Document:

EXHIBIT 10.6

 

	
 

	
Subscription Agreement No.:____________ 

	
 

	
Name:_____________________________

	
 

	
Date:_____________________________ 

 

GYROTRON TECHNOLOGY, INC.

 

SUBSCRIPTION AGREEMENT

 

SERIES A2 PREFERRED STOCK 

 

Gyrotron Technology, Inc.3412 Progress Drive

Bensalem, Pennsylvania 19020 

Gentlemen:

 

1. Subscription.

 

(a) The undersigned subscriber (the “Subscriber”), intending to be legally bound, hereby irrevocably subscribes to purchase from Gyrotron Technology, Inc., a Delaware corporation (the “Company”) _______ units (the “Units”) each consisting of (i) one share of 10% Convertible Redeemable Series A2 Preferred Stock, par value $0.001 per share (the “Series A2 Preferred Stock” or the “Shares”), of the Company, and (ii) twenty five warrants (the “Warrants”), each to acquire one share of common stock, par value $0.001 per share of the Company (each, a “Common Share”), expiring 12/15/16 with an exercise price of $1.00 per Common Share, at a price of $35.00 per Unit, plus accrued dividends, if any; all as set forth on the signature page hereof. The form of Certificate of Designation (“COD”) for the Series A2 Preferred Stock, and the Warrant Agreement for the Warrants are attached as Exhibit B and C respectively and all references to their terms are qualified in their entirety by reference to said exhibits.

 

This subscription is made in accordance with and subject to the terms and conditions described in this Subscription Agreement (this “Agreement).

 

The Shares that are the subject of this Agreement are part of an offering of Units by the Company (the “Offering”), on a best efforts basis. There are 8,750 shares of Series A2 Preferred Stock authorized. The number of Units that the Company may offer and/or sell is at the Company’s discretion. Currently the Company plans to offer $300,000 of units.

 

The Company may use broker-dealers and other agents to offer and sell the Units, and/or finders identify and introduce potential subscribers to the Company. Compensation may be paid to these persons in the amount of (i) up to 6% of the gross proceeds to the Company of the Units that they have placed, to be paid in cash and/or in Units, and (ii) up to 4% of the number of Warrants purchased hereunder as part of the Units. in additional Warrants

 

	 
	
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The Company may, and intends to offer and sell the Units to officers, directors and current shareholders of the Company, as well as other accredited investors or non-US persons. The Company may terminate the Offering at any time without prior notice. Also, the Company, in its sole discretion, may accept or reject this subscription for Shares and Warrants in whole or in part for any reason, but the Company will issue Shares and Warrants in respect of all subscriptions accepted prior to such termination. If the Company decides to reject this subscription, it will do so promptly following its receipt and will return the Subscriber’s funds without interest as soon as practicable.

 

The Series A2 Preferred Stock pro forma begin to accrue dividends as of March 31, 2015. In lieu of requesting payment in the amount of dividends accrued through the date of delivery of the Subscriber’s subscription payment, the Company will withhold from the dividend payments otherwise payable to a Subscriber the amount of the dividends accrued through the date of delivery of the subscription payment.

 

THE SHARES AND THE WARRANTS BEING OFFERED HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY APPLICABLE STATE OR OTHER REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT AND THE EXHIBITS THERETO OR ENDORSED THE MERITS OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

THE SHARES AND THE WARRANTS ARE OFFERED PURSUANT TO EXEMPTIONS PROVIDED BY THE SECURITIES ACT, CERTAIN STATE SECURITIES LAWS AND CERTAIN RULES AND REGULATIONS PROMULGATED PURSUANT THERETO. NEITHER THE SHARES AND THE WARRANTS NOR ANY INTEREST THEREIN MAY BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND COMPLIANCE WITH ANY APPLICABLE STATE OR OTHER SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT AND COMPLIANCE, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

 

The Subscriber understands that the Shares and the Warrants are being issued pursuant to the exemption from the registration requirements of the Securities Act, provided by Section 4(2) of such Act, or Regulation D promulgated thereunder, or both. As such, the Shares and the Warrants are only being offered and sold to investors who qualify as “accredited investors,” and the Company is relying on the representations made by the Subscriber in this Agreement that the Subscriber qualifies as such an accredited investor. The Shares and the Warrants are “restricted securities” for purposes of the United States securities laws and cannot be transferred except as permitted under these laws.

 

	 
	
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(b) The Subscriber is delivering (i) two executed copies of the signature page of this Agreement (including Exhibit A), and (ii) the subscription payment, in the form of:

 

(x) a check payable to “Gyrotron Technology, Inc.” to:

 

Gyrotron Technology, Inc.

3412 Progress Drive 

Bensalem, Pennsylvania 19020

Attention:  Vlad Sklyar; or

 

(y) a wire transfer to “Gyrotron Technology, Inc.”,

 

Wire Transfer Instructions to the Company:

 

	
Bank: Wells Fargo Bank. 

	
Account Name: 

	
 

	
 

	
Swift WFBIUS6S 

	
Gyrotron Technology Inc. 

	
 

	
 

	
ABA No.: 121000248 

	
Ref: Series A2 Units;

	
 

	
	
Account No.:  8788010547

	
 

 

or (z) by agreeing to accept Units for funds previously advanced to the Company or other amounts due Subscriber from Company.

