Document:

jani_ex42.htm

EXHIBIT 4.2

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of November 29, 2013, between Janus Resources, Inc., a corporation organized under the laws of the State of Nevada (the “Company”), and Kalen Capital Corporation, a corporation organized under the laws of the Province of Alberta, Canada (“Investor”). Company and Investor may hereinafter be referred to individually as a “Party” and collectively as, the “Parties.”

RECITALS

WHEREAS, Shareholder has entered into a Subscription Agreement dated as of even date herewith (the “Subscription Agreement”) with the Company pursuant to which the Shareholder has agreed to purchase units of the Company’s equity securities in the initial aggregate amount of ONE MILLION FIVE HUNDRED AND FIVE THOUSAND DOLLARS ($1,505,000) (the “Investment”); and

WHEREAS, it is a condition precedent to Investor’s obligation to make the Investment for Investor and the Company to enter into this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definitions. All capitalized but undefined terms used herein shall have the meaning set forth in the Subscription Agreement. As used in this Agreement, the following terms shall have the following meaning:

“Additional Registrable Securities” means (a) the Current Shares; (b) the Additional Shares; (c) the Penalty Shares; and (d) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Additional Registrable Securities shall cease to be Additional Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Additional Registrable Securities is declared effective by the Commission under the Securities Act and such Additional Registrable Securities have been disposed of by Investor in accordance with such effective Registration Statement; (b) such Additional Registrable Securities have been previously sold in accordance with Rule 144; (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and Investor as reasonably determined by the Company, upon the advice of counsel to the Company; (d) such securities have otherwise been disposed of by Investor pursuant to an exemption from the registration requirements of the Securities Act.

“Additional Registration Statement” means any Registration Statement other than the Initial Registration Statement or Follow-On Registration Statement(s).

“Additional Shares” means all shares of Common Stock acquired by Investor from the date of this Agreement through the nine (9) month anniversary of the date of this Agreement, including shares issuable upon exercise of warrants acquired by Investor, other than the Current Shares, the Penalty Shares, the Unit Shares and the Warrant Shares.

“Business Days” means any day other than a Saturday, Sunday, or a legal holiday of the City of New York.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.00001.

“Current Shares” means the 35,564,800 shares of Common Stock owned by Investor as of the date hereof.

 

  

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“Delinquency Period” shall mean each thirty (30) day period after which a Registration Statement is to be filed pursuant to this Agreement, or such shorter period if Company files a Registration Statement or causes a Registration Statement to be declared effective prior to the thirtieth (30th) day.

“Demand Registrable Securities” shall have the meaning set forth in Section 2(b)(1).

“Effectiveness Period” shall have the meaning set forth in Section 2(a)(1).

“FINRA” means the Financial Industry Regulatory Authority,

“Follow-On Registration Statement” shall have the meaning set forth in Section 2(a)(3).

“Indemnified Party” shall have the meaning set forth in Section 6(c).

“Indemnifying Party” shall have the meaning set forth in Section 6(c).

“Initial Filing Date” means a date no later than the 90th day prior to the expiration of the Lock-Up Agreement, as defined in the Subscription Agreement.

“Initial Registrable Securities” means (a) the Unit Shares; (b) the Warrant Shares; and (c) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Initial Registrable Securities shall cease to be Initial Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Initial Registrable Securities is declared effective by the Commission under the Securities Act and such Initial Registrable Securities have been disposed of by Investor in accordance with such effective Registration Statement; (b) such Initial Registrable Securities have been previously sold in accordance with Rule 144; (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and Investor as reasonably determined by the Company, upon the advice of counsel to the Company; (d) such securities have otherwise been disposed of by Investor pursuant to an exemption from the registration requirements of the Securities Act.

“Initial Registration Statement” means the Registration Statement filed in connection with the Initial Registrable Securities.

“Losses” shall have the meaning set forth in Section 6(a).

“Penalty Shares” shall mean all shares of Common Stock issued to Investor pursuant to Section 4.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”)), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

  

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“Registrable Securities” shall mean, collectively the (a) Initial Registrable Securities; and (b) the Additional Registrable Securities, unless the context otherwise requires, in which case it shall mean each of the (a) Initial Registrable Securities; and (b) the Additional Registrable Securities, individually.

“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2, including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

“SEC Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff; and (ii) the Securities Act.

“Transfer Agent” means Worldwide Stock Transfer, LLC, or such other transfer agent as the Company may then engage for the purposes of providing transfer agent services.

“Unit Shares” means all shares of Common Stock issuable as part of the Units pursuant to the Subscription Agreement and any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing.

“Warrants” means, collectively, the (a) Series B Warrants; and (b) Series C Warrants.

“Warrant Shares” means, collectively, the shares of Common Stock issuable upon exercise of the Warrants.

2. Registration Statements.

(a) Initial Registration Statement.

(1) Filing of the Initial Registration Statement. The Company shall prepare and file with the Commission the Initial Registration Statement covering the resale of the Initial Registrable Securities, or such maximum portion thereof as permitted by SEC Guidance, on or prior to the Initial Filing Date. The Initial Registration Statement filed hereunder shall be on Form S-1, or on such other appropriate form as determined by the Company and its counsel. Subject to the terms of this Agreement, the Company shall use its best efforts to cause the Initial Registration Statement filed hereunder to be declared effective under the Securities Act as promptly as possible after the filing thereof and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until all Initial Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) (A) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and (B) may be sold without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Investor (the “Effectiveness Period”). The Company shall promptly notify Investor via facsimile or by e-mail of the effectiveness of a Registration Statement upon confirming such effectiveness with the Commission.

