SECURITIES PURCHASE AGREEMENT

 

 

This Securities Purchase Agreement (the “Agreement”) dated as of January __, 2011, by and among Green EnviroTech Holdings Corp., a Delaware corporation, with headquarters located at 5300 Claus Rd., P.O. Box 692, Riverbank, CA 95367 (the “Company”), and the purchaser identified on the signature page hereto (including its successors and assigns (the “Purchaser”)).

 

WHEREAS, the Purchaser desires to purchase from the Company a secured debenture in the principal amount set forth on the signature page hereto in substantially the form attached hereto as Exhibit A (the “Debenture”), and a warrant to purchase one-half of a share of the Company’s common stock for every dollar of principal amount of the Debenture substantially in the form attached hereto as Exhibit B (the “Warrant”, and together with the Debenture, the “Securities”);

 

WHEREAS, the Company’s obligations under the Debenture are secured by substantially all of the assets of the Company pursuant to a security agreement dated on or about the date hereof between the Company and the secured parties named on the signature pages thereto (the “Security Agreement”);

 

WHEREAS, this Agreement, the Security Agreement, the Debenture, and the Warrant are collectively referred to as the “Transaction Documents”;

 

WHEREAS, the Company desires that Purchaser purchase the Securities;

 

NOW, THEREFORE, in consideration of the foregoing and on the basis of the respective representations, warranties, covenants, agreements, undertakings and obligations set forth herein, and intending to be legally bound hereby, the parties agree as follows:

 

ARTICLE 1

 

PURCHASE AND SALE OF THE SECURITIES

1.1           Purchase and Sale of Securities.  Upon the terms and subject to the conditions set forth in this Agreement, the Company agrees to sell, assign, transfer and deliver to Purchaser and Purchaser hereby agrees to purchase at the Closing (as defined in Section 2) and accept delivery from the Company, the Debenture and the Warrant free of all liens, pledges, mortgages, security interests, charges, restrictions, adverse claims or other encumbrances of any kind or nature whatsoever, for the consideration specified herein.

 

ARTICLE 2

 

CLOSING

 

2.1           Closing.  As used herein the Closing Date shall mean the day when all conditions precedent to (i) the Purchaser’s obligations to purchase the Securities and (ii) the Company’s obligations to issue the Securities have been satisfied or waived.  On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company shall sell and the Purchaser shall purchase the Securities. The closing of the purchase and sale of the Securities is referred to herein as the “Closing”.

 

The Closing Date shall occur on November __, 2010, at the offices of Sichenzia Ross Friedman Ference LLP, New York, New York 10066, at 10:00 a.m., or at such other time and place as the parties may agree. Pending the Closing, the purchase price for the Securities shall be held in escrow pursuant to the Escrow Agreement, dated on or about the date hereof, between the Company and Signature Bank, as Escrow Agent (the “Escrow Agreement”). The purchase price for the Securities shall be released in accordance with the Escrow Agreement.

 

 

2.2  Deliveries.

 

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

 

(i)   this Agreement duly executed by the Company;

 

(ii)  a Debenture in the principal amount set forth on the signature page hereto;

 

(iii) a Warrant to purchase one-half of a share of the Company’s common stock for each dollar of principal amount of Debenture; and

 

(iv)  the Security Agreement duly executed by the Company;

 

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

 

         (i)  this Agreement duly executed by the Purchaser;

 

         (ii)  the principal amount of the Debenture set forth on the signature page hereto by wire transfer of immediately available funds to:

 

Signature Bank

950 Third Avenue, 9th Floor

New York, NY 10022

Account Name:  Signature Bank as Escrow Agent Green EnviroTech Holdings Corp.

ABA#: 026013576

A/C#: 1501298642

 

         (iii) the Security Agreement duly executed by the Purchaser; and

 

         (iv) the Accredited Investor Questionnaire in the form attached hereto as Exhibit C duly executed by the Purchaser.

 

   2.3   Closing Conditions

 

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

 

(i)  the accuracy in all material respects on the Closing Date of the representations and warranties of the Purchaser contained herein; and

 

(ii)   the delivery by the Purchaser of the items set forth in Section 2.2 (b); and

 

 

(iii) the release of the purchase price in accordance with the Escrow Agreement.

