PERF-GO GREEN HOLDINGS, INC.
SUBSCRIPTION AGREEMENT
INSTRUCTIONS
Each prospective investor must complete, execute and submit the
following:
(1) The Subscription
Agreement;
(2) The Accredited
Investor Questionnaire;
(3) The signature page
to the Security Agreement;
(4) The signature page
to the Registration Rights Agreement; and
(5) At closing, a check or money order made
payable to
Signature Bank, as
Escrow Agent for Perf-Go Green Holdings, Inc. in the amount of the
purchase
price for the notes
and warrants ("Securities") subscribed for by the
investor, or funds can be wired as follows:
Bank:
Signature Bank
Address:
1225 Franklin Avenue, Garden City, New York 11530
ABA
No.:
Beneficiary Name:
Signature Bank As Escrow Agent For Perf Go-Green
Holdings, Inc.
Account No.:
The foregoing
materials should be delivered via a
trackable delivery
system
(overnight delivery) to:
vFinance Investments, Inc.
880 Third Avenue
New York, NY 10022
Attn: Jonathan
Rich
(6) When countersigned
by Perf-Go Green Holdings, Inc., a Delaware corporation
(the
"Company"),
this Agreement shall constitute a subscription for
Securities of the Company. The minimum investment is $50,000,
unless waived
by
the Company.
(7) An accepted copy
of this Agreement
and a Debenture and
Warrant issued in
your
name will be returned to you contemporaneously with your signing of
this
Agreement.
ALL SUBSCRIPTION
DOCUMENTS MUST BE COMPLETE AND ONLY THE PROSPECTIVE INVESTOR'S
PRINCIPAL RESIDENCE SHOULD BE STATED.
<PAGE>
SUBSCRIPTION AGREEMENT
Name of Subscriber ________________________
Perf-Go Green Holdings, Inc.
645 Fifth Avenue, 8th Floor
New York, NY 10022
Ladies and Gentlemen:
1.
Subscription. I
(sometimes referred to herein as the "Investor") hereby
subscribe for and agree to purchase securities (the "Securities")
comprised of
10% Senior Secured
Convertible Debentures
in substantially
the form attached
hereto as Exhibit A (the "Notes") and Warrants to purchase common stock in
substantially the form
attached hereto as Exhibit B (the "Warrants") of Perf-Go
Green Holdings, Inc.,
a Delaware corporation (the "Company"), on the terms and
conditions described
herein (including the exhibits hereto, collectively
referred to as the "Offering Documents").
The
offering size (inclusive of previously accepted subscriptions) will be
$5,000,000. At the
option of the Company,
additional
monies up to 20% of
the
Maximum Offering may
also be accepted. The
aggregate amount subscribed for
hereby is
$___________. At the
Closing, the Investor
will pay $1,000 for each
$1,000 of principal amount of the Notes and related Warrants.
I understand that
a closing will not be held until the Minimum Offering is received
by the Company
and upon the closing
of a share exchange
transaction
between the Company
and
shareholders of
Perf-Go Green Inc. (the "Share Exchange") and that additional
closings may be held
at any time thereafter
until the Termination Date (as
defined below).
The
Notes have a term of three years from the date of closing and
carry an
interest rate of 10%
per annum.
Notes may be converted into shares of the
Company's Common
Stock at an initial
conversion
price of $0.75 per
share (as
converted,
collectively, the
"Conversion
Shares"). The obligations of the
Company under the
Notes shall be secured
pursuant to the terms of the Security
Agreement annexed hereto as Exhibit C (the "Security Agreement"). The Warrants
shall be exercisable
for a period of five
years at an exercise
price of $1.00
per share. Warrants
shall be convertible
into that number of
shares of Common
Stock equal to 100% of
the shares issuable
upon conversion of the Notes (as
exercised, the
"Warrant Shares"). The holders of the shares of
Common Stock
issuable upon
conversion
of the Notes and
exercise of the
Warrants shall be
entitled to
certain registration rights pursuant to the terms of the
Registration Rights
Agreement annexed hereto as Exhibit D. I understand
and
acknowledge that the foregoing summary of the Offering Documents is
qualified in
its entirety by reference to the Offering Documents annexed
hereto.
