FORM OF SECURITIES PURCHASE AGREEMENT

Zenosense, Inc.

Avda. Cortes Valencianas 58, Planta 5,

46015 Valencia, Spain  

The undersigned (the "Investor") hereby confirms its agreement with Zenosense, Inc. as follows:

 

1. This Securities Purchase Agreement (“Agreement”) is made as of the date set forth below between Zenosense, Inc., a Nevada corporation (the "Company"), and the Investor.  The Investor is hereby agreeing to make an investment in five tranches, the first one being an equity investment with the signing of this Agreement (“Initial Purchase”) and four consecutive monthly loans to be advanced to the Company on or before the dates set out in Exhibit A (the “Loan Closing Dates”), pursuant to the terms of this Agreement (“Commitment Loans”).  Notwithstanding the foregoing, the Company reserves the right to sell additional securities of a similar or different nature, for different prices, from time to time  prior to the consummation of the Commitment Loans and thereafter, without notice to the Investor, and the Investor may experience dilution in respect of its investment due to any other any sales.  Additionally, pursuant to a prior existing agreement between the Company and [Investor]  (“Investor”) has the right of first refusal to undertake the Commitment Loans, singly or all, and therefor deprive the right of the Investor to make the Commitment Loans.

 

2. As of the date hereof, in respect of the Initial Purchase, the Company and the Investor agree that the Investor will purchase from the Company, and the Company will issue and sell to the Investor, for an aggregate purchase price of US$150,000 (the “Initial Purchase Price”), an aggregate of 67,126,578 shares of the Company's common stock, par value $0.001 per share (the “Common Stock”).

On or prior to each of the Loan Closing Dates, the Investor will lend the Company the respective amounts of the Commitment Loans as set out in Exhibit A. The Commitment Loans will be convertible into shares of Common Stock and will be made in accordance with the form of loan agreement in Exhibit B. The Investor understands and agrees that the Commitment Loans re a firm commitment without any conditions precedent, but subject to the right of first refusal held by Investor, other than as set forth in the Terms and Conditions for Purchase attached hereto, and the Commitment Loans are an enforceable agreement being made by the Investor, and that the Company will be entitled to take any and all such action as it deems necessary and prudent to enforce its rights hereunder.

The Initial Purchase Price is due to the Company with the return of the Securities Purchase Agreement by the Investor, and the Commitment Loans are due to the Company on the respectiveLoan Closing Dates.  Each of the Initial Purchase Price and Commitment Loans will be deposited into the IOLA account of the Company’s counsel, and the funds will be transferred to the Company operating account upon acceptance of the Securities Purchase Agreement by the Company and delivery of the instructions to issue the shares to the Company’s transfer agent.  During the period the Investor funds are held by the agent of the Company, they will be at risk of the creditors of the Company claiming rights to such funds.

3.           The Company and the Investor agree that the purchase and sale of the Common Stock, as of the date of this Agreement and the Commitment loans as of the Loan Closing Dates is subject to the Terms and Conditions for Purchase attached hereto as Annex I and incorporated herein by reference as if fully set forth herein. Unless otherwise requested by the Investor in Exhibit C, the Common Stock issued to the Investor will be issued in the Investor's name and address as set forth below.

 

4. The Investor represents that, except as set forth below, (a) it has had no position, office or other material relationship within the past three years with the Company or its affiliates, other than as a passive stockholder, if at all, (b) neither it, nor any group of which it is a member or to which it is related, beneficially owns (including the right to acquire or vote) any securities of the Company that is greater than 5% of the current issued and outstanding shares of common stock as reported in the latest report filed by the Company with the United States Securities and Exchange Commission, and (c) neither it, nor any affiliate of the Investor, has any direct or indirect affiliation or association with any Finance and Regulatory Authority, Inc. ("FINRA") member. Exceptions:

 

(If no exceptions, write "none." If left blank, response will be deemed to be "none.")

 

___________________________________________________________

Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.

 

			Dated as of: May 31, 2016
			By:
			Name: Title:

 

 ZENOSENSE, INC.

