Document:

f8k061710ex10i_clearlite.htm

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”), is dated as of                               by and between Clear-Lite Holdings, Inc., a Nevada corporation (the “Company”), and the subscribers identified on the signature page hereto (each a “Subscriber” and collectively, the “Subscribers”).

WHEREAS, the Company and each Subscriber are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Subscribers, as provided herein, and such Subscriber shall purchase for $___ per share for an aggregate amount of $_________ (the “Purchase Price”) for (i) ________ shares of the Company’s Common Stock (the “Sale Shares”), $0.001 par value (the “Common Stock”) and (ii) a five-year warrant to purchase _____________ shares of common stock at an exercise price of $____ per share (the “Warrant”) (collectively the “Offering”).  The Sale Shares and Warrant are collectively referred to herein as the “Securities.”); and

 

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

 

1.           Closing Date.   The “Closing Date” shall be the date that the Purchase Price is transmitted by wire transfer or otherwise credited to or for the benefit of the Company. The consummation of the transactions contemplated herein shall take place at the offices of Anslow & Jaclin LLP, 195 Route 9 South, Suite 204, Manalapan NJ 07726, upon the satisfaction or waiver of all conditions to closing set forth in this Agreement.   Subject to the satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date, Subscribers shall purchase and the Company shall sell to Subscribers Sale Shares in the aggregate amount of $_________ as described in Section 2 of this Agreement.

2.           Sale Shares.

(a)           Sale Shares.   Subject to the satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date, each Subscriber shall purchase and the Company shall sell to each Subscriber the Sale Shares in the amount designated on the signature page hereto for such Subscriber’s Purchase Price indicated thereon.

3.           Allocation of Purchase Price.   The Purchase Price will be allocated among the components of the Securities so that each component of the Securities will be fully paid and non-assessable.

 

4.           Subscriber Representations and Warranties.  Each Subscriber hereby represents and warrants to and agrees with the Company that:

(a)           Organization and Standing of the Subscriber.   If such Subscriber is an entity, such Subscriber is a corporation, partnership or other entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization.

 

  

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(b)           Authorization and Power.   Such Subscriber has the requisite power and authority to enter into and perform this Agreement and the other Transaction Documents (as defined herein) and to purchase the Securities being sold to it hereunder.  The execution, delivery and performance of this Agreement and the other Transaction Documents by such Subscriber and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or partnership action, and no further consent or authorization of such Subscriber or its Board of Directors, stockholders, partners, members, as the case may be, is required.  This Agreement and the other Transaction Documents have been duly authorized, executed and delivered by such Subscriber and constitutes, or shall constitute when executed and delivered, a valid and binding obligation of such Subscriber enforceable against such Subscriber in accordance with the terms thereof.

(c)           No Conflicts.   The execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation by such Subscriber of the transactions contemplated hereby and thereby or relating hereto do not and will not (i) result in a violation of such Subscriber’s charter documents or bylaws or other organizational documents or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument or obligation to which such Subscriber is a party or by which its properties or assets are bound, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to such Subscriber or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on such Subscriber).  Such Subscriber is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement and the other Transaction Documents or to purchase the Securities in accordance with the terms hereof, provided that for purposes of the representation made in this sentence, such Subscriber is assuming and relying upon the accuracy of the relevant representations and agreements of the Company herein.

(d)           Information on Company.    Such Subscriber has been furnished with or has had access to the EDGAR Website of the Commission to the Company's Form 10-K filed on November 16, 2009 for the fiscal year ended July 31, 2009 and the financial statements included therein, Form 10-Q filed on March 17, 2010 for the quarter ended January 31, 2010 , together with all other filings made with the Commission available at the EDGAR website until five days before the Closing Date (hereinafter referred to collectively as the “Reports”).   In addition, such Subscriber may have received in writing from the Company such other information concerning its operations, financial condition and other matters as such Subscriber has requested in writing, identified thereon as OTHER WRITTEN INFORMATION (such other information is collectively, the “Other Written Information”), and considered all factors such Subscriber deems material in deciding on the advisability of investing in the Securities.  Such Subscriber has relied on the Reports and Other Written Information in making its investment decision.

