Document:

once_101.htm

EXHIBIT 10.1

 

ISLET SCIENCES, INC.

SUBSCRIPTION AGREEMENT

 

As of ____________, 2012                  

Mr. John Steel

Chief Executive Officer

Islet Sciences, Inc.

1370 Avenue of the Americas, Suite 902

New York, New York 10019

 

 

	
1.  

	
Subscription; Escrow Arrangement.

	
  

	
(a)

	
The undersigned subscriber (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase the number of shares (the “Shares”) of the Company’s common stock, par value $.001 per share (“Common Stock”), set forth on the signature page hereto from Islet Sciences, Inc., a Nevada corporation (the “Company”) for the purchase price of $0.45 per share in connection with the Company’s offering of up to $2,170,000 in Common Stock together with the right to receive warrants for no additional consideration (the “Offering”), in the form of Exhibit B hereto, granting subscriber the right to purchase a number of shares of common stock, par value $.001 per share, of the Company (the “Common Stock”) equal to fifty percent (50%) of the number of shares of Common Stock subscribed for hereunder (such warrants, the “Warrants;” together with the Shares, the “Securities”).  The Warrants will have an initial exercise price equal to $1.00 per share and shall be exercisable for a five (5) year period.  In addition, the Shares and shares issuable upon exercise of the Warrants (the “Warrant Shares”) shall have the registration rights as provided in Section 4 hereof.

 

This Subscription Agreement (the “Subscription Agreement”) together with the Exhibits constitutes the “Offering Documents.”

 

This subscription is based solely upon the information provided in the Offering Documents and upon the Subscriber’s own investigation as to the merits and risks of this investment.  The Subscriber shall deliver herewith duly executed copies of the signature pages to the following documents: (i) the Subscription Agreement, and (ii) the Accredited Investor Questionnaire & Form W-9.

The Offering may be consummated at more than one closing to occur on a date as may be determined by the Company’s Board of Directors. Each such closing is referred to as a “Closing” and the date of each such Closing is referred to as the “Closing Date.”  A final Closing shall be held by the Company on or before March 31, 2012 (the “Final Closing Date”).  At each Closing with respect to the Shares subscribed for hereby and accepted by the Company, the Escrow Agent shall release and turn over the subscription payments for the Shares to the Company and the Company shall promptly thereafter deliver to the Subscriber, the stock certificate for the Shares.  If the Company does not accept this subscription, in whole or in part, the Escrow Agent will promptly refund to the Subscriber, without deduction therefrom, any subscription payment received from the Subscriber for the Shares, the subscription for which was not accepted by the Company.

 

  

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(b)

	
Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase the number of Shares from the Company set forth on the signature page hereof, and when this Agreement is accepted and executed by the Company, the Company agrees to issue such Shares to the Subscriber.  The subscription price is payable by wire transfer to “Signature Bank, as Escrow Agent for Islet Sciences, Inc.” pursuant to the following wire instructions.

 

WIRING INSTRUCTIONS

 

	Bank’s Name and Address:  	Signature Bank
	 	261 Madison Avenue
	 	New York, NY 10016
	 	 
	Account #:	1501724943
	 	 
	ABA Routing #:	026013576

 

	
2.  

	
Subscriber Representations, Warranties and Agreements.  The Subscriber hereby acknowledges, represents and warrants as follows (with the understanding that the Company will rely on such representations and warranties in determining, among other matters, the suitability of this investment for the Subscriber in order to comply with federal and state securities laws):

	
  

	
(a)

	
In connection with this subscription, the Subscriber has read this Subscription Agreement and the other Offering Documents.  The Subscriber acknowledges that this Subscription Agreement is not intended to set forth all of the information which might be deemed pertinent by an investor who is considering an investment in the Securities.  It being the responsibility of Subscriber (i) to determine what additional information he desires to obtain in evaluating this investment and (ii) to obtain such information from the Company.

	
  

	
(b)

	
THIS OFFERING IS LIMITED TO PERSONS WHO ARE “ACCREDITED INVESTORS,” AS THAT TERM IS DEFINED IN REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND WHO HAVE THE FINANCIAL MEANS AND THE BUSINESS, FINANCIAL AND INVESTMENT EXPERIENCE AND ACUMEN TO CONDUCT AN INVESTIGATION AS TO, AND TO EVALUATE, THE MERITS AND RISKS OF THIS INVESTMENT. THE SUBSCRIBER HEREBY REPRESENTS THAT HE HAS READ, IS FAMILIAR WITH AND UNDERSTANDS RULE 501 OF REGULATION D UNDER THE ACT.  THE SUBSCRIBER IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) OF REGULATION D.

 

  

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(c)

	
The Subscriber has had full access to all the information which the Subscriber (or the Subscriber’s advisor) considers necessary or appropriate to make an informed decision with respect to the Subscriber’s investment in the Securities.  The Subscriber acknowledges that the Company has made available to the Subscriber and the Subscriber’s advisors the opportunity to examine and copy any contract, matter or information which the Subscriber considers relevant or appropriate in connection with this investment and to ask questions and receive answers relating to any such matters including, without limitation, the financial condition, management, employees, business, obligations, corporate books and records, budgets, business plans of and other matters relevant to the Company.  To the extent the Subscriber has not sought information regarding any particular matter, the Subscriber represents that he or she had and has no interest in doing so and that such matters are not material to the Subscriber in connection with this investment.  The Subscriber has accepted the responsibility for conducting the Subscriber’s own investigation and obtaining for itself such information as to the foregoing and all other subjects as the Subscriber deems relevant or appropriate in connection with this investment.  The Subscriber is not relying on any representation other than that contained herein.  The Subscriber acknowledges that no representation regarding projected financial performance or a projected rate of return has been made to it by any party.

	
  

	
(d)

	
The Subscriber understands that the offering of the Securities has not been registered under the Securities Act, in reliance on an exemption for private offerings provided pursuant to Section 4(2) of the Securities Act and that, as a result, the Shares, as well as the securities issuable upon conversion of the Shares as set forth in the Certificate of Designations and the  securities issuable in connection with such securities (collectively, the “Conversion Securities”), will be “restricted securities” as that term is defined in Rule 144 under the Act and, accordingly, under Rule 144 as currently in effect, that the Shares or the Conversion Securities must be held until the latest of (i) at least one (1) year after the investment has been made (or indefinitely if the Subscriber is deemed an “affiliate” within the meaning of such rule), or (ii) January 6, 2013, unless the Shares or Conversion Securities are subsequently registered under the Securities Act and qualified under any other applicable securities law or exemptions from such registration and qualification are available.  The Subscriber understands that the Company is under no obligation to register the Securities under the Securities Act or to register or qualify the Securities under any other applicable securities law, or to comply with any other exemption under the Securities Act or any other securities law, and that the Subscriber has no right to require such registration.  The Subscriber further understands that the Offering of the Securities has not been qualified or registered under any foreign or state securities laws in reliance upon the representations made and information furnished by the Subscriber herein and any other documents delivered by the Subscriber in connection with this subscription; that the Offering has not been reviewed by the Commission or by any foreign or state securities authorities; that the Subscriber’s rights to transfer the Securities will be restricted, which includes restrictions against transfers unless the transfer is not in violation of the Act and applicable state securities laws (including investor suitability standards); and that the Company may in its sole discretion require the Subscriber to provide at Subscriber’s own expense an opinion of its counsel to the effect that any proposed transfer is not in violation of the Act or any state securities laws.

