Document:

SIGMA LABS, INC.

 

SUBSCRIPTION INSTRUCTIONS

Sigma Labs, Inc., a Nevada corporation (the “Company”) is offering and selling shares of its common stock to investors who qualify as “accredited investors,” as that term is defined in Rule 501 and Rule 506 (a) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and who meet the other suitability standards stated herein.  The Company may also accept subscriptions from a limited number of unaccredited investors who undertake substantial representations regarding their suitability for an investment in the Company.

 

If you wish to subscribe to purchase shares of common stock of the Company, you must complete, sign separately and deliver to the Company the attached Subscription Agreement, along with a check payable to “Sigma Labs, Inc.”  If you are an “accredited investor,” you must also complete, sign and deliver to the Company the Confidential Purchaser Questionnaire attached as Exhibit A to the Subscription Agreement.

 

The Subscription Agreement provides that the Company may accept or reject your subscription, in whole or in part.  If the Company rejects your subscription, the rejected subscription funds will be returned promptly, without deduction or interest. Questions regarding these instructions should be directed to Mark Cola at 505-438-2576 or cola@b6sigma.com.

  

  

  

 

SIGMA LABS, INC.

 

SUBSCRIPTION AGREEMENT

Sigma Labs, Inc.

3900 Paseo del Sol

Santa Fe, New Mexico 87507

Attention: Richard Mah

Gentlemen:

 

The undersigned subscriber (hereinafter, the “Purchaser”) acknowledges that he has received and carefully read the Offering Memorandum, dated January 2011 (the “Memorandum”), including the “Risk Factors” section of the Memorandum, which describes certain of the risks associated with an investment in Sigma Labs, Inc., a Nevada corporation (the “Company”).  The Company is offering pursuant to the Memorandum to sell and issue up to 75,000,000 shares of the Company’s common stock, $0.001 par value per share (the “Shares”).

 

Subscription.  Subject to the terms and conditions of this subscription agreement (this “Subscription Agreement”), the Purchaser hereby irrevocably subscribes for and agrees to purchase from the Company the number of the Shares indicated on the signature page hereof at a price of $0.02 per share.  The Purchaser hereby tenders this Subscription Agreement, together with a check payable to “Sigma Labs, Inc.” for the total subscription amount indicated on the signature page hereof.

 

The Purchaser agrees that this subscription shall be irrevocable and shall survive the death or disability of the Purchaser.

 

1.           Acceptance of Subscription.  The Purchaser acknowledges that the Company has the right to accept or reject this subscription, in whole or in part, for any reason, and that this subscription shall be deemed to be accepted by the Company only when it is signed on its behalf.  The Subscription Agreement either will be accepted or rejected, or accepted in part and rejected in part, as promptly as practical after receipt.  The Purchaser agrees that subscriptions need not be accepted in the order they are received by the Company.  Upon rejection of this Subscription Agreement for any reason, all items received with this Subscription Agreement shall be returned to the Purchaser without deduction for any fee, commission or expense, and without interest with respect to any money received, and this Subscription Agreement shall be deemed to be null and void and of no further force or effect.  The Purchaser understands and agrees that the acceptance of this subscription, or a part of this subscription, will in no way constitute a determination that an investment in the Company is a suitable investment for the Purchaser.

 

2.           Accredited Investor Representations, Warranties and Covenants.  This Section 2 and the following representations and warranties apply only to a Purchaser who is an “accredited investor,” as that term is defined in Rule 501 and Rule 506 (a) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). By checking the following box ⁫, the Purchaser hereby represents and warrants to and covenants with the Company as follows, which representations and warranties are true and accurate as of the date hereof, shall be true and accurate as of the date of delivery of this Subscription Agreement and accompanying documents to the Company and shall survive the delivery of the Shares:

 

(a)            Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act, and that the information contained in the Confidential Purchaser Questionnaire (the “Questionnaire”) attached hereto as Exhibit A is complete, accurate and true in all respects.  This representation and warranty is true and accurate as of the date hereof, shall be true and accurate as of the date of delivery of this Subscription Agreement and accompanying documents to the Company and shall survive the delivery of the Shares.  Pursuant to this Section 2, the Purchaser agrees that the foregoing representation may be used as a defense in any actions relating to the Company or the offering of the Shares, and that it is only on the basis of such representations and warranties that the Company may be willing to accept the Purchaser's subscription for the Shares as an “accredited investor.”

