Document:

Change of Control Severance Agreement

 Exhibit 10.28a 
 Thomas F. Gallagher 
 CHANGE OF CONTROL SEVERANCE AGREEMENT 
 THIS AGREEMENT between BJ’s Wholesale Club, Inc., a Delaware corporation (the “Company”), and Thomas F. Gallagher (“Executive”),
dated as of April 3, 2007. 
 Executive is a key executive of the Company or a Subsidiary and an integral part of its management.

 The Company recognizes that the possibility of a Change of Control or Potential Change of Control of the Company may result in the
departure or distraction of management to the detriment of the Company and its shareholders and wishes to modify and restate the agreement previously applicable under such circumstances. 
 The Company wishes to assure Executive of fair severance should Executive’s employment terminate in specified circumstances following a Change of
Control or Potential Change of Control of the Company and to assure Executive of certain other benefits upon such event. 
 In consideration
of Executive’s continued employment with the Company or a Subsidiary and other good and valuable consideration, the parties agree as follows: 
 1.
Benefits Upon Change of Control. 
 1.1 In General. Within 30 days following the earlier of a Change of Control or Potential
Change of Control (such earlier event to be a “Control Event”) as long as this Agreement had not been terminated under Section 8.6 at the time of the Control Event, then whether or not Executive’s employment has been terminated
following the Control Event, the Company shall pay to Executive the following in a lump sum: 
 (a) an amount equal to the
product of (i) the “Target Bonus” under the Company’s Management Incentive Plan or any other annual incentive plan which is applicable to Executive for the fiscal year in which the Control Event occurs (or if the Target Bonus is
reduced within 180 days before the commencement of a Standstill Period, the “Target Bonus” applicable to Executive for the fiscal year in which such reduction occurred) and (ii) a fraction, the numerator of which is the number of days
in such fiscal year prior to the Control Event and the denominator of which is 365; and 
 (b) if Executive is a participant
in a performance-based long-range incentive plan at the time of a Control Event, such amount as is required to be paid to Executive upon a Control Event pursuant to the provisions of such plan; provided, that if such incentive plan does not provide
for an automatic payment on the earlier of a Change of Control or a Potential Change of 

  

 - 1 - 

 
Control, then any payment under such incentive plan shall be made only as and when provided for in such incentive plan even though the benefit under
Section 1.1(a) above has been paid previously. 
 1.2 Benefits Following Qualified Termination of Employment. Executive shall be
entitled to the following benefits upon a Qualified Termination: 
 (a) Within 30 days following the Date of Termination, the
Company shall pay to Executive the following in a lump sum: 
 (i) an amount equal to three times Executive’s Base Salary
for one year at the rate in effect immediately prior to the Date of Termination or, if higher, the Control Event (or if Executive’s Base Salary was reduced within 180 days before the commencement of a Standstill Period, the rate in effect
immediately prior to such reduction), plus the accrued and unpaid portion of Executive’s Base Salary through the Date of Termination. Any payments made to Executive under any long term disability plan of the Company with respect to the three
years following termination of employment shall be offset against such three times Base Salary payment. Executive shall promptly make reimbursement payments to the Company to the extent any such disability payments are received by Executive after
the Base Salary payment; and 
 (ii) an amount equal to three times Executive’s automobile allowance for one year at the
rate in effect immediately prior to the Date of Termination or, if higher, the Control Event (or if such automobile allowance was reduced within 180 days before the commencement of a Standstill Period, the rate in effect immediately prior to such
reduction unless such reduction was offset by an increase in Base Salary during such 180-day period), plus any portion of Executive’s automobile allowance payable but unpaid through the Date of Termination; and 
 (iii) an amount equal to three times the Target Bonus amount, as defined and determined under Section 1.1(a) above without any
fractional adjustment. 
 (b) For a period of thirty-six (36) months after the Date of Termination, the Company shall
maintain in full force and effect for the continued benefit of Executive and Executive’s family all life insurance and medical insurance (other than long-term disability) plans and programs in which Executive was entitled to participate
immediately prior to the Control Event (or if Executive’s title was changed to a level below that of Executive’s Current Title within 180 days before the commencement of a Standstill Period, all such plans and programs in which Executive
was entitled to participate immediately prior to such change, if the benefits thereunder are greater), provided that Executive’s continued participation is possible under the general terms and provisions of such plans and programs. In the event
that participation in such plans or programs is not available to Executive for any reason, including termination of the plan, the Company shall arrange upon comparable terms to provide Executive with benefits substantially similar to those which
Executive is entitled to receive under such plans and programs. Notwithstanding the 

 
foregoing, the Company’s obligations hereunder with respect to life insurance or medical insurance plans and programs shall be deemed satisfied to the
extent (but only to the extent) of any such insurance coverage or benefits provided by another employer. 
 (c) If Qualified
Termination occurs by reason of Disability, the Company shall maintain in full force and effect for the continued benefit of Executive, disability benefits and/or disability insurance at the same level to which Executive was entitled immediately
prior to the Qualified Termination. 
 1.3 Coordination With Certain Tax Rules. 
 (a) Notwithstanding any other provision of this Agreement, in the event that the Company undergoes a Change in Ownership or Control (as
defined below), the Company shall not be obligated to provide to Executive a portion of any “Contingent Compensation Payments” that Executive would otherwise be entitled to receive to the extent necessary to eliminate any “excess
parachute payments” (as defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended (the “Code”)) for Executive. For purposes of this Section 1.3, the Contingent Compensation Payments so eliminated shall
be referred to as the “Eliminated Payments” and the aggregate amount (determined in accordance with Proposed Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Contingent Compensation Payments so
eliminated shall be referred to as the “Eliminated Amount.” 
 (b) For purposes of this Section 1.3, the
following terms shall have the following respective meanings: 
 (i) “Change in Ownership or Control” shall mean a
change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with Section 280G(b)(2) of the Code. 
 (ii) “Contingent Compensation Payments” shall mean any payment (or benefit) in the nature of compensation that is made or made
available (under this Agreement or otherwise) to a “disqualified individual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning of Section 280G (b) (2) (A) (i) of the Code)
on a Change in Ownership or Control of the Company. 
 (c) Any payments or other benefits otherwise due to the Executive
following a Change in Ownership or Control that could be characterized (as reasonably determined by the Company) as Contingent Compensation Payments shall not be made until the determination, pursuant to this Section 1.3(c), of which Contingent
Compensation Payments shall be treated as Eliminated Payments. Within 30 days after each date on which the Executive first becomes entitled to receive (whether or not then due) a Contingent Compensation Payment relating to such Change in Ownership
or Control, the Company shall determine and notify 

