Document:

Exhibit 10.15

FORM OF

 

GTX CORP

 

COMMON STOCK PURCHASE WARRANT

 

	
Warrant No. ____

	
____________ Warrants

 

VOID AFTER 5:00 P.M. LOS ANGELES TIME

ON FEBRUARY __, 2013

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

 

GTX Corp, a Nevada corporation (the “Company”), having its principal office as of the date hereof at 117 W. 9th Street, # 1214, Los Angeles, CA 90015 hereby certifies that, for value received, ________________________________________, or its registered assigns (“Holder”), is entitled, subject to the terms and conditions set forth below, to purchase from the Company at any time on or from time to time after August __, 2011 (date that is the Original Issue Date), and before 5:00 P.M., Pacific Standard Time, on February __, 2013 (date that is thirty months after the Original Issue Date) (the “Expiration Date”), ____________ fully paid and non-assessable shares of Common Stock (as defined below), at the initial Purchase Price per share (as defined below) of $0.08.  The number of such shares of Common Stock and the Purchase Price per share are subject to adjustment as provided in Section 5.

 

The Company agreed to issue Warrants, including this Warrant, to purchase up to a maximum of 7,200,000 shares of Common Stock (subject to adjustment as provided in Section 5) in connection with the Company's private placement of up to a maximum aggregate of $360,000 of Common Stock and Warrants.

 

Definitions.

 

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 

“Aggregate Purchase Price” has the meaning set forth in Section 3.1.

 

“Blue Sky Laws” means any state securities or “blue sky” laws.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the city of Los Angeles, California are authorized or required by law to remain closed.

 

  

  

  

 

 “Company” includes the Company and any corporation which shall succeed to or assume the obligations of the Company hereunder. The term “corporation” shall include an association, joint stock company, business trust, limited liability company or other similar organization.

 

“Common Stock” means the Company’s Common Stock, $.001 par value per share, authorized as of the date hereof, and any stock of any class or classes (however designated) hereafter authorized upon reclassification thereof, which, if the Board of Directors declares any dividends or distributions, has the right to participate in the distribution of earnings and assets of the Company after the payment of dividends or other distributions on any shares of capital stock of the Company entitled to a preference and in the voting for the election of directors of the Company.

 

“Convertible Securities” means (i) options to purchase or rights to subscribe for Common Stock, (ii) securities by their terms convertible into or exchangeable for Common Stock or (iii) options to purchase or rights to subscribe for such convertible or exchangeable securities.

 

“Delivery Date” has the meaning set forth in Section 4.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

 “Holder” means any record owner of Warrants or Underlying Securities.

 

 “Market Price” means, for one share of Common Stock at any date (i) if the principal trading market for the Common Stock is an national securities exchange, the average of the closing sale prices per share for the five (5) previous trading days in which a sale was reported, as officially reported on any consolidated tape, (ii) or (iii) if the security is not listed on a national securities exchange, the average of the closing sale prices per share on the last five (5) previous trading days in which a sale was reported as set forth in the National Quotation Bureau sheet listing such securities for such days.  Notwithstanding the foregoing, if there is no reported closing sale price, as the case may be, reported on any of the five (5)  trading days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be the average of the high bid and asked prices for the five (5) previous trading days in which a sale was reported; and if there is no reported high bid and asked prices, as the case may be, reported on any of the five (5) trading days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be determined in good faith by resolution of the Board of Directors.  The Market Price of Other Securities, if any, shall be determined in the same manner as Common Stock.

 

 “Notice” has the meaning set forth in Section 18.

 

“Original Issue Date” means June 10, 2011.

 

 “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other Person (corporate or otherwise) which the Holders of the Warrants at any time shall be entitled to receive, or shall have received, upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 5 or 6.

 

“Person” means any individual, sole proprietorship, partnership, corporation, limited liability company, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity, any university or similar institution, or any government or any agency or instrumentality or political subdivision thereof.

 

  

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“Purchase Price per share” means $0.08 per share, as may be adjusted from time to time in accordance with Section 5 or 6.

 

“Securities Act” means the Securities Act of 1933 as the same shall be in effect at the time.

 

 “Underlying Securities” means any Common Stock or Other Securities issued or issuable upon exercise of Warrants.

 

 “Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of June 10, 2011, among the Company and the subscriber.

 

“Warrant” means, as applicable, (i) the Warrants dated as of the date hereof, originally issued by the Company pursuant to the Securities Purchase Agreement, of which this Warrant is one, evidencing rights to purchase up to a maximum of 7,200,000 shares of Common Stock, and all Warrants issued upon transfer, division or combination of, or in substitution for, any thereof (all Warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Common Stock for which they may be exercised) or (ii) each right as set forth in this Warrant to purchase one share of Common Stock, as adjusted from time to time in accordance with Section 5 or 6.

