EXHIBIT 4.2
▇▇▇▇▇▇ HOLDING CORP.
SUBSCRIPTION AGREEMENT
INSTRUCTIONS
IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING.
SIGNIFICANT REPRESENTATIONS ARE CONTAINED IN THIS DOCUMENT.
1. Fill in your name and amount of investment on Page 1.
2. Individual Investors must complete the requested information
on Pages 13 and 14 and sign the signature page on Page 14.
3. Entity Investors must complete the requested information on
Pages 15 and 16. and if applicable Page 17 and sign the
signature page on Page 16 and if applicable, Page 17.
DELIVER THE EXECUTED AGREEMENTS TO:
▇▇▇▇▇▇ SECURITIES, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇▇ ▇▇▇▇,
ALONG WITH PAYMENT FOR THE UNITS SUBSCRIBED FOR
If you are tendering a check, make it payable to "▇▇▇▇▇▇ Securities -- ▇▇▇▇▇▇
Holding Special Account." If you are paying by wire transfer, please contact ▇▇.
▇▇▇▇▇▇ ▇▇▇▇ of ▇▇▇▇▇▇ Securities for instructions at (▇▇▇) ▇▇▇-▇▇▇▇.
If you have any questions regarding this form, please contact ▇▇.
▇▇▇▇▇▇ ▇▇▇▇ of ▇▇▇▇▇▇ Securities for instructions at (▇▇▇) ▇▇▇-▇▇▇▇.
Print Name of Subscriber ________________
Amount of Investment __________________
SUBSCRIPTION AGREEMENT
▇▇▇▇▇▇ Holding Corp. ("Company") and the Investor hereby agree as follows:
1. Subscription for Securities. I (sometimes referred to herein as the
"Investor") hereby subscribe for and agree to purchase the number of units
("Unit(s)") set forth on the signature page hereto upon the terms and conditions
described in this Agreement. Each Unit consists of 100,000 shares of common
stock of the Company, 50,000 Class A Warrants and 50,000 Class B Warrants for a
purchase price of $100,000 per Unit. The Class A Warrant and Class B Warrant are
identical except for the exercise price per share of each Warrant. The exercise
price of the Class A Warrants will be $1.50 per share and the exercise price of
the Class B Warrants will be $2.50 per share. The Warrants will have the terms
and conditions contained in the forms of Warrant attached as exhibits to the
Supplement dated August 31, 2001 to the Confidential Term Sheet dated August 1,
2001 (collectively, the "Term Sheet"). ▇▇▇▇▇▇ Securities, Inc. ("▇▇▇▇▇▇
Securities"), a wholly owned subsidiary of the Company, is acting as exclusive
placement agent for the Offering.
2. Offering Period. The Units will be offered for sale until October 31, 2001
or an earlier date at the discretion of the Company ("Termination Date").
3. Investor Delivery of Documents and Payment. I hereby tender to ▇▇▇▇▇▇
Securities, as placement agent for the Company (i) the full purchase price of
the Units by check or wire, and (ii) one manually executed copy of this
Subscription Agreement. If you are tendering a check, make it payable to "▇▇▇▇▇▇
Securities - ▇▇▇▇▇▇ Holding Special Account." If you are paying by wire
transfer, please contact ▇▇. ▇▇▇▇▇▇ ▇▇▇▇ of ▇▇▇▇▇▇ Securities for instructions
at (▇▇▇) ▇▇▇-▇▇▇▇. Prior to the earlier of a Closing (as defined in Section 5
hereof) or the Termination Date, my check or wire transfer will be held in a
non-interest bearing segregated bank account of ▇▇▇▇▇▇ Securities subject to the
terms and conditions herein. If the Company does not receive and accept my
subscription by the Termination Date, my payment will be returned to me without
interest or deduction.
4. Acceptance or Rejection of Subscription. The Company and ▇▇▇▇▇▇ Securities
have the right to reject this subscription for the Units, in whole or in part
for any reason and at any time prior to the Closing, notwithstanding prior
receipt by me of notice of acceptance of my subscription. In the event of the
rejection of this subscription, my payment will be returned promptly to me
without interest or deduction and this Subscription Agreement will have no force
or effect. The Units subscribed for herein will not be deemed issued to or owned
by me until one copy of this Subscription Agreement has been executed by me and
countersigned by the Company and the Closing with respect to my subscription has
occurred.