 
Executive (with reasonable detail regarding the basis for its determinations) (i) which of such payments and benefits constitute Contingent Compensation
Payments and (ii) the Eliminated Amount. Within 30 days after delivery of such notice to Executive, Executive shall notify the Company which Contingent Compensation Payments, or portions thereof (the aggregate amount of which, determined in
accordance with Proposed Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision, shall be equal to the Eliminated Amount), shall be treated as Eliminated Payments. In the event that Executive fails to notify the Company
pursuant to the preceding sentence on or before the required date, the Contingent Compensation Payments (or portions thereof) that shall be treated as Eliminated Payments shall be determined by the Company in its absolute discretion. 
 (d) The provisions of this Section 1.3 are intended to apply to any and all payments or benefits available to Executive under this
Agreement or any other agreement or plan of the Company under which Executive receives Contingent Compensation Payments. 
 1.4
Definitions. The terms defined in Exhibits A and B hereto are used herein as so defined. 
 2. Noncompetition; No Mitigation of Damages; Other
Severance Payments; Withholding. 
 2.1 Noncompetition. Upon a Qualified Termination, any agreement by Executive not to engage in
competition with the Company subsequent to the termination of Executive’s employment, whether contained in an employment contract or other agreement shall no longer be effective. 
 2.2 No Duty to Mitigate Damages. Executive’s benefits under this Agreement shall be considered severance pay in consideration of
Executive’s past service and Executive’s continued service from the date of this Agreement, and Executive’s entitlement thereto shall neither be governed by any duty to mitigate Executive’s damages by seeking further employment
nor offset by any compensation which Executive may receive from future employment. 
 2.3 Other Severance Payments. In the event that
Executive has an employment contract or any other agreement with the Company (or a Subsidiary) which entitles Executive to severance payments upon the termination of Executive’s employment with the Company, the amount of any such severance
payments shall be deducted from the payments to be made under this Agreement. 
 2.4 Withholding. Anything to the contrary
notwithstanding, all payments required to be made by the Company hereunder to Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should
withhold pursuant to any applicable law or regulation. 
 3. Arbitration. Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled exclusively by arbitration in Boston, Massachusetts in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. 

 4. Legal Fees and Expenses. The Company shall pay all legal fees and expenses, including, but not limited to,
counsel fees, stenographer fees, printing costs, etc. reasonably incurred by Executive in contesting or disputing that the termination of Executive’s employment during a Standstill Period is for Cause or other than for good reason (as defined
in paragraph (k) of Exhibit A) or in obtaining any right or benefit to which Executive is entitled under this Agreement. Any amount payable under this Agreement that is not paid when due shall accrue interest at the prime rate as from time to
time in effect at BankBoston, N.A., or its successor, until paid in full. 
 5. Notice of Termination. During a Standstill Period, Executive’s
employment may be terminated by the Company (or a Subsidiary) only upon 30 days’ written notice to Executive. 
 6. Notices. All notices shall be
in writing and shall be deemed given five days after mailing in the continental United States by registered or certified mail, or upon personal receipt after delivery, telex, telecopy or telegram, to the party entitled thereto at the address stated
below or to such changed address as the addressee may have given by a similar notice: 
  

			
	To the Company:	  	 BJ’s Wholesale Club, Inc.
 One Mercer
Road
 Natick, MA 01760
 Attention: President

		
	To Executive:	  	At Executive’s home address, as last shown on the records of the Company.

 7. Severability. In the event that any provision of this Agreement shall be determined to be invalid or
unenforceable, such provision shall be enforceable in any other jurisdiction in which valid and enforceable and in any event the remaining provisions shall remain in full force and effect to the fullest extent permitted by law. 
 8. General Provisions. 
 8.1 Binding Agreement.
This Agreement shall be binding upon and inure to the benefit of the parties and be enforceable by Executive’s personal legal representatives or successors. If Executive dies while any amounts would still be payable to Executive hereunder,
benefits would still be provided to Executive’s family hereunder or rights would still be exercisable by Executive hereunder as if Executive had continued to live. Such amounts shall be paid to Executive’s estate, such benefits shall be
provided to Executive’s family and such rights shall remain exercisable by Executive’s estate in accordance with the terms of this Agreement. This Agreement shall not otherwise be assignable by Executive. 
 8.2 Successors. This Agreement shall inure to and be binding upon the Company’s successors, including any successor to all or substantially
all of the Company’s business and/or assets. The Company will require any successor to all or substantially all of the 

 
business and/or assets of the Company by sale, merger (where the Company is not the surviving corporation), lease or otherwise, by agreement in form and
substance satisfactory to Executive, to assume expressly this Agreement. If the Company shall not obtain such agreement prior to the effective date of any such succession, Executive shall have all rights resulting from a Qualified Termination by
Executive for good reason (as defined in paragraph (k) of Exhibit A) under this Agreement. This Agreement shall not otherwise be assignable by the Company. 
 8.3 Amendment or Modification; Waiver. This Agreement may not be amended unless agreed to in writing by Executive and the Company. No waiver by either party of any breach of this Agreement shall be deemed a
waiver of a subsequent breach. 
 8.4 Titles. No provision of this Agreement is to be construed by reference to the title of any
section. 
 8.5 Continued Employment. This Agreement shall not give Executive any right of continued employment or any right to
compensation or benefits from the Company or any Subsidiary except the right specifically stated herein to certain severance and other benefits, and shall not limit the Company’s (or a Subsidiary’s) right to change the terms of or to
terminate Executive’s employment, with or without Cause, at any time other than during a Standstill Period, except as may be otherwise provided in a written employment agreement between the Company (or a Subsidiary) and Executive. 

8.6 Termination of Agreement Outside of Standstill Period. This Agreement shall be
automatically terminated upon the first to occur of (i) the termination of Executive’s employment for any reason, whether voluntary or involuntary, at any time other than during a Standstill Period or (ii) the 180th day after a change in Executive’s title to a level below that of Executive’s Current Title unless a Standstill
Period was in effect on the date of such change or within 180 days thereafter or (iii) if Executive is employed by a Subsidiary of the Company, the date on which the Subsidiary either ceases to be a Subsidiary of the Company or sells or
otherwise disposes of all or substantially all of its assets, unless such event occurs during a Standstill Period and Executive’s employment shall have been terminated in a Qualified Termination within 90 days of such event, or
(iv) March 31, 2002; provided that on March 31, 2000 and each March 31 thereafter, the termination date provided in this clause (iv) shall be automatically extended for an additional year (the “Date”) (so that on
March 31, 2000 the Date shall become March 31, 2003, and so on) unless, not later than 90 days prior to any March 31, the Company shall have given the Executive written notice that the term of this Agreement will not be further
extended. 
 8.7 Prior Agreement. This Agreement amends and restates and shall supersede and replace any prior change of control
severance agreement between the Company or any of its subsidiaries, or any predecessor, and Executive. 
 8.8 Governing Law. The
validity, interpretation, performance and enforcement of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above
written. 
  

	
	BJ’S WHOLESALE CLUB, INC.
	
	 Herbert J Zarkin

	 Chairman of the Board
 President and Chief Executive
Officer

	
	 Thomas F. Gallagher

	Executive Vice President, Club Operations

 EXHIBIT A 
 Definitions 
 The following terms as used in this Agreement shall have the following meanings:

 (a) “Base Salary” shall mean Executive’s annual base salary, exclusive of any bonus or other benefits Executive may receive.