 

Sale or Exercise Without Registration.  If, at the time of any exercise, transfer or surrender for exchange of a Warrant or of Underlying Securities previously issued upon the exercise of Warrants, such Warrant or Underlying Securities shall not be registered under the Securities Act, the Company may require, as a condition of allowing such exercise, transfer or exchange, that the Holder or transferee of such Warrant or Underlying Securities, as the case may be, furnish to the Company an opinion of counsel, reasonably satisfactory to the Company, to the effect that such exercise, transfer or exchange may be made without registration under the Securities Act and without registration or qualification under any applicable Blue Sky Laws; provided that nothing contained in this Section 2 shall relieve the Holder from its obligations under the Securities Purchase Agreement.

 

Exercise of Warrant.

 

Exercise in Full.  Subject to the provisions hereof, this Warrant may be exercised in full by the Holder hereof by surrender of this Warrant, with the form of subscription at the end hereof duly executed by such Holder, to the Company at its principal office as set forth at the head of this Warrant (or such other location as the Company from time to time may advise the Holder in writing), accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, in the amount obtained (the “Aggregate Purchase Price”) by multiplying (a) the number of shares of Common Stock then  issuable upon exercise of this Warrant by (b) the Purchase Price per share on the date of such exercise.

 

Partial Exercise.  Subject to the provisions hereof, this Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in Section 3.1 except that the amount payable by the Holder upon any partial exercise shall be the amount obtained by multiplying (a) the number of shares of Common Stock designated by the Holder in the subscription at the end hereof by (b) the Purchase Price per share on the date of such exercise.  Upon any such partial exercise, the Company at its expense shall forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant or Warrants of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes and subject to the provisions of Section 2) may request, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock equal to the number of such shares issuable prior to such partial exercise of this Warrant minus the number of such shares designated by the Holder in the subscription at the end hereof.

 

  

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Forced Exercise.  This Warrant is redeemable by the Company at any time upon 5 days’ notice, at a price of $0.0001 per Warrant, provided that the volume weighted average price of the Company’s common stock is at least twelve and one-half cents ($0.125) and  the average daily trading volume of the Company’s common stock is at least 250,000 during the 10 trading days prior to the day on which the Company gives the Holder a notice of redemption. The company cannot redeem this Warrant unless the Underlying Securities can be sold pursuant to a valid registration statement effective under the Securities Act of 1933.

 

Delivery of Stock Certificates, etc., on Exercise.

 

Delivery of Certificates.  As soon as practicable after the exercise of this Warrant in full or in part, and in any event within ten (10) Business Days thereafter (the “Delivery Day”), the Company at its own expense shall cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes and subject to the provisions of Section 2) may direct, a certificate or certificates for the number of fully paid and non-assessable shares of Common Stock or Other Securities to which such Holder shall be entitled upon such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then current Market Price of one full share.

 

Adjustment for Stock Splits; Dividends.  The number and kind of securities purchasable upon the exercise of this Warrant and the Purchase Price shall be subject to adjustment from time to time upon the happening of any of the following.  In case the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Underlying Securities purchasable upon exercise of this Warrant immediately prior thereto shall be adjusted so that the Holder shall be entitled to receive the kind and number of Underlying Securities or other securities of the Company which it would have owned or have been entitled to receive had such Warrant been exercised in advance thereof. Upon each such adjustment of the kind and number of Underlying Securities or other securities of the Company which are purchasable hereunder, the Holder shall thereafter be entitled to purchase the number of Underlying Securities or other securities resulting from such adjustment at a Purchase Price per share or other security obtained by multiplying the Purchase Price per share in effect immediately prior to such adjustment by the number of Underlying Securities purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Underlying Securities or other securities of the Company resulting from such adjustment.  An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.

 

Reorganization, Consolidation, Merger, etc.  In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Company (other than as a result of a subdivision, combination, reclassification or stock dividend provided for in Section 5 above), then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reorganization, reclassification, consolidation or merger by a holder of the same number of shares of Common Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change.  In any such case, appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same.

 

  

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Further Assurances; Reports.  The Company shall take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Underlying Securities upon the exercise of all Warrants from time to time outstanding.

 

Certificate as to Adjustments.  In each case of any adjustment or readjustment in the Underlying Securities, the Company shall, at its expense, promptly compute such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, and the number of shares of Common Stock or Other Securities outstanding or deemed to be outstanding.  The Company shall forthwith mail a copy of each such certificate to the Holder.

 

Reservation of Stock, etc., Issuable on Exercise of Warrants.  The Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable upon the exercise of the Warrants.

 

Exchange of Warrants.  Subject to the provisions of Section 2, upon surrender for exchange of this Warrant, properly endorsed, to the Company, as soon as practicable (and in any event within three Business Days) the Company at its own expense shall issue and deliver to or upon the order of the Holder thereof a new Warrant or Warrants of like tenor, in the name of such Holder or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face of this Warrant so surrendered.

