2025

 

	
No. 1
    	
 
    	
CUSIP No.: 00724F AC5
    
	
 
    	
 
    	
ISIN No.: US0072FAC59
    

 

$[·],000,000

 

ADOBE SYSTEMS INCORPORATED, a Delaware corporation (the “Issuer”), for value received promises to pay to CEDE & CO. or registered assigns the principal sum of [·] MILLION DOLLARS on February 1, 2025.

 

Interest Payment Dates: February 1 and August 1 (each, an “Interest Payment Date”), commencing on August 1, 2015.

 

Interest Record Dates: January 15 and July 15 (each, an “Interest Record Date”).

 

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

 

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officer.

 

	
 
    	
ADOBE   SYSTEMS INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Mark   Garrett
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President and Chief Financial Officer
    

 

	
[Seal of Adobe Systems Incorporated]
    	
 
    
	
 
    	
 
    
	
Attest:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
[·]
    	
 
    
	
 
    	
Title:
    	
[·]
    	
 
    

 

 

This is one of the Notes of the series designated herein and referred to in the within-mentioned Indenture.

 

	
Dated:   January 26, 2015
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK,
    
	
 
    	
NATIONAL   ASSOCIATION,
    
	
 
    	
as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

2

 

(REVERSE OF NOTE)

 

ADOBE SYSTEMS INCORPORATED

3.250% Notes due 2025

 

1.                                      Interest.

 

Adobe Systems Incorporated (the “Issuer”) promises to pay interest on the principal amount of this Note at the rate per annum described above.  Cash interest on the Notes will accrue from the most recent date to which interest has been paid; or, if no interest has been paid, from January 26, 2015.  Interest on this Note will be paid to but excluding the relevant Interest Payment Date.  The Issuer will pay interest semi-annually in arrears on each Interest Payment Date, commencing August 1, 2015.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months in a manner consistent with Rule 11620(b) of the FINRA Uniform Practice Code.

 

The Issuer shall pay interest on overdue principal from time to time on demand at the rate borne by the Notes and on overdue installments of interest (without regard to any applicable grace periods) to the extent lawful.

 

2.                                      Paying Agent.

 

Initially, Wells Fargo Bank, National Association (the “Trustee”) will act as paying agent.  The Issuer may change any paying agent without notice to the Holders.

 

3.                                      Indenture; Defined Terms.

 

This Note is one of the 3.250% Notes due 2025 (the “Notes”) issued under an indenture dated as of January 25, 2010 (the “Base Indenture”) by and between the Issuer and the Trustee, and established pursuant to an Officer’s Certificate dated January 26, 2015, issued pursuant to Section 2.01 and Section 2.03 thereof (together, the “Indenture”).  This Note is a “Security” and the Notes are “Securities” under the Indenture.

 

For purposes of this Note, unless otherwise defined herein, capitalized terms herein are used as defined in the Indenture.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the “TIA”) as in effect on the date on which the Indenture was qualified under the TIA.  Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture and the TIA for a statement of them.  To the extent the terms of the Indenture and this Note are inconsistent, the terms of the Indenture shall govern.

 

4.                                      Denominations; Transfer; Exchange.

 

The Notes are in registered form, without coupons, in denominations of $2,000 and multiples of $1,000 thereafter.  A Holder shall register the transfer or exchange of Notes in accordance with the Indenture.  The Issuer may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental

 

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charges payable in connection therewith as permitted by the Indenture.  The Issuer need not issue, authenticate, register the transfer of or exchange any Notes or portions thereof for a period of fifteen (15) days before the mailing of a notice of redemption, nor need the Issuer register the transfer or exchange of any Note selected for redemption in whole or in part.

 

5.                                      Amendment; Supplement; Waiver.

 

Subject to certain exceptions, the Notes and the provisions of the Indenture relating to the Notes may be amended or supplemented and any existing default or Event of Default or compliance with certain provisions may be waived with the written consent of the Holders of at least a majority in aggregate principal amount of all series of Outstanding Securities (including the Notes) under the Indenture that are affected by such amendment, supplement or waiver (voting together as a single class).  Without notice to or consent of any Holder, the parties thereto may amend or supplement the Indenture and the Notes to, among other things, cure any ambiguity, omission, defect or inconsistency or comply with any requirements of the Commission in connection with the qualification of the Indenture under the TIA, or make any other change that does not adversely affect the rights of any Holder of a Note in any material respect.

