EXHIBIT 10.67
Subscription Agreement
Name Date Amount Signatory
---- ---- ------ ---------
Parkdale LLC * Sept., 1999 $1,000,000
* This document has been filed.
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SWISSRAY INTERNATIONAL, INC.
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THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY, STATE SECURITIES LAWS AND ARE BEING OFFERED AND
SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.
THE SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SUCH LAWS PURSUANT TO
REGISTRATION OR AN EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BE APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE 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 THE OFFERING MATERIALS.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Maximum Offering: $1,000,000
This offering consists of $1,000,000 shares of Swissray International, Inc.
common stock
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SUBSCRIPTION AGREEMENT
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SUBSCRIPTION PROCEDURES
A total of 1,000,000 shares (the "Shares") of the common stock of SWISSRAY
INTERNATIONAL, INC., (the "Company") are being offered in an aggregate amount
not to exceed $1,000,000. The Shares will be transferable to the extent that any
such transfer is permitted by law. This offering is being made in accordance
with the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended (the "Act") and Rule 506 of Regulation D promulgated under the
Act (the "Offering").
The Investor Questionnaire is designed to enable the Investor to
demonstrate the minimum legal requirements under federal and state securities
laws to purchase the Shares. The Signature Page for the Investor Questionnaire
and the Subscription Agreement contain representations relating to the
subscription.
Also included is an Internal Revenue Service Form W-9: "Request for
Taxpayer Identification Number and Certification" for U.S. citizens or residents
of the U.S. for U.S. federal income tax purposes only. (Foreign investors should
consult their tax advisors regarding the need to complete Internal Revenue
Service Form W-9 and any other forms that may be required).
If you are a foreign person or foreign entity, you may be subject to a
withholding tax equal to 30% of any dividends paid by the Company. In order to
eliminate or reduce such withholding tax you may submit a properly executed
I.R.S. Form 4224 (Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United States) or
I.R.S. Form 1001 (Ownership Exemption or Reduced Trade Certificate), claiming
exemption from withholding or eligibility for treaty benefits in the form of a
lower rate of withholding tax on interest or dividends.
Payment must be made by wire transfer as provided below:
Immediately available funds should be sent via wire transfer to the escrow
account stated below and the completed subscription documents should be
forwarded to the Escrow Attorney. Your subscription funds will be deposited into
a non-interest bearing escrow account of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Escrow Agent,
at First Union Bank of Connecticut, Stamford, Connecticut. In the event of a
termination of the Offering or the rejection of this subscription, all
subscription funds will be returned without interest. The wire instructions are
as follows:
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First Union Bank of Connecticut
Executive ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇. ▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ABA #: ▇▇▇▇▇▇▇▇▇
Swift #: ▇▇▇▇▇▇▇▇
Account #: ▇▇▇▇▇-▇▇▇▇▇▇▇-▇
Acct. Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. Trustee Account
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SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS. THE
SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SUCH LAWS PURSUANT TO
REGISTRATION OR AN EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BE APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE 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 THE OFFERING MATERIALS.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
To: Swissray International, Inc.
This Subscription Agreement is made between Swissray International, Inc.,
("Company" or "Seller") a New York corporation, and the undersigned prospective
purchaser ("Purchaser") who is subscribing hereby for the Company's shares of
common stock (the "Shares"). The Shares being offered will be separately
transferable, to the extent that any such transfer is permitted by law. This
subscription is submitted to you in accordance with and subject to the terms and
conditions described in this Subscription Agreement together with any Exhibits
thereto, relating to an offering (the "Offering") of up to 1,000,000 Shares.
This Offering is comprised of an offering of the Shares to accredited investors
in accordance with the exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended (the "Act"), and Rule 506 of Regulation D
promulgated under the Act ("Regulation D").
1. SUBSCRIPTION.
(a) The undersigned hereby irrevocably subscribes for and agrees to
purchase 1,000,000 Shares for $1,000,000. The Purchaser entering into this
Subscription Agreement shall pay the purchase price for the Shares by delivering
immediately available good funds in United States Dollars per the written
instructions of the Company or it's attorney. The closing shall be deemed to
have occurred on the date the funds are wired out per the Company or its
attorney's written instructions, which date the parties agree was September 7,
1999.
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(b) Upon receipt by the Company of the requisite payment for the Shares
being purchased the Shares so purchased will be forwarded by the Company to the
Purchaser and the name of such Purchaser will be registered on the Shares
transfer books of the Company as the record owner of such Shares. The Escrow
Agent shall not be liable for any action taken or omitted by him in good faith
and in no event shall the Escrow Agent be liable or responsible except for the
Escrow Agent's own gross negligence or willful misconduct. The Escrow Agent has
made no representations or warranties in connection with this transaction and
has not been involved in the negotiation of the terms of this Agreement or any
matters relative thereto. Seller and Purchaser each agree to indemnify and hold
harmless the Escrow Agent from and with respect to any suits, claims, actions or
liabilities arising in any way out of this transaction including the obligation
to defend any legal action brought which in any way arises out of or is related
to this Agreement. The Escrow Agent is not rendering securities advice to anyone
with respect to this proposed transaction; nor is the Escrow Agent opining on
the compliance of the proposed transaction under applicable securities law.