 

Replacement of Warrants.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

Warrant Agent.  The Company may, by written notice to each Holder of a Warrant, appoint an agent having an office in Los Angeles, California, for the purpose of issuing Common Stock (or Other Securities) upon the exercise of the Warrants pursuant to Section 3, exchanging Warrants pursuant to Section 10, and replacing Warrants pursuant to Section 11, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

 

No Rights as Stockholder.  This Warrant does not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof.

 

Negotiability, etc.  Subject to Section 2, this Warrant is issued upon the following terms, to all of which each Holder or owner hereof by the taking hereof consents and agrees that:

 

subject to the provisions of this Warrant and the Securities Purchase Agreement, title to this Warrant may be transferred by endorsement (by the Holder hereof executing the form of assignment at the end hereof); and

 

  

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until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

Entire Agreement; Successors and Assigns.  This Warrant and the Securities Purchase Agreement constitute the entire contract between the parties relative to the subject matter hereof.  This Warrant and the Securities Purchase Agreement supersede any previous agreement among the parties with respect to the subject matter hereof.  The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the respective permitted executors, administrators, heirs, successors and assigns of the parties.  Nothing in this Warrant, expressed or implied, is intended to confer upon any party, other than the Holder and the Company, any rights, remedies, obligations or liabilities under or by reason of this Warrant.

 

Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of law.

 

Headings.  The headings of the sections of this Warrant are for convenience and shall not by themselves determine the interpretation of this Warrant.

 

Notices.  Any notice or other communication required or permitted to be given hereunder (each a “Notice”) shall be given in writing and shall be made by personal delivery or sent by courier or certified or registered first-class mail (postage pre-paid), addressed to a party at its address shown below or at such other address as such party may designate by three days’ advance Notice to the other party.

 

Any Notice to the Holder shall be sent to the address for such Holder set forth on books and records of the Company.

 

Any Notice to the Company shall be sent to:

 

GTX Corp

117 W. 9th Street, # 1214

Los Angeles, CA  90015

Attention: Murray Williams, CFO

Each Notice shall be deemed given and effective upon receipt (or refusal of receipt).

 

Severability.  Whenever possible, each provision of this Warrant shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be deemed prohibited or invalid under such applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, and such prohibition or invalidity shall not invalidate the remainder of such provision or any other provision of this Warrant.

 

Amendments and Waivers.  Any provision of this Warrant may be amended and the observance of any provision of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of a majority of the Warrants then outstanding.  Any amendment or waiver effected in accordance with this Section 20 shall be binding upon each Holder of a Warrant.

 

  

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Construction.  Words (including capitalized terms defined herein) in the singular shall be held to include the plural and vice versa as the context requires.  The words “herein”, “hereinafter”, “hereunder” and words of similar import used in this Warrant shall, unless otherwise stated, refer to this Warrant as a whole and not to any particular provision of this Warrant.  All references to “$” in this Warrant and the other agreements contemplated hereby shall refer to United States dollars (unless otherwise specified expressly).  Any reference to any gender includes the other genders.

 

Dated: August __, 2011

  

	
GTX CORP

	 
	  	 
	
By:

	  	 
	
Name: Murray Williams

	 
	
Title: Chief Financial Officer

	 

  

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FORM OF SUBSCRIPTION

 

(To be signed only upon exercise of Warrant)

 

To:  GTX CORP

 

The undersigned, the Holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder,     *    shares of Common Stock of GTX Corp, and herewith makes payment of $__________.

 

The undersigned represents that the undersigned is acquiring such securities for its own account for investment and not with a view to or for sale in connection with any distribution thereof (except for any resale pursuant to, and in accordance with a valid registration statement effective under the Securities Act of 1933).

 

Dated:

 

	  
	
(Signature must conform in all respects to the name of the Holder as specified on the face of the Warrant)

	  
	  
	
(Address)

 

*  Insert here the number of shares called for on the face of the Warrant (or, in the case of a partial exercise, the portion thereof as to which the Warrant is being exercised).

  

8Exhibit 10.16

FORM OF

GTX Corp

SUBSCRIPTION APPLICATION

 

(for Accredited Investors Only)

	
Name of Subscriber

	 	 	 	 
	  	 	 	 	 
	
Name of Co-Subscriber, if any

	 	 	 	 
	  	 	 	 	 
	
Address of Subscriber(1)

	 	 	 	 
	  	 	 	 	 
	
Address of Co-Subscriber (if different)(1)

	 	 	 	 
	  	 	 	 	 
	
Aggregate number of Units subscribed to purchase

	 	 	 	 
	  	 	 	 	 
	
Check enclosed (or wire transfer) in the amount of

	 	$	 	 

	 	
(1)

	
Permanent legal residence and domicile (other than Post Office Box) if the Subscriber is an individual, or permanent principal legal executive offices and place of business (other than Post Office Box) if the Subscriber is an entity.

