ELSINORE SERVICES, INC. SUBSCRIPTION AGREEMENT ("Agreement")
Exhibit
10.2
ELSINORE
SERVICES, INC.
("Agreement")
THE
SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. SUBSCRIBER SHOULD BE AWARE THAT SUBSCRIBER MAY BE REQUIRED
TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.
THE
SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND
ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES SUBSCRIBED FOR
BY THIS AGREEMENT HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THE SECURITIES OFFERED BY THE COMPANY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Elsinore
Services, Inc.
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▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇
▇-▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇.▇.
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[For
Purchase of Common Stock]
Ladies
and Gentlemen:
The
undersigned ("Subscriber") desires to subscribe for and purchase shares of
common stock, $.001 par value per share (“Common Stock;” collectively, the
“Shares”) to be issued by Elsinore Services, Inc., a Delaware corporation (the
"Company”). Accordingly, Subscriber hereby agrees as
follows:
1. Subscription. Subscriber
hereby subscribes for and agrees to purchase from the Company the number of
Shares as set forth on the Signature Page attached to this Agreement, in
consideration of the subscription amount set forth on the Signature
Page.
2. Purchase
Procedure. Subscriber acknowledges that, in order to subscribe
for the Shares, Subscriber must, and Subscriber does hereby, deliver to the
Company:
2.1 One
(1) executed counterpart of the Signature Page attached to this Agreement;
and
2.2 A
check, subject to collection, in the amount set forth on the Signature Page
representing payment in full for the Shares desired to be purchased hereunder,
made payable to the order of “Elsinore Services, Inc.” or such other
consideration as shall be set forth on the Signature Page.
3. Representations of
Subscriber. By executing this Agreement, Subscriber makes the
following representations, declarations and warranties to the Company, with the
intent and understanding that the Company will rely thereon:
3.1 Subscriber
has all requisite power and authority to enter into this Agreement and to carry
out the provisions hereof.
3.2 Subscriber
represents that Subscriber satisfies the definition of “accredited investor” as
set forth in Rule 501(a) of Regulation D (“Regulation D”) under the Securities
Act of 1933, as amended (the “Securities Act”) (a copy of such definition is set
forth in Appendix A attached hereto).
3.3 Subscriber
understands that (i) the Shares (the “Securities”) have not been registered
under the Securities Act or any applicable state securities law; (ii) Subscriber
cannot sell any Securities unless they are registered under the Securities Act
and any applicable state or foreign securities laws or unless exemptions from
such registration requirements are available, (iii) a legend will be placed on
the certificates evidencing the Securities stating that the Securities have not
been registered under the Securities Act and setting forth or referring to the
restrictions on transferability and sales thereof, (iv) the Company will place
stop transfer instructions against the Securities, and (v) the Company has no
obligation to register the Securities or assist Subscriber in obtaining an
exemption from the various registration requirements.
3.4 Subscriber
(i) is acquiring the Securities solely for Subscriber's own account for
investment purposes only and not with a view toward resale or distribution,
either in whole or in part; (ii) has no contract, undertaking, agreement or
other arrangement, in existence or contemplated, to sell, pledge, assign or
otherwise transfer the Securities, to any other person; and (iii) agrees not to
sell, assign, encumber or transfer all or any part of the Securities (except a
transfer upon his death, incapacity or bankruptcy or a transfer without
consideration to his spouse and/or children and/or a trust for the benefit of
such family members) until such securities are subsequently registered under the
Securities Act and any applicable state securities laws or unless an exemption
from any such registration is available as evidenced by an opinion of counsel
acceptable to the Company to the effect that such transfer or assignment (i) may
be effected without registration of the Securities under the Securities Act; and
(ii) does not violate any applicable Federal or state securities
laws.