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

 

  

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

(g)           Compliance with Securities Act.   Such Subscriber understands and agrees that the Securities have not been registered under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and warranties of the Subscriber contained herein), and that such Securities must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration.  In any event, and subject to compliance with applicable securities laws, the Subscriber may enter into lawful hedging transactions in the course of hedging the position they assume and the Subscriber may also enter into lawful short positions or other derivative transactions relating to the Securities, or interests in the Securities, and deliver the Securities, or interests in the Securities, to close out their short or other positions or otherwise settle other transactions, or loan or pledge the Securities, or interests in the Securities, to third parties who in turn may dispose of these Securities.

(h)           Sale Shares Legend.  The Sale Shares shall bear the following or similar legend:

“THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

(i)           Communication of Offer.  The offer to sell the Securities was directly communicated to such Subscriber by the Company.  At no time was such Subscriber presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.

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

 

  

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

(l)           Correctness of Representations.  Such Subscriber represents as to such Subscriber that the foregoing representations and warranties are true and correct as of the date hereof and, unless such Subscriber otherwise notifies the Company prior to the Closing Date shall be true and correct as of the Closing Date.

(m)           Acknowledgement of Going Concern.  Such Subscriber recognizes and acknowledges that the Company is a “going concern” as disclosed in its Reports and Other Written Information and as reported by its auditor and may be unable to meet its financial obligations over the next twelve months.

(n)           Survival.  The foregoing representations and warranties shall survive one (1) year from the Closing Date.

 

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

 

(a)           Due Incorporation.  The Company is a corporation or other entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has the requisite corporate power to own its properties and to carry on its business as presently conducted.  The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect.  For purposes of this Agreement, a “Material Adverse Effect” shall mean a material adverse effect on the financial condition, results of operations, prospects, properties or business of the Company and its Subsidiaries taken as a whole.  For purposes of this Agreement, “Subsidiary” means, with respect to any entity at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity of which more than 30% of (i) the outstanding capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such entity.

 

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

 

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

 

  

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(d)           Capitalization and Additional Issuances.   The authorized and outstanding capital stock of the Company and Subsidiaries on a fully diluted basis as of the date of this Agreement and the Closing Date (not including the Securities) are set forth in the Reports. Except as set forth in the Reports, there are no options, warrants, or rights to subscribe to, securities, rights, understandings or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of capital stock or other equity interest of the Company or any of the Subsidiaries.

 

(e)           Consents.  No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the Company, or any of its Affiliates, the OTC Bulletin Board (the “Bulletin Board”) or the Company's shareholders is required for the execution by the Company of the Transaction Documents and compliance and performance by the Company of its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Securities.  The Transaction Documents and the Company’s performance of its obligations thereunder has been unanimously approved by the Company’s Board of Directors.  No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority in the world, including without limitation, the United States, or elsewhere is required by the Company or any Affiliate of the Company in connection with the consummation of the transactions contemplated by this Agreement, except as would not otherwise have a Material Adverse Effect or the consummation of any of the other agreements, covenants or commitments of the Company or any Subsidiary contemplated by the other Transaction Documents. Any such qualifications and filings will, in the case of qualifications, be effective on the Closing and will, in the case of filings, be made within the time prescribed by law.

 

(f)           No Violation or Conflict.  Assuming the representations and warranties of the Subscriber in Section 4 are true and correct, neither the issuance nor sale of the Securities nor the performance of the Company’s obligations under this Agreement and all other agreements entered into by the Company relating thereto by the Company will:

 

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

 

(ii)           result in the creation or imposition of any lien, charge or encumbrance upon the Securities or any of the assets of the Company or any of its Affiliates except in favor of Subscriber as described herein; or

 

 (g) The Securities.  The Securities upon issuance:

 

  

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(i)           are, or will be, free and clear of any security interests, liens, claims or other encumbrances, subject only to restrictions upon transfer under the 1933 Act and any applicable state securities laws;