  

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(b)           The Purchaser has examined the Memorandum and has relied solely upon the investigations made by or on behalf of the Purchaser or his representative in evaluating the suitability of an investment in the Company and recognizes that an investment in the Shares involves a high degree of risk;

 

(c)           The Purchaser has been advised that there is a limited trading market for the Shares, and there is no assurance that an active public market for the Shares will develop in the foreseeable future, if ever; and it may not be possible to readily liquidate the Purchaser’s investment in the Company.

 

(d)           The Purchaser has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of an investment in the Shares, or the Purchaser has employed the services of an independent investment advisor, attorney or accountant to read all of the documents furnished or made available to him, her or it by the Company and to evaluate the merits and risks of such an investment on the Purchaser's behalf;

 

(e)           The Purchaser's overall commitment to investments which are not readily marketable is not disproportionate to his, her or its net worth; his, her or its investment in the Shares will not cause such overall commitment to become excessive; and he, she or it can afford to bear the loss of his, her or its entire investment in the Shares;

 

(f)           The Purchaser has adequate means of providing for his, her or its current needs and personal contingencies and has no need for liquidity in his, her or its investment in the Shares;

 

(g)           The Purchaser hereby acknowledges that the Purchaser has been advised that this offering has not been registered with, or reviewed by, the Securities and Exchange Commission (the “SEC”) because this offering is intended to be a non-public offering pursuant to Section 4(2) of the Securities Act and Regulation D thereunder (“Regulation D”).  The Purchaser represents that the Purchaser's Shares are being purchased for the Purchaser's own account, for investment purposes only and not with a view towards distribution or resale to others.  The Purchaser agrees that the Purchaser will not attempt to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Shares unless they are registered under the Securities Act or unless in the opinion of counsel satisfactory to the Company an exemption from such registration is available.  The Purchaser understands that the Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act, which depends, in part, upon the Purchasers’ investment intention;

 

(h)           The signatures on the Subscription Agreement are genuine; and the Purchaser has legal competence and capacity to execute the same; and this Subscription Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable in accordance with its terms; and

 

(i)           The Purchaser acknowledges that the Shares have not been recommended by any U.S. Federal or state securities commission or regulatory authority.  Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document.  Any representation to the contrary is a criminal offense.

 

Purchaser agrees that the foregoing representations and warranties may be used as a defense in any actions relating to the Company or the offering of the Shares, and that it is only on the basis of such representations and warranties that the Company may be willing to accept the Purchaser's subscription for the Shares

 

3.           General Investor Representations, Warranties and Covenants.  This Section 3 and the following representations and warranties apply only to a Purchaser who is not an “accredited investor,” as that term is defined in Rule 501 and Rule 506 (a) promulgated under the Securities Act. By checking the following box ⁫, the Purchaser hereby represents and warrants to and covenants with the Company as follows, which representations and warranties are true and accurate as of the date hereof, shall be true and accurate as of the date of delivery of this Subscription Agreement and accompanying documents to the Company and shall survive the delivery of the Shares:

  

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(a)           The Purchaser has examined the Memorandum and has relied solely upon the investigations made by or on behalf of the Purchaser or his representative in evaluating the suitability of an investment in the Company and recognizes that an investment in the Shares involves a high degree of risk;

 

(b)           The Purchaser has been advised that there is a limited trading market for the Shares, and there is no assurance that an active public market for the Shares will develop in the foreseeable future, if ever; and it may not be possible to readily liquidate the Purchaser’s investment in the Company.

 

(c)           The Purchaser has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of an investment in the Shares, or the Purchaser has employed the services of an independent investment advisor, attorney or accountant to read all of the documents furnished or made available to him, her or it by the Company and to evaluate the merits and risks of such an investment on the Purchaser's behalf;

 

(d)           The Purchaser's overall commitment to investments which are not readily marketable is not disproportionate to his, her or its net worth; his, her or its investment in the Shares will not cause such overall commitment to become excessive; and he, she or it can afford to bear the loss of his, her or its entire investment in the Shares;

 

(e)           The Purchaser has adequate means of providing for his, her or its current needs and personal contingencies and has no need for liquidity in his, her or its investment in the Shares;

 

(f)           The Purchaser hereby acknowledges that the Purchaser has been advised that this offering has not been registered with, or reviewed by, the Securities and Exchange Commission (the “SEC”) because this offering is intended to be a non-public offering pursuant to Section 4(2) of the Securities Act and Regulation D thereunder (“Regulation D”).  The Purchaser represents that the Purchaser's Shares are being purchased for the Purchaser's own account, for investment purposes only and not with a view towards distribution or resale to others.  The Purchaser agrees that the Purchaser will not attempt to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Shares unless they are registered under the Securities Act or unless in the opinion of counsel satisfactory to the Company an exemption from such registration is available.  The Purchaser understands that the Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act, which depends, in part, upon the Purchasers’ investment intention;

 

(g)           The signatures on the Subscription Agreement are genuine; and the Purchaser has legal competence and capacity to execute the same; and this Subscription Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable in accordance with its terms; and

 

(h)           The Purchaser acknowledges that the Shares have not been recommended by any U.S. Federal or state securities commission or regulatory authority.  Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document.  Any representation to the contrary is a criminal offense.