 

Personal and Confidential

The undersigned (the “Subscriber”) hereby submits this application to purchase from GTX Corp, a Nevada corporation (the “Company”), the number of Units, consisting of one share of restricted common stock and one warrant to purchase one share of Common Stock, set forth above (the “Subscribed Units”), for a purchase price of  $0.05 per share, pursuant to a Securities Purchase Agreement in substantially the form attached hereto as Exhibit A (the “Agreement”).  The Subscriber understands and agrees that this Subscription Application to purchase the Subscribed Units is binding and irrevocable on the Subscriber’s part, and that acceptance by the Company shall be in its sole discretion and otherwise in accordance with the terms set forth in this Subscription Application and the Agreement (the Agreement and this Subscription Application are sometimes referred to collectively herein as the “Offering Materials”).

[SUBSCRIBER QUESTIONNAIRE FOLLOWS]

  

  

  

 

1.           CONFIDENTIAL SUBSCRIBER INFORMATION

	
 

_________________________________________________________________________________

Name of Subscriber

	
 

_________________________________________________________________________________

If Subscriber is an Entity Provide Name                     Year Formed               State of Formation

	
 

_________________________________________________________________________________

Street Address                                                                     City                                                   Zip

	
 

_________________________________________________________________________________

Subscriber SS# or EIN/TIN       Cell Phone Number     Work Phone Number      Home Phone Number

	
 

_________________________________________________________________________________

Subscriber’s Age          Date of Birth                  Married (Y/N)/Divorced                      # of Dependants

	
 

_________________________________________________________________________________

Name and Address of Subscriber’s Current Employer

	
 

_________________________________________________________________________________

Type of Business of Subscriber                       Position/Title                                         Number of Years

	
 

_________________________________________________________________________________

College/Degree                              Graduate School/Degree                                    Professional Licenses

	
 

_________________________________________________________________________________

List Previous Investment Experience                                                                           Number of Years

	
 

_________________________________________________________________________________

List Previous Private Placement Investments                                                                      Total Invested

	
 

_________________________________________________________________________________

List any Securities Currently Owned                                                                                        Total Value

	
 

_________________________________________________________________________________

How does Subscriber Know the Company?

	
 

_________________________________________________________________________________

Name of Primary Financial Institution                         Address                                         Phone Number

	
 

_________________________________________________________________________________

Name in which securities underlying the Subscribed Units will be Held.  (check one below)

q Individually q A married man(woman) as his(her) separate property q Community property

q JTWROS q Tenants in common q Other (Describe):  ____________________________________

	
 

_________________________________________________________________________________

Aggregate Number of Subscribed Units                        Amount Invested ($)

	
 

_________________________________________________________________________________

Subscriber’s Signature                                                                                                                      Date

 

  

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2.           SUBSCRIBER’S ACCREDITED STATUS

(a)          Accredited Investor (Regulation D).  The Subscriber is an “Accredited Investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as follows: [Please initial one or more of the following provisions describing the Subscriber’s Accredited Investor status as may be applicable.]

(b)          Individuals. (Check all that apply)

q  The Subscriber's individual net worth* or combined net worth* with his or her spouse exceeds $1,000,000;

q The Subscriber's individual income,** exclusive of any income attributable to his or her spouse, was in excess of $200,000 for the two most recent calendar years preceding the calendar year of this Subscription Application, and the Subscriber reasonably expects an income,** exclusive of any income attributable to his or her spouse, in excess of $200,000 in the current calendar year; and/or (3) the Subscriber's combined income** with his or her spouse was in excess of $300,000 for the two most recent calendar years preceding the calendar year of this Subscription Application and the Subscriber and his or her spouse reasonably expect a combined income** in excess of $300,000 in the current calendar year.

*  For purposes of this Subparagraph, the term “net worth” means the excess of total value (including principal residence, home furnishings and automobiles at fair market value) over total liabilities.  In computing net worth, the fair market value of the principal residence of the Subscriber shall be valued at cost, including cost of improvements, or at recently appraised value by an institutional lender making a secured loan, net of encumbrances.

**  The Subscriber may determine income by adding to his, her or its adjusted gross income any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions or claims for depletion, contributions to an IRA or Keogh retirement plan, alimony payments and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income.

(c)          Entities. (Check all that apply)

(i)           q Entity With Value Exceeding $5 Million.  The Subscriber is a corporation, partnership (general or limited), limited liability company, limited liability partnership or Massachusetts or similar business trust which:  (1) was not formed for the specific purpose of acquiring the Subscribed Units, and (2) has total assets in excess of $5,000,000.

(ii)          q Entity Comprised of Accredited Investors.  The Subscriber is a corporation, partnership (general or limited), limited liability company, limited liability partnership or Massachusetts or similar business trust in which all of the Subscriber's equity owners are Accredited Investors.