(2) Cutbacks. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation on the number of Initial Registrable Securities permitted to be registered in the Initial Registration Statement, the number of Initial Registrable Securities to be registered in the Initial Registration Statement on behalf of Investor will be reduced as set forth in the SEC Guidance. In the event of a cutback hereunder, the Company shall give Investor written notice of such.

 

  

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(3) Follow-On Registration Statement. If any SEC Guidance sets forth a limitation on the number of Initial Registrable Securities which may be registered pursuant the Initial Registration Statement, within sixty (60) days of the effectiveness of the Initial Registration Statement, the Company shall prepare and file a Follow-On Registration Statement (each a “Follow-On Registration Statement”) covering the resale of all of the Initial Registrable Securities not covered by the Initial Registration Statement, or such maximum portion as permitted by the SEC Guidance. Subject to the terms of this Agreement, the Company shall use its best efforts to cause the Follow-On Registration Statement filed hereunder to be declared effective under the Securities Act as promptly as possible after the filing thereof and shall use its best efforts to keep such Follow-On Registration Statement continuously effective during the Effectiveness Period. If any SEC Guidance sets forth a limitation on the number of Initial Registrable Securities which may be registered pursuant to a Follow-On Registration Statement, within sixty (60) days of the effectiveness of the Follow-On Registration Statement, the Company shall prepare and file an additional Follow-On Registration Statement covering the resale of all of the remaining Initial Registrable Securities not covered by the Follow-On Registration Statement, or such maximum portion as permitted by the SEC Guidance, until all of the Initial Registrable Securities have been registered for resale. Subject to the terms of this Agreement, the Company shall use its best efforts to cause the Follow-On Registration Statement filed hereunder to be declared effective under the Securities Act as promptly as possible after the filing thereof and shall use its best efforts to keep such Follow-On Registration Statement continuously effective during the Effectiveness Period.

(b)           Additional Registration Statements.

(1) Demand Registration. During the Effectiveness Period and after the filing and effectiveness of the Initial Registration Statement and any Follow-On Registration Statement covering all of the Initial Registrable Securities, Investor shall have the right to provide the Company with written notice (each a “Demand Notice”) requiring the Company to file an Additional Registration Statement covering such number of Additional Registrable Securities as Investor requests in the Demand Notice, subject to Section 2(b)(2) (the “Demand Registrable Securities”), as follows:

(i) if Investor has sold all of the Initial Registrable Securities, Investor shall have the right to require the Company to prepare and file an Additional Registration Statement covering the resale of the Demand Registrable Securities within sixty (60) days of (i) the effective date of the Initial Registration Statement, or any Follow-On Registration Statement, or (ii) the date of the Demand Notice, whichever is later.

 

(ii) if Investor has not sold all of the Initial Registrable Securities, Investor shall have the right to require the Company to prepare and file an Additional Registration Statement covering the resale of the Demand Registrable Securities within ninety (90) days of (i) the effective date of the Initial Registration Statement, or any Follow-On Registration Statement, or (ii) the date of the Demand Notice, whichever is later.

(iii) if Investor has sold all of the Demand Registrable Securities registered pursuant to an Additional Registration Statement, Investor shall have the right to require the Company to prepare and file an Additional Registration Statement covering the resale of additional Demand Registrable Securities within sixty (60) days of (i) the effective date of the of the previous Additional Registration Statement, or (ii) the date of the Demand Notice, whichever is later.

(iv) if Investor has not sold all of the Demand Registrable Securities registered pursuant to an Additional Registration Statement, Investor shall have the right to require the Company to prepare and file an Additional Registration Statement covering the resale of additional Demand Registrable Securities within ninety (90) days of (i) the effective date of the of the previous Additional Registration Statement, or (ii) the date of the Demand Notice, whichever is later.

(2) Cutbacks. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation on the number of Additional Registrable Securities permitted to be registered in an Additional Registration Statement, the number of Additional Registrable Securities to be registered in such Additional Registration Statement on behalf of Investor will be reduced as set forth in the SEC Guidance. In the event of a cutback hereunder, the Company shall give Investor written notice of such.

 

  

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3. Registration Procedures.

In connection with the Company’s registration obligations hereunder, the Company shall:

(a) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to the Securities Act; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to Investor true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that, the Company may excise any information contained therein which would constitute material non-public information as to Investor); and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act of 1934, as amended (the “Exchange Act”) with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by Investor set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

(b) If during the Effectiveness Period the Company becomes eligible to file a Registration Statement on Form S-3 under the Securities Act (“Form S-3”), the Company shall promptly convert the Initial Registration Statement and any Additional Registration Statement, as applicable, to a Form S-3.

(c) Notify Investor (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Business Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Business Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus, (iii) of the issuance by the Commission or any other federal or state governmental authority of any “stop-order” suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any 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; and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided that, any and all of such information shall remain confidential to Investor until such information otherwise becomes public, unless disclosure by Investor is required by law; provided, further, that notwithstanding Investor’s agreement to keep such information confidential, Investor makes no acknowledgement that any such information is material, non-public information.

 

  

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(d) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(e) Furnish to Investor, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

(f) Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by Investor in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(c).

