1
EXHIBIT 10.22
SUBSCRIPTION AGREEMENT FOR COMMON STOCK
OF
iBIZ TECHNOLOGY CORP.
This Subscription Agreement (this "Agreement") is made and entered
into as of this ___ day of January, 2000, by and between iBIZ Technology Corp. a
Florida corporation, and _______ (the "Purchaser")
RECITALS:
A. The Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemptions from registration provided by
Regulation D ("Regulation D") promulgated by the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), and/or Section 4(2) of the Securities Act.
B. The Purchaser wishes to purchase, and the Company wishes to issue
and sell 250,000 shares of the Company's Common Stock, $0.001 par value (the
"Common Stock" or "Shares") for an aggregate purchase price of $275,000 upon the
terms and conditions of this Agreement.
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. PURCHASE AND ISSUANCE OF SHARES. Upon execution of this
Agreement, the Company will, subject to the terms of this Agreement, issue and
sell to the Purchasers, and the Purchasers will purchase from the Company,
250,000 shares of the Common Stock, for a purchase price of $1.10 per share for
an aggregate purchase price of $275,000.
2. DELIVERY OF CERTIFICATES. After delivery of the consideration set
forth in Section 1 by the Purchaser, the Company shall promptly deliver to the
Purchaser one or more certificates representing the Shares purchased by the
Purchaser. The certificates for the Common Stock will bear a notice referencing
certain restrictions on transfer for the purpose of complying with securities
laws and a notice referencing restrictions on transfer contemplated in Section 5
of this Agreement.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASERS. The
Purchaser warrants and covenants to the Company as follows:
3.1 Investor Sophistication. The Purchaser is (i) experienced
in making investments of the kind described in this Agreement; (ii) able,
by
16
2
reason of its business and financial experience, to protect its own
interests in connection with the transactions described in this Agreement;
and (iii) able to afford the entire loss of its investment in the Common
Stock.
3.2 Subsequent Offers or Sales. All subsequent offers and
sales of the Common Stock shall be made pursuant to an effective
registration statement under the Securities Act or pursuant to an
applicable exemption from such registration.
3.3 Reliance on Representations and Warranties. Purchaser
understands that the Common Stock is being offered and sold in reliance
upon exemptions from the registration requirements of the United States
federal securities laws, and that the Company is relying upon the truth
and accuracy of the Purchaser's representations and warranties, and the
Purchaser's compliance with its agreements, each as set forth herein, in
order to determine the availability of such exemptions and the eligibility
of the Purchaser to acquire the Common Stock.
3.4 Access to Information. Purchaser (i) has been provided
with sufficient information with respect to the business of the Company
and such documents relating to the Company as the Purchaser has requested
and the Purchaser has carefully reviewed the same including, without
limitation, the Company's Form 10-SB, and all amendments thereto (the
"Form 10") filed with the Securities and Exchange Commission on October
13, 1999; (ii) has been provided with such additional information with
respect to the Company and its business and financial condition as the
Purchaser, or the Purchaser's agent or attorney, has requested; and (iii)
has had access to management of the Company and the opportunity to discuss
the information and any questions that the Purchaser had with respect
thereto have been answered to the full satisfaction of the Purchaser.
3.5 Valid Authority; Enforceability. The Purchaser has the
requisite corporate power and authority to enter into this Agreement. This
Agreement has been duly and validly authorized by the Purchaser and when
executed and delivered by the Purchaser will be a valid and binding
agreement of the Purchaser, enforceable in accordance with its respective
terms, except to the extent that enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to creditors' rights
generally and to general principles of equity.
3.6 Dilution. Purchaser is aware that its percentage ownership
of Common Stock is subject to subsequent issuances as permitted by the
Company's Articles of Incorporation and Bylaws, which could cause the
percentage of outstanding shares held by the Purchaser to decrease.
17
3
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company hereby represents, warrants and covenants to the Purchasers as follows:
4.1 Organization and Standing; Articles and Bylaws. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida and has all requisite
corporate power and authority to carry on its business as proposed to be
conducted. Each of the Company's subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction. Each of the Company and its subsidiaries is duly
qualified as a foreign corporation in all jurisdictions in which the
failure to so qualify would have a material adverse effect on the Company
and its subsidiaries taken as a whole. Schedule 4.1 lists all subsidiaries
of the Company and, except as noted therein, all of the outstanding
capital stock of all such subsidiaries is owned of record and beneficially
by the Company.
4.2 Corporate Power; Authorization. The Company has all
requisite corporate power to enter into this Agreement. All corporate
action on the part of the Company, its officers and directors necessary
for the consummation of the transactions contemplated by this Agreement,
the performance of the Company's obligations hereunder, and the sale and
issuance of the Common Stock pursuant hereto, has been or will be taken.
