Document:

eex-ex101_30.htm

Exhibit 10.1

SEPARATION AND RELEASE AGREEMENT

 

This Separation and Release Agreement (this “Agreement”) is entered into as of November 8, 2018 (the “Effective Date”), by and between David Loechner (the “Executive”), Emerald Expositions, LLC, a Delaware limited liability company (the “Company”), and solely for the purpose of Section 2(b), Emerald Expositions Events, Inc. (“Parent”) (each of the Executive, the Company, and solely for the purpose of Section 2(b), Parent, a “Party” and collectively, the “Parties”).  The Parties acknowledge that the terms and conditions of this Agreement have been voluntarily agreed to and are intended to be final and binding. 

RECITALS

WHEREAS, the Executive is party to an employment agreement with the Company effective as of January 1, 2017 (the “Employment Agreement”);

WHEREAS, the Executive was previously granted nonqualified stock options (the “Options”) to acquire shares of common stock (“Common Stock”) of Parent pursuant to the Emerald Expositions Events, Inc.  2013 Stock Option Plan and the Emerald Expositions Events, Inc. 2017 Omnibus Equity Plan (the “Plans”) and the applicable option agreements (each, an “Option Agreement”), certain of which are vested or are eligible to become vested prior to the Separation Date (as defined below) (such options as set forth on Schedule I, the “Extended Options”);

WHEREAS, the Parties mutually agree that, effective as of the close of business on November 8, 2018 (the “Transition Date”), the Executive shall cease to serve as the President and Chief Executive Officer of the Company and in all other officer, manager or director capacities with the Company and any of its subsidiaries and affiliates (collectively, the “Company Group”);

WHEREAS, during the period beginning on the Transition Date and ending on December 31, 2018 (the “Separation Date”), the Executive shall remain an employee of the Company and continue to be entitled to the compensation and benefits provided pursuant to Section 2 of the Employment Agreement;

WHEREAS, effective as of Separation Date, the Executive shall cease to serve as an employee of the Company Group; and 

WHEREAS, as a condition precedent and a material inducement for the Company to make available to the Executive the benefits set forth in this Agreement, the Executive has agreed to execute this Agreement and be bound by the provisions herein.

	
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for the monetary and other consideration set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
	

1.Separation from Service.  

(a)The Parties agree that, effective as of the Transition Date, the Executive shall cease to serve as the President and Chief Executive Officer of the Company and in all other officer, manager or director capacities with the Company Group and shall no longer be authorized to incur any expenses, obligations or liabilities on behalf of any member of the Company Group.

(b)The Parties agree that, effective as of the Separation Date, the Executive shall automatically cease to be an employee of the Company.  

2.Severance Arrangements.  Subject to the Release (as defined in Section 3 hereof) having become irrevocable within thirty (30) days following the Separation Date, the Executive shall be entitled to:

(a)Severance and Benefits Continuation.  

1)One times the sum of (x) the Executive’s annual base salary at the rate in effect as of the Effective Date equal to $480,000 and (y) the Executive’s 2018 target annual bonus opportunity equal to $451,027, payable over the 12-month period following termination (the “Severance Period”);

2)to the extent permitted pursuant to the applicable plans, continuation on the same terms as an active employee (including, where applicable, coverage for the Executive and his dependents) of medical insurance benefits that the Executive would otherwise be eligible to receive as an active employee of the Company through the end of the Severance Period or, if earlier, the date on which the Executive becomes eligible for benefits from a subsequent employer; 

3)the Executive’s annual bonus for 2018, with the amount of such bonus (if any) to be determined in the ordinary course and based on actual performance, payable on the normal payment date on which the Company pays 2018 annual bonuses to its employees; and

4)the second installment of the Special Acquisition Bonus (as such term is defined in the Employment Agreement) for 2017 equal to $55,000, and the first and second installments of the Special Acquisition Bonus for 2018 each equal to $50,000, in each case, payable on the normal payment dates in accordance with Section 2.3 of the Employment Agreement.

(b)Extension of Certain Options.  Notwithstanding anything to the contrary contained in the Plans or the applicable Option Agreements, the Extended Options will remain outstanding and exercisable until May 28, 2020 (the “Extension Date”). Any Extended Options that remaining outstanding as of the Extension Date will be deemed to be forfeited for no consideration as of such date.  Except as otherwise provided herein, the terms and conditions of the applicable Option Agreement shall remain in full force and effect.  For the sake of clarity, any Options that are unvested as of the Effective Date but are scheduled to vest in the normal course prior to the Separation Date will be Extended Options. All Options and restricted stock units that are held by the Executive and are unvested as of the Separation Date shall be forfeited for no consideration pursuant to the terms of the applicable Plan and award agreement.

