EXHIBIT 10.19
NAME OF SUBSCRIBER: _____________________________
TO: ▇▇▇▇▇ ▇▇▇▇▇▇▇ FINANCIAL, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement") is being delivered to you in
connection with your investment in a publicly-traded company ("Pubco") and the
anticipated merger (the "Merger") of Presby Acquisition Corp., a wholly-owned
subsidiary of Pubco, with and into Presby Corp., a Delaware corporation
("Presby" or the "Company"). Your obligation to invest in Pubco shall be subject
to, among other things, (a) the notification to you of the identity of Pubco and
(b) your receipt of the draft current report on Form 8-K in accordance with
Section 2.1 below. ▇▇▇▇ ▇▇▇▇▇▇▇ Financial, Inc. shall serve as the Placement
Agent of Pubco (the "Placement Agent") in conducting a private placement (the
"Private Placement") of units ("Units"), each Unit consisting of (i) 50,000
shares of Pubco's common stock ("Common Stock"), and (ii) a detachable warrant
to purchase 25,000 shares of Common Stock ("Warrant" and, together with the
Common Stock, "Securities"), at an exercise price of $2.50 per share from
issuance until the third anniversary of the closing of the Merger. The purchase
price per Unit is $100,000. All funds received in the Private Placement shall be
held in escrow by the law firm of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP (the "Escrow Agent")
and, upon fulfillment of the other conditions precedent set forth herein, shall
be released from escrow and delivered to Pubco at which time the securities
subscribed for as further described below shall be delivered, subject to Section
8 hereof, to you.
1. SUBSCRIPTION AND PURCHASE PRICE
1.1 SUBSCRIPTION. Subject to the conditions set forth in Section 2
hereof, the undersigned hereby subscribes for and agrees to purchase the number
of Units indicated on page C-10 hereof on the terms and conditions described
herein. The minimum number of Units that may be purchased is one (1).
Subscriptions for lesser amounts may be accepted at the discretion of Pubco and
the Placement Agent.
1.2 PURCHASE OF SECURITIES. The undersigned understands and
acknowledges that the purchase price to be remitted to the Placement Agent in
exchange for the Unit(s) shall be $100,000 per Unit, for an aggregate purchase
price of $__________ (the "Aggregate Purchase Price"). The Securities underlying
the Units subscribed for hereunder shall be issued in two tranches. The first
tranche of such Securities (the "First Tranche") shall consist of fifty percent
(50%) of the number of shares of Common Stock and the number of Warrants
underlying the Units subscribed for hereunder. The second tranche of such
Securities (the "Second Tranche") shall consist of fifty percent (50%) of the
number of shares of Common Stock and the number of Warrants underlying the Units
subscribed for hereunder. Payment for the Units subscribed for hereunder shall
be made by the undersigned, by check or wire transfer to the Escrow Agent,
pursuant to the terms of the Escrow Agreement attached hereto, (a) with respect
to the First Tranche, contemporaneously with the undersigned's delivery of this
Agreement to the Placement Agent and (b) with respect to the Second Tranche,
within five (5) Business Days (as hereinafter defined) following receipt of
notice from the Company or the Placement Agent that the conditions to the
consummation of the Final Closing (as defined in Section 2.2 hereof) set forth
in Section 2.3 have been satisfied. The undersigned understands and agrees that,
subject to Sections 2.1(a) and 2.3 and applicable laws, by executing this
Agreement, it is entering into a binding agreement to acquire both the First
Tranche and the Second Tranche, and may not subsequently elect not to acquire
any such Securities. The
undersigned further understands and acknowledges that the undersigned, pursuant
to Section 8 hereof, is pledging the Securities deliverable at the Initial
Closing (as defined in Section 2.2 hereof) to the Company to secure the
undersigned's obligation to acquire the Second Tranche.
2. ACCEPTANCE AND CLOSING PROCEDURES
2.1 ACCEPTANCE OR REJECTION.
(a) The undersigned and the Placement Agent understand and agree
that this subscription shall be revocable by the undersigned up until five (5)
days after a Draft Form 8-K (as defined in Section 5.1 hereof) is prepared and
sent to the undersigned (at the address set forth on the signature page of this
Agreement) in accordance with the terms and conditions set forth in Section 4
hereof (the "Revocation Period"). Provided that the undersigned shall not have,
within the Revocation Period, delivered a written notice via facsimile to the
Escrow Agent (to the attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) at (▇▇▇) ▇▇▇-▇▇▇▇,
electing to withdraw his subscription, the obligation of the undersigned to
purchase the Units shall become irrevocable, and the undersigned shall be
legally bound to purchase the Units subject to the terms set forth in this
Agreement.
(b) The undersigned understands and agrees that Pubco and the
Placement Agent reserve the right to reject this subscription for the Units in
whole or part in any order at any time prior to the Initial Closing (as defined
below) if, in their reasonable judgment, they deem such action in the best
interest of Pubco, notwithstanding the undersigned's prior receipt of notice of
acceptance of the undersigned's subscription.
(c) In the event of the revocation of this subscription by the
undersigned in accordance with Section 2.1(a), rejection by Pubco or the
Placement Agent in accordance with Section 2.1(b), or the sale of the Units is
not consummated by the Placement Agent for any reason, this Agreement and any
other agreement entered into between the undersigned and the Placement Agent
relating to this subscription shall thereafter have no force or effect, and the
Placement Agent shall promptly return or cause to be returned to the undersigned
the purchase price remitted to the Escrow Agent, without interest thereon or
deduction therefrom.