 (b) “Cause” shall mean (i) dishonesty, (ii) conviction of a felony, (iii) gross neglect of duties (other than as
a result of Incapacity, Disability or death), or (iv) conflict of interest; provided that for purposes of clauses (iii) or (iv) any such gross neglect or conflict shall continue for 30 days after the Company gives written notice to
Executive requesting the cessation of such gross neglect or conflict, as the case may be. 
 In respect of any termination during a Standstill Period, Executive shall not be deemed to have been terminated for Cause until the later to occur of (i) the 30th day after notice of termination is given and (ii) the delivery to Executive of a copy of a resolution duly adopted by the affirmative vote of not less
than a majority of the Company’s directors at a meeting called and held for that purpose (after reasonable notice to Executive), and at which Executive together with Executive’s counsel was given an opportunity to be heard, finding that
Executive was guilty of conduct described in the definition of “Cause” above, and specifying the particulars thereof in detail; provided, however, that the Company may suspend Executive and withhold payment of
Executive’s Base Salary from the date that notice of termination is given until the earliest to occur of (a) termination of Executive for Cause effected in accordance with the foregoing procedures (in which case Executive shall not be
entitled to Executive’s Base Salary for such period), (b) a determination by a majority of the Company’s directors that Executive was not guilty of the conduct described in the definition of “Cause” above (in which case
Executive shall be reinstated and paid any of Executive’s previously unpaid Base Salary for such period), or (c) the 90th day after notice of termination is given (in which case Executive shall be reinstated and paid any of Executive’s previously unpaid Base Salary for such period). 
 (c) “Change of Control” shall have the meaning set forth in Exhibit B. 
 (d) “Company” shall mean BJ’s Wholesale Club, Inc. or any successor. 
 (e) “Current Title” shall mean Executive’s title on the date 180 days prior to the commencement of a Standstill Period. 
 (f) “Date of Termination” shall mean the date on which Executive’s employment is terminated. 
 (g) “Disability” shall have the meaning given it in the Company’s long-term disability plan. Executive’s employment shall be deemed
to be terminated for Disability on the date on which Executive is entitled to receive long-term disability compensation pursuant to such long-term disability plan. 

 (h) “Executive” shall mean the person named in the first paragraph of this Agreement.

 (i) “Incapacity” shall mean a disability (other than Disability within the meaning of the definition in (g) above) or other
impairment of health that renders Executive unable to perform Executive’s duties to the reasonable satisfaction of the Board of Directors of the Company. If by reason of Incapacity Executive is unable to perform Executive’s duties for at
least six months in any 12-month period, upon written notice by the Company, the employment of Executive shall be deemed to have terminated by reason of Incapacity. 
 (j) “Potential Change of Control” shall mean: 
 (i) the Company enters into an
agreement, the consummation of which would result in the occurrence of a Change of Control; or 
 (ii) the Board of Directors
of the Company adopts a resolution that, for purposes of this Agreement, a Potential Change of Control has occurred. 
 (k) “Qualified
Termination” shall mean the termination of Executive’s employment during a Standstill Period (1) by the Company other than for Cause, or (2) by Executive for good reason, or (3) by reason of death, Incapacity or Disability.

 For purposes of this definition, termination for “good reason” shall mean the voluntary termination by Executive of
Executive’s employment (A) within 120 days after the occurrence without Executive’s express written consent of any of the events described in clauses (I), (II), (III), (IV), (V) or (VI) below, provided that Executive gives notice
to the Company at least 30 days in advance requesting that the situation described in those clauses be remedied, and the situation remains unremedied upon expiration of such 30-day period; (B) within 120 days after the occurrence without
Executive’s express written consent (which must expressly refer to such consent as being given under this Agreement) of the events described in clauses (VII) or (VIII) below, provided that Executive gives notice to the Company at least 30 days
in advance; or (C) upon occurrence of the event described in clause (IX) below, provided that Executive gives notice to the Company at least 30 days in advance: 
  

	 	(I)	the assignment to Executive of any duties inconsistent with Executive’s positions, duties, responsibilities, reporting requirements, and status with the Company (or a
Subsidiary) immediately prior to a Control Event, or a substantive change in Executive’s titles or offices as in effect immediately prior to a Control Event, or any removal of Executive from or any failure to reelect Executive to such
positions, except in connection with the termination of Executive’s employment by the Company (or a Subsidiary) for Cause or by Executive other than for good reason; or any other action by the Company (or a Subsidiary) which results in a
diminishment in such position, authority, duties or responsibilities, other than an insubstantial and inadvertent action which is remedied by the Company or the Subsidiary promptly after receipt of notice thereof given by Executive; or

	 	(II)	Executive’s rate of Base Salary for any fiscal year is less than 100 percent of the rate of Base Salary paid to Executive in the completed fiscal year immediately preceding the
Control Event, or Executive’s total cash compensation opportunities, including salary, auto allowance, and incentives, for any fiscal year are less than 100 percent of the total cash compensation opportunities made available to Executive in the
completed fiscal year immediately preceding the Control Event, unless any such reduction represents an overall reduction of no more than 5 percent of the rate of Base Salary paid or cash compensation opportunities made available, as the case may be,
and affects all other executives in the same organizational level (it being the Company’s burden to establish this fact); or 

  

	 	(III)	the failure of the Company (or a Subsidiary) to continue in effect any benefits or perquisites, or any pension, life insurance, medical insurance or disability plan in which
Executive was participating immediately prior to the Control Event (the “Benefits,” individually, a “Benefit”) unless the Company (or a Subsidiary) provides Executive with substantially similar Benefits, or the taking of any
action by the Company (or a Subsidiary) that would adversely affect Executive’s participation in or materially reduce any of Executive’s Benefits or deprive Executive of any material Benefit enjoyed by Executive immediately prior to the
Control Event, unless any elimination or reduction of any Benefit, or any adverse effect on Executive’s participation has an aggregate value equal to no more than 5 percent of the Benefits, and affects all other executives in the same
organizational level (it being the Company’s burden to establish this fact); or 

  

	 	(IV)	any purported termination of Executive’s employment by the Company (or a Subsidiary) for Cause during a Standstill Period which is not effected in compliance with paragraph
(b) of this Exhibit; or 

  

	 	(V)	any relocation of Executive of more than 40 miles from the place where Executive was located at the time of the Control Event; or 

  

	 	(VI)	any other breach by the Company of any provision of this Agreement; or 

  

	 	(VII)	the Company sells or otherwise disposes of, in one transaction or a series of related transactions, assets or earning power aggregating more than 30 percent of the assets (taken at
asset value as stated on the books of the Company determined in accordance with generally accepted accounting principles consistently applied) or earning power of the Company (on a non-consolidated basis) or the Company and its Subsidiaries (on a
consolidated basis) to any other Person or Persons (as defined in Exhibit B); or 

  

	 	(VIII)	 if Executive is employed by a Subsidiary of the Company, such Subsidiary either ceases to be a Subsidiary of the Company or sells or otherwise disposes of, in one
transaction or a series of related transactions, assets or earning power aggregating more than 30 percent of the assets (taken at asset value as stated on the books of the Subsidiary determined in 

	 	 
accordance with generally accepted accounting principles consistently applied) or earning power of such Subsidiary (on a non-consolidated basis) or such
Subsidiary and its subsidiaries (on a consolidated basis) to any other Person or Persons (as defined in Exhibit B); or 

  

	 	(IX)	the voluntary termination by Executive of Executive’s employment at any time during the period commencing eight months plus one day after the Change of Control and ending 12
months after the Change of Control, provided, that in the event of any such voluntary termination pursuant to this clause (IX), the Executive shall be entitled to receive only one-half (1/2) of the lump sum amount provided for in
Section 1.2(a) of this Agreement and the benefits provided for in Section 1.2(b) shall be provided for one year rather than two years from the Date of Termination. 

