EXHIBIT 4.3
FORM OF AMENDED SUBSCRIPTION AGREEMENT DATED OTOBER 20, 2003
FIRST AMENDMENT TO THE CENTREX INC. SUBSCRIBTION AGREEMENT
Comes Now, the Subscriber _______________ and Centrex Inc. an Oklahoma
Corporation who hereby amend the original Subscription Agreement between the
parties dated the ___ day of __________, 2003 as set forth below.
The following paragraphs are hereby deleted from the original Subscription
Agreement.
"8.5Look Back Period.
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(i) First Lookback If upon the date of effective
registration the average 10 day closing bid price
according to Bloomberg is below the purchase price
(0.045) the investor shall immediately receive an
additional amount of free trading common stock equal to
100% of the principal multiplied by the difference
between 5.4 cents and the market price. Should the
issuer not want to deliver these additional shares,
they have the right to redeem the investor at 120% of
principal in cash within 5 business days. In that
event, issuer has no further obligations.
(ii) Second Lookback Commencing upon the earlier of the
subscribers total liquidation of his shares or one
hundred twenty (120) days from the date of the
effective registration, if any average ten trading
days; closing bid price is below four and a half cents
($0.045), the issuer agrees to issue additional common
stock at market price (the average ten day closing
price) to make up the difference between the five and
four tenths cents ($0.054) and the market price. In the
event that the investors total return exceeded 110%, no
additional shares will be issued.. The subscriber will
forward all trading records with the written request
for an additional issuance to the Company. The
additional issuance will be based on the total
investment by the Subscriber. The Warrants are not
eligible for an additional issuance. In lieu of issuing
additional stock, Issuer has the option to redeem 120%
of the original investment i.e. five and four tenths
cents ($0.054) per share in cash. The Company shall
register a total of 40 million shares on a Form SB-2
registration, pursuant to the registration
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rights as set forth above. These additional shares are
to be issued pursuant to this look-back clause when and
if necessary."
In consideration of the deletion of the Lookback provisions above the following
paragraph shall supersede and replace the paragraphs 8.5(i) and (ii) as set
forth above and in the original Subscription Agreement.
"8.5 Additional Warrant. The subscriber shall receive two warrants to purchase
Centrex Inc. common stock for every share of Centrex Common Stock purchased in
this offering.
(i) Registration Rights. These Warrants shall have the same registration
rights as the common shares in this offering.
(ii) Strike Price. The Warrants shall have an exercise price of twenty
cents ($0.20) per share.
(iii) Term. This Warrants shall expire in one year.
(iv) Non Cashless Provision. The warrants shall be in the form attached and
made apart hereof as exhibit "A" and do not contain a provision for
cashless exercise.
(v) Regulation D. This warrants are offered based upon the same exemption
from registration as set forth in the original Subscription Agreement
for the Common Shares.
The Subscriber hereby waives any penalty provision that may have been
inadvertently triggered by this Amendment.
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All other terms in the original Subscription Agreement shall remain in full
force and effect specifically the eight cent warrants shall remain in effect
pursuant to their terms as set forth in the original Subscription Agreement.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Jr. M.D.
CEO Centrex Inc.
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Subscriber
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SUBSCRIPTION AGREEMENT
The Subscriber identified on the signature page hereto (the "Subscriber")
hereby agrees to purchase, and Centrex, Inc., a Oklahoma corporation (the
"Company") hereby agrees to issue and to sell to the Subscriber, shares of the
Company's $.001 par value common stock (the "Company Shares") and common stock
purchase warrants representing the right to purchase one share per warrant of
the Company's $.001 par value common stock ("Warrants") for the aggregate
consideration of $600,000 ("Purchase Price"). The Purchase Price shall be
$0.045) per share. The warrants shall be at $0.08 per share. The Purchaser shall
receive one warrant for every dollar invested. The amount of Company Shares to
be sold by the Company and purchased by the Subscriber shall be 19,533,334
Company Shares. The form of Warrant is annexed hereto as Exhibit A. The Company
Shares included in the Securities (as hereinafter defined) are sometimes
referred to herein as the "Shares", "Common Shares" or "Common Stock". The
Company Shares, Warrants, and the Common Stock issuable upon exercise of the
Warrants ("Warrant Shares") are collectively referred to herein as, the
"Securities" or the "Registrable Securities". Subject to the terms and
conditions hereof and upon acceptance of this agreement by the Subscriber, at
the Closing Date, the Company shall issue, sell and deliver the Company Shares
and Warrants against payment, by Subscriber of the Purchase Price, by a federal
funds wire transfer of immediately available funds.
The consummation of the transactions contemplated herein shall take place
at the offices of ▇▇▇▇▇▇▇ & Associates, PLLC, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ upon the satisfaction of all conditions to Closing set forth in
this Agreement. The closing date shall be the date that subscriber funds
representing the net amount due the Company from the Purchase Price of the
Offering is transmitted by wire transfer or otherwise to the Company (the
"Closing Date"). In the event that multiple transactions occur, resulting in
multiple Closing Dates, the Company will file a registration in accordance with
8.1(iv) at the conclusion of the final transaction (the "Final Closing Date").
The Company will also issue and deliver to the Subscriber on the Closing
Date the number of Warrants equal to the number of dollars invested . The per
share "Exercise Price" of the common stock issuable upon exercise of the
Warrants shall be exercisable at eight cents ($0.08). The Warrants shall be
exercisable for three years after the Issue Date (as defined in the Warrant).
The following terms and conditions shall apply to this subscription.
1. Subscriber's Representations and Warranties. The Subscriber hereby
represents and warrants to and agrees with the Company that:
(a) Information on Company. The Subscriber has been furnished or has
obtained from the ▇▇▇▇▇ Website of the Securities and Exchange Commission
(the "Commission") the Company's Form 10-KSB for the year ended December
31, 2001 as filed with the Commission on April 1, 2002, together with all
subsequently filed Forms 10KSB, 10-QSB, 8-K, and filings made with the
Commission available at the ▇▇▇▇▇ website (hereinafter referred to
collectively as the "Reports"). In addition, the Subscriber has received
from the Company such other information concerning its operations,
financial condition and other matters as the Subscriber has requested in
writing (such information in writing is collectively, the "Other Written
Information"), and considered all factors the Subscriber deems material in
deciding on the advisability of investing in the Securities.