(d) Notwithstanding anything to the contrary contained in this
Agreement, in the event that the Merger is not effective on or before the date
that is sixty (60) days after the date of this Agreement, the Placement Agent
shall promptly return or cause to be returned to the undersigned the purchase
price remitted to the Escrow Agent, without interest thereon or deduction
therefrom.
2.2 CLOSINGS.
The closing (the "Initial Closing") of the purchase and sale of the
First Tranche shall take place at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, counsel
to Pubco, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such
other place as determined by the Placement Agent, on the first (1st) Business
Day immediately following the Revocation Period (the "Initial Closing Date"), or
such other date as is mutually agreed to by the parties and the undersigned. The
closing (the "Final Closing" and, together with the Initial Closing, the
"Closings") of the purchase and sale of the Second Tranche shall take place at
the aforementioned offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, or such other place as
determined by the Placement Agent, as soon as reasonably practicable following
satisfaction of the conditions set forth in Section 2.3. "Business Day" shall
mean from the hours of 9:00 a.m. (E.S.T.) through 5:00 p.m. (E.S.T.) of a day
other than a Saturday, Sunday or other day on which commercial banks in New York
City are authorized or required to be closed.
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2.3 CONDITIONS TO FINAL CLOSING.
Notwithstanding anything to the contrary contained in this
Agreement, the Final Closing shall not occur until such time as 1) the
initiation of the Company's Phase II U.S. Food & Drug Administration clinical
trial for the treatment of Presbyopia; 2) the earlier of (a) the receipt of
regulatory approval from Health Canada to commercialize the Company's treatment
for POA Glaucoma and/or Ocular Hypertension or (b) the completion, after the
Merger Closing, of 500 surgical procedures (eyes) in Canada and/or the European
Union utilizing the Focal One Implant for the treatment of POA Glaucoma or
Ocular Hypertension; and 3) as to all purchasers other than CIBA, the concurrent
Second Tranche investment by CIBA of $1,250,000.
3. INVESTOR'S REPRESENTATIONS AND WARRANTIES
The undersigned hereby acknowledges, agrees with and represents and
warrants to the Placement Agent and its affiliates, as follows:
(a) The undersigned has full power and authority to enter into
this Agreement, the execution and delivery of which has been duly authorized, if
applicable, and this Agreement constitutes a valid and legally binding
obligation of the undersigned.
(b) The undersigned acknowledges his understanding that the
offering and sale of the Units is intended to be exempt from registration under
the Securities Act of 1933, as amended (the "Securities Act"), by virtue of
Section 4(2) of the Securities Act and the provisions of Regulation D
promulgated thereunder ("Regulation D"). In furtherance thereof, the undersigned
represents and warrants to the Placement Agent and its affiliates as follows:
(i) The undersigned realizes that the basis for the
exemption from registration may not be available if,
notwithstanding the undersigned's representations contained herein,
the undersigned is merely acquiring the Units for a fixed or
determinable period in the future, or for a market rise, or for
sale if the market does not rise. The undersigned does not have any
such intention.
(ii) The undersigned is acquiring the Unit(s) solely for the
undersigned's own beneficial account, for investment purposes, and
not with view to, or resale in connection with, any distribution of
the shares of Common Stock, including such shares into which the
Warrants are exercised, underlying such Unit(s).
(iii) The undersigned has the financial ability to bear the
economic risk of his investment, has adequate means for providing
for his current needs and contingencies and has no need for
liquidity with respect to his investment in the Company;
(iv) _____________ [insert name of Purchaser Representative:
IF NONE, SO STATE] has acted as the undersigned's Purchaser
Representative for purposes of the private placement exemption
under the Securities Act. If the undersigned has appointed a
Purchaser Representative (which term is used herein with the same
meaning as given in Rule 501(h) of Regulation D), the undersigned
has been advised by his Purchaser Representative as to the merits
and risks of an investment in the Company in general, and the
suitability of an investment in the Units for the undersigned in
particular; and
(v) The undersigned (together with his Purchaser
Representative(s), if any) has such knowledge and experience in
financial and business matters as to be capable of
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evaluating the merits and risks of the prospective investment in
the Units. If other than an individual, the undersigned also
represents it has not been organized for the purpose of acquiring
the Units.
(c) The information in the Accredited Investor Questionnaire
completed and executed by the undersigned (the "Investor Questionnaire") is
accurate and true in all respects, and the undersigned is an "accredited
investor," as that term is defined in Rule 501(a) of Regulation D.
(d) The undersigned (and his Purchaser Representative, if any) has
been furnished with a copy of the Confidential Private Placement Memorandum,
dated October 29, 2002, together with all annexes thereto (as such documents may
be amended or supplemented, the "Memorandum"), relating to the private placement
by Pubco of the Units.
(e) The undersigned is not relying on the Placement Agent or its
affiliates with respect to economic considerations involved in this investment.
The undersigned has relied on the advice of, or has consulted with only the
person(s), if any, named as Purchaser Representative(s) herein. Each Purchaser
Representative, if any, is capable of evaluating the merits and risks of an
investment in the Units as such are described in the Memorandum, and each
Purchaser Representative, if any, has disclosed to the undersigned in writing (a
copy of which is annexed to this Agreement) the specific details of any and all
past, present or future relationships, actual or contemplated, between himself
and the Placement Agent or any affiliate or subsidiary thereof.