4.3 Capital Stock and Related Matters. On the date hereof, the
authorized capital of the Company consists of 100,000,000 shares of Common
Stock, par value $0.001 per share, of which 26,671,380 shares are issued
and outstanding. Schedule 4.3 sets forth all of the options, warrants and
convertible securities of the Company, and any other rights to acquire
securities of the Company (collectively, the "Derivative Securities").
4.4 Reporting Company Status; SEC Filings. The Company files
reports with the Commission pursuant to Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Common Stock is
listed and traded on the OTC Bulletin Board ("OTC"). The Company is not
aware of any pending or contemplated action or proceeding of any kind to
suspend the trading of the Common Stock.
4.5 Valid Issuance. The Common Stock, when issued in
compliance with the provisions of this Agreement, will be validly issued,
fully paid and nonassessable and will be free of any liens or
encumbrances.
4.6 No Conflict. To the knowledge of the Company, the
execution and delivery of this Agreement by the Company will not violate
or
18
4
conflict with any agreement or other obligation to which the Company is
subject, or result in any default or other adverse action. Schedule 4.6
lists all material agreements and instruments to which the Company or any
of its subsidiaries is a party or by which any of their properties or
assets are bound.
4.7 Litigation. Except as disclosed in the Company's public
filings with the Commission, or on Schedule 4.7, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board
or body pending or, to the knowledge of the Company or any of its
subsidiaries, threatened against or affecting the Company or any of its
subsidiaries, in which an unfavorable decision, ruling or finding would
have an adverse effect on the properties, business, condition (financial
or other) or results of operations of the Company and its subsidiaries,
taken as a whole, or the transactions contemplated by this Agreement, or
which would adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under this
Agreement.
4.8 Title to Properties; Liens and Encumbrances. The Company
has good and marketable title to all of its material properties and
assets, both real and personal, and has good title to all its leasehold
interests, in each case subject only to mortgages, pledges, liens,
security interests, conditional sale agreements, encumbrances or charges
created in the ordinary course of business.
4.9 Insurance. The Company maintains property and casualty,
general liability, personal injury and other similar types of insurance
that is adequate, consistent with industry standards and the Company's
historical claims experience. The Company has not received notice from,
and has no knowledge of any threat by, any insurer (that has issued any
insurance policy to the Company) that such insurer intends to deny
coverage under or cancel, discontinue or not renew any insurance policy
presently in force covering the Company or any of its subsidiaries.
4.10 Taxes. All applicable tax returns required to be filed by
the Company and each of its subsidiaries have been prepared and filed in
compliance with all applicable laws, or if not yet filed have been granted
extensions of the filing dates which extensions have not expired. All
taxes, assessments, fees and other governmental charges upon the Company,
its subsidiaries, or upon any of their respective properties, income or
franchises, shown in such returns and on assessments received by the
Company or its subsidiaries to be due and payable have been paid, or
adequate reserves therefor have been set up if any of such taxes are being
contested in good faith. If any of such tax returns have not been filed or
if any such taxes have not been paid or so reserved for, the failure to so
file or to pay would not in the aggregate have a material adverse effect
on the business or financial condition
19
5
of the Company and its subsidiaries, taken as a whole. The Company is
disputing certain tax penalties and interest thereon as set forth on
Schedule 4.10 hereto.
4.11 Brokerage Fees. Other than an amount equal to $__________
payable by the Company as a placement fee, the Company has not incurred
any liability for any consulting fees or agent's commissions in connection
with the offer and sale of the Common Stock contemplated by this
Agreement.
4.12 Knowledge. The phrase "to the knowledge of the Company"
shall mean to the actual knowledge of the parties executing this Agreement
on behalf of the Company.
5. CERTAIN COVENANTS AND ACKNOWLEDGEMENTS.
5.1 Transfer Restrictions. The Purchaser acknowledges that,
(i) except as may be provided for below in Section 6 the Common Stock has
not been registered under the Securities Act, and such securities may not
be transferred unless (A) subsequently registered thereunder or (B) they
are transferred pursuant to an exemption from such registration and (ii)
any sale of the Common Stock made in reliance upon Rule 144 under the
Securities Act may be made only in accordance with the terms of said Rule.
The provisions of Sections 5.1 and 5.2 hereof, together with the rights of
the Purchaser under this Agreement shall be binding upon any subsequent
transferee of the Common Stock.
5.2 Restrictive Legend. The Purchaser acknowledges and agrees
that, until such time as the Common Stock is registered under the
Securities Act or the Purchaser demonstrates to the reasonable
satisfaction of the Company that such registration shall no longer be
required, the Common Stock shall bear a restrictive legend in
substantially the following form:
THESE SECURITIES (INCLUDING ANY UNDERLYING SECURITIES) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE REASONABLY
20
6
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION SHALL NO LONGER
BE REQUIRED.
NOTWITHSTANDING THE RESTRICTIONS IMPOSED BY STATE AND FEDERAL
SECURITIES LAWS, THESE SECURITIES SHALL NOT BE SOLD, PLEDGED,
HYPOTHECATED, EXCHANGED OR OTHERWISE TRANSFERRED UNTIL ON OR AFTER
JUNE 1, 2000.