 

  

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(e)

	
The Subscriber is empowered and duly authorized to enter into this Subscription Agreement which constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms; and the person signing this Subscription Agreement on behalf of the Subscriber is empowered and duly authorized to do so.

	
  

	
(f)

	
The Subscriber has liquid assets sufficient to assure that the purchase price of the Securities will cause no undue financial difficulties and that, after purchasing the Securities the Subscriber will be able to provide for any foreseeable current needs and possible personal contingencies; the Subscriber is able to bear the risk of illiquidity and the risk of a complete loss of this investment.

	
  

	
(g)

	
The information in any documents delivered by the Subscriber in connection with this subscription, including, but not limited to the Investor Questionnaire, is true, correct and complete in all respects as of the date hereof.  The Subscriber agrees promptly to notify the Company in writing of any change in such information after the date hereof.

	
  

	
(h)

	
The offering and sale of the Securities to the Subscriber were not made through any advertisement in printed media of general and regular paid circulation, radio or television or any other form of advertisement, or as part of a general solicitation.

	
  

	
(i)

	
The Subscriber recognizes that an investment in the Securities involves significant risks, including the Risk Factors annexed hereto as Exhibit E.  The Subscriber has read and understands such risks and that such risks, and others, can result in the loss of the Subscriber’s entire investment in the Securities.

	
  

	
(j)

	
The Subscriber is acquiring the Securities, as principal, for the Subscriber’s own account for investment purposes only, and not with a present intention toward or for the resale, distribution or fractionalization thereof, and no other person has a beneficial interest in the Securities.  The Subscriber has no present intention of selling or otherwise distributing or disposing of the Securities, and understands that an investment in the Securities must be considered a long-term illiquid investment.

 

  

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3.  

	
Representations, Warranties and Covenants of the Company.  As a material inducement of the Subscribers to enter into this Subscription Agreement and subscribe for the Securities, the Company represents and warrants to the Subscriber, as of the date hereof, as follows:

	
  

	
(a)

	
Organization and Standing.  The Company is a duly organized corporation, validly existing and in good standing under the laws of the State of Nevada, has full power to carry on its business as and where such business is now being conducted and to own, lease and operate the properties and assets now owned or operated by it and is duly qualified to do business and is in good standing in each jurisdiction where the conduct of its business or the ownership of its properties requires such qualification except where the failure to be so qualified would not have a Material Adverse Effect on the Company.  “Material Adverse Effect” means any circumstance, change in, or effect on the Company that, individually or in the aggregate with any other similar circumstances, changes in, or effects on, the Company taken as a whole: (i) is, or is reasonably expected to be, materially adverse to the business, operations, assets, liabilities, employee relationships, customer or supplier relationships, prospects, results of operations or the condition (financial or otherwise) of the Company taken as a whole, or (ii) is reasonably expected to adversely affect the ability of the Company to operate or conduct the Company’s business in the manner in which it is currently operated or conducted or proposed to be operated or conducted by the Company; provided, however, that none of the following shall be deemed in and of themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (i) any change, event, state of facts or development generally affecting the general political, economic or business conditions of the United States; (ii) any change, event, state of facts or development generally affecting the medical device industry; (iii) any change, event, state of facts or development arising from or relating to compliance with the terms of this Subscription Agreement; (iv) acts of war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, sabotage or terrorism or other international or national calamity or any material worsening of such conditions; (v) changes in laws or Generally Accepted Accounting Principles after date hereof or interpretation thereof; or (vi) any matter set forth in the Offering Documents or the Schedules or Exhibits thereto.

 

	
  

	
(b)

	

Subsidiaries.  Except for Islet Sciences, Inc., a Delaware corporation (“ISI”), as of the date herein, the Company does not own or control any subsidiaries. For purposes of this Agreement, “Subsidiary” means, with respect to any entity at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity of which more than 30% of (i) the outstanding capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such entity.

 

	
  

	
(c)

	
Authority.  The execution, delivery and performance of this Subscription Agreement and the Offering Documents by the Company and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of the Company. Each of the documents contained in the Offering Documents has been (or upon delivery will be) duly executed by the Company is or, when delivered in accordance with the terms hereof, will constitute, assuming due authorization, execution and delivery by each of the parties thereto, the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

  

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(d)

	
No Conflict.  The execution, delivery and performance of this Subscription Agreement and the consummation of the transactions contemplated hereby do not (i) violate or conflict with the Company’s Certificate of Incorporation, By-laws or other organizational documents, (ii) conflict with or result (with the lapse of time or giving of notice or both) in a material breach or default under any material agreement or instrument to which the Company is a party or by which the Company is otherwise bound, or (iii) violate any order, judgment, law, statute, rule or regulation applicable to the Company, except where such violation, conflict or breach would not have a Material Adverse Effect on the Company.  This Subscription Agreement when executed by the Company will be a legal, valid and binding obligation of the Company enforceable in accordance with its terms (except as may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws and equitable principles relating to or limiting creditors’ rights generally).

 

	
  

	
(e) 

	
Authorization.  Issuance of the Securities to Subscriber has been duly authorized by all necessary corporate actions of the Company.

 

	
  

	
(f)

	
Litigation and Other Proceedings.  There are no actions, suits, proceedings or investigations pending or, to the knowledge of the Company, threatened against the Company at law or in equity before or by any court or Federal, state, municipal or their governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign which could materially adversely affect the Company.  The Company is not subject to any continuing order, writ, injunction or decree of any court or agency against it which would have a material adverse effect on the Company.

 

	
  

	
(g)

	
Use of Proceeds.  The proceeds of this Offering and sale of the Securities, net of payment of placement expenses, will be used by the Company for working capital and general corporate purposes.

 

	
  

	
(h)

	
Consents/Approvals.  No consents, filings (other than Federal and state securities filings relating to the issuance of the Securities pursuant to applicable exemptions from registration, which the Company hereby undertakes to make in a timely fashion), authorizations or other actions of any governmental authority are required to be obtained or made by the Company for the Company’s execution, delivery and performance of this Subscription Agreement which have not already been obtained or made or will be made in a timely manner following the initial Closing.

 

	
  

	
(i)

	
No Commissions.  The Company has not incurred any obligation for any finder’s, broker’s or agent’s fees or commissions in connection with the transaction contemplated hereby other than those fees payable to the Placement Agent pursuant to that certain Placement Agent Agreement, dated April 24, 2011.

 

  

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(j)

	
Capitalization. A capitalization table illustrating the authorized and outstanding capital stock of the Company as of the date hereof is attached as Schedule 3(j).  All of such outstanding shares have been, or upon issuance will be, validly issued, fully paid and nonassessable.  As of the date hereof, except as disclosed in Schedule 3(j), and except for Securities issued in the Offering (i) no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding debt securities, (iii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, (iv) except for its obligations under Section 4 of this Agreement, there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their securities under the Act, (v) there are no outstanding securities of the Company or any of its subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to redeem a security of the Company or any of its subsidiaries, and (vi) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance or exercise of the Securities as described in this Subscription Agreement.  The Company has furnished to the Subscriber true and correct copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible or exchangeable into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.  Schedule 3(j) also lists all outstanding debt of the Company with sufficient detail acceptable to Subscriber.