 

Purchaser agrees that the foregoing representations and warranties may be used as a defense in any actions relating to the Company or the offering of the Shares, and that it is only on the basis of such representations and warranties that the Company may be willing to accept the Purchaser's subscription for the Shares.

  

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4.           Indemnification.  The Purchaser acknowledges that he, she or it understands the meaning and legal consequences of the representations, warranties and covenants in paragraph 2 and 3 hereof, as applicable, and that the Company has relied upon such representations, warranties and covenants, as applicable, and he, she or it hereby agrees to indemnify and hold harmless the Company and any of its officers, directors, controlling persons, agents and employees, who is or may be a party or is or may be threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of or arising from any actual or alleged misrepresentation or misstatement of facts or omission to represent or state facts made or alleged to have been made by the undersigned to the Company (or any agent or representative of the Company), or omitted or alleged to have been omitted by the undersigned, concerning the undersigned or the undersigned's authority to invest or financial position in connection with the offering or sale of the Shares, including, without limitation, any such misrepresentation, misstatement or omission contained in the Questionnaire submitted by the Purchaser (if any), against losses, damages, liabilities or expenses for which the Company or any officer, director or controlling person of the Company has not otherwise been reimbursed (including reasonable attorney's fees, judgments, fines and amounts paid in settlement) actually and reasonably incurred by the Company or such officer, director or controlling person in connection with such action, suit or proceeding.  Notwithstanding the foregoing, however, no representation, warranty, covenant, acknowledgment or agreement made herein by the Purchaser shall in any manner be deemed to constitute a waiver of any rights granted to the Purchaser under U.S. Federal or state securities laws.  All representations, warranties and covenants contained in this Subscription Agreement and the indemnification contained in this paragraph 4 shall survive the acceptance of this Subscription Agreement and the delivery of the Shares.

 

5.           Restrictions on Transfer.  The Purchaser understands and agrees that the Shares purchased pursuant to this subscription are being offered pursuant to Section 4(2) of the Securities Act and Regulation D thereunder and any interests therein may not be offered, sold, transferred, pledged or otherwise disposed of except pursuant to (i) an effective registration statement under the Securities Act and any applicable state securities laws or (ii) an exemption from registration under such act and such laws which, in the opinion of counsel for the holder of such Shares, which counsel and opinion are reasonably satisfactory to counsel for the Company, is available.  The Purchaser also understands and agrees that the following legend shall appear on all certificates representing the Shares and that the Company may give appropriate instructions to the transfer agent for the Shares to enforce such restrictions:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW.  THESE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS FIRST REGISTERED UNDER SUCH LAWS, OR UNLESS THE COMPANY HAS RECEIVED EVIDENCE REASONABLY SATISFACTORY TO IT THAT REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED.”

 

6.           Entire Agreement.  This Subscription Agreement (including all exhibits hereto) contains the entire agreement of the parties with respect to the subject matter of this Agreement and there are no representations, covenants or other agreements except as stated or referred to herein or as are embodied in the Subscription Agreement.

 

7.           Assignability.  This Subscription Agreement is not transferable or assignable by the undersigned or any successor thereto.

 

8.           Applicable Law.  This Subscription Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada, without reference to the principles thereof relating to conflicts of law.

 

[Signature page follows]

  

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IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement as of the ____ day of _________, 2011.

 

Subscription Amount: _______________ shares of common stock at a price of $0.02 per share, or a total of $_______________.

 

	
If the Purchaser is an INDIVIDUAL, or if purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY by more than one individual:

	 	  
	  	 	
(Signature of Purchaser)

	  	 	  
	  	 	    
	  	 	
(Name Typed or Printed)

	  	 	  
	  	 	    
	  	 	
(Signature of Co-Purchaser)

	  	 	  
	  	 	    
	  	 	
(Name Typed or Printed)

	  	 	  
	
If the Purchaser is a CORPORATION, PARTNERSHIP OR LIMITED LIABILITY COMPANY:

	 	    
	  	 	
(Signature of Authorized Officer or Agent)

	  	 	  
	  	 	    
	  	 	
(Name of Authorized Officer or Agent)

	  	 	  
	  	 	    
	  	 	
(Name of Business Entity Typed or Printed)

Accepted as of this _____ day of __________, 20__

SIGMA LABS, INC.