The
Notes, the
Conversion
Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the "Securities".
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<PAGE>
2.
Purchase.
(a)
Subject to the
satisfaction (or waiver) of the conditions set forth in
Sections 12 and 13 below, the Company shall issue and sell to each
Investor, and
each Investor severally, but not jointly, agrees to purchase from
the Company on
the Closing Date (as defined below), (x) a principal amount of Notes as is set
forth above and (y) the corresponding number of Warrants as
specified above (the
"Closing").
(b)
In the event that the Closing shall not have occurred with respect to
an Investor on or before five (5) Business Days from the date hereof due to
the
Company's or such
Buyer's failure to satisfy the conditions set forth in
Sections 12 and 13
below (and the
nonbreaching party's
failure to waive
such
unsatisfied
condition(s)), the
nonbreaching
party shall have the option to
terminate this
Agreement with respect
to such breaching
party at the close of
business on such date without liability of any party to any other
party.
3.
[RESERVED]
4.
[RESERVED]
5. Disclosure. Because this offering is limited
to accredited investors as
defined in
Section 2(15) of the Securities Act of 1933, as amended (the
"Securities Act"),
and Rule 501
promulgated
thereunder, in
reliance upon the
exemption contained
in Sections 3(b) or 4(2) of the Securities Act and
applicable state securities laws, the Company is selling the
Securities pursuant
to this Agreement without registration under the Securities Act. I
acknowledge
receipt of the Offering Documents and all related documents and
represent that I
have carefully reviewed and understand the Offering Documents. I have received
all information and materials regarding the Company that I have
requested.
6.
Investor
Representations and Warranties. I acknowledge, represent and
warrant to, and agree with, the Company as follows:
(a)
Accredited
Investor Status. I am
an "accredited
investor" within the
meaning of Securities and Exchange Commission Rule 501 of Regulation
D.
(b)
Purchase Entirely for Own Account. The Notes and Warrants will be
acquired by me for investment for my own account, not as a nominee or
agent, and not with a
view to the resale or
distribution of any part
thereof, and I have no
present intention
of selling,
granting any
participation in,
or otherwise distributing the same. I further
represent that I do not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations
to such person or to any third person, with respect to the
Securities.
(c)
Disclosure of
Information. I fully
understand that the Securities are
speculative
investments which
involve a high
degree of risk of
the
loss of my entire
investment. I
represent that I have
received the
disclosure I believe relevant and necessary to my investment
decision
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<PAGE>
and have had an opportunity to ask questions and receive
answers from
the Company regarding the terms and conditions of this transaction
and
the business,
properties, prospects
and financial
condition of the
Company and to
obtain additional information (to the extent the
Company possessed
such information or could acquire it without
unreasonable effort or
expense) and/or
conduct its own
independent
investigation
necessary to verify
the accuracy
of any information
furnished to me or to
which I have had
access. I have
received no
representation or
warranty from the
Company or any of its
officers,
directors, employees
or agents in
respect of my
investment
in the
Company other than as
set forth in the Offering Documents. I am not
participating in the
offer as a result of or subsequent to: (i) any
advertisement, article, notice or other communication published in
any
newspaper, magazine or
similar media or broadcast over television or
radio or (ii) any seminar or meeting whose attendees, to my
knowledge,
have been invited by any general solicitation or general
advertising.
(d)
Investment
Experience.
I (i) am experienced in evaluating and
investing in private placement transactions in securities of
companies
similar to the Company
and have such
knowledge and experience in
financial or business
matters that I am capable of evaluating the
merits and
risks of the investment in the Securities and (ii)
acknowledge that I can
bear the economic risk of my investment,
including the loss of the entire investment. I have been urged to
seek
independent advice
from my professional advisors relating to the
suitability of an
investment
in the Company in view of my overall
financial needs and with respect to the legal and tax implications of
such investment.