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(c)Accrued Amounts.  Regardless of whether the Executive executes the Release described in Section 3 of this Agreement, the Company will pay or provide the Executive with all accrued and unpaid base salary and accrued and unused vacation days accrued through the Separation Date, and any unreimbursed business expenses accrued through the Transition Date, as soon as practicable following the Separation Date.  

(d)Exclusive Payments.  The Executive and the Company agree that, except as expressly set forth in this Agreement, the Executive shall not be entitled to receive any additional compensation, bonuses, incentive compensation, benefits or other consideration from the Company in connection with or in any way related to his termination from, or prior employment by, the Company. 

3.Release of Claims by the Executive.  As set forth above, the Company’s obligation to provide the benefits contemplated by Section 2(a) and (b) is conditioned on the Executive’s having executed and delivered to the Company the Release of Claims substantially in the form attached as Exhibit A hereto (the “Release”) on or following the Separation Date and such Release having become effective and irrevocable within thirty (30) days following the Separation Date.  

4.Return of Company Property.  On or before the Separation Date, the Executive shall return to the Company all Company Group property he is aware of or reasonably should be aware of being in his possession, including, without limitation, any keys, access cards, credit cards, books, manuals, files, computer software, disks and the like, as well as all paper and electronic copies of materials and documents in his possession or under his direct or indirect control relating to the Company Group, its business, executives, and customers, and, the Executive represents that he will not retain copies, in whatever form, of any such materials or documents; provided, that to the extent he later becomes aware of Company Group property in his possession, the Executive shall promptly upon discovery return to the Company all such Company Group property.  Notwithstanding anything to the contrary set forth herein, the Company hereby acknowledges and agrees that the Executive may retain, as his own property, his copies of his individual personnel documents, such as his payroll and tax records, and similar personal records and his rolodex and address book so long as they contain only contact type information and a copy is left at the Company.

5.Unauthorized Disclosure; Non-Solicitation of Employees and Non-Disparagement.  In consideration of and as a condition to the receipt of the payments and benefits to be provided pursuant to Sections 2(a) and 2(b), the Executive acknowledges and agrees to be bound by the covenants set forth in this Section 5.

(a)Unauthorized Disclosure.  The Executive agrees and understands that in the Executive’s position with the Company, the Executive has been exposed to and has received information relating to the confidential affairs of the Company Group, including, without limitation, technical information, intellectual property, business and marketing plans, strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company Group and other forms of information considered by the Company Group to be confidential or in the nature of trade secrets (including, without limitation, ideas, research and development, know-how, formulas, technical data, designs, drawings, specifications, customer and supplier lists, pricing and 

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cost information and business and marketing plans and proposals) (collectively, the “Confidential Information”).  Confidential Information shall not include information that is generally known to the public or within the relevant trade or industry other than due to the Executive’s violation of this Section 5(a) or disclosure by a third party who is known by the Executive to owe any member of the Company Group an obligation of confidentiality with respect to such information.  The Executive agrees that at all times, the Executive shall not disclose such Confidential Information, either directly or indirectly, to any individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof (each a “Person”) without the prior written consent of the Company and shall not use or attempt to use any such information in any manner, unless required by law to disclose such information, in which case the Executive shall provide the Company with written notice of such requirement as far in advance of such anticipated disclosure as possible.  This confidentiality covenant has no temporal, geographical or territorial restriction.  

(b)Non-Solicitation of Employees.  For a period of 12 months following the Separation Date, the Executive shall not directly or indirectly contact, induce or solicit (or assist any Person to contact, induce or solicit) for employment any person who is, or within 6 months prior to the date of such solicitation was, an employee of any member of the Company Group.

(c)Non-Disparagement.  From and after the Effective Date, (a) the Executive agrees not to make any statement that is intended to become public, or that should reasonably be expected to become public, and that criticizes, ridicules, disparages or is otherwise derogatory of the Company, any of its subsidiaries, affiliates, employees, officers, directors or stockholders and (b) the Company agrees to instruct its directors and officers not to make any statement that is intended to become public, or that should reasonably be expected to become public, and that criticizes, ridicules, disparages or is otherwise derogatory of the Executive.