2. REPRESENTATIONS AND WARRANTIES.
The undersigned hereby represents and warrants to, and agrees with, the
Company as follows:
(a) The undersigned has been furnished with, and has carefully read the
applicable form of Registration Rights Agreement annexed hereto as Exhibit A
(the "Registration Rights Agreement"), and is familiar with and understands the
terms of the Offering. With respect to tax and other economic considerations
involved in his investment, the undersigned is not relying on the Company. The
undersigned has carefully considered and has, to the extent the undersigned
believes such discussion necessary, discussed with the undersigned's
professional legal, tax, accounting and financial advisors the suitability of an
investment in the Company, by purchasing the Shares, for the undersigned's
particular tax and financial situation and has determined that the investment
being made by the undersigned is a suitable investment for the undersigned.
(b) The undersigned acknowledges that all documents, records, and books
pertaining to this investment which the undersigned has requested includes Form
10-KSB for the fiscal year ended June 30, 1997 and 10K for fiscal year ended
June 30,1998 inclusive of any and all amendments thereto and Form 10-Q for the
quarters ended December 31, 1997, March 31, 1998, September 30, 1998 and
December 31, 1998 inclusive of any and all amendments thereto (the "Disclosure
Documents") have been made available for inspection by the undersigned or the
undersigned has access to the Disclosure Documents.
(c) The undersigned has had a reasonable opportunity to ask questions of
and receive answers from a person or persons acting on behalf of
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the Company concerning the Offering and all such questions have been answered to
the full satisfaction of the undersigned.
(d) The undersigned will not sell or otherwise transfer the Shares without
registration under the Act or applicable state securities laws or an exemption
therefrom. The Shares have not been registered under the Act or under the
securities laws of any states. The Shares are to be registered by the Company
pursuant to the terms of the Registration Rights Agreement attached hereto as
Exhibit A and incorporated herein and made a part hereof. The undersigned
represents that the undersigned is purchasing the Shares for the undersigned's
own account, for investment and not with a view to resale or distribution except
in compliance with the Act. The undersigned has not offered or sold any portion
of the Shares being acquired nor does the undersigned have any present intention
of dividing the Shares with others or of selling, distributing or otherwise
disposing of any portion of the Shares either currently or after the passage of
a fixed or determinable period of time or upon the occurrence or nonoccurrence
of any predetermined event or circumstance in violation of the Act. Except as
provided in the Registration Rights Agreement, the Company has no obligation to
register the Shares.
(e) The undersigned recognizes that an investment in the `Shares involves
substantial risks, including loss of the entire amount of such investment.
(f) Legends.
(i) The undersigned acknowledges that each certificate representing
the Shares unless registered pursuant to the Registration Rights Agreement,
shall be stamped or otherwise imprinted with a legend substantially in the
following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED
OR SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER
SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) IF
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
NOTWITHSTANDING THE FOREGOING, THESE SECURITIES ARE ALSO SUBJECT
TO THE REGISTRATION RIGHTS SET FORTH IN EACH OF THAT CERTAIN
SUBSCRIPTION AGREEMENT AND
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REGISTRATION RIGHTS AGREEMENT BY AND BETWEEN THE HOLDER HEREOF
AND THE COMPANY, A COPY OF EACH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
(ii) The Shares shall contain the following legend until the
effectiveness of Registration Statement:
"No sale, offer to sell or transfer of the securities represented by this
certificate shall be made unless a registration statement under the Federal
Securities Act of 1933, as amended, with respect to such securities is then
in effect or an exemption from the registration requirement of such Act is
then in fact applicable to such securities."
(iii) After the effective date of the Registration Statement the
Shares shall not bear any restrictive legend.
(g) If this Subscription Agreement is executed and delivered on behalf of a
corporation, (i) such corporation has the full legal right and power and all
authority and approval required (a) to execute and deliver, or authorize
execution and delivery of, this Subscription Agreement and all other instruments
(including, without limitation, the Registration Rights Agreement) executed and
delivered by or on behalf of such corporation in connection with the purchase of
the Shares and (b) to purchase and hold the Shares: (ii) the signature of the
party signing on behalf of such corporation is binding upon such corporation;
and (iii) such corporation has not been formed for the specific purpose of
acquiring the Shares, unless each beneficial owner of such entity is qualified
as an accredited investor within the meaning of Rule 501(a) of Regulation D and
has submitted information substantiating such individual qualification.