 

6.                                      Redemption.

 

The Issuer may at its option redeem any of the Notes in whole or in part at any time, each at a redemption price calculated by the Issuer equal to the greater of:

 

(i)             100% of the principal amount of the Notes to be redeemed; and

 

(ii)          the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus [·] basis points, plus in each case accrued and unpaid interest thereon to, but excluding, the date of redemption.

 

On or after November 1, 2024, the Issuer may redeem any of the Notes in whole or in part at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the date of redemption.

 

Notwithstanding the foregoing, installments of interest on Notes that are due and payable on interest payment dates falling on or prior to a redemption date will be payable on the interest payment date to the registered Holders as of the close of business on the relevant record date according to the Notes and the Indenture.

 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.

 

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“Comparable Treasury Price” means, with respect to any redemption date, (i) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Quotation Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations, or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation.

 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

 

“Reference Treasury Dealer” means (i) Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and RBS Securities Inc. (or their respective affiliates that are Primary Treasury Dealers) and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the Issuer will substitute therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Issuer.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

 

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of the Notes to be redeemed.  Unless the Issuer defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption.  If less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected by lot by the Depositary, in the case of Notes represented by a Global Note, or by the Trustee by a method the Trustee deems to be fair and appropriate, in the case of Notes that are not represented by a Global Note.

 

7.                                      Change of Control Triggering Event.

 

If a Change of Control Triggering Event (as defined below) occurs, unless the Issuer shall have exercised its right to redeem the Notes as described above, the Issuer shall be required to make an offer to each Holder of Notes to purchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided that after giving effect to the purchase, any Notes that remain outstanding shall have a denomination of $2,000 and integral multiples of $1,000 above that amount.

 

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Within 30 days following the date upon which the Change of Control Triggering Event has occurred or, at the Issuer’s option, prior to any Change of Control (as defined below), but after the public announcement of the transaction that constitutes or may constitute the Change of Control, except to the extent that the Issuer shall have exercised its right to redeem the Notes pursuant to Section 6 hereof the Issuer shall mail a notice (a “Change of Control Offer”) to each Holder with a copy to the trustee describing the transaction or transactions that constitute or may constitute a Change of Control Triggering Event and offering to purchase Notes on the date specified in the notice, which date will be no earlier than 30 days nor later than 60 days from the date such notice is mailed (other than as may be required by law) (such date, the “Change of Control Payment Date”). The notice will, if mailed prior to the date of consummation of the Change of Control, state that the Change of Control Offer is conditioned on the Change of Control being consummated on or prior to the Change of Control Payment Date specified in the notice.

 

On each Change of Control Payment Date, the Issuer shall, to the extent lawful:

 

·                  accept for payment all Notes or portions of the Notes properly tendered pursuant to the applicable Change of Control Offer;

 

·                  deposit with the paying agent an amount equal to the change of control payment in respect of all Notes or portions of Notes properly tendered pursuant to the applicable Change of Control Offer; and

 

·                  deliver or cause to be delivered to the trustee the Notes properly accepted together with an officers’ certificate stating the aggregate principal amount of Notes or portions of Notes being purchased.

 

The Trustee shall promptly mail, or cause the paying agent to promptly mail, to each Holder of Notes so tendered the payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any.

 

The Issuer shall comply, to the extent applicable, with the requirements of Rule 14(e)-1 of the Exchange Act and any other securities laws or regulations in connection with the purchase of Notes pursuant to a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the terms described in the Notes, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations by virtue thereof.

 

Holders of Notes electing to have Notes purchased pursuant to a Change of Control Offer will be required to surrender their Notes, with the form entitled “Purchase Exercise Notice Upon a Change of Control Triggering Event” on the reverse of the Note completed, to the paying agent at the address specified in the notice, or transfer their Notes to the paying agent by book-entry transfer pursuant to the applicable procedures of the paying agent, prior to the close of business on the third business day prior to the Change of Control Payment Date.

 

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The Issuer shall not be required to make a Change of Control Offer if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer and such third party purchases all Notes properly tendered and not withdrawn under its offer.

 

In addition, the Issuer shall not purchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other than a default in the payment of the change of control payment upon a Change of Control Triggering Event.