(g) The Company shall cooperate with any broker-dealer through which Investor proposes to resell its Registrable Securities in effecting a filing with FINRA, as requested by Investor, and the Company shall pay the filing fee required by such filing within two (2) Business Days of request therefor.

(h) Prior to any resale of Registrable Securities by Investor, use its commercially reasonable efforts to register or qualify or cooperate with Investor in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by Investor under the securities or Blue Sky laws of such jurisdictions within the United States as Investor reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(i) Upon the occurrence of any event contemplated by Section 3(c), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies Investor in accordance with clauses (iii) through (vi) of Section 3(c) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then Investor shall suspend use of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(i) to suspend the availability of a Registration Statement and Prospectus for a period not to exceed ninety (90) calendar days (which need not be consecutive days) in any twelve (12) month period.

 

  

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(j) Comply with all applicable rules and regulations of the Commission.

(k) The Company may require Investor to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by Investor and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because Investor fails to furnish such information within three (3) Business Days of the Company’s request.

4. Penalty Payments.

(a) Penalty for Not Filing. Subject to Section 3(c), in the event the Company fails to file a Registration Statement in the time period prescribed in Section 2 hereof, the Company shall issue to Investor a number of shares of Common Stock equal to five percent (5%) of the maximum number of Registrable Securities to be registered pursuant to the Registration Statement, subject to Section 2(b)(2), for every Delinquency Period in which the Company fails to file the Registration Statement (the “Filing Penalty”).

(i) Notwithstanding anything herein to the contrary, the Filing Penalty will not cover any Warrant Shares to be included in any given Registration Statement.

(ii) The maximum number of Penalty Shares issuable pursuant to this Section 4(a) shall not exceed 25% of the Registrable Securities to be registered pursuant to any given Registration Statement.

(b) Penalty for Not Causing Registration Statement to Go Effective. Subject to Section 3(c), in the event the Company fails to cause a Registration Statement to be declared effective within ninety (90) days from the filing of such Registration Statement, the Company shall issue to Investor a number of shares of Common Stock equal to two and one-half percent (2.5%) of the maximum number of Registrable Securities to be registered pursuant to the Registration Statement, subject to Section 2(b)(2), for every Delinquency Period in which the Company fails to cause the Registration Statement to be declared effective (the “Effectiveness Penalty”).

(i) Notwithstanding anything herein to the contrary, the Effectiveness Penalty will not cover any Warrant Shares to be included in any given Registration Statement.

(ii) The maximum number of Penalty Shares issuable pursuant to this Section 4(b) shall not exceed 10% of the Registrable Securities to be registered pursuant to any given Registration Statement.

(iii) The Company hereby agrees and acknowledges that it is undertaking the obligations set forth in this Section 4(b) with the express knowledge that the Commission is solely responsible for declaring a Registration Statement effective.

 

  

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(c) Proration. The shares of Common Stock issuable pursuant to this Section 4 shall be pro-rated for any portion of a Delinquency Period.

(d) Procedure. The Company shall cause the Company’s Transfer Agent to issue to the Investor a share certificate representing the maximum number of Penalty Shares issuable pursuant to this Section 4 within five (5) Business Days after the end of any Delinquency Period.

5. Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities); (ii) printing expenses; (iii) messenger, telephone and delivery expenses; (iv) fees and disbursements of counsel for the Company; (v) Securities Act liability insurance, if the Company so desires such insurance; and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties) and the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of Investor or any fees payable to the Transfer Agent in connection with the sale of any of the Registrable Securities by Investor.

6. Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless Investor, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding Investor furnished in writing to the Company expressly for use therein, or to the extent that such information relates to Investor or Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by Investor expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(vi), the use by Investor of an outdated, defective or otherwise unavailable Prospectus after the Company has notified Investor in writing that the Prospectus is outdated, defective or otherwise unavailable for use by Investor and prior to the receipt by Investor of the Advice contemplated in Section 6(d). The Company shall notify Investor promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware.

 

  

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(b) Indemnification by Investor. Investor shall indemnify and hold harmless the Company, its directors, officers, agents, attorneys and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) Investor’s failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by Investor to the Company specifically for inclusion in such Registration Statement or such Prospectus, or (ii) to the extent that such information relates to Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by Investor expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(vi), the use by Investor of an outdated, defective or otherwise unavailable Prospectus after the Company has notified Investor in writing that the Prospectus is outdated, defective or otherwise unavailable for use by Investor and prior to the receipt by Investor of the Advice contemplated in Section 6(d). In no event shall the liability of Investor under this Section 5(b) be greater in amount than the dollar amount of the net proceeds received by Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (each an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with the defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Business Days of written notice thereof to the Indemnifying Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is judicially determined not to be entitled to indemnification hereunder.

 

  

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(d) Contribution. If the indemnification under Section 6(a) or 6(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

The Parties agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 6(d), Investor shall not be required to contribute pursuant to this Section 6(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received by Investor from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

7. Miscellaneous.

(a) Remedies. In the event of a breach by the Company or by Investor of any of their respective obligations under this Agreement, Investor or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and Investor agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

(b) Compliance. Investor covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement.

(c) Discontinued Disposition. By its acquisition of Registrable Securities, Investor agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(iii) - (vi), Investor will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.

(d) Amendments and Waivers. This Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and Investor. A waiver by either the Company or Investor on one matter shall not be construed as a waiver on all matters.