(h) The undersigned shall indemnify and hold harmless the Company and each
stockholder, executive, employee, representative, affiliate, officer, director,
agent (including Counsel) or control person of the Company, who is or may be a
party or is or may be threatened to be made a party to any threatened pending or
contemplated action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made or alleged to have been made by the undersigned to the Company or
omitted or alleged to have been omitted by the undersigned, concerning the
undersigned or the undersigned's subscription for and purchase of the Shares or
the undersigned's authority to invest or financial position in connection with
the Offering, including, without limitation, any such misrepresentation,
misstatement or omission contained in this Subscription Agreement, the
Questionnaire or any other document submitted by the undersigned, against
losses, liabilities and expenses for which the Company, or any stockholder,
executive, employee,
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representative, affiliate, officer, director, agent (including Counsel) or
control person of the Company has not otherwise been reimbursed (including
attorneys' fees and disbursements, judgments, fines and amounts paid in
settlement) actually and reasonably incurred by the Company, or such officer,
director stockholder, executive, employee, agent (including Counsel),
representative, affiliate or control person in connection with such action, suit
or proceeding.
(i) The undersigned is not subscribing for the Shares as a result of, or
pursuant to, any advertisement, article, notice or other communication published
in any newspaper, magazine or similar media or broadcast over television or
radio or presented at any seminar or meeting.
(j) The undersigned or the undersigned's representatives, as the case may
be, has such knowledge and experience in financial, tax and business matters so
as to enable the undersigned to utilize the information made available to the
undersigned in connection with the Offering to evaluate the merits and risks of
an investment in the Shares and to make an informed investment decision with
respect thereto.
(k) The Purchaser is purchasing the Shares for its own account for
investment, and not with a view toward the resale or distribution thereof
Purchaser is neither an underwriter of, nor a dealer in, the Shares or the
Common Stock issuable upon conversion thereof and is not participating in the
distribution or resale of the Shares.
(l) There has never been represented, guaranteed, or warranted to the
undersigned by any broker, the Company, its officers, directors or agents, or
employees or any other person, expressly or by implication (i) the percentage of
profits and/or amount of or type of consideration, profit or loss to be
realized, if any, as a result of the Company's operations; and (ii) that the
past performance or experience on the part of the management of the Company, or
of any other person, will in any way result in the overall profitable operations
of the Company.
3. SELLER REPRESENTATIONS.
(a) Concerning the Securities. The issuance, sale and delivery of the
Shares have been duly authorized by all required corporate action on the part of
Seller, and when issued, sold and delivered in accordance with the terms hereof
and thereof for the consideration expressed herein and therein, will be duly and
validly issued and enforceable in accordance with their terms, subject to the
laws of bankruptcy and creditors' rights generally.
(b) Authority to Enter Agreement. This Agreement has been duly authorized,
validly executed and delivered on behalf of Seller and is a valid and binding
agreement in accordance with its terms, subject to general principals of
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equity and to bankruptcy or other laws affecting the enforcement of creditors'
rights generally.
(c) Non-contravention. The execution and delivery, of this Agreement and
the consummation of the issuance of the Shares, and the transactions
contemplated by this Agreement do not and will not conflict with or result in a
breach by Seller of any of the terms or provisions of, or constitute a default
under, the articles of incorporation or by-laws of Seller, or any indenture,
mortgage, deed of trust, or other material agreement or instrument to which
Seller is a party or by which it or any of its properties or assets are bound,
or any existing applicable law, rule, or regulation of the United States or any
State thereof or any applicable decree, judgment, or order of any Federal or
State court, Federal or State regulatory body, administrative agency or other
United States governmental body having jurisdiction over Seller or any of its
properties or assets.
(d) Company Compliance. The Company represents and warrants that the
Company and its subsidiaries are: (i) in full compliance, to the extent
applicable, with all reporting obligations under either Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; excepting that the Company acknowledges
that it did not timely file its Form 10-K for its fiscal year ended June 30,
1998, and its Form 10-Q for the fiscal quarter ended September 30, 1998, both of
which were subsequently filed on December 3,1998, (ii) not in violation of any
term or provision of its Certificate of Incorporation or by-laws; (iii) not in
default in the performance or observance of any obligation, agreement or
condition contained in any bond, debenture (excepting for reservation of number
of shares required if all Debentures were to be converted and excepting for
registration of underlying shares as same relates to preexisting debentures),
note or any other evidence of indebtedness or in any mortgage, deed of trust,
indenture or other instrument or agreement to which they are a party, either
singly or jointly, by which it or any of its property is bound or subject.
Furthermore, the Company is not aware of any other facts, which it has not
disclosed which could have a material adverse effect on the business, condition,
(financial or otherwise), operations, earnings, performance, properties or
prospects of the Company and its subsidiaries taken as a whole.
