EXHIBIT 4.11
SUBCRIPTION AGREEMENT
PARTY A: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ON BEHALF OF
STRONG INTERNATIONAL ENTERPRISES (HK) COMPANY LTD.
PARTY B: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ON BEHALF OF
VITAL LIVING INC. (REFERRED TO HEREIN AS THE "COMPANY")
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ON BEHALF OF STRONG INTERNATIONAL ENTERPRISES (HK) COMPANY LTD.
AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ON BEHALF OF VITAL LIVING INC. REACHED COMPLETE AGREEMENT
ON THE FOLLOWING TERMS CONCERNING THAT STRONG INTERNATIONAL ENTERPRISES (HK)
COMPANY LTD. PURCHASING STOCKS OF VITAL LIVING INC. ON THE TERMS MUTUALLY AGREED
UPON BY STRONG INTERNATIONAL ENTERPRISES (HK) COMPANY LTD. AND VITAL LIVING INC.
1. Strong International Enterprises (HK) Company Ltd. (officially
registered in Hong Kong, hereinafter referred to as "Strong Company" or
"Subscriber") will be the entity to purchase between one million and
five million shares of the Common Stock of Vital Living, Inc. at
USD1.00/share in accordance with the following terms mutually agreed
upon by Party A and Party B.
UNITS OFFERED: 50 Units, at a price per Unit of $100,000.
Each Unit consists of 100,000 shares of
Series B Preferred Stock, 100,000 Class D
Warrants and 100,000 Class E Warrants.
Subscriptions for partial units may be
accepted under certain circumstances.
OFFERING SIZE-MINIMUM 10 Units or $ 1,000,000
OFFERING SIZE-MAXIMUM 50 Units or $ 5,000,000
PREFERRED STOCK The shares of Preferred Stock included in
the Units are offered at a price of $1.00
per share, convertible into common stock
twelve (12) months from the date of issuance
on a one for one basis.
DIVIDEND ON PREFERRED: The Preferred Stock will have a minimum
dividend of 25%, payable in common stock 12
months from the date of its issuance to the
investor. In the event the Common Stock
trades for less than 75 cents per share at
the time the last unit is subscribed for,
all Preferred Stock will increase the
dividend amount to equal the difference
between the trading price and $.75. For
example, if the closing price of the Common
Stock was $.65 cents at the time of the last
investment under this document, the dividend
on the preferred would be increase to 35%
from 25%.
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WARRANTS EXERCISE PRICE:
- Class D Warrants: $1.30 per share of Common
Stock.
- Class E Warrants: $1.60 per share of Common
Stock.
WARRANT TERM:
The period commencing on the Initial Closing of the Offering
and terminating on the fifth anniversary of such date.
NUMBER OF SHARES ISSUABLE UPON THE EXERCISE OF EACH OF THE CLASS D
AND CLASS E WARRANTS:
One Share of Common Stock per Warrant
3. PAYMENT
In order to complete your subscription, you will be required to
accompany the entire executed Subscription Agreement with the tender of the
correct purchase price in cash, certified check (made payable to Vital Living,
Inc, wire transfer or similar payment. Wire transfers should be sent to ▇▇▇▇▇
FARGO BANK, ARIZONA, N.A., ACCOUNT NO. 1014446528 ABA NUMBER ▇▇▇▇▇▇▇▇▇__.,
(SWIFT CODE FOR ▇▇▇▇▇▇▇▇ TRANSFERS IS WFBiUS6S. The minimum investment is one
Unit at $100,000 per Unit although partial Units may be subscribed for in the
sole discretion of the Company. See Paragraph 4 to the Subscription Agreement.
Deliver or mail items 1, 2 and 3 to the Company at the address on the
previous page.
1. Unless fully executed by June 30, 2003, (unless such date is extended
at the sole discretion of the Company for an additional ninety (90) days) this
agreement shall have no effect.
2. After Strong Company acquires Vital Living Class B Preferred Stock (as
described in the Term Sheet (at $1.00/share), Warrants Class D (at
$1.30/share), Warrants Class E (at $1.60/share), and hold them for one
year from the date of their issuance, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (Chairman & CEO
of Strong Company) has the full authority to assign any amount of Vital
Living stocks, Warrants Class D, and Warrants Class E to any companies
and individuals as ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ chooses.
3. Vital Living Inc. will offer free services in helping ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
(on behalf of Strong Company) and any other companies and individuals
as ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ chooses to assign any amount of aforesaid Vital
Living stocks, Warrants Class D, and Warrants Class E to (hereinafter
referred to as (Vital Living stockholders, Vital Living warrant
holders) to sell their Vital Living Stocks and exercise their Vital
Living Warrants after these stocks and warrants are held for one year
from the date of their issuance. If there are any legal and finance
fees in connection with the exercise of the warrants, Vital Living
agreed to assume those costs.