(b) Information on Subscriber. The Subscriber is an "accredited
investor", as such term is defined in Regulation D promulgated by the
Commission under the Securities Act of 1933, as amended (the "1933 Act"),
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is experienced in investments and business matters, has made investments of
a speculative nature and has purchased securities of United States
publicly-owned companies in private placements in the past and, with its
representatives, has such knowledge and experience in financial, tax and
other business matters as to enable the Subscriber to utilize the
information made available by the Company to evaluate the merits and risks
of and to make an informed investment decision with respect to the proposed
purchase, which represents a speculative investment. The Subscriber has the
authority and is duly and legally qualified to purchase and own the
Securities. The Subscriber is able to bear the risk of such investment for
an indefinite period and to afford a complete loss thereof. The information
set forth on the signature page hereto regarding the Subscriber is
accurate.
(c) Purchase of Company Shares and Warrants. On the Closing Date, the
Subscriber will purchase the Company Shares and Warrants for its own
account and not with a view to any distribution thereof.
(d) Compliance with Securities Act. The Subscriber understands and
agrees that the Securities have not been registered under the 1933 Act, by
reason of their issuance in a transaction that does not require
registration under the 1933 Act (based in part on the accuracy of the
representations and warranties of Subscriber contained herein), and that
such Securities must be held indefinitely unless a subsequent disposition
is registered under the 1933 Act or is exempt from such registration. In
any event, the Subscriber may enter into hedging transactions with third
parties, which may in turn engage in short sales of the Securities in the
course of hedging the position they assume. The Subscriber may also enter
into short positions or other derivative transactions relating to the
Securities, or interests in the Securities, and deliver the Securities, or
interests in the Securities, to close out their short or other positions or
otherwise settle short sales or other transactions, or loan or pledge the
Securities, or interests in the Securities, to third parties that in turn
may dispose of these Securities.
(e) Company Shares Legend. The Company Shares, and the Warrant Shares,
shall bear the following or similar legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO CENTREX INC. THAT
SUCH REGISTRATION IS NOT REQUIRED."
(f) Warrants Legend. The Warrants shall bear the following or similar
legend:
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE
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UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO CENTREX INC. THAT SUCH REGISTRATION IS
NOT REQUIRED."
(g) Communication of Offer. The offer to sell the Securities was
directly communicated to the Subscriber. At no time was the Subscriber
presented with or solicited by any leaflet, newspaper or magazine article,
radio or television advertisement, or any other form of general advertising
or solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.
(h) Correctness of Representations. The Subscriber represents that the
foregoing representations and warranties are true and correct as of the
date hereof and, unless the Subscriber otherwise notifies the Company prior
to the Closing Date (as hereinafter defined), shall be true and correct as
of the Closing Date. The foregoing representations and warranties shall
survive the Closing Date for a period of three years.
(i) No Short Sales. The Subscriber will not directly or indirectly
enter into any short positions of the Company's securities whether hedging
or otherwise. In addition, the subscriber will not direct any third parties
to short or hedge the Company's securities. The subscriber further
recognizes that injunctive relief would be an available and acceptable
remedy to prohibit any shorting activity as described above.
(j) Open Books and Records. The Subscriber agrees to open for complete
review upon demand of the Company all of its brokerage accounts and its
assigns brokerage accounts where the Company's shares have been placed.
This review is entitled to be as broadly construed as possible, there shall
be no reasonable limitation on the Company's right to review the subscriber
and its assigns trading records. The subscriber further recognizes that
affirmative injunctive relief would be an acceptable and appropriate remedy
for the subscriber's failure to comply with this paragraph.
2. Company Representations and Warranties. The Company represents and
warrants to and agrees with the Subscriber that:
(a) Due Incorporation. The Company and each of its subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of the respective jurisdictions of their incorporation and have the
requisite corporate power to own their properties and to carry on their
business as now being conducted. The Company and each of its subsidiaries
is duly qualified as a foreign corporation to do business and is in good
standing in each jurisdiction where the nature of the business conducted or
property owned by it makes such qualification necessary, other than those
jurisdictions in which the failure to so qualify would not have a material
adverse effect on the business, operations or financial condition of the
Company.
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CNEX SUBSCRIPTION FINAL
(b) Outstanding Stock. All issued and outstanding shares of capital
stock of the Company and each of its subsidiaries has been duly authorized
and validly issued and are fully paid and non-assessable.
(c) Authority; Enforceability. This Agreement, the Warrant and other
agreements delivered together with this Agreement or in connection herewith
have been duly authorized, executed and delivered by the Company and are
valid and binding agreements enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights generally and to general principles of equity;
and the Company has full corporate power and authority necessary to enter
into this Agreement, Warrant and such other agreements and to perform its
obligations hereunder and under all other agreements entered into by the
Company relating hereto.
(d) Additional Issuances. There are no outstanding agreements or
preemptive or similar rights affecting the Company's common stock or equity
and no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, or agreements or understandings with
respect to the sale or issuance of any shares of common stock or equity of
the Company or other equity interest in any of the subsidiaries of the
Company except as described in Schedule 2(d).
(e) Consents. No consent, approval, authorization or order of any
court, governmental agency or body or arbitrator having jurisdiction over
the Company, or any of its affiliates, the American Stock Exchange
("Amex"), the National Association of Securities Dealers, Inc. ("NASD"),
Nasdaq, the OTC Bulletin Board ("Bulletin Board") or the Company's
Shareholders is required for execution of this Agreement, and all other
agreements entered into by the Company relating thereto, including, without
limitation, the issuance and sale of the Securities, and the performance of
the Company's obligations hereunder and under all such other agreements.
(f) No Violation or Conflict. Assuming the representations and
warranties of the Subscriber in Section 1 are true and correct and the
Subscriber complies with its obligations under this Agreement, neither the
issuance and sale of the Securities nor the performance of the Company's
obligations under this Agreement and all other agreements entered into by
the Company relating thereto by the Company will:
(i) violate, conflict with, result in a breach of, or constitute
a default (or an event which with the giving of notice or the lapse of
time or both would be reasonably likely to constitute a default) under
(A) the articles of incorporation, charter or bylaws of the Company,
(B) to the Company's knowledge, any decree, judgment, order, law,
treaty, rule, regulation or determination applicable to the Company of
any court, governmental agency or body, or arbitrator having
jurisdiction over the Company or any of its affiliates or over the
properties or assets of the Company or any of its affiliates, (C) the
terms of any bond, debenture, note or any other evidence of
indebtedness, or any agreement, stock option or other similar plan,
indenture, lease, mortgage, deed of trust or other instrument to which
the Company or any of its affiliates is a party, by which the Company
or any of its affiliates is bound, or to which any of the properties
of the Company or any of its affiliates is subject, or (D) the terms
of any "lock-up" or similar provision of any underwriting or similar
agreement to which the Company, or any of its affiliates is a party
except the violation, conflict, breach, or default of which would not
have a material adverse effect on the Company; or
(ii) result in the creation or imposition of any lien, charge or
encumbrance upon the Securities or any of the assets of the Company,
its subsidiaries or any of its affiliates.