	
By:

	
    

	 	
Mark Cola, President and Chief Operating Officer

 

  

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EXHIBIT A

 

CONFIDENTIAL PURCHASER QUESTIONNAIRE

(TO BE COMPLETED ONLY BY NATURAL PERSONS)

 

Name(s) of Purchaser(s):* 

 

	 	 	 	(1)                                                                                                                                    
	 	 	 	 
	 	 	 	(2)                                                                                                                                    
	 	 	 	 	 	 
	1.   	Background Information.
	 	  	  	  	  	  
	 	
a.

	  	
Home Address:

	  	
—

	 	  	  	  	  	  
	 	  	  	
  

	  
	 	  	  	  	  	  
	 	
b.

	  	
Home Telephone:

	  	
—

	 	  	  	  	  	  
	 	
c.

	  	
Social Security #(s):

	  	
—

	 	  	  	  	  	  
	 	
d.

	  	
U.S. Citizen:

	
______ Yes ______ No

	  
	 	  	  	  	  	  
	 	
e.

	  	
Occupation:

	  	
—

	 	  	  	  	  	  
	 	
f.

	  	
Employer:

	  	
—

	 	  	  	  	  	  
	 	
g.

	  	
Bus. Address:

	  	
—

	 	  	  	  	  	  
	 	
h.

	  	
Bus. Telephone:

	  	
—

	 	  	  	  	  	  
	 	
i.

	  	
E-Mail Address:

	  	
—

	 	  	  	  	  	  
	 	
j.

	  	
Age:

	  	
—

	 	  	  	  	  	  
	 	
k.

	  	
Send Mail to:

	
______ Home    ______ Office     ______ E-Mail

	  
	 	  	  	  	  	  
	 	  	
Other:

	    	  
	 	 	 	   	 

 

*      If there is more than one Purchaser (other than husband and wife), a separate Confidential Purchaser Questionnaire must be completed for each such Purchaser. If Purchaser is a business entity, a separate Confidential Purchaser Questionnaire must be completed for each Equity Owner (as defined in Section 3 – Purchaser Suitability below) thereof.

  

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2.

	
Type of Ownership.

 

Indicate type of ownership subscribed for (if other than for a single individual or business entity):

 

______ Joint Tenants with Rights of Survivorship

 

______ Tenants in Common

 

______ Tenants by the Entirety

 

	
3.

	
Purchaser Suitability.

 

Please indicate all of the following (if any) certifications that apply to you:

 

a.            If the Purchaser is an individual, or if purchased as joint tenants, as tenants in common or as community property by more than one individual):

 

(i)           I certify that I am an “accredited investor” because I have an individual net worth* (or joint net worth* with my spouse) in excess of $1,000,000 or total corporate assets of in excess of $5,000,000.

 

Yes ______No ______

 

(ii)           I certify that I am an “accredited investor” because I had an individual income** (not including any amounts attributable to my spouse or to property owned by my spouse) of more than $200,000 in each of the previous two calendar years and I reasonably expect to reach the same income level in the current year.

 

Yes ______No ______

 

(iii)           I certify that I am an “accredited investor” because I had a joint income** with my spouse in excess of $300,000 in each of the previous two calendar years and I reasonably expect to reach the same income level in the current year.

 

Yes ______No ______

 

*      For purposes of this Questionnaire, your “net worth” is equal to the excess of your total assets at fair market value over your total liabilities, excluding from this calculation the value of your primary residence and the amount of any indebtedness secured by your primary residence (up to the fair value of the residence). The amount of any indebtedness secured by your primary residence in excess of the fair value of the residence must be included in total liabilities.

  

**      For purposes of this Questionnaire, “income” means adjusted gross income, as reported for Federal income tax purposes, less any income attributable to a spouse or to property owned by a spouse, increased by the following amounts (but not including any amounts attributable to a spouse or to property owned by a spouse): (i) the amount of any tax-exempt interest income under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”) received, (ii) the amount of losses claimed as a limited partner in a limited partnership as reported on Schedule E of Form 1040 and (iii) any deduction claimed for depletion under Section 611 et. seq. of the Code.