 

If Holders of not less than 95% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer, as described above, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuer shall have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase at a redemption price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption (subject to the right of Holders of record on a record date to receive interest on the relevant interest payment date).

 

For purposes of the Change of Control Offer provisions of the Notes, the following definitions are applicable:

 

“Change of Control” means the occurrence of any one of the following:

 

(a)                                 the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Issuer’s assets and the assets of the Issuer’s subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than to the Issuer or one of its subsidiaries;

 

(b)                                 the consummation of any transaction (including without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our outstanding Voting Stock, measured by voting power rather than number of shares;

 

(c)                                  the Issuer consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, the Issuer, in any such event pursuant to a transaction in which any of the Issuer’s outstanding Voting Stock or the outstanding Voting Stock of such other person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the Issuer’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person immediately after giving effect to such transaction; or

 

(d)                                 the adoption of a plan relating to the Issuer’s liquidation or dissolution.

 

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Notwithstanding the foregoing, a transaction will not be considered to be a Change of Control if (a) the Issuer becomes a direct or indirect wholly owned subsidiary of a holding company and (b) immediately following that transaction, (1) the direct or indirect holders of the Voting Stock of the holding company are substantially the same as the holders of the Issuer’s Voting Stock immediately prior to that transaction or (2) no person or group is the beneficial owner, directly or indirectly, of more than a majority of the total voting power of the Voting Stock of the holding company.

 

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Ratings Event.

 

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating category of Moody’s); a rating of BBB- or better by S&P (or its equivalent under any successor rating category of S&P); and the equivalent investment grade rating from any replacement Rating Agency or Agencies appointed by the Issuer.

 

“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.

 

“Rating Agency” means each of Moody’s and S&P; provided, that if either of Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available, the Issuer shall appoint a replacement for such Rating Agency that is a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act.

 

“Ratings Event” means the Notes cease to be rated Investment Grade by each of the Rating Agencies on any day during the period (the “Trigger Period”) commencing on the date 60 days prior to the first public announcement by the Issuer of any Change of Control (or pending Change of Control) and ending 60 days following consummation of such Change of Control (which Trigger Period will be extended for so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by either of the Rating Agencies).

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

 

“Voting Stock” of any specified person as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

 

8.                                      Defaults and Remedies.

 

If an Event of Default (other than certain bankruptcy Events of Default with respect to the Issuer) under the Indenture occurs with respect to the Notes and is continuing, then the Trustee may and, at the direction of the Holders of at least 25% in principal amount of the outstanding Notes, shall by written notice, require the Issuer to repay immediately the entire principal amount of the Outstanding Notes, together with all accrued and unpaid interest and premium, if any.  If a bankruptcy Event of Default with respect to the Issuer occurs and is continuing, then the entire principal amount of the Outstanding Notes will automatically become due immediately and payable without any declaration or other act on the part of the Trustee or any Holder.  Holders of Notes may

 

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not enforce the Indenture or the Notes except as provided in the Indenture.  The Trustee is not obligated to enforce the Indenture or the Notes unless it has received indemnity as it reasonably requires.  The Indenture permits, subject to certain limitations therein provided, Holders of a majority in aggregate principal amount of the Notes then outstanding to direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of Notes notice of certain continuing defaults or Events of Default if it determines that withholding notice is in their interest.

 

9.                                      Authentication.

 

This Note shall not be valid until the Trustee manually signs the certificate of authentication on this Note.

 

10.                               Abbreviations and Defined Terms.

 

Customary abbreviations may be used in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

11.                               CUSIP Numbers.

 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes.  No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon.

 

12.                               Governing Law.

 

The laws of the State of New York shall govern the Indenture and this Note thereof.

 

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ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to

 

	
 
    
	
(Print or type assignee’s name, address and zip code)
    
	
 
    
	
 
    

(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably appoint                agent to transfer this Note on the books of the Issuer.  The agent may substitute another to act for him.

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Your   Signature:
    	
 
    

 

	
 
    
	
Sign   exactly as your name appears on the other side of this Note.
    

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
Signature   Guarantee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature   must be guaranteed
    	
 
    	
Signature
    

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the United States Securities Exchange Act of 1934, as amended.