6.Notices.  Any notice required or desired to be delivered hereunder shall be in writing and shall be delivered personally, by courier service, or by certified mail, return receipt requested, and shall be effective when actually delivered to the Party to whom such notice shall be directed and shall be addressed as follows (or to such other address as the Party entitled to notice shall hereafter designate in accordance with the terms hereof):          

	
 
	
If to the Company:
	
Emerald Expositions, LLC

	
 
	
 
	
 31910 Del Obispo St., Suite 200

	
 
	
 
	
 San Juan Capistrano, CA  92675

	
 
	
 
	
 Attention:  General Counsel

	
 
	

	
 

	
 
	
With a copy to:
	
Fried, Frank, Harris, Shriver & Jacobson LLP

	
 
	

	
One New York Plaza

	
 
	

	
New York, NY  10004

	
 
	

	
Attn:  Amy L. Blackman, Esq.

 

If to the Executive, at his last address on file with the Company.

 

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7.Complete Agreement.  This Agreement constitutes the complete agreement of the Parties with respect to the subject matter hereof and shall supersede all agreements, whether written or oral, between the Parties to the extent they relate in any way to the employment, termination of employment, compensation and benefits of the Executive.  For the avoidance of doubt, nothing in this Agreement shall be construed to interfere with the Executive’s right to elect COBRA continuation coverage in accordance with applicable law.

8.Severability.  Each provision hereof and portion thereof is severable, and if one or more provisions hereof or portions thereof are declared invalid, the remaining provisions and portions thereof shall nevertheless remain in full force and effect.  If any provision of this Agreement or portion thereof is so broad, in scope or duration or otherwise, as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

9.No Waiver.  No delay on the part of any of the Parties in exercising any right, power or privilege hereunder shall operate as a waiver thereof.  The failure to enforce at any time any of the provisions of this Agreement or to require at any time performance by another party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect the validity of this Agreement, or any part hereof, or the right of any Party thereafter to enforce each and every such provision in accordance with the terms of this Agreement.

10.Counterparts.  This Agreement may be executed via facsimile or electronic transmission (e.g., “.pdf”) and in several counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.  

11.Governing Law.  This Agreement shall be construed and enforced in accordance with, and the laws of the State of California hereto shall govern the rights and obligations of the parties, without giving effect to the conflicts of law principles thereof.

12.Amendments.  This Agreement may be modified, amended or supplemented only by a written agreement executed by the Parties; provided, that the observance of any provision of this Agreement may be waived by the Party that will lose the benefit of such provision as a result of such waiver in a writing expressly stating which observance is being waived.

13.General Interpretive Principles.  The name assigned this Agreement and headings of the sections, paragraphs, subparagraphs, clauses and subclauses of this Agreement are for convenience of reference only and shall not in any way affect the meaning or interpretation of any of the provisions hereof.  Words of inclusion shall not be construed as terms of limitation herein, so that references to “include,” “includes” and “including” shall not be limiting and shall be regarded as references to non-exclusive and non-characterizing illustrations.  Any reference to a Section of the Internal Revenue Code of 1986, as amended, shall be deemed to include any successor to such Section.

14.Section 409A.  The Parties agree that this Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder (“Section 409A”), or an exemption from Section 409A, and that all provisions of this Agreement shall be interpreted accordingly.

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15.Withholding.  Notwithstanding anything in this Agreement to the contrary, the Company shall have the right to deduct from any amount payable under this Agreement any taxes or other amounts required by applicable law to be withheld. 

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date and year first above written.

 

EMERALD EXPOSITIONS, LLC

 

 

By: /s/ David Gosling

Name: David Gosling

Title: SVP, General Counsel and Secretary

 

 

Emerald Expositions Events, Inc.

 

 

By: /s/ David Gosling

Name: David Gosling

Title: SVP, General Counsel and Secretary

 

 

EXECUTIVE

 

 

/s/ David Loechner

David Loechner

 

 

[Signature Page Loechner Separation and Release Agreement]

Exhibit A

 

RELEASE

 

YOU ARE ADVISED TO CONSULT AN ATTORNEY 
BEFORE SIGNING THIS RELEASE OF CLAIMS.