(e)
Restricted Securities.
I understand that the Securities are being sold
pursuant to exemptions
from registration under Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act") and Rule
506
of Regulation D promulgated thereunder. I also understand that the
Securities and any
securities
issuable on
exercise or conversion
thereof may
not be resold by me without registration under the
Securities Act or an exemption therefrom, and that in the absence of
an effective
registration statement
covering the
Securities
or an
available exemption
from registration
under the Securities
Act, the
Securities may be
restricted from resale
in a transaction
to which
United States securities laws apply for an indefinite period of
time.
(f)
Illiquid Investment. I understand that no market for the
Securities
exists and no such market may ever exist.
(g)
Operating History. I
understand and acknowledge that the Company has a
limited operating
history. The Company
will use the proceeds of this
Offering to (i) develop its business and the relationships acquired
upon the consummation
of the Share
Exchange and (ii) pay the legal
fees and other costs related to the Share Exchange, all as described
in the Offering Documents.
3
<PAGE>
(h)
Residence.
I reside, or my office primarily responsible for the
purchase of the
Securities is located,
at the address listed
on the
signature page.
(i)
Brokers or Finders. All negotiations on the part of the Investor
relative to the transactions contemplated hereby have been
carried on
by me without the
intervention of any
person or as the result of any
act of
mine in such manner as
to give rise to any
valid claim for a
brokerage commission, finder's fee, or other like payment.
(j)
Reliance. I understand
that this agreement is made with me in reliance
upon my representations to the Company, as set forth above.
(k)
Legend. I understand that the certificates or other instruments
representing the Notes
and the Warrants and,
until such time as
the
resale of the
Conversion Shares,
the Common
Shares and the
Warrant
Shares have been registered under the 1933 Act as contemplated
by the
Registration Rights Agreement, the stock certificates representing
the
Conversion Shares, the Common Shares and the Warrant Shares, except
as
set forth below,
shall bear any legend
as required by the "blue sky"
laws of any state
and a restrictive legend in substantially the
following form
(and a stop-transfer order may be placed against
transfer of such stock certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR
THE SECURITIES INTO WHICH THESE SECURITIES ARE
[CONVERTIBLE]
[EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, 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 OF 1933,
AS AMENDED,
OR (B) AN OPINION
OF
COUNSEL, IN A
GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID
ACT OR (II) UNLESS
SOLD PURSUANT TO RULE
144 OR
RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.
The legend set forth
above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities
upon which it is
stamped or issue to such holder by electronic delivery at the
applicable balance
account at DTC (as
defined below),
if, unless otherwise required by state
securities laws,
(i) such Securities are registered for
resale under the 1933
Act, (ii) in connection with a sale, assignment or other transfer,
such holder
provides the Company with an opinion of counsel, in a generally
acceptable form,
4
<PAGE>
to the effect that such sale, assignment or transfer of the
Securities
may be
made without registration under the applicable requirements of the 1933 Act,
or
(iii) such holder
provides the Company with reasonable assurance that the
Securities can be
sold, assigned or
transferred
pursuant to Rule 144
or Rule
144A.
7.
Company
Representations and
Warranties.
The Company
represents
and
warrants to each of the Investors, as of the date hereof and as of
the date of
Closing as follows
(which representations
and warranties shall be deemed to
apply, as appropriate,
to each subsidiary of the Company,
including without
limitation, Perf-Go Green, Inc:
(a)
Organization and Authority.
(i) Organization.
Each of the Company
and its "Subsidiaries"
(which
for purposes
of this Agreement means any entity in which the
Company, directly or indirectly, owns any of the capital stock
or
holds an equity or similar interest) are entities duly
organized
and validly
existing in good standing under the laws of the
jurisdiction in which
they are formed,
and have the
requisite
power and
authorization to own
their properties and to carry on
their business as now
being conducted.