 

 

SCHEDULE OF EXCHANGES OF NOTES

 

The following exchanges of a part of this Global Note for Physical Notes or a part of another Global Note have been made:

 

	
Date of Exchange
    	
 
    	
Amount of decrease in
   principal amount of
   this Global Note
    	
 
    	
Amount of increase in
   principal amount of
   this Global Note
    	
 
    	
Principal amount of
   this Global Note
   following such
   decrease (or increase)
    	
 
    	
Signature of
   authorized officer of
   Trustee
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

PURCHASE EXERCISE NOTICE UPON A CHANGE OF CONTROL TRIGGERING EVENT

 

To: Adobe Systems Incorporated

 

The undersigned registered owner of this Security hereby acknowledges receipt of a notice from Adobe Systems Incorporated (the “Issuer”) as to the occurrence of a Change of Control Triggering Event with respect to the Issuer and hereby directs the Issuer to pay, or cause the Trustee to pay,                                an amount in cash equal to 101% of the aggregate principal amount of the Notes, or the portion thereof (which is a multiple of $1,000, provided that the remaining principal amount, if any, following such purchase shall be at least $2,000 or a multiple of $1,000 in excess thereof) below designated, to be purchased plus interest accrued to, but excluding, the purchase date, except as provided in the Indenture.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
 
    
	
 
    	
 
    
	
Principal   amount to be purchased
    	
 
    
	
(a   multiple of $1,000):
    	
 
    
	
 
    	
 
    
	
Remaining   principal amount
    	
 
    
	
following   such purchase:
    	
 
    
	
(zero   or at least $2,000 or a multiple of $1,000 in excess thereof)
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatoryex10-1.htm

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”) entered into as of this __ day of January, 2015 (the “Effective Date”) by and between the parties on the signature page to this Agreement (each, a “Purchaser”), Vaporin, Inc., a Delaware corporation (“VAPO”) and Vapor Corp., a Delaware corporation. (“Vapor”), solely to the extent provided in Sections 2, 3, 6, 7 and 8 (collectively, the Purchaser, VAPO and Vapor are the “Parties”).

WHEREAS, this Agreement contemplates a transaction in which the Purchaser will purchase from VAPO, and VAPO will sell to the Purchaser, up to $1 million of a one-year convertible note (the “Note”) convertible into Vapor common stock only if the proposed merger between VAPO and Vapor (the “Merger”) closes.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

1.           Sale and Purchase.  VAPO agrees to sell and the Purchaser agrees to purchase a one-year 10% Note for the consideration set forth on the signature page to this Agreement. A copy of the form of Note is annexed as Exhibit A to this Agreement.

2.           Conversion. The Note shall be convertible into Vapor common stock at the lower of (i) $1.08 or (ii) a 15% discount to a 20-trading day VWAP following the closing of the Merger. Provided, however, because of the Rules of the NASDAQ Stock Market in no event shall more than 1,500,000 shares of common stock be issued if all $1 million is raised. If less than $1 million is raised, the maximum number of shares shall be adjusted pro rata. For the purposes of this Agreement, “VWAP” means: for any date, the price determined by the first of the following clauses that applies: (a) if the common stock is then listed or quoted on the NASDAQ Stock Market or other applicable national securities exchange (any, a “Trading Market”), the daily volume weighted average price of the common stock for such date (or the nearest preceding date) on the Trading Market on which the common stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if prices for the common stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the common stock so reported, or (d) in all other cases, the fair market value of a share of common stock as determined by an independent appraiser selected in good faith by the Purchaser of a majority in interest of the Notes then outstanding and reasonably acceptable to Vapor, the fees and expenses of which shall be paid by Vapor.

3.           Piggyback Registration.

3.1           Subsequent to the Merger but prior to the two year anniversary of the Effective Date, each time Vapor proposes for any reason to register any of its common stock under the Securities Act of 1933 (“Securities Act”) in connection with the proposed offer and sale of its common stock for money, either for its own account or on behalf of any other security holder (a “Proposed Registration”), other than pursuant to a registration statement on Form S-4 or S-8, Vapor shall promptly give written notice of such Proposed Registration to the Purchaser and shall offer the Purchaser the right to request inclusion of shares of common stock underlying or issued upon exercise of the Note (the “Registrable Securities”) in the Proposed Registration. The Purchaser shall have 10 days from the receipt of such notice to deliver to Vapor a written request specifying the number of Registrable Securities the Purchaser intends to sell in the Proposed Registration and the Purchaser’s intended method of disposition.

