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EXHIBIT 10.7
SUBSCRIPTION AND DEBT CONVERSION AGREEMENT
Vitech America, Inc.
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▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned is writing to advise you of the following terms and
conditions under which the undersigned hereby offers (the "Offer") to purchase
share(s) of common stock of Vitech America, Inc. (the "Company") in satisfaction
of certain debts owed by the Company to the undersigned.
1. Subscription
Subject to the terms and conditions hereinafter set forth in
this Subscription and Debt Conversion Agreement ("Agreement"), the undersigned
hereby offers to purchase 4,653 shares of the Company's common stock (the
"Shares"), for $5.50 per share, or an aggregate purchase price of $25,588.00
(the "Purchase Price").
If the offer is accepted, the Shares shall be paid for by the
conversion of $25,588.00 of indebtedness (the "Indebtedness") of the Company to
the undersigned which represent all of the indebtedness of the Company to the
undersigned.
2. Conditions to Offer
Acceptance of this Offer shall be deemed given by the
countersigning of this Agreement on behalf of the Company.
3. Satisfaction of Indebtedness
Upon acceptance of this Agreement by the Company and issuance
of the Shares to the undersigned, the Indebtedness shall be fully satisfied and
the Company shall have no further obligation for the Indebtedness.
4. Representations and Warranties of the Undersigned
The undersigned, in order to induce the Company to accept this
Offer, hereby warrants and represents as follows:
(A) The undersigned has sufficient liquid assets to
sustain a loss of the undersigned's entire investment.
(B) The undersigned represents that it is an Accredited
Investor as that term is defined in Regulation D promulgated under the
Act. In general, an
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"accredited investor" is an organization described in Section 501(c)(8)
of the Internal Revenue Code, a corporation, Massachusetts or similar
business trust, or company, not formed for the specific purpose of
acquiring the securities offered, with assets in excess of $5,000,000.
(C) The Company has not made any representations or
warranties to the undersigned with respect to the Company, its
profitability or future performance or rendered any investment advice
except as contained herein.
(D) The undersigned has not authorized any person or
institution to act as its Purchaser Representative (as that term is
defined in Regulation D) in connection with this transaction. The
undersigned has such knowledge and experience in financial, investment
and business matters that it is capable of evaluating the merits and
risks of the prospective investment in the securities of the Company.
The undersigned has consulted with such independent legal counsel or
other advisers as it has deemed appropriate to assist the undersigned
in evaluating its proposed investment in the Company.
(E) The undersigned represents that it (i) has adequate
means of providing for its current financial needs and possible
personal contingencies, and has no need for liquidity of investment in
the Company; (ii) can afford (a) to hold unregistered securities for an
indefinite period of time as required and (b) sustain a complete loss
of the entire amount of the subscription; and (iii) has not made an
overall commitment to investments which are not readily marketable
which is disproportionate so as to cause such overall commitment to
become excessive.
(F) The undersigned has been afforded the opportunity to
ask questions of, and receive answers from the officers and/or
directors of the Company acting in its behalf concerning the terms and
conditions of this transaction and to obtain any additional
information, to the extent that the Company possesses such information
or can acquire it without unreasonable effort or expense, necessary to
verify the accuracy of the information furnished; and has availed
itself of such opportunity to the extent it considers appropriate in
order to permit it to evaluate the merits and risks of an investment in
the Company. It is understood that all documents, records and books
pertaining to this investment have been made available for inspection,
and that the books and records of the Company will be available upon
reasonable notice for inspection by investors during reasonable
business hours at its principal place of business.
(G) The undersigned acknowledges that the Shares have not
been registered under the Act in reliance on an exemption for
transactions by an issuer not involving a public offering.
(H) The undersigned further acknowledges that this Offer
has not been passed upon or the merits thereof endorsed or approved by
any state or federal authorities.
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(I) The Shares being subscribed for are being acquired
solely for the account of the undersigned for personal investment and
not with a view to, or for resale in connection with, any distribution
in any jurisdiction where such sale or distribution would be precluded.