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(g) The Securities. The Securities upon issuance:
(i) are, or will be, free and clear of any security interests,
liens, claims or other encumbrances, subject to restrictions upon
transfer under the 1933 Act and State laws;
(ii) have been, or will be, duly and validly authorized and on
the date of issuance and on the Closing Date, as hereinafter defined,
and the Warrants are exercised, the Securities will be duly and
validly issued, fully paid and nonassessable (and if registered
pursuant to the 1933 Act, and resold pursuant to an effective
registration statement will be free trading and unrestricted, provided
that the Subscriber complies with the Prospectus delivery
requirements);
(iii) will not have been issued or sold in violation of any
preemptive or other similar rights of the holders of any securities of
the Company; and
(iv) will not subject the holders thereof to personal liability
by reason of being such holders.
(h) Litigation. There is no pending or, to the best knowledge of the
Company, threatened action, suit, proceeding or investigation before any
court, governmental agency or body, or arbitrator having jurisdiction over
the Company, or any of its affiliates that would affect the execution by
the Company or the performance by the Company of its obligations under this
Agreement, and all other agreements entered into by the Company relating
hereto. Except as disclosed in the Reports or Other Written Information,
there is no pending or, to the best knowledge of the Company, threatened
action, suit, proceeding or investigation before any court, governmental
agency or body, or arbitrator having jurisdiction over the Company, or any
of its affiliates which litigation if adversely determined could have a
material adverse effect on the Company.
(i) Reporting Company. The Company is a publicly-held company subject
to reporting obligations pursuant to Sections 15(d) and 13 of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and has a
class of common shares registered pursuant to Section 12(g) of the 1934
Act. The Company's common stock is listed for trading on the Bulletin
Board. Pursuant to the provisions of the 1934 Act, the Company has filed
all reports and other materials required to be filed thereunder with the
Securities and Exchange Commission during the preceding twelve months.
(j) No Market Manipulation. The Company has not taken, and will not
take, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or manipulation
of the price of the common stock of the Company to facilitate the sale or
resale of the Securities or affect the price at which the Securities may be
issued or resold.
(k) Information Concerning Company. The Reports contain all material
information relating to the Company and its operations and financial
condition as of their respective dates which information is required to be
disclosed therein. Since the date of the financial statements included in
the Reports, and except as modified in the Other Written Information or in
the Schedules hereto, there has been no material adverse change in the
Company's business, financial condition or affairs not disclosed in the
Reports. The Reports do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
when made.
(l) Stop Transfer. The Securities are restricted securities as of the
date of this Agreement. The Company will not issue any stop transfer order
or other order impeding the sale, resale or delivery of the Securities,
except as may be required by federal securities laws.
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(m)Defaults. To the best of the Company's knowledge and belief and
except as disclosed in the Exhibits hereto, the Company is (i) not in
violation of its Articles of Incorporation or ByLaws. (ii) not in default
under or in violation of any other material agreement or instrument to
which it is a party or by which it or any of its properties are bound or
affected, which default or violation would have a material adverse effect
on the Company, (iii) not in default with respect to any order of any
court, arbitrator or governmental body or subject to or party to any order
of any court or governmental authority arising out of any action, suit or
proceeding under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition or similar matters, and (iv) not in
violation of any statute, rule or regulation of any governmental authority
which violation would have a material adverse effect on the Company.
(n) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or 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 cause the offer of the
Securities pursuant to this Agreement 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 the Bulletin Board, nor will the Company or any of its
affiliates or subsidiaries take any action or steps that would cause the
offer of the Securities to be integrated with other offerings. The Company
will not conduct any offering other than the transactions contemplated
hereby that will be integrated with the offer or issuance of the
Securities.
(o) No General Solicitation. Neither the Company, nor any of its
affiliates, nor to its knowledge, 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 under the ▇▇▇▇ ▇▇▇) in connection with
the offer or sale of the Securities.
(p) Listing. The Company's common stock is quoted on, and listed for
trading on the Bulletin Board. The Company has not received any oral or
written notice that its Common Stock will be delisted from the Bulletin
Board nor that its common stock does not meet all requirements for the
continuation of such listing. The Company satisfies the requirements for
the continued listing of the Common Stock on the Bulletin Board.
(q) No Undisclosed Liabilities. The Company has no liabilities or
obligations which are material, individually or in the aggregate, which are
not disclosed in the Reports and Other Written Information, other than
those incurred in the ordinary course of the Company's business since
December 31, 2001 and which, individually or in the aggregate, would
reasonably be expected to have a material adverse effect on the Company's
financial condition, other than as set forth in Schedule 2(q).
(r) No Undisclosed Events or Circumstances. Since December 31, 2001,
no event or circumstance has occurred or exists with respect to the Company
or its business, properties, operations or financial condition, that, under
applicable law, rule or regulation, requires public disclosure or
announcement prior to the date hereof by the Company but which has not been
so publicly announced or disclosed in the Reports.
(s) Capitalization. The authorized and outstanding capital stock of
the Company as of the date of this Agreement and the Closing Date are set
forth on Schedule 2(s). Except as set forth in the Reports and Other
Written Information and Schedule 2(s), there are no options, warrants, or
rights to subscribe to, securities, rights or obligations convertible into
or exchangeable for or giving any right to subscribe for any shares of
capital stock of the Company. All of the outstanding shares of Common Stock
of the Company have been duly and validly authorized and issued and are
fully paid and nonassessable.
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(t) Dilution. The Company's executive officers and directors have
studied and fully understand the nature of the Securities being sold hereby
and recognize that they have a potential dilutive effect on the interests
of other holders of the Company's securities. The board of directors of the
Company has concluded, in its good faith business judgment, that such
issuance is in the best interests of the Company.
(u) Correctness of Representations. The Company represents that the
foregoing representations and warranties are true and correct as of the
date hereof in all material respects, will be true and correct as of the
Closing Date in all material respects, and, unless the Company otherwise
notifies the Subscriber prior to the Closing Date, shall be true and
correct in all material respects as of the Closing Date. The foregoing
representations and warranties shall survive the Closing Date for a period
of three years.