3.2           In the event that the Proposed Registration by Vapor is, in whole or in part, an underwritten public offering, Vapor shall so advise the Purchaser as part of the written notice given pursuant to Section 3.1, and any request under Section 3.1 must specify that the Purchaser’s Registrable Securities be included in the underwriting on the same terms and conditions as the shares of common stock, if any, otherwise being sold through underwriters under such registration.

3.3           Upon receipt of a written request pursuant to Section 3.1, Vapor shall promptly use commercially reasonable efforts to cause all such Registrable Securities held by the Purchaser to be registered under the Securities Act (and included in any related qualifications under blue sky laws or other compliance), to the extent required to permit sale or disposition as set forth in the Proposed Registration.

  

  

  

 

3.4           In the event that the offering is to be an underwritten offering, if the Purchaser proposes to distribute its Registrable Securities through such underwritten offering, then the Purchaser agrees to enter into an underwriting agreement with the underwriter or underwriters selected for such underwriting by Vapor.  Notwithstanding the foregoing, if in its good faith judgment, Purchaser or managing underwriter determines and advises in writing that the inclusion of the Registrable Securities proposed to be included in the underwritten public offering, together with any other issued and outstanding shares of common stock proposed to be included therein by holders other than the Purchaser would interfere with the successful marketing of such securities, then the number of the Purchaser’s Registrable Shares to be included in such underwritten public offering shall be reduced as determined by Vapor and the managing underwriter.

3.5           Vapor’s obligations under Section 3 are subject to the Purchaser promptly supplying to Vapor the necessary information with respect to the Purchaser, its beneficial ownership of Vapor common stock and its proposed plan of distribution.

4.           Representations and Warranties of VAPO.  As an inducement to the Purchaser to enter into this Agreement and consummate the transaction contemplated hereby, VAPO hereby makes the following representations and warranties, each of which is materially true and correct on the date hereof:

4.1           Organization.  VAPO is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and is duly authorized to conduct business as currently conducted.

4.2           Authority.  VAPO has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  This Agreement constitutes the valid and legally binding obligation of VAPO, enforceable in accordance with its terms. The execution, delivery, and performance of this Agreement and all other agreements contemplated hereby have been duly authorized by VAPO.

4.3           Non-Contravention.  The execution and delivery of this Agreement by VAPO and the observance and performance of the terms and provisions contained herein do not constitute a violation or breach of any applicable law, or any provision of any other contract or instrument to which VAPO is a party or by which it is bound, or any order, writ, injunction, decree, statute, rule, by-law or regulation applicable to VAPO.

4.4           Litigation.  There are no actions, suits, or proceedings pending or, to the best of VAPO’s knowledge, threatened, which could in any manner restrain or prevent VAPO from effectually and legally selling the Note pursuant to the terms and provisions of this Agreement.  VAPO is not a party to any litigation except as has been disclosed in its Form 10-K filed with the Securities and Exchange Commission (the “SEC”).

4.5           Brokers’ Fees.  VAPO has no liability or obligation to pay fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

4.6           Reporting Company.  VAPO is a publicly-held company subject to reporting obligations pursuant to Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) and has a class of common stock registered pursuant to Section 12(g) of the Exchange Act.

4.7           SEC Reports. VAPO has filed with the SEC all reports required to be filed since January 1, 2012, none of the reports filed with the SEC contained any material statements which were not true and correct or omitted to state any statements of material fact necessary in order to make the statements made not misleading.

4.8           Outstanding Securities.  All issued and outstanding shares of capital stock and equity interests in VAPO have been duly authorized and validly issued and are fully paid and non-assessable.

4.9           No Material Adverse Change.  Since November 14, 2014 (filing date of the last Form 10-Q), there has not been individually or in the aggregate a Material Adverse Change with respect to VAPO. For the purposes of this Agreement, “Material Adverse Change” means any event, change or occurrence which, individually or together with any other event, change, or occurrence, could result in a material adverse change on VAPO or material adverse change on its business, assets, financial condition, or results of operations. Provided, however, a Material Adverse Change does not exist solely because (i) there are changes in the economy, credit markets or capital markets, or (ii) changes generally affecting the industry in which VAPO operates.