Each of the Company
and
its Subsidiaries
is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which
its ownership of property or the nature of the business
conducted
by it makes such
qualification
necessary, except to
the extent
that the failure to be so qualified or be in good standing
would
not have a Material
Adverse Effect.
As used in this
Agreement,
"Material Adverse
Effect" means any
material adverse
effect on
the business,
properties,
assets,
operations,
results
of
operations, condition
(financial
or otherwise) or
prospects of
the Company and its
Subsidiaries,
taken as a whole,
or on the
transactions
contemplated hereby
and the other Transaction
Documents or by the agreements and instruments to be entered
into
in connection
herewith or
therewith,
or on the authority or
ability of the
Company to perform its obligations under the
Transaction Documents
(as defined below). The Company has no
Subsidiaries, except Perf-Go Green, Inc.
(ii) Authorization; Enforcement; Validity. The Company has the
requisite power and
authority to enter into and perform its
obligations under this
Agreement,
the Notes,
the Irrevocable
Transfer Agent Instructions, the Warrants, and each of the
other
agreements entered
into by the parties hereto in connection with
the transactions
contemplated by this
Agreement
(collectively,
the "Transaction
Documents")
and to issue
the Securities in
accordance with the
terms hereof and thereof. The execution and
delivery of the
Transaction
Documents by the Company and the
consummation by the
Company of the transactions contemplated
hereby and thereby,
including, without
limitation, the issuance
of the Notes and the Warrants, the reservation for issuance and
the
issuance of the shares issuable upon conversion of the Notes,
5
<PAGE>
the reservation
for issuance and issuance of Warrant Shares
issuable upon
exercise of the
Warrants and any shares issued in
connection with the
payment of interest (the "Interest Shares")
and the granting of a
security interest in
the Collateral
(as
defined in the Security Agreement) have been duly authorized by
the Company's
Board of Directors and
(other than (i) the filing
of appropriate
UCC financing
statements
with the appropriate
states and other authorities pursuant to the Security
Agreement,
(ii) the filing with the SEC of one or more registration
statements in accordance with the Registration Rights Agreement
between the Company and the Holders) and (iii) appropriate "blue
sky" state
securities law filings, no further filing, consent, or
authorization is required by the Company, its Board of Directors
or its stockholders.
This Agreement and the other
Transaction
Documents of even date
herewith have been duly executed and
delivered by the Company, and constitute the legal, valid and
binding obligations
of the Company, enforceable against the
Company in accordance with their respective terms, except as
such
enforceability may be
limited by general principles of equity or
applicable bankruptcy,
insolvency,
reorganization,
moratorium,
liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors' rights and remedies.
(iii) Issuance of
Securities. The
issuance of the Notes,
the Common
Shares and the Warrants are duly authorized and are free from
all
taxes, liens and charges with respect to the issue thereof. As
of
the applicable
Closing, a number of shares of Common Stock shall
have been duly
authorized and reserved for issuance which equals
at least (i) 100% of the number of Common Shares issued
hereunder
and (ii) 130% of the sum of the maximum number of shares Common
Stock issuable
(A) as Interest pursuant to the terms of the
Notes, (B) upon conversion of the Notes issued at such
Closing
and issued at all prior Closings and (C) upon exercise of the
Warrants. Upon conversion or payment in accordance with the
Notes
or exercise in accordance with the Warrants, as the case may be,
the Conversion
Shares, the Interest Shares and the Warrant
Shares, respectively,
will be validly issued, fully paid and
nonassessable and free
from all preemptive
or similar
rights,
taxes, liens and charges with respect to the issue thereof,
with
the holders being entitled to all rights accorded to a holder of
Common Stock.
The offer and issuance by the Company of the
Securities is exempt from registration under the 1933 Act.