 

1.In consideration of the payments and benefits to be made under the Employment Agreement, dated as of March 30, 2017 (the “Employment Agreement”), by and between David Loechner (the “Executive”) and Emerald Expositions, LLC, a Delaware limited liability company (the “Company”), (each of the Executive and the Company, a “Party” and collectively, the “Parties”) and the Separation and Release Agreement, dated as of November __, 2018, by and between the Executive, the Company and Emerald Expositions Events, Inc. (the “Separation and Release”), the sufficiency of which the Executive acknowledges, the Executive, with the intention of binding himself and his heirs, executors, administrators and assigns, does hereby release, remise, acquit and forever discharge the Company and each of its subsidiaries and affiliates (the “Company Affiliated Group”), their present and former officers, directors, executives, shareholders, agents, attorneys, employees and employee benefit plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each of the foregoing (collectively, the “Company Released Parties”), of and from any and all claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and whether now known or unknown, suspected or unsuspected, which the Executive, individually or as a member of a class, now has, owns or holds, or has at any time heretofore had, owned or held, arising on or prior to the date hereof, against any Company Released Party that arises out of, or relates to, the Employment Agreement, the Executive’s employment with the Company or any of its subsidiaries and affiliates, or any termination of such employment, including claims (i) for severance or vacation benefits, unpaid wages, salary or incentive payments, (ii) for breach of contract, wrongful discharge, impairment of economic opportunity, defamation, intentional infliction of emotional harm or other tort, (iii) for any violation of applicable state and local labor and employment laws (including, without limitation, all laws concerning unlawful and unfair labor and employment practices) and (iv) for employment discrimination under any applicable federal, state or local statute, provision, order or regulation, and including, without limitation, any claim under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor Standards Act, the Americans with Disabilities Act (“ADA”), the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Age Discrimination in Employment Act (“ADEA”), and any similar or analogous state statute, excepting only: 

	
 
	
A.
	
rights of the Executive arising under, or preserved by, this Separation and Release or Section 3 of the Employment Agreement;

	
 
	
B.
	
the right of the Executive to receive COBRA continuation coverage in accordance with applicable law;

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C.
	
claims for benefits under any health, disability, retirement, life insurance or other, similar employee benefit plan (within the meaning of Section 3(3) of ERISA) of the Company Affiliated Group;

	
 
	
D.
	
rights to indemnification the Executive has or may have by contract or under the by-laws or certificate of incorporation of any member of the Company Affiliated Group or as an insured under any director’s and officer’s liability insurance policy now or previously in force; and

	
 
	
E.
	
rights granted to Executive during his employment related to the purchase and/or grant of equity of Emerald Expositions Events, Inc.

2.WITH RESPECT TO THIS RELEASE, IF THE UNDERSIGNED IS A RESIDENT OF CALIFORNIA, THE UNDERSIGNED ACKNOWLEDGES THAT HE OR SHE IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHTS THAT HE MAY HAVE UNDER SECTION 1542, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

 

3.The Executive acknowledges and agrees that this Release is not to be construed in any way as an admission of any liability whatsoever by any Company Released Party, any such liability being expressly denied.

4.This Release applies to any relief no matter how called, including, without limitation, wages, back pay, front pay, compensatory damages, liquidated damages, punitive damages, damages for pain or suffering, costs, and attorneys’ fees and expenses.

5.The Executive specifically acknowledges that his acceptance of the terms of this Release is, among other things, a specific waiver of his rights, claims and causes of action under Title VII, ADEA, ADA and any state or local law or regulation in respect of discrimination of any kind; provided, however, that nothing herein shall be deemed, nor does anything contained herein purport, to be a waiver of any right or claim or cause of action which by law the Executive is not permitted to waive.

6.As to rights, claims and causes of action arising under ADEA, the Executive acknowledges that he has been given but not utilized a period of 21 days to consider whether to execute this Release. If the Executive accepts the terms hereof and executes this Release, he may thereafter, for a period of seven days following (and not including) the date of execution, revoke this Release as it relates to the release of claims arising under ADEA. If no such revocation occurs, this Release shall become irrevocable in its entirety, and binding and enforceable against the 

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Executive, on the day next following the day on which the foregoing seven-day period has elapsed. If such a revocation occurs, the Executive shall irrevocably forfeit any right to any payments or benefits provided under Section 2 of the Separation and Release or Section 3 of the Employment Agreement, but the remainder of the Employment Agreement shall continue in full force.

7.Other than as to rights, claims and causes of action arising under ADEA, this Release shall be immediately effective upon execution by the Executive.

8.The Executive acknowledges and agrees that he has not, with respect to any transaction or state of facts existing prior to the date hereof, filed any complaints, charges or lawsuits against any Company Released Party with any governmental agency, court or tribunal.

9.The Executive acknowledges that he has been advised to seek, and has had the opportunity to seek, the advice and assistance of an attorney with regard to this Release, and has been given a sufficient period within which to consider this Release.

10.The Executive acknowledges that this Release relates only to claims that exist as of the date of this Release.