 

If this subscription is accepted by the Company, in whole or in part, then, as soon as practicable following the acceptance, the Company will deliver to the Subscriber a certificate representing the Shares and the Warrants that the Subscriber has subscribed for and a fully executed copy of this Agreement. The Company may in its sole discretion reject any Subscription.

 

 (c) The Subscriber may not withdraw this subscription or any amount paid pursuant thereto.

 

2. Conditions. It is understood and agreed that this subscription is made subject to all terms and conditions set forth in this Agreement, including those set forth in Section 1 above.

 

	 
	
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3.  Representations and Warranties of the Company. The Company represents and warrants to, and agrees with the Subscriber as follows, in each case as of the date hereof and in all material respects as of the date of any closing, except for any changes resulting solely from the Offering:

 

(a) The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation with full power and authority to own, lease, license and use its properties and assets and to carry out the business in which it is engaged. The Company is duly qualified to transact the business in which it is engaged and is in good standing as a foreign corporation in every jurisdiction in which its ownership, leasing, licensing or use of property or assets or the conduct of its business makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the Company.

 

(b) Except as described herein or in the documents filed by the Company with the Securities and Exchange Commission, there is no commitment, plan or arrangement to issue, and no outstanding option, warrant or other right calling for the issuance of, any share of capital stock of the Company or any security or other instrument which by its terms is convertible into, exercisable for or exchangeable for capital stock of the Company. The Company may in the ordinary course pay bonuses in stock or issue options to employees. The Company is currently seeking to raise additional capital on the same terms as are offered herein.

 

(c) The Company has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and to issue and sell the Shares and the Warrants.

 

All necessary proceedings of the Company have been duly taken to authorize the execution, delivery, and performance of this Agreement. This Agreement has been duly authorized by the Company and, when executed and delivered by the Company will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

(d) No consent of any party to any contract, agreement, instrument, lease, license, arrangement or understanding to which the Company or any of its subsidiaries is a party or to which any of their respective properties or assets are subject is required for the execution, delivery or performance by the Company of any of this Agreement or the issuance and sale of the Shares or the Warrants.

 

(e) The execution, delivery and performance of this Agreement and the issuance and sale of the Shares and the Warrants will not violate or result in a breach of, or entitle any party (with or without the giving of notice or the passage of time or both) to terminate or call a default under any contract or agreement to which the Company is a party or violate or result in a breach of any term of the certificate of incorporation or by-laws of the Company, or violate any law, rule, regulation, order, judgment or decree binding upon, the Company or any of its subsidiaries, or to which any of their respective operations, businesses, properties or assets are subject, the breach, termination or violation of which, or default under which, would have a material adverse effect on the operations, business, properties or assets of the Company.

 

	 
	
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4. Representations, Warranties and Covenants of the Subscriber. The Subscriber hereby represents and warrants to, and agrees with, the Company as follows:

 

(a) The Subscriber is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act, and as specifically indicated in Exhibit A to this Agreement, or the Subscriber is not a “US Person” as that term is defined in Regulation S promulgated under the Securities Act.

 

(b) If a natural person, the Subscriber is: a bona fide resident of the state or non-United States jurisdiction contained in the address set forth on the signature page of this Agreement as the Subscriber’s home address; at least 21 years of age; and legally competent to execute this Agreement. If an entity, the Subscriber has its principal offices or principal place of business in the state or non-United States jurisdiction contained in the address set forth on the signature page of this Agreement, the individual signing on behalf of the Subscriber is duly authorized to execute this Agreement.

 

(c) This Agreement has been duly executed and delivered by the Subscriber and constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.

 

(d) Neither the execution, delivery or performance of this Agreement by the Subscriber violates or conflicts with, creates (with or without the giving of notice or the lapse of time, or both) a default under or a lien or encumbrance upon any of the Subscriber’s assets or properties pursuant to, or requires the consent, approval or order of any government or governmental agency or other person or entity under (i) any note, indenture, lease, license or other material agreement to which the Subscriber is a party or by which it or any of its assets or properties is bound or (ii) any statute, law, rule, regulation or court decree binding upon or applicable to the Subscriber or its assets or properties. If the Subscriber is not a natural person, the execution, delivery and performance by the Subscriber of this Agreement, and all other documents relating to an investment by Subscriber in the Shares, have been duly authorized by all necessary corporate or other action on behalf of the Subscriber and such execution, delivery and performance does not and will not constitute a breach or violation of, or default under, the charter or by-laws or equivalent governing documents of the Subscriber.

 

(e) The Subscriber has received, read carefully and is familiar with this Agreement; the Certificate of Designation for the Series A2 Preferred Stock; and the form of Warrant.

 

(f) The Subscriber, together with its professional advisor, is familiar with the Company’s business, plans and financial condition, the terms of the Offering and any other matters relating to the Offering; the Subscriber has received all materials which have been requested by the Subscriber; has had a reasonable opportunity to ask questions of the Company and its representatives; and the Company has answered to the satisfaction of the Subscriber all inquiries that the Subscriber or the Subscriber’s representatives have put to it. The Subscriber has had access to all additional information that the Subscriber has deemed necessary to verify the accuracy of the information set forth in this Agreement, and the filings made by the Company with the Securities and Exchange Commission, and has taken all the steps necessary to evaluate the merits and risks of an investment as proposed under this Agreement.