 

  

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(e) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Subscription Agreement.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the Parties. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of Investor. Investor may assign its rights hereunder without the written consent of the Company.

(g) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to Investor in this Agreement or otherwise conflicts with the provisions hereof.

(h) Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

(i) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Subscription Agreement.

(j) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law or those provided in the Subscription Agreement.

(k) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(l) Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.

[SIGNATURE PAGE FOLLOWS]

 

  

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IN WITNESS WHEREOF, Company and Investor have entered into this Registration Rights Agreement as of the date first written above.

Company

Janus Resources, Inc.

 

By:        /s/ Joseph Sierchio                                       

Name:   Joseph Sierchio

Title:     Acting Interim President and Chief Executive Officer

Investor

Kalen Capital Corporation

 

By:         /s/ Harmel S. Rayat                                       

Name:   Harmel S. Rayat

Title:     President

 

 

12jani_ex101.htm

EXHIBIT 10.1

THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND MAY NOT BE OFFERED OR SOLD DIRECTLY OR INDIRECTLY (A) WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS DEFINED IN REGULATION S) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER, OR AN EXEMPTION FROM, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, OR (B) IN CANADA OR TO RESIDENTS OF CANADA EXCEPT PURSUANT TO PROSPECTUS EXEMPTIONS UNDER THE APPLICABLE PROVINCIAL SECURITIES LAWS AND REGULATIONS OR PURSUANT TO AN EXEMPTION ORDER MADE BY THE APPROPRIATE PROVINCIAL SECURITIES REGULATOR.

This Subscription Agreement (this “Agreement”) is entered into by and between Janus Resources, Inc., a corporation organized under the laws of Nevada (the “Company”) and Kalen Capital Corporation, a corporation organized under the laws of the Province of Alberta, Canada (the “Subscriber”).

R E C I T A L S

WHEREAS, the Company desires to sell to the Subscriber and the Subscriber desires to purchase from the Company an aggregate of THREE MILLION FIVE HUNDRED THOUSAND (3,500,000) units (each, a “Unit”) of the Company’s equity securities (the “Subscribed for Units”), at a purchase price of FORTY-THREE CENTS ($0.43) per Unit for ONE MILLION FIVE HUNDRED AND FIVE THOUSAND DOLLARS ($1,505,000) in the aggregate (the “Subscription Amount”);

WHEREAS, each Unit shall consist of: (a) one share of common stock, par value $0.00001 (the “Common Stock”), (b) one Series A Stock Purchase Warrant (the “Series B Warrants”) and (c) one Series B Stock Purchase Warrant (the “Series C Warrants”) (the Units, Series B Warrants, the Series C Warrants and the Common Stock issuable upon exercise thereof may collectively be referred to as the “Securities”);

WHEREAS, each Series A Warrant shall be exercisable for one share of Common Stock for a period of five (5) years from the Closing Date at a price of $0.43 per share if the Subscriber exercises the Series B Warrants within eighteen (18) months from the Closing Date, or $0.46 if exercised any time after eighteen (18) months from the Closing Date and prior to expiration of the Series B Warrant; and

WHEREAS, each Series B Warrant shall be exercisable for one share of Common Stock for a period of five (5) years from the Closing Date at a price of $0.43 per share if the Subscriber exercises the Series C Warrants within eighteen (18) months from the Closing Date, or $0.49 if exercised any time after eighteen (18) months from the Closing Date and prior to expiration of the Series C Warrant (each of the Series B Warrants and Series C Warrants shall include a provision allowing the holder to exercise on a cashless basis as set forth therein).

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

1.           Subscription for Shares; Subscription Procedures; Closing.

1.1           Subscription. Subject to the terms and conditions hereinafter set forth, the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company the Subscribed for Units and simultaneously with the Subscriber’s execution and delivery of this Agreement, herewith has transmitted the Subscription Amount by wire transfer, in accordance with the written instructions provided by the Company to the Subscriber.

 

  

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1.2           Subscription Procedure. To complete a subscription for the shares, the Subscriber must fully comply with the subscription procedure provided in this Section 1.2 and Section 1.3 below, on or before the Closing Date, as defined below:

(a)           Subscription Agreement. On or before the Closing Date, the Subscriber shall review, complete and execute the Signature Page to this Agreement, and shall return this Agreement, as executed, to the Company 430 Park Avenue, Suite 702, New York, New York 10022. Executed documents may be delivered by email, provided that the Subscriber delivers the original copies of the documents as soon as practicable thereafter.

(b)           Subscription Amount. Simultaneously with the delivery of this Agreement, as provided herein, the Subscriber shall deliver the Subscription Amount to the Company as set forth in Section 1.1 above.

1.3           Closings; Closing Date.

(a)           Date and Place of Closing. The consummation of the transactions contemplated herein shall take place at the offices of the Company, upon the satisfaction or waiver of all conditions to closing set forth in Sections 4 and 5 hereof (the “Closing Conditions”) prior to the Offering Termination Date, as defined below (the “Closing Date”).

(b)           Subscriber’s Closing Deliveries. At the Closing, the Subscriber shall have delivered to the Company an executed copy of each of: (i) this Agreement (including Appendix A hereto); (ii) the Subscription Amount; (iii) the Lock-Up Agreement, substantially in the form of Exhibit A attached hereto (the “Lock-Up Agreement”); and (iv) the Registration Rights Agreement (the “Registration Rights Agreement”) substantially in the form of Exhibit B attached hereto.