  

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b.            If the Purchaser is a business entity:

 

(i)           I certify that Purchaser is a corporation, partnership or limited liability company, and was not formed for the specific purpose of acquiring the Shares.

 

Yes ______No ______

 

(ii)           I certify that I am an equity owner of Purchaser (“Equity Owner”) and an “accredited investor” because I have an individual net worth* (or joint net worth* with my spouse) in excess of $1,000,000 or total corporate assets of in excess of $5,000,000.

 

Yes ______No ______

 

(iii)           I certify that I am an Equity Owner and an “accredited investor” because I had an individual income** (not including any amounts attributable to my spouse or to property owned by my spouse) of more than $200,000 in each of the previous two calendar years and I reasonably expect to reach the same income level in the current year.

 

Yes ______No ______

 

(iv)           I certify that I am an Equity Owner and an “accredited investor” because I had a joint income** with my spouse in excess of $300,000 in each of the previous two calendar years and I reasonably expect to reach the same income level in the current year.

 

Yes ______No ______

 

	
4.

	
Reliance by the Company.

 

I understand that the Company will be relying on the accuracy and completeness of my responses to the foregoing questions and I represent, warrant and covenant to the Company as follows:

 

(i)           The answers to the above questions are complete and correct and may be relied upon by the Company in determining whether the Offering in connection with which I have executed this Questionnaire is exempt from registration under the Securities Act;

 

(ii)           I will notify the Company immediately of any material change in any statement made herein or any event resulting in the omission of any statement required to be made herein that occurs prior to the acceptance of my subscription; and

 

(iii)           I understand that an investment in the Shares involves a high degree of risk.

*      For purposes of this Questionnaire, your “net worth” is equal to the excess of your total assets at fair market value over your total liabilities, excluding from this calculation the value of your primary residence and the amount of any indebtedness secured by your primary residence (up to the fair value of the residence). The amount of any indebtedness secured by your primary residence in excess of the fair value of the residence must be included in total liabilities.

  

**      For purposes of this Questionnaire, “income” means adjusted gross income, as reported for Federal income tax purposes, less any income attributable to a spouse or to property owned by a spouse, increased by the following amounts (but not including any amounts attributable to a spouse or to property owned by a spouse): (i) the amount of any tax-exempt interest income under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”) received, (ii) the amount of losses claimed as a limited partner in a limited partnership as reported on Schedule E of Form 1040 and (iii) any deduction claimed for depletion under Section 611 et. seq. of the Code.

  

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Dated:   ___________, 20__

	    
	  	
(Signature of Purchaser)

	  	  
	  	    
	  	
(Name Type or Printed)

	  	  
	  	    
	  	
(Signature of Co-Purchaser)

	  	  
	  	    
	  	
 (Name Typed or Printed)

 

  

9Sigma Labs, Inc.

and its Wholly Owned Subsidiary B6 Sigma, Inc.

 

February 9, 2011

 

Hudson Valley Capital Management Corp

2039 Albany Post Road

Croton on Hudson, NY 10520

Attention: Mark Gillis, Chief Executive Officer

 

Dear Mark,

 

This letter agreement (the “Agreement”) shall confirm the engagement of Hudson Valley Capital Management Corp (the “Placement Agent”) by Sigma Labs, Inc., a Nevada corporation (the “Company”), as the Company's non-exclusive placement agent during the term of Placement Agent's engagement hereunder, in connection with the private placement of up to 75,000,000 shares of the Company's common stock, $0,001 par value per share (collectively, the “Shares,” and such private placement, the “Offering”). Placement Agent understands that the Company currently contemplates the Offering to be made pursuant to one or more exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), and any applicable securities laws of any state or other jurisdiction. The Offering and the Placement Agent's engagement will be subject to the following terms and conditions:

 

	 	
1.

	
Retention.

 

(a)           Subject to the terms and conditions of this Agreement, the Company hereby appoints Placement Agent to act as its placement agent during the Authorization Period (as hereinafter defined). Placement Agent hereby accepts such appointment and agrees, subject to the terms and conditions of this Agreement, to seek to complete the placement of up to $1,500,000 or any portion thereof of the Shares on a “best efforts” basis during the Authorization Period. The Shares will be sold at a price of $0.02 per Share. All Shares sold will be done so pursuant to the Private Placement Memorandum, dated January 19, 2011 (the “Private Placement Memorandum”), which provides for no minimum sale of Shares and up to a maximum of 75,000,000 Shares.