(f) The undersigned represents, warrants and agrees that he will
not sell or otherwise transfer the shares of Common Stock (including such shares
into which the Warrants are exercisable) or Warrants without registration under
the Securities Act or an exemption therefrom, and fully understands and agrees
that he must bear the economic risk of his purchase because, among other
reasons, neither the shares of Common Stock nor the Warrants have been
registered under the Securities Act or under the securities laws of any state
and, therefore, cannot be resold, pledged, assigned or otherwise disposed of
unless they are subsequently registered under the Securities Act and under the
applicable securities laws of such states, or an exemption from such
registration is available. In particular, the undersigned is aware that the
shares of Common Stock and Warrants are "restricted securities," as such term is
defined in Rule 144 promulgated under the Securities Act ("Rule 144"), and they
may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144
are met. The undersigned also understands that, except as otherwise provided
herein, the Company is under no obligation to register the shares of Common
Stock or Warrants on his behalf or to assist him in complying with any exemption
from registration under the Securities Act or applicable state securities laws.
The undersigned understands that any sales or transfers of the shares of Common
Stock and Warrants are further restricted by state securities laws and the
provisions of this Agreement.
(g) No representations or warranties have been made to the
undersigned by Pubco, Presby or the Placement Agent, or any of their respective
officers, employees, agents, affiliates or subsidiaries, other than any
representations of the Placement Agent contained herein and in the Memorandum,
and in subscribing for Units the undersigned is not relying upon any
representations other than any contained herein or in the Memorandum.
(h) The undersigned understands and acknowledges that his purchase
of the Units is a speculative investment that involves a high degree of risk and
the potential loss of his entire investment.
(i) The undersigned's overall commitment to investments that are
not readily marketable is not disproportionate to the undersigned's net worth,
and an investment in the Units will not cause such overall commitment to become
excessive.
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(j) The undersigned understands and agrees that the certificates
for the shares of Common Stock (including such shares into which the Warrants
are exercisable) and Warrants shall bear substantially the following legend
until (i) such securities shall have been registered under the Securities Act
and effectively disposed of in accordance with a registration statement that has
been declared effective or (ii) in the opinion of counsel for the Company such
securities may be sold without registration under the Securities Act as well as
any applicable "blue sky" or state securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED BY THE ISSUER WITH THE SECURITIES AND EXCHANGE COMMISSION
COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
(k) The foregoing representations, warranties and agreements shall
survive the Closings.
4. PUBCO'S REPRESENTATIONS AND WARRANTIES
Pubco hereby acknowledges, agrees with and represents and warrants to each
of the undersigned, as follows:
(a) Pubco has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
has been duly authorized, executed and delivered by Pubco and is valid, binding
and enforceable against Pubco in accordance with its terms.
(b) The Units, Common Stock and Warrants to be issued to the
undersigned pursuant to this Agreement, when issued and delivered in accordance
with the terms of this Agreement, will be duly and validly issued and will be
fully paid and nonassessable.
(c) Neither the execution and delivery nor the performance of this
Agreement by Pubco will conflict with Pubco's Certificate of Incorporation, as
amended, or By-laws, or result in a breach of any terms or provisions of, or
constitute a default under, any material contract, agreement or instrument to
which Pubco is a party or by which Pubco is bound.
(d) After giving effect to the transactions contemplated by this
Agreement and immediately after the Final Closing, Pubco will have the
outstanding capital stock as described in the Memorandum.
(e) The information contained in the Memorandum is true and
correct in all material respects as of its date.
5. COVENANTS FOLLOWING THE INITIAL CLOSING
5.1 PREPARATION AND DELIVERY OF THE DRAFT FORM 8-K; WITHDRAWAL OF
SUBSCRIPTION. At least five (5) days prior to the date of closing of the Merger,
the Company shall prepare and deliver to the undersigned via overnight courier
or facsimile, a draft copy of the current report on Form 8-K (the "Draft
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Form 8-K") proposed to be filed by Pubco, which shall describe the terms and
conditions of the Merger, in accordance with the requirements of the Securities
Exchange Act of 1934 and the Accounting and Financial Reporting Interpretations
and Guidance issued by the accounting staff members of the Division of Corporate
Finance of the Securities and Exchange Commission on March 31, 2001, as the same
relates to "Reverse Acquisitions-Reporting Issues."
5.2 REGISTRATION RIGHTS; LOCK-UP.
(a) The Company shall use its reasonable best efforts to file a
registration statement (the "Registration Statement") with the Securities and
Exchange Commission (the "SEC") covering the resale of the shares of Common
Stock (including such shares into which the Warrants are exercisable) not later
than the earlier of (i) 180 days after the date of closing of the Merger or (ii)
90 days after approval for listing the Common Stock on the American Stock
Exchange or 180 days after approval for listing on the Nasdaq SmallCap Market,
whichever approval occurs first. The Company will maintain the effectiveness of
the Registration Statement through the first anniversary of the date of closing
of the Merger; PROVIDED that, if at any time or from time to time after the date
of effectiveness of the Registration Statement, the Company notifies the
undersigned in writing of the existence of a Potential Material Event (as
defined below), the undersigned shall not offer or sell any shares of Common
Stock, or engage in any other transaction involving or relating to such shares,
from the time of the giving of notice with respect to a Potential Material Event
until the Company notifies the undersigned that such Potential Material Event
either has been disclosed to the public or no longer constitutes a Potential
Material Event; PROVIDED, further that, the Company may not suspend the right of
the undersigned pursuant to this Section 5.2(a) for more than 120 days in the
aggregate. "Potential Material Event" means the possession by the Company of
material information regarding a potential transaction beneficial to the Company
or its stockholders not ripe for disclosure in a registration statement, which
shall be evidenced by determinations in good faith by the Board of Directors of
the Company that disclosure of such information in the registration statement
would be detrimental to the business and affairs of the Company.