 

 (b)  The obligations of the Purchaser 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;

 

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

 

(iii) the Purchaser shall have completed its due diligence of the Company and the results thereof shall be satisfactory to the Purchaser in its sole and absolute discretion; and

 

(iv)  the delivery by the Company of the items set forth in Section 2.2 (a).

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

3.           Representations and Warranties of the Company.  The Company represents and warrants to the Purchaser as follows:

 

(a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of Delaware.

(b)           This Agreement has been duly executed and delivered by Company and constitutes the valid, binding and enforceable obligation of Company, subject to the applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and rights of stockholders.

(c)           The Company has full power and authority to sell and transfer the Debenture to Purchaser without obtaining the waiver, consent, order or approval of (i) any state or federal governmental authority or (ii) any third party or other person.  The Company has the corporate power, authority and capacity to carry on its business as presently conducted.

(d)           Neither the execution and delivery of the Transaction Documents nor the consummation of the transactions contemplated thereby will constitute a violation or default under any term or provision of the Certificate of Incorporation or By-Laws of the Company or of any contract, commitment, indenture, other agreement or restriction of any kind or character to which the Company is a party to or by which the Company is bound.

(e)           The Company has the corporate power to own its properties and to carry on its business as now being conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the failure to be so qualified and in good standing would have a material adverse effect on the Company.  The Company is not in violation of any of the provisions of its certificate of incorporation or by-laws.  Other than the declaration of effectiveness of any registration statement, no consent, approval or agreement of any individual or entity is required to be obtained by the Company in connection with this Agreement.

 

(f)           There is no private or governmental action, suit, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic, or, to the Company’s best knowledge, threatened against the Company or any of its properties or any of its officers or directors (in their capacities as such).  There is no judgment, decree or order against the Company that could prevent, enjoin, alter or delay any of the transactions contemplated by the Transaction Documents.

(g)           There are no material claims, actions, suits, proceedings, inquiries, labor disputes or investigations (whether or not purportedly on behalf of the Company) pending or, to the Company’s knowledge, threatened against the Company or any of its assets, at law or in equity or by or before any governmental entity or in arbitration or mediation.  No bankruptcy, receivership or debtor relief proceedings are pending or, to the best of the Company’s knowledge, threatened against the Company.

(h)           The Company has complied with, is not in violation of, and has not received any notices of violation with respect to, any federal, state, local or foreign laws, judgment, decree, injunction or order, applicable to it, the conduct of its business, or the ownership or operation of its business.  References in this Agreement to “Laws” shall refer to any laws, rules or regulations of any federal, state or local government or any governmental or quasi-governmental agency, bureau, commission, instrumentality or judicial body (including, without limitation, any federal or state securities law, regulation, rule or administrative order).

 (i)           All representations, covenants and warranties of the Company contained in this Agreement shall be true and correct on and as of the Closing date with the same effect as though the same had been made on and as of such date.

(j)           The Company has the corporate power, authority and capacity to carry on its business as presently conducted.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

4.           Representations and Warranties of Buyer.  The Purchaser hereby represents and warrants to the Company as follows:

 

(a)  Organization; Authority.  Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement.   and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of Purchaser.  This Agreement has been duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of 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 (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

 

(b)  Own Account.  Purchaser understands that the Securities constitute “restricted securities” and have not been registered under the Securities Act of 1933, as amended (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 (this representation and warranty not limiting Purchaser’s right to sell the Securities pursuant to an effective registration statement or otherwise in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law.

 

(c)  Purchaser Status.  At the time Purchaser was offered the Securities, as of the date hereof it is, and as of the date of the Closing it will be an “accredited investor” as defined in Rule 501(a) under the Securities Act.  Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.  Purchaser has (i) a preexisting personal or business relationship with the Company or one or more of its directors, officers or control persons or (ii) by reason of Purchaser’s business or financial experience Purchaser is capable of evaluating the risks and merits of this investment and of protecting Purchaser’s own interests in connection with an investment in the Securities.