By such representation, the undersigned means that no other person has
a beneficial interest in the Shares subscribed for hereunder, and that
no other person has furnished or will furnish directly or indirectly,
any part of or guarantee the payment of any part of the consideration
to be paid to the Company in connection therewith. The undersigned does
not intend to dispose of all or any part of the Shares, except in
compliance with the provisions of the Act and applicable state
securities laws and understands that the Shares are being offered
pursuant to a specific exemption under the provisions of the Act, which
exemption(s) depends, among other things, upon the compliance with the
provisions of the Act.
(J) The undersigned understands that sales of the Shares
may be subject to restrictions imposed under state securities laws. The
undersigned further represents and agrees that the undersigned will not
sell, transfer, pledge or otherwise dispose of or encumber the Shares,
except pursuant to the applicable rules and regulations under
applicable state securities laws, and prior to any such sale, transfer,
pledge, disposition or encumbrance, the undersigned will, if requested,
furnish the Company and its transfer agent with an opinion of counsel
satisfactory to the Company in form and substance that registration
under applicable state securities laws is not required.
(K) The undersigned hereby agrees that the Company may
place the following or similar legend on the face of the certificates
evidencing Shares if required in compliance with state securities laws:
"These securities have not been registered under the
Securities Act of 1933, as amended, or any state securities
laws and may not be sold or otherwise transferred or disposed
of except pursuant to an effective registration statement
under any applicable federal and state securities laws, or an
opinion of counsel satisfactory to counsel to the Company that
an exemption from registration is available."
(L) The undersigned certifies that each of the foregoing
representations and warranties set forth in subsections (A) through (K)
inclusive of this Section 4, are true as of the date hereof and shall
survive such date.
5. Registration Rights
The Company shall prepare and file with the Securities and
Exchange Commission, a Registration Statement on Form S-3 (or if the Company is
not eligible to register for resale of the Shares on Form S-3, such registration
shall be on another
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appropriate form in accordance herewith) in accordance with the method or
methods of distribution thereof as specified by the undersigned, and use its
best efforts to cause the Registration Statement to become effective within 90
days of the date hereof and remain effective. The Company will be responsible to
pay for all registration costs and fees including all related attorney, auditor
or other expenses.
6. Indemnification
The undersigned understands that the Shares acquired pursuant
to this Agreement are being issued without registration under the Act and
applicable state securities laws in reliance upon the exemption for transactions
by an issuer not involving any public offering; that the availability of such
exemption is, in part, dependent upon the truthfulness and accuracy of the
representations made by the undersigned herein; that the Company will rely on
such representations in accepting this Offer for the Shares; and that the
Company may take such steps as it considers reasonable to verify the accuracy
and truthfulness of such representations in advance of accepting or rejecting
the undersigned's subscription. The undersigned agrees to indemnify and hold
harmless the Company against any damage, loss, expense or cost, including
reasonable attorney's fees, sustained as a result of any misrepresentation,
misstatement or omission on the undersigned's part.
7. State Legend
FOR RESIDENTS OF ALL STATES: THE SECURITIES OFFERED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY
STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED
THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
8. No Waiver
Notwithstanding any of the representations, warranties,
acknowledgements or agreements made herein by the undersigned, the undersigned
does
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not thereby or in any manner waive any rights granted to the undersigned under
federal or state securities laws.
9. Revocation
The undersigned agrees that he shall not cancel, terminate or revoke this
Agreement or any agreement the undersigned made hereunder, and that this
Agreement shall survive the death or disability of the undersigned.
10. Miscellaneous
(A) All notices or other communications given or made
hereunder shall be in writing and shall be mailed by registered or
certified mail, return receipt requested, postage prepaid, to the
undersigned at its address set forth below and to Vitech America, Inc.
(B) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties.
(C) The provisions of this Agreement shall survive the
execution and acceptance hereof.
11. Certification
The undersigned certifies that he has read this entire
Agreement and that every statement on his part made and set forth herein is true
and complete.
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IN WITNESS WHEREOF, the undersigned has executed this Subscription and Debt
Conversion Agreement on the date his signature has been subscribed and sworn to
below.
CHENBRO AMERICA, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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By:
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Its:
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The Shares are
To be issued as follows:
3,490 shares to be issued to: 1,163 shares to be issued to:
Chenbro America, Inc. ▇▇▇▇▇▇ & Assoc.
▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Accepted as of the 19 day
of July, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial Officer
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