(c)           Company’s Closing Deliveries. At the Closing, the Company shall have delivered to the Subscriber (i) a duly countersigned copy of this Agreement; (ii) the certificate(s) representing the Common Stock underlying the Subscribed for Units; (iii) the Series B Warrants executed by the Company; (iv) the Series C Warrants executed by the Company; (v) a duly countersigned copy of the Lock-Up Agreement; and (vi) a duly countersigned copy of the Registration Rights Agreement.

1.5           Termination. If the Closing has not occurred on or before November 29, 2013, this Agreement shall terminate and be of no further force or effect (the “Offering Termination Date”).

2.           Subscriber’s Representations and Warranties. Subscriber hereby represents and warrants to, and agrees with, the Company that:

2.1           Authorization; Power and Enforceability.

Subscriber hereby represents, warrants and acknowledges to and agrees with the Company that:

(a)           US Person. Subscriber is not a US Person as that term is defined in Regulation S (“Regulation S”) as promulgated by the United States Securities and Exchange Commission (the “SEC”).

(b)           No Registration. Subscriber understands and agrees that none of the Subscribed for Units have been registered under the Securities Act of 1933, as amended (the “1933 Act”), or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and warranties of the Subscriber contained herein), and, unless so registered, may not be offered or sold in the United States or to an US Person except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act.

(c)           Reliance Solely on Company Representations Herein. The decision to execute this Agreement and purchase the shares agreed to be purchased hereunder has not been based upon any oral or written representation (except as specifically set forth herein) as to fact or otherwise made by or on behalf of the Company and such decision is based solely upon a review of the Company’s filings with the SEC available on the SEC’s website at www.sec.gov and such other information provided to Subscriber pursuant to this Agreement (the “Company Information”).

(d)           Company Information. Subscriber hereby acknowledges and hereby represents that the Subscriber has been furnished by the Company or has had access to, during the course of the Offering, with all Company Information, the terms and conditions of the Offering and any additional information that the Subscriber, its purchaser representative, attorney and/or accountant has requested or desired to know, and has been afforded the opportunity to ask question of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering.

 

  

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(e)           Books and Records. The books and records of the Company were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by Subscribers during reasonable business hours at its principal place of business and that all documents, records and books in connection with the sale of the Securities hereunder have been made available for inspection by the Subscriber, the Subscriber’s attorney and/or advisor(s).

(f)           Consultation With Its Own Advisors. Subscriber has been advised to consult its own legal, tax and other advisors with respect to the merits and risks of an investment in the Securities and with respect to applicable resale restrictions and it is solely responsible (and the Company is not in any way responsible) for compliance with applicable resale restrictions.

(g)           No Exchange Listing. None of the Securities are listed on any stock exchange and no representation has been made to the Subscriber that any of the Securities will become listed on any stock exchange or, if currently quoted on an automated dealer quotation system, will remain quoted on such system. Subscriber acknowledges there is currently no active market for the Securities and the Company makes no representation that an active market for the Securities will ever exist.

(h)           Own Account. Subscriber is acquiring the shares purchased pursuant to this Agreements as principal for its own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such shares; if it is acquiring the shares as a fiduciary or agent for one or more investor accounts, it has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgments, representations and agreements on behalf of such account.

(i)           Unavailability of Certain Remedies. Subscriber is acquiring the Securities purchased pursuant to this Agreements pursuant to an exemption from the registration and prospectus requirements of applicable securities legislation in all jurisdictions relevant to this Agreement, and, as a consequence, the Subscriber will not be entitled to use most of the civil remedies available under applicable securities legislation and the Subscriber will not receive information that would otherwise be required to be provided to the Subscriber pursuant to applicable securities legislation.

(j)           Start-up Phase. Subscriber has been advised that the business of the Company is in a start-up phase and acknowledges that there is no assurance that the Company will raise sufficient funds to adequately capitalize the business or that the business will be profitable in the future.

(k)           No Governmental Review. Subscriber acknowledges and understands that no United States federal or state agency, including the SEC has passed on or made recommendations or endorsement of the Subscribed for Units or the suitability of the investment contemplated hereby; nor, have such authorities passed upon or endorsed the merits of the offering of the Subscribed for Units. There is no government or other insurance covering any part of the Units.

(l)           Risk Acknowledgement. Subscriber recognizes that the purchase of the Subscribed for Units involves a high degree of risk including, without limitation, the following: (1) the Company is a development stage business with limited operating history and requires and will require substantial funds in addition to the proceeds of the Offering; (2) the purchase of the Subscribed for Units is highly speculative, and only investors who can afford the loss of their entire investment should consider purchasing the Subscribed for Units; (3) Subscriber may not be able to ever liquidate its investment in the Subscribed for Units; (4) transferability of the Subscribed for Units is limited; and (5) the Company has not paid a dividend on its capital stock since inception and does not anticipate paying any dividends in the foreseeable future.

 

  

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(m)           Communication of Offer. The offer to sell the Subscribed for Units was directly communicated to Subscriber by the Company. Subscriber represents that no Subscribed for Units were offered or sold to it by means of any form of general solicitation or general advertising and that at no time was Subscriber presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.

(n)           Authorization; Enforceability. Subscriber is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder.

