Document:

SECURITIES PURCHASE AGREEMENT (SERIES B)

SECURITIES PURCHASE AGREEMENT (SERIES B)

 

SECURITIES PURCHASE AGREEMENT 

SERIES B

 

 

This Securities Purchase Agreement (this “Agreement”) is dated as of March 31, 2016 between Revolutionary Concepts Inc., a Nevada corporation (the “Company”), and each Purchaser identified on Schedule A hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers” or “The Group”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to resolve debt obligations via the conversion of debt to preferred stock, to issue and/or sell to Purchasers, and to enable Purchasers to purchase from the Company, securities of the Company as more fully described in this Agreement; and

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1  Definitions.  In addition to the terms defined elsewhere in this Agreement: 

(a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the other Transaction Documents (as applicable), and 

(b) the following terms have the meanings set forth in this Section 1.1:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Asset” means where the Company acknowledges in its books and records the value, any item of economic value, owned by an individual or corporation, especially that which could be converted to cash.

 

“Best efforts” means an agreement in which a company or underwriter promises to make a full-fledged attempt to sell as much of an initial public offering as possible to the public, with no guarantee of success. 

 

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

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Cash Equivalent (CE)” means investment securities that are short term (Usual 3 months or less), have high credit quality, and highly liquid investments (where there are buyers and sellers in the market place both readily convertible to know amounts of cash), and they represent insignificant risk of changes in value.  Cash Equivalent includes the U.S. Government Treasury bills, bank certificates of deposit, bankers acceptances, corporate commercial paper (preferred shares, common stock, membership interest, convertible notes), and other money market instruments.

 

“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing Date” has the meaning set forth in Section 2.1.

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

 

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such common stock may hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiary which would, directly or indirectly, entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time, directly or indirectly, convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Company Counsel” means legal representation for the Company.

 

“Conversion” means the transformation of loans or debt into shares of stock or equity. 

 

“Conversion Date” means an Elective Conversion Date.

 

“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series “A”, “A-1”, “A-2” and “B” Preferred Stock in accordance with the terms of the Certificate of Designation.

 

“Cross-Receipts” means the cross receipts executed by the Purchaser(s) and the Company, each to be in the form of Exhibit F hereto. 

 

“Disclosure Schedules” shall have the meaning set forth in Section 3.1.

 

“ Effective Date ” means the earlier of the date that 

 

(a) all of the Registrable Securities (as defined in the Registration Rights Agreement) have been registered for resale by the holders thereof pursuant to a registration statement(s) declared effective by the Commission or 

 

(b) all of the Registrable Securities have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without volume or manner-of-sale restrictions, so long as the Company is current with the public information requirements under Rule 144.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“ Exempt Issuance ” means the issuance of 

 

(a) shares of Common Stock or options to employees, officers or directors of the Company to any stock or option plan  

 

(i) duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, and  

 

(ii) approved pursuant  to the provisions of Section 8 of the Series A Certificate of Designation, Series A-1 Certificate of Designation, Series A-2 Certificate of Designation and the Series B Certificate of Designation,  

 

(b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder (including, without limitation, any Underlying Shares) and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement or as disclosed  

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in the Company’s Disclosure Schedules, provided that such securities have not been amended on or after the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (it being understood that such securities may be adjusted for anti-dilution purposes in connection with this Agreement), 

 

(c) securities issued pursuant to acquisitions or strategic transactions approved by  

 

(i) a majority of the disinterested directors of the Company, and  

 

(ii) pursuant to the provisions of Section 8 of the Series A Certificate of Designation,  Series A-1 Certificate of Designation, Series A-2 Certificate of Designation and the Series B Certificate of Designation, and  

 

(a) securities issued as consideration for  

 

(i) dividends to the Purchasers of the Preferred Stock under the, Series A Certificate of Designation, Series A-1 Certificate of Designation, Series A-2 Certificate of Designation and the Series B Certificate of Designation and to purchasers of any other Parity Securities as the case may be, any and all shares of Common Stock issuable in lieu of cash payments pursuant to the Make-Whole Payment and including, solely with respect to the Series “A”, “A-1”, “A-2”, and “B” Preferred Stock, any and all shares of Common Stock issuable in lieu of cash payments pursuant to the Additional Dividend payment (as defined in the Series A-1 Certificate of Designation)); or  

 

(ii) capital contributions to Revolutionary Concepts, Inc. 

 

 

“Existing Debt Amount” means with respect to each Purchaser, the amount owed by the Company to such Purchaser under such Purchaser(s) Existing Promissory Note as the Closing, as set forth on Schedule A hereto.

 

“Existing Promissory Notes” means whereas both Seller and the Purchaser recognize/acknowledge the promissory notes of the company or convertible Promissory Notes used as cash equivalent by Purchaser(s).

 

“Face Value ” means both The Company and the Purchaser(s) acknowledges the stated value and the original value of promissory note(s), the face value of a loan refers to the principal of the loan, which is the original amount of the loan as detailed in the loan contract, promissory note, or debt instrument. The amount of the obligation or loan constitutes what is due to the promisee.  The promissory note itself has no face value.  It may or may not be considered legal tender, although it can be transferred from one obligee to another.  It does show the amount of the obligation or consideration due to the promisee by the promisor, which all parties have agreed on.