 

	 
	
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(g) The Subscriber acknowledges that this subscription is and shall be irrevocable and this subscription and the agreements contained herein shall survive the insolvency, death or disability of the Subscriber (as applicable), except that the Subscriber shall have no obligation hereunder in the event that its subscription is for any reason rejected or the Offering is cancelled or terminated by the Company, which the Company reserves the right to do in its sole and absolute discretion and for any reason.

 

(h) The Subscriber or the Subscriber’s purchaser representative has such knowledge and experience in finance, securities, taxation, investments and other business matters so as to be able to protect the interests of the Subscriber in connection with this transaction.

 

(i) The Subscriber understands the various risks of an investment in the Company as proposed herein and can afford to bear such risks, including, without limitation, the risks of losing the entire investment.

 

(j) The Subscriber acknowledges that no market for the Shares presently exists and none is expected to develop in the future, that the Common Shares which the Shares are convertible into have a very limited market, and that the Subscriber may find it impossible to liquidate the investment at a time when it may be desirable to do so, or at any other time.

 

(k) The Subscriber has been advised by the Company that neither the Shares nor the Warrants being offered (or the Common Shares into which the Shares are convertible of for which the Warrants are exercisable) have been registered under the Securities Act, that the Shares and the Warrants will be issued on the basis of the statutory exemption provided by Section 4(2) of the Securities Act or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering and under similar exemptions under certain state securities laws; that this transaction has not been reviewed by, passed on or submitted to any United States Federal or state agency or self-regulatory organization where an exemption is being relied upon; and that the Company’s reliance thereon is based in part upon the representations made by the Subscriber in this Agreement.

 

(l) The Subscriber acknowledges that the Subscriber has been informed by the Company of, or is otherwise familiar with, the nature of the limitations imposed by the Securities Act and the rules and regulations thereunder on the transfer of the Shares and the Warrants acquired hereunder (or the Common Shares into which the Shares are convertible of for which the Warrants are exercisable). In particular, the Subscriber agrees that no sale, assignment or transfer of any of the Shares or the Warrants acquired by the Subscriber (or the Common Shares into which the Shares are convertible of for which the Warrants are exercisable) shall be valid or effective, and the Company shall not be required to give any effect to such a sale, assignment or transfer, unless (i) the sale, assignment or transfer of such Shares or Warrants are registered under the Securities Act, it being understood that the Shares or the Warrants are not currently registered for sale and that the Company has no obligation or intention to so register the Shares or the Warrants, except as contemplated by the terms of this Agreement; (ii) the Shares (or the Common Shares into which the Shares are convertible of for which the Warrants are exercisable) are sold, assigned or transferred in accordance with all the requirements and limitations of Rule 144 under the Securities Act (it being understood that Rule 144 is not available at the present time for the sale of the Shares or the Warrants), or (iii) such sale, assignment or transfer is otherwise exempt from registration under the Securities Act, including Regulation S promulgated thereunder. The Subscriber further understands that an opinion of counsel and other documents may be required to transfer the Shares or the Warrants.

 

	 
	
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(m) The Subscriber acknowledges that the Shares to be acquired will be subject to a stop transfer order and any certificate or certificates evidencing any Shares shall bear the following or a substantially similar legend and such other legends as may be required by state blue sky laws:

 

“THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.”

 

The Subscriber acknowledges that the Warrants to be acquired will be subject to a stop transfer order and the certificate or certificates evidencing the Warrants shall bear the following or a substantially similar legend and such other legends as may be required by state blue sky laws:

 

“THE WARRANTS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.”

 

(n) The Subscriber will acquire the Shares and the Warrants for the Subscriber’s own account (or, if such individual is married, for the joint account of the Subscriber and the Subscriber’s spouse either in joint tenancy, tenancy by the entirety or tenancy in common) for investment and not with a view to the sale or distribution thereof or the granting of any participation therein in violation of the securities laws, and has no present intention of distributing or selling to others any of such interest or granting any participation therein in violation of the securities laws.

 

	 
	
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(o) No representation, guarantee or warranty has been made to the Subscriber by any broker, the Company, any of the officers, directors, stockholders, partners, employees or agents of any of them, or any other persons, whether expressly or by implication, that:

 

(I) the Company or the Subscriber will realize any given percentage of profits and/or amount or type of consideration, profit or loss as a result of the Company’s activities or the Subscriber’s investment in the Company; or

 

(II) the past performance or experience of the management of the Company, or of any other person, will in any way indicate the predictable results of the ownership of the Shares or the Warrants or of the Company’s activities.

 

(p) The Subscriber is not subscribing for the Shares or the Warrants as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or similar gathering; or any solicitation of a subscription by a person, other than Company personnel, previously not known to the undersigned.

 

(q) The Subscriber is not relying on the Company with respect to the tax considerations or the economic merit of an investment.

 

(r) The Subscriber understands that the net proceeds from all subscriptions paid and accepted pursuant to the Offering (after deduction for commissions, discounts and expenses of the Offering) will be used in all material respects to fund the business and operations of the Company in the discretion of management.

 

(s) The Subscriber acknowledges that the representations, warranties and agreements made by the Subscriber herein shall survive the execution and delivery of this Agreement and the purchase of the Shares and the Warrants.