(b) If the Company fails to (i) have the Registration Statement
declared effective by the SEC within 240 days after the date of closing of the
Merger, or (ii) subject to Section 5.2(a) and Section 5.2(c), maintain the
effectiveness of the Registration Statement through the first anniversary of the
date of the closing of the Merger, the Company shall be obligated to issue to
the undersigned additional shares of Common Stock computed as follows: on the
first day that the Company has failed to obtain the effectiveness of, or to
maintain the effectiveness of, the Registration Statement, as the case may be
(the "First Determination Date"), the Company shall determine the number of
shares of Common Stock entitled to the benefit of the registration rights set
forth in this Section 5.2 that are held by the undersigned (the "Subject
Shares") and the number of shares purchasable pursuant to Warrants held by the
undersigned (the "Subject Warrants" and, together with the Subject Shares, the
"Subject Securities"); PROVIDED, HOWEVER, that the Subject Warrants shall only
be included as Subject Securities if the closing price of the Common Stock for
the trading day immediately prior to the First Determination Date on the
principal exchange or trading system on which the Common Stock is traded is
greater than the exercise price for the Warrants. Within fifteen (15) days
following the First Determination Date, the Company shall issue to the
undersigned shares of Common Stock equal to 1% of the Subject Securities (the
"Penalty Shares"). Penalty Shares shall also be issuable upon the expiration of
each 30-day period following the First Determination Date during which the
Company has continued to fail to obtain effectiveness of, or maintain
effectiveness of, the Registration Statement, as the case may be (the expiration
date of each such 30-day period being a "Subsequent Determination Date"). The
number of Penalty Shares issuable following each Subsequent Determination Date
shall be determined and issued in accordance with this section on the same basis
applicable to the First Determination Date; PROVIDED, HOWEVER, that Penalty
Shares previously issued to the undersigned shall be excluded from the
calculation of Subject Securities. Notwithstanding the foregoing, (i) if the
Final Closing has not been consummated
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or if the undersigned is eligible to sell the shares of Common Stock pursuant to
Rule 144 under the Securities Act, no portion of the Penalty shall be issuable
to the undersigned and (ii) the Company shall not be obligated to issue to the
undersigned in respect of the Penalty an aggregate number of shares of Common
Stock greater than 10% of the Subject Securities held by the undersigned as of
the first day of the last month in which payments in respect of the Penalty are
required to be made.
(c) The Company shall notify the undersigned at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing. At the
request of the undersigned, the Company shall also prepare, file and furnish to
the undersigned a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing. Plus the undersigned agrees not to offer or
sell any shares covered by the Registration Statement after receipt of such
notification until the receipt of such supplement or amendment.
(d) The Company may request the undersigned to furnish the Company
such information with respect to the undersigned and the undersigned's proposed
distribution of shares of Common Stock pursuant to the Registration Statement as
the Company may from time to time reasonably request in writing or as shall be
required by law or by the SEC in connection therewith, and the undersigned
agrees to furnish the Company with such information.
(e) The undersigned shall not publicly sell, contract to sell or
otherwise dispose of (a "Transfer") any Securities beneficially owned by the
undersigned, including any shares of Common Stock issued upon exercise of the
Warrants; PROVIDED, HOWEVER, that following the earlier of the effective date of
the Registration Statement or one year after the date of closing of the Merger,
the undersigned may Transfer Securities at a rate of nine percent (9%) of the
undersigned's initial holdings per month, subject to applicable securities laws.
6. USE OF PROCEEDS
The Company shall use the net proceeds from the offering of the Units for
the costs of FDA clinical trials for the treatment of Presbyopia, Ocular
Hypertension and Primary Open Angle Glaucoma, salaries and related expenses and
professional fees, including auditing, legal, costs associated with the
Company's patent portfolio, public relations, SEC compliance and other public
entity expenses. Remaining net proceeds will be used for (i) working capital and
general corporate purposes, including acquisitions, (ii) cost overruns relating
to FDA clinical trials, and (iii) research and development on next-generation
products, including the SEVFL and a surgical treatment for Dry ARMD. Upon
receipt of the proceeds of this Offering from the Escrow Agent, the Company
shall deposit and maintain the net proceeds in a segregated bank account and
funds shall be released into the Company's operating account in a manner
consistent with foregoing plan and upon periodic authorization from the Board of
Directors of the Company.
7. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PROHIBITION; INDEMNITY
(a) Commencing as of the date upon which the Draft Form 8-K is
sent to the undersigned and until the filing by the Company of the Form 8-K with
the SEC, the undersigned hereby agrees to (i) refrain from (a) engaging in any
transactions with respect to the capital stock of the Company
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or securities exercisable or convertible into or exchangeable for any shares of
capital stock of the Company, and (b) entering into any transaction which would
have the same effect, or entering into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership of
the capital stock of the Company and (ii) indemnify and hold harmless the
Company, the Placement Agent, and their respective officers and directors,
employees and affiliates and each other person, if any, who controls any of the
foregoing, against any loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation
commenced or threatened or any claim whatsoever) arising out of or based upon
any violation of this Section 7 by the undersigned.