11.The Executive acknowledges that the severance payments and benefits he is receiving in connection with this Release and his obligations under this Release are in addition to anything of value to which the Executive is entitled from the Company.

12.Each provision hereof is severable from this Release, and if one or more provisions hereof are declared invalid, the remaining provisions shall nevertheless remain in full force and effect. If any provision of this Release is so broad, in scope, or duration or otherwise, as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

13.This Release constitutes the complete agreement of the Parties in respect of the subject matter hereof and shall supersede all prior agreements between the Parties in respect of the subject matter hereof except to the extent set forth herein.

14.The failure to enforce at any time any of the provisions of this Release or to require at any time performance by another party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect the validity of this Release, or any part hereof, or the right of any party thereafter to enforce each and every such provision in accordance with the terms of this Release.

15.This Release may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Signatures delivered by facsimile shall be deemed effective for all purposes.

16.This Release shall be binding upon any and all successors and assigns of the Executive and the Company.

17.Except for issues or matters as to which federal law is applicable, this Release shall be governed by and construed and enforced in accordance with the laws of the State of California without giving effect to the conflicts of law principles thereof.

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[signature page follows]

 

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IN WITNESS WHEREOF, this Release has been signed by or on behalf of each of the Parties, all as of January __, 2019.

 

EMERALD EXPOSITIONS, LLC

 

 

By:

Name: David Gosling

Title: SVP, General Counsel and Secretary

 

 

EXECUTIVE

 

 

 

David Loechner

 

 

[Signature Page Loechner Release of Claims]

Schedule I

 

[Extended Options]

 

						
	
Date of Grant 
	
Exercise Price
	
Total Granted
	
Total Vested

of Effective Date
	
Options Vesting Prior to the Separation Date
	
Total Extended Options

	
7/19/13
	
$8.00
	
957,500
	
957,500
	
0
	
957,500

	
7/19/13
	
$12.00
	
441,250
	
434,650
	
0
	
434,650

	
7/19/13
	
$16.00
	
441,250
	
148,193
	
0
	
148,193

	
2/26/14
	
$8.00
	
30,000
	
24,000
	
0
	
24,000

	
4/22/14
	
$8.00
	
181,250
	
145,000
	
0
	
145,000

	
4/22/14
	
$12.00
	
90,625
	
72,500
	
0
	
72,500

	
4/22/14
	
$16.00
	
90,625
	
68,800
	
0
	
68,800

	
12/15/14
	
$10.40
	
28,500
	
17,100
	
 5,700
	
22,800

	
12/15/14
	
$12.00
	
14,250
	
8,550
	
2,850
	
11,400

	
12/15/14
	
$16.00
	
14,250
	
8,350
	
2,850
	
11,200Exhibit 10.1 Form of Securities Purchase Agreement

 

EXHIBIT 10.1

 

TRXADE GROUP, INC.

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement, dated as of the date below (this “Agreement”), is entered into by and among Trxade Group, Inc. (the “Company”), a corporation incorporated in the state of Delaware, and the persons and entities listed on the signature page attached hereto (the “Investors”).

 

The parties hereby agree as follows:

 

1.The Securities. 

 

(a)Issuance of Securities. Subject to all of the terms and conditions hereof, the Company agrees to issue and sell to each of the Investors, and each of the Investors severally agrees to purchase, shares of Common Stock (each, a “Security” and, collectively, the “Securities”) for the investment amount set forth opposite the respective Investor’s name on signature page hereto (the “Investment Amount”). The obligations of the Investors to purchase Notes are several and not joint. The aggregate Investment Amounts for the purchase of Securities hereunder shall not exceed $2,000,000. 

 

(b)Delivery; Use of Proceeds. The sale and purchase of the Securities shall take place at a closing (the “Closing”) to be held at such place and time as the Company and the Investors may determine (the “Closing Date”). At the Closing, the Company will deliver to each of the Investors the Securities to be purchased by such Investor, against receipt by the Company of such Investor’s Investment Amount. The Company may conduct one or more additional closings within two years of the Closing (each, an “Additional Closing”) to be held at such place and time as the Company and the Investors participating in such Additional Closing may determine (each, an “Additional Closing Date”). Proceeds of the Securities shall be used for general corporate purposes, including the payment of a salary to the officers of the Company. 

 

2.Representations and Warranties of the Company. The Company represents and warrants to each Investor that: 

 

(a)Due Incorporation, Qualification. The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; (ii) has the power and authority to own, lease and operate its properties and carry on its business as now conducted; and (iii) is duly qualified, licensed to do business and in good standing as a foreign corporation in each jurisdiction where such qualification or license is required. 