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5. Closing and Delivery of Securities. The Offering is being made on a "best
efforts, no minimum" basis. Accordingly, there is no minimum amount of Units
that must be subscribed for in order for the Company to hold a closing with
respect to those Units that are subscribed and paid for. The Company anticipates
it will hold closings from time to time for subscriptions accepted up to the
Termination Date. The initial closing ("Closing") will occur at the offices of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, counsel to the Company, at any time up to the Termination Date,
as determined jointly by the Company and ▇▇▇▇▇▇ Securities. Subsequent closings
with respect to the sale of additional Units, may take place at any time with
respect to subscriptions accepted by the Termination Date (each such closing,
together with the first Closing, being referred to as the "Closing"). In the
event my subscription is accepted and there is a Closing, my payment will be
released to the Company and the certificates representing the Units will be
delivered promptly to me along with a fully executed version of this Agreement.
6. Offering to Accredited Investors. This Offering is limited to
accredited investors as defined in Section 2(15) of the Securities Act of 1933,
as amended ("Securities Act"), and Rule 501 promulgated thereunder, and is being
made without registration under the Securities Act in reliance upon the
exemptions contained in Sections 3(b), 4(2) and/or 4(6) of the Securities Act
and applicable state securities laws. As indicated by the responses on the
signature page hereof, the Investor is an accredited investor within the meaning
of Section 2(15) of the Securities Act and Rule 501 promulgated thereunder.
7. Company Obligations.
7.1. Registration Rights.
(a) Filing of Registration Statement. The Company will file a
registration statement with the Securities and Exchange Commission
("Commission") under the Securities Act relating to the resale of the common
stock included in the Units and the shares of common stock issuable upon the
exercise of the Class A Warrants and Class B Warrants (collectively, "Underlying
Common Stock") on or before November 30, 2001. The Company will use its
reasonable commercial efforts to cause the registration statement to be declared
effective by the Commission.
(b) Procedures. The Company will promptly give written notice
of such proposed registration to all holders ("Holders") of Units and will
forward a selling stockholder questionnaire to each Holder which must be
completed by the Holder and returned to the Company in order for the Underlying
Common Stock to be included in the registration statement.
(c) Effective and Current. The Company will use its reasonable
commercial efforts to keep the registration statement which registers the
Underlying Common Stock pursuant hereto effective and the related Prospectus
current until the earlier of the date by which all the registered Underlying
Common Stock has been sold and the date that the Underlying Common Stock may be
sold pursuant to Rule 144(k) promulgated under the Securities Act.
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(d) Amended Prospectus. The Company will notify each Holder
of such Underlying Common Stock as expeditiously as possible following the
effectiveness of such registration statement, of any request by the Commission
for the amending or supplementing of such registration statement or prospectus.
If the prospectus is amended to comply with the requirements of the Securities
Act, the Holders, if notified by the Company, will immediately cease making
offers of the Underlying Common Stock and return all prospectuses to the Company
and the Company will promptly provide the Holders with revised prospectuses to
enable the Holders to resume making offers of the Underlying Common Stock. The
Company will promptly notify the Holders, if after delivery of a prospectus to
the Holders, that, in the judgment of the Company, it is advisable to suspend
use of the prospectus delivered to the Holders due to pending material
developments or other events that have not yet been publicly disclosed and as to
which the Company believes public disclosure would be detrimental to the
Company. Upon receipt of such notice, each such Holder will immediately
discontinue any sales of Underlying Common Stock pursuant to such registration
statement until such Holder has received copies of a supplemented or amended
prospectus or until such Holder is advised in writing by the Company that the
then current prospectus may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such prospectus.
(e) Covenants. After the filing of the registration
statement, the Company will:
(i) as expeditiously as possible furnish to each Holder
such reasonable numbers of copies of the prospectus in conformity with the
requirements of the Securities Act, and such other documents as such Holder may
reasonably request in order to facilitate the public sale or other disposition
of the Underlying Common Stock owned by such Holder;
(ii) as expeditiously as possible, notify each Holder,
promptly after it receives notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed; and
(iii) if any additional shares of common stock are issued
to Holders pursuant to the anti-dilution provisions of Section 7.2 hereof, the
Company will similarly register such additional shares for resale under the
Securities Act.
(f) Fees and Expenses. In any registration statement in which
Underlying Common Stock or additional shares issued pursuant to the
anti-dilution provisions are included, the Company will bear all expenses and
pay all fees incurred in connection therewith, excluding underwriting discounts
and commissions payable with respect to the Underlying Common Stock or
additional shares, but including the expenses of providing a reasonable number
of copies of the prospectus contained therein to the Holders.
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(g) Indemnification.