(e) Pending Litigation. Except as otherwise disclosed in Exhibit B, there
is (i) no action, suit or proceeding before or by any court, arbitrator or
governmental body now pending or, to the knowledge of the Company, threatened or
contemplated to which the Company or any of its subsidiaries is or may be a
party or to which the business or property of the Company or any of its
subsidiaries is or may be bound or subject, (ii) no law, statute, rule,
regulation, order or ordinance that has been enacted, adopted or issued by any
Governmental Body or that, to the knowledge of the Company, has been proposed by
any Governmental Body adversely affecting the Company or any of its
subsidiaries, (iii) no injunction, restraining order or order of any nature by a
federal, state or foreign court or Governmental Body of competent jurisdiction
to
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which the Company or any of its subsidiaries is subject issued that, in the case
of clauses (i), (ii) and (iii) above, (x) is reasonably likely, singly or in the
aggregate, to result in a material adverse effect on the business, condition,
(financial or otherwise), operations, earnings, performance, properties or
prospects of the Company, and its subsidiaries taken as a whole or (y) would
interfere with or adversely affect the issuance of the Shares or would be
reasonably likely to render this Subscription Agreement or the Shares, or any
portion thereof invalid or unenforceable.
(f) Issuance of the Shares. No action has been taken and no law, statute,
rule, regulation, order or ordinance has been enacted, adopted or issued by any
Governmental Body that prevents the issuance of the Shares; no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction has been issued that prevents the issuance of the Shares
in any jurisdiction; and no action, suit or proceeding is pending against or, to
the best knowledge of the Company, threatened against or affecting, the Company,
any of its subsidiaries or, to the best knowledge of the Company, before any
court or arbitrator or any Governmental Body that, if adversely determined,
would prohibit, materially interfere with or adversely affect the issuance or
marketability of the Shares or render the Subscription Agreement or the Shares,
or any portion thereof, invalid or unenforceable.
(g) The Company shall indemnify and hold harmless the Purchaser and each
stockholder, executive, employee, representative, affiliate, officer, director
or control person of the Purchaser, who is or may be a party or is or may be
threatened to be made a party to any threatened, pending or contemplated action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of or arising from any actual or alleged misrepresentation or
misstatement of facts or omission to represent or state facts made or alleged to
have been made by the Company to the Purchaser or omitted or alleged to have
been omitted by the Company, concerning the Purchaser or the Purchaser's
subscription for and purchase of the Shares or the Purchaser's authority to
invest or financial position in connection with the Offering, including, without
limitation, any such misrepresentation, misstatement or omission contained in
this Subscription Agreement, the Questionnaire or any other document submitted
by the Company, against losses, liabilities and expenses for which the
Purchaser, or any stockholder, executive, employee, representative, affiliate,
officer, director or control person of the Purchaser has not otherwise been
reimbursed (including attorneys' fees and disbursements, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by the Purchaser,
or such officer, director, stockholder, executive, employee, representative,
affiliate or control person in connection with such action, suit or proceeding.
(h) No Change. Other than filings required by the Blue Sky or federal
securities law and/or NASDAQ Rules and Regulations, no consent, approval or
authorization of or designation, declaration or filing with any governmental or
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other regulatory authority on the part of the Company is required in connection
with the valid execution, delivery and performance of this Agreement. Any
required qualification or notification under applicable federal securities laws
and state Blue Sky laws of the offer, sale and issuance of the. Shares, has been
obtained on or before the date hereof or will have been obtained within the
allowable period thereafter, and a copy thereof will be forwarded to Counsel for
the Purchaser.
(i) True Statements. Neither this Agreement nor any of the "Disclosure
Documents", as hereinafter defined, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained herein or therein not misleading in the light of the
circumstances under which such statements are made. There exists no fact or
circumstances which, to the knowledge of the Company, materially and adversely
affects the business, properties or assets, or conditions, financial or
otherwise, of the Company, which has not been set forth in this Subscription
Agreement or disclosed in such documents.
(j) The Purchaser has been advised that the Company has not retained any
independent professionals to review or comment on this Offering or otherwise
protect the interests of the Purchaser. Although the Company has retained its
own counsel, neither such counsel nor any other firm, including ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., has acted on behalf of the Purchaser, and the Purchaser should
not rely on the Company's legal counsel or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. with respect
to any matters herein described.
(k) Prior Shares Issued Under or Regulation D. In the past nine months the
Company raised $7,081,200 in Regulation D offerings, including redemptions and
rollovers.
(l) Current Authorized Shares. As of September 1, 1999 there were
50,000,000 authorized shares of Common Stock of which approximately 14,540,737
shares were issued and outstanding.