 

(b)Authority; Enforceability. The execution, delivery and performance by the Company of this Agreement and Securities issued hereunder (and collectively with the other documents referenced herein, the “Transaction Documents”) and the consummation of the transactions contemplated hereby and thereby (i) are within the power of the Company and (ii) have been duly authorized by all necessary actions on the part of the Company.  Each Transaction Document executed by the Company has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity. 

 

(c)Non-Contravention. The execution and delivery by the Company of the Transaction Documents executed by the Company and the performance and consummation of the transactions contemplated thereby do not and will not (i) violate the Company’s Certificate of Incorporation, Bylaws or other formation or charter documents, as applicable (as amended, the “Charter Documents”), or any material judgment, order, writ, decree, statute, rule or regulation applicable to the Company; (ii) violate any provision of, or result in the breach or the acceleration of, or entitle any other person to accelerate (whether after the giving of notice or lapse of time or both), any material mortgage, indenture, agreement, instrument or contract to which the Company is a party or by which it is bound; or (iii) result in the creation or imposition of any lien or encumbrance upon any property, asset or revenue of the Company. 

 

(d)No Violation or Default. The Company is not in violation of or in default with respect to (i) its Charter Documents or any material judgment, order, writ, decree, statute, rule or regulation applicable to the Company; or (ii) any material mortgage, indenture, agreement, instrument or contract to which the Company is a party or by which it is bound. 

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(e)Capitalization. As of the date of this Agreement, the authorized and outstanding capital stock of the Company is as set herein and in the Public Filings (whichever is later) and also sets forth all outstanding options, warrants and convertible securities of the Company outstanding as of the date hereof, including any shares reserved for issuance under any equity incentive or similar plan of the Company. All outstanding shares of the Company have been duly authorized and validly issued in compliance with applicable laws, and are fully paid and nonassessable. 

 

3.Representations and Warranties of Investors. Each Investor, for that Investor alone, represents and warrants to the Company upon the acquisition of a Security as follows: 

 

(a)Binding Obligation. Such Investor has full legal capacity, power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement and the Transaction Documents constitute valid and binding obligations of such Investor, enforceable in accordance with their terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity. 

 

(b)Securities Law Compliance. Such Investor has been advised that the Securities and the underlying securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. Such Investor has not been formed solely for the purpose of making this investment and is purchasing the Securities to be acquired by such Investor hereunder for its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. Such Investor has such knowledge and experience in financial and business matters that such Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing such Investor’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time. 

 

(c)Access to Information. Such Investor has received, read carefully and understands this Agreement and the Securities and all exhibits hereto and thereto and has consulted its own attorney, accountant and/or investment advisor with respect to the transactions contemplated hereby and thereby and its suitability for such Investor. The Company has made available to such Investor, prior to the purchase of the Securities, all Public Filings filed under the SEC, and Investor has had the opportunity to ask questions of and receive answers from management of the Company concerning the terms and conditions of this Agreement and the Securities and to obtain any additional information necessary to verify information contained in the Agreement, the Securities or otherwise related to the financial data and business of the Company, to the extent that such parties possess such information or can acquire it without unreasonable effort or expense, and all such questions, if asked, have been answered satisfactorily and all such documents, if requested, have been found to be satisfactory. The foregoing shall not limit the Company’s representations and warranties or such Investor’s right to rely thereon.   

 

(d)Acknowledgement of Risks. Such Investor is aware and acknowledges that (a) the Company has no operating history, and there is a high degree of risk that the Company will be unable to execute its business strategy successfully; (b) the Securities involve a substantial degree of risk of loss of its entire investment; (c) such Investor, in purchasing the Securities, is relying solely upon the advice of such Investor’s tax advisor with respect to the tax aspects of purchasing the Securities; and (d) because there are substantial restrictions on the transferability of the Securities it may not be possible for such Investor to liquidate its investment readily. . Investor has reviewed the Risk Factors and other information referenced in the 10-K, the 10-Q and the Public Filings. 

 

(e)Accredited Investor. Such Investor (a) is an “accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act, and (b) maintains its domicile, and is not merely a transient or temporary resident, at the address shown on the signature page hereof. 

 

(f)No Public Advertising.  Investor acknowledges that Investor has not seen, received, been presented with, or been solicited by any leaflet, public promotional meeting, newspaper or magazine article or advertisement, radio or television advertisement, or any other form of advertising or general solicitation with respect to the Securities. 