3. Regulation D Offering. This Offering is being made pursuant to the
exemption from the registration provisions of the Securities Act of 1933, as
amended, afforded by Rule 506 of Regulation D promulgated thereunder. On the
Closing Date, the Company will provide an opinion reasonably acceptable to
Subscriber from the Company's legal counsel opining on the availability of the
Regulation D exemption as it relates to the offer and issuance of the
Securities. A form of the legal opinion is annexed hereto as Exhibit B. The
Company will provide, at the Company's expense, such other legal opinions in the
future as are reasonably necessary for the exercise of the Warrants.
4. Reissuance of Securities. The Company agrees to reissue certificates
representing the Securities without the legends set forth in Sections 1(e) and
1(f) above at such time as (a) the holder thereof is permitted to and disposes
of such Securities pursuant to Rule 144(d) and/or Rule 144(k) under the 1933 Act
in the opinion of counsel reasonably satisfactory to the Company, or (b) upon
resale subject to an effective registration statement after the Securities are
registered under the ▇▇▇▇ ▇▇▇. The Company agrees to cooperate with the
Subscriber in connection with all resales pursuant to Rule 144(d) and Rule
144(k) and provide legal opinions at the Company's expense necessary to allow
such resales, provided the Company and its counsel receive reasonably requested
written representations from the Subscriber and selling broker, if any. Provided
the Subscriber provides required certifications and representation letters, if
any, if the Company fails to remove any legend as required by this Section 4 (a
"Legend Removal Failure"), then beginning on the tenth (10th) day following the
date that the Subscriber has requested the removal of the legend and delivered
all items reasonably required by the Company to be delivered by the Subscriber,
that the Company continues to fail to remove such legend, the Company shall pay
to each Subscriber or assignee holding shares, subject to a Legend Removal
Failure, as liquidated damages and not a penalty an amount as set forth and more
fully described in paragraph 8.8 below. The penalty for a Legend Removal Failure
shall be identical to a wrongful refusal to deliver unlegended shares by the
Company.
5. Finder's Fee/Legal Fee.
(a) Legal Fee. The Company shall pay to ▇▇▇▇▇▇▇ & Associates, PLLC a
$15,000 fee ("Legal Fee") for services rendered as Escrow Agent in
connection with the purchase and sale of the Company Shares and Warrants
for the aggregate Purchase Price of $600,000 (the "Offering") pursuant to a
separate funds escrow agreement ("Escrow Agreement") to be entered into by
the Company, Subscriber and Escrow Agent in connection with the Offering.
The Legal Fee will be payable out of funds held pursuant to the Escrow
Agreement
(b) Finder. The Company on the one hand, and the Subscriber on the
other hand, agree to indemnify the other against and hold the other
harmless from any and all liabilities to any persons claiming brokerage
commissions or finder's fees other than the finders identified on Schedule
C hereto on account of services purported to have been rendered on behalf
of the indemnifying party in connection with this Agreement or the
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transactions contemplated hereby and arising out of such party's actions.
The Company agrees that it will pay the fees due to the finders identified
on Schedule C on the Closing Date directly out of the funds held pursuant
to the Escrow Agreement. The Company represents that there are no other
parties entitled to receive fees, commissions, or similar payments in
connection with the offering described in this Agreement except as
identified on Schedule C.
6. Covenants of the Company. The Company covenants and agrees with the
Subscriber as follows:
(a) Stop Orders. The Company will advise the Subscriber, promptly
after it receives notice of issuance by the Securities and Exchange
Commission, any state securities commission or any other regulatory
authority of any stop order or of any order preventing or suspending any
offering of any securities of the Company, or of the suspension of the
qualification of the Common Stock of the Company for offering or sale in
any jurisdiction, or the initiation of any proceeding for any such purpose.
(b) Listing. The Company shall promptly secure the listing of the
Company Shares, and Common Stock issuable upon the exercise of the Warrants
upon each national securities exchange, or automated quotation system, if
any, upon which shares of common stock are then listed (subject to official
notice of issuance) and shall maintain such listing so long as any
Securities are outstanding. The Company will maintain the listing of its
Common Stock on the Amex, Nasdaq SmallCap Market, Nasdaq National Market
System, OTC Bulletin Board (or any successor entity or the proposed
"Bulletin Board Exchange"), or New York Exchange (whichever of the
foregoing is at the time the principal trading exchange or market for the
Common Stock (the "Principal Market")), and will comply in all respects
with the Company's reporting, filing and other obligations under the bylaws
or rules of the Bulletin Board and such exchanges, as applicable. The
Company will provide the Subscriber copies of all notices it receives
notifying the Company of the threatened and actual delisting of the Common
Stock from any Principal Market.
(c) Market Regulations. The Company shall notify the Commission, the
Bulletin Board, the Principal Market and applicable state authorities, in
accordance with their requirements, if any, of the transactions
contemplated by this Agreement, and shall take all other necessary action
and proceedings as may be required and permitted by applicable law, rule
and regulation, for the legal and valid issuance of the Securities to the
Subscriber and promptly provide copies thereof to Subscriber.
(d) Reporting Requirements. From the Closing Date and until the sooner
of such time as the Subscriber has sold all the Company Shares without
further restrictions on resale or two years after the actual effective date
of the Registration Statement on Form SB-2 or such other Registration
Statement described in Section 8.1(iv) hereof, the Company will (i) cause
its Common Stock to continue to be registered under Sections 12(b) or 12(g)
of the Exchange Act, (ii) comply in all respects with its reporting and
filing obligations under the Exchange Act, (iii) comply with all reporting
requirements that are applicable to an issuer with a class of Shares
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, as
applicable, and (iv) comply with all requirements related to any
registration statement filed pursuant to this Agreement. The Company will
use its best efforts not to take any action or file any document (whether
or not permitted by the Act or the Exchange Act or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its
reporting and filing obligations under said Acts until the later of two (2)
years after the actual effective date of the Registration Statement on Form
SB-2 or such other Registration Statement described in Section 8.1(iv)
hereof. Until the earlier of the resale of the Company Shares by the
Subscriber or at least two (2) years after the Warrants have been
exercised, the Company will use its best efforts to continue the listing of
the Common Stock on the Principal Market and will comply in all respects
with the Company's reporting, filing and other obligations under the bylaws
or rules of Principal Market.
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CNEX SUBSCRIPTION FINAL
(e) Use of Proceeds. The Purchase Price is to be used as set forth on
Schedule 6(e).
(f) Reservation of Common Stock. The Company undertakes to reserve
from its authorized but unissued common stock, at all times that Warrants
remain outstanding, a number of common shares equal to the amount of common
shares issuable upon exercise of the Warrants.
