Document:

psws_ex1043.htm

EXHIBIT 10.43

 

NEITHER THIS SECURITY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.

 

	No._______	US $125,000.00

 

PURESAFE WATER SYSTEMS, INC.

 

SECURED CONVERTIBLE PROMISSORY NOTE DUE DECEMBER 1, 2011

THIS Note is a duly authorized issuance of $125,000.00 of PURESAFE WATER SYSTEMS, INC., a Delaware corporation and located at 25 Fairchild Avenue, Ste 250, Plainview NY 11803 (the "Company") designated as its Convertible Note, pursuant to that certain Securities Purchase Agreement between the Company and Holder of even date.

FOR VALUE RECEIVED, the Company promises to pay to SOUTHRIDGE PARTNERS II, LP, the registered holder hereof (the "Holder"), the principal sum of one hundred twenty five thousand and 00/100 Dollars (US $125,000.00) , multiplied by the associated redemption premium (outlined in Section 1A below), plus accrued interest in the amount of eight percent (8%) per annum on all outstanding principal on December 1, 2011 (the “Maturity Date”). The principal plus accrued interest of this Note is payable at the option of the Holder at any time after the Maturity Date, in shares of the Company’s common stock, $.001 par value per share ("Common Stock") as set forth below, or in United States dollars, at the address last appearing on the Note Register of the Company as designated in writing by the Holder. The Company will pay the outstanding principal amount of this Note, plus accrued interest, in cash on or before the Maturity Date to the registered holder of this Note. The forwarding of such check or wire transfer shall constitute a payment hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer plus any amounts so deducted.

This Note is subject to the following additional provisions:

1. The Note is issuable in denominations of Ten Thousand Dollars (US$10,000) and integral multiples thereof, provided that the number of shares to be issued upon conversion is a minimum of 3,000 (unless if at the time of election to convert the number of shares of Common Stock issuable upon conversion is less than 3,000). The Note is exchangeable for an equal aggregate principal amount of Note of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

1.A The Company shall have the right to redeem this Note at any time by providing written notice to the Holder by making a cash payment to the Holder of the outstanding principal amount of the Note multiplied by a premium according to the following schedule, plus all accrued interest: 120% of the outstanding principal amount if redeemed within 90 days after the issuance date; 125% of the outstanding principal amount if redeemed within 180 days after the issuance date; 130% of the outstanding principal amount if redeemed after 180 days after the issuance date. Written notice to the Holder shall be received at least 5 business days prior to the date of redemption payment (“Redemption Date”). If the redemption payment is not made on or before the Redemption Date, the redemption notice shall be rendered null and void and the Holder thereafter shall have the right to convert any portion of the outstanding principal of the Note.

1.B This Note is further guaranteed by the Guarantor(s) pursuant to a Recourse Guarantee, and secured pursuant to a Stock Pledge Agreement, each dated August 3, 2011 between the parties whereby the Guarantor(s) has guaranteed this Note and has granted to Holder a security interest in Collateral, as defined therein, to secure the payment of this Note. Such security interest may be perfected by the filing of the applicable UCC statements in the appropriate recording offices.

 

  

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2. The Holder of this Note is entitled at any time after the Maturity Date, at its option, subject to the following provisions, to convert all or a portion of the principal amount of this Note plus accrued interest into shares of Common Stock at a conversion price for each share of Common Stock equal to the Current Market Price multiplied by seventy percent (70%) (the “Conversion Price”). “Current Market Price” means the average of the two (2) lowest closing bid prices for the Common Stock as reported by Bloomberg, LP or, if not so reported, as reported on the over-the-counter market, for the five (5) trading days ending on the trading day immediately before the relevant Conversion Date (as defined below). The amount of shares issuable pursuant to a conversion shall equal the principal amount (or portion thereof) of the Note to be converted, plus accrued interest, divided by the Conversion Price.