(ii)           have been, or will be, duly and validly authorized and on the dates of issuance of the Sale Shares, such Sale Shares will be duly and validly issued, fully paid and non-assessable, and if registered pursuant to the 1933 Act and resold pursuant to an effective registration statement or exempt from registration will be free trading, unrestricted and unlegended;

 

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

 

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

 

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

 

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

 

(j)           Information Concerning Company.  The Reports and Other Written Information contain all material information relating to the Company and its operations and financial condition as of their respective dates which information is required to be disclosed therein.   Since January 31, 2010 and except as modified in the Reports and Other Written Information, there has been no Material Adverse Effect relating to the Company's business, financial condition or affairs. The Reports and Other Written Information, including the financial statements included therein do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, taken as a whole, not misleading in light of the circumstances and when made.

 

(k)           No Integrated Offering.   Neither the Company, nor any of its Affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security of the Company nor solicited any offers to buy any security of the Company under circumstances that would cause the offer of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the Bulletin Board.  No prior offering will impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.  Neither the Company nor any of its Affiliates will take any action or steps that would cause the offer or issuance of the Securities to be integrated with other offerings which would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.  The Company will not conduct any offering other than the transactions contemplated hereby that may be integrated with the offer or issuance of the Securities that would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.

 

  

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(l)           No General Solicitation.  Neither the Company, nor any of its Affiliates, nor to its knowledge, any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the 1933 Act) in connection with the offer or sale of the Securities.

 

(m)           No Disagreements with Accountants and Lawyers.  Other than the opinion regarding the Company’s ability to continue as a “going concern,” as disclosed in the Company’s Reports, there are no material disagreements of any kind presently existing, or reasonably anticipated by the Company to arise between the Company and the accountants and lawyers previously and presently employed by the Company, including but not limited to disputes or conflicts over payment owed to such accountants and lawyers, nor have there been any such disagreements during the two years prior to the Closing Date.

(n)           Investment Company.   Neither the Company nor any Affiliate of the Company is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

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

(p)           Listing.  The Company's Common Stock is quoted on the Bulletin Board under the symbol CLRH.  The Company has not received any oral or written notice that its Common Stock is not eligible nor will become ineligible for quotation on the Bulletin Board nor that its Common Stock does not meet all requirements for the continuation of such quotation.  The Company satisfies all the requirements for the continued quotation of its Common Stock on the Bulletin Board.

 

6.           Regulation D Offering.  The offer and issuance of the Securities to the Subscribers is being made pursuant to the exemption from the registration provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of Regulation D promulgated thereunder.

 

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

 

(a)           Stop Orders.  The Company will advise the Subscribers, within twenty-four hours after it receives notice of issuance by the Commission, any state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose.  The Company will not issue any stop transfer order or other order impeding the sale, resale or delivery of any of the Securities, except as may be required by any applicable federal or state securities laws and unless contemporaneous notice of such instruction is given to the Subscribers.

 

  

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(b)           Listing/Quotation.  The Company will maintain the quotation or listing of its Common Stock on the American Stock Exchange, Nasdaq Capital Market, Nasdaq Global Market, Nasdaq Global Select Market, Bulletin Board, or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock (the “Principal Market”), and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Principal Market, as applicable. The Company will provide Subscribers with copies of all notices it receives notifying the Company of the threatened and actual delisting of the Common Stock from any Principal Market.  As of the date of this Agreement and the Closing Date, the Bulletin Board is and will be the Principal Market.

 

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

 

(d)           Use of Proceeds.   The proceeds of the Offering will be employed by the Company for expenses of the Offering, and general working capital.

 

(e)           Registration Rights.   The Company shall file with the Commission a registration statement on Form S-1 (the “Registration Statement”) (or such other form that it is eligible to use) in order to register the Shares for resale and distribution under the 1933 Act within seventy-five (75) calendar days after the Closing Date, and use its commercially reasonable efforts to cause the Registration Statement to be declared effective not later than one hundred and fifty (150) days after the Closing Date.