 (l) “Standstill Period” shall be the period commencing on the date of a Control Event
and continuing until the close of business on the last business day of the 24th calendar month following a Change of
Control; provided, however, if no Change of Control occurs within 12 months of a Potential Change of Control, then the Standstill Period that began as a result of such Potential Change of Control shall end on the close of business on the last
business day of the 12th calendar month following such Potential Change of Control. 
 (m) “Subsidiary” shall mean any corporation in which the Company owns, directly or indirectly, 50 percent or more of the total combined voting
power of all classes of stock or with respect to determining the subsidiaries of a Subsidiary in paragraph (k) (VIII), shall mean any corporation in which the Subsidiary owns, directly or indirectly, 50 percent or more of the total combined
voting power of all classes of stock. 

 EXHIBIT B 
 Definition of Change of Control 
  

	A	“Change of Control” shall mean: 

 (a) The
acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which satisfies the criteria set forth in clauses (i), (ii) and (iii) of subsection
(c) of this definition; or 
 (b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequently to the date hereof whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board (except that this proviso shall not apply to any individual whose
initial assumption of office as a director occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board); or 
 (c) Consummation of a reorganization, merger or consolidation involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, immediately following such Business Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the
then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, of the corporation resulting from such Business Combination (which as used in
Section (c) of this definition shall include, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit plan (or related 

 
trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively,
the then outstanding shares of common stock of the corporation resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation and (iii) at least half of the members of the
board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

 (d) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.EXHIBIT 4.4

US FARMS, INC. 

 

SECURITIES PURCHASE AGREEMENT 

 

 

THIS SECURITIES PURCHASE AGREEMENT (as amended, modified, supplemented or restated in accordance with its terms from time to time, this “Agreement”) is between US Farms Inc., a Nevada corporation and its affiliates (the “Company”), and the individuals named on the signature page of this agreement attached hereto (individually, a “Purchaser” and together, the “Purchasers”).  

 

RECITALS 

 

WHEREAS, the Company has authorized the offering and sale of up to 2,000,000 shares of the Company’s $0.001 par value common stock (the “Shares”) and warrants (the “Warrants”) of the Company’s common stock, $0.001 par value per share (collectively, the “Units”) at the purchase price of twenty-five cents ($0.25) per Units, for an aggregate offering amount of $500,000, which amount may be increased at the option of the Company and Placement Agent, and which Units shall be purchased in minimum investment amounts of $10,000 (the “Offering”); and 

 

WHEREAS, the Company has engaged US Farms, Inc. as the placement agent (the “Placement Agent”) to offer and sell the Units on behalf of the Company; and 

 

WHEREAS, the Offering shall commence on November 28, 2006 (“Effective Date”) and end on Mar 15, 2007, unless extended or terminated by mutual consent of the Company and the Placement Agent; and 

 

WHEREAS, the Company has the right to terminate the Offering early with a 15-day prior written notice to Placement Agent (“Early Termination Date”).  In the event a Closing has already occurred, this early termination will not relieve the Company of any other of its obligations contained in the Offering with respect to such closing; and 

 

WHEREAS, the Units will be offered and sold only to “accredited investors” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act pursuant to this Agreement and that certain subscription agreement executed by the Purchasers in connection with the Offering (the “Subscription Agreement”); and 

 

WHEREAS, each Unit shall be priced at $.25 (the “Offering Price”) once the investment amount by check or wire is received by the Company (the “Purchase Date”).  

 

WHEREAS, Purchasers desire to purchase the Units on the terms and conditions set forth herein and in the Subscription Agreement; and 

 

WHEREAS, the Company desires to sell the Units to Purchasers on the terms and conditions set forth herein. 

 

1

   
  

  

AGREEMENT 

 

In consideration of the recitals and the mutual promises, covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 

 

ARTICLE  I 

 

AUTHORIZATION AND SALE OF THE UNITS 

 

1.1 Authorization. The Company has, prior to the date of this Agreement, (i) authorized the issuance and sale of the Shares to the Purchasers and (ii) authorized issuance of and reserved for issuance shares upon warrant exercise. 

 

1.2 Sale of the Units to the Purchasers. Subject in all respects to the satisfaction of the terms and conditions herein set forth, and in reliance upon the respective representations and warranties of the parties set forth herein, in the SPA and in any document delivered pursuant hereto or thereto, the Company agrees to sell to each Purchaser (and such Purchaser agrees by executing and delivering the Execution Documents and investment amount to purchase from the Company) the number of Units set forth in such Purchasers’ Subscription Agreement at the Offering Price. 

 

1.3 Offering Price and Share Calculation. Each Unit shall be priced at the Offering Price.  

 

1.4 Delivery of the Units to the Purchasers. Upon the execution and delivery by the Purchasers of the Execution Documents and the investment amount, the Company will calculate the number of Units purchased by the Purchaser and deposit the funds in a segregated bank account designated by the Company.  The Units will be issued to the Purchaser when the subscription has been accepted by the Company and the Company receives notice that the funds have been cleared by the bank holding the funds.  This delivery in no way shall exceed 10 days from the Final Closing or Early Termination date whichever is first. 

 

1.5  Early Termination.  Not with standing anything contained herein to the contrary, the Company has the right to terminate the Offering at any time upon 15 days’ written notice to Placement Agent (“Early Termination Date”).  In the event a Closing has already occurred, this early termination will not relieve the Company of its obligations to register the Shares and shares of Common Stock underlying the Warrant (the “Warrant Shares”) sold at such Closing. 

 

1.6 Terms of Warrant.  (a) Each Warrant will entitle the holder to purchase one share of Common Stock at an exercise price of $.50. The Warrants will be exercisable at any time for three years after the Effective Date, unless earlier redeemed. The Warrants will be issued in unregistered form.  

 

(b) The Warrant Shares, when issued upon exercise of a Warrant, will  

be fully paid and non-assessable, and the Warrant Shares will be registered in the Registration Statement mentioned elsewhere in this agreement. Company will pay any transfer tax incurred as a result of the issuance of Common Stock to the holder upon its exercise.   

2

   
  

  
ARTICLE II 

 

REGISTRATION RIGHTS 

 

2.1 Registration of Shares by Company. The Company will file a registration  

statement covering the Shares and Warrant Shares (the “Registration Statement”).  The Company will file the Registration Statement within 60 days of the final date of Closing of the Offering (“Closing Date”), or, in the event a Closing has already occurred, the Early Termination Date, whichever comes first, and use its best efforts to have the Registration Statement declared effective 120 days of the Closing Date. If the Registration Statement is not filed on a timely basis as indicated above or is not declared effective by the SEC for any reason on a timely basis as indicated above, the Company will be required to pay Investors an amount equal to 1% of the principal amount of the amount subscribed for by Investors and received by the Company for every 30 day period (or portion thereof) after the relevant date, in each case until the Registration Statement is filed or declared effective, as the case may be (“Registration Penalty”). 

 

2.2 Late Filing Penalty Clause. As with the Registration Penalty, the Company 

shall also be required to pay investors an amount equal to 1% of the principal amount of the Amount subscribed for by Investors and received by the Company if the Company becomes deficient in their Securities Exchange Act of 1934 filings (taking into account permitted extensions) up until the point that the above mentioned Registration Statement becomes effective (“Late Filing Penalty”). This Late Filing Penalty shall be in addition to any other penalties mentioned. 