5.3 Filings. The Company undertakes and agrees that it will
make all required filings in connection with the sale of the Common Stock
to the Purchaser as required by United States laws and regulations, or by
any domestic securities exchange or trading market. If applicable, the
Company agrees to file a notice on Form D (at such time and in such manner
as required by the Rules and Regulations of the Commission), and to
provide copies thereof to the Purchaser promptly after such filing or
filings.
5.4 Reporting Status. So long as the Purchaser beneficially
owns any of the shares of Common Stock purchased under this Agreement, the
Company shall timely file all reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act and shall
not terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.
5.5 State Securities Filings. The Company shall from time to
time promptly take such action as the Purchaser or any of its
representatives, if applicable, may request to qualify the Common Stock
for offering and sale under the securities laws (other than United States
federal securities laws) of the jurisdictions in the United States as
shall be so identified to the Company, and to comply with such laws so as
to permit the continuance of sales therein.
6. REGISTRATION RIGHTS.
6.1 The Company shall use reasonable best efforts to, on or
after June 1, 2000, but not later than July 31, 2000, include the Common
Stock in a registration statement ("Registration Statement") filed with
the Commission under the Securities Act, and have such Registration
Statement declared effective no later than December 31, 2000 or amend an
effective registration statement appropriate for the registration of the
Common Stock so that the Common Stock will thereafter become freely
tradeable, provided that the Purchaser shall furnish to the Company all
appropriate information in connection therewith as the Company may
reasonably request.
21
7
6.2 The Company shall (i) bear the costs, expenses and fees
incurred in connection with any such registration, excluding any broker
fees, selling commissions and out-of-pocket costs and expenses of the
Purchaser; (ii) supply prospectuses and other documents as the Purchaser
may reasonably request; (iii) use its reasonable best efforts to register
and qualify the Common Stock for sale in such states as the Purchaser
designates; (iv) do any and all other acts and things that may be
necessary or desirable to enable the Purchaser to consummate the public
sale or other disposition of the Common Stock; and (v) enter into
cross-indemnification arrangements with the Purchaser with respect to
matters arising from such Registration Statement and public offering.
7. REMEDIES; ATTORNEYS' FEES. In the event of any default hereunder,
the parties shall have all rights available at law or equity, including without
limitation the right to specific performance, the right to damages and the right
to rescind this Agreement. All remedies shall be cumulative and not exclusive.
In the event of a dispute between the parties arising out of this Agreement, the
prevailing party shall be entitled to reimbursement from the nonprevailing party
of reasonable attorneys' fees and court costs arising out of that dispute.
8. SURVIVAL. The representations, warranties and covenants made
herein shall survive the closing of the transactions contemplated hereby.
9. GOVERNING LAW; MISCELLANEOUS. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Arizona, without
regard to principles of conflict of laws. Each of the parties consents to the
jurisdiction of Arizona in connection with any dispute arising under this
Agreement or any of the transactions contemplated hereby, and hereby waives, to
the maximum extent permitted by law, any objection, including any objections
based on forum non conveniens, to the bringing of any such proceeding in such
jurisdictions. No provision of this Agreement shall be deemed amended, or
modified by any party unless a written amendment is signed by the parties or a
form of waiver is signed by the party against whom the waiver is asserted. This
Agreement may be signed in one or more counterparts, each of which shall be
deemed an original and may be executed and delivered by facsimile or other
reasonable means. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of this
Agreement. This Agreement has been entered into freely by each of the parties,
following consultation with their respective counsel, and shall be interpreted
fairly in accordance with its respective terms, without any construction in
favor of or against either party. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or unenforceability of this
Agreement in any other jurisdiction. This Agreement shall inure to the benefit
of, and be binding upon the successors and assigns of each of the
22
8
parties hereto. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
10. NOTICES. Any notice required or permitted hereunder shall be
given in writing (unless otherwise specified herein) and shall be effective upon
personal delivery, via facsimile (upon receipt of confirmation of error-free
transmission) or three business days following deposit of such notice with an
internationally recognized courier service, with postage prepaid and addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by five days advance written
notice to each of the other parties hereto.
COMPANY: iBIZ Technology Corp
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Tel.: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, PLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Tel.: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
23
9
PURCHASER:
11. FURTHER ACTS AND INSTRUMENTS. Each party to this Agreement
hereby agrees, for themselves, their heirs, personal representatives, assigns
and other successors, to do such further acts and execute and deliver such
further instruments as may be reasonably necessary to effectuate and comply with
the provisions of this Agreement.
[SIGNATURE PAGE FOLLOWS]
24
10
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first signed above.
iBIZ Technology Corp., a Florida corporation
By:________________________________________
Name:______________________________________
Its:____________________________________
______________________________________
______________________________________
By:________________________________________
Name:______________________________________
Its:____________________________________
25