 

  

  

  

5.           Representations and Warranties of the Purchaser.  As an inducement to VAPO to enter into this Agreement and to consummate the transactions contemplated hereby, the Purchaser hereby makes the following representations and warranties, each of which is materially true and correct on the date hereof and will be materially true and correct on the closing date:

5.1           Authority.  The Purchaser has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  This Agreement constitutes the valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms. The execution, delivery, and performance of this Agreement and all other agreements contemplated hereby have been duly authorized by the Purchaser.

5.2           Non-Contravention. The execution and delivery of this Agreement by the Purchaser and the observance and performance of the terms and provisions of this Agreement on the part of the Purchaser to be observed and performed will not constitute a violation of applicable law or any provision of any contract or other instrument to which the Purchaser is a party or by which it is bound, or any order, writ, injunction, decree statute, rule or regulation applicable to it;

5.3           Litigation There are no actions, suits, or proceedings pending or, to the best of the Purchaser’s knowledge, threatened, which could in any manner restrain or prevent the Purchaser from effectually and legally purchasing the Note pursuant to the terms and provisions of this Agreement.

5.4           Brokers’ Fees.  The Purchaser has no liability or obligation to pay fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

5.5           Information.  The Purchaser has relied solely on the reports of VAPO filed with the SEC, other publicly available information and other written and electronic information prepared by VAPO in making its decision to purchase the Note. The Purchaser acknowledges that the purchase of the Note entails a high degree of risk including the risks highlighted in the risk factors contained in filings by VAPO with the SEC including its annual report on Form 10-K for the year ended December 31, 2013 and the Form S-4 filed with the SEC relating to the Merger, and in other publicly available information. The Purchaser represents that it has had an opportunity to ask questions and receive answers from VAPO regarding the terms and conditions of this Agreement and the reasons for this offering, the business prospects of VAPO, the risks attendant to VAPO’s business, and the risks relating to an investment in VAPO.  The Purchaser further acknowledges that pursuant to Section 517.061(11)(a)(3), Florida Statutes and Rule 3E-5090.05(a) thereunder, the Purchaser has had an opportunity to obtain additional information (to the extent VAPO possesses such information and could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to such Purchaser or to which the Purchaser had access.  VAPO will put such information in writing if requested by the Purchaser.  The Purchaser acknowledges the receipt (without exhibits) of or access to the reports filed with SEC at www.sec.gov which includes VAPO’s and Vapor’s annual report on Form 10-K with respect to the year ended December 31, 2013 and quarterly reports on Form 10-Q for the quarter ended March 31, 2014 and June 30, 2014 and September 30, 2014 and the Form S-4 (as well as any other reports) filed prior to the date of this Agreement.  These reports will be made available to the Purchaser upon written request to VAPO.

5.6           Investment.  The Purchaser is acquiring the Note for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distribution or selling the same, and, except as contemplated by this Agreement, and has no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for the disposition thereof.  The Purchaser understands that the Note may not be sold, transferred or otherwise disposed of without registration under the Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Note or an available exemption from registration under the Act, the Note must be held indefinitely.

5.7           Restricted Securities.  The Purchaser understands that the Note is not registered under the Act in reliance on an exemption from registration under the Act pursuant to Section 4(a)(2) thereof and Rule 506(b) thereunder and the Note will bear a restrictive legend.

5.8           Investment Experience.  The Purchaser represents that: it is an “accredited investor” within the meaning of the applicable rules and regulations promulgated under the Act, for one of the reasons on the attached Exhibit B to this Agreement. The Purchaser represents and acknowledges that: (i) it is experienced in evaluating and investing in private placement transactions in similar circumstances (ii) it has such knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the investment in the Note, (iii) it is able to bear the substantial economic risks of an investment the Note for an indefinite period of time, (iv) it has no need for liquidity in such investment, (v) it can afford a complete loss of such investment, and (vi) it has such knowledge and experience in financial, tax and business matters so as to enable it to utilize the information made available to it in connection with the offering of the Note to evaluate the merits and risks of the purchase of the Note and to make an informed investment decision with respect thereto.

 

  

  

  

5.9           No General Solicitation.  The offer to sell the Note was directly communicated to the Purchaser by VAPO.  At no time was the Purchaser presented with or solicited advertisement, articles, notice or other communication published in any newspaper, television or radio or presented at any seminar or meeting, or any solicitation by a person not previously known to the undersigned in connection with the communicated offer.