 

“GAAP (Generally Accepted Accounting Principles)” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Limited Liability Company” means LLC or other formation (under the Nevada statues or other) created by the company to conduct related business transactions or operate as a management entity when opportunities arise.

 

“Lost Note Affidavit and Indemnity Agreement” If necessary, means a Lost Note Affidavit and Indemnity Agreement in a form reasonably acceptable to the Company in the form attached hereto as Exhibit E.

 

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Participation Maximum” shall have the meaning ascribed to such term in Section 4.8(a).

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“Payoff Letter”  If required, means the payoff letters executed by the Purchasers in favor of the Company, each in the form of Exhibit A hereto, providing for termination and release of all obligations under the applicable Existing Promissory Note and related Loan Documents (as defined in such Payoff Letter).

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

 

“Placement Agents” mean the agents of the Company in the private offer and sale of the Series B Preferred Stock.

 

“Preferred Stock” means shares of Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series B Preferred Stock.

 

“Pre-Notice” shall have the meaning ascribed to such term in Section 4.8(b).

 

“Pro Rata Portion” shall have the meaning ascribed to such term in Section 4.8(e).

 

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

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.6.

 

“Registration Rights Agreement” means the Registration Rights Agreement, in the form of Exhibit B hereto, by and among the Company and the Purchasers, providing registration rights with respect to the Underlying Shares held by the Purchasers on the terms and conditions set forth therein.

 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares, ignoring any conversion or exercise limits set forth therein and assuming that any previously unconverted shares of Preferred Stock are held until the third anniversary of the Closing Date and all dividends are paid in shares of Common Stock or Preferred Stock until such third anniversary.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities” means the Preferred Stock and the Underlying Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Series A Certificate of Designation” means the 10 1⁄2% Series A Convertible Preferred Stock Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Nevada.

 

“Series A Preferred Stock” means the Company’s 101⁄2% Series A Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Series A Certificate of Designation in the form of Exhibit G attached hereto.

 

“Series A-1 Certificate of Designation” means the 10 1⁄2% Series A-1 Convertible Preferred Stock Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Nevada,  in the form  of Exhibit C attached hereto.

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“Series A-1 Preferred Stock ” means the Company’s 10 1⁄2% Series A-1 Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Series A-1 Certificate of Designation.

“Series A-2 Certificate of Designation” means the 10 1⁄2% Series A-2 Convertible Preferred Stock Certificate of Designation  to be filed prior to the Closing by the Company with the Secretary of State of Nevada,  in the form of Exhibit D  attached hereto.

 

“Series A-2 Preferred Stock” means the Company’s 10 1⁄2% Series A-2 Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Series A-2 Certificate of Designation.

 

“Series B Certificate of Designation” means the 10 1⁄2% Series B Convertible Preferred Stock Certificate of Designation to be filed prior to the Closing by the Company with the Secretary of State of Nevada, in the form of Exhibit A attached hereto.

 

“Series B Preferred Stock” means the Company’s 10 1⁄2% Series B Convertible Preferred Stock issued hereunder having the rights, preferences and privileges set forth in the Series B Certificate of Designation.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

“Stated Value” means Series A Preferred at $0.06 or  Series A1 and A2 and Series B Preferred at $1,000 per share, subject to adjustment as provided in the Certificate of Designation of Series A, Series A-1 Certificate of Designation,  the Series A-2 Certificate of Designation and Series B Certificate of Designation (as applicable).

 

 “Subsequent Financing” shall have the meaning ascribed to such term in Section 4.8(a).

 

“Subsequent Financing Notice” shall have the meaning ascribed to such term in Section 4.8(b).

 

“Subsidiary” shall have the meaning ascribed to such term in Section 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“The Group” refer to Certificate of Designation, Section 1.

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

 

“Trading Market ” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the Toronto Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTC Bulletin Board and the OTC Markets, or any other national or international exchange in which securities, commodities, derivatives and other financial instruments are traded, (or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement, the Series A Certificate of Designation, Series A-1 Certificate of Designation, the Series A-2 Certificate of Designation, the Series B Certificate of Designation, the Registration Rights Agreement, all exhibits and schedules thereto and hereto, and any other documents or agreements executed in connection with the transactions contemplated hereunder (including, without limitation, the documents referenced in Section 2.2(c) (ii).

 

“Transfer Agent” means RCI, the Company or Island Corporate Stock Transfer Inc., the current transfer agent of the Company, with a mailing address of 15500 Roosevelt Blvd, Clearwater, FL 33760, and any successor transfer agent of the Company.

 

“Underlying Shares” means the shares of Common Stock that are:

 

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(a) issued and issuable upon conversion of the Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock or Series B Preferred Stock; and 

 

(b) issued or issuable in lieu of cash payment of dividends on the Preferred Stock referenced in clauses (a) in accordance with the terms of the Series A Certificate of Designation, Series A-1 Certificate of Designation, Series A-2 Certificate of Designation and the Series B Certificate of Designation, as applicable (including, solely with respect to the Series A-2 Preferred Stock and Series B Preferred Stock, any and all shares of Common Stock issuable in lieu of cash payments pursuant to the Make-Whole Payment (as defined in the Series A-2 Certificate of Designation and Series B Certificate of Designation, respectively) and including, solely with respect to the Series A or Series A-1 Preferred Stock, any and all shares of Common Stock issuable in lieu of cash payments pursuant to the Additional Dividend payment (as defined in the Series A or Series A-1 Certificate of Designation). 