(i) The Company will indemnify the Holders of the
Underlying Common Stock to be sold pursuant to any registration statement
hereunder, the officers and directors of each Holder, each underwriter of such
Underlying Common Stock and each person, if any, who controls such Holders or
underwriters within the meaning of Section 15 of the Securities Act or Section
20(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or
any state securities law or regulation, against all loss, claim, damage, expense
or liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever incurred by the indemnified party in any action or proceeding between
(A) the indemnified party and any third party or otherwise or (B) the indemnitor
and the indemnified party only with respect to an action or proceeding to
enforce the indemnification provisions of this Section 7.1(g)(i) to which any of
them may become subject under the Securities Act, the Exchange Act or any other
statute or at common law or otherwise under the laws of any of the United States
or foreign countries, arising from such registration statement or based upon any
untrue statement or alleged untrue statement of a material fact contained in (x)
any preliminary prospectus, the registration statement or prospectus (as from
time to time each may be amended and supplemented); (y) any post-effective
amendment or amendments or any new registration statement and prospectus in
which is included the Underlying Common Stock; or (z) any application or other
document or written communication (collectively called "application") executed
by the Company or based upon written information furnished by the Company in any
jurisdiction in order to qualify the Underlying Common Stock under the
securities laws thereof or filed with the Securities and Exchange Commission,
any state securities commission or agency, Nasdaq or any securities exchange; or
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless such statement
or omission is made in reliance upon, and in conformity with, written
information furnished to the Company by and with respect to such registered
holders ("Purchaser Information") expressly for use in any preliminary
prospectus, the registration statement or prospectus, or any amendment or
supplement thereof, or in any application, as the case may be, or unless the
indemnities failed to deliver a final prospectus in which the material
misstatement or omission was corrected. Subject to the foregoing provisions of
this paragraph, the Company will reimburse such Holder, underwriter and each
such controlling person for any legal or any other expenses reasonably incurred
by such Holder, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
The Company agrees promptly to notify such Holders of the commencement of any
litigation or proceedings against the Company or any of its officers, directors
or controlling persons in connection with the issue and sale or resale of the
Underlying Common Stock or in connection with the registration statement or
prospectus.
(ii) The Holders agree to indemnify and hold harmless the
Company, the officers and directors of the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act against all loss, claim, damage, expense or
liability to which the Company or such controlling person may become subject,
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under the Securities Act or otherwise insofar as such losses, claims, damages,
expenses or liabilities (or actions in respect thereof) arise out of or are
based upon Purchaser Information that is included or relied upon by the Company
in the registration statement or prospectus or any amendment or supplement
thereto or in any application; and will reimburse the Company, officer, director
and each such controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided that such loss, claim, damage,
expense or liability is found ultimately to arise out of or be based upon such
Purchaser Information.
(iii) Any party entitled to indemnification hereunder
("Indemnified Party") will permit the Company to assume the defense of any such
claim or any litigation resulting therefrom; provided, that counsel for the
Company, who will conduct the defense of such claim or litigation, will be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld). The Indemnified Party may participate in such defense at such party's
expense; provided, however, that the Company will pay such expense if
representation of such Indemnified Party by the counsel retained by the Company
would be inappropriate due to actual or potential differing interests between
the Indemnified Party and any other party represented by such counsel in such
proceeding; provided further that in no event will the Company be required to
pay the expenses of more than one law firm per jurisdiction as counsel for the
Indemnified Party. The Company is also responsible for the expenses of such
defense if the Company does not elect to assume such defense. The Company, in
the defense of any such claim or litigation may not, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party may
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Company, which consent may not be unreasonably
withheld.
(h) Expiration of Registration Rights. Notwithstanding
anything to the contrary contained herein, such registration is not required for
a Holder of Underlying Common Stock if in the opinion of counsel to the Company,
the Holder can sell his Underlying Common Stock without restriction under Rule
144(k) promulgated under the Securities Act and all restrictive legends under
the Securities Act are removed from the certificates representing such
securities and any stop transfer order for such certificates is removed.
(i) Successors. The registration rights granted to the
Holders inure to the benefit of all the Holder's successors, heirs, pledges,
assignees, transferees and purchasers of the Units or underlying securities.
7.2. Anti-Dilution Protection for Common Stock Underlying Units.
(a) Issuances at Less Than Trigger Price. Except with respect
to Excluded Issuances (as defined below), if the Company sells prior to October
31, 2002, shares of common stock or securities convertible or exercisable into
shares of common stock ("New Shares"), without consideration or for a
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consideration per share ("New Price") less than the Trigger Price as defined
below ("Dilutive Event"), the Company shall issue to each Holder such number of
shares of common stock ("Anti-Dilutive Shares") as equal to the difference
between the (x) the lesser of the number of shares of common stock included in
the Units originally issued to the Holder or the number of shares of common
stock included in such Units that continue to be beneficially owned by the
Holder on the date of the Dilutive Event and (y) the quotient obtained by
dividing the purchase price paid by the Holder for the number of shares of
common stock determined in accordance with clause (x) above by the "Weighted
Average Price" per share. The Weighted Average Price shall be determined by the
application of the following formula:
(O x TP) + (NP x NS)
---------------------------
O + NS
O = the outstanding shares of common stock of the Company
determined on a fully diluted basis immediately prior
to the Dilutive Event.
