Document:

ex102.htm

Exhibit 10.2

 

CORPORATE SPONSORSHIP AGREEMENT

 

This Agreement is made effective November 1, 2010 between the American Diabetes Association, an Ohio non-profit corporation with its principal office located at 1701 N. Beauregard Street, Alexandria, Virginia 22311 ("ADA"), and the Epic Wound Care, Inc. ("Company" or "Epic Wound Care"), a Nevada corporation, with its principal place of

 

business at 1365 N. Courtenay Parkway, Suite A, Merritt Island, FL 329523

 

WHEREAS, ADA is the nation's leading voluntary health organization concerned with diabetes and its complications, and the mission of ADA is to prevent and cure diabetes and to improve the lives of all people affected by diabetes;

 

WHEREAS, Company, a manufacturer of consumer products company principally focused on wound care applications, desires to support ADA and ADA's mission and related activities outlined in Attachment A hereto;

 

WHEREAS, in furtherance of its tax-exempt purposes, ADA conducts various programs and Company desires to sponsor the ADA and the ADA programs outlined in Attachment A hereto (Company's sponsorship of ADA and its programs is hereinafter defined as the "Program" or the "Sponsorship").

 

WHEREAS, the parties desire to confirm the nature of the sponsorship ("Sponsorship");

 

NOW THEREFORE, and for valuable consideration, the receipt and adequacy of which are hereby acknowledged, ADA and Company agree as follows:

 

1. Scope: ADA agrees to identify and acknowledge Company as a sponsor of the Program, as permitted in connection with qualified sponsorship payments under Section 513(i) of the Internal Revenue Code and Treasury regulations thereunder ("Code"). Company agrees not to knowingly take any actions that would jeopardize the tax-exempt status of ADA under section 501(c)(3) of the Code. Company agrees to inform its business partners about ADA's tax-exempt status. Company agrees to provide its services, as defined in Attachment A, in accordance with all applicable laws and in accordance with standards of decorum and taste so as not to adversely reflect upon ADA or its mission. The purpose of the Sponsorship is to support the American Diabetes Association Mission.

 

2. Name and Logos: ADA warrants that it is the sole and exclusive owner of its name and logos, with or without accompanying words, and has the legal right to enter into agreements relating hereto. In addition, any materials provided by or developed by ADA for this Sponsorship are and remain the property of ADA. ADA's names, logos, and various marks (Attachment B) shall collectively be referred to as "the Marks". ADA's ownership of the Marks is or shall be secured through registration, or under common law, or both. Use by Company of the Marks does not create ownership rights in the Marks for Company. Company accepts and acknowledges ADA's exclusive ownership of the Marks and shall not, during the period of this Agreement, or any time thereafter, challenge ADA's exclusive ownership or registration of its Marks in any forum or on any basis, including the basis that rights to the Marks accrue to Company by virtue of this Agreement. Company shall provide reasonable assistance to ADA upon request in obtaining whatever additional protection for the Marks that ADA finds necessary.

 

  

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3. License: ADA hereby grants Company a non-exclusive (except as set forth in Attachment A), limited, revocable and conditional license during the period of this Agreement to use the Marks, solely to identify Company as a sponsor of the Program, with the limited authority to use the ADA Marks only in connection with the recognition authorized under this Agreement. Use by Company of the Marks is limited to the particular Marks as authorized by ADA in Attachment B, may not be revised or altered in any way, must be displayed in the same form and colors, and does not extend to any other marks of ADA.

 

Use by Company of the Marks on and in conjunction with its product or brand is conditioned upon Company's observance of the specifications for permissible uses of the Marks as given in writing by ADA. Except as set forth in Attachment A, the license for the Marks described is non-exclusive; nothing shall prohibit ADA, during the period of this Agreement, from licensing the use of substantially similar Marks for substantially similar uses in working with companies or industries that compete directly or indirectly with those of Company. ADA may require that a disclaimer stating that ADA's participation in the Sponsorship does not convey or imply ADA's approval, endorsement, certification, acceptance, or referral of any product or service of Company, or of any corporation or other entity providing sponsorship, accompany the depiction of the Marks.