The execution, delivery and performance by Subscriber of the transactions contemplated by this Agreement have been duly authorized by any necessary corporate or similar action on the part of such Subscriber. This Agreement has been duly executed by Subscriber, and when delivered by Subscriber in accordance with the terms hereof, will constitute the valid and legally binding obligation of Subscriber, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(o)           No Conflicts. The entering into of this Agreement and the consummation of the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound.

(p)           No Consents. Subscriber is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement provided that for purposes of the representation made in this sentence, the Subscriber is assuming and relying upon the accuracy of the relevant representations and agreements of the Company herein.

(q)           Experience of the Subscriber. Subscriber, its advisors (who are not compensated by or affiliated with the Company, directly or indirectly), if any, and designated representatives, if any, have the knowledge and experience in financial and business matters necessary to evaluate the merits and risks of its prospective investment in the Company, and have carefully reviewed and understand the risks of, and other considerations relating to, the purchase of the Subscribed for Units and the tax consequences of the investment, and have the ability to bear the economic risks of the investment and protect the Subscriber’s interests in connection with the transaction contemplated hereby.

(r)           Ability to Bear the Economic Risk. Subscriber (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the Units for an indefinite period of time.

(s)           Acknowledgement of and Consent to Restrictive Legend. Subscriber hereby acknowledges that that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing the Units and shares issuable pursuant to the Units will bear a legend in substantially the following form:

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.

 

  

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(t)           Regulation S Compliance. Subscriber further represents and warrants to the Company that:

(i)           it is acquiring the Units in an offshore transaction pursuant to Regulation S and the Subscriber was outside the United States when receiving and executing this Agreement;

(ii)           Subscriber has not acquired the Units as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S) in the United States in respect of the Units which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of the Subscribed for Units; provided, however, that the Subscriber may sell or otherwise dispose of the Securities pursuant to registration of the Securities under the 1933 Act and any applicable state and provincial securities laws or under an exemption from such registration requirements and as otherwise provided herein;

(iii)           during the six month distribution compliance period set forth in Regulation S (the “Distribution Compliance Period”), the Subscriber understands and agrees that offers and sales of any of the Securities shall only be made pursuant to an effective registration statement as to such Securities or in compliance with the safe harbor provisions set forth in Regulation S (which the purchaser of the Securities (other than a distributor) certifies that it is not a U.S. person and is not acquiring the securities for the account or benefit of any U.S. person or is a U.S. person who purchased securities in a transaction that did not require registration under the 1933Act); following the Distribution Compliance Period offers and sales of the Securities may be effected by the Subscriber solely pursuant to an effective registration statement as to such Securities or an exemption from the registration requirements of the 1933 Act, and in each case only in accordance with all other applicable securities laws;

(iv)           Subscriber understands and agrees not to engage in any hedging transactions involving the Securities; and

(v)           Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including: (i) the legal requirements within its jurisdiction for the purchase of the Securities; (ii) any foreign exchange restrictions applicable to such purchase; (iii) any governmental or other consents that may need to be obtained; and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities. The Subscriber’s subscription and payment for, and its continued beneficial ownership of the Securities, will not violate any applicable securities or other laws of the Subscriber’s jurisdiction of residency as set forth on the signature page hereto.

(u)           Address. Subscriber represents that the address of the Subscriber furnished by the Subscriber on the signature page hereof is the Subscriber’s principal business address.

(v)           Other Offerings. Subscriber acknowledges that the Company will, from time to time, offer and sell additional shares of Common Stock and/or securities convertible into common stock on such terms and conditions as its Board of Directors, in its sole discretion, may determine. The terms and conditions of the offer and sale of any such additional shares of Common Stock may be different from and on terms better than the terms of this Offering and may result in substantial dilution to the existing shareholders.

 

  

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(w)          Reliance. Subscriber understands and acknowledges that (i) the Subscribed for Units are being offered and sold to the Subscriber without registration under the 1933 Act in a private placement that is intended to be exempt from the registration provisions of the 1933 Act and (ii) the availability of such exemption, depends in part on, and the Company will rely upon, the accuracy and truthfulness of, the foregoing representations and warranties and the Subscriber hereby consents to such reliance. The Subscriber agrees that the representations, warranties and covenants of the Subscriber contained herein (or in any representation letter or questionnaire executed and delivered by the Subscriber pursuant to the provisions hereof) shall be true and correct both as of the execution of this Agreement and as of the Closing Date, and shall survive the completion of the distribution of the Subscribed for Units. The Subscriber hereby agrees to notify the Company immediately of any change in any representation, warranty, covenant or other information relating to the Subscriber contained in this Agreement, or any exhibit hereto, which takes place prior to Closing.

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

(y)           Brokers, Finders and Financial Advisors. No broker, finder or financial advisor has acted for Subscriber in connection with this Agreement or the transactions contemplated hereby or thereby, and no broker, finder or financial advisor is entitled to any broker’s, finder’s or financial advisor’s fee or other commission in respect thereof based in any way on any contract with Subscriber.

(z)           Use of Proceeds. Subscriber acknowledges that the Company intends to use the net proceeds of the Subscription Amount for general working capital and the Company has not made any representations to allocate any portion of the Subscription Amount for any specific purpose.

3.           The Company’s Representations and Warranties. The Company represents and warrants to and agrees with the Subscriber that:

3.1           Due Incorporation. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite corporate power to own its properties and to carry on its business as presently conducted.