6.           Representations and Warranties of Vapor.  As an inducement to the Purchaser to enter into this Agreement and consummate the transaction contemplated hereby, Vapor hereby makes the following representations and warranties, each of which is materially true and correct on the date hereof:

6.1           Organization.  Vapor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and is duly authorized to conduct business as currently conducted.

6.2           Authority.  Vapor has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  This Agreement constitutes the valid and legally binding obligation of Vapor, enforceable in accordance with its terms. The execution, delivery, and performance of this Agreement and all other agreements contemplated hereby have been duly authorized by Vapor.

6.3           Non-Contravention.  The execution and delivery of this Agreement by Vapor and the observance and performance of the terms and provisions contained herein do not constitute a violation or breach of any applicable law, or any provision of any other contract or instrument to which Vapor is a party or by which it is bound, or any order, writ, injunction, decree, statute, rule, by-law or regulation applicable to Vapor.

6.4           Litigation.  There are no actions, suits, or proceedings pending or, to the best of Vapor’s knowledge, threatened, which could in any manner restrain or prevent Vapor from effectually and legally selling the Note pursuant to the terms and provisions of this Agreement.  Vapor is not a party to any litigation except as has been disclosed in its Form 10-K filed with the SEC.

6.5           Brokers’ Fees.  Vapor has no liability or obligation to pay fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

6.6           Reporting Company.  Vapor is a publicly-held company subject to reporting obligations pursuant to Section 13 of the Exchange Act and has a class of common stock registered pursuant to Section 12(b) of the Exchange Act.

6.7           SEC Reports. Vapor has filed with the SEC all reports required to be filed since January 1, 2012, none of the reports filed with the SEC contained any material statements which were not true and correct or omitted to state any statements of material fact necessary in order to make the statements made not misleading.

6.8           Outstanding Securities.  All issued and outstanding shares of capital stock and equity interests in Vapor have been duly authorized and validly issued and are fully paid and non-assessable.

6.9           No Material Adverse Change.  Since November 14, 2014 (filing date of the last Form 10-Q), there has not been individually or in the aggregate a Material Adverse Change with respect to Vapor. For the purposes of this Agreement, “Material Adverse Change” means any event, change or occurrence which, individually or together with any other event, change, or occurrence, could result in a material adverse change on Vapor or material adverse change on its business, assets, financial condition, or results of operations. Provided, however, a Material Adverse Change does not exist solely because (i) there are changes in the economy, credit markets or capital markets, or (ii) changes generally affecting the industry in which Vapor operates.

7.           Survival of Representations and Warranties and Agreements.  All representations and warranties of the Parties contained in this Agreement shall survive the closing.

8.           Indemnification.

8.1           Indemnification Provisions for Benefit of the Purchaser.  In the event VAPO breaches any of its representations, warranties, and/or covenants contained herein and provided that the Purchaser make a written claim for indemnification against VAPO, then VAPO agrees to indemnify the Purchaser from and against the entirety of any losses, damages, amounts paid in settlement of any claim or action, expenses, or fees including court costs and reasonable attorneys' fees and expenses.

 

  

  

  

8.2           Indemnification Provisions for Benefit of VAPO.  In the event the Purchaser breaches any of its representations, warranties, and/or covenants contained herein and provided that VAPO make a written claim for indemnification against the Purchaser, then the Purchaser agrees to indemnify VAPO from and against the entirety of any losses, damages, amounts paid in settlement of any claim or action, expenses, or fees including court costs and reasonable attorneys' fees and expenses.

8.3           Indemnification Concerning Vapor.   The foregoing provisions of Sections 8.1 and8.2 shall apply to Vapor if the Merger closes.

9.       Post-Closing Covenants. The Parties agree as follows with respect to the period following the closing:

9.1             General.  In case at any time after the closing any further action is necessary or desirable to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as the other Party may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefore under Section 8).

9.2           Company.  VAPO hereby covenants that, after the closing, VAPO will, at the request of Purchaser, execute, acknowledge and deliver to the Purchaser without further consideration, all such further assignments, conveyances, consents and other documents, and take such other action, as the Purchaser may reasonably request (a) to transfer to, vest and protect in the Purchaser and its right, title and interest in the Note, and (b) otherwise to consummate or effectuate the transactions contemplated by this Agreement.