 

Company may not permit any third party to use the Marks without the express prior written approval of ADA, which may be withheld for any reason. The Marks must be used in a professional manner and solely in connection with the activities authorized under this Agreement. The Marks shall not be placed adjacent to the Marks of another organization concerned with diabetes, or those of a company which manufactures products related to diabetes, without ADA's specific written consent, which may be withheld for any reason. The Marks may not be used for individual, personal or professional gain, or other private benefit, and Company may not use the Marks in any manner that: diminishes their value or otherwise dilutes the Marks; discredits the ADA or tarnishes its reputation and goodwill; is false, misleading or likely to cause confusion, mistake or deception; violates the rights of others; violates any federal, state or local law, regulation or other public policy; or mischaracterizes the relationship between the parties, including but not limited to the fact that Company is a separate and distinct legal entity from, and is not an agent of, ADA.

 

4. Review: All uses of the ADA Marks, including the specific placement of the Marks, on the product or brand and all promotional materials and packaging, are subject to ADA's prior written approval, which approval shall not be unreasonably withheld. Any reference to ADA in electronic or other publication or broadcast is subject to ADA's prior written approval, which approval shall not be unreasonably withheld.

 

5. Quality: All products, services or other items of Company with which the Marks are used shall be maintained throughout the period of this Agreement at or above their quality at the beginning of the agreement. ADA may, upon reasonable notice and subject to reasonable confidentiality requirements of Company, visit Company's facility at reasonable times during regular business hours for the purpose of inspecting the quality of goods or services used with the Marks or otherwise to determine compliance by Company with the terms of this Agreement. Company shall provide to ADA on a quarterly basis two (2) samples of any items or materials which contain ADA's Marks.

 

  

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6. Infringement: Company shall take measures it deems necessary to assure that none of the material which is prepared, or which shall be prepared, pursuant to this Agreement, violates or infringes upon any trademark or copyright, or any other right of any person, Company or other entity. Company shall protect against infringement of the Marks. Company shall provide reasonable assistance to ADA in protecting the Marks upon request. Company shall notify ADA immediately if it learns of any infringement of the Marks. ADA shall have sole discretion to determine whether to pursue infringement of the Marks.

 

7. Indemnification and Insurance: Each party agrees to indemnify and hold harmless the other party, its officers, directors, employees, volunteers, subcontractors and agents, from any and all claims, losses, damages, liabilities, judgments, or settlements, including reasonable attorneys' fees costs and other expenses incurred on account of the indemnifying party's negligent acts or omissions in connection with the Sponsorship. In addition, each party shall maintain adequate and sufficient insurance to cover all losses under this Agreement and the other party shall be an additional insured under such policy(ies), coverage to apply as primary without regard to contribution from any other source, with evidence of such insurance provided to the other party within 30 days of the signing of this Agreement.

 

8. Waiver: Either party's waiver of or failure to exercise any right provided for in this Agreement shall not be deemed a waiver of any further or future right under this Agreement. Any provision of this Agreement, which is prohibited and unenforceable in any jurisdiction, shall as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions or affecting the validity or enforceability of any provisions in any other jurisdiction. All provisions are severable.

 

9. Amendment: This Agreement may be amended only by writing clearly setting forth the amendments and signed by ADA and Company.

 

10. Assignment: Neither party may assign its rights nor obligations under this Agreement to a third party without obtaining the written approval of the other party. This Agreement shall then be binding on any successor(s) and assign(s).

 

11. Entire Agreement: This Agreement constitutes the entire agreement between ADA and Company, supersedes all prior writings or oral agreements, as well as any ancillary or affiliated agreements connected herewith, and there are no other agreements between ADA and Company on the subject of the Sponsorship.

