SECURITIES ISSUANCE
AGREEMENT
THIS SECURITIES ISSUANCE AGREEMENT is made on
the 23 rd
day of April 2009, by
and among Cellynx Group, Inc., a Nevada corporation (the “
Company ”), Dollardex Group Corp., a company organized
under the laws of Panama or its assigns, (“ Investor
”), Robert Legendre, a natural person (“
Legendre ”), Tareq Risheq, a natural person (“
Risheq ”), and for purposes of Section 1.3(c) only,
Daniel Ash (“ Ash ”), a natural person, and Norm
Collins (“ Collins ”), a natural
person.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1.
Securities Issuance;
Separation .
(a)
Subject to the terms and conditions of
this Agreement, the Investor agrees, to purchase at the Closing or
pursuant to Section 1.3 and the Company agrees to sell
and issue to the Investor at the Closing or pursuant to
Section 1.3 , that number of shares of the
Company’s common stock (“ Common Stock ”
or “ Shares ”) and warrants to purchase that
number of Shares at $0.10 per share (“ Warrants
” and together with the Shares, the “ Securities
”), set forth opposite the Investor’s name on
Schedule A hereto for the purchase price set forth
thereon. The Investor shall purchase an aggregate of
2,785,000 shares of common stock and 2,785,000 warrants for an
aggregate purchase price of $278,500.
(a)
Closings . The purchase and sale of the Securities
shall be made through several closings.
(b)
First Closing . The first closing in the aggregate
amount of at least $40,000 shall take place at 10:00 am on or prior
to April 23, 2009 at the offices of Richardson & Patel LLP at
10900 Wilshire Boulevard, Los Angeles, California or at such other
time and place the Company and Investors mutually agree upon orally
or in writing (which time and place are designated as the “
First Closing ”). The
Investor has already advanced $78,500 to the Company. At
the First Closing, the Company shall deliver to Investors
certificates representing the Securities that such Investor is
purchasing.
(c)
Subsequent Closings
. Subject to the terms and
conditions of this Agreement, at each subsequent closing (“
Subsequent Closing ,” and along with the First
Closing, generically referred to as, a “ Closing
”), the Company will sell to the Investor and the Investor
will purchase from the Company additional Securities in
installments. Each Subsequent Closing shall take place
at 10:00 a.m. local time on or about the business day on the
conditions in Section 4 applicable to such Subsequent Closing have
been fulfilled or waived or at such other time and date as the
Company and the Investor shall mutually agree. Each
Subsequent Closing shall occur in accordance with Schedule A
, subject to a 10-day grace period for the purchase of the
Securities if requested by Investor.
(a)
Legendre . Upon execution of this Agreement,
Legendre hereby resigns as Executive Chairman and director of the
Company (and any other officer positions at the Company) and hereby
cancels all options to purchase Shares that were originally granted
by the Company to him. In exchange for cancelling the
options and as payment in full for all services rendered to the
Company in any capacity, the Company shall issue Legendre 2,000,000
Shares which shall be delivered after Legendre has tendered his
option to the Company. Legendre agrees that these 2.0
million Shares shall be subject to the Lock-up Agreement executed
by Legendre and the Company on or about June
2008.
(b)
Risheq . Upon execution of this Agreement, Risheq
hereby resigns any and all officer positions of the Company that he
holds but will remain as a director and hereby cancels
all options to purchase Shares that were originally granted to
him. In exchange for cancelling the options and for
payment in full for all services rendered to the Company in any
capacity, the Company shall issue Risheq 1,500,000
Shares. Risheq agrees that these 1.5 million Shares
shall be subject to the Lock-up Agreement executed by Risheq and
the Company on or about June 2008. (Risheq, Legendre and
Investor shall generically be referred to as, “
Holders ”).
(c)
Replacement Personnel
. Following execution of this
Agreement, Ash, Risheq and Collins agree to appoint Don Wright as a
director of the Company. Ash, Risheq and Collins
acknowledge that they have discussed Mr. Wright’s
directorship appointment and reviewed his employment history,
education and other relevant background and believe such an
appointment would be in the best interests of the Company’s
shareholders. Within 30 days of this Agreement, Investor
shall propose another designee to serve on the Company’s
Board of Directors. Ash, Risheq and Collins agree not to
unreasonably withhold their support and approval of such
designee. Notwithstanding the foregoing, Ash, Risheq and
Collins may withhold their appointment of Wright or any Investor
designee as a director if they in their good faith believe that
such appointment would not be in the best interest of the Company
and its shareholders.
2.
Representations and Warranties of the
Company . As of
the date of this Agreement, or such other date as set forth
therein, the Company hereby represents and warrants to the Investor
that:
2.1
Organization, Good Standing and
Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of
the State of California. The Company is duly qualified
to transact business and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse
effect on its business or properties.
2.2
Capitalization and Voting
Rights. As of December 31, 2008, the number
of authorized Shares and the number of outstanding Shares as of
such date, were described in the Company’s latest Form 10-Q
filed with the Securities and Exchange Commission (“ Form
10-Q ”).
(a)
The outstanding shares of Common Stock
are all duly and validly authorized and issued, fully paid and
nonassessable, and were issued in compliance with all applicable
state and federal laws concerning the issuance of
securities.
(b)
There are no options, warrants, rights
(including conversion or preemptive rights) or agreements for the
purchase or acquisition from the Company of any shares of its
capital stock other than as reported in the Company’s Form
10-Q or other filings with the Securities and Exchange Commission
(“ SEC ”). The Company has reserved
such number of shares of its Common Stock for purchase upon
exercise of options to be granted in the future under the
Company’s stock option plan. The Company is not a
party or subject to any agreement or understanding, and, to the
Company’s knowledge, there is no agreement or understanding
between any persons and/or entities, which affects or relates to
the issuance of additional securities of the Company, or voting or
giving of written consents with respect to any security or by a
director of the Company other than as described in the
Company’s filings with the SEC.
2.3
Subsidiaries.
The Company does not presently own or control, directly
or indirectly, any interest in any other corporation, association,
or other business entity. The Company is not a
participant in any joint venture, partnership, or similar
arrangement.
2.4
Authorization.
All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the
performance of all obligations of the Company hereunder and
thereunder, and the authorization (or reservation for issuance),
sale and issuance of the Common Stock being sold hereunder has been
taken or will be taken prior or subsequent to the
Closing. This Agreement constitutes valid and legally
binding obligations of the Company, enforceable in accordance with
their respective terms, except (i) as limited by 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) to the extent the
indemnification provisions may be limited by applicable federal or
state securities laws.
2.5
Valid Issuance of Common
Stock. The Common Stock (including Common
Stock subject to the Warrants) that is being purchased by the
Investor hereunder, when issued, sold and delivered in accordance
with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid and
nonassessable and will be free of restrictions on transfer, other
than restrictions on transfer under this Agreement and under
applicable state and federal securities laws.
2.6
Governmental Consents.
No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing
with, any federal, state or local governmental authority on the
part of the Company is required in connection with the consummation
of the transactions contemplated by this Agreement, except for:
(i) the filing of a Form D under Regulation D promulgated under the Securities Act of 1933, as
amended (the “ Act ”), which filing will be
effected within the time prescribed by law, and (ii) such
other filings required pursuant to applicable federal and
state securities laws and blue sky laws, which filings will be
effected within the required statutory period.
2.7
Offering.
Subject in part to the truth and accuracy of the
Investor’s representations set forth in Section 3 of
this Agreement, the offer, sale and issuance of the Common Stock as
contemplated by this Agreement are exempt from the
registra
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