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

3.3           Capitalization and Additional Issuances. The Company is authorized to issue up to 200,000,000 shares of common stock having a par value of $0.00001 per share of which 63,075,122 shares are issued and outstanding as of November 25, 2013; and 10,000,000 shares of preferred stock having a par value of $0.0001 are authorized, of which none (0) are issued outstanding. All issued and outstanding shares of capital stock and other equity interests in the Company have been duly authorized and validly issued and are fully paid and non-assessable. As of November 25, 2013, there are stock options to purchase up to 40,000 shares of Common Stock at an exercise price of $0.65 per share issued to our directors, of which 20,000 are vested. In addition to the Series B Warrants and Series C Warrants included as part of the Units and the stock options disclosed herein, there is a Series A Common Stock Purchase Warrant allowing the holder thereof to purchase up to 1,200,000 shares of Common Stock at an exercise price of $0.35 per share through July 11, 2019. There are no other warrants, or rights to subscribe to, securities, rights, understandings or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of Common Stock or other equity interest of the Company. There are no outstanding agreements or preemptive or similar rights affecting the Company’s common stock.

 

  

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3.4          Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority, is required by the Company or any Affiliate of the Company in connection with the consummation of the transactions contemplated by this Agreement, except as may be required in connection with filings pursuant to Regulation S, or which otherwise would not have a Material Adverse Effect or the consummation of any of the other agreements, covenants or commitments of the Company or any Subsidiary contemplated hereby. Any such qualifications and filings will, in the case of qualifications, be effective on the Closing and will, in the case of filings, be made within the time prescribed by law.

3.5          No Violation or Conflict. If the representations and warranties of the Subscriber in Section 2 herein are true and correct, then neither the issuance nor the sale of the Units nor the performance of the Company’s obligations under this Agreement by the Company will:

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

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

(c)           result in the triggering of any piggy-back or other registration rights of any Person or entity holding securities of the Company or having the right to receive securities of the Company.

3.6          The Common Stock. The Common Stock, including the Common Stock issuable upon exercise of each of the Series A Warrants and Series B Warrants in accordance with the terms thereof, upon issuance:

(a)           have been, or will be, duly and validly authorized and validly issued, and non-assessable;

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

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

3.7          Litigation. There is no litigation, arbitration, mediation, action, suit, claim, proceeding or investigation, whether legal or administrative, pending against the Company or any of its Subsidiaries or, to the Company’s knowledge, threatened against the Company or any of its Subsidiaries or any of their respective assets, properties or operations, at applicable law or in equity, before or by any governmental authority or any order of any governmental authority that, individually or in the aggregate, has had or caused or would reasonably be expected to have or cause a material adverse effect on the Company’s operations.

3.8          No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf, has directly or indirectly made any offers or sales of any security of the Company nor solicited any offers to buy any security of the Company under circumstances that would cause the offer of the shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the 1933 Act. No prior offering will impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder. Neither the Company nor any of its Affiliates will take any action or steps that would cause the offer or issuance of the shares to be integrated with other offerings which would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder. The Company will not conduct any offering other than the transactions contemplated hereby that may be integrated with the offer or issuance of the shares that would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.

 

  

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3.9          No General Solicitation. Neither the Company, nor any of its Affiliates, nor to its knowledge, any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising in connection with the offer or sale of the shares.

3.10        Correctness of Representations. The Company represents that the foregoing representations and warranties are true and correct as of the date hereof in all material respects, and, unless the Company otherwise notifies the Subscriber prior to the Closing Date, shall be true and correct in all material respects as of the Closing Date; provided, that, if such representation or warranty is made as of a different date, in which case such representation or warranty shall be true as of such date.

4.           Subscriber’s Conditions of Closing. The Subscriber’s obligation to purchase the Subscribed for Units is subject to the satisfaction or waiver, on or before the Closing Date, of the conditions contained in this Section 4.

4.1          Representations, Warranties and Covenants. The representations, warranties and covenants of the Company set forth in Section 3 hereof shall be true in all material respects on and as of the Closing Date.

4.2          Closing Deliveries. The conditions in Section 1.3(d) hereof shall have been satisfied or waived in writing by the Subscriber.

4.3          Company’s Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of such Closing shall have been performed, complied with in all material respects, or waived in writing by the Subscriber.

4.4          No Adverse Action or Decision. There shall be no action, suit, investigation or proceeding pending, or to the Company’s knowledge, threatened, against or affecting the Company or any of its properties or rights, or any of its affiliates, associates, officers or directors, before any court, arbitrator, or administrative or governmental body that (i) seeks to restrain, enjoin, prevent the consummation of or otherwise adversely affect the transactions contemplated by this Agreement, or (ii) questions the validity or legality of any such transaction or seeks to recover damages or to obtain other relief in connection with any such transaction.

5.           Company’s Conditions of Closing. Subject to the Company’s rights in Section 1.4 and elsewhere in this Agreement, the Company’s obligation to sell the Subscribed for Units is subject to the satisfaction or waiver, on or before the Closing Date, of the conditions contained in this Section 5.

5.1          Representations, Warranties and Covenants. The representations, warranties and covenants of the Subscriber set forth in Section 2 hereof shall be true in all material respects on and as of the Closing Date.

5.2          Closing Deliveries. The conditions in Section 1.3(c) hereof shall have been satisfied or waived in writing by the Company.

5.3          Subscriber’s Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Subscriber on or prior to the date of such Closing shall have been performed, complied with in all material respects, or waived in writing by the Company.