 

(g)Transfer Restrictions.  Further, Investor is aware that the Company was previously a shell company, and therefore the exemption offered pursuant to Rule 144 is not currently available.  Notwithstanding the foregoing, however, Investor is aware that because the Company has filed current "Form 10 information" with the Securities and Exchange Commission reflecting its status as an entity that is no longer a shell company, if (i) the Company remains subject to the reporting requirements of section 13 or 15(d) of the Exchange Act; and (ii) if the Company has filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months; then the Shares issued in connection with this Offering may be sold subject to Rule 144 (and applicable holding periods) and other applicable securities laws after one year has elapsed from the date that the Company file D "Form 10 information" with the Securities and Exchange Commission. 

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(h)Indemnification.  Investor hereby agrees to indemnify and hold harmless the Company, its principals, the Company’s officers, directors attorneys, and agents, from any and all damages, costs and expenses (including actual attorneys’ fees) which they may incur: (i) by reason of P Investor’s failure to fulfill any of the terms and conditions of this Subscription; (ii) by reason of Investor’s breach of any of representations, warranties or agreements contained herein (including the Purchaser Questionnaire and Suitability Statement); or (iii) with respect to any and all claims made by or involving any person, other than Investor personally, claiming any interest, right, title, power, or authority in respect to the Securities.  Investor further agrees and acknowledges that these indemnifications shall survive any sale or transfer, or attempted sale or transfer, of any portion of the Securities. 

 

4.Conditions to Closing of the Investors. Each Investor’s obligations at the Closing and each Additional Closing are subject to the fulfillment, on or prior to the Closing Date or applicable Additional Closing Date, of all of the following conditions: 

 

(a)Representations and Warranties. The representations and warranties made by the Company in Section 2 hereof shall have been true and correct when made, and shall be true and correct on the Closing Date or applicable Additional Closing Date. 

 

(b)Governmental Approvals and Filings. Except for any notices required or permitted to be filed after the Closing Date or applicable Additional Closing Date with certain federal and state securities commissions, the Company shall have obtained all governmental approvals required in connection with the lawful sale and issuance of the Securities. 

 

(c)Transaction Documents. The Company shall have duly executed and delivered to the Investors the following documents: (i) this Agreement and (ii) Securities issued hereunder. 

 

5.Conditions to Obligations of the Company. The Company’s obligation to issue and sell the Securities at the Closing and at each Additional Closing is subject to the fulfillment, on or prior to the Closing Date or the applicable Additional Closing Date, of the following conditions: 

 

(a)Representations and Warranties. The representations and warranties made by the applicable Investors in Section 3 hereof shall be true and correct when made, and shall be true and correct on the Closing Date and the applicable Additional Closing Date. 

 

(b)Legal Requirements. At the Closing and at each Additional Closing, the sale and issuance by the Company, and the purchase by the applicable Investors, of the Securities shall be legally permitted by all laws and regulations to which such Investors or the Company are subject. 

 

6.Miscellaneous. 

 

(a)Waivers; Amendments. Any provision of this Agreement and the Securities may be amended, waived or modified only upon the written consent of the Company and Investor. 

 

(b)Nature of Investment. For the avoidance of doubt, the parties hereto acknowledge and agree that the payment of the Investment Amount to the Company by an Investor will be deemed to be an equity investment in the Company and will not be a loan to or indebtedness of the Company. 

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(c)Governing Law; Arbitration, Consent to Jurisdiction, Waiver of Jury Trial. Any action to enforce or interpret this Offering, or to resolve disputes over this Agreement between the Company and the Investor, will be settled by arbitration in accordance with the rules of the American Arbitration Association. Arbitration will be the exclusive dispute resolution process, and arbitration will be a held in Tampa, Florida.  Any Party may commence arbitration by sending a written demand for arbitration to the other Parties. The demand will set forth the nature of the matter to be resolved by arbitration. The Company will select the place of arbitration. The substantive law of the state of Florida will be applied by the arbitrator to the resolution of the dispute. The Parties will share equally all initial costs of arbitration. The prevailing Party will be entitled to reimbursement of attorney fees, costs, and expenses incurred in connection with the arbitration. All decisions of the arbitrator will be final, binding, and conclusive on all Parties. Judgment may be entered on any such decision in accordance with applicable law in any court having jurisdiction of it. The arbitrator (if permitted under applicable law) or the court may issue a writ of execution to enforce the arbitrator’s decision.  TO THE EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS SUBSCRIPTION, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALING OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT EITHER PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. 