(g) Taxes. The Company will promptly pay and discharge, or cause to be
paid and discharged, when due and payable, all lawful taxes, assessments
and governmental charges or levies imposed upon the income, profits,
property or business of the Company; provided, however, that any such tax,
assessment, charge or levy need not be paid if the validity thereof shall
currently be contested in good faith by appropriate proceedings and if the
Company shall have set aside on its books adequate reserves with respect
thereto, and provided, further, that the Company will pay all such taxes,
assessments, charges or levies forthwith upon the commencement of
proceedings to foreclose any lien which may have attached as security
therefore.
(h) Insurance. The Company will keep its assets which are of an
insurable character insured by financially sound and reputable insurers
against loss or damage by fire, explosion and other risks customarily
insured against by companies in the Company's line of business, in amounts
sufficient to prevent the Company from becoming a co-insurer and not in any
event less than 100% of the insurable value of the property insured; and
the Company will maintain, with financially sound and reputable insurers,
insurance against other hazards and risks and liability to persons and
property to the extent and in the manner customary for companies in similar
businesses similarly situated and to the extent available on commercially
reasonable terms.
(i) Books and Records. The Company will keep true records and books of
account in which full, true and correct entries will be made of all
dealings or transactions in relation to its business and affairs in
accordance with generally accepted accounting principles applied on a
consistent basis.
(j) Governmental Authorities. The Company shall duly observe and
conform in all material respects to all valid requirements of governmental
authorities relating to the conduct of its business or to its properties or
assets.
(k) Intellectual Property. The Company shall maintain in full force
and effect its corporate existence, rights and franchises and all licenses
and other rights to use intellectual property owned or possessed by it and
reasonably deemed to be necessary to the conduct of its business.
(l) Properties. The Company will keep its properties in good repair,
working order and condition, reasonable wear and tear excepted, and from
time to time make all needful and proper repairs, renewals, replacements,
additions and improvements thereto; and the Company will at all times
comply with each provision of all leases to which it is a party or under
which it occupies property if the breach of such provision could reasonably
be expected to have a material adverse effect.
(m) Confidentiality. The Company agrees that it will not disclose
publicly or privately the identity of the Subscriber unless expressly
agreed to in writing by the Subscriber or only to the extent required by
law.
7. Covenants of the Company and Subscriber Regarding Indemnification.
(a) The Company agrees to indemnify, hold harmless, reimburse and
defend Subscriber, Subscriber's officers, directors, agents, affiliates,
control persons, and principal shareholders, against any claim, cost,
9
CNEX SUBSCRIPTION FINAL
expense, liability, obligation, loss or damage (including reasonable legal
fees) of any nature, incurred by or imposed upon Subscriber or any such
person which results, arises out of or is based upon (i) any material
misrepresentation by Company or breach of any warranty by Company in this
Agreement or in any Exhibits or Schedules attached hereto, or other
agreement delivered pursuant hereto; or (ii) after any applicable notice
and/or cure periods, any breach or default in performance by the Company of
any covenant or undertaking to be performed by the Company hereunder, or
any other agreement entered into by the Company and Subscriber relating
hereto.
(b) Subscriber agrees to indemnify, hold harmless, reimburse and
defend the Company and each of the Company's officers, directors, agents,
affiliates, control persons against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature,
incurred by or imposed upon the Company or any such person which results,
arises out of or is based upon (i) any material misrepresentation by
Subscriber in this Agreement or in any Exhibits or Schedules attached
hereto, or other agreement delivered pursuant hereto; or (ii) after any
applicable notice and/or cure periods, any breach or default in performance
by Subscriber of any covenant or undertaking to be performed by Subscriber
hereunder, or any other agreement entered into by the Company and
Subscribes relating hereto.
(c) The procedures set forth in Section 8.6 shall apply to the
indemnifications set forth in Sections 7(a) and 7(b) above.
8.1. Registration Rights. The Company hereby grants the following
registration rights to holders of the Securities.
(i) On one occasion, for a period commencing 121 days after the
Closing Date, but not later than three years after the Closing Date
("Request Date"), the Company, upon a written request therefor from any
record holder or holders of the Company Shares actually issued hereunder
(the Company Shares issued hereunder on the Closing Date, and one share of
common stock issued or issuable upon exercise of the Warrants, collectively
the "Registrable Securities"), shall prepare and file with the Commission a
registration statement under the 1933 Act covering the Registrable
Securities which are the subject of such request, unless such Registrable
Securities are the subject of an effective registration statement or
included for registration in a pending registration statement. In addition,
upon the receipt of such request, the Company shall promptly give written
notice to all other record holders of the Registrable Securities that such
registration statement is to be filed and shall include in such
registration statement Registrable Securities for which it has received
written requests within 10 days after the Company gives such written
notice. Such other requesting record holders shall be deemed to have
exercised their demand registration right under this Section 8.1(i).
(ii) If the Company at any time proposes to register any of its
securities under the 1933 Act for sale to the public, whether for its own
account or for the account of other security holders or both, except with
respect to registration statements on Forms ▇-▇, ▇-▇ or another form not
available for registering the Registrable Securities for sale to the
public, provided the Registrable Securities are not otherwise registered
for resale by the Subscriber or Holder pursuant to an effective
registration statement, each such time it will give at least 15 days' prior
written notice to the record holder of the Registrable Securities of its
intention so to do. Upon the written request of the holder, received by the
Company within 10 days after the giving of any such notice by the Company,
to register any of the Registrable Securities, the Company will cause such
Registrable Securities as to which registration shall have been so
requested to be included with the securities to be covered by the
registration statement proposed to be filed by the Company, all to the
extent required to permit the sale or other disposition of the Registrable
Securities so registered by the holder of such Registrable Securities (the
"Seller"). In the event that any registration pursuant to this Section
8.1(ii) shall be, in whole or in part, an underwritten public offering of
common stock of the Company, the number of shares of Registrable Securities
to be included in such an underwriting may be reduced by the managing
underwriter if and to the extent that the Company and the underwriter shall
10
CNEX SUBSCRIPTION FINAL
reasonably be of the opinion that such inclusion would adversely affect the
marketing of the securities to be sold by the Company therein; provided,
however, that the Company shall notify the Seller in writing of any such
reduction. Notwithstanding the foregoing provisions, or Section 8.4 hereof,
the Company may withdraw or delay or suffer a delay of any registration
statement referred to in this Section 8.1(ii) without thereby incurring any
liability to the Seller.