	
  

	
(k)

	
Intellectual Property Rights. The Company owns or possesses adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct its businesses as now conducted.  The Company does not have any knowledge of any infringement by the Company of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical trade secrets or technical information by others and there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company regarding trademarks, trade name rights, patents, patent rights, inventions, copyrights, licenses, service names, service marks, service mark registrations, trade secrets or other infringement.

	
  

	
(l)

	
Disclosure. No representation or warranty by the Company in this Subscription Agreement, the Offering Documents, nor in any certificate, Schedule or Exhibit delivered or to be delivered pursuant to this Subscription Agreement or the Offering Documents: contains or will contain any untrue statement of material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.  To the knowledge of the Company at the time of the execution of this Subscription Agreement and at each Closing, there is no information concerning the Company which has not heretofore been disclosed to the Subscribers that would have a Material Adverse Effect.

 

  

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(m)

	
Title.  The Company has good and marketable title to all personal property owned by it which is material to the business of the Company, in each case free and clear of all liens, encumbrances and defects.

	
  

	
(n)

	
Tax Status.  The Company has made or filed all United States federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and all such returns, reports and declarations are true, correct and accurate in all material respects.  The Company has paid all taxes and other governmental assessments and charges, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, for which adequate reserves have been established, in accordance with generally accepted accounting principles (“GAAP”).

	
  

	
(o)

	
Compliance with Laws. The business of the Company has been and is presently being conducted so as to comply with all applicable material federal, state and local governmental laws, rules, regulations and ordinances.

	
  

	
(p)

	
Restrictions on Business Activities.  There is no judgment, order, decree, writ or injunction binding upon the Company or any subsidiary or, to the knowledge of the Company or any subsidiary, threatened that has or could prohibit or impair the conduct of their respective businesses as currently conducted or any business practice of the Company or any subsidiary, including the acquisition of property, the provision of services, the hiring of employees or the solicitation of clients, in each case either individually or in the aggregate.

	
  

	
(r)

	
Issuances. The Company’s common stock issuable upon conversion of the Shares and exercise of Warrants will be validly issued, fully paid and nonassessable.

	
  

	
(s)

	
USA PATRIOT Act and Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with the money laundering requirements of all applicable governmental authorities and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental authority (collectively, the “Money Laundering Laws”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into Law October 26, 2001) (the “USA PATRIOT Act”) and no action, suit or proceeding by or before any court or governmental authority or any arbitrator involving any of the Company or any of its Subsidiaries with respect to the Money Laundering Laws or USA PATRIOT Act is pending or, to the best knowledge of the Company, threatened.

 

  

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Section 4.   Registration Rights.

	
  

	
(a)

	
Registration Rights.

 

	
(i)  

	
If at any time after the Closing , when there is not an effective Registration Statement providing for the resale of the Shares and the Warrant Shares (the “Registrable Securities”), and any of the Registrable Securities may not be sold pursuant to Rule 144 under the Securities Act, 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 Act of any of its equity securities (other than for an underwritten offering or on Form S-4 or Form S-8, each as promulgated under the Securities Act, or their then equivalents), the Company shall send to each holder of Registrable Securities written notice of such determination.  If within thirty (30) days after receipt of such notice, or within such shorter period of time as may be specified by the Company in such written notice as may be necessary for the Company to comply with its obligations with respect to the timing of the filing of such Registration Statement, any such holder shall so request in writing, (which request shall specify the Registrable Securities intended to be registered), the Company shall use commercially reasonable efforts to cause the registration under the Act of all Registrable Securities which the Company has been so requested to register by the holder; and

 

	
(ii)  

	
the Company will pay all expenses associated with the registration, including, without limitation, filing and printing fees, accounting fees and expenses, costs, if any, associated with clearing the Registrable Securities for sale under applicable state securities laws.

	
  

	
(b)

	
Subscriber Information. Each Subscriber shall (A) furnish to the Company such information regarding itself, the Registrable Securities, other securities of the Company held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably requested by the Company to effect and maintain the effectiveness of the Registration Statement, (B) execute such documents in connection with the Registration Statement as the Company may reasonably request and (C) immediately discontinue disposition of Registrable Securities pursuant to any registration statement upon notice from the Company of (x) the issuance of any stop order or other suspension of effectiveness of the Registration Statement by the Commission, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction by the applicable regulatory authorities or (y) the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omission 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 or (z) the failure of the prospectus included in the Registration Statement, as then in effect, to comply with the requirements of the Securities Act until the Subscriber’s receipt of a supplemented or amended prospectus or receipt of notice that no supplement or amendment is required.

 

  

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(c)

	
Indemnification.

 

	
(i)  

	
In the event any Registrable Securities are included in the Registration Statement under this Section 4, to the extent permitted by law, the Company will indemnify and hold harmless each of the Subscribers (including their officers, directors, members and partners), any underwriter (as defined in the Securities Act) for the Subscribers and each person, if any, who controls such Subscriber or underwriter within the meaning of the Securities Act or the Exchange Act (each a “Subscriber Indemnified Person”), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law (“Claims”), insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; and the Company will pay to the Subscriber Indemnified Person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any Claim; provided, however, that the indemnity agreement contained in this Section 4 shall not apply to amounts paid in settlement of any such Claim if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed), nor shall the Company be liable to any Subscriber Indemnified Person for any such Claim to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by the Subscriber Indemnified Person. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Subscriber Indemnified Person and shall survive the transfer of the Registrable Securities by the Subscribers.

 

	
(ii)   

	
In the event any Registrable Securities are included in the Registration Statement under this Section 4 to the extent permitted by law, each Subscriber shall, severally and not jointly, indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 4, the Company, each of its directors, each of its officers who signs the registration statement and each Person, if any, who controls the Company within the meaning of the Securities Act or the Securities Exchange Act  of 1934, as amended (the “Exchange Act”), (each, a “Company Indemnified Person”), against any Claim, insofar as such Claims arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in strict conformity with written information furnished to the Company by such Subscriber expressly for use in the Registration Statement; and, subject to Section 4, such Subscriber will reimburse any legal or other expenses reasonably incurred by any Company Indemnified Person in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 4 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the indemnifying Subscriber, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Company Indemnified Person and shall survive the transfer of the Registrable Securities by the Subscribers.

 

  

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(iii)  

	
Promptly after receipt by a Subscriber Indemnified Person or Company Indemnified Person (each, an “Indemnified Person”) under this Section 4 of notice of a Claim, such Indemnified Person shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 4, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall, by giving written notice to the Indemnified Party within fifteen days after the Indemnified Party has given notice of the Claim, have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person; provided, however, that an Indemnified Person shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnified Person to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Subscriber Indemnified Person or Company Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding. In the case of any Company Indemnified Person, legal counsel referred to in the proviso of the immediately preceding sentence shall be selected by the holders holding at least a majority in interest of the Registrable Securities included in the registration statement to which the Claim relates. The Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Person that relates to such action or Claim. The indemnifying party shall keep the Indemnified Person reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Person of a full and general release from all liability in respect to such Claim or litigation, and such settlement (a) shall provide for the payment by the Indemnifying Party of money as sole relief for the claimant, (b) shall not include any finding or admission as to fault on the part of the Indemnified Person and (c) shall have no effect on any other claims that may be made against the Indemnified Party.