 

                

ARTICLE III 

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

 

The Company represents and warrants (such representations and warranties do not lessen or obviate the representations and warranties of the Purchasers set forth in this Agreement or the Subscription Agreement) that: 

 

3.1 Organization and Existence, Authority, Etc. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada, and has all requisite corporate power and authority to carry on its business as now conducted and proposed to be conducted; the Company has all requisite corporate power and authority to enter into this Agreement, to issue the Units as contemplated herein and to carry out the provisions and conditions of this Agreement. This Agreement has been duly executed and delivered by, and constitutes the valid and binding obligations of, the Company, enforceable in accordance with their respective terms, subject to the effect of any applicable bankruptcy, moratorium, insolvency, reorganization or other similar law affecting the enforceability of creditors' rights generally and to the effect of general principles of equity which may limit the availability of remedies (whether in a proceeding at law or in equity). The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or ownership of its properties would so require, except where the failure to be so qualified would not have a material adverse effect on its business and financial condition, taken as a whole.  The Company will preserve, protect, and maintain, (a) its corporate existence, and (b) all rights, franchises, accreditations, privileges, and properties, the failure of which to preserve, protect, and maintain might have a material adverse effect on the business, affairs, assets, prospects, operations, employee relations, rights or condition, financial or otherwise, of the Company taken as a whole. 

3

   
  

  
3.2 Litigation. Except as disclosed in the Company Commission Filings (as hereinafter defined) and the Private Placement Memorandum, to the knowledge of the Company, there is no action, suit or proceeding pending, or threatened, against the Company before any court, administrative agency or arbitrator which could reasonably be expected to result in any material adverse change in the business, properties, condition (financial or otherwise) of the Company, taken as a whole, or which challenges the validity of any action taken or to be taken pursuant to or in connection with this Agreement. 

 

3.3 Charter Documents. Neither the execution nor the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance with the terms and provisions hereof, will conflict with, or result in a breach of or creation of a lien under, the terms, conditions or provisions of, or constitute a default under, the charter or by-laws of the Company, as amended, copies of which are available to the Purchasers in the Company Commission Filings. 

 

3.4 Authorized and Outstanding Capital Stock. The authorized capital stock of the 

Company, as of September 30, 2006, consists of (i) 500,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, par value $0.001. As of September 30, 2006, there are approximately 15,442,656 shares of Common Stock and 88,500 shares of Preferred Stock outstanding. All of such outstanding shares of Common Stock have been validly issued and are fully paid and non-assessable. The Company has authorized the issuance of the number of Shares and Warrant Shares deliverable to the Purchasers under this Offering at the Offering Amount up to $500,000. The Shares when issued as part of the Units in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable. 

 

 

         3.5 Commission Filings and Financial Statements. True and complete copies of all reports, registration statements, definitive proxy statements and other documents (in each case together with all amendments and supplements thereto) filed by the Company with the Securities and Exchange Commission (such reports, registration statements, definitive proxy statements and other documents, together with any amendments and supplements thereto, are sometimes collectively referred to as the "Company Commission Filings") are available to the Purchasers at the Commission’s website www.sec.gov. The Company Commission Filings constitute all of the documents (other than preliminary materials) that the Company was required to file with the Commission. As of their respective dates, each of the Company Commission Filings complied in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable, and the rules and regulations under each such act, and none of the Company Commission Filings contained as of such date any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. When filed with the Commission the financial statements included in the Company Commission Filings complied as to form in all material respects with the applicable rules and regulations of the Commission and were prepared in accordance with generally accepted accounting principles (as in effect from time to time) applied on a consistent basis (except as may be indicated therein or in the notes or schedules thereto), and such financial statements fairly present in accordance with generally accepted accounting principles in all material respects the financial position of the Company as at the dates thereof and the results of its operations and its cash flows for the periods then ended, subject, in the case of the unaudited interim financial statements, to normal, recurring year-end audit adjustments and the absence of footnotes.  

4

   
  

  
             3.6 Intellectual Property. The Company shall maintain in full force and affect its corporate existence, rights and franchises and all licenses and other rights to use Intellectual Property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business. 

 

 

3.7 Tax Returns and Payments. The Company has timely filed all tax returns (federal, state and local) required to be filed by it. All taxes shown to be due and payable on such returns, any assessments imposed, and to the Company's knowledge all other taxes due and payable by the Company as of the date hereof, have been paid, are being contested in good faith or will be paid prior to the time they become delinquent. The Company has not been advised (a) that any of its returns, federal, state or other, have been or are being audited as of the date hereof, or (b) of any deficiency in assessment or proposed judgment to its federal, state or other taxes. The Company has no knowledge of any liability of any tax to be imposed upon its properties or assets as of the date of this Agreement that is not adequately provided for. 

 

 

3.8 Title to Properties. The Company has good and marketable title to its properties and assets, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent, (b) minor liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company, and (c) those that have otherwise arisen in the ordinary course of business. The Company is in compliance with all material terms of each lease to which it is a party or is otherwise bound. 

 

3.9 Compliance with Other Instruments, Etc. The Company is not in violation of any term of its certificate or articles of incorporation or by-laws, and the Company is not in material violation of any material term of any material agreement or instrument to which it is a party or by which it is bound or any material term of any applicable law, ordinance, rule or regulation of any governmental authority or any material term of any applicable order, judgment or decree of any court, arbitrator or governmental authority, the consequences of which violation might have a materially adverse effect on the business, condition (financial or other), operations, assets or properties of the Company; the execution, delivery and performance of this Agreement and the Related Agreements will not result in any material violation of or be in material conflict with or constitute a material default under any such term; and there is no such term which materially adversely affects the business, condition (financial or other), operations, assets, or properties of the Company, taken as a whole. 

 

3.10 Governmental Consent. No material consent, approval or authorization of, or declaration or filing with, any governmental authority on the part of the Company or any of its Subsidiaries is required for the valid execution and delivery of this Agreement and the Related Agreements or the valid offer, issue, sale and delivery of the Units pursuant to this Agreement or the Related Agreements, except where the failure to obtain such consent or make such filing would not have a material adverse effect on the business, operations or assets of the Company, and except for appropriate filings (i) with the Commission and (ii) with such state securities commissions in respect of "blue sky" laws as may be appropriate.  

5

   
  

  
 

3.11 Use of Proceeds. The Company estimates they will use Offering proceeds of $500,000 as follows: 

 

• $79,000 for Inventory Requirements 

• $239,000 for Immediate CAPX Requirements 

• $75,000 for Asparagus (Growing / Harvesting) 

• $75,000 for Placement Agent Fees (Assuming full subscription) 

• $32,000 for General Working Capital. 

 

3.12 Disclosure. To the best of the Company's knowledge, there is no fact (other than matters of a general economic or political nature which does not affect the Company uniquely) known to the Company which materially adversely affects the business, condition (financial or other), operations, assets or properties of the Company which has not been set forth either in the Company Commission Filings or in this Agreement or in the other documents, certificates and instruments delivered to the Purchasers by or on behalf of the Company specifically for use in connection with the transactions contemplated by this Agreement. 