TP = the price per share paid by the Holder for the shares
of common stock underlying the Unit (i.e., $1.00), as
adjusted for stock splits, stock dividends,
combinations, reclassifications or other similar events
("Trigger Price").
NP = the New Price per share payable for the New Shares.
NS = the number of New Shares being issued or issuable
upon conversion or exercise or exchange of the
securities being issued pursuant to the Dilutive Event.
As used herein the term "Excluded Issuances" shall mean (i) the issuance of
securities (including, but not limited to, the issuance of common stock and
options or warrants to purchase common stock and the subsequent exercise of the
same) to directors, officers or consultants of the Company under one of the
Company's stock plans or otherwise and (ii) the issuance of securities by the
Company pursuant to the exercise of all options or warrants outstanding on
August 1, 2001.
(b) Treatment of Options, etc. In the case of the issuance of
options to purchase or rights to subscribe for common stock, securities by their
terms convertible into or exchangeable for common stock or options to purchase
or rights to subscribe for such convertible or exchangeable securities, the
following provisions shall apply for all purposes of this Section 7.2:
(i) The aggregate maximum number of shares of common
stock deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential anti-dilution adjustments) of such options to
purchase or rights to subscribe for common stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration, if any, received by the Company upon the issuance of
such options or rights plus the minimum exercise price provided in such options
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or rights (without taking into account potential anti-dilution adjustments) for
the common stock covered thereby.
(ii) The aggregate maximum number of shares of common
stock deliverable upon conversion of, or in exchange for, any such convertible
or exchangeable securities or upon the exercise of options to purchase or rights
to subscribe for such convertible or exchangeable securities and subsequent
conversion or exchange thereof shall be deemed to have been issued at the time
such securities were issued or such options or rights were issued and for a
consideration equal to the consideration, if any, received by the Company for
any such securities and related options or rights (excluding any cash received
on account of accrued interest or accrued dividends), plus the minimum
additional consideration, if any, to be received by the Company (without taking
into account potential anti-dilution adjustments) upon the conversion or
exchange of such securities or the exercise of any related options or rights.
(iii) The expiration of any such options or rights,
the termination of any such rights to convert or exchange or the expiration of
any options or rights related to such convertible or exchangeable securities,
shall not affect the prior issuance of the Anti-Dilutive Shares.
(c) Determination of Consideration. In the case of the
issuance of securities for cash, the consideration shall be deemed to be the
amount of cash paid therefor before deducting any discounts, commissions or
other expenses allowed, paid or incurred by the Company for any underwriting or
otherwise in connection with the issuance and sale thereof. In the case of the
issuance of common stock for a consideration in whole or in part other than
cash, the consideration other than cash shall be deemed to be the fair value
thereof as determined in good faith by the Board of Directors for this purpose,
irrespective of any accounting treatment.
(d) Successors and Assigns. The anti-dilutive rights granted
to the Holders do not inure to the benefit of the Holder's successors, pledgees,
assignees, transferees and purchasers of the common stock other than those
persons deriving rights under the Holder's last will and testament or under the
laws of intestacy.
(e) Limitations on Dilutive Issuances of Stock.
(i) Notwithstanding anything to the contrary contained
herein, the Company hereby agrees that it will not issue any New Shares for a
per share consideration less than the Trigger Price unless the Holders are able
to receive the benefits of the Anti-Dilutive protection benefits pursuant to
Section 7.2.
(ii) Notwithstanding anything to the contrary contained
herein, the Company will not issue such number of Anti-Dilutive Shares issuable
pursuant to the terms of Section 7.2 which would exceed the number of shares of
common stock which may be issued without first obtaining shareholder approval
pursuant to the rules and policies of the Nasdaq National Market unless the
Company has first obtained such approval. The maximum number of shares of common
stock issuable as a result of the Nasdaq limitation set forth herein is
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hereinafter referred to as the "Nasdaq Share Limitation." The Company hereby
agrees to take the necessary steps to obtain shareholder approval of the
issuance of the Anti-Dilutive Shares exceeding the Nasdaq Share Limitation prior
to issuing the New Shares which trigger the requirement to obtain shareholder
approval.