 

Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person under this Section 4, except to the extent that the indemnifying party is materially prejudiced in its ability to defend such action.

 

	
5.

	
Legends.  The Subscriber understands and agrees that the Company will cause any necessary legends to be placed upon any instruments(s) evidencing ownership of the Securities, together with any other legend that may be required by federal or state securities laws or deemed necessary or desirable by the Company.

	
6.

	
General Provisions.

	
  

	
(a)

	
Confidentiality.  The Subscriber covenants and agrees that it will keep confidential and will not disclose or divulge any confidential or proprietary information that such Subscriber may obtain from the Company pursuant to financial statements, reports, and other materials submitted by the Company to such Subscriber in connection with this offering or as a result of discussions with or inquiry made to the Company, unless such information is known, or until such information becomes known, to the public through no action by the Subscriber; provided, however, that a Subscriber may disclose such information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary in connection with his or her investment in the Company so long as any such professional to whom such information is disclosed is made aware of the Subscriber’s obligations hereunder and such professional agrees to be likewise bound as though such professional were a party hereto, (ii) if such information becomes generally available to the public through no fault of the Subscriber, or (iii) if such disclosure is required by applicable law or judicial order.

	
  

	
(b)

	
Successors.  The covenants, representations and warranties contained in this Subscription Agreement shall be binding on the Subscriber’s and the Company’s heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the Company.  The rights and obligations of this Subscription Agreement may not be assigned by any party without the prior written consent of the other party.

	
  

	
(c)

	
Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same instrument.

	
  

	
(d)

	
Execution by Facsimile.  Execution and delivery of this Agreement by facsimile transmission (including the delivery of documents in Adobe PDF format) shall constitute execution and delivery of this Agreement for all purposes, with the same force and effect as execution and delivery of an original manually signed copy hereof.

 

  

11

  

 

	
  

	
(e)

	
Governing Law and Jurisdiction.  This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts to be wholly performed within such state and without regard to conflicts of laws provisions.  Any legal action or proceeding arising out of or relating to this Subscription Agreement and/or the Offering Documents may be instituted in the courts of the State of New York sitting in New York County or in the United States of America for the Southern District of New York, and the parties hereto irrevocably submit to the jurisdiction of each such court in any action or proceeding.  Subscriber hereby irrevocably waives and agrees not to assert, by way of motion, as a defense, or otherwise, in every suit, action or other proceeding arising out of or based on this Subscription Agreement and/or the Offering Documents and brought in any such court, any claim that Subscriber is not subject personally to the jurisdiction of the above named courts, that Subscriber’s property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper.

	
  

	
(f)

	
(i)

	
Indemnification Generally.  The Company, on the one hand, and the Subscriber, on the other hand (for the purpose of this Section 6(f) only, each an “Indemnifying Party”), shall indemnify the other from and against any and all losses, damages, liabilities, claims, charges, actions, proceedings, demands, judgments, settlement costs and expenses of any nature whatsoever (including, without limitation, reasonable attorneys’ fees and expenses) resulting from any breach of a representation and warranty, covenant or agreement by the Indemnifying Party and all claims, charges, actions or proceedings incident to or arising out of the foregoing.  Notwithstanding any provision herein to the contrary, the indemnification obligation of any Subscriber shall be limited to the investment amount in the Shares purchased by said Subscriber, except to the extent that such indemnification obligation relates to a breach of Section 2(b).

	
  

	
(ii)

	
Indemnification Procedures.  Each person entitled to indemnification under this Section 6 (for the purpose of this Section 6(f) only, an “Indemnified Party”) shall give notice as promptly as reasonably practicable to each party required to provide indemnification under this Section 6 of any action commenced against or by it in respect of which indemnity may be sought hereunder, but failure to so notify an Indemnifying Party shall not release such Indemnifying Party from any liability that it may have, otherwise than on account of this indemnity agreement so long as such failure shall not have materially prejudiced the position of the Indemnifying Party.  Upon such notification, the Indemnifying Party shall assume the defense of such action if it is a claim brought by a third party, and, if and after such assumption, the Indemnifying Party shall not be entitled to reimbursement of any expenses incurred by it in connection with such action except as described below.  In any such action, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the contrary or (ii) the named parties in any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing or conflicting interests between them.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent (which shall not be unreasonably withheld or delayed by such Indemnifying Party), but if settled with such consent or if there be final judgment for the plaintiff, the Indemnifying Party shall indemnify the Indemnified Party from and against any loss, damage or liability by reason of such settlement or judgment.

 

  

12

  

 

	
  

	
g.

	
Notices.  All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be delivered by certified or registered mail (first class postage pre-paid), guaranteed overnight delivery, or facsimile transmission if such transmission is confirmed by delivery by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the following addresses and facsimile numbers (or to such other addresses or facsimile numbers which such party shall subsequently designate in writing to the other party):

 

	 	(i)	if to the Issuer:
	 	 	 
	 	 	Islet Sciences, Inc.
	 	 	1370 Avenue of the Americas, Suite 902
	 	 	New York, New York 10019
	 	 	Tel.: 858-699-8313
	 	 	Facsimile: 212-245-4165
	 	 	 
	 	(ii)	if to the Subscriber to the address set forth next to its name on the signature page hereto.

 

	
  

	
h.

	
Entire Agreement.  This Subscription Agreement (including the Exhibits attached hereto) and other Offering Documents delivered at  a Closing pursuant hereto, contain the entire understanding of the parties in respect of its subject matter and supersede all prior agreements and understandings between or among the parties with respect to such subject matter.  The Exhibits constitute a part hereof as though set forth in full above.

	
  

	
i.

	
Amendment; Waiver.  This Subscription Agreement may not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by the Company and the holders of not less than a majority of theShares.  No failure to exercise, and no delay in exercising, any right, power or privilege under this Subscription Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege.  No waiver of any breach of any provision shall be deemed to be a waiver of any proceeding or succeeding breach of the same or any other provision, nor shall any waiver be implied from any course of dealing between the parties.  No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance of any other obligations or any other acts.  The rights and remedies of the parties under this Subscription Agreement are in addition to all other rights and remedies, at law or equity, that they may have against each other.

	
  

	
j.

	
No Impairment.  At all times after the date hereof, the Company will not take or permit any action, or cause or permit any subsidiary to take or permit any action that materially impairs or adversely affects the rights of the Subscribers under the this Agreement or any of the other Offering Documents.

[SIGNATURE PAGES FOLLOW]

 

  

13

  

 

IN WITNESS WHEREOF, the Company has executed this Subscription Agreement as of the date first written above.