(iii)         q Revocable Trust.  The Subscriber is a revocable trust (also commonly known as a family or living trust) established to facilitate the distribution of the estate of the settlors (grantors):  (1) which may be revoked or amended at any time by the settlors (grantors); (2) which passes all tax benefits of investments made by such trust through to the settlors (grantors) individually; and (3) in which all of the settlors (grantors) are Accredited Investors.

(iv)         q Trust Whose Assets Exceed $5 Million.  The Subscriber is a trust that has total assets in excess of $5,000,000, and the person making the investment decision on behalf of the trust has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Subscribed Units.

 

  

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(v)           q Financial Institution as Trustee.  The Subscriber is a financial institution which:  (1) is a bank, savings and loan association, or other regulated financial institution; (2) is acting in its fiduciary capacity as trustee; and (3) is subscribing for the purchase of the Subscribed Units on behalf of the subscribing trust.

(vi)          q Employee Benefit Plan (including Keogh Plan) With Self-Directed Investments and Segregated Accounts.  The Subscriber is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and:  (1) such plan is self directed and provides for segregated accounts; (2) the investment decision to purchase the Subscribed Units is being made by a plan participant who is an Accredited Investor; and (3) the investment in the Subscribed Units is being made solely on behalf of such Accredited Investor.

(vii)         q Employee Benefit Plan (including Keogh Plan) With Financial Institution As Trustee.  The Subscriber is an employee benefit plan within the meaning of ERISA, and the decision to invest in the Subscribed Units was made by a plan fiduciary (as defined in Section 3(21) of ERISA), which is either a bank, savings and loan association, insurance company, or registered investment adviser.

(viii)        q Employee Benefit Plan (including Keogh Plan) With Assets Exceeding $5 Million.  The Subscriber is an employee benefit plan within the meaning of ERISA and has total assets in excess of $5,000,000.

(ix)          q Tax Exempt 501(c)(3) Organization.  The Subscriber is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, which organization was not formed for the specific purpose of acquiring the Subscribed Units, and which organization has total assets in excess of $5,000,000.

(x)           q Bank.  The Subscriber is a bank as defined in Section 3(a)(2) of the Securities Act.

(xi)          q Savings and Loan Association.  The Subscriber is a savings and loan association or other institution as defined in Section 3(a)(5)(i) of the Securities Act.

(xii)        q Insurance Company.  The Subscriber is an insurance company as defined in Section 2(14) of the Securities Act.

(xiii)       q Investment Company.  The Subscriber is an investment company registered under the Investment Company Act of 1940.

(xiv)        q Business Development Company.  The Subscriber is a business development company as defined in Section 2(a)(48) of the Investment Company Act of 1940.

(xv)         q Small Business Investment Company.  The Subscriber is a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

(xvi)        q Private Business Development Company.  The Subscriber is a private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

(xvii)       q Registered Broker or Dealer.  The Subscriber is a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.

 

  

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3.           REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER

The Subscriber and, if the Subscriber is an entity, each of its officers, directors, partners, managers, members, trustees, beneficial owners, principals and/or agents, hereby represent and warrant to the Company, each of which is deemed to be a separate representation and warranty, as follows:

(a)           Residence.  The Subscriber's permanent legal residence and domicile, if the Subscriber is an individual, or permanent legal executive offices and principal place of business, if the Subscriber is an entity, was and is at the address designated on the cover page of this Subscription Application at both the time of the “offer” and the time of the “sale” of the Subscribed Units to the Subscriber.

(b)          Age.  The Subscriber, if a natural person, is age eighteen (18) or over.

(c)          Knowledge and Experience; Sophistication (Regulation D; Blue Sky).   The Subscriber (together with his, her and/or its Advisors (as defined in subsection (f) below)) has such knowledge and experience in business, financial and tax matters including, in particular, investing in private placements of securities in companies similar to the Company, so as to enable them to utilize the information made available to them in connection with this offering to:  (i) evaluate the merits and risks of an investment in the Company and to make an informed investment decision with respect thereto; and (ii) to reasonably be assumed to have the capacity to protect the Subscriber's own interests in connection with the transaction contemplated by this Subscription Application.

(d)          Minimum Net Worth (Blue Sky).  An investment in the Subscribed Units will not exceed ten percent (10%) of the Subscriber's net worth if the Subscriber is an entity, or joint net worth with his or her spouse if the Subscriber is a natural person.

(e)          Receipt and Review of Offering Materials.  The Subscriber:  (i) has received the Offering Materials; and (ii) has read each of the Offering Materials in its entirety and fully understands the matters discussed therein and the terms of thereof.