(iv) No Conflicts. The
execution,
delivery and
performance
of the
Transaction Documents
by the Company and the consummation by the
Company of the
transactions
contemplated
hereby and thereby
(including, without limitation, the issuance of the Notes and
the
Warrants, the granting
of a security interest
in the Collateral
and reservation
for issuance and issuance of the Conversion
Shares, the Interest
Shares and the Warrant Shares) will not (i)
result in a
violation of the Articles of Incorporation (as
defined in
Section 3(r)) of the Company or any of its
Subsidiaries, any
capital stock of the Company or Bylaws (as
defined in
Section 3(r)) of the Company or any of its
6
<PAGE>
Subsidiaries, or (ii)
conflict with, or constitute a default (or
an event which with notice or lapse of time or both would
become
a default) under,
or give to others any
rights of
termination,
amendment,
acceleration or
cancellation
of, any agreement,
indenture or
instrument
to which the Company or any of its
Subsidiaries is a
party, or (iii)
result in a violation
of any
law, rule,
regulation,
order, judgment or decree (including
federal and state
securities laws and
regulations and the rules
and regulations
of the OTC Bulletin Board (the "Principal
Market")) applicable to the Company or any of its Subsidiaries
or
by which any
property or asset of the Company or any of its
Subsidiaries is bound or affected.
(v) Consents.
Neither the Company nor any of its Subsidiaries is
required to obtain any
consent, authorization or order of, or
make any filing or
registration with,
any court,
governmental
agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its
obligations under or
contemplated by the Transaction Documents,
in each case in accordance with the terms hereof or thereof.
All
consents, authorizations, orders, filings and registrations
which
the Company is
required to obtain pursuant to the preceding
sentence have
been obtained or effected on or prior to the
Closing Date,
and the Company is unaware of any facts or
circumstances which
might prevent the Company from obtaining or
effecting any
of the registration, application or filings
pursuant to the preceding sentence.
(vi) Acknowledgment
Regarding Investor's Purchase of Securities. The
Company acknowledges and agrees that Investor is acting solely
in
the capacity
of arm's length purchaser with respect to the
Transaction Documents
and the transactions
contemplated
hereby
and thereby and that no Investor is (i) an officer or director
of
the Company, (ii) to its knowledge, an "affiliate" of the
Company
(as defined
in Rule 144) or (iii) to the knowledge of the
Company, a "beneficial
owner" of more than
10% of the shares of
Common Stock
(as defined for purposes of Rule 13d-3 of the
Securities Exchange
Act of 1934, as
amended (the "1934
Act")).
The Company further acknowledges that Investor is not acting as
a
financial advisor or
fiduciary of the Company (or in any similar
capacity) with
respect to the Transaction Documents and the
transactions
contemplated hereby
and thereby, and any advice
given by a Investor or
any of its
representatives or
agents in
connection with the
Transaction Documents
and the
transactions
contemplated hereby
and thereby is merely incidental to such
Investor's purchase
of the Securities. The Company further
represents to each Investor that the Company's decision to enter
into the Transaction
Documents has been based solely on the
independent evaluation by the Company and its representatives.
(vii) No General
Solicitation;
Placement Agent's
Fees. Neither the
Company, nor any of its affiliates, nor any Person acting on its
or their behalf, has engaged in any form of general solicitation
or general advertising
(within the meaning of
Regulation D) in
7
<PAGE>
connection with the offer or sale of the Securities. The Company
shall be responsible
for the payment of any
placement agent's
fees, financial
advisory fees, or
brokers' commissions
(other
than for persons engaged by any Investor or its investment
advisor)
relating to
or arising out of the transactions
contemplated hereby.
The Company shall pay, and hold each
Investor harmless
against, any liability, loss or expense
(including, without limitation, attorney's fees and
out-of-pocket
expenses) arising in
connection with any such claim. The Company
acknowledges that it
has engaged vFinance
Investments, Inc.
as
placement agent (the
"Placement
Agent") in connection
with the
sale of the
Securities. Other
than the Placement Agent, the
Company has not
engaged any
placement agent or other agent in
connection with the sale of the Securities.