 

ARTICLE 2

 

PURCHASE, SALE OR CONVERSION

 

2.1 Closing.  

 

(a) On the date hereof (the “Closing Date”), upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto: The Company may agree to a buy, sell or conversion of its stock, and the Purchasers, severally and not jointly, each agree to purchase, the number of shares of Series Preferred Stock, as set forth on Schedule A hereto.   

 

(b) The Company and each Purchaser shall each deliver the items set forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Company Counsel or such other location as the parties shall mutually agree. 

 

2.2 Deliveries.

 

(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:  

 

(i) this Agreement and the Registration Rights Agreement, each duly executed by the Company, and 

 

(ii) evidence of the filing and acceptance of the Series B Certificate of Designation from the Secretary of State of Nevada.

 

(b) Within five (5) Business Days after the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser a certificate evidencing the number of shares of Series B Preferred Stock issued to such Purchaser registered in the name of such Purchaser. 

 

(c) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company this Agreement and the Registration Rights Agreement, duly executed by such Purchaser. 

 

(d) And supporting documents for 3rd Party Convertible Notes, and Promissory Notes 

 

2.3 Closing Conditions.

 

(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met: 

 

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(i) The accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein); 

 

(ii) All obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and 

 

(iii) The delivery by each Purchaser of the items set forth in Sections 2.2(c) of this Agreement. 

 

(a) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met: 

 

(i) The accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein); 

 

(ii) All obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; and 

 

(iii) The delivery by the Company of the items set forth in Sections 2.2(a) and (b) of this Agreement. 

 

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company.  Except as set forth in the Disclosure Schedules , which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:

 

(a) Subsidiary.  is the Company’s intent to form subsidiaries. 

 

(b) Organization and Qualification.  The Company is an entity duly incorporated or otherwise organized, validly existing and due to its public status and reporting requirements, may or may not be in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business of business development, licensing and potentially product development.  The company and any of its subsidiaries may be in violation or default of the material provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  The Company is currently restating and correcting prior financial statements and SEC filings that were found to contain errors.  The company has engaged a new accounting firm and has identified new Auditors to assist the company in moving forward and restating its financials. The Company is also currently involved in a “Nonpublic” Order Directing Private Investigation and Designating Officers to Take Testimony” that begin in 2015. It is the Company’s intent to fully address all affected fillings and to comply with any SEC recommendations or requirements should there be any. The Company is currently effectively operating and fulfilling operational goals and objectives of which this transaction is included. Any formed subsidiary will be duly qualified to conduct business in any jurisdiction except where prohibited. 

 

(c) Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection therewith.  Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except:  

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(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,  

 

(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and  

 

(iii) insofar as indemnification and contribution provisions may be limited by applicable law. 

 

(a) No Conflicts.  The execution, delivery and performance by the Company of the Transaction Documents, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do not and will not:  

 

(i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents,  

 

(ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or  

 

(iii)  subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii) , such as could not have or reasonably be expected to result in a Material Adverse Effect. 

 

(b) Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than:  

 

(i) the filings required pursuant to Section 4.5 of this Agreement,  

 

(ii)  the filings with the Commission pursuant to the Registration Rights Agreement,  

 

(iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Preferred Stock and the listing of the Underlying Shares for trading thereon in the time and manner required thereby and  

 

(iv)  the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).  

 

(c) Issuance of the Securities.  The Securities are duly authorized and, when issued, and  paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Underlying Shares, when issued in accordance with the terms of the Transaction Documents, will be irrevocably issued, fully paid and non-assessable, free and clear of all Liens  

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imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to 150% of the shares of Common Stock initially issuable upon conversion of the Preferred Stock issuable hereunder.

 

(d) Capitalization.  The capitalization of the Company is as set forth on Schedule 3.1(g) , which Schedule 3.1(g) also includes the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Securities or as set forth in Schedule 3.1(g) or in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.  All of the outstanding shares of capital stock of the Company are validly issued, fully paid and non-assessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 

 

(e) SEC Reports; Financial Statement.  The Company is in the process of restating its financials for several quarters and yearend statements to bring current. All quarterly and annual reports required to be filed by the Company under the Exchange Act for the three (3) years preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) are under review in an effort to restate and correct various statements and financial filings. The company has not requested an extension for such filings, however, the company has engaged a new accountant and identified a new auditing firm to assist in the restated filings.  

 

The company is currently cooperating in an SEC inquiry and various restatements of previous filings have been requested. To the best of the companies and managements knowledge and in accordance with GAAP, all previous statements are true and accurate. The company relies heavily on accounting and auditing professionals to assure the accuracy of related financial reports however previously filed financial statements of the Company included in the SEC Reports were not in compliance in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  To the best of the Company’s knowledge, such financial statements were prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, however the financial statements fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(f) Material Changes; Undisclosed Events, Liabilities or Developments. Except as set forth on Schedule 3.1(i) or the SEC Reports, since the date of the latest audited financial statements included within the SEC Reports:  

 

(i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,  

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(ii) the Company has not incurred any liabilities (contingent or otherwise) other than  

 

(a) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and  

 

(b) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,  

 

(i) the Company has not altered its method of accounting,  

 

(ii) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and  

 

(iii) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i) , no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiary or their respective business, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made. 