(b) The undersigned agrees to indemnify and hold harmless the
Company, the Placement Agent, the Escrow Agent and their respective officers and
directors, employees and affiliates and each other person, if any, who controls
any of the foregoing, against any loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation commenced or threatened or any claim whatsoever) arising out of or
based upon any false representation or warranty by the undersigned, or the
undersigned's breach of, or failure to comply with, any covenant or agreement
made by the undersigned herein or in any other document furnished by the
undersigned to the Company, its officers and directors, employees and its
affiliates and each other person, if any, who controls any of the foregoing in
connection with this transaction.
8. PLEDGE AND LIQUIDATED DAMAGES
8.1 PLEDGE. The undersigned hereby grants to the Company a continuing
and unconditional security interest in the Securities issuable or issued to the
undersigned at the Initial Closing and all other rights, contractual or
otherwise, now existing or hereafter arising with respect to the Securities
issuable or issued to the undersigned at the Initial Closing and all dividends,
cash, securities, instruments and other property from time to time paid, payable
or otherwise distributed in respect of or in exchange for any or all of the
undersigned's interests in such Securities to secure the prompt, timely and
complete payment of the amount payable to the Company hereunder by the
undersigned at the Final Closing. All of the certificates or agreements
evidencing the Securities issued to the undersigned at the Initial Closing will
be delivered to the Company, accompanied by a stock power in the form of Exhibit
A attached hereto and made a part hereof, duly executed in blank. So long as the
security interest granted herein is not terminated, the undersigned will keep
the Securities free of all security interests, voting trust agreements, or other
instruments and encumbrances, except the security interest granted herein. So
long as the Final Closing has not been consummated by the undersigned and the
undersigned has not failed to make payment thereat when due, the undersigned
shall be entitled to exercise any and all voting and other rights pertaining to
such Securities. The security interest granted herein shall terminate and the
Securities issued to the undersigned at the Initial Closing shall be delivered
to the undersigned, upon the earlier of (i) the timely and complete payment of
the amount payable by the undersigned to the Company at the Final Closing, and
(ii) the date the Securities are no longer subject to the lock-up provisions of
Section 5.2(e); PROVIDED, HOWEVER, that in the case of clause (ii), the security
interest shall terminate only with respect to that number of Securities as to
which the lock-up provisions have expired.
8.2 LIQUIDATED DAMAGES. The undersigned understands and acknowledges
that its failure to deliver the amount payable by the undersigned at the Final
Closing will cause serious damage to the Company and on account of the great
difficulty if not impossibility of ascertaining and proving the amount of such
damage, the undersigned authorizes and appoints the Company, as liquidated
damages sustained by the Company resulting from such nonpayment, as the
undersigned's attorney-in-fact to transfer all or any part of the Securities to
the Company. It is further agreed that such Securities, without proof of the
same, shall be deemed to represent damages actually sustained by the Company by
reason of
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such nonpayment on or prior to the Final Closing by the undersigned.
9. MISCELLANEOUS PROVISIONS
9.1 MODIFICATION. Neither this Agreement, nor any provisions hereof,
shall be waived, modified, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, modification, discharge or
termination is sought.
9.2 NOTICES. Any party may send any notice, request, demand, claim or
other communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited courier,
messenger service, fax, ordinary mail or electronic mail), but no such notice,
request, demand, claim or other communication will be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
9.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.4 BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall be binding upon, and inure to the benefit of, the parties to this
Agreement and their heirs, executors, administrators, successors, legal
representatives and assigns. If the undersigned is more than one person or
entity, the obligation of the undersigned shall be joint and several and the
agreements, representations, warranties and acknowledgments contained herein
shall be deemed to be made by, and be binding upon, each such person or entity
and his or its heirs, executors, administrators, successors, legal
representatives and assigns.
9.5 ASSIGNABILITY. This Agreement is not transferable or assignable by
the undersigned. This Agreement shall be transferable or assignable by the
Placement Agent to the Company.
9.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of law principles.
9.7 PRONOUNS. The use herein of the masculine pronouns "he," "him" or
"his" or similar terms shall be deemed to include the feminine and neuter
genders as well, and the use herein of the singular pronoun shall be deemed to
include the plural as well.
C-9
ALL SUBSCRIBERS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the undersigned has executed this Agreement on the ____ day
of ____________ 200_.
________________________ X $100,000 for each Unit = $_______________________.
Units subscribed for Aggregate Purchase Price
Manner in which Title is to be held (Please Check ONE):
1. ___ Individual 7. ___ Trust/Estate/Pension or Profit sharing Plan
Date Opened:______________
2. ___ Joint Tenants with 8. ___ As a Custodian for
Right of Survivorship ______________________________________
Under the Uniform Gift to Minors Act of
the Sate of
______________________________________
3. ___ Community Property 9. ___ Married with Separate Property
4. ___ Tenants in Common 10. ___ ▇▇▇▇▇
5. ___ Corporation/Partnership/ 11. ___ Tenants by the Entirety
Limited Liability Company
6. ___ IRA
IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
INDIVIDUAL SUBSCRIBERS MUST COMPLETE PAGE C-11.
SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE C-12.