(viii) No Integrated Offering. None of the Company, its
Subsidiaries,
any of their
affiliates, and any
Person acting on their
behalf
has, directly
or indirectly, made any offers or sales of any
security or
solicited any offers to buy any security, under
circumstances that
would require registration of any of the
Securities under
the 1933 Act or cause this offering of the
Securities to be integrated with prior offerings by the Company
for purposes
of the 1933 Act or any applicable stockholder
approval provisions,
including,
without limitation,
under the
rules and regulations
of any exchange or automated quotation
system on which any of the securities of the Company are listed
or designated.
None of the
Company, its Subsidiaries, their
affiliates and any
Person acting on their
behalf will take
any
action or steps referred to in the preceding sentence that would
require registration
of any of the Securities under the 1933 Act
or cause the offering of the Securities to be integrated with
other offerings.
(ix) Dilutive Effect.
The Company
understands and acknowledges that
the number of Conversion Shares issuable upon conversion of
the
Notes and the
Warrant Shares issuable upon exercise of the
Warrants will
increase in certain circumstances. The Company
further acknowledges
that its obligation to issue Conversion
Shares upon
conversion
of the Notes in accordance with this
Agreement and the
Notes and its
obligation to issue the Warrant
Shares upon exercise
of the Warrants
in accordance with this
Agreement and
the Warrants, in each case, is absolute and
unconditional
regardless of
the dilutive effect that such
issuance may
have on the ownership interests of other
stockholders of the Company.
(x) Application
of Takeover Protections; Rights Agreement. The
Company has not
adopted a stockholder rights plan or similar
arrangement relating
to accumulations of beneficial ownership of
Common Stock or a change in control of the Company.
(b)
SEC Documents.
8
<PAGE>
(i) The Company is
current with its reporting obligations under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act").
None of the Company's
filings made pursuant
to the Exchange Act
(collectively, the "SEC Documents") contains any untrue
statement
of a material fact or
omitted 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. The
Company SEC Documents,
as of their
respective
dates, were timely
filed and complied in
all material
respects
with the requirements
of the Exchange Act, and the rules and
regulations of the
Commission thereunder,
and are available
on
the Commission's EDGAR system.
(ii) The Company
SEC Documents include the Company's audited
consolidated financial
statements
for the fiscal
years ended
October 31,
2007 and 2006 and the unaudited consolidated
financial statements
for the quarters ended January 31, 2008 and
April 30, 2008 (collectively, the "Financial Statements"),
including, in
each case, a balance sheet and the related
statements of income, stockholders' equity and cash flows for
the
period then ended,
together with the related notes. The audited
Financial Statements
for the fiscal year
ended October 31, 2007
have been certified by Webb & Company, P.A. ("Webb"). The
audited
Financial Statements
for the fiscal year
ended October 31, 2006
have been certified by Williams & Webster, P.S. ("Williams").
The
Financial Statements
which have been
prepared from the books,
records and
accounts of the Company, are true, correct and
complete and
have been prepared in accordance with GAAP,
consistently applied. Webb is independent as to the Company
under
the rules of the Commission pursuant to the Securities Act and
is
registered with the
Public Company
Accounting Oversight
Board
("PCAOB"). The Financial Statements present fairly and
accurately
the financial position
of the Company at the respective balance
sheet dates, and fairly and accurately present the results of
the
Company's operations,
changes in
stockholders' equity
and cash
flows for the periods covered.
(iii) Other than as
disclosed in the SEC
Documents, at the
close of
business on
October 31, 2007, the Company did not have any
material liabilities,
absolute
or contingent, of the type
required to be reflected on balance sheets prepared in
accordance
with
GAAP which are not
fully reflected,
reserved against or
disclosed on the October 31, 2007 balance sheet. The Company has
not guaranteed or assumed or incurred any obligation with
respect
to any debt or
obligations of any
Person. The Company
does not
have any debts, contracts, guaranty, standby, indemnity or hold
harmless commitments,
liabilities
or obligations of any kind,
character or description, whether accrued, absolute,
contingent
or otherwise,
or due or to become
due except to the
extent set
forth or noted in the Financial Statements, and not heretofore
paid or discharged.