Conversion shall be effectuated by surrendering the Note to the Company, accompanied by or preceded by facsimile or other delivery to the Company of the form of conversion notice attached hereto as Exhibit A, executed by the Holder evidencing such Holder's intention to convert a specified portion hereof. No fractional shares of Common Stock or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. The date on which notice of conversion is given (the "Conversion Date") shall be deemed to be the date on which the Holder faxes or otherwise delivers the conversion notice ("Notice of Conversion"), substantially in the form annexed hereto as Exhibit A, duly executed, to the Company. Facsimile delivery of the Notice of Conversion shall be accepted by the Company at facsimile number (516) 208-8252 ATTN: President. Certificates representing Common Stock upon conversion will be delivered within three (3) business days from the Conversion Date. (“Delivery Date”).

The Company understands that a delay in the issuance of the Shares of Common Stock beyond the Delivery Date (as defined in this Section) could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay late payments to the Holder for late issuance of Shares upon Conversion, unless the delay is due to causes beyond the reasonable control of the Company or the Transfer Agent, in accordance with the following schedule (where “No. Business Days Late” refers to the number of business days which is beyond three (3)) business days after the Delivery Date):1

 

	 	Late Payment For Each $10,000 of Note Principal or Interest
	 	 	 	 
	
No. Business

Days Late

	 	Amount Being Converted	 
	 	 	 	 	 
	1	 	$	100	 
	2	 	$	200	 
	3	 	$	300	 
	4	 	$	400	 
	5	 	$	500	 
	6	 	$	600	 
	7	 	$	700	 
	8	 	$	800	 
	9	 	$	900	 
	10	 	$	1,000	 
	 	 	 	 	 
	 	

>10 $1,000 +$200 for each Business Day Late beyond 10 days

 

The Company shall pay any payments incurred under this Section in immediately available funds upon demand as the Holder’s remedy for such delay. Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of such shares of Common Stock by close of business on the Delivery Date, unless such failure is due to causes beyond the Company’s reasonable control or that of its Transfer Agent, the Holder will be entitled to revoke the relevant Notice of Conversion by delivering a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion; provided, however, that an amount equal to any payments contemplated by this Section which have accrued through the date of such revocation notice shall remain due and owing to the Converting Holder notwithstanding such revocation.

  

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If, by the relevant Delivery Date, the Company fails, unless such failure is due to causes beyond the Company’s reasonable control or that of its Transfer Agent, for any reason to deliver the Shares to be issued upon conversion of the Note and after such Delivery Date, the Holder of the Note being converted (a “Converting Holder”) purchases, in an arm’s-length open market transaction or otherwise, shares of Common Stock (the “Covering Shares”) in order to make delivery in satisfaction of a sale of Common Stock by the Converting Holder (the “Sold Shares”), which delivery such Converting Holder anticipated to make using the Shares to be issued upon such conversion (a “Buy-In”), the Converting Holder shall have the right, to require the Company to pay to the Converting Holder, in addition to and not in lieu of the amounts due hereunder (but in addition to all other amounts contemplated in other provisions of the Transaction Agreements, and not in lieu of any such other amounts), the Buy-In Adjustment Amount (as defined below). The “Buy-In Adjustment Amount” is the amount equal to the excess, if any, of (x) the Converting Holder's total purchase price (including brokerage commissions, if any) for the Covering Shares over (y) the net proceeds (after brokerage commissions, if any) received by the Converting Holder from the sale of the Sold Shares. The Company shall pay the Buy-In Adjustment Amount to the Company in immediately available funds immediately upon demand by the Converting Holder. By way of illustration and not in limitation of the foregoing, if the Converting Holder purchases shares of Common Stock having a total purchase price (including brokerage commissions) of $11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required to pay to the Converting Holder will be $1,000.

In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Company’s Transfer Agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, upon request of the Holder and its compliance with the provisions contained in this paragraph, so long as the certificates therefore do not bear a legend and the Holder thereof is not obligated to return such certificate for the placement of a legend thereon, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.