 

(a) Private Placement.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.  The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market. 

 

(b)  No Integrated Offering.  To the best of the companys knowledge, assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 , neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of  

 

(i) the Securities Act which would require the registration of any such securities under the Securities Act, or  

 

(ii) any applicable stockholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated. 

 

(c) No General Solicitation.  To the best of the companys knowledge, neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising.  The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. 

 

(d) Litigation.  The Company is currently responding to an SEC inquiry and is confident that the SEC inquiry will validate its appropriate and effective measures of business development.  To the knowledge of the Company and as of the date of this transaction, there is no action, legal procedure, demand against the Company or any action affecting the Company before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “ Action ”) other than the SEC inquiry as provided. The Company believes the result of the inquiry will not (i)  

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adversely affect or challenge the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  The Commission issued a 10 day suspension of the Company’s trading beginning @ 9:30am on June 17, 2015 and ending @ 11:59pm on June 30, 2015. The Company has engaged a new accounting firm and has identified a new auditing firm to assist in restating previous filings. The company will remain on the gray sheets until these objectives are completed. 

 

(e) Compliance.  The Company has been notified by its creditors that is it in default on its loans and credit agreements. Said default is being resolved via the conversion of debt to preferred Series A or Series A-1 Securities. The Company has disclosed and accounted for all debt obligations that it is aware of in its SEC reports. The restatement of the Company’s financials will also include all known debt obligations as well as any new debt including but not limited to  

 

(i) any judgment, decree or order of any court, arbitrator or governmental body or  

 

(ii)  violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect. 

 

(f) Title to Assets.  Except as set forth in the SEC Reports, the Company and the Subsidiary have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiary, in each case, may or may not be, free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiary and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiary are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiary are in compliance. 

 

(g) Sarbanes-Oxley; Internal Accounting Controls.  The Company is not in compliance with any and all requirements of the Sarbanes-Oxley Act of 2002 applicable to smaller reporting companies that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.  The company is seeking and will be adding an individual with an accounting back ground to its BOD to satisfy the Sarbanes-Oxley requirement. To the best of the Company’s knowledge, this is the only matter affecting full compliance with Sarbanes-Oxley Act of 2002. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that:  

 

(i) transactions are executed in accordance with management’s general or specific authorizations,  

 

(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,  

 

(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and  

 

(iv) the recorded balances of assets are compared with the actual assets of the Company at reasonable intervals and appropriate action is taken with respect to any differences.  The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the  

REVOPage 11 

 

 

Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “ Evaluation Date ”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(h) Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary: 

 

(i) has made or filed all required United States federal and state income and all foreign income and franchise tax returns (or extension requests related thereto), reports and declarations required by any jurisdiction to which it is subject,  

 

(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and  

 

(iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim. 

 

(i) Listing  The Company presently intends to meet the listing requirements of the Toronto Stock Exchange Venture, NASDAQ and/or the American Stock Exchange within the next 24-36 months.  The company presently on a best effort basis intends to meet the listing requirements of a recognizable exchange, there is no guarantee that the company can or will achieve this, it is only being done on a best effort basis. 

 

3.2 Representations and Warranties of the Purchasers.  Each Purchaser, for itself and for no other Purchaser, severally and not jointly, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):

 

(a) Organization; Authority.  Such Purchaser is either an individual or an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or other power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, Limited Liability Company or similar action, as applicable, on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except:  

 

(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,  

 

(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and  

 

REVOPage 12 

 

 

(iii) insofar as indemnification and contribution provisions may be limited by applicable law.  If the Purchaser(s) is a corporation, trust, partnership or other entity that is not an individual person, it has not been organized for the specific purpose of purchasing the Securities and is not prohibited from doing so. 

 

(a) Own Account.  Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws).  Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. 

 

(b) Purchaser Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it converts any shares of Preferred Stock, it will be either:  

 

(i) an “accredited investor” as defined in Rule 501 under the Securities Act or  

 

(ii) a “qualified institutional buyer” as defined in Rule 144A (a) under the Securities Act.  Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 

 

(a) Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 

 

(b) Reliance on Exemptions.  Each Purchaser understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Securities.  Each Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities, or the fairness or suitability of the investment in the Securities, nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 

 

(c) General Solicitation.  Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement. 

 

(d) Representation of Purchasers.  Each Purchaser solely owns all right, title and interest in and to its respective Existing Promissory Note(s) and has not conveyed any interest or other right in any such Existing Promissory Note to any other Person or otherwise subjected, or allowed to be subjected, such Existing Promissory Note to any lien or other encumbrance.  The transactions contemplated by this Agreement will result in the full and complete release and satisfaction of any and all obligations of the Company with respect to each Purchaser’s Existing Promissory Notes(s).  The existing Promissory Note(s) being tendered by each Purchaser to the Company pursuant to this Agreement are the only promissory notes or other debt obligations of the Company to such Purchaser. 