 

8.           Covenants of the Company Regarding Indemnification.

 

(a)           The Company agrees to indemnify, hold harmless, reimburse and defend the Subscriber, the Subscriber’s officers, directors, agents, Affiliates, members, managers, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Subscriber or any such person which results, arises out of or is based upon (i) any material misrepresentation by Company or breach of any representation or warranty by Company in this Agreement, or (ii) after any applicable notice and/or cure periods, any breach or default in performance by the Company of any material covenant or undertaking to be performed by the Company hereunder, or any other material agreement entered into by the Company and Subscriber relating hereto.

 

(b)           In no event shall the liability of the Subscriber or permitted successor hereunder or under any Transaction Document or other agreement delivered in connection herewith be greater in amount than the dollar amount of the net proceeds actually received by such Subscriber or successor upon the sale of Registrable Securities (as defined herein).

 

9.           Miscellaneous.

 

(a)           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

  

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If to the Company, to:

Clear-Lite Holdings, Inc.

Attn: Thomas J. Irvine, CEO

102 NE 2nd Street, PMB 400

Boca Raton, FL 33432

facsimile: (561) 852-2322

With a copy by fax only to (which copy shall not constitute notice):

Anslow & Jaclin LLP

Attn: Joseph M. Lucosky, Esq.

195 Route 9 South, Suite 204

Manalapan, NJ 07726

facsimile: (732) 577-1188

If to the Subscribers:

To each of the addresses and facsimile numbers listed on the signature pages of this Agreement

 

(b)           Entire Agreement; Assignment.  This Agreement and other documents delivered in connection herewith represent the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties.  Neither the Company nor the Subscriber has relied on any representations not contained or referred to in this Agreement and the documents delivered herewith.   No right or obligation of the Company shall be assigned without prior notice to and the written consent of the Subscribers.

 

(c)           Counterparts/Execution.  This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.  This Agreement may be executed by facsimile transmission, PDF, electronic signature or other similar electronic means with the same force and effect as if such signature page were an original thereof.

 

(d)           Law Governing this Agreement.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of New York.  The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  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 in personam jurisdiction of such courts and hereby irrevocably waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.  Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

  

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

 

(f)           Captions: Certain Definitions.  The captions of the various sections and paragraphs of this Agreement have been inserted only for the purposes of convenience; such captions are not a part of this Agreement and shall not be deemed in any manner to modify, explain, enlarge or restrict any of the provisions of this Agreement.  As used in this Agreement the term “person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof.

 

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

 

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

 

 

[-signature page follows-]

 

  

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SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

 

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and returning a copy to the undersigned whereupon it shall become a binding agreement between us.

CLEAR-LITE HOLDINGS, INC.

a Nevada corporation

By:_________________________________

Name: Thomas J. Irvine

Title:  Chief Executive Officer

	
SUBSCRIBER

	
PURCHASE PRICE

	
SALE SHARES

	
 

          

 

 

 

             ____________________________

             By:

            Title:

 

	  	  

 

11fs1a2010ex10vi_dcbrands.htm

Exhibit 10.6

 

 

Endorsement Agreement

 

 

THIS AGREEMENT is entered into this 21st day of October, 2009, by and between DC Brands International, Inc., a Colorado corporation with offices at 9500 NW 49th Ave., Ste. D-106, Wheatridge, Colorado (the Company), and Chris Andersen, an individual whose address is 5401 South Park Terrace Avenue. #308B, Greenwood Village, CO 80111 (the Athlete).

 

WITNESSETH:

 

WHEREAS. Athlete is recognized and widely known throughout the world as a professional basketball player with the National Basketball Association's Colorado Denver Nuggets: and

 

WHEREAS, Athlete's name and likeness, by virtue of his ability, experience and public image, have acquired a meaning in the mind of the purchasing public important to the advertising, promotion and sale of merchandise: and

 

WHEREAS, Company is engaged in the manufacture, distribution, and sale of nutraceutical and other health-oriented beverages under the trade name Hard Nutrition (the Product);

 

WHEREAS, Company is desirous of acquiring the exclusive right and license (for this specific category only/beverages) to utilize Athlete's name in connection with the advertisement, promotion, and sale of the Product in the United States, Asia, South and Central America and Europe (the Territory), and Athlete is willing to grant such right and license.