9
<PAGE>
(c)
Absence of Changes.
Since October
31, 2007, except as set forth on
Schedule 7(c) there have not been:
(i) any change in the
consolidated assets,
liabilities, or financial
condition of the Company, except changes in the ordinary
course
of business
which do not and will
not have a Material
Adverse
Effect on the Company;
(ii) any damage, destruction, or loss to the Company's assets,
whether
or not covered by insurance, materially and adversely
affecting
the assets or financial condition of the Company (as conducted
and as proposed to be conducted);
(iii) any change
or amendment to a contract, to the Company's
certificate of incorporation or by-laws, or arrangement to which
the Company
is a party
other than contracts which are to be
terminated at or prior
to the Closing
which are set forth on
Schedule 7(c);
(iv) any loans made by the Company to any affiliate of the Company or
any of the Company's employees, officers, directors,
Stockholders
or any of its affiliates;
(v) any declaration or
payment of any dividend or other distribution
or any redemption of any capital stock of the Company;
(vi) any sale,
transfer or issuance of any shares of capital stock or
other securities of
the Company, except
for (i) the shares sold
to the investors in the previous financing that raised
$2,100,000
for the Company, (ii)
the Notes and Warrants issued to investors
in the Private
Placement on May 13,
2008, (iii) the shares of
Common Stock issued to the shareholders of Perf-Go Green, Inc.
issued in connection
with the Share
Exchange Agreement by and
between the Company and the shareholders of Perf-Go Green,
Inc.
dated May 13,
2008, and (iv) the shares of common stock of
Perf-Go Green,
Inc. issued to certain investors in connection
with the conversion of
senior secured
convertible
notes in an
offering consummated
in January and
February 2008 in the amount
of $750,000;
(vii) any sale,
transfer, or lease of any of the
Company's assets
other than in the ordinary course of business;
(viii) any capital expenditure;
(ix) any other event or condition of any character which might have a
Material Adverse Effect on the Company;
(x) any satisfaction or discharge of any
lien, claim or
encumbrance
or payment of any
obligation by Company
except in the
ordinary
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<PAGE>
course of business
and that is not
material to the assets or
financial
condition of the Company; or
(xi) any agreement
or commitment by the Company to do any of the
things described in this Section 7(c).
(d)
No Undisclosed Events, Liabilities, Developments or Circumstances.
No
event, liability,
development or
circumstance
has occurred or
exists, or is
contemplated to occur
with respect to the Company, its Subsidiaries or their
respective business, properties, prospects, operations or financial
condition,
that would
be required to be disclosed by the Company under applicable
securities laws on a
registration
statement on Form S-1 filed with the SEC
relating to an
issuance and sale by
the Company of its Common Stock and which
has not been publicly announced.
(e)
Conduct of Business;
Regulatory Permits.
Neither the Company
nor its
Subsidiaries is in
violation of any term of or in default under its Articles of
Incorporation or
Bylaws or their
organizational
charter or certificate of
incorporation or
bylaws, respectively. Neither the Company nor any of its
Subsidiaries is in
violation of any
judgment, decree or
order or any statute,
ordinance, rule or regulation applicable to the Company or its
Subsidiaries, and
neither the Company nor any of its Subsidiaries will conduct its business in
violation of any of the foregoing, except for possible violations which would
not, individually or in the aggregate, have a Material Adverse Effect.
Without
limiting the generality of the foregoing, the Company is not in
violation of any
of the rules,
regulations or
requirements of the
Principal Market and
has no
knowledge of any facts or circumstances which would reasonably lead
to delisting
or suspension of the
Common Stock by the
Principal Market in
the foreseeable
future. Since July
2007, the Common Stock has been designated for quotation on
the Principal Market.