 

12. Confidentiality: Each party, on behalf of itself and its respective agents and employees, agree not to use or disclose at any time any confidential information of the other party, except as may be authorized in writing, or as required by law. This provision survives termination of this Agreement.

 

13. Term and Expiration: This Agreement is valid from Novemberl, 2010 until October31, 2013. It expires at the end of this period. This Agreement can only be renewed for another term by mutual consent as set forth below under Option to Renew. Upon the termination or expiration of this Agreement, each party shall: (i) immediately cease utilization of the other party's marks for any purpose; (ii) return forthwith all deliverables, including but not limited to, all originals and copies of the other party's marks (whether in printed, electronic, recorded, and/or other tangible form); (iii) immediately cease utilization of the manuals created as a result of this Agreement, and (iv) discard or destroy all copies thereof.

 

The infringement, insurance, confidentiality and indemnification provisions herein shall survive the termination or expiration of this Agreement.

 

  

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14. Option to Renew: Company shall provide ADA notice of its intention to renew the Agreement no later than June 30, 2012. The parties shall have until October 31, 2013 to negotiate the Agreement.

 

15. Territory: The geographic territory for the Agreement is the United States, including all U.S. territories and possessions, including Puerto Rico..

 

16. Independence: ADA and Company agree that they are independent and that this Agreement is not intended to create any partnership, joint venture, or agency relationship of any kind. ADA and Company agree not to contract any obligations in the name of each other or to use each other's credit in conducting any activities under this Agreement or to refer to the relationship among ADA and Company as anything other than independent.

 

17. Cancellation: Upon cancellation no further use may be made of the Marks, or other proprietary property or materials provided, developed or intended for use in connection with the Sponsorship, without prior written authorization. If Company cancels this Agreement, for reasons other than breach, Company's commitment to pay pursuant to Attachment A survives cancellation of this Agreement.

 

18. Compliance with Anti-discrimination Laws and Policies. Company verifies that it is in compliance with all laws prohibiting discrimination against people with diabetes including, but not limited to, the Americans with Disabilities Act, the Rehabilitation Act of 1973, and state and municipal anti-discrimination laws Company states that it shall not discriminate against a qualified individual with diabetes, because of the person's diabetes, in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, or other terms, conditions, and privileges of employment. Company further verifies that each person with diabetes, whether or not the person uses insulin, is eligible for any employment with Company for which he/she is otherwise qualified and that Company does not have any rule or policy that automatically excludes a person with diabetes from employment in any position with Company.

 

19. Notice: All written notices required to be given pursuant to the terms set forth in this Agreement shall be deemed given on the day notice is either delivered personally, or by fax or overnight or certified delivery or deposited in the mail addressed as specified below:

 

	
Company:

	
Epic Wound Care, Inc.

1365 N. Courtenay Parkway, Suite A 

Merritt Island, FL 329523

Attention: Mr. Kelly Hickle, CEO

 

  

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ADA:

	
American Diabetes Association, 1701 N. Beauregard Street, Alexandria, VA

22311

Attention: Steve Safran, Director, Corporate Alliances & Cause Related Marketing

 

	
cc:

	
Attention: Rhonda Lees, Vice President, Legal Affairs

 

20. Governing Law. This Agreement is to be interpreted under the laws of the Commonwealth of Virginia, without regard to conflict of laws principles.

 

Signatures:

 

	
American Diabetes Association 

 

	 	 	Epic Wound Care, LLC	 
	
Name: Larry Hausner

	 	 	
Name: Kelly T. Hickel

	 
	
 

Signature: /s/ Larry Hausner

	 	 	
Signature: /s/ Kelly T. Hickel

	 
	
 

Title: CEO

	 	 	
Title: CEO

	 
	
 

Date: 7/28/10

	 	 	Date: 7/13/10	 

 

 

  

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ATTACHMENT A

 

ACKNOWLEDGEMENT OF SUPPORT

 

The following outlines the type of acknowledgment that has been agreed upon by the Company and ADA and describes the appropriate recognition of support, in accordance with the Internal Revenue Code. (All advertising, promotional and educational materials, with or without the ADA marks, are subject to ADA advance review and approval.)