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4. The Vital Living stockholders shall be responsible for any finance fees
related to their selling of their Vital Living stocks.
5. Strong Company understands and agrees that an investment in the Units
is not a liquid investment. In particular and in addition to the
representations in Section 4 hereof, the undersigned recognizes,
acknowledges and agrees that:
5.1 Strong Company must bear the economic risk of
investment in the Units for an indefinite period of time, since the
Units have not been registered under the Securities Act of 1933, as
amended (the "Securities Act") or applicable state securities laws
("State Acts"), and, therefore, cannot be transferred or sold unless
either they are subsequently registered under the Securities Act and
applicable State Acts, or an exemption from registration is available
and a favorable opinion of counsel to that effect is obtained. The
undersigned acknowledges and agrees that the Company has no independent
obligation to file with the Securities and Exchange Commission ("SEC")
relating to the units or any securities included therewith. Pursuant to
Rule 144, as presently promulgated under the rules of the SEC,
Subscriber may begin to sell the shares of Common Stock acquired
hereunder pursuant to the terms of such Rule, as well as, subject to
applicable holding periods which begin upon the exercise of the
Warrants, any shares of Common Stock acquired upon the exercise of the
Warrants.
5.2 No market currently exists for any of the Company's
securities other than its Common Stock and no market for the Units, the
Series B Preferred Stock, Series D Warrants or the Series E Warrants is
expected to develop in the foreseeable future.
6. In connection with the agreement to purchase Units by Strong Company
herein, the Company hereby represents and warrants as follows:
6.1 The Company is a corporation duly organized and
validly existing and in good standing under the laws of the State of
Nevada and has all the requisite power and authority to conduct its
business and own and operate its properties, and to enter into and
execute this Agreement and to carry out the transactions contemplated
hereby.
6.2 The Company has the power to execute, deliver and
perform the terms and provisions of this Agreement and has taken all
necessary action to authorize the execution, delivery and performance
of this Subscription Agreement, and to authorize the issuance and sale
of the Units (consisting of the Shares) contemplated by this Agreement,
and the representatives of the Company executing this Subscription and
Purchase Agreement are duly authorized to do so.
6.3 Assuming the due execution and delivery of this
Agreement by Strong Company, this Agreement is a legal, valid and
binding obligation of the Company enforceable in accordance with its
terms except (a) as its obligations may be affected by bankruptcy,
insolvency, reorganization, moratorium or similar laws, or by equitable
principles relating to or limiting creditors' rights generally and (b)
that the remedies of specific performance, injunction and other forms
of equitable relief are subject to certain tests of equity
jurisdiction, equitable defenses and the discretion of the court before
which any proceeding therefore may be brought.
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6.4 The execution, delivery and performance of this
Agreement and the fulfillment of or compliance with the terms and
provisions hereof, including the issuance and sale of the Units
(consisting of shares of the Series B Preferred Stock and the Warrants)
contemplated by this Agreement, are not in contravention of or in
conflict with any applicable laws or any contract to which the Company
is a party or by which the Company or any of its properties may be
bound or affected.
6.5 The Company has advised Strong Company that true and
complete copies of its Annual Report on Form 10-k for the Fiscal Year
ended December 31, 2001, its Quarterly Report on Form 10-Q for the
period ended September 30, 2002, and a Preliminary Prospectus (the
"Preliminary Prospectus") included in a Registration Statement filed on
Form SB-2 on December 20, 2003, as amended on March 7, 2003, (the "SEC
Documents") are available on the ▇▇▇▇▇ internet site maintained by the
Securities and Exchange Commission. These documents are incorporated
herein by this reference, including the Risk Factors set forth in the
Preliminary Prospectus. The Company has not provided to the Subscriber
any information that, according to applicable law, rule or regulation,
should have been disclosed publicly prior to the date hereof by the
Company, but which has not been so disclosed. As of their respective
dates, the SEC Documents complied as to form and substance in all
material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and other federal, state and local
laws, rules and regulations applicable to such SEC Documents, and none
of the SEC Documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply as to
form and substance in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of
unaudited interim statements, to the extent they may include summary
notes and may be condensed or summary statements) and fairly present in
all material respects the financial position of the Company as of the
dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments).
6.6 The Company will provide, at no additional cost to Strong
Company, any and all services, including legal fees, associated with
the lawful transfer or sale of the Common Stock acquired hereby, or the
exercise of the Warrants and the subsequent transfer or sale of any
shares of Common Stock acquired upon the exercise of such Warrants.