C-10
EXECUTION BY NATURAL PERSONS
-----------------------------------------------------------------------------
Exact Name in Which Title is to be Held
---------------------------------- ----------------------------------------
Name (Please Print) Name of Additional Purchaser
---------------------------------- ----------------------------------------
Residence: Number and street Address of Additional Purchaser
---------------------------------- ----------------------------------------
City, State and Zip Code City, State and Zip Code
---------------------------------- ----------------------------------------
Social Security Number Social Security Number
---------------------------------- ----------------------------------------
Telephone Number Telephone Number
---------------------------------- ----------------------------------------
Fax Number (if available) Fax Number (if available)
---------------------------------- ----------------------------------------
E-Mail (if available) E-Mail (if available)
---------------------------------- ----------------------------------------
(Signature) (Signature of Additional Purchaser)
ACCEPTED this ___ day of _______, 200_, on behalf of Pubco.
By:
------------------------------------
Name:
Title:
C-11
EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY
(Corporation, Partnership, Trust, Etc.)
--------------------------------------------------------------------------------
Name of Entity (Please Print)
Date of Incorporation or Organization:__________________________________________
State of Principal Office:______________________________________________________
Federal Taxpayer Identification Number: ________________________________________
----------------------------------
Office Address
----------------------------------
City, State and Zip Code
----------------------------------
Telephone Number
----------------------------------
Fax Number (if available)
----------------------------------
E-Mail (if available)
By:
------------------------------------
Name:
Title:
[seal]
Attest:
-----------------------------
(If Entity is a Corporation)
----------------------------------------
Address
ACCEPTED this ____ day of __________, 200_, on behalf of Pubco.
By:
-------------------------------
Name:
Title:
C-12
EXHIBIT A
IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED,________________________ hereby sells, assigns and
transfer unto Presby Corp. or its successor and assigns, ______________________
(______) shares of common stock and warrants exercisable for _________________
(__________) shares of common stock of _____________________, a _____________
corporation, standing in the undersigned's name on the books of such corporation
represented by Certificate(s) No. __________ and Warrant(s) No. ______, and
attorney to transfer such stock and warrants on the books of such corporation
with full power of substitution in the premises.
Dated:___________________ ----------------------------------
Name:
C-13
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement"), is entered into as of
_______________, 2002, by and among a publicly-traded company which will acquire
by merger Presby Corp ("Pubco"), ______________________, an individual residing
at the address indicated on the signature page hereof (the "Subscriber"), and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, as escrow agent (the "Escrow Agent"). Pubco and the
Subscriber are sometimes referred to herein individually as a "Party" and
together as the "Parties." Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the
Subscription Agreement
(as defined below).
RECITALS
WHEREAS, Pubco and the Subscriber have entered into a
Subscription Agreement of
even date herewith (the "
Subscription Agreement") for the purchase by the
Subscriber of a number of units ("Units"), each consisting of (i) 50,000 shares
of Pubco's common stock, par value $.001 per share ("Common Stock"), and (ii) a
detachable warrant to purchase 25,000 shares of Common Stock ("Warrant");
WHEREAS, pursuant to Section 1.2 of the
Subscription Agreement, the Subscriber
is required to deliver the Aggregate Purchase Price for the Units (the "Escrowed
Funds") to the Escrow Agent, to be held and distributed by the Escrow Agent in
accordance with the terms of this Escrow Agreement; and
WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Parties and the Escrow Agent hereby agree as follows:
1. DEPOSIT AND RELEASE OF ESCROWED DOCUMENTS
1.1 RECEIPT OF TOTAL PURCHASE PRICE AND SECURITIES. On the terms and subject to
the conditions of this Escrow Agreement, the Escrow Agent agrees to receive,
deposit and hold the funds representing payment of the Aggregate Purchase Price
(the "Payment") in a special non interest-bearing bank account (the "Escrow
Account") upon delivery thereof by the Subscriber to the Escrow Agent. The date
that a Payment is received into escrow is referred to herein as a "Payment
Date." The Placement Agent shall instruct the Subscriber to remit the Payment in
the form of a check (which check must be certified if remitted during the five
(5) Business Days prior to the Closing Date) or wire transfers to the Escrow
Agent for receipt by the Escrow Agent at least two (2) Business Days before the
Closing Date. All such checks and wire transfers forwarded to the Escrow Agent
shall be accompanied by information identifying the Subscriber and the
Subscriber's social security or tax identification number and address. Wire
transfers of the Payment to the Escrow Account shall be made in U.S. federal
funds transferred as follows:
C-14
Wire Instructions for Escrow Account
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA #▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
FOR CREDIT TO:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
Escrow Account No. ▇▇▇▇▇▇▇▇
REFERENCE:
Presby Private Placement
57077.0101
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
1.2 RELEASE OF ESCROW FUNDS AND DELIVERY OF SECURITIES.
(a) In the event that the Subscriber exercises its right to revoke the
subscription pursuant to Section 2.1(a) of the
Subscription Agreement, the
Placement Agent shall provide the Escrow Agent with written notice of such
revocation (the "Revocation Notice") and, within ten (10) Business Days after
receipt of the Revocation Notice, the Escrow Agent shall (i) terminate the
escrow and (ii) distribute the Escrowed Funds to the Subscriber by check
directly to the Subscriber in accordance with the amounts deposited into escrow
by such Subscriber.