 

(t) The Subscriber has had the opportunity to consult the Subscriber’s own financial, legal and tax advisors with respect to the economic, legal and tax consequences of an investment in the Shares and the Warrants and has not relied on the Company, its officers, directors or professional advisors for advice as to such consequences.

 

(u) Except as set forth on the signature page hereto, the Subscriber has not engaged any broker or other person or entity that is entitled to a commission, fee or other remuneration as a result of the execution, delivery or performance of this Agreement.

 

(v) For California and Massachusetts individuals: If the Subscriber is a California resident, such Subscriber’s investment in the Company will not exceed 10% of such Subscriber’s net worth (or joint net worth with his spouse). If the Subscriber is a Massachusetts resident, such Subscriber’s investment in the Company will not exceed 25% of such Subscriber’s joint net worth with his spouse (exclusive of principal residence and its furnishings).

 

	 
	
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5. Indemnification. The Subscriber understands the meaning and legal consequences of the representations and warranties contained in Section 4 hereof, and agrees to indemnify and hold harmless the Company and each officer, director, partner, employee, agent and controlling person of each of them, past, present or future, from and against any and all loss, damage or liability due to or arising out of a breach of any such representation or warranty by Subscriber.

 

6. Transferability. Neither this Agreement, nor any interest of the Subscriber herein, shall be assignable or transferable by the Subscriber in whole or in part except by operation of law. Any attempt to assign or transfer this agreement or any interest therein other than by operation of law shall be void. Notwithstanding the foregoing, Subscriber may transfer the securities acquired hereunder in accordance with the provisions of paragraph 4(l) above.

 

7. Confidentiality. The Subscriber acknowledges and agrees that all confidential information, written and oral, concerning the Company furnished from time to time to the Subscriber may not be disclosed, to anyone other than (x) the Subscriber’s officers, directors, employees, legal counsel, accountants or authorized agents or advisors who have a need to know such information in connection with evaluating whether the Subscriber should enter into this Agreement and acquire the Shares, each of whom have agreed to the provisions of this Section 7 and (y) other stockholders of the Company and their representatives who have similarly agreed to the provisions of this Section 7, except to the extent that (i) the information becomes publicly available other than as a result of disclosure in violation of the provisions of this Agreement or (ii) such disclosure is required by law,. The provisions of this Section 7 shall survive the purchase of the Shares and the Warrants and/or the termination of this Agreement.

 

8.  Registration and Trading. Beginning 9 months from the date hereof, the Company agrees to pay to the Subscriber 1⁄2% per month calculated day-to-day on a 30/360 basis, of the Liquidation Preference of the Shares held by the Subscriber and acquired pursuant to this Agreement (the “Monthly Payment”), until the date that both of the following conditions shall be satisfied: (i) the Common Stock is listed for trading on a national securities exchange, an inter-dealer automated quotation system of a national association of securities dealers or listed on the OTC Pinks (or its successor or an equivalent or better regarded marketplace or listing) and (ii) the Common Shares issuable upon conversion of the Shares shall be registered under the Securities Act of 1933, as amended (the “Act”) or the Subscriber is then able to sell such Common Shares under Rule 144 promulgated pursuant to the Act without volume restriction (or the foreign equivalent of this condition (ii) if the listing in (i) is on a foreign exchange). The Monthly Fee will be pro-rated if these conditions are satisfied with respect to only a portion of such Common Shares. The Monthly Payment shall be due and payable at the end of each month. If at any time during the six-month period commencing upon the day that both of the above conditions are first satisfied they are no longer satisfied, then the Company shall again become obligated to make the Monthly Payment until the above conditions have been satisfied for a period of six months in aggregate.

 

	 
	
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9. Miscellaneous.

 

(a) This Agreement, including the exhibits hereto, sets forth the entire understanding of the parties with respect to the subject matter hereof, supersedes all existing agreements among them concerning such subject matter, and may be modified only by a written instrument duly executed by the party to be charged.

 

(b) Except as otherwise specifically provided herein, any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or by Federal Express, Express Mail or similar overnight delivery or courier service or delivered (in person or by telecopy, telex or similar telecommunications equipment) against receipt to the party to whom it is to be given,

 

(i) if to the Company:

 

Gyrotron Technology, Inc.

3412 Progress Drive 

Bensalem, Pennsylvania 19020

Attention: Vlad Sklyar

Fax: (215) 244-4742

Confirm: (215) 244- 4740

 

with a copy to:

 

David Lubin 

David Lubin & Associates, PLLC 

108 S. Franklin Ave, Suite 10 

Valley Stream, NY 11580 

(516) 887-8200 

fax: (516) 887-8250

 

(ii) if to the Subscriber, at the address set forth on the signature page hereof,

 

or in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 9(b). Any notice given by means permitted by this Section 9(b) shall be deemed given at the time of receipt thereof at the address specified in this Section 9(b).

 

(c) This Agreement shall be binding upon and inure to the benefit of the parties hereto, the successors and assigns of the Company, and the permitted successors, assigns, heirs and personal representatives of the Subscriber, not including, however, any transferees of the Shares.

 

	 
	
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(d) The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

 

(e) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(f) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to principles governing conflicts of law that would defer to the substantive law of another jurisdiction. The parties hereby irrevocably consent to resolve any disputes in connection with, arising out of, or relating to this agreement by arbitration in New York City in front of three arbitrators with each party picking one arbitrator and the two selected arbitrators picking a third. Without limiting the foregoing, no action or proceeding in connection with, arising out of, or relating to this agreement shall be brought by the parties hereto in any court other than the courts of the State of New York or any federal court located in such State.