8. Investor Representations and Warranties.
8.1. Investor Representations. I am aware that, except for any
rescission rights that may be provided under applicable laws, I am not
entitled to cancel, terminate or revoke this subscription, and any agreements
made in connection herewith will survive my death or disability. In order to
induce the Company to issue and sell the Units to me, I represent and warrant
that the information relating to me stated herein is true and complete as of the
date hereof and will be true and complete as of the date on which my purchase of
Units becomes effective. If, prior to the final consummation of the offer and
sale of the Units, there should be any change in such information or any of such
information becomes incorrect or incomplete, I agree to notify the Company and
supply the Company promptly with corrective information.
8.2. Information About the Company.
(a) I have read the Term Sheet relating to this offering and
all exhibits listed therein and fully understand the Term Sheet, including the
"Risk Factors" set forth in exhibit 99 to the Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2000. I have been given access to full and
complete information regarding the Company and have utilized such access to my
satisfaction for the purpose of verifying the information included in the Term
Sheet and exhibits thereto, and I have either met with or been given reasonable
opportunity to meet with officers of the Company for the purpose of asking
reasonable questions of such officers concerning the terms and conditions of the
offering of the Units and the business and operations of the Company and all
such questions have been answered to my full satisfaction. I have also been
given an opportunity to obtain any additional relevant information to the extent
reasonably available to the Company. I have received all information and
materials regarding the Company that I have reasonably requested. After my
reading of the materials about the Company, I understand that there is no
assurance as to the future performance of the Company.
(b) I have received no representation or warranty from
the Company or ▇▇▇▇▇▇ Securities or any of their respective officers, directors,
employees or agents in respect of my investment in the Company. I am not
participating in the offer as a result of or subsequent to: (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television, radio or the
Internet or (ii) any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
8.3. Speculative Investment. I am aware that the Units are a
speculative investment that involves a high degree of risk including, but not
limited to, the risk of losses from operations of the Company and the total loss
of my investment. I have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Units and have obtained, in my judgment, sufficient information from the
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Company to evaluate the merits and risks of an investment in the Company. I have
not utilized any person as my purchaser representative (as defined in Regulation
D) in connection with evaluating such merits and risks and have relied solely
upon my own investigation in making a decision to invest in the Company. I have
been urged to seek independent advice from my professional advisors relating to
the suitability of an investment in the Company in view of my overall financial
needs and with respect to the legal and tax implications of such investment. I
believe that the investment in the Units is suitable for me based upon my
investment objectives and financial needs, and I have adequate means for
providing for my current financial needs and contingencies and have no need for
liquidity with respect to my investment in the Company. The investment in the
Company does not constitute all or substantially all of my investment portfolio.
8.4. Restrictions on Transfer. I understand that (i) none of
the Units, shares of common stock, Class A Warrants, Class B Warrants or
Underlying Common Stock have been registered under the Securities Act or the
securities laws of certain states in reliance on specific exemptions from
registration, (ii) no securities administrator of any state or the federal
government has recommended or endorsed this Offering or made any finding or
determination relating to the fairness of an investment in the Company, and
(iii) the Company is relying on my representations and agreements for the
purpose of determining whether this transaction meets the requirements of the
exemptions afforded by the Securities Act and certain state securities laws.
Other than as set forth herein, I acknowledge that there is no assurance that
the Company will file any registration statement for the securities. I
acknowledge that there is no assurance that the Company will file any
registration statement for the securities I am purchasing, that such
registration statement, if filed, will be declared effective or, if declared
effective, that the Company will be able to keep it effective until I sell the
securities registered thereon. Furthermore, I agree to furnish the Company with
such information regarding myself and the distribution of the securities
proposed by me as the Company may request in connection with any registration,
qualification or compliance with the Company's registration obligations set
forth herein.
8.5. Investment Representation. I am purchasing the securities for
my own account for investment and not with a view to, or for sale in connection
with, any subsequent distribution of the securities, nor with any present
intention of selling or otherwise disposing of all or any part of the Units,
shares of common stock, Class A Warrants, Class B Warrants or Underlying Common
Stock. I understand that there is no market at present and in all likelihood
there will not be any market in the future for the Warrants. I understand and
agree that the Units, shares of common stock, Class A Warrants, Class B Warrants
or Underlying Common Stock cannot be resold, pledged, assigned or otherwise
disposed of unless they are subsequently registered under the Securities Act and
under applicable securities laws of certain states, or an exemption from such
registration is available. I understand that the warrants comprising part of the
Units may only be transferred to accredited investors. I understand that, except
as set forth herein, the Company is under no obligation to register the
securities or to assist me in complying with any exemption from such
registration under the Securities Act or any state securities laws. I hereby
authorize the Company to place a legend denoting the restrictions on the
certificates representing the securities.