(iii) If, at the time any written request for registration is received
by the Company pursuant to Section 8.1(i), the Company has determined to
proceed with the actual preparation and filing of a registration statement
under the 1933 Act in connection with the proposed offer and sale for cash
of any of its securities for the Company's own account and the Company
actually does file such other registration statement, such written request
shall be deemed to have been given pursuant to Section 8.1(ii) rather than
Section 8.1(i), and the rights of the holders of Registrable Securities
covered by such written request shall be governed by Section 8.1(ii).
(iv) The Company shall file with the Commission not later than thirty
(30) days after the Final Closing Date (the "Filing Date"), and use its
reasonable commercial efforts to cause to be declared effective within
ninety (90) days after the Final Closing Date (the "Effective Date"), a
Form SB-2 registration statement (the "Registration Statement") (or such
other form that it is eligible to use) in order to register the Registrable
Securities for resale and distribution under the 1933 Act. The Company will
register not less than a number of shares of common stock in the
aforedescribed registration statement that is equal to the number of
Company Shares issued on the Closing Date and one share of common stock for
each of the common shares issuable upon exercise of the Warrants. The
Registrable Securities shall be reserved and set aside exclusively for the
benefit of the Subscriber, and not issued, employed or reserved for anyone
other than the Subscriber. Such registration statement will expeditiously
be amended or additional registration statements will be immediately filed
by the Company as necessary to register additional Company Shares to allow
the public resale of all Common Stock included in and issuable by virtue of
the Registrable Securities.
8.2. Registration Procedures. If and whenever the Company is required by
the provisions hereof to effect the registration of any shares of Registrable
Securities under the 1933 Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
required by Section 8.1, with respect to such securities and use its best
efforts to cause such registration statement to become and remain effective
for the period of the distribution contemplated thereby (determined as
herein provided), and promptly provide to the holders of Registrable
Securities ("Sellers") copies of all filings and Commission letters of
comment;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective until the earlier of: (i) twelve months after all the
Company Shares are eligible for resale pursuant to Rule 144(k) of the 1933
Act; or (ii) until such Registration Statement has been effective for a
period of not less than 365 days; or (iii) until all the Registrable
Securities have been sold without further restrictions on resale.
(c) furnish to the Seller, at the Company's expense, not fewer than 10
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as the Seller may request in order
to facilitate the public sale or disposition of the Registrable Securities;
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CNEX SUBSCRIPTION FINAL
(d) use its best efforts to register or qualify the Seller's
Registrable Securities covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as reasonably requested
by Seller, provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent
to general service of process in any such jurisdiction;
(e) list the Registrable Securities covered by such registration
statement with any securities exchange on which the Common Stock of the
Company is then listed;
(f) immediately notify the Seller, when a prospectus relating thereto
is required to be delivered under the 1933 Act, of the happening of any
event of which the Company has knowledge as a result of which the
prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(g) provided same would not be in violation of the provision of
Regulation FD under the 1934 Act, make available for inspection by the
Seller, and any attorney, accountant or other agent retained by the Seller
or underwriter, all publicly available, non-confidential financial and
other records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors and employees to supply all
publicly available, non-confidential information reasonably requested by
the seller, attorney, accountant or agent in connection with such
registration statement.
8.3. Provision of Documents. In connection with each registration described
in this Section 8, the Seller will furnish to the Company in writing such
information and representation letters with respect to itself and the proposed
distribution by it as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws. In connection with
each registration pursuant to Section 8.1(i) or 8.1(ii) covering an underwritten
public offering, the Company and the Seller agree to enter into a written
agreement with the managing underwriter in such form and containing such
provisions as are customary in the securities business for such an arrangement
between such underwriter and companies of the Company's size and investment
stature.
8.4. Non-Registration Events. The Company and the Subscriber agree that the
Seller will suffer damages if any registration statement required under Section
8.1(iii) or 8.1(iv) above is not filed within 45 days after the Final Closing
Date and/or not declared effective by the Commission within 90 days after such
request [or the Filing Date and Effective Date, respectively, in reference to
the Registration Statement on Form SB-2 or such other form described in Section
8.1(iv)], and maintained in the manner and within the time periods contemplated
by Section 8 hereof, and it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, if (i) the Registration Statement
described in Sections 8.1(i) or 8.1(ii) or 8.1 (iii) is not filed within 45 days
after the Final Closing Date or is not declared effective by the Commission on
or prior to the date that is 90 days after filing, or (ii) the registration
statement on Form SB-2 or such other form described in Section 8.1(iv) is not
filed on or before the Filing Date or not declared effective on or before the
sooner of the Effective Date, or within ten (10) business days of receipt by the
Company of a written or oral communication from the Commission that the
registration statement described in Section 8.1(iv) will not be reviewed, or
(iii) any registration statement described in Sections 8.1(i), 8.1(ii) or
8.1(iii) or 8.1(iv) is filed and declared effective but shall thereafter cease
to be effective (without being succeeded immediately by an additional
registration statement filed and declared effective) for a period of time which
shall exceed 45 days in the aggregate per year or more than 20 consecutive
calendar days (defined as a period of 365 days commencing on the date the
Registration Statement is declared effective) (each such event referred to in
clauses (i), (ii) and (iii) of this Section 8.4 is referred to herein as a
"Non-Registration Event"), then, for so long as such Non-Registration Event
shall continue, until the Registrable Securities are eligible for resale
12
CNEX SUBSCRIPTION FINAL
pursuant to Rule 144 without regard to volume limitations, the Company shall pay
in cash as Liquidated Damages to each holder of any Registrable Securities an
amount equal to one (1%) percent for the first 30 days or part thereof, and two
(2%) percent per 30-day period or part thereof thereafter, of the Purchase Price
of the number of Company Shares which are not eligible for unrestricted sale or
transfer and based upon the percentage of the actually paid Purchase Price (as
defined in the Warrant) of the Common Stock issued or issuable upon exercise of
the Warrant, during the pendency of such Non-Registration Event for the
Registrable Securities owned of record by such holder as of or subsequent to the
occurrence of such Non-Registration Event. Payments to be made pursuant to this
Section 8.4 shall be due and payable within ten (10) business days after demand
in immediately available funds. Provided that (y) the Company fully responds to
letters of comment made by the Commission in its review of the Registration
Statement within seven days of the receipt of such letters of comment by the
Company or its counsel, and (z) that the actual effective date of the
Registration Statement is not later than 120 days after the Closing Date, then
for purposes of only this Section 8.4 and Section 9.2, "Effective Date" shall
mean 120 days after the Final Closing Date.