(f)           Independent Review of Investment Merits; Due Diligence.   During the course of the transactions contemplated by this offering, and before purchasing the Subscribed Units:  (i) the Subscriber had the opportunity to engage such investment professionals and advisors including, without limitation, accountants, appraisers, investment, tax and legal advisors (collectively, the “Advisors”), each of whom are independent of the Company and its advisors and agents (including its legal counsel) to:  (1) review the terms and conditions of this Subscription Application, the Agreement, and the information and disclosures contained herein and therein; (2) conduct such due diligence review as the Subscriber and/or such Advisors deemed necessary or advisable, and (3) to provide such opinions as to (A) the investment merits of a proposed investment in the Subscribed Units; (B) the tax consequences of the purchase of the Subscribed Units and the subsequent disposition of the Subscribed Units; and (C) the effect of same upon the Subscriber’s personal financial circumstances, as the Subscriber and/or such Advisors may deem advisable; and (ii) to the extent the Subscriber availed himself, herself or itself of this opportunity, received satisfactory information and answers from such Advisors.

(g)          Opportunity to Ask Questions and to Review Documents, Books and Records; Opportunity to Meet with Representatives of the Company; Full Satisfaction.  Without limiting the generality of subsections (e) and (f) above, during the course of the transaction contemplated by this Subscription Application, and before purchasing the Subscribed Units, the Subscriber and/or his, her or its Advisors had the opportunity, to the extent they determined to be necessary or relevant in order to verify the accuracy of the information contained in the Offering Materials, GTX Corp’s filings with the Commission, including but not limited to Forms 10-K, 10-Q and 8-K, and/or to evaluate the merits of an investment in the Subscribed Units:  (i) to be provided with financial and other written information about the Company (in addition to that contained in the Offering Materials) to the extent the Company has such information in its possession or could acquire it without unreasonable effort or expense; (ii) to meet with representatives of the Company and to ask questions and receive answers concerning the terms and conditions of the Offering Materials, an investment in the Subscribed Units, and the business of the Company and its finances; (iii) to review all documents, books and records of the Company; and (iv) to the extent the Subscriber and/or his, her or its Advisors availed themselves of this opportunity, received satisfactory information and answers.

 

  

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(h)           Risk Factors.  The Subscriber understands and acknowledges that the purchase of the Subscribed Units involves a number of significant risks and that the Subscriber may lose the Subscriber’s entire investment in the Subscribed Units.

  

(i)           Acceptance of Investment Risks.  The Subscriber understands and acknowledges that:  (i) an investment in the Subscribed Units:  (1) is a speculative investment with a high degree of risk of loss and the Subscriber must, therefore, be able to presently afford a complete loss of this investment; (2) the Subscriber must be able to hold the Subscribed Units indefinitely; and (3) it may not be possible for the Subscriber to liquidate the securities underlying the Subscribed Units in the case of emergency and/or other need and the Subscriber must, therefore, have adequate means of providing for the Subscriber's current and future needs and personal contingencies, and have no need for liquidity in this investment; and (ii) the Subscriber has evaluated the Subscriber's financial resources and investment position in view of the foregoing, and is able to bear the economic risk of an investment in the Subscribed Units.

(j)           Units Purchased For Subscriber's Own Account.   The Subscriber is purchasing the Subscribed Units:  (i) as principal and not by any other person; (ii) with the Subscriber's own funds and not with the funds of any other person; and (iii) for the account of the Subscriber, and not as a nominee or agent and not for the account of any other person.  The Subscriber is purchasing the Subscribed Units for investment purposes only for an indefinite period, and not with a view to the sale or distribution of any part or all thereof, by public or private sale or other disposition.  No person other than the Subscriber will have any interest, beneficial or otherwise, in the Subscribed Units, and the Subscriber is not obligated to transfer the Subscribed Units to any other person nor does the Subscriber have any agreement or understanding to do so.  The Subscriber understands that the Company is relying in material part upon the Subscriber's representations as set forth in the Agreement and herein for purposes of claiming the “Federal Exemptions” or “Blue Sky Exemptions” (as those are defined in subsection (l) below), and that the basis for such exemptions may not be presented if, notwithstanding the Subscriber’s representations, the Subscriber has in mind merely acquiring the Subscribed Units for resale of such Subscribed Units upon the occurrence or nonoccurrence of some predetermined event, and the Subscriber has no such intention.

(k)           Compliance With Investment Laws.   The Subscriber has complied with all applicable investment laws and regulations in force relating to the legality of an investment in the Subscribed Units by the Subscriber in any jurisdiction in which he, she or it purchases the Subscribed Units or is otherwise subject, and has obtained any consent, approval or permission required of him, her or it for the purchase of the Subscribed Units under such investment laws and regulations.

(l)           Subscribed Units Not Registered.  The Subscriber understands and acknowledges that:  (i) the Subscribed Units have not been, and when issued will not be, registered with the Securities and Exchange Commission (the “Commission”) under Section 5 of the Securities Act in reliance upon one or more exemptions afforded by the Securities Act and/or rules promulgated by the Commission pursuant thereto which may be selected by the Company in its sole discretion including, without limitation (collectively and severally, the “Federal Exemptions”):  (1) Section 4(2) of the Securities Act for private offerings; and (2) Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act for private offerings; and (ii) the Subscribed Units have not been, and when issued will not be, registered or qualified with any applicable state or territorial securities regulatory agency in reliance upon one or more exemptions afforded from registration or qualification afforded under the securities laws of such state or territory (the “Blue Sky Laws”) which exemptions may be selected by the Company in its sole discretion (collectively and severally, the “Blue Sky Exemptions”).