 

 

	 	ISLET SCIENCES, INC.	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ 	 
	 	 	Name:  John Steel	 
	 	 	Title:   Chief Executive Officer	 

  

14

  

 

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL

DOLLAR AMOUNT INVESTED $_____________________________

 

	NAME IN WHICH SHARES AND WARRANT SHOULD BE ISSUED:	 

 

 

	AMOUNT INVESTED TO BE SENT VIA:	 o	Check (enclosed)	 o	Wire

 

Address Information

For individual subscribers this address should be the Subscriber’s primary legal residence.  For entities other than individual subscribers, please provide address information for the entities primary place of business.  Information regarding a joint subscriber should be included in the column at right.

	
 

_________________________________

Legal Address

	
 

_________________________________

Legal Address

	
 

_________________________________

City, State, and Zip Code

	
 

_________________________________

City, State, and Zip Code

Alternate Address Information

Subscribers who wish to receive correspondence at an address other than the address listed above should complete the Alternate Address section on the following page.

	
 

_________________________________

Tax ID # or Social Security #

 

	
 

_________________________________

Tax ID # or Social Security #

 

	
AGREED AND SUBSCRIBED

 

 

This __ day of ______________________, 2012

 

By:_________________________________

Name:

Title (if any):

	
AGREED AND SUBSCRIBED

SIGNATURE OF JOINT SUBSCRIBER (if any)

 

This __ day of ______________________, 2012

 

By:_________________________________

Name:

Title (if any):

 

	
 

__________________________________

Subscriber Name (Typed or Printed)

	
 

__________________________________

Additional Subscriber Name (Typed or Printed)

 

  

15

  

 

	
ACCEPTED:

 

ISLET SCIENCES, INC.

 

 

By:_________________________________

Name: John Steel

Title: Chief Executive Officer

Date of Acceptance:  ____________________

 

	  

 

Alternate Address Information (if applicable)

	
 

_________________________________

Alternate Address for Correspondence

	
 

_________________________________

Alternate Address for Correspondence

	
 

_________________________________

City, State and Zip Code

	
 

_________________________________

City, State and Zip Code

	
 

_________________________________

Telephone

	
 

_________________________________

Telephone

	
 

_________________________________

Facsimile

	
 

_________________________________

Facsimile

	
 

_________________________________

Tax ID # or Social Security #

 

	
 

_________________________________

Tax ID # or Social Security #

 

 

  

16

  

 

CERTIFICATE OF SIGNATORY

(To be completed if the Shares are

being subscribed for by an entity)

I,____________________________ , am the____________________________of _____________________________________________ (the “Entity”).

 

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Shares, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

 

IN WITNESS WHEREOF, I have set my hand this ____ day of ______________, 2012.

 

 

	 	 	 	 
	 	 	(Signature)	 

 

 

 17gltc_ex102.htm

EXHIBIT 10.2

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

 

EXCLUSIVE DISTRIBUTOR AGREEMENT

THIS AGREEMENT is made between TFISA, LLC., a limited liability company organized under the laws of the state of Delaware with its principal place of business at 950 Peninsula Corporate Center, Boca Raton, FL 33487, hereinafter referred to as “Distributor”, and FireIce Gel, Inc., a corporation organized under the laws of the state of Florida with its principal place of business at 1460 Park Lane South, Suite 1, Jupiter, FL 33458, hereinafter referred to as “Manufacturer” in accordance with the following terms and conditions which constitute the entire Agreement between the parties.

WHEREAS, Distributor distributes certain products and is willing to promote, distribute and sell products invented and/or manufactured by Manufacturer (herein "Manufacturer’s Products") to Customers in the Territory all  as defined herein and as set forth hereinafter; and

WHEREAS, Manufacturer is willing and desires for Distributor to promote and sell its Products, all as defined herein and as set forth hereinafter,

NOW THEREFORE, for and in consideration of the mutual covenants set forth herein, the parties hereto do agree with each other as follows, TO WIT:

I.              DEFINITIONS

	
a.

	
Territory.  This Agreement shall apply to the following territories/countries (herein the “Territory”).

 WORLDWIDE

	
b.

	
Products.  This Agreement shall operate with respect to the products (herein the “Products”) invented, manufactured or to be manufactured by Manufacturer as listed on Appendix A.

	
c.

	
“Term” of this Agreement shall mean the period from the date of execution of this Agreement to the date of termination hereof, whether such termination occurs at the end of the term herein specified or occurs sooner pursuant to the provisions hereof.

	
d.

	
“Customers” shall mean those individuals, companies, or other entities, including, but not limited to Governmental entities, their departments, agencies, subdivisions and/or territories, who enter into an agreement(s) with Distributor to buy any of those Products which are defined and set forth in Appendix A.

 

  

1

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

 

	
e.

	
“Agreement” shall mean this Agreement including all Appendices, Exhibits and Modifications thereto entered pursuant to the provisions of this Agreement.

	
f.

	
“Military Markets” shall mean (i) the United States Government and all agencies and activities of the same and all National Guard activities of the United States Government and/or any state thereof, (ii) any state municipality and territory government within the United States and all military activities, and (iii) all departments and/or ministries, agencies, subdivisions, municipalities, towns and territories of all other countries worldwide.

 

	
g.

	
"Military Markets" shall be referred to herein as "Exclusive Market".

 

	
h.

	
"Ancillary Markets" shall mean all Fire, Police, Forestry, Emergency Response services departments and/or agencies, whether private, public or volunteer; fire protection services, oil, gas and petroleum services, shipping and transportation services.

	
i.

	
"Exclusive Countries" shall mean the countries and territories designated as exclusive in accordance with Appendix A.

II.             APPOINTMENT

	
a.

	
Manufacturer hereby appoints Distributor as its distributor to buy Manufacturer’s Products and resell them in the Territory under this appointment for the term of this Agreement.

	
b.

	
The distribution rights of Distributor in the Territory shall be exclusive for all Customers purchasing the Products for use directly or indirectly in the Exclusive Market.

	
c.

	
Manufacturer will forward to Distributor all requests for quotation from within the Territory and from exporters, embassies or governmental organizations, and/or others if the Products ordered are destined for sale in the Territory.

	
d.

	
Manufacturer shall not supply Products or items that compete with the Products directly or indirectly to customer(s) or other distributors or sales agents if such customer(s) intends to resell the Products in the Territory.

 

  

2

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

III.           QUOTATION AND SALES

	
a.

	
Manufacturer agrees to furnish quotations for sale of Products to Distributor at the request of Distributor, except where the sale of such Product(s) to Distributor is specifically precluded by U.S. Government regulations.

	
b.

	
Such quotations shall normally include:

(1)           Quantities, unit prices and delivery schedule;

(2)           Period of validity of prices and delivery.

(3)           Packing, CIF, FAS, etc. charges, if any;

(4)           Optional Manufacturer technical support; and

	
  

	
(5)

	
Any other conditions which may be applicable.

	
  

	
The "Initial Price" list is attached hereto as Appendix B.

	
c.

	
Distributor shall purchase all Products from Manufacturer for Distributor's own account.  The deliveries of the Products from Manufacturer to Distributor shall be performed on the basis of written orders from Distributor and written confirmations of sale from Manufacturer in each case.  Unless such documents have been properly executed and exchanged, neither party hereto shall be bound and/or liable in connection with any sale/supply transaction.

	
d.