10.           Expenses.  Except as otherwise provided in this Agreement, all parties hereto shall pay their own expenses, including legal and accounting fees, in connection with the transactions contemplated herein.

11.           Severability.  In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

12.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

13.           Benefit.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.  Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the Parties or their respective heirs, successors and assigns any rights, remedies, obligations, or other liabilities under or by reason of this Agreement.

14.           Notices and Addresses. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar overnight next business day delivery, or by email followed by overnight next business day delivery, as follows:

 

	To VAPO:  	
Vaporin, Inc.

4400 Biscayne Blvd.

Suite 850

Miami, FL 33137

Attention:  Mr. James Martin

Email: jmartin@vaporin.com

 

	To Vapor:	
Vapor Corp.

3001 Griffin Road

Dania Beach, FL 33312

Attention:  Mr. Jeffrey Holman

Email: jeff.holman@vapor-corp.com

 

	To the Purchaser:   	The address set forth on the signature page attached hereto 
or to such other address as any of them, by notice to the other may designate from time to time.

 

  

  

  

15.           Attorney's Fees.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or arbitration proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to a reasonable attorney's fee, including the fees on appeal, costs and expenses.

16.           Governing Law; Venue.  This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided therein or performance shall be governed or interpreted according to the laws of the State of Florida. Any proceeding or action shall only be commenced in Broward County, Florida or the United States District Court for the Southern District of Florida. The parties hereto irrevocably and unconditionally submit to the exclusive jurisdiction of such courts and agree to take any and all future action necessary to submit to the jurisdiction of such courts.

17.           Oral Evidence.  This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof.  Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against whom enforcement or the change, waiver discharge or termination is sought.

18.           Assignment.  No Party hereto shall assign its rights or obligations under this Agreement without the prior written consent of the other Party.

19.           Section Headings.  Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.

 

FLORIDA LAW PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO VAPO, AN AGENT OF VAPO OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.  ALL SALES IN THIS OFFERING ARE SALES IN FLORIDA.  PAYMENTS FOR TERMINATED SUBSCRIPTIONS VOIDED BY PURCHASERS AS PROVIDED FOR IN THIS PARAGRAPH WILL BE PROMPTLY REFUNDED WITHOUT INTEREST.  NOTICE SHOULD BE GIVEN TO VAPO TO THE ATTENTION OF JAMES MARTIN AT THE ADDRESS SET FORTH IN SECTION 14 OF THIS AGREEMENT.

[Signature Page Attached]

  

  

  

IN WITNESS WHEREOF the parties hereto have set their hand and seals as of the above date.

	  	
VAPO:

	  	  
	  	
 

By: ________________                                                               

James Martin,

	  	
      Chief Financial Officer

	  	
 

VAPOR:

 

 

By:  ________________                                                                 

	  	
Jeffrey Holman,

	  	
      Chief Executive Officer

	  	  
	  	
PURCHASER:

 

	  	  
	  	
 

By: ________________________________

(Print Name and Title)

 

 

	  	  
	  	  
	  	
Address:______________________________

 

_____________________________________

 

Email:________________________________

	  	  
	  	  

Amount of Note Purchased: $__________________

 

  

  

  

 

Exhibit A

Convertible Note

  

  

  

Exhibit B

Accredited Investor

For Individual Investors Only:

(1)           I am an accredited investor because I have an individual net worth, or my spouse and I have combined net worth, in excess of $1,000,000. For purposes of calculating net worth under this paragraph (1), (i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to the execution of this Subscription Agreement, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.

(2a)           I am an accredited investor because I had individual income (exclusive of any income attributable to my spouse) of more than $200,000 in the last two completed years and I reasonably expect to have an individual income in excess of $200,000 this year.

(2b)           Alternatively, my spouse and I have joint income in excess of $300,000 in each applicable year.

(3)           I am a director or executive officer of the Company.

Other Investors:

(4)           The undersigned is one of the following:  any bank as defined in Section 3(a)(2) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; insurance company as defined in Section 2(13) of the Securities Act; investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; Small Business Investment Company licensed by the U.S.  Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

(5)           The undersigned is a private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

(6)           The undersigned is a organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.

(7)           The undersigned is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the Securities Act.

(8)           The undersigned is an entity in which all of the equity owners are accredited investors.

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