REVOPage 13 

 

 

 

(e) No Legal Advice From the Company; Sole Representations in Agreement,  Each Purchaser acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with his or its own legal counsel and investment and tax advisors.  Each Purchaser is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.  Each Purchaser acknowledges that the only representations being made by the Company in connection with the transactions contemplated by this Agreement are set forth in this Article III and that in connection with its decision to enter into the transactions contemplated by this Agreement, it is relying only on such representations in this Article III and the SEC Reports, and not on any other statements or representations of the Company or any of its representatives or agents. Each Purchaser agrees for the benefit of the Company and the Placement Agents that the Purchaser has conducted and relied upon its own due diligence investigation of the Company and its own in-depth analysis of the merits and risks of the Securities in making its investment decision and has not relied upon any information provided by the Placement Agents or any investigation of the Company conducted by the Placement Agents and the Purchaser agrees that the Placement Agents shall have no liability to the Purchaser in connection with its purchase of the Securities. 

 

(f) Both the Company and the Purchaser(s) acknowledges, by its execution of this Agreement, that its obligations hereunder are irrevocable.  The Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.  Contemplated hereby and further, both parties acknowledge the Company, reserves the right to modify, correct, amend, or abort any part of this Agreement in whole or in part, without any further notice to the Purchaser(s), except for the parts that are irrevocable between the Company and the Purchaser(s). 

 

 

ARTICLE 4

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

(a) The Securities may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement. 

 

(b) The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form: 

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE 

REVOPage 14 

 

 

EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties.  Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice shall be required of such pledge.

 

(c) Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof):  

 

(i) while a registration statement covering the resale of such security is effective under the Securities Act,  

 

(ii) following any sale of such Underlying Shares pursuant to Rule 144,  

 

(iii) if such Underlying Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions or  

 

(iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).  The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder.  If all or any shares of Preferred Stock are converted at a time when there is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144, or if the Underlying Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission), then such Underlying Shares shall be issued free of all legends.  The Company, irrevocably, agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent, irrevocable, of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend, deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1(c) .  Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser(s), irrevocable. 

 

REVOPage 15 

 

 

(d) Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will only sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding. 

 

4.2 Furnishing of Information.  Until the time that no Purchaser owns any Securities, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.  As long as any Purchaser owns any Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities, including without limitation, under Rule 144.  The Company further covenants that it will take such further action as any holder of Securities may reasonably request, to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act, including without limitation, within the requirements of the exemption provided by Rule 144.

 

4.3 Integration.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

4.4 Conversion Procedure.  The form of Notice of Conversion included in the Series B Certificate of Designation sets forth the totality of the procedures required of the Purchasers in order to convert the Preferred Stock.  No additional legal opinion, other information or instructions shall be required of the Purchasers to convert their Preferred Stock.  The Company shall honor irrevocable, conversions of the Series B Preferred Stock and shall deliver irrevocably, Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

4.5 Securities Laws Disclosure; Publicity.  The Company shall, in accordance with applicable federal securities law, issue a Current Report on Form 8-K and press release disclosing the material terms of the transactions contemplated hereby, and including the Transaction Documents as exhibits thereto.  From and after the issuance of such press release, the Company shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its subsidiary, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.  The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except: 

 

(a) as required by federal securities law in connection with  

 

(i) any registration statement contemplated by the Registration Rights Agreement and  

 

(ii) the filing of final Transaction Documents (including signature pages thereto) with the Commission; and 

 

REVOPage 16 

 

 

(b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this Section 4.5 . 

 

4.6 Indemnification of Purchasers.  Subject to the provisions of this Section 4.6, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents.  The indemnification required by this Section 4.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.

 

4.7 Reservation and Listing of Securities.

 

(a) The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. 

 

(b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock and/or Preferred Stock is less than 150% of  

 

(i) the Required Minimum on such date, minus  

 

(ii) the number of shares of Common Stock or Preferred Stock (as applicable) previously issued pursuant to the Transaction Documents, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock and/or Preferred Stock (as applicable) to at least the Required Minimum at such time (minus the number of shares of Common Stock and/or Preferred Stock (as applicable) previously issued pursuant to the Transaction Documents), as soon as possible and in any event not later than the 120th day after such date; provided that the Company will not be required at any time to authorize a number of shares of Common Stock and/or Preferred Stock (as applicable) greater than the maximum remaining number of shares of Common Stock or Preferred Stock (as applicable) that could possibly be issued after such time pursuant to the Transaction Documents. 

 

(c) The Company shall, if applicable:  

 

(i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application,  

 

(ii) on a best effort basis, take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation on such Trading Market as soon as possible thereafter,  

 

(iii) provide to the Purchasers evidence of such listing or quotation and  

 

(iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading Market or another Trading Market. 

 

REVOPage 17 

 

 

4.8 Participation in Future Financing.

 

(a) From the date hereof until such time as the Purchasers no longer hold any shares of Preferred Stock, upon any issuance by the Company or any of its Subsidiary of Common Stock, Common Stock Equivalents for cash consideration, or a combination of units hereof (a “Subsequent Financing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to 100% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing. 

 

(b) At least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).  Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser.  The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment. 

 

(c) Any Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New York City time) on the fourth (4th ) Trading Day after all of the Purchasers have received the Pre-Notice that the Purchaser is willing to participate in the Subsequent Financing, the amount of the Purchaser’s participation, and representing and warranting that the Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice.  If the Company receives no such notice from a Purchaser as of such fourth (4th) Trading Day, such Purchaser shall be deemed to have notified the Company that it does not elect to participate. 