 

The Company product/brand covered by this Agreement is: ABC Gauze.

 

Company shall be recognized as a National Strategic Partner, the ADA's highest level of corporate support for consumer product companies. Such title acknowledges Company's commitment to supporting the mission of ADA. The term must be used intact. Company may not modify the term or call itself a "Partner" of ADA or refer to the sponsorship as a Partnership.

 

As a National Strategic Partner, Company shall participate in and receive recognition for the following activities from Novemberl, 2010 through October 31, 2013. ADA shall review with Company on an annual basis the recognition of Company's participation in the activities outlined below as well as explore mutually agreed upon proprietary platform opportunities for each year of the Agreement.

 

I. USE OF INTELLECTUAL PROPERTY; PROMOTIONAL RIGHTS 

 

Use of the ADA Name and "Proud Sponsor" Logo

 

As a National Strategic Partner of ADA, Company shall receive the opportunity to use the ADA Name and Logo herein, referred to as the Marks (as illustrated on Attachment C, attached hereto and incorporated by reference herein) on Company's educational, marketing and or promotional materials, for the term of this Agreement. All such materials are subject to advance review and written approval by ADA.

 

In addition to the use of the Marks, Company shall be entitled to use the following designation(s), which must accompany the Marks:

 

(a) "A proud sponsor of American Diabetes Association®."

 

(b) "A National Strategic Sponsor of the American Diabetes Association®" 

 

OR

 

(c) Such other wording as may be approved in writing in advance by ADA.

 

  

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II. RECOGNITION BENEFITS 

 

Primary Platform: Stop DiabetessM

 

As a National Strategic Partner, Company shall be recognized as a sponsor of Stop Diabetes and Company shall receive the right to advertise and promote the relationship with the ADA year-round through the following:

 

	
·  

	
Use of Stop Diabetes imagery on the company's advertising and promotional materials. Examples of promotional materials include, but are not limited to email messages, direct mail pieces, product packaging, website, print and television ads

 

	
·  

	
Use of the following sponsor designation: National Sponsor of the Stop DiabetessM movement/Proud Sponsor of the movement to Stop DiabetessM

 

	
·  

	
Use of the following tagline

 

"Epic Wound Care and the American Diabetes Association: Working Together to Stop Diabetes. Visit stopdiabetes. corn to learn more—

 

Diabetes EXPOS

Company shall receive the opportunity to participate in the 2011 Diabetes Expos events of Company's choosing during each year of this Agreement (A Schedule of Events shall be available by mid-summer 2010). Company shall receive a $25,000 credit per year to select the type of participation desired in the events (i.e., size of exhibit booth and markets). Each year, the credit shall be allocated from the annual sponsorship fee. Company shall be responsible for all costs associated with attending and exhibiting at the Diabetes Expos.

 

Center for Information and Community Support (formerly named National Call Center) Company shall receive the opportunity provide pre-approved information for insertion in fulfillment packets for a period of three (3) months during each year of this Agreement. Specifications shall be provided by ADA and the timeframe for including materials shall be discussed and finalized at a later to be determined date. Company shall assume incremental fees for samples that may increase ADA's postage costs. Company must exercise its right to participate in the fulfillment packets prior to December 31 during each year of the Agreement otherwise the opportunity shall be forfeited for the year.

 

Step out: Walk to Fight Diabetes

Company shall receive the opportunity to receive a 10 X 10 exhibit space and rights to sample products in up to three (3) Step Out walk events in markets of its choice and to promote its relationship with the ADA and communicate its value to walk participants. Company's promotional efforts may include but are not limited to product sampling, on-site educational material and other PR activities to promote the events.