3.5 Subscriber
represents that the Company has made available to Subscriber all information
which Subscriber deemed material to making an informed investment decision in
connection with his, her or its purchase of the Securities. Subscriber
acknowledges that Subscriber has received and carefully read in their entirety
(i) this Subscription Agreement, and all information necessary to verify the
accuracy and completeness of the Company's representations, warranties and
covenants made herein; (ii) a business plan for the Company, dated _________,
2009, and (iii) written (or verbal) answers to all questions Subscriber
submitted to the Company regarding an investment in the Company; and Subscriber
has relied on the information contained therein and has not been furnished with
any other documents, offering literature, memorandum or
prospectus. Subscriber acknowledges that the Company has made
available to the Subscriber the opportunity to ask questions of, and receive
answers from the Company, its officers, directors and other persons acting on
its behalf, including ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, President and Chief Executive Officer of
the Company, concerning the terms and conditions of Subscriber’s purchase and to
obtain any additional information, to the extent the Company possesses such
information or can acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the information disclosed to
Subscriber. Subscriber represents that no statement, printed material
or inducement was given or made by the Company or anyone on its behalf which is
contrary to the information disclosed to Subscriber.
3.6 Subscriber
is in a position regarding the Company, which, based upon employment, family
relationship or economic bargaining power, enabled and enables the Subscriber to
obtain information from the Company in order to evaluate the merits and risks of
this investment.
3.7 Subscriber
understands that an investment in the Securities involves substantial risks and
Subscriber recognizes and understands the risks relating to the purchase of the
Securities.
3.8 Subscriber
has such knowledge and experience in financial and business matters that
Subscriber is capable of evaluating the merits and risks of an investment in the
Company.
3.9 Subscriber
understands that (i) the offering contemplated hereby has not been reviewed by
any Federal, state or other governmental body or agency; (ii) if required by the
laws or regulations of said state(s) or other jurisdiction the offering
contemplated hereby will be submitted to the appropriate authorities of such
state(s) or other jurisdiction for registration or exemption therefrom; and
(iii) subscription documents used in connection with this offering have not been
reviewed or approved by any regulatory agency or government department, nor has
any such agency or government department made any finding or determination as to
the fairness of the Shares for investment.
3.10 Subscriber
is aware no market exists for the Shares and that none may
develop. Subscriber has adequate means of providing for Subscriber’s
current needs and personal and family contingencies, has no need for liquidity
in the investment contemplated hereby, and is able to bear the risk of loss of
his, her or its entire investment.
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3.11 Subscriber
(i) is a citizen or resident of the state of residence shown on the Agreement’s
Subscriber Signature Page; (ii) if a natural person, is at least 21 years of
age; (iii) has adequate means of providing for his or its current needs and
personal contingencies; (iv) has no need for liquidity in his, her or its
investment in the Securities; and (v) maintains his, her or its domicile (and is
not a transient or temporary resident) at the address shown below.
3.12 All
information that Subscriber has provided the Company concerning Subscriber,
Subscriber's financial position and Subscriber's knowledge of financial and
business matters is correct and complete as of the date hereof. The
Subscriber agrees that financial and other information concerning Subscriber may
be disclosed by the Company to any persons or entities that may enter into a
transaction with the Company. Subscriber further agrees, if requested
by the Company or its authorized representative, to provide bank references or
other confirming information concerning Subscriber's financial information as
may be reasonably requested by the Company.
3.13 Subscriber
is familiar with the nature and extent of the risks inherent in investments in
unregistered securities and in the business in which the Company is engaged and
intends to engage and recognizes and understands all of the risks relating to
the purchase of the Securities and has determined that an investment in the
Company is consistent with Subscriber's investment objectives and income
prospects.
3.14 Subscriber
understands that the total amount of funds tendered to purchase the Securities
are unsecured and are placed at the risk of the business and may be completely
lost.
