EXHIBIT 10.9
SUBSCRIPTION AGREEMENT AND INVESTMENT LETTER
August 1, 2002
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Synergx Systems Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇.▇▇▇▇▇▇:
This will acknowledge that pursuant to all regulatory approvals and
documentation satisfactory to the parties hereto, the Undersigned ("Undersigned"
or "Subscriber") hereby subscribes to purchase an aggregate of ONE HUNDRED
SEVENTY THOUSAND (170,000) units (the "Units") of Synergx Systems Inc., a
Delaware corporation (the "Corporation") at an aggregate purchase price of
$238,000.00 ($1.40 per Unit); each Unit consists of one share (a "Share") of the
Corporation's Common Stock, $.001 par value per share, and one (1) Common Stock
purchase warrant each of which shall be exercisable for a period of twenty-four
(24) months at an exercise price of $1.40 ("Warrant") to purchase one Share
(attached hereto as Exhibit A).
Execution of this Subscription Agreement and Investment Letter (the
"Subscription Agreement") shall constitute an offer by the Undersigned to
purchase the number of Units set forth above on the terms specified herein.
1. Subscriber Representations and Warranties.
Subscriber hereby acknowledges, represents and warrants to, and agrees with
the Corporation as follows:
(a) The Subscriber is acquiring the Units for his own account as principal
for investment and not with a view to resale, distribution or fractionalization
in whole or in part, and has no present agreement, understanding or arrangement
to subdivide, sell, assign or otherwise dispose of all or any part of the Units
and understands that there is no established market for the Units and it is
anticipated that no public market for the Units will develop in the foreseeable
future;
(b) The Subscriber is not affiliated with the Corporation, Mirtronics Inc.,
▇▇▇▇ ▇. ▇▇▇▇▇▇, the family of ▇▇▇▇ ▇. ▇▇▇▇▇▇, or any trust for the benefit of
the family of ▇▇▇▇ ▇. ▇▇▇▇▇▇.
(c) The Subscriber acknowledges his understanding that the offering and
sale of the Units is intended to be exempt from registration under the
Securities Act of 1933 (the "Securities Act") by virtue of Section 4(2) of the
Securities Act or Regulation D adopted thereunder, and that the Units cannot be
sold, pledged, assigned or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. The Subscriber also understands that sales or transfers of his Units
are further restricted by the provisions of state securities laws;
(d) The Subscriber: (i) by itself or together with its advisor, has such
knowledge and experience in financial, business and tax matters that the
Subscriber is capable of evaluating the merits of the prospective investment in
the Corporation and making an investment decision with respect to the
Corporation; and (ii) the Subscriber is able to bear the economic risk of this
investment (i.e., it can afford a complete loss of the entire investment);
(e) The Subscriber has adequate means of providing for its current needs
and possible personal contingencies, has no need for liquidity of this
investment and has no reason to anticipate any change in personal circumstances,
financial or otherwise, which might cause or require any sale or distribution of
the Units;
(f) The Subscriber is familiar with the nature of the risks attending
investments in securities and has determined that the investment in the Units is
consistent with its investment objectives and income prospects;
(g) The Subscriber's investment in the Corporation has not been solicited
by means of general solicitation or general advertisement;
(h) The Subscriber has been given the opportunity to ask questions of, and
receive answers from, management or its representatives concerning the business
of the Corporation and other matters pertaining to this investment, and has been
given the opportunity to obtain any additional information which the Corporation
possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of the information provided to it or contained
in this Subscription Agreement;
(i) Other than information, if any, given to the Subscriber as described in
paragraph (h) above, no representations or warranties have been made or implied
to the Undersigned by the Corporation or any other person in connection with
this offering, or any officer, employee, agent, affiliate or subsidiary of any
of them, other than the representations made by the Corporation as are set forth
herein;
(j) The Subscriber is not relying on the Corporation, or this Subscription
Agreement with respect to individual tax and other economic considerations
involved in this investment;
(k) The certificate for Shares shall bear the following legend:
"The Shares Represented By This Certificate Have Been Acquired For
Investment And Have Not Been Registered Under The Securities Act Of
1933 Or Under Any State Securities Or Blue Sky Laws. The Shares May
Not Be Sold Or Transferred In The Absence Of Such Registration Or An
Exemption Therefrom Under Said Act And Laws."