 

(d) If by 5:30 p.m. (New York City time) on the fourth (4th )  Trading Day after all of the Purchasers have received the Pre-Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may affect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice. 

 

(e) If by 5:30 p.m. (New York City time) on the fourth (4th) Trading Day after all of the Purchasers have received the Pre-Notice, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” of a Purchaser means the ratio of: (x) the aggregate Stated Value of the Preferred Stock issued to such Purchaser on the Closing Date; and (y) the aggregate Stated Value of the Preferred Stock issued to all Purchasers participating in such Subsequent Financing under this Section 4.8 . 

 

(f) The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation set forth above in this Section 4.8, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial Subsequent Financing Notice. 

 

(g) Notwithstanding the foregoing, this Section 4.8 shall not apply in respect of  

 

(i) an Exempt Issuance or 

 

(ii) an underwritten public offering of Common Stock.

 

REVOPage 18 

 

 

4.9 Equal Treatment of Purchasers.  No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents.  For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

4.10  Certain Transactions and Confidentiality.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5, provided that in no event shall such period extend beyond February 29, 2016.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.5, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that 

 

(i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5, 

 

(ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.5 and 

 

(iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiary after the issuance of the initial press release as described in Section 4.5 .  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

 

4.11 Form D; Blue Sky Filings.  The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser.  The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

 

ARTICLE 5

MISCELLANEOUS

 

5.1 Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

 

5.2 Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and 

REVOPage 19 

 

 

understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.3 Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: 

 

(a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, 

 

(b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, 

 

(c) the second (2 ND )Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or 

 

(d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

5.4 Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and each Purchaser.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.  The parties agree and acknowledge that this Section 5.4 relates solely to waivers, modifications, supplements and amendments to this Agreement, and not to any other Transaction Document.

 

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

 

5.6 Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9 and Section 3.2.

 

5.8 Governing Law.  ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THE TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.  EACH PARTY AGREES THAT ALL LEGAL PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENTS (WHETHER BROUGHT AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN NEVADA FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN 

REVOPage 20 

 

 

CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER OR IS AN INCONVENIENT VENUE FOR SUCH PROCEEDING.  EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  IF EITHER PARTY SHALL COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS OF THE TRANSACTION DOCUMENTS, THEN, IN ADDITION TO THE OBLIGATIONS OF THE COMPANY UNDER SECTION 4.6, THE PREVAILING PARTY IN SUCH ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE ATTORNEYS’ FEES AND OTHER COSTS AND EXPENSES INCURRED WITH THE INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR PROCEEDING.

 

5.9 Survival.  The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

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

 

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

 

5.12 Replacement of Securities.  If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefore, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

 

 

5.13 Remedies.

 

(a) In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby  

REVOPage 21 

 

 

agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

(b)  If the Company defaults in complying with the covenants set out in Section 4.2 hereof and the Company fails to remedy such default within 30 days after notice by Purchasers specifying the nature of the default, the Company shall, at its cost and in the manner described in the Registration Rights Agreement, as promptly as practicable file with the Commission and thereafter cause to be declared effective (unless it becomes effective automatically upon filing) on or prior to the 90th day after the expiration of such 30 day cure period, a registration statement on an appropriate form under the Securities Act relating to the offer and sale of the Underlying Shares; provided, that if the Commission comments on such registration statement, then the Company shall cause such registration statement to be declared effective on or prior to the 120th day after the expiration of such 30 day cure period. 

 

5.14 Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.

 

5.15 Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

5.16 Construction.  The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

5.17 WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

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

 

 

COMPANY                                                                                                                                                                                           REVOLUTIONARY CONCEPTS, INC.

 

 

By: ________________________________

RONALD CARTER

Its: President  & CEO

REVOPage 22 

 

 

 

PURCHASER

THE GROUP

 

 

BY: _________________________

ERNEST DELONG

Trustee

 

 

PURCHASER or CONVERSION RECIPENT

 

 

By:_______________________________

Ronald Carter

 

 

PURCHASER or CONVERSION RECIPIENT

 

 

By:_____________________________

Garry Stevenson

 

 

PURCHASER or CONVERSION RECIPENT 

 

 

By:______________________________

Bethiel Tesfassiliassie

 

 

 

PURCHASER or CONVERSION RECIPIENT

 

 

By:________________________________

Solomon RC Ali            

 

 

REVOPage 23REGISTRATION RIGHTS AGREEMENT (SERIES A)

REGISTRATION RIGHTS AGREEMENT (SERIES A)

 

REGISTRATION RIGHTS AGREEMENT

SERIES A

 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of March 31, 2016, between REVOLUTIONARY CONCEPTS INC (REVO)., a Nevada corporation (the “Company”), and each of the Persons who are signatories hereto (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).

 

This Agreement is made pursuant to the Purchase Agreement (as defined herein).

 

The Company and each Purchaser hereby agrees as follows:

 

1. Definitions.  Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

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

 

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

 

“Commission” means the U.S. Securities and Exchange Commission.

 

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

 

“FINRA” means the Financial Industry Regulatory Authority.

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Indemnified Party” shall have the meaning set forth in Section 5(c).

 

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

 

“Losses” shall have the meaning set forth in Section 5(a).

 

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

 

“Purchase Agreement” means the Securities Purchase Agreement, dated as of the date hereof, among the Company and the initial Holders party hereto, as amended, modified or supplemented from time to time in accordance with its terms.