 

(g) This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement (except as specifically provided in this Agreement).

 

9. Most Favored Nation.

 

(a) If prior to 12/31/16 the Company conducts and subsequently closes (whether prior to or after 12/31/16) a financing or a series of related financings (other than a financing or other transaction which is included within any of the Exempt Issuances (as defined below)), whose terms were substantially negotiated prior to 12/31/16 that could reasonably be deemed to have terms and conditions more favorable than the terms provided for herein, in all such cases with gross cash proceeds in excess of $50,000 (each such financing a "New Financing"), then the undersigned shall have the right (“MFN Right”) to exchange (any such exchange being an "MFN Exchange") all or any part of the units purchased hereunder by the undersigned and still held by the undersigned valued at $35 per unit and any dividends accrued thereon valued at the accrued amount, for securities offered in the New Financing at the same price and on the same terms and conditions offered in the New Financing. The MFN Right shall permanently terminate if for a period of 20 consecutive trading days (i) the Common Stock is listed for trading on a national securities exchange, an inter-dealer automated quotation system of a national association of securities dealers or listed on “OTC Pinks” (or its successor or an equivalent or better regarded marketplace or listing) and (ii) the Common Shares issuable upon conversion of the Shares shall have been registered under the Securities Act of 1933, as amended (the “Act”) or the Subscriber is then able to sell such Common Shares under Rule 144 promulgated pursuant to the Act without volume restriction (or the foreign equivalent of this condition (ii) if the listing in (i) is on a foreign exchange) and (iii) on each of those 20 days the price of the Company’s common stock closes at or above $0.80 (as adjusted for splits etc.), and (iv) the average closing price for those 20 days equals or exceeds $1.00 (as adjusted).

 

An “Exempt Issuance” shall mean any of the following transactions: (i) any shares of Common Stock to be sold by the Company at a price per share of $0.70 (as adjusted) or more, (ii) non-convertible financings , (iii) shares or options representing up to 1,000,000 of the shares of Common Stock (as adjusted for stock splits, combinations and similar events) in the aggregate, to be issued to employees, directors or service providers that have been approved by the Board, (iv) any shares or other convertible securities issued in connection with acquisitions, mergers or other consolidations or issued to a non-financial strategic investor not affiliated with the Company or any of its affiliates, or (v) any shares or options issued to a commercial financing source in connection with a financing to the Company which are issued at nominal consideration

 

(b) The Company covenants and agrees to promptly give written notice (an “MFN Notice”) to the undersigned of the terms and conditions of any such New Financing. On or prior to the expiration of the twenty (20) business day period (the “MFN Review Period”) after the undersigned has received the MFN Notice, the undersigned shall notify the Company in writing (the "MFN Response") specifying whether it elects to conduct an MFN Exchange. If the undersigned fails to send an MFN Response prior to the expiration of the MFN Review Period, the undersigned shall be deemed to have waived its rights under this Section solely with respect to the MFN Exchange specified in the MFN Notice relating to such MFN Review Period.

 

(c) Each potential MFN Exchange shall be communicated to the undersigned in accordance with this Section until such time as the undersigned elects to conduct an MFN Exchange. Once the undersigned elects to conduct an MFN Exchange, the undersigned shall have no further right to receive notice of or to conduct any future MFN Exchange under this Section. The Company and the undersigned shall cooperate to promptly cancel the Shares being exchanged and to promptly enter into such agreements, certificates, instruments and other documents that are necessary to reflect an MFN Exchange that the undersigned elects to conduct.

 

 [Signature page follows]

 

	 
	
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SIGNATURE PAGE

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year this subscription has been accepted by the Company as set forth below. 

 

	Units Subscribed For: 	 	Print Name of Subscriber	 
				
				
		 	 		 
		 	By: 		 
		 	 	
(Signature of Subscriber or
Authorized Signatory)

	 
	
Social Security Number or other

			
 

	
	
Taxpayer Identification Number

		Address:	
 

	
				
 

	
			Telephone:	
 

	
			Fax:	
 

	

  

If the Shares will be held as joint tenants, tenants in common, or community property, please complete the following:

 

		 	 	 	 
	 	 	 	Print name of spouse or other co-subscriber 	 
	 	 		 	 
	 	 		Signature of spouse or other co-subscriber 	 
					
				Print manner in which Shares and Warrant will be held	

 

If the Shares and the Warrants have been purchased through a broker or other intermediary, please identify such entity:

 

____________________________________________________

 

[Please complete Exhibit A for each subscriber.]

 

	 
	
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ACCEPTANCE OF SUBSCRIPTION

 

			 		 
		 	 	Name of Subscriber	 
		 	 	 	 
	ACCEPTED BY:	 	 	 	 
		 	 		 	 
	GYROTRON TECHNOLOGY, INC.	 	 		 
	