 

By: ____________________

      Name: Carlos Jose Gil

      Title: Authorized Signatory

 

 

 

 

1.1Purchase and Sale. At the Closing (as defined in Section 2), the Company will sell to the Investor, and the Investor will purchase from the Company, upon the terms and subject to the conditions set forth herein, for the Initial Purchase Price or Commitment Loans, as the case may be, the Common Stock or the Commitment Loans described in Paragraph 2 of the Securities Purchase Agreement attached hereto (collectively with this Annex I and the other exhibits attached hereto, this “Agreement”).

 

1.2           Investor. The Investor must execute and deliver a Securities Purchase Agreement, and must complete a Certificate Questionnaire (in the form attached as Exhibit C hereto) and an Investor Questionnaire (in the form attached as Exhibit D hereto) in order to purchase the Common Stock.

1.3           Preemption Right. The Investor acknowledges that a prior Investor has the right to preemptively fund any one or all of the Commitment Loan(s) amounts, in which funding event that Commitment Loan(s) will be struck from the Agreement as if it (they) had never been included in the Agreement.

2.Delivery at Closing.  The completion of the purchase and sale of the Common Stock at the Initial Purchase, as defined in the Securities Purchase Agreement (being referenced herein as a “Closing”) shall occur in respect of the Initial Purchase to be the date of this Agreement and the purchase and sale of the Commitment Loans the Closing therewith will be the Loan Closing Dates, as defined in the Securities Purchase Agreement. At the Closing for the Initial Purchase, the Company shall instruct its transfer agent to issue (the “Instruction Letter”) to the Investor that number of shares of Common Stock relevant to the investment, as set forth in Paragraph 2 of the Securities Purchase Agreement. In exchange for the delivery of the shares of Common Stock, the Investor shall pay the Initial Purchase Price to the IOLA account of the counsel to the Company by wire transfer of immediately available funds, pursuant to the written instructions provided by the Company, if not previously delivered to the Company. In exchange for the delivery of each of the Commitment Loans, the Investor shall pay the respective amounts as set out in Exhibit A to the IOLA account of the counsel to the Company by wire transfer of immediately available funds, pursuant to the written instructions provided by the Company, if not previously delivered to the Company and the Company will issue a convertible promissory note in the form of Exhibit B.

 

The Company's obligation to issue and sell the securities to the Investor shall be subject to the satisfaction of the following conditions, any one or more of which may be waived by the Company: (a) prior receipt by the Company of a copy of this Agreement executed by the Investor; (b) the accuracy of the representations and warranties made by the Investor in this Agreement; and (c) the receipt of the Purchase Price or Commitment Loan amount by the counsel to the Company.

 

The Investor's obligation to purchase the securities shall be subject to the satisfaction of the following conditions, any one or more of which may be waived by the Investor: (a) the accuracy of the representations and warranties made by the Company in this Agreement; (b) the execution and delivery by the Company of the Instruction Letter; (c) the execution and delivery by the Company of each respective Commitment Loan; and (d) the fulfillment of the obligations of the Company under this Agreement on or prior to the Closing.

3.           Reverse Split.  After Closing, the Company will take all reasonable commercial steps as necessary to effect a one post-split to seven pre-split reverse stock split of the Company’s Common Stock.

4.           Use of Proceeds. The Initial Purchase Price and the Commitment Loans will be used to allow the Company to participate with a third party in the “MIDS” development project in line with the terms and budget already supplied by the Company and approved by the Investor, and any remaining balance to be used for general working capital.

  

5.Representations and Warranties of the Company.  Except as set forth in the SEC Reports (as defined below), the Company hereby represents and warrants to the Investor as of the date hereof and the Closing Date, as follows:

 

5.1Organization. The Company is a corporation duly organized and validly existing under, and by virtue of, the laws of the State of Nevada.