 

  

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(m)         Resale Restrictions On Subscribed Units Pursuant to Securities Laws.  The Subscriber understands and acknowledges that:  (i) should the Company elect to rely upon the exemptions afforded by Rule 506 under Regulation D, the Subscribed Units will be classified, pursuant to Rule 502(d) of Regulation D of the Securities Act, as “restricted securities” acquired in a transaction under Section 4(2) of the Securities Act, which cannot be sold without registration under the Securities Act or an exemption therefrom such as, by way of example and not limitation:  (1) Section 4(1) of the Securities Act; (2) the so-called “Section 4(11⁄2) Exemption” to the Securities Act which, pursuant to Section 4(1) of the Securities Act, exempts from the provisions of the Securities Act requiring the registration of securities certain “private sales” which are effectuated in a manner similar to private placements by issuers under Section 4(2) of the Securities Act; and (3) Rule 144 and/or Rule 144A to the Securities Act; (ii) if the Subscriber is an “Affiliate” of the Company (as such term is defined below), he, she or it generally will not be able to sell, transfer, assign, or otherwise dispose of the Subscribed Units except under Rule 144; (iii) should the Company rely upon the exemption afforded by Section 3(a)(11) of the Securities Act and Rule 147 promulgated pursuant thereto for intrastate offerings, the Subscriber will not be able to sell, transfer, assign or otherwise dispose of the Subscribed Units for a period of at least nine (9) months from the date of the last sale by the Company of its securities as part of an offering, including the offering of the Subscribed Units contemplated by this Subscription Application, to any person who is not a resident of the state where the Subscriber is domiciled; and (iv) the Subscribed Units will also be subject to applicable state securities laws that may require registration or qualification of the Subscribed Units in connection with their resale, unless an exemption from such registration or qualification is available.  In general, an “Affiliate” is defined as a person who is a director or officer of a company, or who directly or indirectly controls a company.  As a rule of thumb, ownership of 10% or more of a company's voting stock generally will be deemed to constitute control, while ownership of less than 5% of a company's voting stock will generally not be deemed to constitute control.

(n)          Satisfaction of Counsel of Company As to Transfers of Subscribed Units.   The Subscriber understands and acknowledges that:  (i) prior to any sale, transfer, assignment, pledge, hypothecation or other disposition of the Subscribed Units, the Subscriber must either: (1) furnish the Company with a detailed explanation of the circumstances surrounding the proposed disposition; furnish the Company with an opinion of legal counsel (which may be the Company’s), in form and substance reasonably satisfactory to the Company and its legal counsel, to the effect that such disposition is exempted from the registration and prospectus delivery requirements under the Securities Act and the securities laws of the state in which the Subscriber is then resident; and legal counsel for the Company shall have concurred in such opinion and the Company shall have advised the Subscriber of such concurrence; or (2) satisfy the Company that a registration statement on Form S-1, Form SB-1, or Form SB-2 under the Securities Act (or any other form appropriate under the Securities Act, or any form replacing any such form) with respect to the Subscribed Units proposed to be so disposed of shall then be effective, and that such disposition shall have been appropriately qualified or registered in accordance with the applicable Blue Sky Laws; and (ii) notwithstanding the foregoing, if in the opinion of counsel for the Company, the Subscriber has acted in a manner inconsistent with the representations and warranties in this Subscription Application or the Agreement, the Company may refuse to transfer the Subscribed Units until such time as counsel for the Company is of the opinion that such transfer:  (1) will not require registration of the Units under the Securities Act, and registration or qualification of the Subscribed Units under the applicable Blue Sky Laws; or (2) will otherwise comply with the Securities Act or the applicable Blue Sky Laws with respect to the sale or transfer of the Subscribed Units.  The Subscriber understands and agrees that the Company may refuse to acknowledge or permit any disposition of the Subscribed Units that is not in all respects in compliance with this Subscription Application, and the Company intends to make an appropriate notation in its records to that effect.