 

(b)           The Company and the Placement Agent understand and agree that, in soliciting offers to purchase Shares from the Company pursuant to this Agreement and in assuming its other obligations hereunder, Placement Agent is acting as agent for the Company and not as principal, and that Placement Agent's responsibility in respect of its engagement hereunder is limited to a “best efforts” basis in placing the Shares, with no understanding, expressed or implied, on Placement Agent's part of a commitment to underwrite, purchase or place any of the Shares or any other securities of the Company.

3900 Paseo del Sol, Santa Fe New Mexico 87507

  

  

  

 

(c)          Placement Agent agrees that it may not bind or obligate the Company to sell the Shares or otherwise enter into any agreement on behalf of the Company. The Company is not obligated or required to accept any offer to purchase Shares by any prospective investor identified by Placement Agent, and the Company may refuse in its sole discretion to sell any Shares to such prospective investor without any liability to Placement Agent. If the Company should fail to deliver Shares to a purchaser whose offer the Company has accepted by execution of a subscription agreement in respect thereof, the Company shall pay to Placement Agent any fee to which Placement Agent would be entitled hereunder in connection with such sale as if such sale had been consummated.

 

(d)          During the Authorization Period, the Company shall be authorized to utilize the services of other placement agents.

 

(e)          It is understood that Placement Agent is being engaged hereunder solely to provide the services described in this Agreement to the Company as an independent contractor and that Placement Agent is not acting as an agent or fiduciary of, and shall have no duties or liabilities to, the shareholders of the Company or any third party in connection with its engagement hereunder.

 

2.           Authorization Period. Placement Agent's engagement hereunder shall become effective on the date hereof and shall continue until the earlier of (i) the final closing date of the Offering, and (ii) the date either party to this Agreement terminates the engagement according to the terms of the next sentence (such date, the “Termination Date”; the period from the date hereof through the Termination Date being hereinafter referred to as the “Authorization Period”). This Agreement may be terminated at any time by either party upon 30 days written notice to the other party, effective upon receipt of written notice to that effect by the other party.

 

3.           Offering Documents. In addition to the Private Placement Memorandum, the Company will prepare and provide to the Placement Agent such amendments or supplements thereto as the Company and its legal representatives may deem reasonably, to effectuate the offer and sale of the Shares (the Private Placement Memorandum and any such amendments or supplements, are collectively referred to herein as the “Offering Materials”). The Company shall cooperate with Placement Agent and shall provide to Placement Agent such information, as Placement Agent reasonably believes necessary in connection with its assistance in the preparation of, or for inclusion in, the Offering Materials, and provide such other information, as Placement Agent reasonably believes appropriate to its engagement hereunder. The Company authorizes the Placement Agent to transmit the Offering Materials to potential purchasers of the Shares, and shall furnish to Placement Agent copies of the Offering Materials in such quantities as Placement Agent may from time to time request. The Company shall prepare forms of purchase agreements or subscription agreements containing terms and conditions customary for private placement offerings, to be entered into by the Company and each purchaser of Shares, which forms shall be provided to the Placement Agent's offerees only upon the review and approval of both the Company and Placement Agent.

3900 Paseo del Sol, Santa Fe New Mexico 87507

 

  

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4.

	
Compensation.

 

(a)                    Fees. As compensation for Placement Agent's services hereunder, the Company shall pay Placement Agent a fee of ten percent (10%) of the Aggregate Consideration (as defined below) received or receivable by the Company at each closing of the Offering. For purposes of calculating Placement Agent's fees, “Aggregate Consideration” shall consist of the payments made to, and actually received by the Company from the sale of Shares to investors placed by the Placement Agent in connection with the Offering (the “Agent's Investors”). The Placement Agent acknowledges that investor funds may be placed in escrow pending the satisfaction of all closing conditions and the acceptance of the subscription documents by the Company, and that such escrowed funds shall not be deemed to constitute Aggregate Consideration until (and if) such funds are released to the Company.

 

(b)                    Warrants. On each closing date of the sale of Shares, the Placement Agent shall be entitled to receive warrants (the “Placement Agent Warrants”) to purchase shares of common stock of the Company in an amount equal to fifteen percent (15%) of the number of Shares sold by the Company to the Agent's Investors at such closing. The Placement Agent Warrants shall be issued at the closing of the Offering, in substantially the form attached hereto as Exhibit A, and shall expire five (5) years after issuance. The Placement Agent Warrants shall be exercisable at a per share price of $0,025.