(b) The Placement Agent shall provide the Escrow Agent with written notice of
the effectiveness of the Merger (the "Notice of Merger") within one (1) Business
Day after the date of such effectiveness. In the event that the Merger is
effective on or before the date which is seventy-five (75) days after the zdate
of the
Subscription Agreement (the "Merger Deadline"), no later than the fifth
(5th) Business Day following the Escrow Agent's receipt of the Notice of Merger,
(i) the Escrow Agent shall distribute the Escrowed Funds to Pubco or as
designated by Pubco in writing, and (ii) Pubco shall direct the transfer agent
of Pubco to issue and deliver certificates representing the Shares in the name
of the Subscriber thereof to the address specified by the Subscriber in the
Subscription Agreement.
(c) In the event that the Merger is not effective on or before the Merger
Deadline, no later than the tenth (10th) Business Day after the Merger Deadline,
the Escrow Agent shall (i) terminate the escrow and (ii) distribute the Escrowed
Funds to the Subscriber by check directly to the Subscriber in accordance with
the amounts deposited into escrow by such Subscriber.
2. DUTIES AND RESPONSIBILITIES OF ESCROW AGENT
2.1 ACCEPTANCE. The Escrow Agent ▇▇▇▇▇▇ accepts its appointment and agrees to
act as escrow agent in accordance with and subject to the terms and conditions
of this Escrow Agreement.
2.2 LIMITED DUTIES. The Parties acknowledge and agree that the Escrow Agent:
(i) shall not be responsible for or bound by, and shall not be required to
inquire into whether any Party or other person is entitled to receive the
Escrowed Funds or any portion thereof pursuant to the
Subscription Agreement,
but
C-15
shall be obligated only for the performance of such duties as are specifically
set forth in this Escrow Agreement; (ii) may rely on and shall be protected in
acting or refraining from acting upon any written notice, instruction,
instrument, statement, request or document furnished to it hereunder and
believed by it in good faith to be genuine and to have been signed or presented
by the proper person, and shall have no responsibility for determining the
accuracy thereof; and (iii) may consult counsel satisfactory to it, and the
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion of such counsel. The Escrow Agent shall
not be required to inquire into the propriety of the Escrowed Funds deposited
hereunder nor shall the Escrow Agent be required to investigate any other matter
or arrangement by and among the Parties or any other person.
2.3 INDEMNITY. The Parties, jointly and severally, hereby agree to indemnify
and hold harmless the Escrow Agent and any of its employees or agents against
and in respect of any and all claims, suits, actions, proceedings (formal and
informal), investigations, judgments, deficiencies, damages, settlements,
liabilities and legal and other expenses (including reasonable legal fees and
expenses of attorneys chosen by Escrow Agent) as and when incurred arising out
of or based upon any act, omission, alleged act, or alleged omission by the
Escrow Agent, or its agents, or any other cause, in any case in connection with
the acceptance of, or the performance or non-performance by ▇▇▇▇▇▇ Agent, or its
agents, of any of the Escrow Agent's duties under this Escrow Agreement. The
Escrow Agent shall not be liable for any mistake of fact or of law or any error
of judgment, or for any act or any omission or act of negligence, other than bad
faith, gross negligence or willful misconduct (including fraud), and the Parties
waive any such claim against Escrow Agent. The Escrow Agent's duty is only to
the Company or the Parties to this Escrow Agreement and to no other person
whomsoever.
2.4 EXPENSES. The Placement Agent or Pubco, as the case may be, agrees to
reimburse the Escrow Agent for its reasonable out-of-pocket expenses (including
reasonable counsel fees) incurred in connection with the performance of its
duties and responsibilities under this Escrow Agreement.
2.5 RESIGNATION. If the Escrow Agent shall be unable to act or shall resign as
▇▇▇▇▇▇ Agent hereunder, the successor escrow agent shall be a proper entity
chosen by ▇▇▇▇▇▇ Agent in its sole discretion (the "Successor"). Escrow Agent
may at any time give written notice of its resignation (the "Resignation
Notice") to the other parties hereto. Such resignation shall take effect when
the Successor accepts in writing its appointment as Successor and receives from
Escrow Agent, the Escrowed Funds. If no Successor has been appointed and has
accepted the Escrowed Funds within five (5) days after the Resignation Notice is
sent, the Subscription Agent and the Subscriber may petition any court of
competent jurisdiction for the appointment of a Successor. Such court may
thereupon appoint a Successor after Escrow Agent deposits the Escrowed Funds
into such court and after such notice, if any, to the other parties hereto as
the court may deem proper and prescribe. This Escrow Agreement shall not
otherwise be assignable without the prior written consent of the other parties
hereto.
2.6 NO INTEREST. The Escrow Agent does not have and will not have any interest
in the Escrowed Funds, but is serving only as stakeholder, having only
possession thereof.
2.7 EXCLUSIVE DUTIES. This Escrow Agreement sets forth exclusively the duties
of the Escrow Agent with respect to any and all matters pertinent thereto and no
implied duties or obligations shall be read into this Escrow Agreement.
2.8 COUNSEL. The Parties acknowledge that the Escrow Agent is acting as counsel
to Pubco in connection with the transactions contemplated by the Subscription
Agreement, and the Parties agree that neither this Escrow Agreement nor the
Escrow Agent's duties or actions as escrow agent hereunder shall prohibit the
Escrow Agent from acting or continuing to act as legal counsel for Pubco in
connection with
C-16
the transactions contemplated by the Subscription Agreement and/or in connection
with any dispute which may arise out of this Escrow Agreement.