3.15 Subscriber’s
overall commitment to investments, including Subscriber’s investment in the
Company, which are not readily marketable, is not disproportionate to
Subscriber’s net worth, and Subscriber’s investment in the securities described
herein will not cause such overall commitment to become excessive. Subscriber
understands that the statutory basis on which such Securities are being offered,
sold and/or issued to the Subscriber would not be available if Subscriber’s
present intention were to hold such securities for a fixed period of time or
until the occurrence of a certain event. Subscriber realizes that, in the view
of the Securities and Exchange Commission (“SEC”), a purchase of such securities
now, with a present intention to resell by reason of a foreseeable specific
contingency or any anticipated change in the market value of such securities, or
in the condition of the Company or that of the industry in which the business of
the Company is engaged or in connection with a contemplated liquidation, or
settlement of any loan obtained by Subscriber for the acquisition of such
securities, and for which such securities may be pledged as a security or as
donations to religious or charitable institutions for the purpose of securing a
deduction on an income tax return, would, in fact, constitute a purchase with an
intention inconsistent with Subscriber’s representations to the Company and the
SEC would then regard such purchase as a purchase for which the exemption from
registration under the Securities Act relied upon by the Company in connection
herewith is not available.
3.16 Subscriber
acknowledges that the Company has the unconditional right to accept or reject
this subscription, in whole or in part. The Company will notify
Subscriber whether this subscription is accepted or rejected. If such
subscription is rejected, payment will be returned to Subscriber.
3.17 If
Subscriber is a corporation, trust, partnership or other entity that is not a
natural person, it has been formed and validly exists and has not been organized
for the specific purpose of purchasing the Securities and is not prohibited from
doing so.
3.18 If
Subscriber is purchasing the Securities in a fiduciary capacity for another
person or entity, including without limitation a corporation, partnership, trust
or any other entity, Subscriber has been duly authorized and empowered to
execute this Subscription Agreement and all other subscription documents, and
such other person or entity fulfills all the requirements for purchase of the
Securities as such requirements are set forth herein, concurs in the purchase of
the Securities and agrees to be bound by the obligations, representations,
warranties and covenants contained herein. Upon request of the Company,
Subscriber will provide true, complete and current copies of all relevant
documents creating Subscriber, authorizing its investment in the Company and/or
evidencing the satisfaction of the foregoing.
3
3.19 Subscriber
recognizes that the Company may seek to raise additional operating capital
through a variety of sources, and that although the Company may undertake one or
more public or private offerings of its shares of Common Stock or other
securities, there can be no assurance that any such offering will be made or, if
made, that it will be successful.
4. Indemnification. Subscriber
hereby agrees to indemnify and hold harmless the Company and the Company's
officers, directors, employees, attorneys, agents and affiliates from and
against any and all damages, losses, costs, liabilities and expenses (including,
without limitation, reasonable attorneys' fees) which they, or any of them, may
incur by reason of the Subscriber's failure to fulfill any of the terms and
conditions of this Agreement or by reason of Subscriber's breach of any of his
representations and warranties contained herein. This Agreement and
the representations and warranties contained herein shall be binding upon
Subscriber's heirs, executors, administrators, representatives, successors and
assigns. THE COMPANY
AND SUBSCRIBER HAVE BEEN ADVISED THAT THE INDEMNIFICATION OF THE COMPANY, ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND AFFILIATES IS DEEMED TO BE VOID AS
AGAINST PUBLIC POLICY AND THEREBY UNENFORCEABLE IN SOME
STATES.
5. Arbitration
Agreement.