 

5.           Representations, Warranties and Covenants of the Company.    The Company represents and warrants to, and covenants with, Placement Agent as follows:

 

(a)                    During the Authorization Period, the Company shall not use, disseminate, publish, distribute or refer to any materials in connection with any offering of the Shares, including without limitation, any Offering Materials, unless such materials are also provided to the Placement Agent.

 

(b)                    The Company has not taken, and will not take, any action, directly or indirectly, so as to cause any of the transactions contemplated by this Agreement to fail to be entitled to exemption from registration under all applicable securities laws. The Company shall ensure that neither it, nor any of its affiliates, nor any person (other than the Placement Agent who agrees to comply with this requirement) acting on behalf of the Company or any such affiliates, has engaged or will engage in any general advertising or general solicitation (as those terms are used in Regulation D under the Securities Act of 1933) with respect to the Shares.

 

(c)                    The Company shall, from time to time, take such action as Placement Agent may reasonably request to qualify the Shares for offering and sale as a private placement under the securities laws of such states or other jurisdictions as Placement Agent may reasonably request and to comply with such laws so as to permit such offers and sales.

 

3900 Paseo del Sol, Santa Fe New Mexico 87507

  

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(d)                    The Company shall make available to Placement Agent, at the Company's expense, all financial statements, projections, appraisals, surveys and other information prepared by the Company in connection with the Offering for use in the offering. The Company shall, upon reasonable request, cause its directors, officers, personnel, counsel, accountants, and other representatives to meet with Placement Agent or its representatives to discuss all information relevant for disclosure in any Offering Materials. The Company shall cooperate in any reasonable investigation requested by Placement Agent or its representatives or counsel (including the production of information at the Company's offices or copies of such information at the offices of Placement Agent) for the purpose of examining the accuracy and completeness of the statements contained in the Offering Materials.

 

(e)                    To the best of the Company's knowledge, the Offering Materials as of the date thereof and as of the closing date of each sale of Shares, are and will be true, complete and correct in all material respects and do not, and will 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 contained therein, in light of the circumstances under which they were made, not misleading. The Company shall advise Placement Agent immediately of the occurrence of any event or other change which results in the Offering Materials containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, and shall furnish to Placement Agent copies of amended or supplemented Offering Materials that correct such statement or omission in such quantities as Placement Agent may from time to time request upon being so advised.

 

(f)                    With respect to any financial or other projections included or to be included in the Offering Materials, if any, the Company represents and warrants that they have been, or will be, prepared in good faith on the basis of reasonable assumptions. The Company recognizes and confirms that Placement Agent: (i) will be using and relying primarily on the information in the Offering Materials and information available from generally recognized public sources in performing the services contemplated hereunder, without having independently verified the accuracy or completeness thereof, (ii) does not assume responsibility for the accuracy or completeness of the Offering Materials or such other information, and (iii) will not make any appraisal of any assets owned or used by the Company.

 

(g)                    (i) The Company has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and all consents, authorizations, approvals and orders required in connection with the execution, delivery and performance hereof have been obtained; (ii) this Agreement is a valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors generally and general principles of equity; and (iii) the execution, delivery and performance of this Agreement will not conflict with, result in a breach of any of the terms or provisions of, or constitute a violation or a default under, the Company's charter, by-laws or comparable documents or under any material agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound.

3900 Paseo del Sol, Santa Fe New Mexico 87507

 

  

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6.            Representations and Covenants of Placement Agent: Placement Agent represents and warrants to, and covenants with, the Company as follows:

 

(a)                    None of Placement Agent, its affiliates or any persons acting on the behalf of Placement Agent or any such affiliates has engaged in or will engage in any general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) with respect to the Shares.

 

(b)                    Placement Agent will use its best efforts to conduct the offering and sale of the Shares (i) in a manner consistent with the Private Placement Memorandum and (ii) so that the Shares are sold in a transaction or series of transactions exempt from registration under the Securities Act.

 

(c)                    The Offering Materials will be sent only to persons that Placement Agent reasonably believes are “accredited investors” (as defined under Rule 501(a) of the Securities Act).

 

(d)                    Placement Agent will not make any representation or warranty as to the Shares or the Company except those expressly stated in the Offering Materials.

 

(e)                    Placement Agent is a broker-dealer registered as such under applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, without limitation, Section 15 of the Exchange Act.

 

7.             Notices. Notice given pursuant to any of the provisions of this Agreement shall be in writing and shall be mailed or delivered (a) if to the Company, at its principal office at 3900 Paseo del Sol, Santa Fe, New Mexico 87507, Attention: Mark Cola, President, and (b) if to Placement Agent, at the address set forth on the first page of this Agreement, Attention: Mark Gillis, Chief Executive Officer.