 

Advertising in American Diabetes Association Publications 

Diabetes Forecast

 

Company shall receive two (2) full page, 4-color advertisements in Diabetes Forecast, ADA's premier publication for people with diabetes during each year of this Agreement. If Company does not exercise this benefit during each year of the agreement, the opportunity shall be forfeited for the year and credit shall not roll overto the next year of the agreement.

 

  

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Diabetes Spectrum

 

Company shall receive two (2) full page, 4-color advertisements in Diabetes Spectrum during each year of this Agreement. If Company does not exercise this benefit during each year of the agreement, the opportunity shall be forfeited for the year and credit shall not roll over to the next year of the agreement.

 

Healthcare Professional Mailing List

 

Company receives the opportunity to use the ADA professional member mailing list one-time per calendar year during the term of this Agreement. The content of the mailing are at the discretion of Company, however all copy is subject to prior review and written approval by ADA. Company is responsible for all costs associated with the mailings (including creative, production and postage costs). If Company does not exercise this benefit during each year of the agreement, the opportunity shall be forfeited for the year and credit shall not roll over to the next year of the agreement.

 

Scientific Sessions

 

Company shall receive the opportunity to exhibit a 10' X 10' (inline placement) booth at ADA's h Scientific Sessions for each year of the Agreement and have the ability to interact with leaders in healthcare and diabetes research. Company will be responsible for all costs associated with attending and exhibiting at the Scientific Sessions. If Company so chooses, Company may secure larger exhibit space(s) for an incremental fee. Company shall work directly with ADA's event management company to finalize details for participation in the show. ADA shall facilitate Company's introduction to ADA's event management company.

 

III. ADDITIONAL RIGHTS AND BENEFITS

 

ADA shall provide the following rights and benefits:

 

	
(a)  

	
Right to pass-through certain sponsor benefits to a pre-approved third party. The third party may be a business partner, vendor, retail partner or media partner. (Subject to ADA approval)

 

	
(b)  

	
Right to conduct a fundraising event, a donation campaign or matching gift challenge (at Company's expense).

 

	
(c)  

	
Access to ADA quotes/content for Company's press releases

 

	
(d)  

	
Recognition in National Strategic Partner ads that run in the following ADA publications:

 

· Diabetes Forecast®, two times per year

 

· Diabetes Spectrum®, one time per year

 

· Annual Report (digital or PDF)

 

	
(e)  

	Recognition on stopdiabetes.com

 

	
(f)  

	Recognition on ADA's Corporate Sponsors area of diabetes.org

 

 

  

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Sponsor Services

 

The ADA Corporate Alliances staff shall provide the partnership services and promotional support needed to make your ADA relationship as efficient and effective as possible. This includes:

 

	
(a)  

	
Participation in ADA Annual Sponsor Summit

 

	
(b)  

	Single account executive for all ADA-related communications

 

	
(c)  

	
Monthly strategy meetings with account executive to guide relationship and to develop activation ideas

 

	
(d)  

	
Annual fulfillment report detailing results/status of commitment

 

	
(e)  

	
20+ hours of ADA staff time to assist Company with developing editorial or promotional content (e.g., advertising messages, collateral content, etc.)

 

	
(f)  

	
Annual one-on-one meeting with ADA Corporate Alliance staff to review marketing

 

	
(g)  

	
objectives and activation opportunities

 

Relationship Structure and Sponsorship Fee

 

Company as a National Strategic Partner shall make a promotional commitment to support the relationship. The promotional commitment includes marketing activities Company shall conduct to promote its sponsorship and is over and above the rights fee. An example would be retail promotions in which a portion of product sales go to support the ADA.