(l) The Subscriber acknowledges his understanding that neither the Units
nor the Warrants shall be tradeable and therefore, no CUSIP number shall be
obtained therefore; and
(k) The foregoing representations, warranties and agreements shall survive
the date of this Subscription Agreement.
2. Corporation Representations and Warranties. (a) Organization and Good
Standing. The Corporation is a corporation duly organized and validly existing
under the laws of the State of Delaware and has full power and authority to own
its properties and to carry on its business as now conducted.
(b) Capitalization. The Corporation's authorized capital stock ("Capital
Stock") consists of 10,000,000 shares of common stock, $.001 par value per
share, of which 1,704,425 shares are validly issued and outstanding. Except as
detailed on Scheduled 2(b), attached hereto and made a part hereof, no other
shares of capital stock of the Corporation are issued or outstanding. All shares
of the Capital Stock are validly issued, fully paid and nonassessable, and there
are no options, calls, warrants or other securities or rights outstanding which
are convertible into, exercisable for or relate to the Capital Stock or any
other shares of capital stock of the Corporation.
(c) Validity of Securities. Upon the issuance of the Units pursuant to the
terms of this Subscription Agreement: (i) the Units will be duly authorized,
validly issued and fully paid, and Subscriber shall receive good and valid title
to such securities free and clear of any pledges, security interests, liens,
charges or encumbrance of any kind (other than the restrictions on transfer set
forth in this Subscription Agreement or under applicable securities laws).
(d) The foregoing representations, warranties and agreements shall survive
the date of this Subscription Agreement.
3. Subscription Not Binding Until Accepted. This Subscription is not binding on
the Corporation until it is accepted as evidenced by the signature of an officer
of the Corporation. The Corporation will have the right to accept or reject this
subscription in whole or in part for any reason whatsoever. In the event of
rejection of this subscription, or in the event that, for any reason, no sale of
Units is consummated, (in which case this subscription will be deemed to be
rejected) the Corporation will promptly thereupon return or cause to be returned
to the Subscriber by mail, a check in the amount paid by the subscriber in this
offering, without interest thereon or deduction for expenses, and this
Subscription Agreement shall thereafter have no further force or effect.
4. Piggyback Registration Rights. Whenever the Corporation shall determine to
make application to register or qualify equity securities under the Securities
Act and under the securities laws of any state, it will, upon each such
determination, promptly give Subscriber written notice of its intention in that
regard. If the registration or qualification of Shares is then possible under
the then applicable law and regulations of the Securities and Exchange
Commission or other governmental agency substituted therefor ("SEC"), or of any
state, and if Subscriber shall, within 30 days after receipt of such notice, so
request in writing, subject to the limitations contained herein, the Corporation
will at the time of making such application, also register the Shares owned by
Subscriber which were purchased hereunder and/or upon exercise of the Warrants
(also "Restricted Shares") under the Securities Act and, register or qualify
such Restricted Shares under such state laws (the "Piggyback Right"); provided
that:
(a) Subscriber shall only have the right to include Restricted Shares in a
registration by the Corporation one time;
(b) if the offering is to be through prospective underwriters selected by
the Corporation, registration of the Restricted Shares shall be on the terms and
subject to the conditions of an underwriting agreement negotiated with such
prospective underwriters, and on the condition that the Subscriber shall pay its
proportionate share of any costs and expenses, including any underwriting
discounts or commissions; or
(c) if equity securities are to be offered on behalf of the Corporation,
the Subscriber shall agree with the Corporation not to offer the Restricted
Shares covered by such registration for a period not exceeding 90 days following
the effective date of the Registration Statement; or
(d) if, in connection with an offering by the Subscriber, in the opinion of
the prospective managing underwriter it is necessary to decrease the number of
Restricted Shares included in the Registration Statement pursuant to
registration rights under this Section 4, the Subscriber will have the number of
Restricted Shares registered on its behalf reduced in proportion to the
reduction in the number of shares registered on behalf of the Corporation.