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8.6. Entity Authority. If the Investor is a corporation,
partnership, company, trust, employee benefit plan, individual retirement
account, ▇▇▇▇▇ Plan or other tax-exempt entity, it is authorized and qualified
to become an investor in the Company and the person signing this Subscription
Agreement and Investor Information Statement on behalf of such entity has been
duly authorized by such entity to do so.
8.7. No Offer Until Determination of Suitability. I
acknowledge that any delivery to me of the documents relating to the Offering of
the Units prior to the determination by the Company of my suitability will not
constitute an offer of the Units until such determination of suitability is
made.
8.8. For Florida Residents. None of the Units, shares of common
stock, Class A Warrants, Class B Warrants or Underlying Common Stock have
been registered under the Securities Act of 1933, as amended, or the Florida
Securities Act, by reason of specific exemptions thereunder relating to the
limited availability of the Offering. The Units, shares of common stock, Class A
Warrants, Class B Warrants or Underlying Common Stock cannot be sold,
transferred or otherwise disposed of to any person or entity unless subsequently
registered under the Securities Act of 1933, as amended, or the Securities Act
of Florida, if such registration is required. Pursuant to Section 517.061(11) of
the Florida Securities Act, when sales are made to five (5) or more persons in
Florida, any sale made pursuant to Subsection 517.061(11) of the Florida
Securities Act will be voidable by such Florida purchaser either within three
days after the first tender of consideration is made by the purchaser to the
issuer, an agent of the issuer, or an escrow agent, or within three days after
the availability of the privilege is communicated to such purchaser, whichever
occurs later. In addition, as required by Section 517.061(11)(a)(3), Florida
Statutes and by Rule 3-500.05(a) thereunder, if I am a Florida resident I may
have, at the offices of the Company, at any reasonable hour, after reasonable
notice, access to the materials set forth in the Rule that the Company can
obtain without unreasonable effort or expense.
9. Indemnification. I hereby agree to indemnify and hold harmless the
Company and ▇▇▇▇▇▇ Securities, their respective officers, directors,
stockholders, employees, agents, and attorneys against any and all losses,
claims, demands, liabilities, and expenses (including reasonable legal or other
expenses incurred by each such person in connection with defending or
investigating any such claims or liabilities, whether or not resulting in any
liability to such person or whether incurred by the indemnified party in any
action or proceeding between the indemnitor and indemnified party or between the
indemnified party and any third party) to which any such indemnified party may
become subject, insofar as such losses, claims, demands, liabilities and
expenses (a) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact made by me and contained herein, or (b)
arise out of or are based upon any breach by me of any representation, warranty,
or agreement made by me contained herein. ▇▇▇▇▇▇ Securities is a third-party
beneficiary of this Section and this Section may not be modified or amended
without the prior written agreement of ▇▇▇▇▇▇ Securities.
10. Severability Remedies. In the event any parts of this Subscription
Agreement are found to be void, the remaining provisions of this Subscription
Agreement are nevertheless binding with the same effect as though the void parts
were deleted.
10
11. Governing Law and Jurisdiction. This Subscription Agreement will be deemed
to have been made and delivered in New York City and will be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal laws of the State of New York. Each of the Company and the Investor
hereby (i) agrees that any legal suit, action or proceeding arising out of or
relating to this Subscription Agreement will be instituted exclusively in New
York State Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York, (ii) waives any objection to the
venue of any such suit, action or proceeding and the right to assert that such
forum is not a convenient forum for such suit, action or proceeding, (iii)
irrevocably consents to the jurisdiction of the New York State Supreme Court,
County of New York, and the United States District Court for the Southern
District of New York in any such suit, action or proceeding, (iv) agrees to
accept and acknowledge service of any and all process that may be served in any
such suit, action or proceeding in New York State Supreme Court, County of New
York or in the United States District Court for the Southern District of New
York and (v) agrees that service of process upon it mailed by certified mail to
its address set forth on my signature page will be deemed in every respect
effective service of process upon it in any suit, action or proceeding.
12. Counterparts. This Subscription Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument. The execution of this Subscription
Agreement may be by actual or facsimile signature.
13. Benefit. Except as otherwise set forth herein, this Subscription Agreement
is binding upon and inures to the benefit of the parties hereto (and ▇▇▇▇▇▇
Securities to the extent it is a third-party beneficiary hereof) and their
respective heirs, executors, personal representatives, successors and assigns.