 

Company shall pay to the ADA a total of $1,200.000 for the term of this Agreement (November1, 2010 through October 31, 2013). Company shall also provide ADA with in-kind consumer advertising/ promotional support, valued at $500,000, during each year of this Agreement. The advertising/ promotional support will be outlined in a subsequent document and will include at a minimum:

 

	
·  

	
Use of NBA spokesperson to support ADA. Company is currently targeting Adam Morrison LA Lakers, and is working closely to reach other NBA players.

 

	
·  

	
Opportunity to have presence at and have ADA materials distributed by Company at the trade shows, which Company plans to attend. Estimated attendees is approximately 420,000: EMT, ENT, Military, Nursing, Teachers, Sports and Physicians

 

	
·  

	
Co-branding in Company's TV and Advertisements (to be finalized)

 

Upon execution of this Agreement, Company shall pay ADA according to the following schedule:

 

Year 1: $100,000 on November 1, 2010, February 1, 2011, May 1, 2011, August 1, 2011

 

Year 2: $100,000 on November 1, 2011, February 1, 2012, May 1, 2012, August 1, 2012

 

Year 3: $100,000 on November 1, 2012, February 1, 2013, May 1, 2013, August 1, 2013

 

  

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Attachment B

 

Use of the ADA Marks

 

PROUD SPONSOR LOGO

 

	 	 Linear version

 

	 	 Stacked version

 

 

NATIONAL STRATEGIC PARTNER LOGO

 

	 	 Stacked version

 

STOP DIABETES SM LOGO

 

	 	 

 

10ex41.htm

Exhibit 4.1

 

SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of July 30, 2010, by and among Sunovia Energy Technologies, Inc., a Nevada corporation, with headquarters located at 106 Cattlemen Rd. Sarasota, FL 34232 (the “Company”), and each of the purchasers set forth on the signature pages hereto (the “Buyers”).

 

WHEREAS:

 

A. The Company and the Buyers are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

 

B. Buyers desire to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement 8% convertible debentures of the Company, in the form attached hereto as Exhibit “A”, in the aggregate principal amount of One Million Dollars ($1,000,000) (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Notes”), convertible into shares of common stock, par value $.001 per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Notes.

 

C. Each Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Notes as is set forth immediately below its name on the signature pages hereto; and

 

NOW THEREFORE, the Company and each of the Buyers severally (and not jointly) hereby agree as follows:

 

1. PURCHASE AND SALE OF NOTES AND WARRANTS.

 

a. Purchase of Notes.  On the Closing Date (as defined below), the Company shall issue and sell to each Buyer and each Buyer severally agrees to purchase from the Company such principal amount of Notes as is set forth immediately below such Buyer’s name on the signature pages hereto.

 

b. Form of Payment.  On the Closing Date (as defined below), (i) each Buyer shall pay the purchase price for the Notes to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Notes in the principal amount equal to the Purchase Price, and (ii) the Company shall deliver such Notes duly executed on behalf of the Company, to such Buyer, against delivery of such Purchase Price.

 

c. Closing Date.  Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Notes and the Warrants pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on July 28, 2010 or such other mutually agreed upon time.  The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.  On the Closing, the Buyers shall acquire $500,000 in Notes.  In addition, the Buyers, in their sole election, shall acquire an additional $500,000 in Notes on or prior to August 31, 2010.

 

  

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2. BUYERS’ REPRESENTATIONS AND WARRANTIES.  Each Buyer severally (and not jointly) represents and warrants to the Company solely as to such Buyer that:

 

a. Investment Purpose.  As of the date hereof, the Buyer is purchasing the Notes and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Notes (such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Notes and Conversion Shares, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

 

b. Accredited Investor Status.  The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

 

c. Reliance on Exemptions.  The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

d. Information.  The Buyer and its advisors, if any, have been, and for so long as the Notes remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors.  The Buyer and its advisors, if any, have been, and for so long as the Notes remain outstanding will continue to be, afforded the opportunity to ask questions of the Company.  Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer.  Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below.  The Buyer understands that its investment in the Securities involves a significant degree of risk.