 

5.2Corporate Power. The Company has all requisite corporate power and authority to own and operate its properties and assets, and to carry on its business as presently conducted.  The Company has all requisite legal and corporate power and authority to execute and deliver the Agreement and to carry out and perform its obligations under the terms of the Agreement.

 

5.3Authorization; Validity. The execution, delivery and performance of the Agreement by the Company has been duly authorized by all requisite corporate action and the Agreement constitute the valid and binding obligations of the Company, enforceable against it in accordance with its terms, except as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally.  The shares of Common Stock when issued pursuant to the Agreement shall be, duly authorized, validly issued, fully paid and non-assessable.

5.4           Non-Contravention.  Neither the execution, delivery nor performance of any of the Agreement has or will result in a violation or conflict with or constitute, with or without the passage of time or giving of notice or both, either a default under any provision of the Company’s articles of incorporation or by-laws or any agreement, instrument or contract to which it is a party or by which it is bound and that has been filed as an exhibit to the SEC Reports.

 

5.5Compliance with Laws. The Company is not in material violation of, and neither the execution, delivery nor performance of the Agreement or any of its terms by the Company has or will result in a material violation of, any federal, state, local or foreign law, rule, regulation, order, judgment or decree applicable to the Company.

 

5.6            Accurate Information.  All disclosure furnished by the Company to the Investor regarding the Company, its business and the transactions contemplated hereby, is true and correct in all material respects.

 6. Representations and Warranties of the Investor.  The Investor hereby represents and warrants to the Company as of the date hereof and the Closing Date, as follows:

 

6.1Investor Knowledge and Status. (a) The Investor represents and warrants to, and covenants with, the Company that: (i) the Investor is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), is knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to, investments in restricted securities of micro-cap companies presenting an investment decision similar to that involved in the purchase of the securities, and has requested, received, reviewed and considered all information it deemed relevant in making an informed decision to purchase the securities; (ii) the Investor understands that the shares of Common Stock and any shares issued on conversion of the Commitment Loans will be “restricted securities” when issued and will not have been registered under the Securities Act and will be acquiring the shares of Common Stock in the ordinary course of its business and for its own account for investment only, has no present intention of distributing any of the securities and has no arrangement or understanding with any other persons regarding the distribution of the Common Stock or Commitment Loans; and (iii) the Investor has, in connection with its decision to purchase the securities, relied only upon the representations and warranties of the Company contained herein and the information contained in the SEC Reports. The Investor understands that the issuance of the Common Stock and Commitment Loans to the Investor and the Common Stock on conversion of the Commitment Loans have not been registered under the Securities Act, or registered or qualified under any state securities law, in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the representations made by the Investor in this Agreement. No person is authorized by the Company to provide any representation that is inconsistent with or in addition to those contained herein or in the SEC Reports, and the Investor acknowledges that it has not received or relied on any such representations.

(b)           The Investor: (i) if a natural person, represents on its behalf; or (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock corporation or other entity, represents on its behalf and the behalf of its officers, directors and principal stockholders, connected with the Investor at the time of this Agreement, that it is not subject to any “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualifying Event”), except for a Disqualifying Event covered by Rule 506(d)(2) or (d)(3).

6.2Power. The Investor has all requisite power and authority to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this Agreement.

6.3           Authorization; Validity.   The execution, delivery and performance by the Investor of the transactions contemplated by this Agreement have been duly authorized by any necessary corporate or similar action on the part of the Investor, as applicable. This Agreement has been duly executed by the Investor and constitutes the valid and binding obligation of the Investor, enforceable against it in accordance with its terms, except as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally.

 

6.4Additional Acknowledgement. The Investor acknowledges that it has independently evaluated the merits of the transactions contemplated by this Agreement, that it has independently determined to enter into the transactions contemplated hereby, that it is not relying on any advice from or evaluation by any other person, that it is relying solely upon the representations and warranties of the Company set forth in this Agreement in making its investment decision, and that it is not acting in concert with any other person in making its purchase of the securities hereunder.

6.5           OFAC. (a) The Investor represents that the amounts invested and to be invested by it in the Company in the Offering were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at <http://www.treas.gov/ofac>. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists.