Since July 2007, (i)
trading in the Common Stock has not
been suspended
by the SEC or the
Principal Market and (ii) the Company has
received no communication, written or oral, from the SEC or the
Principal Market
regarding the
suspension
or delisting of the
Common Stock from the
Principal
Market. The
Company and its Subsidiaries possess all certificates,
authorizations and
permits issued by the
appropriate
regulatory
authorities
necessary to conduct their respective businesses, except where the failure to
possess such
certificates,
authorizations
or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of
proceedings
relating
to the revocation or
modification of any
such certificate,
authorization
or
permit.
(f) Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any
director, officer, agent, employee or other Person acting
on behalf of the
Company or any of its
Subsidiaries has, in
the course of its
actions for, or on
behalf of, the Company or any of its Subsidiaries (i) used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses
relating to political activity; (ii) made any direct or
indirect unlawful
payment to any
foreign or domestic
government
official or
11
<PAGE>
employee from
corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.
(g)
Transactions
With Affiliates. Except as set forth on Schedule
7(g),
none of the officers, directors or employees of the Company is
presently a party
to any transaction with the Company or any of its Subsidiaries (other than for
ordinary course
services as employees,
officers or
directors), including
any
contract, agreement
or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from,
or otherwise
requiring payments to or from any such officer, director or
employee or, to the
knowledge of the
Company or any of its
Subsidiaries, any
corporation,
partnership, trust or
other entity
in which any such officer,
director, or employee
has a substantial
interest or is an
officer, director,
trustee or partner.
(h)
Equity Capitalization.
As of the date hereof,
the authorized
capital
stock of the Company
consists of (i)
100,000,000 shares of
Common Stock,
of
which as of the date hereof, 32,279,470 are issued and
outstanding,
10,000,000
shares are reserved
for issuance
pursuant to the
Company's stock option and
purchase plans. All of such outstanding shares have been, or upon issuance
will
be, validly issued and are fully paid and nonassessable.
Except as set forth
on
Schedule 7(h), (i) none of the Company's capital stock is 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 options, warrants,
scrip, rights to subscribe to, calls or commitments of any
character
whatsoever
relating to, or
securities
or rights convertible into, or exercisable or
exchangeable for, any
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 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, or exercisable or
exchangeable for, any
capital stock of the Company or any of its Subsidiaries;
(iii) there are no outstanding debt securities, notes, credit
agreements, credit
facilities or other agreements, documents or instruments evidencing
Indebtedness
of the Company or any of its Subsidiaries or by which the
Company or any of its
Subsidiaries is or may
become bound;
(iv) there are no
financing statements
securing obligations in any material amounts, either singly or in
the aggregate,
filed in connection with the Company or any of its Subsidiaries; (v) 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 1933 Act
(except pursuant
to Section 4(u) hereof); (vi) there are no outstanding
securities or
instruments
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;
(vii) there are no
securities or
instruments
containing
anti-dilution or
similar provisions
that will be triggered
by the issuance of
the Securities; (viii)
the Company does not have any stock appreciation rights
or "phantom stock"
plans or agreements or
any similar plan or
agreement; and
(ix) the Company and its Subsidiaries have no liabilities or obligations
12
<PAGE>
required to be
disclosed in the SEC
Documents but not so
disclosed in the SEC
Documents, other than
those incurred in the ordinary course of the Company's or
its Subsidiaries'
respective
businesses
and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect.
True, correct and
complete copies of the Company's Articles of Incorporation, as
amended and as in
effect on the date hereof (the "Articles of Incorporation"), and the Company's
Bylaws, as
amended and as in effect on the date
hereof (the "Bylaws") are
available for review on the EDGAR system maintained by the U.S.
Securities and
Exchange Commission.
(i)
Indebtedness and Other Contracts. Except as disclosed in Schedule
7(i),
neither the
Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract,
agreement or
instrument, the
violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument would
result in a Material
Adverse Effec