 

e. Governmental Review.  The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

 

f. Transfer or Re-sale.  The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.  Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

 

g. Legends.  The Buyer understands that the Notes and, until such time as the Conversion Shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares and Warrant Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended.  The securities may not be sold, transferred or assigned in the absence of an effective registration statement for the securities under said Act, or an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, that registration is not required under said Act or unless sold pursuant to Rule 144 or Regulation S under said Act.”

 

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (c) such holder provides the Company with reasonable assurances that such Security can be sold pursuant to Rule 144 or Regulation S.  The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.

 

  

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h. Authorization; Enforcement. This Agreement has been duly and validly authorized.  This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes valid and binding agreements of the Buyer enforceable in accordance with their terms.

 

i. Residency.  The Buyer is a resident of the jurisdiction set forth immediately below such Buyer’s name on the signature pages hereto.

 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company represents and warrants to each Buyer that:

 

a. Organization and Qualification.  The Company and each of its subsidiaries, if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.

 

b. Authorization; Enforcement.  (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement.

 

c. Capitalization.  The capitalization of the Company is as set forth in the Company’s reports as filed with the Securities and Exchange Commission.

 

d. Issuance of Shares.  The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Notes.

 

e. Acknowledgment of Dilution.  The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares.

 

4. COVENANTS.

 

a. Best Efforts.  The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

 

b. Form D; Blue Sky Laws.  The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to each Buyer promptly after such filing.  The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyers at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to each Buyer on or prior to the Closing Date.

 

5. INTENTIONALLY LEFT BLANK.

 

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.  The obligation of the Company hereunder to issue and sell the Notes to a Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

 

a. The applicable Buyer shall have executed this Agreement and delivered the same to the Company.

 

b. The applicable Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

c. The representations and warranties of the applicable Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the applicable Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the applicable Buyer at or prior to the Closing Date.

 

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

  

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7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.  The obligation of each Buyer hereunder to purchase the Notes at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for such Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion:

 

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

 

b. The Company shall have delivered to such Buyer duly executed Notes (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

 

c. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

 

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

e. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company.

 

8. GOVERNING LAW; MISCELLANEOUS.

 

a. Governing Law.  THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN TAMPA, FLORIDA WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

 

b. Counterparts; Signatures by Facsimile.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

c. Headings.  The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

 

d. Severability.  In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

e. Entire Agreement; Amendments.  This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

 

  

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f. Notices.  Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party.  The addresses for such communications shall be:

 

	
If to the Company, to:

	
Sunovia Energy Technologies, Inc.

	  	
106 Cattlemen Rd.

	  	
Sarasota, FL 34232

	  	
Attention: Carl Smith

	  	
Telephone: (941) 751-6800

	  	
Facsimile: (941) 751-3583

	
With a copy to:

	
Law Offices of Steven M. Fleming, PLLC

Attn: Stephen Fleming

	  	
49 Front Street, Suite 206

Rockville Centre, NY 11570

	  	
Telephone: (516) 833-5034

	  	
Facsimile: (516) 977-1029

	  	  

If to the Buyer(s), to the address set forth on the signature page.  Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.  Neither the Company nor any Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other.  Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from a Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

 

h. Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  

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IN WITNESS WHEREOF, the undersigned Buyers and the Company have caused this Agreement to be duly executed as of the date first above written.

 

	
SUNOVIA ENERGY TECHNOLOGIES, INC.

 

	 	 	 	 
	
/s/ Carl Smith

	 	 	 	 
	
Carl Smith

	 	 	
 

	 
	
Chief Executive Officer

	 	 	
 

	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ Craig Hall	 	 	 	 
	Craig Hall	 	 	 	 
	 	 	 	 	 

ADDRESS:

AGGREGATE SUBSCRIPTION AMOUNT:

 

	Aggregate Principal Amount of Notes:   	$1,000,000
	Aggregate Purchase Price: 	$1,000,000

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