Such services and assistance will be provided in an expedited manner.
7. Strong Company represents to and agrees with the Company that:
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7.1 Strong Company has carefully reviewed and understand the risks
of and other considerations relating to a purchase of the Units.
7.2 The undersigned and his purchaser representative(s), if any,
have been afforded the opportunity to obtain any information necessary
to verify the accuracy of any representations or information set forth
in the Memorandum and have had all of their inquiries to the Company
answered in full, and have been furnished all requested materials
relating to the Company, the offering and sale of the Units and any
other matter described in the Memorandum.
7.3 Neither the undersigned nor his purchaser representative(s),
if any, have been furnished any offering literature by the Company or
any of their affiliates, associates or agents, other than the
Memorandum, the representations contained herein, and the exhibits and
attachments thereto and hereto.
7.4 Strong Company is acquiring the Units for which it hereby
subscribes as principal for its own investment account, and not (1)
with a view to the resale or distribution of all or any part thereof,
(2) on behalf of another person who has not made the foregoing
representation, or (3) in order for any person to acquire less than the
minimum subscription required hereunder, unless a lesser subscription
specifically has been accepted by the Company.
7.5 Strong Company is an accredited investor, as defined in Rule
501(a) of Regulation D promulgated pursuant to the Securities Act, by
virtue of the fact that it is an accredited partnership, corporation,
trust or other entity investors must and at least one of the following
statements is applicable
_____(i) The undersigned is a 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)
of Regulation D or
_____(ii) All of the equity owners of the undersigned qualify
as an "accredited investor".
For purposes of determining whether Strong Company is an "accredited
investor" at least one of the following statements must be applicable:
_____(i) The undersigned had individual income (exclusive of
any income attributable to spouse) of more than $200,000 in
each of the most recent two years or joint income with the
undersigned's spouse in excess of $300,000 in each of such
years and reasonably expects to have income of at least the
same level for the current year.
_____(ii) The undersigned has an individual net worth, or a
combined net worth with the undersigned's spouse, in excess of
$1,000,000. For purposes of
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this Subscription Agreement, "individual net worth" means the
excess of total assets at fair market value, including home
and personal property, over total liabilities.
7.6 Strong Company understands the fundamental aspects of and
risks involved in an investment in the Company as are reflected in the
Preliminary Prospectus, and that the undersigned has read and reviewed
each Risk Factor set forth therein and has had an opportunity to
question management of the Company about its business, prospects and
financial condition.
7.7 Strong Company (1) is authorized and otherwise duly qualified
to purchase and hold the Units, (2) has its principal place of business
at its residence address set forth on the Subscription Agreement
Signature Page hereof, (3) has not been formed for the specific purpose
of acquiring the Units, and (4) has submitted and executed all
documents required pursuant to the Certificate for Corporate,
Partnership, Trust and Joint Purchasers and Special Subscription
Instructions. The person executing this Subscription Agreement and all
other documents related to the offering hereby represents that he is
duly authorized to execute and deliver all such documents on behalf of
the entity. IF THE UNDERSIGNED IS ONE OF THE AFOREMENTIONED ENTITIES,
IT HEREBY AGREES TO SUPPLY ANY ADDITIONAL WRITTEN INFORMATION THAT MAY
BE REASONABLY REQUIRED BY THE COMPANY.
7.8 All of the information that the undersigned has heretofore
furnished to the Company, or that is set forth herein with respect to
himself, his financial position, and his business and investment
experience, is correct and complete as of the date hereof, and, if
there should be any material change in such information prior to the
closing of the sale of the Units, the undersigned will immediately
furnish the revised or corrected information to the Company.
7.9 Strong Company consents to the placement of a legend on any
certificate(s) or other document evidencing the Units (including the
underlying securities), stating that such securities have not been
registered under the Securities Act and setting forth or referring to
the restrictions on transferability and sale thereof. The undersigned
is aware that the Company will make a notation in its appropriate
records with respect to the restrictions on the transferability of such
securities. The legend shall be substantially as follows:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED UNLESS COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF SUCH ACT HAS BEEN MADE OR UNLESS AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION PROVISIONS HAS BEEN ESTABLISHED OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933.
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7.10 Strong Company understands that the Company will review this
Subscription Agreement; and it is further agreed that the Company
reserves the unrestricted right to reject or limit in whole or in part
any subscription and to close the offer at any time.
7.11 Strong Company acknowledges that the Company has agreed to pay
to certain representatives, brokers and finders, a fee of up to 12.5%
of the gross proceeds raised and an option to acquire 200,000 shares of
the Company's Common Stock at $1.30 per share.