(m) Disclosure Documents. The Disclosure Documents are all the documents
(other than preliminary materials) that the Company has been required to file
with the SEC from June 30, 1997, to the date hereof, exclusive of such
registration statements as have been filed in accordance with certain
registration rights agreements. As of their respective dates, and/or dates of
amended filings with respect thereto, none of the Disclosure Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and no material event has occurred since the Company's filing on
Form 10-K and 10-K/A for the year ended June 30, 1998 and Form 10-Q for quarters
ended September 30, 1998 and December 31, 1998 which could make any of the
disclosures contained therein (as
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subsequently amended and/or restated) misleading The financial statements of the
Company included in the Disclosure Documents have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated in the audit
adjustments) the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and changes in financial position for the periods then
ended.
(n) Information Supplied. The information supplied by the Company to
Purchaser in connection with the offering of the Shares does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements, in the light of the circumstances in which they were
made, not misleading. There exists no fact or circumstances which, to the
knowledge of the Company, materially and adversely affects the business,
properties, assets, or conditions, financial or otherwise, of the Company, which
has not been set forth in this Agreement or disclosed in such documents.
(o) Non-contravention. The execution and delivery of this Agreement by the
Company, the issuance of the Shares, and the consummation by the Company of the
other transactions contemplated by this Agreement, do not and will not conflict
with or result in a breach by the Company of any of the terms or provisions of,
or constitute a default under, the (i) certificate of incorporation or by-laws
of the Company, (ii) any indenture, mortgage, deed of trust, or other material
agreement or instrument to which the Company is a party or by which it or any of
its properties or assets are bound, (iii) any material existing applicable law,
rule, or regulation or any applicable decree, judgment, or (iv) order of any
court, United States federal or state regulatory body, administrative agency, or
other governmental body having jurisdiction over the Company or any of its
properties or assets, except such conflict, breach or default which would not
have a material adverse effect on the transactions contemplated herein.
(p) No Default. Except as may be set forth in the Company's report on form
10-K for the fiscal year ending June 30, 1998, the Company is not in default in
the performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust or other, material
instrument or agreement to which it is a party or by which it or its property is
bound, and neither the execution of, nor the delivery by the Company of, nor the
performance by the Company of its obligations under, this Agreement or the
Shares, other than the conversion provision thereof, will conflict with or
result in the breach or violation of any of the terms or provisions of, or
constitute a default or result in the creation or imposition of any lien or
charge on any assets or properties of the Company under, (i) any material
indenture, mortgage, deed of trust or other material agreement applicable to the
Company or instrument to which the Company is a party or by which it is bound,
(ii) any statute applicable to the Company or its property, (iii) the
Certificate of Incorporation! or By-Laws of the Company, (iv) any decree,
judgment, order, rule or regulation of any court or
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governmental agency or body having jurisdiction over the Company or its
properties, or (v) the Company's listing agreement, if any, for its Common
Stock.
(q) Use of Proceeds. The Company represents that the net proceeds of this
offering will be primarily used for working capital.
(r) The Company hereby represents that it shall be paying consultant a fee
of _____________.
4. ISSUANCE OF SHARES AND REGISTRATION.
(a) Legend. Upon registration of the Shares, the Company shall deliver to
the Purchaser, or per the Purchaser's instructions, the shares of Common Stock,
subject to the following restrictive legend:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN INCLUDED IN THE
COMPANY'S REGISTRATION STATEMENT INITIALLY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON ______________, 1999, AND
MAY BE SOLD IN ACCORDANCE WITH THE COMPANY'S PROSPECTUS DATED
_______, 1999, WHICH FORMS A PART OF SUCH REGISTRATION STATEMENT,
OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
(b) Opinion Letter. It shall be the Company's responsibility to take all
necessary actions and to bear all such costs to issue the Certificate of Common
Stock as provided herein, including the responsibility and cost for delivery of
an opinion letter to the transfer agent, if so required. The person in whose
name the certificate of Common Stock is to be registered shall be treated as a
shareholder of record on and after the date of issuance. Upon surrender of any
Share certificates that are to be sold in part, the Company shall issue to the
Purchaser new Share Certificates equal to the unsold amount.
(c) Once the Common Stock has been registered, if the Common Stock is not
delivered per the written instructions of the Purchaser, within 5 (five)
business days after the Company receives the Share certificates from the
Purchaser, then in such event the Company shall pay to Purchaser one-half of one
percent (.50%) in cash, of the purchase price of the Shares delivered to the
Company per each day after the fifth business day following the receipt by the
Company that the Common Stock is not delivered. The Company acknowledges that
its failure to deliver the Common Stock within said five (5) business days will
cause the Initial Investor to suffer damages in an amount that will be difficult
to ascertain. Accordingly, the parties agree that it is appropriate to include
in this
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Agreement a provision for liquidated damages. The parties acknowledge and agree
that the liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form and amount of such liquidated damages are reasonable and will not
constitute a penalty. The payment of liquidated damages shall not relieve the
Company from its obligations to register the Common Stock and deliver the Common
Stock pursuant to the terms of this Agreement and the Subscription Agreement.