 

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

 

“Registrable Securities” means, as of any date of determination:

 

(a) the Underlying Shares with respect to the Preferred Stock; 

 

REVOPage 1 

 

 

(b) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as:

 

(i) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, 

 

(ii) such Registrable Securities have been previously sold in accordance with Rule 144, or 

 

(iii) such securities become eligible for resale without volume or manner-of-sale restrictions (provided the Company is current with the public information requirements as determined by the counsel to the Company as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the Company.

 

“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2 (Registration) or Section 6(d) (Piggyback Registrations), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).

 

“Significant Holder” shall have the meaning set forth in Section 3(a).

 

“10-K Filing Date” shall have the meaning set forth in Section 2(a).

 

2. Registration.

 

(a) The Company shall, at its own cost, prepare and, not later than 45 days after (or if the 45th day is not a business day, the first business day thereafter) the date upon which the Company’s annual report on Form 10-K for the fiscal year ending December 31, 2017 is filed with the Commission (the “10-K Filing Date”), file with the Commission a Registration Statement covering the resale of the Registrable Securities by each Holder.

 

(b) The Registration Statement filed hereunder shall be on an appropriate form as determined by the Board of Directors.  Subject to the terms of this Agreement, the Company shall cause a Registration Statement filed hereunder to be declared effective under the Securities Act as promptly as possible after the filing thereof but in no event later than the one (1) year anniversary of the Closing Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until the earlier of: 

 

(i) the date on which all Registrable Securities covered by such Registration Statement may be resold without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without 

REVOPage 2 

 

 

the requirement for the Company to be in compliance with the current public information under Rule 144 or any other rule of similar effect; 

 

(ii) the date on which all Registrable Securities covered by such Registration Statement have been sold pursuant to a Prospectus or Rule 144 or any other rule of similar effect; or 

 

(iii) as otherwise mutually agreed to between the parties hereto (the “Effectiveness Period”).  The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. New York City time on a Trading Day.  The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of such Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of such Registration Statement.  The Company shall, by 9:30 a.m. New York City time on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424.

 

3. Registration Procedures.  In connection with the Company’s registration obligations hereunder, the Company shall:

 

(a) Not less than ten (10) Trading Days prior to the filing of such Registration Statement and not less than three (3) Trading Days prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall  

 

(i) furnish to each Holder that has Registrable Securities constituting at least 35% of the aggregate Registrable Securities included in such Registration Statement (each, “Significant Holder”) copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Significant Holders, and 

 

(ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Significant Holder, to conduct a reasonable investigation within the meaning of the Securities Act.  The Company shall not file a Registration Statement or any amendments or supplements thereto to which the Significant Holders shall reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Significant Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after the Significant Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto.  Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex A (a “Selling Stockholder Questionnaire”) promptly after it has been requested by the Company, but in no event less than five (5) Trading Days prior to the filing date of the Registration Statement. 

 

(a)   

(i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, 

 

(ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424,  

 

(iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably  

REVOPage 3 

 

 

possible to the Significant Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement ( provided that, the Company may excise any information contained therein which would constitute material non-public information as to any Significant Holder which has not executed a confidentiality agreement with respect thereto with the Company), and 

 

(iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented. 

 

(b) Provide notice to the Holders whose Registrable Securities are to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of clause (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day: 

 

(i) (A)  with respect to the Significant Holders and all other Holders whose Registrable Securities are to be sold in such registration, notice of when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; 

 

(B)  with respect only to the Significant Holders, notice when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement; and 

 

(C)  with respect to the Significant Holders and all other Holders whose Registrable Securities are to be sold in such registration, notice of when the Registration Statement or any post-effective amendment thereto has become effective;

 

(ii) with respect only to the Significant Holders, notice of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; 

 

(iii) with respect to the Significant Holders and all other Holders whose Registrable Securities are to be sold in such registration, notice of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; 

 

(iv) with respect to the Significant Holders and all other Holders whose Registrable Securities are to be sold in such registration, notice of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; 

 

(v) with respect to the Significant Holders and all other Holders whose Registrable Securities are to be sold in such registration, notice of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and 

REVOPage 4 

 

 

 

(vi) with respect to the Significant Holders and all other Holders whose Registrable Securities are to be sold in such registration, notice of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided that, any and all of such information shall remain confidential to each Holder until such information otherwise becomes public, unless disclosure by a Holder is required by law; provided, further , that notwithstanding each Holder’s agreement to keep such information confidential, each such Holder makes no acknowledgement that any such information is material, non-public information. 

 

(c) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of  

(i) any order stopping or suspending the effectiveness of a Registration Statement, or  

 

(ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. 

 

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

 

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

 

(f) The Company shall cooperate with any broker-dealer through which a Holder proposes to resell its Registrable Securities in effecting a filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as requested by any such Holder, and the Company shall pay the filing fee required by such filing within two (2) Business Days of request therefore. 

 

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

 

(h) If requested by a Holder, the issuer must cooperate with such Holder to facilitate and coordinate with the Company’s transfer agent the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement (unless it falls under the Rules of Exemption under state and federal regulatory statues and SEC guidelines), which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request and should be deemed an irrevocable transaction. 