 

NOW, THEREFORE. in consideration of the mutual covenants set forth herein and for other good and valuable consideration, it is agreed as follows:

 

  

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1. GRANT OF ENDORSEMENT RIGHTS

 

Subject to the terms and conditions set forth herein, Athlete grants to Company the exclusive right and license during the Term and within the Territory to use Athlete's name, nickname, initials, autograph, facsimile signature, photograph, likeness, and/or endorsement (Endorsement) in connection with the advertisement, promotion, and sale of Product in the Territory.

 

2. TERM

 

This Agreement shall be effective as of the date of execution by both parties and shall extend for a period of one (1) year, with an option in favor of the Athlete to extend the Term for an additional one (1) year under the same provisions as this Agreement (the Term).

 

3. COMPENSATION

 

In consideration for the Licenses granted hereunder, Company agrees to pay to Athlete upon execution of this Agreement and during the Term of this Agreement a promotional fee (the Promotional Fee), as follows:

 

A. 1,750,000 shares of the Company's common stock, per year. with the proviso that the Company will, at its option, either register or provide a suitable opinion letter from its counsel under provision of SEC Rule 144 permitting resale, after six (6) months from the date of this Agreement. Such shares shall be immediately issued to such account(s) as Athlete deems fit with the express understanding that no resale may occur prior to six (6) months from the date of this agreement.

 

  

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B. In the event that the market price, meaning the closing high bid price, for the shares is less than $.25 per share, when demand for registration or other permission to resale is requested, then Company shall issue an additional number of shares to make the value of the aggregate number of shares equivalent to no less than $437,500. The agreement to register or otherwise make the shares eligible for resale shall be enforceable only for so long as this Agreement remains in force,

 

C. In the event of termination of this contract, by either party, Compensation herein shall be deemed to have vested pro-rata monthly. (i.e. 145,834 shares per month) at the $25 per share and Athlete shall be provided those common stock shares at time of termination.

 

4. PROMOTIONAL APPEARANCES AND PERFORMANCE

 

A. If requested to do so by Company, Athlete agrees to make himself available once in each year of the Term for photographs or video recording for use in Company's advertising. Athlete has recently completed a photo shoot for other purposes: the Company may use these photographs in its advertising until such time as the photo shoot agreed to in this Agreement can be completed. Athlete shall have final approval of all Company produced advertising material using his likeness, such approval not to be unreasonably withheld.

 

B. If requested to do so by Company, Athlete shall make four (4) public appearances in each calendar year of the Term for the purpose of promoting the Product. Absent Athlete's agreement, the public appearances shall be no more than two (2) hours. No materials distributed at such appearances, including specifically any items bearing Athlete's likeness, shall be used without his prior approval.

 

C. With respect to each photo session or public appearance as defined above, Company agrees to pay all reasonable out-of-pocket expenses incurred by Athlete in connection with such session or appearance.

 

  

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D. If requested to do so by Company, Athlete agrees to make himself available no less than twice in each year of the Term to provide voice recordings for use in Company's advertising. Athlete shall have final approval of all Company produced advertising material using his recorded voice, such approval not to be unreasonably withheld.

 

E. All public appearances shall be scheduled with Athlete's approval, and Company shall not schedule any such session or appearance at a time that would conflict with Athlete's performance of his obligations as a professional athlete. In furtherance of these scheduling matters, if permitted. Athlete agrees to endorse, recommend or otherwise publicize the Product at these appearances.

 

F. Athlete agrees to provide Company with four (4) autographed game jerseys (paid for by the company) for use as a display in Company offices and for gifts to VIP's related to the company, and furthermore to provide Company with one (1) pair of autographed game-worn shoes for use in such promotional or charitable purposes as Company determines appropriate.

 

5. NOTICE AND PAYMENTS

 

Any notice required to be given pursuant to this Agreement shall be in writing and mailed to Athlete at such address as is designated in writing to Company by certified or registered mail, return receipt requested, or delivered by a national overnight express service.