The Holder of the Note shall be entitled to exercise its conversion privilege with respect to the Note notwithstanding the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). In the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of such holder’s conversion privilege. The Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of the conversion of the Note.

 

3. The Company shall be entitled to withhold from all payments of principal of this Note any amounts required to be withheld under the applicable provisions of the United States income tax laws or other applicable laws at the time of such payments, and Holder shall execute and deliver all required documentation in connection therewith.

4. This Note has been issued subject to investment representations of the original purchaser hereof and may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (the "Act"), and other applicable state and foreign securities laws. In the event of any proposed transfer of this Note, the Company may require, prior to issuance of a new Note in the name of such other person, that it receive reasonable transfer documentation including legal opinions that the issuance of the Note in such other name does not and will not cause a violation of the Act or any applicable state or foreign securities laws. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

5. No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct obligation of the Company.

 

  

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6. [INTENTIONALLY OMITTED].

7. The Holder of the Note, by acceptance hereof, agrees that this Note is being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Note or the shares of Common Stock issuable upon conversion thereof except under circumstances which will not result in a violation of the Act or any applicable state Blue Sky or foreign laws or similar laws relating to the sale of securities.

8. This Note shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties consents to the jurisdiction of the federal courts whose districts encompass any part of the City of New York or the state courts of the State of New York sitting in the City of New York in connection with any dispute arising under this Note and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non coveniens, to the bringing of any such proceeding in such jurisdictions. Each of the parties hereby waives the right to a trial by jury in connection with any dispute arising under this Note.

 

9. The following shall constitute an "Event of Default":

	
  

	
a.

	
The Company shall default in the payment of principal and interest on this Note and same shall continue for a period of five (5) days; or

	
  

	
b.

	
Any of the representations or warranties made by the Company herein, in any certificate or financial or other written statements heretofore or hereafter furnished by the Company in connection with the execution and delivery of this Note shall be false or misleading in any material respect at the time made; or

	
  

	
c.

	
The Company shall fail to perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or obligation of any Note and such failure shall continue uncured for a period of thirty (30) days after written notice from the Holder of such failure; or

	
  

	
d.

	
The Company fails to authorize or to cause its Transfer Agent to issue shares of Common Stock upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or to cause its Transfer Agent to transfer any certificate for shares of Common Stock issued to the Holder upon conversion of this Note and when required by this Note, and such transfer is otherwise lawful, or fails to remove any restrictive legend on any certificate or fails to cause its Transfer Agent to remove such restricted legend, in each case where such removal is lawful, as and when required by this Note, the Agreement, and any such failure shall continue uncured for ten (10) business days; or

	
  

	
e.

	
The Company shall (1) admit in writing its inability to pay its debts generally as they mature; (2) make an assignment for the benefit of creditors or commence proceedings for its dissolution; or (3) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or

	
  

	
f.

	
A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or

	
  

	
g.

	
Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or

 

  

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h.

	
Any money judgment, writ or warrant of attachment, or similar process in excess of One Hundred Thousand ($100,000) Dollars in the aggregate shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or

	
  

	
i.

	
Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding; or

	
  

	
j.

	
The Company shall have its Common Stock suspended or delisted from an exchange or over-the-counter market from trading for in excess of five trading days.

Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider all obligations under this Note immediately due and payable within five (5) days of notice, without presentment, demand, protest or notice of any kinds, all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law.

 

10. The Holder may not convert this Note to the extent such conversion would result in the Holder, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 4.999% of the then issued and outstanding shares of Common Stock held by such Holder after application of this Section. Since the Holder will not be obligated to report to the Company the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock in excess of 4.999% of the then outstanding shares of Common Stock without regard to any other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the principal amount of Note are convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a principal amount of Note that would result in the issuance of in excess of the permitted amount hereunder, without regard to any other shares that the Holder or its affiliates may beneficially own, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion Date and, at the option of the Holder, either retain any principal amount tendered for conversion in excess of the permitted amount hereunder for future conversions or return such excess principal amount to the Holder. The provisions of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than 65 days prior notice to the Company. Other Holders shall be unaffected by any such waiver.