 

 

ARTICLE IV 

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 

 

Each Purchaser hereby severally and not jointly represents and warrants to the Company with respect to itself or himself as follows (such representations and warranties do not lessen or obviate the representations and warranties of the Company set forth in this Agreement): 

 

4.1 Requisite Power and Authority. Purchaser has all necessary power and authority under all applicable governing documents and provisions of law to execute and deliver this Agreement and the Related Agreements and to carry out their provisions. All action on Purchaser's part required for the lawful execution and delivery of this Agreement and the Related Agreements have been or will be taken prior to the Closing Date. Upon their execution and delivery, this Agreement and the Related Agreements will be valid and binding obligations of Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights, and (b) as limited by general principles of equity that restrict the availability of equitable remedies. 

 

4.2 Investment Representations. Purchaser understands that the Units are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Purchaser's representations contained in the Agreement. 

 

4.3 Purchaser Bears Economic Risk. Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Purchaser must bear the economic risk of this investment for an indefinite period of time. 

6

   
  

  
 

4.4 Acquisition for Own Account. Purchaser is acquiring the Units for Purchaser's own account for investment only, and not with a view towards their distribution or resale. 

 

4.5 Purchaser Can Protect Its Interest. Purchaser represents that by reason of his/her/its, or of its management's, business or financial experience, Purchaser has the capacity to protect its own interests in connection with the transactions contemplated in this Agreement, and the Related Agreements. Further, Purchaser is aware of no publication or any advertisement in connection with the transactions contemplated in the Agreement.  In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or other information (oral or written) other than as stated in this Agreement. 

 

4.6 Self-Reliance. The Purchaser is not relying on the Company or any of its employees or agents or Placement Agent with respect to the legal, tax, economic and related considerations as to an investment in the Securities, and the Purchaser has relied on the advice of, or has consulted with, only his own advisors 

 

4.7 Accredited Investor. Each Purchaser acknowledges that a purchase of the Units is only available to a Purchaser who is an "accredited investor." In connection therewith, each Purchaser represents and warrants to the Company and the Placement Agent that he/she or it, as the case may be, qualifies as an "accredited investor" within the meaning of Regulation D, since he/she or it meets one of the following standards for determination of "accredited investor" status of Regulation D set forth below: 

 

(a) Any broker or dealer registered pursuant to Section 15 of the Exchange Act; 

 

(b) Any natural person whose individual net worth, or joint net worth with 

that person's spouse, at the time of his purchase exceeds $1,000,000; 

 

(c) Any 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; 

 

(d) Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D; 

 

(e) Any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, 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; or 

 

(f) Any entity in which all of the equity owners are "accredited investors". 

 

4.8 Available Information. Each Purchaser hereby represents that he/she/it (i) has access to and has carefully reviewed the Company Commission Filings, and (ii) has had the opportunity to ask questions and receive answers from the Company concerning the Company Commission Filings and the terms and conditions of the offering of the Units and to obtain any documents relating to the Company which are publicly available and any additional information or documents relating to the Company which the Company possesses or can acquire without unreasonable effort or expense.  

7

   
  

  

 

4.9  Regulatory Compliance. Purchaser agrees that Purchaser will comply with all 

relevant rules and regulations of the Exchange Act, including the provisions of Regulation M promulgated thereunder. 

 

4.10 Legends. Purchaser understands the certificates representing the components of the Units shall bear the following legend (or one substantially similar) until the Shares and Warrant Shares are covered by an effective registration statement filed with the Commission: 

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "ACT") OR, IF APPLICABLE, STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SECURITIES, OR AN OPINION OF THE COMPANY'S COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT. ALTHOUGH THE COMPANY HAS AN OBLIGATION TO REGISTER FOR RESALE THE SHARES AND THE WARRANT SHARES, THERE CAN BE NO ASSURANCE THAT SUCH REGISTRATION WILL BE COMPLETED WITHIN THE TIME FRAMES REQUIRED, OR AT ALL.  THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.” 

 

 4.11 Confidentiality. The Purchaser agrees that he/she/it will not include in any public announcement, the name of the Company, unless expressly agreed to by the Company or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. 

 

             4.12 Non-Manipulative Practices. Under no circumstances is Placement Agent or Purchasers to engage in any type of short selling in an attempt to hedge their positions or manipulate the stock.  

 

4.13 Financial Position / Requisite Knowledge.

 

(a) That the undersigned is in a financial position to hold the Securities for an indefinite period of time and is able to bear the economic risk and withstand a complete loss of the undersigned's investment in the Securities. Additionally, the undersigned's proposed investment in the Securities does not exceed 20% of the undersigned's net worth exclusive of home, home furnishings and automobiles;  

 

(b) That the undersigned, either alone or with the assistance of the undersigned's own professional advisor, has such knowledge and experience in financial and business matters that the undersigned is capable of evaluating the merits and risks of an investment in the Securities, has the capacity to protect the undersigned's own interests in connection with an investment in the Notes and has the net worth to undertake such risks;  

8

   
  

  
 

(c) That the undersigned has obtained, to the extent the undersigned deems necessary, the undersigned's own personal professional advice with respect to the risks inherent in the investment in the Securities, and the suitability of an investment in the Securities in light of the undersigned's financial condition and investment needs 

 

(d) That the undersigned believes that an investment in the Securities is suitable for the undersigned based upon their investment objectives and financial needs, and the undersigned has adequate means for providing for the their current financial needs and personal contingencies and has no need for liquidity of investment with respect to the Securities; 

 

(e) That the undersigned recognizes that the Securities as an investment involves a high degree of risk, including, but not limited to, the risk of loss of 100% of the undersigned's investment in the Securities; 

 

4.14 Purchaser Bears Economic Risk. Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Purchaser must bear the economic risk of this investment until the Securities are registered pursuant to the Securities Act, or an exemption from registration is available. That the undersigned realizes that (i) the purchase of the Securities is a long-term investment; (ii) the purchaser of the Securities must bear the economic risk of investment for an indefinite period of time because the Securities have not been registered under the Act, or under the securities laws of any state and, therefore, the Securities cannot be resold unless they are subsequently registered under said laws or exemptions from such registrations are available; (iii) there is presently no public market for the Securities and the undersigned may be unable to liquidate the undersigned's investment in the event of an emergency, or pledge the Securities as collateral for a loan; and (iv) the transferability of the Securities is restricted and requires conformity with the restrictions contained in Section 3.3 and legends will be placed on the certificate(s) representing the Securities referring to the applicable restrictions on transferability; and 

9

   
  

  

4.15 OFAC Statement. The Purchaser should check the Office of Foreign Assets Control (“OFAC”) website at <http://www.treas.gov/ofac> before making the following representations. The Purchaser represents that the amounts invested by it in the Company in the Offering were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals.  The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at <http://www.treas.gov/ofac>.  In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. 

4.16 Use of Information. Any information which the undersigned has heretofore furnished or furnishes herewith to the Company is complete and accurate and may be relied upon by the Company in determining the availability of an exemption from registration under Federal and state securities laws in connection with the offering of Securities as described herein. The Purchaser further represents and warrants that it will notify and supply corrective information to the Company immediately upon the occurrence of any change therein occurring prior to the Company's issuance of the Securities 

 

 

ARTICLE V 

 

COVENANTS OF THE COMPANY 

 

5.1 Insurance. The Company will maintain or cause to be maintained with financially sound and reputable insurers, insurance with respect to its assets and business against loss or damage covering risks of such types and in such amounts which are customary for similarly situated corporations of established reputation engaged in the same or similar businesses, in adequate amounts. 