5. Indemnification by Requesting Stockholder. In the event of any registration
of any Restricted Shares pursuant to Section 4 hereof, Subscriber will indemnify
and hold harmless the Corporation, and each other person, if any, who controls
the Corporation within the meaning of Section 15 of the Securities Act, and any
underwriter of such Restricted Shares, against any losses, claims, damages or
liabilities, joint or several, to which the Corporation, or such controlling
person or underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof, in any
Registration Statement under which such Restricted Shares were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and will reimburse the Corporation, each controlling person and underwriter for
any legal or any other expenses reasonably incurred by the Corporation,
controlling person or underwriter in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
Subscriber will be liable in any such case only to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, said preliminary prospectus or said prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished to the Corporation by the Subscriber specifically for use
in the preparation thereof; and further provided, that the Subscriber shall not
be required to indemnify the Corporation, controlling person or underwriter for
any payment made to any claimant in settlement of any suit or claim unless such
payment shall have been approved in writing by the Subscriber liable for
indemnity.
6. Indemnity. The Subscriber agrees to indemnify and hold harmless the
Corporation, its officers and directors or any other persons participating in
the sale of Units against any and all loss, liability, claim, damage and
expenses whatsoever (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
litigation commenced or threatened or any claim whatsoever) arising out of or
based upon any breach of or failure by the Subscriber to comply with any
representation, warranty, covenant or agreement made by the Subscriber herein or
in any other document furnished by the Subscriber to any of the foregoing in
connection with this transaction.
7. Modification. Neither this Subscription Agreement nor any provisions hereof
shall be modified, changed, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
8. Revocability. Except as may be required by law in certain jurisdictions, this
Subscription Agreement is irrevocable and when signed, may not be withdrawn or
revoked by the Subscriber in whole or in part without the consent of the
Corporation.
9. Notices. All notices, consents, requests, demands, offers, reports and other
communications required or permitted to be given pursuant to this Subscription
Agreement shall be in writing and shall be considered properly given or made
when personally delivered to the party entitled thereto, or when sent by United
States mail in a sealed envelope, with postage prepaid, addressed, if to the
Corporation, to the address given above, and if to the Subscriber, to the
address set forth opposite the Subscriber's signature on the counterpart of this
Subscription Agreement that he originally executed and delivered to the
Corporation. The Corporation may change its address by giving notice to all
Shareholders.
10. Counterparts. This Agreement may be executed in multiple counterpart copies,
each of which shall be considered an original and all of which constitute one
and the same instrument binding on all the parties, notwithstanding that all
parties are not signatures to the same counterpart.
11. Successors and Assigns. This Subscription Agreement and all of the terms and
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective heirs, executors, administrators, successors, trustees,
legal representatives and assigns. If the Subscriber is more than one person,
the obligation of the Subscriber shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained shall be deemed
to be made by and be binding upon each such person and his heirs, executors,
administrators, successors, trustees, legal representatives and assigns.
12. Transferability. The Undersigned will not transfer or assign this
Subscription Agreement, or any interest of the Undersigned herein, and the
assignment and transferability of the Units acquired pursuant hereto shall be
made only in accordance with the provisions of this Subscription Agreement, the
Act and Regulations thereunder and applicable state securities laws.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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SUBSCRIPTION SIGNATURE PAGE
IN WITNESS WHEREOF, the Undersigned has executed this Subscription
Agreement this ____ day of August, 2002.
NUMBER OF UNITS
SUBSCRIBED 170,000 Check herewith $238,000
SUBSCRIBER:
INVESTORS MONEY MANAGEMENT CORPORATION
By: _____________________________
This Subscription Agreement Accepted this 30th day of September, 2002.
SYNERGX SYSTEMS INC.
By: ____________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇, President