(o)          Legend on Certificates to Comply with Securities Laws.   The Subscriber understands and agrees that the certificates representing the Subscribed Units, when issued, shall bear such legend as the Company may deem reasonably necessary or advisable to facilitate compliance with the Securities Act and the securities laws of the state or territory of the Subscriber's residence, including, without limitation, substantially the following legend:

 

  

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”) UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON ONE OR MORE EXEMPTIONS FROM REGISTRATION OR QUALIFICATION AFFORDED BY THE SECURITIES ACT AND/OR RULES PROMULGATED BY THE COMMISSION PURSUANT THERETO.  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE ALSO NOT BEEN REGISTERED OR QUALIFIED (AS THE CASE MAY BE) UNDER THE SECURITIES LAWS OF ANY STATE OR TERRITORY OF THE UNITED STATES (THE “BLUE SKY LAWS”), IN RELIANCE UPON ONE OR MORE EXEMPTIONS FROM REGISTRATION OR QUALIFICATION (AS THE CASE MAY BE) AFFORDED UNDER SUCH SECURITIES LAWS.  NEITHER THE COMMISSION NOR ANY SECURITIES REGULATORY AGENCY OF ANY STATE OR TERRITORY OF THE UNITED STATES HAS REVIEWED OR PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING CONTEMPLATED BY THIS CERTIFICATE, AND ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.  THESE SECURITIES HAVE BEEN ACQUIRED FOR THE HOLDER'S OWN ACCOUNT FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW FOR RESALE OR DISTRIBUTION.

THESE SECURITIES ARE “RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT.  THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED, OR OFFERED FOR SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION, WITHIN THE UNITED STATES OR ANY OF ITS TERRITORIES OR TO A UNITED STATES PERSON, UNLESS:  (i) THE SECURITIES ARE REGISTERED PURSUANT TO SECTION 5 OF THE SECURITIES ACT AND/OR REGISTERED OR QUALIFIED PURSUANT TO ANY APPLICABLE BLUE SKY LAWS; OR (ii) THE PROPOSED TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE REGISTRATION AND QUALIFICATION PROVISIONS OF ANY APPLICABLE BLUE SKY LAWS.  AS A RESULT, THESE SECURITIES ARE SUITABLE ONLY FOR CERTAIN SOPHISTICATED AND QUALIFIED INVESTORS WHO CAN BEAR THE FINANCIAL RISK OF AN INVESTMENT IN THESE SECURITIES FOR AN INDEFINITE PERIOD OF TIME.

(p)           Completeness and Accuracy of Information.  All information which the Subscriber has heretofore furnished or furnishes herewith to the Company or its agents is complete and accurate and may be relied upon by the Company in determining the availability of an exemption from registration under Federal and state securities laws in connection with the offer and sale of the Subscribed Units to the Subscriber in particular.

(q)           Material Changes in Information.  The Subscriber will notify and supply corrective information to the Company immediately upon the occurrence of any material change(s) in any information provided by the Subscriber to the Company occurring prior to the Closing, (as defined in the Agreement), of the purchase by the Subscriber of the Subscribed Units.

(r)           Cooperation.  Within five (5) days after receipt of a request from the Company, the Subscriber will provide such information and deliver such documents as may reasonably be necessary to comply with any and all laws and ordinances to which the Company is subject.

(s)           Offering Representations and Communications.  No person has provided any information (other than the Offering Materials) or made any oral or written representations or warranties to the Subscriber and/or his, her or its Advisors, if any, about the Company, the Subscribed Units or this offering, other than as stated in Section 3 of the Agreement.

 

  

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(t)           Reliance Upon Offering Materials and Information Provided.   Except as provided below, in evaluating the suitability of an investment in the Subscribed Units, the Subscriber has not relied upon, and agrees that he/she/it may not rely upon, any representation, warranty or other information (oral or written) other than as stated in Section 3 of the Agreement.

(u)           No Awareness of Public Advertising.  The Subscriber is unaware of, is in no way relying on, and did not become aware of this offering, through or as a result of any form of public advertising including, without limitation, any advertisement, article, notice, leaflet or other communication (whether published in any newspaper, magazine, or similar media or broadcast over television or radio, or otherwise generally disseminated or distributed).

(v)           No General Solicitation.  The Subscriber did not subscribe to purchase the Subscribed Units, or become aware of this offering, through or as the result of any public or promotional seminar or meeting to which the Subscriber was invited by, or any solicitation of a subscription by, a person not previously known to the Subscriber in connection with investments in securities generally.

(w)          q Pre-Existing Relationship with Company.  The Subscriber, by initialing this box, represents that he, she or it has a pre-existing personal or business relationship* with the Company or any of its managers, officers or controlling persons.

*  The term “pre-existing personal or business relationship” includes any relationship consisting of personal or business contacts of a nature and duration which would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of the person with whom the relationship exists.

(x)           Investment Knowledge.  Does Subscriber believe that he/she/it has sufficient knowledge and experience in financial and business matters so that he/she/it is capable of evaluating the merits or risks of this investment?  qYes qNo

WHEREFORE, the Subscriber, as of the date set forth below, is deemed to have executed this Subscription Application in the City of _________________, County of _________________, State of ________________________, Country of _____________________.

 

	
SUBSCRIBER:

	  
	
By:

	  
	  	
(Signature)

	  	  
	
Print Name:

	  
	  	  
	
Print Title:

	  
	
 

	  
	
Date:

	  

 

EXHIBIT A

SECURITIES PURCHASE AGREEMENT

   

  

9

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