8.5Look Back Period.
(i) First Lookback If upon the date of effective registration the
average 10 day closing bid price according to Bloomberg is below the
purchase price (0.045) the investor shall immediately receive an additional
amount of free trading common stock equal to 100% of the principal
multiplied by the difference between 5.4 cents and the market price. Should
the issuer not want to deliver these additional shares, they have the right
to redeem the investor at 120% of principal in cash within 5 business days.
In that event, issuer has no further obligations.
(ii) Second Lookback Commencing upon the earlier of the subscribers
total liquidation of his shares or one hundred twenty (120) days from the
date of the effective registration, if any average ten trading days;
closing bid price is below four and a half cents ($0.045), the issuer
agrees to issue additional common stock at market price (the average ten
day closing price) to make up the difference between the five and four
tenths cents ($0.054) and the market price. In the event that the investors
total return exceeded 110%, no additional shares will be issued.. The
subscriber will forward all trading records with the written request for an
additional issuance to the Company. The additional issuance will be based
on the total investment by the Subscriber. The Warrants are not eligible
for an additional issuance. In lieu of issuing additional stock, Issuer has
the option to redeem 120% of the original investment i.e. five and four
tenths cents ($0.054) per share in cash. The Company shall register a total
of 40 million shares on a Form SB-2 registration, pursuant to the
registration rights as set forth above. These additional shares are to be
issued pursuant to this look-back clause when and if necessary.
8.6. Expenses. All expenses incurred by the Company in complying with
Section 8, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses (including reasonable counsel
fees) incurred in connection with complying with state securities or "blue sky"
laws, fees of the National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars, and costs of insurance are called
"Registration Expenses". All underwriting discounts and selling commissions
applicable to the sale of Registrable Securities, including any fees and
disbursements of any special counsel to the Seller, are called "Selling
Expenses". The Seller shall pay the fees of its own additional counsel, if any.
The Company will pay all Registration Expenses in connection with the
registration statement under Section 8. Selling Expenses in connection with each
registration statement under Section 8 shall be borne by the Seller and may be
apportioned among the Sellers in proportion to the number of shares sold by the
Seller relative to the number of shares sold under such registration statement
or as all Sellers thereunder may agree.
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CNEX SUBSCRIPTION FINAL
8.7. Indemnification and Contribution.
(a) In the event of a registration of any Registrable Securities under
the 1933 Act pursuant to Section 8, the Company will, to the extent
permitted by law, indemnify and hold harmless the Seller, each officer of
the Seller, each director of the Seller, each underwriter of such
Registrable Securities thereunder and each other person, if any, who
controls such Seller or underwriter within the meaning of the 1933 Act,
against any losses, claims, damages or liabilities, joint or several, to
which the Seller, or such underwriter or controlling person may become
subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such Registrable
Securities was registered under the 1933 Act pursuant to Section 8, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon 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 in light of the circumstances when made, and will subject to the
provisions of Section 8.6(c) reimburse the Seller, each such underwriter
and each such controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
Company shall not be liable to the Seller to the extent that any such
damages arise out of or are based upon an untrue statement or omission made
in any preliminary prospectus if (i) the Seller failed to send or deliver a
copy of the final prospectus delivered by the Company to the Seller with or
prior to the delivery of written confirmation of the sale by the Seller to
the person asserting the claim from which such damages arise, (ii) the
final prospectus would have corrected such untrue statement or alleged
untrue statement or such omission or alleged omission, or (iii) to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by any
such Seller, or any such controlling person in writing specifically for use
in such registration statement or prospectus.
(b) In the event of a registration of any of the Registrable
Securities under the 1933 Act pursuant to Section 8, the Seller will, to
the extent permitted by law, indemnify and hold harmless the Company, and
each person, if any, who controls the Company within the meaning of the
1933 Act, each officer of the Company who signs the registration statement,
each director of the Company, each underwriter and each person who controls
any underwriter within the meaning of the 1933 Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or
such officer, director, underwriter or controlling person may become
subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Registrable
Securities were registered under the 1933 Act pursuant to Section 8, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon 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, and will reimburse the Company and each such officer, director,
14
CNEX SUBSCRIPTION FINAL
underwriter and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action, provided, however, that
the Seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with information
pertaining to such Seller, as such, furnished in writing to the Company by
such Seller specifically for use in such registration statement or
prospectus, and provided, further, however, that the liability of the
Seller hereunder shall be limited to the gross proceeds received by the
Seller from the sale of Registrable Securities covered by such registration
statement.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim
in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to
notify the indemnifying party shall not relieve it from any liability which
it may have to such indemnified party other than under this Section 8.6(c)
and shall only relieve it from any liability which it may have to such
indemnified party under this Section 8.6(c), except and only if and to the
extent the indemnifying party is prejudiced by such omission. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in and, to the extent it shall wish,
to assume and undertake the defense thereof with counsel satisfactory to
such indemnified party, and, after notice from the indemnifying party to
such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under this Section 8.6(c) for any legal expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of liaison
with counsel so selected, provided, however, that, if the defendants in any
such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional
to those available to the indemnifying party or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified parties, as a group, shall have
the right to select one separate counsel and to assume such legal defenses
and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the indemnifying party as
incurred.
(d) In order to provide for just and equitable contribution in the
event of joint liability under the 1933 Act in any case in which either (i)
the Seller, or any controlling person of the Seller, makes a claim for
indemnification pursuant to this Section 8.6 but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial
of the last right of appeal) that such indemnification may not be enforced
in such case notwithstanding the fact that this Section 8.6 provides for
indemnification in such case, or (ii) contribution under the 1933 Act may
be required on the part of the Seller or controlling person of the Seller
in circumstances for which indemnification is not[?] provided under this
Section 8.6; then, and in each such case, the Company and the Seller will
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so
that the Seller is responsible only for the portion represented by the
percentage that the public offering price of its securities offered by the
registration statement bears to the public offering price of all securities
offered by such registration statement, provided, however, that, in any
such case, (y) the Seller will not be required to contribute any amount in
excess of the public offering price of all such securities offered by it
pursuant to such registration statement; and (z) no person or entity guilty
of fraudulent misrepresentation (within the meaning of Section 10(f) of the
▇▇▇▇ ▇▇▇) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.