7.12 The foregoing representations are true and accurate as of the
date hereof, shall be true and accurate as of the date of the Closing
of this offering, and shall survive such Closing. If, in any respect,
such representations shall not be true and accurate prior to or upon
the Closing of this offering, the undersigned shall give written notice
of such fact to the Company, specifying which representations are not
true and accurate and the reasons therefore, with a copy to his
purchaser representative(s), if any.
8. Confirmed by Party B, foreign Vital Living stockholders and warrant
holders (including foreign companies and foreign country citizens) will
not pay any taxes (such as income tax, profit tax... etc.) in the
United States when they sell their Vital Living stocks and exercise
their Vital Living warrants.
9. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or his representative (who will be informed to Vital
Living Inc. by ▇▇▇▇▇▇▇ ▇▇▇▇'▇ written notice) will coordinate with
Vital Living Inc. to get the aforesaid services done by Vital Living
Inc. in a timely manner.
10. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ on behalf of Vital Living Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇ on
behalf of Strong Company will maintain complete confidentiality on all
the matters, discussions, communications and legal documents related to
this mission and all aforesaid subjects.
VITAL LIVING, INC.
SUBSCRIPTION AGREEMENT
SIGNATURE PAGE
The undersigned hereby subscribes for the number of Units set forth
below as described in the Term Sheet dated March 24, 2003, issued by
Vital Living, Inc., a corporation organized under the laws of the State
of Nevada. The entire Subscription Agreement, of which this is the
Signature Page, is provided as an Exhibit to the Memorandum.
1. Dated:____________________, 2003
2. Number of Units:_____________
3. Subscription Price ($100,000 per Unit,
minimum subscription one Unit):
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STRONG INTERNATIONAL ENTERPRISES (HK) COMPANY LTD.
_______________________________________________
Taxpayer Identification
Or Social Security Number
_____________________________________________
Mailing Address including
City, State, Zip Code
Subscription for __________ Units accepted as of _____________________, 2003.
VITAL LIVING, INC.
By:___________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO
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SPECIAL SUBSCRIPTION INSTRUCTIONS
FOR
CORPORATE, PARTNERSHIP, TRUST, AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, or other entity
or joint purchasers, the following additional instructions must be
followed. INFORMATION ADDITIONAL TO THAT REQUESTED BELOW MAY ALSO BE
REQUIRED BY THE COMPANY IN SOME CASES.
I. AUTHORIZATION. The investor must provide a copy of (a) the
corporation's articles of incorporation, by-laws and authorizing resolution, or
alternatively, a corporate investor may supply a good standing certificate from
the applicable jurisdiction or some other document establishing that the entity
is validly existing and has the authority to invest, (b) the partnership
agreement, or (c) the trust agreement, as applicable.
II. SUBSCRIPTION AGREEMENT
A. CORPORATIONS. An authorized officer of the
corporation must date, sign, and complete the Subscription Agreement
with information concerning the corporation. The officer should print
the name of the corporation above his signature, and print his name and
office below his signature.
B. PARTNERSHIPS. An authorized partner must date, sign,
and complete the Subscription Agreement with information concerning the
partnership. The partner should print the name of the partnership above
his signature, and print his name and the words "general partner" below
his signature.
C. TRUSTS. In the case of trust, the authorized trustee
should date, sign, and complete the Subscription Agreement with
information concerning the trust. The trustee should print the name of
the trust above his signature, and print his name and the word
"trustee" below his signature. In addition, an authorized trustee
should also provide information requested in the Subscription Agreement
as it pertains to him as an individual.
D. JOINT OWNERSHIP. Except with regard to married
couples, joint individual or other investors must individually meet the
investor suitability requirements; in all cases, each must date, sign,
and complete the Subscription Agreement. Joint investors must state if
they are purchasing the Units as joint tenants with the right of
survivorship, tenants in common, or community property, and each must
execute the Subscription Agreement Signature Page.
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VITAL LIVING, INC.
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, joint
purchaser, or other entity, an authorized officer, partner, or trustee must
complete, date, and sign this Certificate.
CERTIFICATE
The undersigned hereby certifies that:
a. The investor has been duly formed and is validly existing and
has full power and authority to invest in Vital Living, Inc. (the
"Company"). The investor has not been formed for the purpose of
investing in the Units.
b. The investor's Subscription Agreement has been duly and
validly authorized, executed, and delivered by the investor and, upon
acceptance by the Company, will constitute the valid, binding, and
enforceable obligation of the investor.
Dated:________________, 2003
Strong International Enterprises (HK) Company Ltd.
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
(authorized officer, partner or trustee, etc.)
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