 

		 	 	 	 
	
By:

		 		 	 
	Name:	 	 	 	 	 
	Title:	 	 		 	 
		 	 		 	 

  

Date: ,_________________ 2015

 

Funds Received: ________________, 2015

 

Accepted for ____________ Units

 

	 
	
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EXHIBIT A

ACCREDITED INVESTOR STATUS

 

The oversigned subscriber represents that it is an Accredited Investor on the basis that it is (check one):

 

_____(i) A bank as defined in Section 3(a)(2) of the Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined in Section 2(13) of the Act; an investment company registered under the Investment Company Act of 1940 (the “Investment Company Act”) or a business development company as defined in Section 2(a)(48) of the Investment Company Act; a 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; a 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; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, 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.

 

_____(ii) A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

 

_____(iii) An 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.

 

_____(iv) A director or executive officer of the Company.

 

_____(v) A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds $1,000,000 excluding his/their principal residence.

 

_____(vi) A natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

 

_____(vii) 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) (i.e., a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment).

 

_____(viii) An entity in which all of the equity owners are accredited investors. (If this alternative is checked, the Subscriber must identify each equity owner and provide statements signed by each demonstrating how each is qualified as an accredited investor. Further, the Subscriber represents that it has made such investigation as is reasonably necessary in order to verify the accuracy of this alternative.

 

 

14EX10.1 Form of RSA Grant FY15 (Executives)

Exhibit 10.1
Global Payments Inc.

FORM OF RESTRICTED  STOCK  AWARD  CERTIFICATE

Non-transferable
G R A N T  T O

____________________________________
 (“Grantee”)

by Global Payments Inc. (the “Company”) of

____________________________________

shares of its common stock, no par value (the “Shares”) pursuant to and subject to the provisions of the Global Payments Inc. 2011 Incentive Plan (the “Plan”) and to the terms and conditions set forth on the following pages of this award certificate (the “Terms and Conditions”).  By accepting this Award, Grantee shall be deemed to have agreed to the terms and conditions set forth in this Restricted Stock Award Certificate (the “Certificate”) and the Plan.

Unless sooner vested in accordance with Section 3 of the Terms and Conditions or otherwise in the discretion of the Committee, the restrictions imposed under Section 2 of the Terms and Conditions will expire as to the following percentage of the Shares awarded hereunder, on the following respective dates; provided that Grantee is then still employed by the Company or any of its Affiliates:  

	
				
	 
	Percentage of Shares
	Date of Expiration of Restrictions
	 

	 
	33.33%
	[Year 1]
	 

	 
	33.33%
	[Year 2]
	 

	 
	33.34%
	[Year 3]
	 

IN WITNESS WHEREOF, Global Payments Inc., acting by and through its duly authorized officers, has caused this Certificate to be executed.

	
		
	Global Payments Inc.

By: ____________________________________________
Its:  Authorized Officer
	Grant Date: 
Grant Number:

Accepted by Grantee:  __________________________

TERMS AND CONDITIONS
1.  Grant of Shares.  The Company hereby grants to the Grantee named on the cover page hereof, subject to the restrictions and the other terms and conditions set forth in the Plan and in this Certificate, the number of Shares indicated on the cover page hereof of the Company’s no par value common stock (the “Shares”).  Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan.
2.  Restrictions.  The Shares are subject to each of the following restrictions.  “Restricted Shares” mean those Shares that are subject to the restrictions imposed hereunder which restrictions have not then expired or terminated.  Restricted Shares may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered.  If Grantee’s employment with the Company or any Affiliate terminates for any reason other than as set forth in paragraph (b) of Section 3 hereof, then Grantee shall forfeit all of Grantee’s right, title and interest in and to the Restricted Shares as of the date of employment termination, and such Restricted Shares shall revert to the Company.  The restrictions imposed under this Section shall apply to all shares of the Company’s Stock or other securities issued with respect to Restricted Shares hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Stock.
3.  Expiration and Termination of Restrictions.  The restrictions imposed under Section 2 will expire on the earliest to occur of the following (the period prior to such expiration being referred to herein as the “Restricted Period”): 
		
	(a)
	As to the percentages of the Shares specified on the cover page hereof, on the respective dates specified on the cover page hereof; provided Grantee is then still employed by the Company or an Affiliate; or

		
	(b)
	Termination of Grantee’s employment by reason of death or Disability or, subject to the consent of the Committee, Grantee’s Retirement.

4.  Delivery of Shares.  The Shares will be registered on the books of the Company in Grantee’s name as of the Grant Date and will be held by the Company during the Restricted Period in certificated or uncertificated form.  If a certificate for Restricted Shares is issued during the Restricted Period with respect to such Shares, such certificate shall be registered in the name of Grantee and shall bear a legend in substantially the following form:
“This certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in a Restricted Stock Award Certificate between the registered owner of the shares represented hereby and Global Payments Inc.  Release from such terms and conditions shall be made only in accordance with the provisions of such Certificate, copies of which are on file in the offices of Global Payments Inc.”
Stock certificates for the Shares, without the above legend, shall be delivered to Grantee or Grantee’s designee upon request of Grantee after the expiration of the Restricted Period, but delivery may be postponed for such period as may be required for the Company with reasonable diligence to comply if deemed advisable by the Company, with registration requirements under the Securities Act of 1933, listing requirements under the rules of any stock exchange, and requirements under any other law or regulation applicable to the issuance or transfer of the Shares.
5.  Voting and Dividend Rights.  Grantee, as beneficial owner of the Shares, shall have full voting and dividend rights with respect to the Shares during and after the Restricted Period.  If Grantee forfeits any rights he or she may have under this Certificate in accordance with Section 2, Grantee shall no longer have any rights as a shareholder with respect to the Restricted Shares or any interest therein and Grantee shall no longer be entitled to receive dividends on such stock.
6.  No Right of Continued Employment.  Nothing in the Plan or this Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate Grantee’s employment without liability at any time, nor confer upon Grantee any right to continue in the employ of the Company or any Affiliate.
7.  No Entitlement to Future Awards.  The grant of this Award does not entitle Grantee to the grant of any additional awards under the Plan in the future.  Future grants, if any, will be at the sole discretion of the Company.  