▇▇▇▇▇▇ Securities is a third-party beneficiary with respect to any sections
hereof that so state or that otherwise indicate that ▇▇▇▇▇▇ Securities would be
entitled to rely on the representations, warranties or covenants made by me
therein.
14. Notices. All notices, offers, acceptance and any other acts under
this Subscription Agreement (except payment) must be in writing, and is
sufficiently given if delivered to the addressees in person, by overnight
courier service, or, if mailed, postage prepaid, by certified mail (return
receipt requested), and will be effective three days after being placed in the
mail if mailed, or upon receipt or refusal of receipt, if delivered personally
or by courier or confirmed telecopy, in each case addressed to a party. All
communications to me should be sent to my preferred address on the signature
page hereto. All communications to the Company should be sent to:
▇▇▇▇▇▇ Holding Corp.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Executive Officer
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
11
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
15. Oral Evidence. This Subscription Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior oral and written agreements between the parties hereto with
respect to the subject matter hereof. This Subscription Agreement may not be
changed, waived, discharged, or terminated orally, but rather, only by a
statement in writing signed by the party or parties against which enforcement or
the change, waiver, discharge or termination is sought.
16. Section Headings. Section headings herein have been inserted for
reference only and will not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part, any of the terms or
provisions of this Subscription Agreement.
17. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained herein will survive the
delivery of, and the payment for, the Units.
18. Acceptance of Subscription. The Company may accept this Subscription
Agreement at any time for all or any portion of the Securities subscribed for by
executing a copy hereof as provided and notifying me within a reasonable time
thereafter.
12
SIGNATURE PAGE FOR INDIVIDUAL INVESTORS - COMPLETE ALL INFORMATION
Name: ____________________ Name of Joint Investor (if any): __________________
Residence Address: ___________________________________________________________
Telephone: (H)_______________(W)___________________Fax _______________
Occupation:__________________Employer:_________________________________________
Business Address: _____________________________________________________________
Send communications to: |_| Home |_| Office |_| E-Mail: _________________
Age: _______________
Social Security Number: ____________________
Check manner in which securities are to be held:
|_| Individual Ownership |_| Tenants in Common |_| Joint Tenants with
Right of Survivorship
(both parties must sign)
|_| Community Property |_| Other (please indicate)
___________________________
Amount Of Investment: $__________________ (or ___________ Units)
Accredited Investor Status For Individuals. (INVESTORS THAT ARE CORPORATIONS,
LIMITED LIABILITY COMPANIES, PARTNERSHIPS, REVOCABLE TRUSTS, IRREVOCABLE TRUSTS,
EMPLOYEE BENEFIT PLAN TRUSTS AND INDIVIDUAL RETIREMENT ACCOUNTS SHOULD IGNORE
THE FOLLOWING QUESTIONS AND PROCEED TO THE ENTITY SIGNATURE PAGE).
(a) I am an accredited investor within the meaning of Section 2(15) of
the Securities Act and Rule 501 promulgated thereunder because (check any boxes
that apply):
|_| My individual annual income during each of the two most recent
years exceeded $200,000 and I expect my annual income during the
current year will exceed $200,000.
13
|_| If I am married, my joint annual income with my spouse during
each of the two most recent years exceeded $300,000 and I expect
my joint annual income with my spouse during the current year
will exceed $300,000.
|_| My individual or joint (together with my spouse) net worth
(including my home, home furnishings and automobiles) exceeds
$1,000,000.
(b) The aggregate value of my assets is approximately $___________.
(c) My aggregate liabilities are approximately $___________.
(d) My current and expected income is:
---------------------------- -------------------------
YEAR | INCOME
---------------------------- -------------------------
2001 (estimated) |$
|
---------------------------- -------------------------
2000 (Actual) |$
|
---------------------------- -------------------------
1999 (Actual) |$
|
---------------------------- -------------------------
I hereby confirm the information set forth above is true and correct in
all respects as of the date hereof and will be on the date of the purchase of
Units.
--------------------------------------------------------------------------
ALL INVESTORS MUST SIGN | The foregoing subscription is
AND PRINT NAME BELOW | accepted and the Company hereby
| agrees to be bound by its terms.
Signature:_________________________ |
| ▇▇▇▇▇▇ Holding Corp.