 

REVOPage 5 

 

 

(i) . Upon the occurrence of any event contemplated by Section 3(c) , as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(c) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus.  The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is reasonably practicable.  The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period. 

 

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

 

(k) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the shares. 

 

4 Registration Expenses.  All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement.  The fees and expenses referred to in the foregoing sentence shall include, without limitation, 

 

(i) all registration and filing fees (including, without limitation, reasonable fees and expenses of the Company’s counsel and independent registered public accountants) 

 

(A) with respect to filings made with the Commission, 

 

(B) with respect to filings required to be made with any Trading Market, on which the Common Stock is then listed for trading, 

 

(C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities) and 

 

(D) with respect to any sales of Registrable Securities in an underwritten offering any filing fees payable to FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, 

 

(ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), 

 

(iii) fees and disbursements of counsel for the Company, 

 

(iv) Securities Act liability insurance, if the Company so desires such insurance, and 

 

(v) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement.  In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.  In no event shall the Company be responsible 

REVOPage 6 

 

 

for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

 

5. Indemnification.

 

(a) Indemnification by the Company.  The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to  

 

(1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, 

 

(2) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or 

 

(3) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that: 

 

(i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or 

 

(ii) in the case of an occurrence of an event of the type specified in Section 3(c) (iii) - (vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(c).  The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware.

 

(a) Indemnification by Holders .  Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or relating to: (x) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act, (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or (z) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading  

 

REVOPage 7 

 

 

(i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus or  

 

(ii) (ii) in the case of an occurrence of an event of the type specified in Section 3(c)(iii) - (vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(c).  A Holder shall notify the Company promptly of the institution, thread or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Holder is aware.  In no event shall the liability of any selling Holder under this Section 5(b) be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. 

 

(a) Conduct of Indemnification Proceedings.  If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “ Indemnified Party ”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “ Indemnifying Party ”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provide, that, the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party. 

 

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless:  

 

(1) the Indemnifying Party has agreed in writing to pay such fees and expenses, 

 

(2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or 

 

(3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party).  The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten (10) Trading Days of written notice thereof to the Indemnifying Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and 

REVOPage 8 

 

 

expenses applicable to such actions for which such Indemnified Party is judicially determined not to be entitled to indemnification hereunder.

 

(b) Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.  The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 5 was available to such party in accordance with its terms. 

 

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute pursuant to this Section 5(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

 

The indemnity and contribution agreements contained in this Section 5 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

 

6. Miscellaneous.

 

(a) Remedies. 

 

(i)Additional Dividends under Certain Circumstances.  Additional dividends (the “Additional Dividends”) with respect to the Preferred Stock shall be assessed if the Registration Statement is not declared effective by the Commission on or prior to the one (1) year anniversary of the Closing Date as provided in Section 2(b) hereof (such event, a “Registration Default”). Additional Dividends shall accrue on the Preferred Stock over and above the dividend rate set forth in the title of the Securities from and including the date on which such Registration Default shall occur to but excluding the date on which such Registration Default has been cured. The rate of the Additional Dividends will be 1.00% per annum for the first 30-day period (or pro rata portion thereof) immediately following the occurrence of a Registration Default, and such rate will increase by an additional 1.00% per annum with respect to each subsequent 30-day period (or pro rata portion thereof) until such Registration Default has been cured. Additional Dividends shall be paid on Dividend Payment Dates. Such Additional Dividends will be in addition to any other dividends payable from time to time with respect to the Preferred Stock.

 

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

REVOPage 9 

 

 

performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

 

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

 

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

 

(d) Piggy-Back Registrations.  If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock option or other employee benefit plans, then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided, however , that the Company shall not be required to register any Registrable Securities pursuant to this Section 6(d) that are eligible for resale pursuant to Rule 144 promulgated by the Commission pursuant to the Securities Act or that are the subject of a then effective Registration Statement. 

 

(e) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of at least 85% of the then outstanding Registrable Securities (including, for this purpose any Registrable Securities issuable upon exercise or conversion of any Security issued and issuable under the Purchase Agreement). 

 

(f) If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each   Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement.  Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however , that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the first sentence of this Section 6(e) . 

 

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

 

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

REVOPage 10 

 

 

the Holders of the then outstanding Registrable Securities.  Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.6 of the Purchase Agreement.

 

(i) No Inconsistent Agreements.  Neither the Company nor any of its Subsidiary has entered, as of the date hereof, nor shall the Company or any of its Subsidiary, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.  Neither the Company nor any of its Subsidiary has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full. 

 

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

 

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

 

(l) Cumulative Remedies.  The remedies provided herein are cumulative and not exclusive of any other remedies provided by law. 

 

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

 

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

 

(o) Independent Nature of Holders’ Obligations and Rights.  The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. 

 

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement effective as of the day, month and year first above written. 

 

 

COMPANY

REVOLUTIONARY CONCEPTS INC. (REVO)

 

REVOPage 11 

 

 

 

By: 

PRINT NAME:  Ron Carter

Its: President & CEO

 

 

PURCHASER

By: 

PRINT NAME:  

PURCHASER

By: 

PRINT NAME:  

 

 

PURCHASER

By: 

PRINT NAME:  

 

PURCHASER

By: 

PRINT NAME:  

 

 

PURCHASER

By: 

PRINT NAME:  

 

 

 

REVOPage 12

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