(b)  To the best of the Investor’s knowledge, none of: (1) the Investor; (2) any person controlling or controlled by the Investor; (3) if the Investor is a privately-held entity, any person having a beneficial interest in the Investor; or (4) any person for whom the Investor is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Investor agrees that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representations set forth in the preceding paragraph. The Investor agrees to promptly notify the Company should the Investor become aware of any change in the information set forth in these representations. The Investor understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Investor, either by prohibiting additional subscriptions from the Purchaser, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations. The Investor further acknowledges that the Company may, by written notice to the Investor, suspend the redemption and conversion rights, if any, of the Investor if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs.

 

7.Transfer Restrictions;Legends. Certificates evidencing the shares of Common Stock and Commitment Loans and any shares of Common Stock issued on conversion of the Commitment Loans shall each bear any legend as required by the "blue sky" laws of any state and a restrictive legend in substantially the following form, until such time as they are not required:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

 8.Notices.  All notices, requests, consents and other communications hereunder shall be in writing, shall be delivered by first-class registered or certified airmail, or internationally recognized overnight express courier, postage prepaid, or by facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail domestic, upon the business day received, or (ii) if delivered by an internationally recognized overnight carrier, one business day after timely delivery to such carrier, and shall be addressed as follows, or to such other address or addresses as may have been furnished in writing by a party to another party pursuant to this paragraph:

 

(a) if to the Company, to:	Zenosense, Inc. Avda Cortes Valencianas 58, Planta 5, 46015 Valencia, Spain   Attention:
with a copy to:	Golenbock Eiseman Assor Bell &Peskoe LLP 437 Madison Avenue New York, New York10022   Attention: Andrew D. Hudders, Esq.   The above notice to counsel is only for informational purposes, and shall not constitute legal notice under this Agreement or for any other purpose.

 

(b)if to the Investor, at its address on the signature page to the Securities Purchase Agreement.

9.Amendments; Waiver. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investor. Any waiver of a provision of this Agreement must be in writing and executed by the party against whom enforcement of such waiver is sought.

 

10.Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.

 

11.Entire Agreement; Severability. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof and supersedes all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written relating to the subject matter hereof. If any provision contained in this Agreement is determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.  Other than a condition precedent, the Investor has no rights under the Asset Purchase Agreement.

 

12.Governing Law; Jurisdiction.  This Agreement shall be governed by and construed and enforced in accordance with the law of the State of New York, without giving effect to principals of conflict of laws. The parties (i) agree that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in the courts of the State of New York, County of New York, (ii) waive any objection to the venue of any such suit, action or proceeding and the right to assert that such forum is not a convenient forum, and (iii) irrevocably consent to the jurisdiction of the courts of the State of New York, County of New York, in any such suit, action or proceeding, and further agree to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding and agree that service of process upon them mailed by certified mail to their respective addresses shall be deemed in every respect effective service of process upon them in any such suit, action or proceeding.

 

13.Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

14.           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. Neither party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party (other than by merger).

 

15.Fees and Expenses.  Except as provided in this Agreement, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of the Common Stock to the Investor.

 

16.Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.

 

17.Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investor and the Company will be entitled to specific performance under the Agreement.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Agreement and hereby agrees to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

18.           Non-Contravention.  The Investor is agreeing to the terms of this Agreement on the understanding and agreement that the Company will use all commercially reasonable efforts to not frustrate in any way the ability of the Investor to sell any of the Shares that may be purchased under this Agreement, including to cause its agents to act expeditiously to take any and all action to remove any federal and state securities restrictive legends and other restrictions that it is legally able to remove as requested by the Investor from time to time, such actions to be at the expense of the Company.  Notwithstanding the foregoing, this obligation of the Company does not include registering any of the Shares for resale under any federal or state securities laws, or to take any other action to facilitate the sale of the Shares, including consenting to any service in any jurisdiction or paying any fees in respect of the sale of the Shares.