11. Nothing contained in this Note shall be construed as conferring upon the Holder the right to vote or to receive dividends or to consent or receive notice as a shareholder in respect of any meeting of shareholders or any rights whatsoever as a shareholder of the Company, unless and to the extent converted in accordance with the terms hereof.

 

12. Maximum Rate. All provisions herein made are expressly limited so that in no event whatsoever, whether by reason of advancement of proceeds hereof, acceleration of maturity of the unpaid balance hereof or otherwise, shall the amount paid or agreed to be paid to Holder for the use of the money advanced or to be advanced hereunder exceed the maximum rate of interest allowed to be charged under applicable law (the “Maximum Rate”), regardless of whether or not there has been an acceleration of the payment of principal as set forth herein. If, from any circumstances whatsoever, the fulfillment of any provision of this Note or any other agreement or instrument now or hereafter evidencing, securing or in any way relating to the indebtedness evidenced hereby shall involve the payment of interest in excess of the Maximum Rate, then, ipso facto, the obligation to pay interest hereunder shall be reduced to the Maximum Rate; and if from any circumstance whatsoever, Payee shall ever receive interest, the amount of which would exceed the amount collectible at the Maximum Rate, such amount as would be excessive interest shall be applied to the reduction of the principal balance remaining unpaid hereunder and not to the payment of interest. This provision shall control every other provision in any and all other agreements and instruments existing or hereafter arising between the Maker and Holder with respect to the indebtedness evidenced hereby.

 

  

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized.

 

	 	PURESAFE WATER SYSTEMS, INC.	 
	 	 	 	 
	
Dated: August  3, 2011

	
By: 

	/s/ Leslie Kessler	 
	 	 	(Print Name)	 
	 	 	Title 	 

	ATTESTOR	 
	 	 	 
	By:	 	 

 

 

6psws_ex1044.htm

EXHIBIT 10.44

 

SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of August 3, 2011, between PURESAFE WATER SYSTEMS, INC., a Delaware corporation (“PSWS”), and SOUTHRIDGE PARTNERS II, LP, a Delaware limited partnership (“Purchaser”).

WHEREAS, Purchaser and PSWS are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”);

WHEREAS, Purchaser desires to purchase and PSWS desires to issue, upon the terms and conditions set forth in this Agreement, a convertible promissory note and stock warrants of PSWS in consideration for the payment in $125,000.00 in cash; and

NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. PURCHASE AND SALE OF CONVERTIBLE PROMISSORY NOTE.

a. Purchase of Convertible Promissory Note(s). On the Closing Date (as defined below), PSWS shall issue and deliver to Purchaser, and Purchaser shall purchase from PSWS, (1) a duly executed 8% convertible promissory note in the principal amount of $125,000.00 (the “Note”) and (2) a stock warrant exercisable for an amount equal to 1,250,000 shares of PSWS common stock (the “Warrant”), in consideration of up to $125,000.00 in cash (the “Purchase Price”).

b. Closing Date. Subject to the satisfaction (or waiver) of the conditions thereto set forth in Section 5 and Section 6 below, the date and time of the sale of a Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon New York City Time on the date agreed to by the Parties. The first such Closing Date shall be August 3, 2011 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.

c. Form of Payment. On the Closing Date, (i) Purchaser shall pay the Purchase Price in United States dollars by wire transfer of immediately available funds to an account designated in writing by PSWS for such purpose, against delivery of the Note and the Warrant, and (ii) PSWS shall deliver to Purchaser the Note and Warrant duly executed on behalf of PSWS, against delivery of the Purchase Price.

d. Guarantee; Pledge. The Note is further guaranteed by the Guarantor(s) pursuant to a Guarantee, and secured pursuant to a Stock Pledge Agreement, each dated August 3, 2011 between the parties whereby the Guarantor(s) has pledged certain Collateral in order to guarantee the Note and has granted to Purchaser a security interest in Collateral, as defined therein, to secure the payment of the Note. Such security interest may be perfected by the filing of the applicable UCC statements in the appropriate recording offices.