 

6. ENDORSED PRODUCTS FOR ATHLETE'S USE

 

During the Term of this Agreement, Company shall supply Athlete. at no charge, such amounts of the Product as Athlete may reasonably request for his or her own personal use or for distribution in connection with charitable events.

  

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7. LABELING OF ENDORSED PRODUCTS

 

If deemed appropriate by Company, Product distributed or sold in the Territory may have some part or all of Athlete's endorsement affixed thereto or imprinted thereon,

 

8. RESERVATION OF RIGHTS

 

A. Subject to the terms of this Agreement, Athlete shall retain all rights in and to his name and endorsement and, whether during the Term or any extension thereof, Athlete shall not be prevented from using, permitting, or licensing others to use his name or endorsement in connection with the advertisement, promotion, and sate of any product or service other than the Product or those that are substantially similar to the Product, including but not limited to all computer/video games, CD-ROMs, and/or interactive video of any forth, except where otherwise obligated by contract. Company herein acknowledges Athlete has prior and ongoing endorsement relationships with Max Muscle, Pizza Hut, Alpine Grv1C, Pizza Hut Corporation, Arby's Corporation, Digome, InkWell Management, Remedy Clothing, and contractual NBA required appearances through Denver Nugget Basketball Operations, and the same shall not be construed as a "conflict" with the endorsement herein, Company and Athlete agree that they shall take all necessary steps during the Term to protect the Endorsement in connection with the advertisement, promotion, and sale of the Product.

 

B. It is understood and agreed that Athlete shall retain all right, title, and interest in his or her likeness, name, and/or trademarks, where applicable, except as licensed hereunder.

 

C. The parties agree to execute any documents reasonably requested by the other party to affect any of the above provisions.

  

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9. NO LICENSE FOR USE OF OTHER TRADE MARKS

 

Company understands that Athlete has no individual rights or privileges with respect to the use of the trade marks, logos or other designs (the Marks) of the National Basketball Association or the Denver Nuggets, and agrees that it will not use Marks in its advertising absent the approval of either or both of them.

 

10. QUALITY CONTROL

 

A. Company shall fully comply with the marking provisions of the intellectual property laws of the applicable countries in the Territory.

 

B. The Product shall be of a high quality, at least equal to comparable products manufactured and marketed by Company and in conformity with a standard sample approved by Athlete.

 

C. If the quality of a class of the Product falls below such a production-run quality, as previously approved by Athlete, Company shall use its best efforts to restore such quality. In the event that Company has not taken reasonable steps to restore such quality within 30 days after notification by Athlete, Athlete shall have the right to terminate this Agreement.

 

11. REPRESENTATIONS, WARRANTIES, AND INDEMNITY

 

A. Athlete represents and warrants that he or she has not granted to others any right to use the Endorsement in connection with the advertisement, sale, or promotion of the Product or those that are substantially similar to the Product during the Term.

 

B. Athlete further represents to Company that he has the full right, power. and authority to grant the Endorsement herein.

  

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C. Athlete further represents and warrants that he or has not misrepresented or concealed anything with respect to his background that may have a prejudicial effect on the value of the Endorsement, that he is in good health and does not plan to retire during the Term of this Agreement, and that he has not engaged nor will he engage during the Term of this Agreement in any activity (criminal or otherwise) that could potentially have a negative impact on the Product.

 

D. Company agrees to defend, indemnify. and hold Athlete harmless against all costs, expenses, and losses (including reasonable attorney fees and costs) incurred through claims of third parties against Athlete based on the manufacture or sale of the Product, including, but not limited to, actions founded on product liability.

 

E. Athlete agrees to defend, indemnify, and hold Company. and its officers, directors, agents. and employees, harmless against all costs, expenses. and tosses (including reasonable attorney fees and costs) incurred through claims of third parties against Company based on a breach by Athlete of any representation and/or warranty made in this Agreement.