The Company shall make any payments incurred under this Section 4(c) in
immediately available funds within three (3) business days from the date of
issuance of the applicable Common Stock. Nothing herein shall limit a
Purchaser's right to pursue actual damages for the Company's failure to issue
and deliver Common Stock to the Purchaser within five (5) business days after
registration and after the Company receives the Share certificates from the
Purchaser.
(d) The Company shall at all times reserve and have available all Common
Stock necessary for registration of all the Shares purchased by all Purchasers
of the Shares. It at any time the Company does not have sufficient authorized
but unissued shares of Common Stock available for registration ("Default", the
date of such default being referred to herein as the "Default Date"), the
Company shall issue to the Purchaser all of the shares of Common Stock which are
available. The Company shall provide notice of such Default ("Notice of
Default") to all Purchasers, within one (1) business day of such default (with
the original delivered by overnight or two day courier).
The Company agrees to pay to all Purchasers of outstanding Shares payments
for a Default ("Default Payments") in the amount of (N/365) x (.24) x the
initial issuance price of the outstanding Shares held by each Purchaser where N
= the number of days from the Default Date to the date (the "Authorization
Date") that the Company authorizes a sufficient number of shares of Common Stock
to effect of all remaining Shares. The Company shall send notice ("Authorization
Notice") to each Purchaser of outstanding Shares that additional shares of
Common Stock have been authorized, the Authorization Date and the amount of
Purchaser's accrued Default Payments. The accrued Default shall be paid in cash
which payments shall be made to such Purchaser of outstanding Shares by the
fifth day of the following calendar month following registration of all the
Shares.
5. LIMITS ON AMOUNT OF CONVERSION AND OWNERSHIP.
Notwithstanding the provisions hereof, in no event except with respect to a
conversion pursuant to redemption by the Company if there is (a) a public
announcement that 50% or more of the Company is being acquired, (b) a public
announcement that the Company is being merged, or (c) a change in control,
14
shall the Purchaser be entitled to own the number of shares of Common Stock
beneficially owned by the Purchaser and its affiliates, and, would result in
beneficial ownership by the Purchaser and its affiliates of more than 4.99% of
the outstanding shares of Common Stock. For purposes of the proviso to be
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (15 of such proviso.
The Purchaser further agrees that if the Purchaser transfers or assigns any of
the Shares to a party who or which would not be considered such an affiliate,
such assignment shall be made subject to the transferee's or assignee's specific
agreement to be bound by the provisions of this Section as if such transferee or
assignee were a signatory to the Subscription Agreement.
6. DELIVERY INSTRUCTIONS.
Prior to or on the Closing Date the Company shall deliver to the Escrow
Agent an opinion letter signed by counsel for the Company in the form attached
hereto as Exhibit C. Also, prior to or on the Closing Date the Company shall
deliver to the Escrow Agent a signed Registration Rights Agreement in the form
attached hereto as Exhibit A.
7. UNDERSTANDINGS.
The undersigned understands, acknowledges and agrees with the Company as
follows:
FOR ALL SUBSCRIBERS:
(a) This Subscription may be rejected, in whole or in part, by the Company
in its sole and absolute discretion at any time before the date set for closing
unless the Company has given notice of acceptance of the undersigned's
subscription by signing this Subscription Agreement.
(b) No U.S. federal or state agency or any agency of any other jurisdiction
has made any finding or determination as to the fairness of the terms of the
Offering for investment nor any recommendation or endorsement of the Shares.
(c) The representations, warranties and agreements of the undersigned and
the Company contained herein and in any other writing delivered in connection
with the transactions contemplated hereby shall be true and correct in all
material respects on and as of the date of the sale of the Shares, and as of the
date of the conversion and exercise thereof, as if made on and as of such date
and shall survive the execution and delivery of this Subscription Agreement and
the purchase of the Shares.
15
(d) IN MAKING AN INVESTMENT DECISION, PURCHASERS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THE SHARES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY
MEMORANDUM OR THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
(e) The Regulation D Offering is intended to be exempt from registration
under the Securities Act by virtue of Section 4(2) of the Securities Act and the
provisions of Regulation D thereunder, which is in part dependent upon the
truth, completeness and accuracy of the statements made by the undersigned
herein and in the Questionnaire.
(f) It is understood that in order not to jeopardize the Offering's exempt
status under Section 4(2) of the Securities Act and Regulation D, any transferee
may, at a minimum, be required to fulfill the investor suitability requirements
thereunder.