2. PURCHASER’S REPRESENTATIONS AND WARRANTIES.  Purchaser represents and warrants to PSWS that:

a. Accredited Purchaser; Investment Purpose. Purchaser represents that it is an “Accredited Investor” as defined in Regulation D under the Securities Act of 1933. Purchaser is purchasing the Note and Warrant for its own account for investment purposes only and not with a view toward, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1993 Act and applicable state securities laws; provided, however, that by making the representations herein, Purchaser does not agree to hold the Note or Warrant for any minimum or other specific term and reserves the right to dispose of the Note and Warrant at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act and applicable state securities laws.

  

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b. Reliance on Exemptions. Purchaser understands that the Note and Warrant 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 PSWS is relying upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Note.

c. Information. Purchaser and its advisors, if any, have been furnished with materials relating to the business, finances and operations of PSWS and materials relating to the offer and sale of the Note which have been requested by Purchaser or its advisors. Neither such inquiries nor any other due diligence investigation conducted by Purchaser or any of its advisors or representatives shall modify, amend or affect Purchaser’s right to rely on PSWS’s representations and warranties contained in Section 3 below. Purchaser understands that its investment in the Note and Warrant involves a significant degree of risk.

d. Governmental Review. Purchaser 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 Note and Warrant.

e. Transfer or Resale. Purchaser understands that (i) the sale or resale of the Note and Warrant and any underlying conversion shares of common stock has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Note and the Warrant may not be transferred unless (a) the Note, the Warrant and Common Stock issuable upon conversion of the Note (“Conversion Shares”) are sold pursuant to an effective registration statement under the 1933 Act, (b) the Note, the Warrant and the Conversion Shares are sold or transferred pursuant to an exemption from such registration, (c) the Note, the Warrant and the Conversion Shares are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of Purchaser who agrees to sell or otherwise transfer the Note or the Warrant only in accordance with this Section 2(e) and who is an Accredited Investor, or (d) (i) the Note, the Warrant and the Conversion Shares are sold pursuant to Rule 144, if such Rule is available; (ii) any sale of such Note, the Warrant and the Conversion Shares 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 resale of such Note, the Warrant and the Conversion Shares 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 BRZG nor any other person is under any obligation to comply with the terms and conditions of any exemption under the 1933 Act.

f. Legends. Purchaser understands that the Note, the Warrant, and the Conversion shares shall bear a restrictive legend in the following form:

“NEITHER THIS SECURITY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.”

g. Authorization; Enforcement. This Agreement has been duly and validly authorized by Purchaser. This Agreement has been duly executed and delivered on behalf of Purchaser, and this Agreement constitutes a valid and binding agreement of Purchaser enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies or by other equitable principles of general application.

i. No Brokers. Purchaser has taken no action which would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

  

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3. REPRESENTATIONS AND WARRANTIES OF PSWS.  PSWS represents and warrants to Purchaser that:

a. Authorization; Enforcement. (i) PSWS has all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and to sell the Note and the Warrant, in accordance with the terms hereof, (ii) the execution and delivery of this Agreement by PSWS and the consummation by it of the transactions contemplated hereby (including without limitation, the sale of the Note and Warrant to Purchaser) have been duly authorized by PSWS and no further consent or authorization of PSWS or its shareholders is required, (iii) this Agreement has been duly executed and delivered by PSWS, and (iv) this Agreement constitutes a legal, valid and binding obligation of PSWS enforceable against PSWS in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies or by other equitable principles of general application.

b. Title; Rule 144 Matters. PSWS acknowledges that Pledgor, as defined in the Stock Pledge Agreement of even date, has good and marketable title to the Pledge Shares, free and clear of all liens, pledges and encumbrances of any kind, and that Pledgor has owned the Shares since at least August 1, 2010.