8.8. Delivery of Unlegended Shares.
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CNEX SUBSCRIPTION FINAL
(a) Within ten (10) business days (such tenth business day, the
"Delivery Date") after the business day on which the Company has received a
notice that (i) Registrable Securities have been sold, (ii) a
representation that the prospectus delivery requirements, if applicable,
have been satisfied, and (iii) and the original Company Share certificate,
the Company at its expense, (i) shall deliver, and shall cause legal
counsel selected by the Company to deliver, to its transfer agent (with
copies to Subscriber) an appropriate instruction and opinion of such
counsel, for the delivery of unlegend Company Shares issuable pursuant to
any effective and current registration statement described in Section 8 of
this Agreement or pursuant to Rule 144 (the "Unlegended Shares"); and (ii)
transmit the certificates representing the Unlegended Shares, with a
legended certificate representing the balance of the unsold Company Shares
to the Subscriber at the address specified in the notice of sale, via
express courier, by electronic transfer or otherwise on or before the
Delivery Date.
(b) In lieu of delivering physical certificates representing the
Unlegended Shares, if the Company's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer
program, upon request of the Subscriber and its compliance with the
provisions contained in this paragraph, so long as the certificates
therefore do not bear a legend and the Subscriber is not obligated to
return such certificate for the placement of a legend thereon, the Company
shall use its best efforts to cause its transfer agent to electronically
transmit the Unlegended Shares by crediting the account of Subscriber's
prime Broker with DTC through its Deposit Withdrawal Agent Commission
system.
(c) The Company understands that a delay in the delivery of the
Unlegended Shares pursuant to Section 8 hereof beyond the Delivery Date
could result in economic loss to the Subscriber. As compensation to the
Subscriber for such loss, the Company agrees to pay late payments to the
Subscriber for late delivery of Unlegended Shares in the amount of $10 per
business day after the Delivery Date for each $10,000 of Purchase Price of
the Company Shares delivered to the Company for reissuance as Unlegended
Shares. The Company shall pay any payments incurred under this Section in
immediately available funds upon demand.
9. Miscellaneous.
(a) Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery,
telegram, or facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written notice.
Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered
on a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice
is to be received) or (b) on the second business day following the date of
mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: (i) if to the
Company, to Centrex, telecopier: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy by telecopier
only to: ▇▇▇▇▇▇▇ & Associates, PLLC, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., telecopier: (▇▇▇) ▇▇▇-▇▇▇▇,
and (ii) if to the Subscriber, to the name, address and telecopy number set
forth on the signature page hereto.
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CNEX SUBSCRIPTION FINAL
(b) Closing. The consummation of the transactions contemplated herein
shall take place at the offices of ▇▇▇▇▇▇▇ & Associates, PLLC, ▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ upon the satisfaction of all
conditions to Closing set forth in this Agreement. The closing date shall
be the date that subscriber funds representing the net amount due the
Company from the Purchase Price of the Offering is transmitted by wire
transfer or otherwise to the Company (the "Closing Date").
(c) Entire Agreement; Assignment. This Agreement and other documents
delivered in connection herewith represent the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended
only by a writing executed by both parties. Neither the Company nor the
Subscriber has relied on any representations not contained or referred to
in this Agreement and the documents delivered herewith. No right or
obligation of either party shall be assigned by that party without prior
notice to and the written consent of the other party.
(d) Execution. This Agreement may be executed by facsimile
transmission, and in counterparts, each of which will be deemed an
original.
(e) Law Governing this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of Oklahoma without
regard to principles of conflicts of laws. Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of Oklahoma or in the
federal courts located in the state of Oklahoma. Both parties and the
individuals executing this Agreement and other agreements on behalf of the
Company agree to submit to the jurisdiction of such courts and waive trial
by jury. The prevailing party shall be entitled to recover from the other
party its reasonable attorney's fees and costs. In the event that any
provision of this Agreement or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability
of any other provision of any agreement.
(f) Specific Enforcement, Consent to Jurisdiction. The Company and
Subscriber acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof or thereof,
this being in addition to any other remedy to which any of them may be
entitled by law or equity. Injunctive relief is not limited to paragraphs
in which it is explicitly set forth, but rather to all specific terms
whereby the parties would be entitled to injunctive relief. It is further
agreed that during any time period where the Company deems it would be
entitled to injunctive relief to enforce the terms pursuant to paragraphs 1
(i) and (j) the Look Back Provision shall be null and void during that time
period and until such time as a court of competent jurisdiction has found
that said terms had not been violated. Subject to Section 9(e) hereof, each
of the Company and Subscriber hereby waives, and agrees not to assert in
any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the
suit, action or proceeding is improper. Nothing in this Section shall
affect or limit any right to serve process in any other manner permitted by
law.
(g) Automatic Termination. This Agreement shall automatically
terminate without any further action of either party hereto if the Closing
shall not have occurred by the tenth (10th) business day following the date
this Agreement is accepted by the Subscriber.
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CNEX SUBSCRIPTION FINAL
[THIS SPACE INTENTIONALLY LEFT BLANK]
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CNEX SUBSCRIPTION FINAL
Please acknowledge your acceptance of the foregoing Subscription Agreement
by signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.
CENTREX INC.
By:_________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ M.D.
Title: President
Dated: April 30, 2003
SUBSCRIBER
This Subscription Agreement has been executed by Subscriber effective
__________________________, 2003. Number of Shares Purchased ________________
FOR INDIVIDUALS FOR CORPORATE & OTHER
Signature(s): Signature:
-------------------------------- ---------------------------------------
By:
-------------------------------- ---------------------------------------
(Second signature if Shares (Print name and title)
held jointly)
Please Register Shares as Please Register Shares as Follows:
Follows:
Name: Name:
-------------------------------- ---------------------------------------
-------------------------------- ---------------------------------------
Address: Address:
-------------------------------- ---------------------------------------
-------------------------------- ---------------------------------------
City/State: City/State:
-------------------------------- ---------------------------------------
Zipcode: Zipcode:
-------------------------------- ---------------------------------------
Phone Phone
-------------------------------- ---------------------------------------
Fax: Fax:
-------------------------------- ---------------------------------------
SSN #: Tax ID #:
-------------------------------- ---------------------------------------
If Shares are jointly held, please check one:
[ ] Joint Tenants with Right of Survivorship [ ] Tenants in Common
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CNEX SUBSCRIPTION FINAL
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Warrant
Exhibit B Form of Legal Opinion
Schedule C Finders
Schedule 2(d) Additional Issuances
Schedule 2(q) Undisclosed Liabilities
Schedule 2(s) Capitalization
Schedule 6(e) Use of Proceeds
Schedule 8.1 Other Securities to be Registered
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CNEX SUBSCRIPTION FINAL