 

12. TERMINATION

 

A. Athlete shall have the right to terminate this Agreement upon 30 days' prior written notice to Company in the event of the appearance of any of the following contingencies:      

 

	 	1.	If Company is adjudicated insolvent, declares bankruptcy, or fails to continue its business of selling the Product; provided, however, that nothing contained in this Agreement shall obligate Company to sell any specific quantities of Product during the Term; or

 

	 	2.	
In the event Company fails to make payment to Athlete of any sums due pursuant to this Agreement within 30 days after such payment is due.

 

B. Company shall have the right to terminate this Agreement upon 30 days' prior written notice to Athlete or his or her legal representative in the event that Athlete;

 

	 	1.	
Retires as a professional athlete;

 

	 	2.	
Fails, for a period of 10 consecutive NBA games during the regular season, to be on an NBA roster. For the purpose of this Agreement, the status of "Disabled List" shall not be included in the definition of failing to be on a NBA roster

 

	 	3.	
Engages in illegal or immoral conduct resulting in a felony arrest or indictment, or if he has otherwise conducted himself/herself in a manner that is not reasonable in keeping with the standards of professional athletes;

 

	 	4.	
Misrepresents or conceals anything in his or her background that could be detrimental to the value of the endorsement being made;

 

	 	5.	
Engages in conduct contrary to the best interest of Company;

 

	 	6.	
Engages in conduct that offends the sensitivities of a significant portion of the population; or

 

	 	7.	Engages in conduct that could bring Athlete into public disrepute.

 

C. Either party may terminate this Agreement on 30 days' written notice to the other party in the event of a breach of any provision of this Agreement by the other party, provided that, during the 30-day period, the breaching party fails to cure such breach.

 

  

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D. Athlete shall have the right to terminate this Agreement at any time on 30 days' written notice to Company, such termination to become effective at the conclusion of such 30-day period.

 

12. POST TERMINATION RIGHTS

 

A. Upon the expiration or termination of this Agreement, all rights granted to Company under this Agreement shall forthwith terminate and immediately revert to Athlete and Company shall discontinue all use of and reference to the Endorsement.

 

B. In the event of termination of this Agreement other than because of a breach of any representation or warranty by Athlete, all monies paid to Athlete shall be deemed nonrefundable.

 

13. RELATIONSHIP OF THE PARTIES

 

Athlete's performance of services for Company hereunder is in his capacity as an independent contractor. Accordingly, nothing contained in this Agreement shall be construed as establishing an employer/employee, a partnership, or a joint venture relationship between Athlete and Company,

 

14. JURISDICTION AND DISPUTES

 

A. This Agreement shall be governed by the laws of Colorado.

 

B. All disputes hereunder shall be resolved in the applicable state or federal courts of Colorado. The parties consent to the jurisdiction of such courts, agree to accept service of process by mail, and waive any jurisdictional or venue defenses otherwise available.

 

  

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C. Parties herein agree that any disputes shall be resolved through binding Arbitration through AAA (American Arbitration Association) and any such decision can then be reduced to an Order of the Court

 

15. AGREEMENT BINDING ON SUCCESSORS

 

This Agreement shall be binding on and shall inure to the benefit of the parties hereto, and their heirs, administrators, successors, and assigns.

 

16. WAIVER

 

No waiver by either party of any default shall be deemed as a waiver of any prior or subsequent default of the same or other provisions of this Agreement.

 

  

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17. SEVERABILITY

 

If any provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other provision and such invalid provision shall be deemed to be severed from the Agreement.

 

18. ASSIGNABILITY

 

The License granted hereunder is personal to Athlete and may not be assigned by any act of Athlete, with the exception that Athlete shall have the right to assign his or her financial benefits hereunder.

 

19. INTEGRATION

 

This Agreement constitutes the entire understanding of the parties, and revokes and supersedes all prior agreements between the parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents that may be in conflict therewith.

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have each caused to be affixed hereto its or his/her hand and seal the day indicated.

 

 

	DC Brands International, Inc.	 	Chris Andersen
	 	 	 	 	 
	By:	 	 	/s/ Chris Anderson
	Title: 	 President & CEO	 	 S/S No.:	 ###-##-####
	Date:	 9-26-10	 	 Date:	 10-26-09

 

 

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