 

5.2 Payment of Taxes and Other Obligations. The Company will pay or cause to be paid all material taxes, assessments and other governmental charges levied upon any of its assets or in respect of its franchises, businesses, income or profits, all trade accounts payable in accordance with usual and customary business terms, and all claims for work, labor or materials, which if unpaid might become a Lien upon any asset of the Company before the same become delinquent, except that (unless and until foreclosure, restraint, sale or other similar proceedings shall have been commenced) no such charge need be paid if being contested in good faith and by appropriate measures promptly initiated and diligently conducted if (a) such reserve or other appropriate provision, if any, as shall be required by sound accounting practice consistent with GAAP shall have been made therefor, and (b) such contest does not have a material adverse effect on the financial condition of the Company or the ability of the Company to pay any Indebtedness and no assets are in imminent danger of forfeiture. 

 

5.3 Compliance With Laws. The Company will comply, and will cause each of its 

Subsidiaries to comply, with all material laws (including, but not limited to, Environmental Laws), rules, regulations, judgments, orders and decrees of any governmental or regulatory authority applicable to its and their respective assets. 

 

5.4 Corporate Existence; Property. The Company will preserve, protect and maintain (a) its corporate existence, and (b) all rights, franchises, accreditations, privileges, and properties, the failure of which to preserve, protect, and maintain might have a material adverse effect on the business, affairs, assets, prospects, operations, employee relations, rights or condition, financial or otherwise, of the Company taken as a whole.  

__________________________

1 These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. 

10

   
  

  
 

5.5 Maintenance. The Company will maintain and keep its properties in good repair, working order and condition, subject to normal wear and tear, and from time to time make all necessary repairs, renewals and replacements so that its businesses may be properly and advantageously conducted at all times. 

 

5.6 Other Obligations. The Company will comply with all obligations which it incurs pursuant to any contract or agreement, whether oral or written, express or implied, as such obligations become due to the extent to which the failure to so comply could be expected to have a material adverse effect upon the business, affairs, assets, prospects, operations, employee relations, rights or condition, financial or otherwise, of the Company, unless and to the extent that the same are being contested in good faith and by appropriate proceedings and adequate reserves (as determined in accordance with GAAP) have been established on its books with respect thereto. 

 

5.7 No Restrictions. The Company will not enter into or become subject to any agreement or instrument, which by its terms would (under any circumstances) restrict the 

Company’s right to perform the provisions of this Agreement or the Related Agreements. 

 

5.8 Public Disclosures. The Company will not disclose the Purchaser’s name or identity as an investor in the Company in any press release or other public announcement or in any document or material filed with any governmental entity, without the prior written consent of the Purchaser and Placement Agent, unless such disclosure is required by applicable law or governmental or Commission regulations or by order of a court of competent jurisdiction. 

 

5.9 No Violation. None of the execution and delivery of this Agreement and any Related Agreements, the consummation of the transactions provided for herein and therein or contemplated hereby and thereby, the fulfillment by the Company of the terms hereof or thereof, will (a) conflict with or result in a breach of any provision of the Articles of Incorporation or By-Laws of the Company, (b) result in a default or breach, give rise to any right of termination, cancellation or acceleration, or require any consent or approval, under any of the terms, conditions or provisions of any material stock, bond, mortgage, indenture, loan, factoring arrangement, license, agreement, lease or other instrument or obligation to which the Company is a party or by which it or any of its respective assets may be bound or (c) to the knowledge of the Company, violate any material law (including, but not limited to, any Environmental Law), judgment, order, writ, injunction, decree, statute, rule or regulation of any court, administrative agency, bureau, board, commission, office, authority, department or other governmental entity applicable to the Company or any of its assets. 

 

5.10 Use of Proceeds. The Company will use the proceeds from the sale of the Units as specified herein. 

 

5.11 Fees and Expenses. 

 

(a) The Company will bear all of its own expenses in connection with the preparation, execution and negotiation of this Agreement and the Related Agreements, and the transactions contemplated hereby and thereby.  

11

   
  

  
 

(b) The Company is offering the Units through the Placement Agent, a member of the National Association of Securities Dealers, Inc. (NASD). The Placement Agent will receive a cash commission of 10%, plus a non-accountable expense allowance of 3%, plus 2% due diligence expense allowance of the gross proceeds received in the Offering. In addition, the Placement Agent will receive Common Stock equal to 10% of the number of Shares sold by it in this Offering for consulting services rendered to the Company. 

 

(c) Placement Agent shall also be the warrant agent on transactions involving an exercise of the Warrants and will receive cash commission in the amount of 10% of the amount of said exercise. 

 

(d) It is the Company’s obligation to file appropriate federal and state forms regarding this Offering.  

 

5.12 Non-Manipulative Practices. Company shall under no circumstances engage 

in any activities that could be construed as price manipulation. 

 

 

ARTICLE VI 

 

DEFINITIONS 

 

6.1 Definitions. In addition to the capitalized terms defined elsewhere in this 

Agreement, the following capitalized terms shall have the following meanings when used in this Agreement: 

 

(a) “Common Stock” means the shares of common stock, $.001 par value per share, of the Company. 

 

(b) “Environmental Laws” means all federal, state and local laws, ordinances and rules of common law relating to environmental, safety, or health matters, including those relating to fines, orders, injunctions, penalties, damages, contribution, cost recovery compensation, losses, or injuries resulting from the release or threatened release of Hazardous Substances and the generation, use, storage, transportation, or disposal of Hazardous Substances in any manner applicable to the Company or its assets, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. ¤¤ 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. ¤¤ 1801 et seq the Resource Conservation and Recovery Act of 1976 (42 U.S.C. ¤¤6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. ¤¤ 1251 et seq.), the Clean air  Act (42 U.S.C. ¤¤ 7401 et seq.), the Toxic Substances Control Act of 1976 (15 U.S.C. ¤¤ 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. ¤¤ 300f- ¤¤ 300j-11 et seq, the Occupational Safety and Health Act of 1970 (29 U.S.C. ¤¤ 651 et seq.), and the Emergency Planning and Community Right-to-Know Act (42 U.S.C. ¤¤ 11001 et seq.), each as heretofore and hereafter amended or supplemented, and any analogous present or future federal, state, or local statutes, rules, and regulations promulgated thereunder or pursuant thereto, and any other present or future law, ordinance, rule, regulation, permit, order, or directive addressing environmental, safety or health issues, of or by the federal government, any state or political subdivision thereof, or any agency, court, or body of the federal government or any state or political subdivision thereof.  

  

12

   
  

  

 

(c) “Execution Documents” means this Agreement and the Subscription Agreement. 

 

(d) “GAAP” means United States generally accepted accounting principles, consistently applied. 