Print Name:________________________ |
|
Date:______________________________ | By: _____________________________
|
Signature:_________________________ | Name:____________________________
|
Print Name:________________________ | Title:___________________________
|
Date:______________________________ | Date:____________________________
--------------------------------------------------------------------------
14
SIGNATURE PAGE FOR ENTITY INVESTORS - COMPLETE ALL INFORMATION
Name of Entity: _______________________________________________________________
Address of Principal Office:___________________________________________________
Telephone: ____________________________ Fax: ___________________________
Taxpayer Identification Number: ____________________________
Check type of Entity:
|_| Employee Benefit |_| Limited |_| General |_| Individual
Plan Trust Partnership Partnership Retirement
Account
|_| Limited Liability |_| Revocable |_| Corporation |_| Other
Company Trust (please indicate)
|_| Irrevocable Trust (If the Investor is an Irrevocable Trust, a
supplemental questionnaire must be completed by the person directing
the decision for the trust to determine by accredited investor
status. Please contact ▇▇▇▇▇▇ Securities for a copy of such
supplemental questionnaire.)
Amount Of Investment: $__________________ (or ___________ Units)
Date of Formation or incorporation: __________ State of Formation: ___________
Describe the business of the Entity: __________________________________________
_______________________________________________________________________________
List the names and positions of the executive officers, managing members,
partners or trustees authorized to act with respect to investments by the Entity
generally and specify who has the authority to act with respect to this
investment.
------------------------ --------------------- ----------------------------
| | Authority for this
Name | Position | investment (yes or no)
------------------------ --------------------- ----------------------------
| |
------------------------ --------------------- ----------------------------
| |
------------------------ --------------------- ----------------------------
| |
------------------------ --------------------- ----------------------------
| |
------------------------ --------------------- ----------------------------
15
Accredited Investor Status for Entities.
(a) Check all boxes which apply (▇▇▇ Entities can skip this question
and go to (b)):
|_| The Entity was not formed for the specific purpose of
investing in the Company
|_| The Entity has total assets in excess of $5 million
dollars
|_| For Employee Benefit Plan Trusts Only: The decision
to invest in the Company was made by a plan
fiduciary, as defined in Section 3(21) of ERISA, who
is either a bank, insurance company or registered
investment advisor.
(b) If you did not check the first two of the three boxes in Question (a)
or if the Entity is an Individual Retirement Account, a Self-directed Employee
Benefit Plan Trust or an Irrevocable Trust, list the name of each person who:
(i) owns an equity interest in the Entity (i.e., each shareholder if
the Entity is a corporation, each member if the Entity is a limited liability
company and each partner if the Entity is a partnership); or
(ii) is a grantor for the revocable trust or Individual Retirement
Account; or
(iii) is the person making the investment decision for a self-directed
Employee Benefit Plan Trust; or
(iv) is the person making the investment decisions for an Irrevocable
Trust.
--------------------------- --------------------------
--------------------------- --------------------------
EACH PERSON LISTED ABOVE MUST SEPARATELY COMPLETE AND SUBMIT TO THE COMPANY THE
ANSWERS TO THE QUESTIONS FOLLOWING THE SIGNATUREBOX BELOW AND SIGN THE WRITTEN
CONFIRMATION IMMEDIATELY FOLLOWING.
------------------------------------ --------------------------------------
INVESTOR: |The foregoing subscription is accepted
|and the Company hereby agrees to be
|bound by its terms.
|
|▇▇▇▇▇▇ Holding Corp.
---------------------------------- |
Signature of Authorized Signatory |
|By: _________________________________
Name:____________________________ |Name:________________________________
Title:___________________________ |Title: ______________________________
Date:____________________________ |Date: _______________________________
----------------------------------- -------------------------------------
16
Accredited Investor Questions for Entity equity owners and investment decision
makers
(a) I am an accredited investor within the meaning of Section 2(15) of the
Securities Act and Rule 501 promulgated thereunder because (check any boxes that
apply):
|_| My individual annual income during each of the two most recent
years exceeded [GRAPHIC OMITTED$200,000 and I expect my annual
income during the current year will exceed $200,000.
|_| If I am married, my joint annual income with my spouse during
each of the two most [GRAPHIC OMITTEDrecent years exceeded
$300,000 and I expect my joint annual income with my spouse
during the current year will exceed $300,000.
|_| My individual or joint (together with my spouse) net worth
(including my home, [GRAPHIC OMITTEDhome furnishings and
automobiles) exceeds $1,000,000.
(b) The aggregate value of my assets is approximately $___________.
(c) My aggregate liabilities are approximately $___________.
(d) My current and expected income is:
---------------------------- -------------------------
YEAR | INCOME
---------------------------- -------------------------
2001 (estimated) |$
|
---------------------------- -------------------------
2000 (Actual) |$
|
---------------------------- -------------------------
1999 (Actual) |$
|
---------------------------- -------------------------
I hereby confirm the information set forth above is true and correct in all
respects as of the date hereof and will be on the date of the purchase of Units.
Date:________________________________ __________________________________
Name:
17