3. DISPUTE RESOLUTION
It is understood and agreed that if any dispute shall arise with respect to the
delivery, ownership, right of possession or disposition of the Escrowed Funds,
or any portion thereof, or if the Escrow Agent shall in good faith be uncertain
as to its duties or rights hereunder, the Escrow Agent shall be authorized,
without liability to anyone, to (i) refrain from taking any action other than to
continue to hold the Escrowed Funds pending receipt of joint written instruction
signed by each of the Parties, or (ii) deposit the Escrowed Funds with any court
of competent jurisdiction located in the State of
New York or any Federal Court
located in the State of
New York, in which event the Escrow Agent shall give
written notice thereof to each of the Parties and thereupon the Escrow Agent
shall be relieved and discharged from all further obligations pursuant to this
Escrow Agreement. The Escrow Agent may, but shall be under no duty whatsoever
to, institute or defend any legal proceedings which relate to the Escrowed
Funds. The Escrow Agent shall have the right to retain counsel if it becomes
involved in any disagreement, dispute or litigation on account of this Escrow
Agreement or otherwise determines that it is necessary to consult counsel.
4. NOTICES
Unless otherwise provided, any notice, consent, approval, authorization, waiver
or other communication required or permitted under this Escrow Agreement shall
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be notified, on the next business day after delivery to a
nationally recognized overnight courier service, upon confirmation of receipt of
a facsimile transmission or five (5) days after deposit with the United States
Post Office, by registered or certified mail, postage prepaid, and addressed to
the party to be notified at the address or facsimile number indicated below for
such party, or at such other address as such party may designate upon written
notice to the other parties (except that notice of change of address shall be
deemed given upon receipt). A copy of any notice given by the Placement Agent or
the Subscriber to the Escrow Agent pursuant to this Escrow Agreement shall be
given simultaneously to the other Party. A copy of any notice given by the
Escrow Agent pursuant to this Escrow Agreement to any Party shall be given
simultaneously to each other Party.
(a) In the case of Pubco or the Placement Agent:
▇▇▇▇▇ ▇▇▇▇▇▇▇ Financial, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
(b) In the case of the Subscriber, at the address set forth on the
signature page hereto; and
(c) In the case of the Escrow Agent to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
C-17
The MetLife Building
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
5. MISCELLANEOUS PROVISIONS
5.1 ENTIRE AGREEMENT. This Escrow Agreement and the Subscription Agreement
between the Placement Agent and the Subscriber constitute the entire agreement
among the parties with respect to the subject matter hereof, and supersede all
prior and contemporaneous arrangements or understandings with respect thereto,
whether written or oral.
5.2 AMENDMENTS AND WAIVERS. Any term of this Escrow Agreement may be amended
and the observance of any term of this Escrow Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by an instrument in writing and signed by the Party against
whom such amendment or waiver is sought to be enforced. The duties of the Escrow
Agent under this Escrow Agreement may not be altered, amended, modified or
revoked except by an instrument in writing executed by the Escrow Agent and each
of the Parties.
5.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, the
terms and conditions of this Escrow Agreement shall inure to the benefit of and
be binding upon the respective successors and assigns of the parties. Nothing in
this Escrow Agreement, express or implied, is intended to confer upon any person
or entity other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Escrow Agreement, except as may be expressly provided in this Escrow
Agreement.
5.4 GOVERNING LAW. This Escrow Agreement, including the validity hereof and the
rights and obligations of the parties hereunder, and all amendments and
supplements hereof and all waivers and consents hereunder, shall be governed by
and construed in accordance with the laws of the State of
New York, without
giving effect to conflicts of law principles.
5.5 SEVERABILITY. If any provision of this Escrow Agreement shall be adjudged
by a court to be invalid or unenforceable, the same shall in no way affect any
other provision of this Escrow Agreement, the application of such provision in
any other circumstances or to any other party, or the validity or enforceability
of this Escrow Agreement.
5.6 COUNTERPARTS. This Escrow Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.7 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Subscription Agent and
the Subscriber hereby irrevocably consent to the jurisdiction of the courts of
the State and County of
New York and of any Federal Court located in the State
and County of
New York, each as may have competent jurisdiction, in connection
with any action, suit or other proceeding arising out of or relating to this
Escrow Agreement or any action taken or omitted hereunder, waive personal
service of any summons, complaint or other process and agree that the service
thereof may be made by certified or registered mail directed to such person at
such person's address for purpose of notice hereunder.
C-18
5.8 JUDGMENTS. The Escrow Agent is hereby expressly authorized to comply with
and obey any order, judgment or decree of a court of competent jurisdiction. In
case the Escrow Agent obeys or complies with any such order, judgment or decree,
the Escrow Agent shall not be liable to any of the Parties or to any other
person, firm, corporation or entity by reason of such compliance,
notwithstanding that any such order, judgment or decree may be subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
into without jurisdiction.
5.9 TERMINATION OF ESCROW AGREEMENT. This Escrow Agreement shall terminate and
the Escrow Agent shall have no further duties hereunder upon the earlier to
occur of (i) the termination of the Subscription Agreement or (ii) the
distribution of all of the Escrowed Funds pursuant to the terms and conditions
hereof.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the
date first above written.
PUBCO:
By:
-----------------------------
Name:
Title:
ESCROW AGENT:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
By:
-----------------------------
Name:
Title:
SUBSCRIBER:
--------------------------------
Name:
--------------------------
Address:
-----------------------
--------------------------------
--------------------------------
C-19