 

8.             Non-Disclosure of Confidential Information. The Placement Agent acknowledges that it is the policy of the Company to maintain as confidential all valuable information heretofore or hereafter acquired, developed or used by the Company in relation to its business, operations, employees and customers which may give the Company a competitive advantage in its industry, including the information set forth in the Private Placement Memorandum of the Company (all such information is hereinafter referred to as “Confidential Information”). The parties recognize that, by reason of its access to the Private Placement Memorandum and other information about the Company, the Placement Agent may acquire Confidential Information. The Placement Agent recognizes that all such Confidential Information is the property of the Company. In consideration of the Company entering into this Agreement, the Placement Agent agrees that it shall never, directly or indirectly, intentionally or unintentionally, publicly disseminate or otherwise disclose any Confidential Information obtained during its engagement by the Company without the prior written consent of the Company, unless and until such information is otherwise known to the public generally or is not otherwise secret and confidential (through no fault of the Placement Agent), it being understood that the obligation created by this subparagraph shall survive the termination of this Agreement.

 

3900 Paseo del Sol, Santa Fe New Mexico 87507

 

  

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9.             Registration Rights. If, subsequent to the date hereof, the Company proposes to file a registration statement under the Securities Act, as amended (“Securities Act”) with respect to an offering of Company's equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, such equity securities (“Securities”), by the Company for its own account or for shareholders of the Company for their account, then the Company shall (x) give written notice of such proposed filing to the Placement Agent as soon as practicable, which notice shall describe, among other things, the amount of Securities to be included in such offering and the intended method(s) of distribution, and (y) offer to the Placement Agent in such notice the opportunity to register the sale of such number of shares of Warrant Stock as the Placement Agent may request in writing within ten (10) days following receipt of such notice, subject to customary underwriter cutbacks in connection with such offering. For purposes hereof, “Warrant Stock” means the shares of common stock issuable upon exercise of the Placement Agent Warrants.

 

10.           Miscellaneous.

 

(a)           This Agreement sets forth the entire agreement between the parties, supersedes and merges all prior written or oral agreements with respect to the subject matter hereof, may only be amended, modified or waived in writing and signed by each party to be bound thereby, and shall be governed by the laws of the State of California applicable to agreements made and to be performed entirely within such State. Each party hereto hereby irrevocably submits for purposes of any action arising from this Agreement brought by the other party hereto to the jurisdiction of the courts of California and the U.S. District Court for the County of Los Angeles, California.

 

(b)           The Company (for itself, anyone claiming through it or in its name, and on behalf of its equity holders) and Placement Agent each hereby irrevocably waive any right they may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or the transactions contemplated hereby.

 

(c)           This Agreement may not be assigned by either party without the prior written consent of the other party.

 

(d)           If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect.

3900 Paseo del Sol, Santa Fe New Mexico 87507

 

  

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[Signature page follows]

3900 Paseo del Sol, Santa Fe New Mexico 87507

 

  

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Please confirm that the foregoing correctly sets forth our agreement by signing and returning to the Company the enclosed duplicate copy of this Agreement.

	  	
Very truly yours,

	  	  
	  	
SIGMA LABS, INC.

	  	  
	  	
By:

	
/s/ Mark J. Cola

	  	
Name: Mark J. Cola

	  	
Title: President

 

Accepted and agreed to as of

the date first written above

 

HUDSON VALLEY CAPITAL MANAGEMENT CORP

	
By:

	 	 
	
Name: Mark Gillis.

	 
	
Title: Chief Executive Officer

	 

3900 Paseo del Sol, Santa Fe New Mexico 87507

 

  

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Please confirm that the foregoing correctly sets forth our agreement by signing and returning to the Company the enclosed duplicate copy of this Agreement.

	  	
Very truly yours,

	  	  
	  	
SIGMA LABS, INC.

	  	  
	  	
By:

	 
	  	
Name: Mark Cola

	  	
Title: President

	
Accepted and agreed to as of

	
the date first written above

	  
	
HUDSON VALLEY CAPITAL MANAGEMENT CORP

	
By:

	/s/ Mark Gillis	 
	
Name: Mark Gillis.

	 
	
Title: Chief Executive Officer

	 

 

  

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Exhibit A

 

Form of Placement Agent Warrant

 

[See attached]

 

3900 Paseo del Sol, Santa Fe New Mexico 87507

  

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