(g) THE SHARES MAY NOT BE TRANSFERRED, RESOLD OR OTHERWISE DISPOSED OF
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS SHOULD BE
AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT
FOR AN INDEFINITE PERIOD OF TIME.
(h) NASAA UNIFORM LEGEND
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933 AND THE APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY WILL BE REQUIRED TO
16
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
9. Litigation.
(a) Forum Selection and Consent to Jurisdiction. Any litigation based
thereon, or arising out of, under, or in connection with, this agreement or any
course of conduct, course of dealing, statements (whether oral or written) or
actions of the Company or Purchaser shall be brought and maintained exclusively
in the courts of the State of New York. The Company hereby expressly and
irrevocably submits to the jurisdiction of the state and federal courts of the
State of New York for the purpose of any such litigation as set forth above and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with such litigation. The Company further irrevocably consents to the
service of process by registered mail, postage prepaid, or by personal service
within or without the State of New York. The Company hereby expressly and
irrevocably waives, to the fullest extent permitted by law, any objection which
it may have or hereafter may have to the laying of venue of any such litigation
brought in any such court referred to above and any claim that any such
litigation has been brought in any inconvenient forum. To the extent that the
Company has or hereafter may acquire any immunity from jurisdiction of any court
or from any legal process (whether through service or notice, attachment prior
to judgment, attachment in aid of execution or otherwise) with respect to itself
or its property, the Company hereby irrevocably waives such immunity in respect
of its obligations under this agreement and the other loan documents.
(b) Waiver of Jury Trial The Purchaser and the Company hereby knowingly,
voluntarily and intentionally waive any rights they may have to a trial by jury
in respect of any litigation based hereon, or arising out of, under, or in
connection with, this agreement, or any course of conduct, course of dealing,
statements (whether oral or written) or actions of the Purchaser or the Company.
The Company acknowledges and agrees that it has received full and sufficient
consideration for this provision and that this provision is a material
inducement for the Holder entering into this agreement.
(c) Submission To Jurisdiction. Any legal action or proceeding in
connection with this Agreement or the performance hereof may be brought in the
state and federal courts located in the State of New York and the parties hereby
irrevocably submit to the non-exclusive jurisdiction of such courts for the
purpose of any such action or proceeding.
10. MISCELLANEOUS.
(a) All pronouns and any variations thereof used herein shall be deemed to
refer to the masculine, feminine, impersonal, singular or plural, as the
identity of the person or persons may require.
17
(b) Neither this Subscription Agreement nor any provision hereof shall be
waived, modified, changed, discharged, terminated, revoked or canceled, except
by an instrument in writing signed by the party effecting the same against whom
any change, discharge or termination is sought.
(c) Notices required or permitted to be given hereunder shall be in writing
and shall be deemed to be sufficiently given when personally delivered or sent
by registered mail, return receipt requested, addressed: (i) if to the Company,
at SWISSRAY International, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ with a copy by facsimile and mail to ▇▇▇▇ ▇. ▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and (ii) if to the undersigned, at the
address for correspondence set forth in the Questionnaire, or at such other
address as may have been specified by written notice given in accordance with
this paragraph 10(c).
(d) This Subscription Agreement shall be enforced, governed and construed
in all respects in accordance with the laws of the State of New York, as such
laws are applied by New York courts to agreements entered into, and to be
performed in, New York by and between residents of New York, and shall be
binding upon the undersigned, the undersigned's heirs, estate, legal
representatives, successors and assigns and shall inure to the benefit of the
Company, its successors and assigns. If any provision of this Subscription
Agreement is invalid or unenforceable under any applicable statue or rule of
law, then such provisions 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 provision hereof that may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
hereof.
(e) This Subscription Agreement, together with Exhibits A, B, and C
attached hereto and made a part hereof, constitute 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 hereto. An executed facsimile copy of
the Subscription Agreement shall be effective as an original.
11. SIGNATURE.
The signature of this Subscription Agreement is contained as part of the
applicable Subscription Package, entitled "Signature Page."
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK)
18
SWISSRAY INTERNATIONAL, INC.
CORPORATION QUESTIONNAIRE
Investor Name: ________________
The information contained in this Questionnaire is being furnished in order
to determine whether the undersigned CORPORATION'S Subscription to purchase the
Shares described in the Subscription Agreement may be accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned CORPORATION understands, however, that the
Company may present this Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares is
exempt from registration under the Securities Act of 1933, as amended. Further,
the undersigned CORPORATION understands that the offering is required to be
reported to the Securities and Exchange Commission, NASDAQ and to various state
securities and "blue sky" regulators.
IN ADDITION TO SIGNING THE SIGNATURE PAGE, THE UNDERSIGNED CORPORATION MUST
COMPLETE FORM W-9 ATTACHED HERETO.