5.4          No Adverse Action or Decision. There shall be no action, suit, investigation or proceeding pending, or to the Company’s knowledge, threatened, against or affecting the Company or any of its properties or rights, or any of its affiliates, associates, officers or directors, before any court, arbitrator, or administrative or governmental body that (i) seeks to restrain, enjoin, prevent the consummation of or otherwise adversely affect the transactions contemplated by this Agreement, or (ii) questions the validity or legality of any such transaction or seeks to recover damages or to obtain other relief in connection with any such transaction.

5.5          Return of Subscription Amount. If the Closing Conditions have not been satisfied on or prior to the Offering Termination Date, the Company will return the Subscription Amount to the Subscriber.

 

  

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6.           Miscellaneous.

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

(i) if to the Company, to:

Janus Resources, Inc.

430 Park Avenue

Suite 702;

New York, New York 10022

Attention: President & CEO

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

Sierchio & Company, LLP

430 Park Avenue

Suite 702

New York, New York 10022

Attention: Joseph Sierchio

and (ii) if to the Subscriber, to the addresses indicated on the signature page hereto.

6.2          Entire Agreement; Assignment. This Agreement and other Transaction Documents delivered in connection herewith represent the entire agreement between the parties hereto with respect to the subject matter hereof. Neither the Company nor the Subscribers has relied on any representations not contained or referred to in this Agreement and the documents delivered herewith. No right or obligation of the Company shall be assigned without prior notice to and the written consent of the Subscriber. The Subscriber may not assign this Agreement without the prior written consent of the Company.

6.3          Indemnification. The Subscriber agrees to indemnify and hold harmless the Company, and its officers, directors, employees, agents, control Persons and affiliates from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to, any and all expenses incurred in investigating, preparing or defending against any litigation commenced or threatened) based upon or arising out of (i) any sale or distribution of the Subscribed for Units by the Subscriber in violation of the 1933 Act or any applicable state securities or “Blue Sky” laws or (ii) any actual or alleged false acknowledgment, representation or warranty, or misrepresentation or omission to state a material fact, or breach by the Subscriber of any covenant or agreement made by the Subscriber herein, in any Transaction Document, or in any other document delivered in connection with this Agreement or any Transaction Document.

6.4          Counterparts/Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.

 

  

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

6.6          Captions; Certain Definitions. The captions of the various sections and paragraphs of this Agreement have been inserted only for the purposes of convenience; such captions are not a part of this Agreement and shall not be deemed in any manner to modify, explain, enlarge or restrict any of the provisions of this Agreement. As used in this Agreement the term “Person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the Person or Persons referred to may require.

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

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

6.9          Irrevocability; Binding Effect. The Subscriber hereby acknowledges and agrees that the subscription hereunder is irrevocable by the Subscriber, except as required by applicable law, and that this Agreement shall survive the death or disability of the Subscriber and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and permitted assigns. If the Subscriber is more than one Person, the obligations of the Subscriber hereunder shall be joint and several and the agreements, representations, warranties and acknowledgments herein shall be deemed to be made by and be binding upon each such Person and such Person’s heirs, executors, administrators, successors, legal representatives and permitted assigns.

6.10        Modification. Except as otherwise expressly provided herein, any term of this Agreement may be amended and observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely) with the written consent of the Company and in writing.

6.11           Fees. Unless otherwise specifically provided, each of the Parties shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, whether or not the transactions contemplated hereby are consummated.

6.12           Survival of Representations. All representations, warranties and agreements contained herein or made in writing by or on behalf of any party to this Agreement in connection herewith shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

6.13           Confidentiality. The Subscriber acknowledges and agrees that any information or data the Subscriber has acquired from or about the Company or may acquire in the future, not otherwise properly in the public domain was received in confidence. The Subscriber agrees not to divulge, communicate or disclose, except as may be required by law or for the performance of this Agreement, or use to the detriment of the Company or for the benefit of any other Person, or misuse in any way, any confidential information of the Company.

 

  

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6.14           Binding Obligation. Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of the shares as herein provide, subject, however to the right reserved by the Company to enter into the same agreement with or other subscribers and to add an/or remove other Persons as subscribers.

6.15           Further Assurances. The parties hereto agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

6.16           No Third Party Rights. Nothing in this Agreement shall create or be deemed to create any rights in any Person or entity not a party to this Agreement.

6.17           Reference and Effective Date. The reference and effective date of this Agreement shall be the date on which this Agreement is signed by the Company, regardless of the date on which it is signed by the Subscriber.

6.18           Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery). Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of the documents contemplated herein, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

[COMPANY’S SIGNATURE PAGE FOLLOWS]

 

 

 

 

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COMPANY SIGNATURE PAGE

IN WITNESS WHEREOF, the Company has duly executed this Subscription Agreement.

Dated: November 29, 2013

Janus Resources, Inc.

 

By:         /s/ Joseph Sierchio                                           

Name:    Joseph Sierchio

Title:      Acting Interim President and Chief Executive Officer

[SUBSCRIBER’S SIGNATURE PAGE FOLLOWS]

 

 

 

  

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SUBSCRIBER SIGNATURE PAGE

IN WITNESS WHEREOF, the Subscriber hereby executes this Subscription Agreement as of the 29th day of November, 2013.

Kalen Capital Corporation

By:         /s/ Harmel S. Rayat                                               

Name:    Harmel S. Rayat

Title:      President

 

 

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