8.  Payment of Taxes.  Upon issuance of the Shares hereunder, Grantee may make an election to be taxed upon such award under Section 83(b) of the Code.  The Company or any Affiliate employing Grantee has the authority and the right to deduct or withhold, or require Grantee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Grantee’s FICA obligation) required by law to be withheld with respect to any taxable event arising as a result of the vesting of the Shares.  The withholding requirement may be satisfied, in whole or in part, at the election of the Company’s general counsel, principal financial officer or chief accounting officer, by withholding from the settlement Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as such officer establishes.  The obligations of the Company under this Certificate will be conditional on such payment or arrangements, and the Company and, where applicable, its Affiliates will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to Grantee.
9.  Amendment.  The Committee may amend, modify or terminate this Certificate without approval of Grantee; provided, however, that such amendment, modification or termination shall not, without Grantee’s consent, reduce or diminish the value of this award determined as if it had been fully vested (i.e., as if all restrictions on the Restricted Shares hereunder had expired) on the date of such amendment or termination.
10.  Plan Controls. The terms contained in the Plan are incorporated into and made a part of this Certificate and this Certificate shall be governed by and construed in accordance with the Plan.  Without limiting the foregoing, the Restricted Shares are subject to adjustment as provided in Article 15 of the Plan.  In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Certificate, the provisions of the Plan shall be controlling and determinative.  Any conflict between this Certificate and the terms of a written employment, key position, or change-in-control agreement with Grantee that has been approved, ratified or confirmed by the Committee shall be decided in favor of the provisions of such employment, key position, or change-in-control agreement. 
11.  Governing Law.  This Certificate shall be construed in accordance with and governed by the laws of the State of Georgia, United States of America, regardless of the law that might be applied under principles of conflict of laws.  Grantee hereby agrees and submits to jurisdiction in the state and federal courts of the State of Georgia and waives objection to such jurisdiction.
12.  Severability.  If any one or more of the provisions contained in this Certificate is deemed to be invalid, illegal or unenforceable, the other provisions of this Certificate will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included.
13.  Relationship to Other Benefits.  The Shares shall not affect the calculation of benefits under any other compensation plan or program of the Company, except to the extent specially provided in such other plan or program.
14.  Notice.  Notices and communications hereunder must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid.  Notices to the Company must be addressed to Global Payments Inc., 10 Glenlake Parkway, North Tower, Atlanta, Georgia 30328; Attn: Corporate Secretary, or any other address designated by the Company in a written notice to Grantee.  Notices to Grantee will be directed to the address of Grantee then currently on file with the Company, or at any other address given by Grantee in a written notice to the Company.
15. Clawback.  Notwithstanding anything to the contrary in this Certificate, the Plan, or any employment, key position, or change-in-control agreement with Grantee, the award granted hereunder is subject to the provisions of the following clawback policy established by the Committee prior to the grant of the Restricted Shares hereunder. The Committee may seek to recoup all or any portion of the value of any annual or long-term incentive awards provided to any current or former executive officers in the event that the Company’s financial statements are restated due to the Company’s material noncompliance with any financial reporting requirement under the securities laws (the “Restatement”).  The Committee may seek recoupment from any current or former executive officer who received incentive-based compensation, granted after the date hereof, during the three (3) year period preceding the date that the Company was required to prepare the Restatement.  The Committee may seek to recover the amount by which the individual executive's incentive payments exceeded the lower payment that would have been made based on the restated financial results and the Committee may determine whether the Company shall effect such 