 

(d)Survival. The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Agreement. 

 

(e)Transferability. The Securities shall not be transferred directly or indirectly, by any Investor to any person (other than to persons who are and remain affiliates of such Investor) without compliance with all applicable securities laws. 

 

(f)Successors and Assigns. Subject to the restrictions on transfer described herein, the rights and obligations of the Company and the Investors shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties. 

 

(g)Transaction Expenses. Each party agrees to pay its own costs and expenses (including attorneys’ fees) in connection with the preparation and closing of the transactions contemplated by this Agreement and the Securities 

 

(h)Entire Agreement. This Agreement together with the other Exhibits referenced heretin constitute and contain the entire agreement among the Company and Investors and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof. 

 

(i)Notices. All notices, demands, consents, or other communications hereunder shall in writing and faxed, mailed, emailed or delivered to each party as follows: (i) if to a Investor, at such Investor’s address, email address, or facsimile number set forth in the signature page attached hereto, or at such other address as such Investor shall have furnished the Company in writing, or (ii) if to the Company, at such address, or fax number set forth on the signature pages hereto, or at such other address, or facsimile number as the Company shall have furnished to the Investors in writing. All such communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by facsimile (with receipt of appropriate confirmation), (iv) one business day after being deposited with an overnight courier service of recognized standing or (v) four days after being deposited in the U.S. mail, first class with postage prepaid. 

 

(j)Severability. If any provision of this Agreement shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

 

(k)Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile copies of signed signature pages will be deemed binding originals. 

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(l)Confidentiality and No-Trading. Except as required by law, the Investor agrees that it shall keep confidential and shall not disclose or divulge any confidential, proprietary or secret non-public information that such Investor may obtain from the Company pursuant to financial statements, reports and other materials submitted by the Company to such Investor pursuant to this Agreement or otherwise, or pursuant to visitation or inspection rights granted under this Agreement, unless such information is known, or until such information becomes known, to the public; provided, that such Investor may disclose such information (a) to its attorneys, accountants, consultants and other professionals to the extent necessary to obtain their services in connection with its investment in the Company; (b) to any prospective transferee of any Securities from such Investor as long as such prospective transferee agrees in writing to be bound by the provisions of this section; or (c) to any affiliate of such Investor or to a partner, stockholder or stockholder of such Investor.  INVESTOR UNDERSTANDS THAT TO THE EXTENT DISCLOSED, THE COMPANY’S CONFIDENTIAL INFORMATION AS WELL AS THE EXISTENCE OF THE DISCUSSIONS CONCERNING THE OFFERING AND THE TERMS OF THE OFFERING BEING CONTEMPLATED BY THE PARTIES MAY BE DEEMED MATERIAL NON-PUBLIC INFORMATION AND INVESTOR SHALL NOT TRADE IN THE STOCK OF THE COMPANY WHILE INVESTOR IS IN POSSESSION OF ANY MATERIAL NON-PUBLIC INFORMATION CONVEYED HEREUNDER. 

 

You hereby certify that (a) all the information contained in this Agreement is complete and accurate and contains no material omissions and may be relied upon by the Company, and (b) you will notify the Company in writing immediately of any change in any of such information.

 

Amount of Security for Which the undersigned Investor Subscribes: $_________

(You May Subscribe for Not Less than $50,000 unless approved by the Company)

 

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly signed as of the date first above written.

 

INVESTOR (if individual):INVESTOR (if entity): 

 

 

______________________________________________________________________________ 

SignatureName of Entity 

 

_______________________________________By: ____________________________________ 

Name (type of print)

Name: __________________________________ 

 

Its: _____________________________________ 

 

Address:

 

_______________________________________

Street

 

_______________________________________

City                         State                 Zip

 

Email: _________________________________

 

NOTE: If the Securities are to be jointly owned, please check the applicable box below. The co-owner must complete and sign the Co-Owner Signature Page and the Co-Owner Suitability Statements on the next page.

 

[   ]  Joint Tenants with Right of Survivorship 

 

[   ]  Tenants-in-Common

 

[   ]  Other: ____________________________

5

 

IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement to be duly signed as of the date first above written.

 

 

COMPANY:

 

TRXADE GROUP, INC.

a Delaware corporation

 

 

By: _________________________ 

Name: Suren Ajjarapu, CEO

 

Trxade Group, Inc.

3480 Land O Lakes Blvd

Land O Lakes, FL 34639

 

 

 

DATE: ______________________

6

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