5.1 Subscriber
represents, warrants and covenants that any controversy or claim brought
directly, derivatively or in a representative capacity by him in his capacity as
a present or former security holder, whether against the Company, in the name of
the Company or otherwise, arising out of or relating to any acts or omissions of
the Company, or any security holder or any of their officers, directors, agents,
attorneys, affiliates, associates, employees or controlling persons (including
without limitation any controversy or claim relating to a purchase or sale of
the Shares) shall be settled by arbitration under the Federal Arbitration Act in
accordance with the commercial arbitration rules of the American Arbitration
Association ("AAA") and judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof. Any controversy
or claim brought by the Company against Subscriber, whether in his capacity as
present or former security holder of the Company or against any of Subscriber's
officers, directors, agents, affiliates, associates, employees or controlling
persons, shall also be settled by arbitration under the Federal Arbitration Act
in accordance with the commercial arbitration rules of the AAA and judgment
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. In arbitration proceedings under this Section 5, the
parties shall be entitled to any and all remedies that would be available in the
absence of this Section 5 and the arbitrators, in rendering their decision,
shall follow the substantive laws that would otherwise be
applicable. This Section 5 shall apply, without limitation, to
actions arising in connection with the offer and sale of the Securities
contemplated by this Agreement under any Federal or state securities
laws.
5.2 The
arbitration of any dispute pursuant to this Section 5 shall be held in
Washington, D.C.
5.3 Notwithstanding
the foregoing, in order to preserve the status quo pending the resolution by
arbitration of a claim seeking relief of an injunctive or equitable nature, any
party, upon submitting a matter to arbitration as required by this
Section 5, may simultaneously or thereafter seek a temporary restraining
order or preliminary injunction from a court of competent jurisdiction pending
the outcome of the arbitration.
5.4 This
Section 5 is intended to benefit the security holders, agents, attorneys,
affiliates, associates, employees and controlling persons of the Company, each
of whom shall be deemed to be a third party beneficiary of this Section 5,
and each of whom may enforce this Section 5 to the full extent that the
Company could do so if a controversy or claim were brought against
it.
5.5 Subscriber
acknowledges that this Section 5 limits a number of Subscriber's rights,
including without limitation (i) the right to have claims resolved in a court of
law and before a jury; (ii) certain discovery rights; and (iii) the right to
repeal any decision.
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5.6 Please
note that: (i) arbitration is final and binding on the parties; (ii) the
parties are waiving their rights to seek remedies in court, including the right
to jury trial; (iii) pre-arbitration discovery is generally more limited than
and different from court proceedings; (iv) the arbitrators’ award is not
required to include factual findings or legal reasoning and any party’s right to
appeal or seek modification of rulings by the arbitrators is strictly
limited; (v) the panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated with the securities industry;
(vi) no person shall bring a putative or certified class action to arbitration,
nor seek to enforce any pre-dispute arbitration agreement against any person who
has initiated in court a putative class action; or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (a) the class certification is denied; or
(b) the class is decertified; or (c) the customer is excluded from the class by
the court. Such forbearance to enforce an agreement to arbitrate shall not
constitute a waiver of any rights under this Agreement except to the extent
stated herein.
6. Governing
Law. The validity and construction of this Agreement and all
matters pertaining hereto are to be determined in accordance with the laws of
the State of Delaware without reference to the conflicts of laws of that
state.
7. Execution in
Counterparts. This Agreement may be executed in one or more
counterparts.
8. Persons
Bound. This Agreement shall, except as otherwise provided
herein, inure to the benefit of and be binding on the Company and its successors
and assigns and on Subscriber and his respective heirs, executors,
administrators, successors and assigns.
9. Notices. Any
notices or other communications required or permitted to be given under the
terms of this Agreement must be in writing and will be deemed to have been
delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile, provided a copy is mailed by U.S. certified mail, return
receipt requested; (iii) three (3) days after being sent by U.S. certified mail,
return receipt requested; or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for
such communications shall be: if to the Subscriber, to the address and facsimile
number set forth on the Signature Page hereof; if to the Company, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇-▇▇▇, ▇▇▇▇▇▇▇▇▇▇, D.C., attention: Chief
Executive Officer.
10. Entire
Agreement. This Agreement, when accepted by the Company, will
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. This Agreement may not be modified,
changed, waived or terminated other than by a writing executed by all the
parties hereto. No course of conduct or dealing shall be construed to
modify, amend or otherwise affect any of the provisions hereof.
11. Headings. The
headings of this Agreement are for convenience of reference only and are not
part of this Agreement.