recovery:  (i) by seeking repayment from the executive; (ii) by reducing (subject to applicable law and the terms and conditions of the applicable plan, program or arrangement) the amount that would otherwise be payable to the executive under any compensatory plan, program or arrangement maintained by the Company; or (iii) a combination of foregoing.  The Grantee hereby acknowledges that this award is subject to the foregoing policy and agrees to make any repayment required in connection therewith.
16.  Non-Competition and Non-Solicitation.  As a condition of Grantee’s receipt of this Award, Grantee agrees to the following restrictions. Grantee acknowledges and agrees that as a result of Grantee’s employment with the Company or an Affiliate, Grantee’s knowledge of and access to confidential and proprietary information, and Grantee’s relationships with the Company’s or its Affiliate’s customers and employees, Grantee would have an unfair competitive advantage if Grantee were to engage in activities in violation of this Agreement.  Grantee also acknowledges and agrees that the covenants in this Section 16 are necessary to protect the trade secrets of Company.
16.1    Non-Competition. During the term of Grantee’s employment and for a period of twenty-four (24) months immediately following the termination of Grantee’s employment for any reason, Grantee shall not, directly or indirectly, seek or obtain any employment or independent contractor relationship with a Competitor, or otherwise engage in Competitive Services, in the geographic area in which the Company or an Affiliate conducts business, in which Grantee has duties for (or provides services to) such Competitor that relate to Competitive Services and are the same or similar to those services actually performed by Grantee for the Company; provided, however, that (a) nothing in this Section 16.1 shall prohibit Grantee from acquiring or holding, for investment purposes only, less than five percent (5%) of the outstanding publicly traded securities of any corporation which may compete directly or indirectly with the Company or an Affiliate; and (b) the time period of the non-compete in this Section shall not be longer than the time period of the non-compete in a written employment agreement between Grantee and the Company.  
16.2    Non-Solicitation of Customers. During the term of Grantee’s employment and for a period of twenty-four (24) months immediately following the termination of Grantee’s employment for any reason, Grantee shall not, directly or indirectly, on Grantee’s own behalf or on behalf of any other individual, corporation, partnership, joint venture, limited liability company, association or other entity or otherwise, solicit, divert or take away or attempt to solicit divert or take away any Protected Customer for the purpose of providing or selling Competitive Services; provided however, that the non-solicitation restriction contained in this Section 16.2 shall only apply to those Protected Customers (a) with whom Grantee, alone or in conjunction with others, had business dealings with on behalf of the Company or an Affiliate during the twelve (12) month period immediately preceding the termination of Grantee’s employment or any earlier date of any alleged breach by Grantee of the restriction in Section 16.2 hereof, and/or (b) for whom Grantee was responsible for supervising or coordinating the business dealings between the Company or an Affiliate and the Protected Customer during the twelve (12) month period immediately preceding the termination of Grantee’s employment or any earlier date of any alleged breach by Grantee of the restriction in Section 16.2 hereof.
16.3    Non-Solicitation of Employees. During the term of Grantee’s employment and for a period of twenty-four (24) months immediately following the termination of Grantee’s employment for any reason, Grantee shall not, directly or indirectly, on Grantee’s own behalf or on behalf of any other individual, corporation, partnership, joint venture, limited liability company, association or other entity or otherwise, solicit or induce any Protected Employee with whom Grantee worked or otherwise had material contact with through employment with the Company or an Affiliate to terminate his or her employment relationship with the Company or an Affiliate or to enter into employment with any other individual, corporation, partnership, joint venture, limited liability company, association or other entity.  
16.4    Definitions.  For purposes of this Section 16, the following definitions shall apply:
(a)    “Competitive Services” means services competitive with the business activities engaged in by the Company or an Affiliate as of the date of termination of Grantee’s employment for any reason or any earlier date of an alleged breach by Grantee of the restrictions in Section 16 hereof, which include, but are not limited to, the provision of products and services to facilitate or assist with the movement in electronic commerce of payment and financial 

information, merchant processing, merchant acquiring, credit and debit transaction processing, check guarantee and verification, electronic authorization and capture, terminal management services, purchase card services, financial electronic data interchange, cash management services, and wire transfer services.
(b)    “Competitor” means any individual, corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise which is engaged, wholly or in part, in Competitive Services, including but not limited to the following companies, all of whom engage in Competitive Services (and all of their parents, subsidiaries, or affiliates who engage in Competitive Services) and all of the successors in interest to any of the foregoing: TSYS Acquiring Solutions, Chase Paymentech Solutions, First Data Corporation, Total System Services, Inc., Vantiv, Wells Fargo Merchant Services, Heartland Payment Systems, First National Merchant Solutions, RBS Lynk, TransFirst Holdings, iPayment, BA Merchant Services, NPC, Elavon Merchant Services and Moneris Solutions.
(c)    “Protected Customer” means any individual, corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise to whom the Company or an Affiliate has sold or provided its products or services, or actively solicited to sell its products or services, during the twelve (12) months prior to termination of Grantee’s employment for any reason or any earlier date of an alleged breach by Grantee of the restrictions in Section 16 hereof. 
(d)    “Protected Employee” means any employee of the Company or an Affiliate who was employed by Company or an Affiliate at any time within six (6) months prior to the termination of Grantee’s employment for any reason or any earlier date of an alleged breach by Grantee of the restrictions in Section 18 hereof.
16.5    Rights and Remedies Upon Breach.  Grantee agrees that, in the event that Grantee breaches or  threatens to breach the covenants set forth in Section 16 hereof, the Company shall be entitled to enjoin, preliminarily and permanently, Grantee from violating or threatening to violate the covenants set forth in Section 16 hereof and to have the covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.  In addition, if the Grantee breaches any of the covenants set forth in Section 16 hereof, all unvested Shares covered by this Certificate shall be immediately forfeited. Such forfeiture shall be in addition to any other right the Company may have with respect to any such violation or breach.
16.6    Severability. Grantee acknowledges and agrees that the covenants set forth in Section 16 hereof are reasonable and valid in time and scope and in all other respects and shall be considered and construed as separate and independent covenants. If any portion of the foregoing provisions is found to be invalid or unenforceable by a court of competent jurisdiction because its duration, the territory, the definition of activities or the definition of information covered is considered to be invalid or unreasonable in scope, the invalid or unreasonable term shall be redefined, or a new enforceable term provided, such that the intent of the Company and Grantee will not be impaired and the provision in question shall be enforceable to the fullest extent of the applicable laws.

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