c. No Conflicts. The execution, delivery and performance of this Agreement by PSWS and the consummation by PSWS of the transactions contemplated hereby (including, without limitation, the sale of the Note and Warrant to Purchaser) will not (i) conflict with or result in a violation of any provision of its certificate of formation or other organizational documents, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, note, bond, indenture or other instrument to which PSWS is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which PSWS is subject) applicable to PSWS or by which any property of PSWS are bound or affected. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable federal and state securities laws, PSWS is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement in accordance with the terms hereof. Except for filings that may be required under applicable federal and state securities laws in connection with the issuance and sale of the Note and the Warrant, all consents, authorizations, orders, filings and registrations which PSWS is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.

d. No Brokers. PSWS has taken no action which would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.

e. No Other Representations. Except as specifically set forth herein, PSWS makes no representations or warranties with respect its financial status, earnings, assets, liabilities, corporate status or any other matter.

  

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4. COVENANTS.

a. Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 5 and Section 6 of this Agreement.

b. Financial Reporting. Subsequent to Closing Date, PSWS will take no action which would adversely affect the tacking for the benefit of the Purchaser of Pledgor’s holding period under Rule 144. PSWS shall make and keep public information available, as those terms are understood and defined in Rule 144 and shall file with the SEC in a timely manner all quarterly and annual reports required of PSWS under the Exchange Act.

5. CONDITIONS TO COMPANY’S OBLIGATION TO SELL. The obligation of PSWS hereunder to sell and deliver the Note and the Warrant to Purchaser 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 PSWS’s sole benefit and may be waived by PSWS at any time in its sole discretion:

a. Purchaser shall have executed this Agreement and delivered the same to PSWS.

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

c. The representations and warranties of Purchaser 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 Purchaser 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 Purchaser 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.

6. CONDITIONS TO PURCHASER’S OBLIGATION TO PURCHASE. The obligation of Purchaser hereunder to purchase the Shares 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 Purchaser’s sole benefit and may be waived by Purchaser at any time in its sole discretion.

a. PSWS shall have executed this Agreement and delivered the same to Purchaser.

b. PSWS shall have delivered to Purchaser duly executed Note and Warrant (in such denominations as Purchaser shall reasonably request) in accordance with Section 1(b) above.

c. The representations and warranties of PSWS 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 PSWS 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 PSWS 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. The Guarantor(s) has delivered to Purchaser or Purchaser’s escrow agent to pledge shares associated with the loan amount and has otherwise performed all his or her obligations in connection with the Stock Pledge Agreement and Guarantee.

  

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7. GOVERNING LAW; MISCELLANEOUS.

a. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITH 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 THE CITY OF NEW YORK, NEW YORK 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 ANY PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. THE 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 PARTIES HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

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 enforceable 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 PSWS nor Purchaser 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.

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:

 

  

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If to PSWS:

25 Fairchild Avenue, Ste 250

Plainview, NY 11803

Attention: President

Phone: 516-208-8250

Facsimile:

 

If to Purchaser:

Southridge Partners II, LP

90 Grove Street

Ridgefield, Connecticut 06877

Tel: 203-431-8300

Fax: 203-431-8301

Email: info@southridgellc.com

 

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 PSWS nor Purchaser 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(e), Purchaser may assign its rights hereunder to any person that purchases the Note, the Warrant or any Conversion Shares in a private transaction from Purchaser or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of PSWS.

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.

i. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

j. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

  

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IN WITNESS WHEREOF, Purchaser and PSWS have caused this Securities Purchase Agreement to be duly executed as of the date first above written.

 

	PURESAFE WATER SYSTEMS, INC.	 
	 	 	 
	
By: 

	/s/ Leslie Kessler	 
	 	Leslie Kessler	 
	 	CEO 	 
	 	 	 
	 	SOUTHRIDGE PARTNERS II, LP	 
	 	 	 
	By: 	/s/ Henry Sargent	 
	 	Henry Sargent	 
	 	 	 

 

 

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