 

 (e) “Indebtedness” of any Person means the principal of, premium, if any, and unpaid interest on (a) indebtedness for borrowed money, (b) indebtedness guaranteed, directly or indirectly, in any manner by such Person, or in effect guaranteed, directly or indirectly, in any manner by such Person through an agreement, contingent or otherwise, to supply funds to, or in any other manner invest in, the debtor, or to purchase indebtedness, or to purchase and pay for property if not delivered or pay for services if not performed, primarily for the purpose of enabling the debtor to make payment of the indebtedness or to assure the owners of the indebtedness against loss, (c) all indebtedness secured by any mortgage, lien, pledge, charge or other encumbrance upon property owned by such Person, even though such Person has not in any manner become liable for the payment of such indebtedness, (d) all indebtedness of such Person created or arising under any conditional sale, lease (intended primarily as a financing device) or other title retention or security agreement with respect to property acquired by such Person even though the rights and remedies of the seller, lessor or lender under such agreement or lease in the event of default may be limited to repossession or sale of such property, and (e) renewals, extensions and refunding of any such indebtedness. 

 

(f) “Lien” means any mortgage, deed of trust, lien, security interest, pledge, lease, conditional sale contract, claim, charge, easement, right of way, assessment, restriction and other encumbrance of every kind. 

 

(g) “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof. 

 

(h) “Placement Agent” means US Farms, Inc., an NASD registered broker/dealer. 

 

(i) “Related Agreement” means the Subscription Agreement. 

 

(j) “Securities Act” means the Securities Act of 1933, as amended. 

 

6.2 Rules of Construction. The following provisions shall be applied wherever appropriate herein: 

 

(a) “herein,” ”hereby,” “hereunder,” ”hereof” and other equivalent words shall refer to this Agreement as an entirety and not solely to the particular portion of this Agreement in which any such word is used; 

 

(b) all definitions set forth herein shall be deemed applicable whether the words defined are used herein in the singular or the plural;  

13

   
  

  
 

(c) wherever used herein, any pronoun or pronouns shall be deemed to include both the singular and plural and to cover all genders; 

 

(d) all accounting terms not specifically defined herein shall be construed in accordance with GAAP; 

 

(e) neither this Agreement nor any other agreement, document or instrument referred to herein or executed and delivered in connection herewith shall be construed against either party as the principal draftsperson hereof or thereof; 

 

(f) all references or citations in this Agreement to statutes or regulations or 

statutory or regulatory provisions shall generally be considered citations to such statutes, regulations or provisions as in effect on the date hereof, except that when the context otherwise requires, such references shall be considered citations to such statutes, regulations or provisions as in effect from time to time, including any successor statutes, regulations or provisions directly or indirectly superseding such statutes, regulations or provisions; 

 

(g) any references herein to a particular Section, Article, Exhibit or Schedule means a Section or Article of, or an Exhibit or Schedule to, this Agreement unless another agreement is specified; and 

 

(h) the Exhibits and Schedules attached hereto are incorporated herein by reference and shall be considered part of this Agreement. 

 

 

ARTICLE VII 

 

MISCELLANEOUS 

 

7.1 Consent to Amendments; Waivers. The provisions of this Agreement may be amended, and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of a majority in interest of the Purchasers in the Offering, such consent not to be unreasonably withheld, delayed or conditioned.  No other course of dealing between the Company and any Purchaser or any delay in exercising any rights hereunder or under any of the Related Agreements shall operate as a waiver of any rights of any such Purchaser. If the Company pays any consideration to any Person for such consent to any amendment, modification or waiver hereunder or under any of the Related Agreements, the Company shall also pay each Purchaser granting its consent equivalent consideration computed on a pro rata basis. Any waiver, permit, consent or approval of any kind or character on the part of any party of any provisions or conditions of this Agreement or any Related Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. 

 

7.2 Representations and Warranties: Indemnification. 

 

(a) All representations and warranties contained herein or in any Related Agreement or made in writing by any party in connection herewith or therewith will survive the execution and delivery of this Agreement and any investigation made at any time by or on behalf of the Purchasers.  

 

14

   
  

  

(b) The Company will defend, indemnify and hold the Purchasers harmless from and against any and all actions, suits, losses, damages, liabilities, claims, obligations and expenses (including, but not limited to, legal fees and court costs) (“Losses”), whether or not resulting from judgments or arbitration awards, that shall be suffered or incurred by such Purchasers resulting from or arising out of any breach of any of the representations, warranties or covenants of the Company contained in this Agreement or in any Related Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by the Company hereunder or thereunder. 

 

(c) Each Purchaser will, jointly and severally, defend, indemnify and hold the Company harmless from and against any and all losses, whether or not resulting from judgment or arbitration awards, that shall be suffered or incurred by the Company resulting from or arising out of any breach of any of the representations, warranties or covenants of the Purchasers contained in this Agreement or in any Related Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by the Purchasers hereunder or thereunder. 

 

7.3 Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto, whether so expressed or not, provided, however, that neither party shall assign (by operation of law or otherwise) this Agreement or any part hereof or any obligation hereunder without the prior written consent of the Company or the Purchaser. In addition, and whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of the Purchasers are also for the benefit of, and enforceable by, any subsequent holders of all or any part of the Units. The Units may not be transferred unless such transfer is registered under the Securities Act or unless an exemption from such registration is available, which exemption shall be established either by an opinion of counsel delivered by the holder of the Units being transferred or by other customary means. 

 

7.4 Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience of reference only and do not constitute a part of and shall not be utilized in interpreting this Agreement. 

 

7.5 Notices. Any notices required or permitted to be sent hereunder shall be delivered personally or mailed, by certified mail, return receipt requested, or delivered by overnight courier service to the following addresses, or such other address as any party hereto designates by written notice to the Company, and shall be deemed to have been given upon delivery, if delivered personally, five days after mailing, if mailed, or one business day after delivery to the courier, if delivered by overnight courier service. 

 

15

   
  

  
 

If to the Company, to: 

 

US Farms Inc. 

1635 Rosecrans Street. Suite D 

San Diego, Ca 92106 

Attn: Yan Skwara – President / Chairman 

 

 If to the Purchasers, to the addresses specified on the signature page attached hereto. 

 

7.6 Governing Law. This Agreement and the rights and duties of the parties hereto shall be governed by the laws of the State of California (without regard to principles of conflicts of law). 

 

7.7 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one instrument. 

 

7.8 Consent to Jurisdiction. The Company and the Purchasers hereby irrevocably agree that any suit, action, proceeding or claim against it arising out of or in any way relating to this agreement or any of the related agreements, or any judgment entered by any court in respect thereof, may be brought or enforced in the state or federal courts located in Orange County, CA and hereby irrevocably waives, to the fullest extent permitted by law, any objection which they may now or hereafter have to the venue of any proceeding brought in Orange County, CA and further irrevocably waives any claims that any such proceeding has been brought in an inconvenient forum. 

16

   
  

  

SECURITIES PURCHASE AGREEMENT - SIGNATURE PAGE 

 

The parties hereto have executed this Securities Purchase Agreement as of the date set 

forth below. 

 

COMPANY: 

US FARMS INC. 

 

 

By:_______________________________ 

 

 

Its:_______________________________ 

 

 

Date:_____________________________ 

 

PURCHASER/PURCHASERS: 

 

 

Signature___________________________   

Signature ___________________________ 

 

 

Print Name_________________________ 

Print Name __________________________ 

 

 

Soc. Sec. No________________________ 

Soc. Sec. No _________________________ 

 

 

Date: ______________________________   

Date: ______________________________ 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]