	
All sales will be governed by this Agreement.  All printed terms on any order or order confirmation form unless otherwise agreed by the parties pursuant to the provisions of Article XIX infra, shall be without any force or effect.  The parties may agree on special sales or delivery terms through written correspondence executed by an authorized representative of each party.

	
e.

	
Manufacturer shall sell the Products to Distributor at CIF Huntsville, Tennessee.  Distributor shall thereafter bear expenses incurred in connection with further shipment of goods ordered by Distributor. At Distributor's request,  particular orders shall be shipped from Manufacturer to other locations, including locations of Customers, and the specific orders shall address the change in shipping terms and costs therefor.

	
f.

	
Unless the terms of an order state specific contrary delivery terms, Manufacturer may make partial deliveries and invoice each such partial delivery separately.  Manufacturer is not required to deliver any Product under any order if Distributor is in default in the payment of any invoice under any order.

	
g.

	
The Initial Prices shall only be changed by giving distributor at least [****] prior notice.  Each price increase shall not exceed [****].

	
h.

	
Any special terms and conditions of sales to Distributor for resale will be negotiated on a case-by-case basis.  Unless otherwise specifically agreed in writing executed by authorized representatives of both Manufacturer and Distributor, the terms of this Agreement shall apply to each request for quotation, order and/or sale placed by Distributor with Manufacturer during the term of this Agreement.

 

  

3

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

IV.           NEW PRODUCTS

 

If Manufacturer or any of its affiliates now or hereafter manufactures or distributes, or proposes to manufacture or distribute any product other than the Products, Manufacturer shall immediately notify Distributor of that fact and of all details concerning that product.  Distributor may request from Manufacturer distribution rights for that product in the Territory, or any portion thereof, and if so requested, Manufacturer shall grant such distribution rights to Distributor on terms and conditions no less favorable than those provided in this Agreement with respect to Products.

V.            RESALE BY DISTRIBUTOR

All purchases by Distributor are for Distributor’s own account and for resale or for Distributor’s own account.  Distributor reserves the right to determine the resale prices and payment terms and such other terms and conditions which are not in conflict with the terms and conditions governing the purchase of such Products by Distributor from Manufacturer

  

4

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

 

VI.           DUTIES OF DISTRIBUTOR

                Distributor hereby agrees:

	
(a)

	
to use its best efforts during the Term of this Agreement to promote and expand the sale of the Products within the Territory and for the Exclusive Market in accordance within the scope of this Agreement and to further promote and expand the sale of the Products within other markets as it is able and within the scope of this Agreement.

	
(b)

	
to pay all of its own expenses incurred in connection with the sale, promotion and  distribution of Products and to hold Manufacturer harmless therefrom;

	
(c)

	
to engage as necessary sales personnel and to insure that all its sales personnel shall have a working knowledge of the Products.  It is agreed that the sale of the Products may also be made by any Distributor affiliate, associate or subsidiary company or by agents or representatives appointed by Distributor;

	
(d)

	
to comply with all laws and regulations applicable to Distributor;

	
(e)

	
Compliance with Law - All operations and activities of Distributor shall be in strict accordance with the requirements of the laws, rules, and regulations of the United States of America and where applicable the individual States thereof and the countries of the Territory.

	
(f)

	
Distributor agrees that with regard to the Exclusive Markets it will not carry or represent any other product which would be competitive to the Products so long as the provisions of Article II.b above are in effect.

VII.          DUTIES OF MANUFACTURER

Manufacturer hereby agrees to assist Distributor's efforts within the scope of the Agreement with a view to maximizing the sale of Products by Distributor in the Territory, and agrees:

 

	
(a)

	
to furnish Distributor all available advertising literature, catalogues, folders, diskettes and mailings suitable for an adequate marketing of the Products in the Territory.

	
(b)

	
to make available to Distributor's staff information necessary to assist in satisfactory promotion, sales, installation and servicing of the Products.

 

  

5

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

	
(c)

	
to arrange, as necessary technical training of Distributor personnel and Distributor’s representatives in the Territory regarding the Products and Product maintenance.

	
(d)

	
to supply Distributor with Product samples and prototypes at mutually agreed pricing levels.

	
(e)

	
to fill all orders placed by Distributor according to the provisions of this Agreement no later than 30 days after receiving such order, and to supply to Distributor sufficient Products to enable Distributor to meet the full demand for Products in the territory.

 

	
(f)

	
to furnish Distributor with technical documentation for service for Products. Distributor agrees to use such information received from Manufacturer only for purposes of the performance of this Agreement and to keep such information strictly confidential unless such information otherwise lawfully becomes publicly known or Distributor is required by law to disclose the same.

 

	
(g)

	
to review all requests from Distributor that Manufacturer product custom products for Customer(s) and to determine and promptly communicate to Distributor the price, terms and conditions under which it would be willing to fabricate such custom Product(s).

	
(h)

	
to render its personnel available as needed to assist with product demonstrations.

	
(i)

	
to provide such product modification (if possible) as may be necessary to meet the specific requirements of military customers and/or end users.

	
(j)

	
to provide reasonable necessary resources to undertake product modification and/or new product development to meet customer requirements (if possible).

	
(k)

	
not to sell the same or similar Products to any third party under different names and/or packaging.

	
(l)

	
not to compete with Distributor in the Territory.

	
(m)

	
Manufacturer agrees to carry liability insurance for the Products which it will purchase from Manufacturer, such insurance to be in amounts of not less that $____________ per occurrence, and to add Distributor to the list of entities insured under such policy(s).

	
(n)

	
Compliance with Law - All operations and activities of Manufacturer shall be in strict accordance with the requirements of the laws, rules, and regulations of the United States of America and where applicable the individual States.

 

  

6

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

 

VIII.         PAYMENT FOR PURCHASES

The payment terms shall be net thirty (30) days from receipt of goods.  The parties may with regard to certain customers agree to special payment terms.  Any invoices not paid by the due date will accrue interest from the due date at an interest rate of six percent (6%) per annum.

IX.           PRODUCT CONFORMITY

In selling to Distributor, Manufacturer agrees to deliver Products conforming to Manufacturer’s Product specifications as set forth in Appendix B attached hereto.

X.           EXPORT LICENSING

Required Permits, Licenses and Approvals - Distributor shall be responsible to obtain and to secure the continuation or renewal of all required permits, licenses and approvals for the export of the Products from the United States into any other part of the Territory.  Manufacturer agrees to cooperate with Distributor and, upon Distributor’s request, to render reasonable assistance to aid Distributor in obtaining all required export licenses.

XI.           WARRANTIES

Manufacturer hereby agrees to authorize Distributor to assign, transfer and novate to any purchaser of Manufacturer’s Products from Distributor any Manufacturer warranties which apply to such Products.  The only warranties, express or implied, made by Manufacturer for Products sold hereunder shall be as set forth in Manufacturer’s normal warranty policy for the specific type of Product(s) purchased by Distributor from Manufacturer as set forth in Appendix C attached hereto.  Manufacturer shall be solely responsible and liable for the proper discharge of all obligations set forth in such warranties.  Distributor shall give reasonable assistance to Manufacturer with respect to the discharge of Manufacturer’s warranty obligations.  Unless otherwise agreed in writing by Manufacturer, Manufacturer disclaims all warranties except as stated in Article IX (Product Conformance) hereto, including but not limited to all warranties of merchantability and fitness for a particular purpose.