12. Assignability. Subscriber
acknowledges that Subscriber may not assign any of Subscriber’s rights to or
interest in or under this Agreement without the prior written consent of the
Company, and any attempted assignment without such consent shall be void and
without effect.
13. Interpretation. When
the context in which words are used in this Agreement indicates that such is the
intent, singular words shall include the plural, and vice versa, and masculine
words shall include the feminine and neuter genders, and vice
versa.
14. CERTIFICATION. THE SUBSCRIBER CERTIFIES THAT THE
SUBSCRIBER HAS READ THIS ENTIRE SUBSCRIPTION AGREEMENT AND THAT EVERY STATEMENT
MADE BY THE SUBSCRIBER HEREIN IS TRUE AND COMPLETE.
[THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.]
5
SUBSCRIBER SIGNATURE
PAGE
The
undersigned, desiring to subscribe for Shares of Elsinore Services, Inc. (the
"Company"), as set forth below, acknowledges that the undersigned has received
and understands the terms and conditions of the Subscription Agreement attached
hereto and that the undersigned does hereby agree to all the terms and
conditions contained therein.
IN WITNESS WHEREOF, the
undersigned has hereby executed this Subscription Agreement as of the date set
forth below.
(PLEASE
PRINT OR TYPE)
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Number
of Shares Subscribed for hereby:
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Total
Amount of Subscription:
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$
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Exact
name(s) of Subscriber(s):
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Signature
of Subscriber(s)*:
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State
of Residence:
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*If
Subscriber is an association, corporation, partnership or trust enter the
name and title of the person authorized to bind the
Subscriber:
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PLEASE
ATTACH CERTIFIED COPY OF AUTHORIZING DOCUMENTS.
In
addition, if Subscriber is a corporation and has a corporate seal, the corporate
seal should be affixed:
[SEAL]
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Date:
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Residence
or Mailing Address:
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Telephone
Numbers (include Area
Code) Business: (___)
___-____ Home: (___)
___-___
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Facsimile
Number (include Area Code) (___)
___-____
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Social
Security or Taxpayer
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Identification
Number(s):
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Mailing
Address for Correspondence
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from
the Company:
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The
foregoing subscription is accepted by Elsinore Services, Inc., to the extent of
$__________ this _____ day of ____________, 20__.
| ELSINORE SERVICES, INC. | |||
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By:
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| Name: | |||
| Title: | |||
7
Appendix
A
INVESTOR
SUITABILITY STANDARDS
A
purchase of the Shares pursuant to the Subscription Agreement involves a high
degree of risk and is suitable only for persons of substantial financial means
who have no need for liquidity in their investments. The offer, offer
for sale, and sale of the Shares is intended to be exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
pursuant to Section 4(2) of the Securities Act and/or Rule 506 of Regulation D
promulgated thereunder (“Regulation D”) or another exemption thereunder and is
intended to be exempt from the registration requirements of applicable state
securities laws.
Rule
501(a) of Regulation D defines an “accredited investor” as any person who comes
within any of the following categories, or who the issuer reasonably believes
comes within any of the following categories, at the time of the sale of the
securities to that person:
(1) Any
bank as defined in Section 3(a)(2) of the Securities Act, or any 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; any
broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934; any insurance company as defined in Section 2(a)(13) of the
Securities Act; any investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; any 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; any plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; any employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors;
(2) Any
private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;
(3) Any
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose or acquiring the securities offered, with total assets
in excess of $5,000,000;
(4) Any
director, executive officer or general partner of the issuer of the securities
being offered or sold, or any director, executive officer or general partner of
a general partner of that issuer;
(5) Any
natural person whose individual net worth, or joint net worth with that person’s
spouse, at the time of his purchase exceeds $1,000,000;
(6) Any
natural person who had an individual income in excess of $200,000 in each of the
two most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year;
(7) Any
trust with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii); or
(8) Any
entity in which all of the equity owners are accredited investors.
8