I. PLEASE CHECK EACH OF THE STATEMENTS BELOW THAT APPLIES TO THE CORPORATION.
[ ]
1. The undersigned CORPORATION: (a) has total assets in excess of
$5,000,000; (b) was not formed for the specific purpose of acquiring the
Shares and (c) has its principal place of business in _______________.
[ ]
2. Each of the shareholders of the undersigned CORPORATION is able to
certify that such shareholder meets at least one of the following three
conditions:
(a) the shareholder is a natural person whose individual net worth*
or joint net worth with his or her spouse exceeds $1,000,000; or
(b) the shareholder is a natural person who had an individual income*
in excess of $200,000 in each of 1997 and 1998 and who reasonably
expects an individual income in excess of $206,000 in 1999; or
19
(c) Each of the shareholders of the undersigned CORPORATION is able
to certify that such shareholder is a natural person who,
together with his or her spouse, has had a joint income in excess
of $300,000 in each of 1997 and 1998 and who reasonably expects a
joint income in excess of $300,000 during 1999; and the
undersigned CORPORATION has its principal place of business in
________________________.
* For purposes of this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In determining income, an investor should
add to his or her adjusted gross income any amounts attributable to tax-exempt
income received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to ▇▇▇ or ▇▇▇▇▇ retirement plan,
alimony payments and any amount by which income from long-term capital gains has
been reduced in arriving at adjusted gross income.
[ ]
3. The undersigned CORPORATION is:
(a) a bank as defined in Section 3(a)(2) of the Securities Act; or
(b) a savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; or
(c) a broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; or
(d) an insurance company as defined in Section 2(13) of the Securities
Act; or
(e) An investment company registered under the Investment Company Act
of 1940 or a business development company as defined in Section
2(a)(48) of the Investment Company Act of 1940; or
(f) a small business investment company licensed by the U.S. Small
Business Administration under Section 301 (c) or (d) of the Small
Business Investment Act of 1958; or
(g) a private business development company as defined in Section
202(a) (22) of the Investment Advisors Act of 1940.
20
II. OTHER CERTIFICATIONS.
By signing the Signature Page, the undersigned certifies the following:
(a) That the CORPORATION'S purchase of the Shares will be solely for the
CORPORATION'S own account and not for the account of any other person or
entity; and
(b) that the CORPORATION'S name, address of principal place of business,
place of incorporation and taxpayer identification number as set forth in
this Questionnaire are true, correct and complete.
III. GENERAL INFORMATION
(a) PROSPECTIVE PURCHASER (THE CORPORATION)
Name:
Principal Place of Business: ___________________________________________________
________________________________________________________________________________
Address for Correspondence (if different): SAME
-------------------
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number: ______________________________________________________________
(Area Code) (Number)
Jurisdiction of Incorporation: _________________________________________________
Date of Formation: _____________________________________________________________
Taxpayer Identification Number: ________________________________________________
Number of Shareholders: ________________________________________________________
(b) INDIVIDUAL WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
CORPORATION.
Name: __________________________________________________________________________
Position or Title: _____________________________________________________________
21
SWISSRAY INTERNATIONAL, INC.
CORPORATION SIGNATURE PAGE
Your signature on this Corporation Signature Page evidences the agreement
by the Purchaser to be bound by the Questionnaire and the Subscription
Agreement.
1. The undersigned hereby represents that (a) the Information contained in
the Questionnaire is complete and accurate and (b) the Purchaser will notify
SWISSRAY INTERNATIONAL, INC. immediately if any material change in any of the
information occurs prior to the acceptance of the undersigned Purchaser's
subscription and will promptly send SWISSRAY INTERNATIONAL, INC. written
confirmation of such change.
2. The undersigned officer of the Purchaser hereby certifies that he has
read and understands this Subscription Agreement.
3. The undersigned officer of the Purchaser hereby represents and warrants
that he has been duly authorized by all requisite action on the part of the
Corporation to acquire the Shares and sign is Subscription Agreement on behalf
of Parkdale LLC and, further, that Parkdale LLC has all requisite authority to
purchase the Shares and enter into this Subscription Agreement.
------------------------------- ---------------------------------------
Number of Shares subscribed for Date
/s/ Parkdale LLC
---------------------------------------
(Purchaser)
By: /s/ [ILLEGIBLE]
---------------------------------------
(Signature)
Name: Navigator Management Ltd.
Director
---------------------------------------
(Please Type or Print)
Title:
---------------------------------------
(Please Type or Print)
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE' REGISTRATION STATEMENT
UNDER THE ACT.
22
23
COMPANY ACCEPTANCE PAGE
This Subscription Agreement accepted
and agreed to this ____ day of September, 1999
SWISSRAY INTERNATIONAL, INC.
BY /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, its Chairman and President
duly authorized
24