 

  

7

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

XII.          TECHNICAL SUPPORT

Unless otherwise agreed, Distributor shall be solely responsible for all technical support of Manufacturer’s Products sold by Distributor.  Upon Distributor’s request, Manufacturer shall assist with technical support within the Territory, counsel and advise Distributor’s customers and/or personnel in the operation, service, maintenance and repair of Manufacturer’s Products, at reasonable and mutually acceptable prices, terms, and conditions.  The cost of such optional Manufacturer technical support shall be stated in each quotation to Distributor, when requested by Distributor.  If Distributor makes no such request in its request(s) for quotation to Manufacturer, Manufacturer shall have no obligation to provide any such technical support unless otherwise, independently agreed between the parties.

XIII.         NO THIRD PARTY RELATIONSHIPS

Distributor agrees that in its performance under this Agreement, Distributor will not make payments for political purposes.  Further, Distributor acknowledges that except for Joseph Ingarra or Michael Cordani, no employee of Manufacturer or any of its divisions or subsidiaries has any authority to give any direction, written or oral, in connection with the making of any commitment by Distributor to any third party.

Distributor shall not, in connection with its performance under this Agreement, make any payments to third parties if such payments (i) would not constitute a deduction by Distributor as an ordinary and necessary business expense or capital expenditures for United State tax purposes under criteria of the United States Internal Revenue Service; or (ii) would be in violation of any applicable laws, including the laws of the United States and the Territories specified in paragraph 1.a. above, including but not limited to the Foreign Corrupt Practices Act.

No third party beneficiary - Nothing herein expressed or implied is intended or shall be construed to confer on or to give any person, firm, or corporation other than Manufacturer and Distributor, or either or them, any rights or remedies under or by reason of this Agreement unless specifically set forth herein.

 

  

8

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

XIV.        TERM AND TERMINATION

	
  

	
a.

	
This Agreement shall become effective upon execution by both parties, and shall continue for a forty-eight (48) month period from the date of this Agreement from and after said date and from year to year thereafter, unless terminated earlier by either party by notice in writing to the other at least one hundred eighty (180) days prior to the expiration of the initial term or any subsequent term thereof.  If Manufacturer terminates this contract by giving written notice to Distributor of its intention to do so, Manufacturer will honor all quotations made by it for the period set forth in said quotation(s).

	
  

	
b.

	
To the extent permitted by applicable law, in the event that either party shall (i) file any voluntary or involuntary petition under any section or sections of the bankruptcy laws of the United States or any State thereof; (ii) be subject to any voluntary or involuntary proceeding being commenced in any forum to declare either party insolvent or unable to pay its debts as they mature; (iii) be subject to appointment by either party of a trustee or receiver in bankruptcy of its assets; (iv) make an assignment for the benefit of creditors; or (v) be subject to the commencement of any collection action in and before any legal forum or governmental authority which would in any way encumber assets of  such party and or render such party unable to function effectively, the party not affected by such circumstances may elect to terminate this agreement without penalty.  However, with respect to the foregoing in the event any of said conditions are applicable to Distributor, Manufacturer agrees that it will consider Distributor’s continuing ability to perform and promote Manufacturer's products and at its sole option may, without waiver of any subsequent rights under this Agreement, elect to continue to permit Distributor to perform under this Agreement.

	
  

	
bc.

	
This Agreement may be terminated prior to expiration of its terms by Manufacturer upon thirty (30) days written notice to Distributor, if any payment obligation of Distributor is not fulfilled and has not been fulfilled for a period of thirty (30) days from when such payment was due.

 

	
  

	
cd.

	By mutual agreement of the parties.

 

	
  

	
de.

	
The termination of this Agreement shall not release either party from the obligation to pay any sum of money that may be owing from one party to the other or from the obligation to perform any other duty to discharge any other liability incurred prior thereto.

 

  

9

  

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

XV.          EFFECT OF TERMINATION

	
  

	
a.

	
In the event of termination of this Agreement or any renewals thereof by either party, for any reason, all pending confirmed orders shall be filled and completed pursuant to the terms of this Agreement.

	
  

	
b.

	
Upon expiration or termination of this Agreement for any of the reasons set forth herein, Distributor shall cease representing, in any way, that it is a distributor for Manufacturer's Products and Manufacturer may appoint a new distributor in the Territory for any or all of the activities performed by Distributor at the time of expiration or termination.

	
  

	
c.

	
Return of Supplies - within thirty (30) days after the date of termination of this Agreement, Distributor shall return all supplies, product samples and prototypes, catalogues, price lists, blue prints and other items described in Article VII a. hereof and Customer lists supplied to Distributor by Manufacturer for which Distributor has not paid Manufacturer.

	
  

	
d.

	
Distributor and Manufacturer each acknowledge and agree that they have comparable bargaining power and that it is their express decision to allocate the economic and other risks as provided in the Agreement.  It is expressly understood and agreed that neither party hereto is under any obligation to continue this Agreement after termination of this Agreement in accordance with this Article XV. and/or to pay any compensation to the other party other than as provided herein.

XVI.         DISPUTES/ARBITRATION

Any controversy between the parties shall be settled by arbitration in accordance with the rules then prevailing of the American Arbitration Association, such arbitration to be held in Miami, Florida or at any other location within the state of Florida to which the parties are able to mutually agree.  The parties agree that the arbitrators may not change, alter, limit, or overrule any provision of this Agreement and that they shall be bound to adhere to the terms hereof in determining their arbitral award.  The parties agree that any paper in connection with arbitration may be served inside or outside the State of Florida and/or any other location within the Territory where the receiving party is located by certified mail or by personal service or in such other manner as may be permissible under the rules of the applicable arbitration.  The parties further agree that in no event shall punitive damages be assessed against either of them by the arbitrators.

  

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CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

 

XVII.       LIMITED LICENSE RIGHTS

	
a.

	
Manufacturer hereby grants to Distributor a limited license in the trademarks owned by Manufacturer and known as “FireIce ®” and Skin ArmorTM for the limited purpose of promoting and advertising the Products. Distributor may use said trademark in conjunction with its promotion, advertising, offer and sale of the Products.

	
b.

	
Manufacturer represents that it has applied for United States patents for the Products and agrees that during the term of the agreement, Distributor is authorized to use and sell the Product covered and those patents and can avail itself of any protection afforded by such patents against third parties. Manufacturer agrees that it will apply for patent protection for the Products sold in exclusive territory counties  within 3 months of the date of opening sales order(s) for that country.

XVIII.      NOTICE

Notice: Unless otherwise provided herein, any notice required or permitted to be given under this Agreement shall be sufficient if delivered personally or by certified mail or private express carrier, on or before any date herein specified to the address of the applicable party as noted herein:

To Distributor:

TFISA,LLC

950 Peninsula Corporate Center

Boca Raton, FL 33487

Attn:   Steven Eisen, CFO

561-999-9710 (Telephone)

561-999-9713 (Fax)

To Manufacturer:

FireIce Gel, Inc.

1460 Park Lane South

Suite 1

Jupiter, FL 33458

Attn:      Joseph Ingarra – President / COO

561-427-6144 (Telephone)

561-427-6182 (Fax)

 

  

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CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

XIX.        RIGHTS OF ASSIGNMENT

Neither party hereto may assign or transfer any of its rights or duties hereunder without the prior written consent of the other party, except for Distributor’s right to assign Manufacturer warranties in accordance with Article XI above.  Notwithstanding anything contained herein, Distributor may assign any and all rights under this agreement to another entity, provided control of that entity is held among any combination of Howard W. Thier, Steve Eisen and Jerome B. Eisenberg.

XIX.        AMENDMENT

This Agreement may be amended, modified or revised from time to time as may be mutually agreed in writing executed by an authorized representative of each of the parties, and such amendment, modification or revision shall be effective as of the date such writing is so executed.

XX.         CHOICE OF LAW

It is mutually agreed that this Agreement shall in all respects by governed by and interpreted in accordance with the applicable laws of the State of Florida its choice of law provisions notwithstanding, provided, however, that the terms of the United Nations Convention on Contracts for the International Sale of Goods is hereby excluded in its entirety.

XXI.        INDEPENDENT CONTRACTORS

Both parties hereto agree that each shall remain an independent contractor, responsible only for its own actions, and that nothing in this Agreement shall be construed otherwise.  The relationship between the parties to this Agreement shall be that of Buyer and Seller.  Distributor may neither accept, approve, nor execute any order, contract or other agreement on behalf of or in the name of Manufacturer.  Further, in no event shall Manufacturer be responsible for Distributor’s dealings with the Government or Governmental personnel in the United States, in the countries comprising the Territory of this Agreement, or in any other countries.

This Agreement does not create a common law agency in Distributor by Manufacturer but appoints Distributor solely to engage in the Authorized Activities permitted by this Agreement as an independent contractor.  Neither Distributor not any employee, agent or representative of same shall in any sense or for any purpose whatsoever be deemed or construed to be common law agents or employees of Manufacturer, nor shall Distributor in any sense or for any purpose whatsoever be deemed or construed to be a franchisee of Manufacturer.

Distributor shall for all legal purposes be considered, and function as an independent contractor.  Distributor shall retain authority to collect accounts.  Distributor shall only have the authority expressly set forth in this Agreement and Distributor shall not incur any obligation or liability on behalf of Manufacturer.

 

  

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CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

XXII.       VALIDITY

In case one or more provisions of this Agreement are now or shall become invalid or voidable, the validity or the remaining provisions shall not be affected hereby, provided the Agreement remains meaningful, reasonable and mutually acceptable.

XXIII.     ENTIRE CONTRACT

This Agreement supersedes all former agreements and understanding between the parties hereto and sets forth the entire Contract between the parties, and except as otherwise provided herein, no waiver or modification of any of the provisions hereof shall be binding on either party unless same shall be in writing and signed by an authorized representative of each of the parties hereto.

XXIV.     WAIVER, ETC.

The failure of either party at any time to require performance by the other or any provision(s) hereof shall in no way affect the right of such party to enforce such provision(s) at a later date; nor shall the waiver by one party of any breach by the other of any of the provisions hereof be construed to be a waiver of any succeeding breach of such provision and/or any other provisions of this Agreement.

XXV.      FORCE MAJEURE

Any delay in, or failure of performance by, either party to this Agreement shall not constitute default hereunder or give rise to any claims for damage against said party if and to the extent such delay or failure of performance is caused by acts of God or of the public enemy, acts of Government, including failure to act, riots, war or warlike hostilities, epidemics, quarantine restrictions, sabotages, terrorism, piracy, strikes and other concerted acts of workmen, lockouts, fires, floods, explosions, shipment, embargoes, earthquakes, or for any cause beyond the reasonable control of the party claiming force majeure.  An occurrence shall be deemed beyond the reasonable control of the party claiming force majeure only  if it arose without the fault or negligence of that party, its agents, subcontractors, vendors or their employees or agents.  Payment of any moneys due may not be excused by force majeure.

  

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CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 

IN WITNESS WHEREOF, the parties hereto have set their hands this 7th day of July, 2009.

 

	 	For Manufacturer: 	 	 	For Distributor:	 
	 	 	 	 	 	 
	 	FireIce Gel, Inc. 	 	 	TFISA, LLC.	 
	 	 	 	 	 	 
	By: 	
/s/ Joseph Ingarra 

	 	By: 	
 /s/ Steven Eisen

	 
	 	Date: 7/7/09 	 	 	
Date: 7/7/09

	 
	 	
 

	 	 	
 

	 

                                                                                 

  

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CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

 APPENDIX A (Products)

	
  

	
1)

	
SkinArmorTM - Tube (or in any other container form) for Skin Protection from Fire

Exclusive distribution, sales and marketing rights throughout the territory.___________.

	
  

	
2)

	
FireIce® exclusive in the Territory for military marketplace.

        

	
  

	
3)

	
FireIce®- Eductors for Pumper Truck and potential aerial drop usages and usages in the Ancillary Markets.

3.1           Exclusive distribution in the following countries and their territories:

All of the countries of Europe, East and West,

All of the Russian speaking countries and the countries that were part of the former Soviet Union,

 Mexico, Canada, Turkey, Taiwan, Japan, Indonesia, India, Philippines, Puerto Rico, Argentina, Colombia, Ecuador,  Chile, Venezuela, Pakistan, Afghanistan, Iraq, Egypt, Morocco, Tunisia, Algeria, Israel, Saudi Arabia, Lebanon, Kuwait, Jordan, South Africa, Nigeria, Kenya.

3.2           Non-Exclusive distribution in all other countries except for China, Brazil, Greece and Dubai..

 

3.2.1         Manufacturer shall have the right to appoint exclusive representatives in any of these non-exclusive countries by giving Distributor 120 days notice thereof. In such event, Distributor shall be given the right and sufficient time to conclude any and all negotiations and sales that were ongoing prior to appointing an exclusive representative.

3.3           In the event that Distributor obtains a customer and concludes a sale in any non-exclusive country, that country shall thereafter be included among the exclusive countries as set forth in Appendix A Section 3.1.

  

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CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A CONFIDENTIAL TREATMENT REQUEST. THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH FOUR ASTERISKS [****].

APPENDIX B (Pricing)

Pricing:

FI-1 - Case of 24 bottles for Fire Extinguisher – [****]

- 24 bottles per case – 120 cases per pallet

FI 25B - 25 lb. bucket for pumper trucks and aerial usage – [****]

- 1 bucket contains 25lbs. of FireIce – 48 buckets per pallet

Eductor - Pumper Truck / Hydrant Apparatus – [****]

- Pallet quantities (TBD)

FI-2000 - 2000 lb. supersack for overseas large scale production / distribution – [****].

SkinArmor - We are still dialing in and awaiting final packaging specs. (sizes, tube type, etc.) but we are in the [****] range per tube for distributor pricing -  MSRP should be in the [****] range.

 

 

 

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