EXHIBIT 2.0
SUBSCRIPTION AGREEMENT made on this 8th day of February, 1999,
between MAS Acquisition VI Corp., an Indiana corporation (the "Company"),
and the undersigned subscriber (the "Subscriber").
The Company desires to obtain financing by selling restricted shares
of Common Stock of the Company (the "Shares"). The Subscriber desires to
purchase the number of Shares at a price of $0.0015 per Share as set forth
on the signature page hereof.
NOW, THEREFORE, for and in consideration of the promises and the
mutual covenants hereinafter set forth, the parties hereto do hereby agree
as follows:
I. SUBSCRIPTION FOR SHARES
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase the
number of Shares from the Company set forth upon the signature
page hereof, and the Company agrees to sell such Shares to the
Subscriber at a purchase price of $0.0015 per Share on the terms
and conditions stated herein.
1.2 The purchase price is payable by check made payable to the order
of "MAS Acquistion VI Corp." payable within 30 days from the
date of subscription. If the Company declines to accept this
subscription, the Company will return such funds to the
undersigned without interest thereon or deduction therefrom.
II. REPRESENTATIONS BY THE SUBSCRIBER
2.1 The Subscriber hereby represents and warrants to the Company as
follows:
(a) The Common Stock are being purchase for his own account,
for investment purposes only, not for the account of any
other person, and not with a view to distribution,
assignment or resale to others or to fractionation, in
whole or in part. The Subscriber acknowledges that the
offering and sale of the Shares has not been filed with or
reviewed by the Securities and Exchange Commission (the
"SEC") because of the Company's representations that this
is intended to be a non-public offering pursuant to
Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act").
(b) The Subscriber agrees that he will not sell, transfer or
otherwise dispose of any of the Shares unless they are
registered under the Securities Act or unless an exemption
from such registration is available. The Subscriber must
receive prior approval from the Company should he desire to
transfer the securities. The request must be accompanied by
an opinion of counsel reasonably satisfactory to the
Company that the proposed sale, transfer or disposition
does not result in a violation of the Securities Act or
any applicable state "blue sky" laws (collectively, the
"Securities Laws"). The Subscriber agrees to hold the
Company and its directors, executive officers and
controlling persons and their respective heirs,
representatives, successors and assigns harmless and to
indemnify them against all liabilities, costs and expenses
incurred by them as a result of any sales, transfer or
disposition of the Securities by the undersigned Subscriber
in violation of any Securities Laws or any misrepresentation
herein.
(c) The Company has made available to the Subscriber in
connection with this transaction, at Subscriber's request,
all S.E.C. filings including, but not limited to, its 10-KSB
for the year ended December 31, 1998 and various Offering
Documents. To the extent the Company possessed such
information or could acquire it without unreasonable effort
or expense, the Company has made available to the Subscriber
for his inspection and review all other documents, records,
books and other information that he has requested relating
to an investment in the Company. The Subscriber understands
the "Risk Factors" set forth in the Offering Documents.
(d) The Subscriber represents that he is an "accredited investor".
(e) The Subscriber represents that he has significant prior
investment experience, including investment in non-listed
and non-registered securities and that he recognizes the
highly speculative nature of this investment.
(f) The Subscriber acknowledges and agrees that the Company is
relying on the Subscriber's representations contained in this
Agreement and the related subscription documents in
determining whether to accept this subscription. The Company
reserves the unrestricted right to reject or limit any
subscription and to close the offer at any time.
(g) All representations are true and correct in all material
respects as of the date of execution hereof, and the
Subscriber covenants that until the closing of the Shares
subscribed for, he shall inform the Company immediately of
any changes in any of the representations provided by the
Subscriber hereunder.
2.2 The Subscriber acknowledges and is aware that:
(a) No federal or state agency has passed upon the Securities
or made any finding or determination as to the fairness of
this investment, nor any recommendation or endorsement of
the Securities.
(b) The certificates evidencing the Shares will contain the
following or a substantially similar legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, (THE ACT), AND
ARE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE
144 UNDER THE ACT.
(c) The purchase of the Shares involves a high degree of risk
and is suitable only for persons of adequate financial means
who have no need for liquidity in this investment in that
(i) such persons may not be able to liquidate their
investment in the event of an emergency; (ii)
transferability is extremely limited; and (iii) in the event
of a required disposition, such persons could sustain a
complete loss of their entire investment.
(d) The Subscriber understands the risks involved and has
carefully evaluated such risks and other considerations,
relating to the purchase of the Shares. The Subscriber (i)
has adequate means of providing for his current needs and
contingencies, (ii) has no need of his investment, (iii) is
able to bear the substantial economic risks of an investment
in the Shares for an indefinite period, and (iv) at the
present time, can afford a complete loss of such investment.
2.3 Indemnification.
The Subscriber recognizes that the sale of the Shares to him will be
based upon his representations and warranties set forth above and on other
written information supplied by the Subscriber to the Company. The
Subscriber agrees to indemnify and to hold harmless the Company, and its
affiliates from and against any and all loss, damage, liability or expense,
including costs and reasonable attorney's fees, arising out of or based
upon any false representation or warranty made by the Subscriber in this
Subscription Agreement and/or any failure by the Subscriber to fulfill any
covenants or agreements set forth herein or in the other documents executed
and delivered by him in connection with this transaction.
REPRESENTATIONS BY THE COMPANY
3.1 The Company represents and warrants to the Subscriber as
follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Indiana.
(b) The execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors
of the Company.
(c) The Common Stock has been duly authorized and when paid for
and issued pursuant to the terms hereof, will be validly
issued, fully paid and non-assessable.
IV. TERMS OF OFFERING
The subscription period will end on midnight March 31, 1999.
V. REGISTRATION RIGHTS
The Company has no obligation to the Subscriber to include all Shares
sold in this offering in its registration statement under the Securities
Act for purposes of effecting a public offering of securities of the
Company (including, but not limited to, registration statements relating
to secondary offerings of securities of the Company, but excluding
registration statements relating to any employee benefit plan or a
corporate reorganization).
VI. NOTICES TO SUBSCRIBERS
6.1 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT, OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED
AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENT OF THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING
OR THE ACCURACY OR ADEQUACY OF THE OFFERING DOCUMENTS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
6.2 THESE SECURITIES ARE SUBJECT TO RESTRICTION ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT, AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
SUBSCRIBERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
6.3 SUBSCRIBERS SHOULD REVIEW THE OFFERING DOCUMENTS WHEREIN NOTICES
TO SUBSCRIBERS RESIDING IN CERTAIN STATES ARE SET FROTH IN
ACCORDANCE WITH SECURITIES LAWS OF SUCH STATES.
VII. RISK FACTORS
AN INVESTMENT IN THE SECURITIES BEING OFFERED HEREBY IS HIGHLY
SPECULATIVE, INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE MADE ONLY BY
INVESTORS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. PROSPECTIVE
INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION, SHOULD CAREFULLY
CONSIDER, TOGETHER WITH OTHER MATTERS REFERRED TO HEREIN, INCLUDING THE
FINANCIAL STATEMENTS AND NOTES THERETO, THE FOLLOWING RISK FACTORS. IT
MUST BE RECOGNIZED THAT OTHER UNFORESEEN RISKS MIGHT ARISE IN THE FUTURE
AND AFFECT THE COMPANY TO A GREATER EXTENT THAN COULD EVER BE ANTICIPATED.
THE OFFERING DOCUMENTS CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD-
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THESE STATEMENTS APPEAR IN A NUMBER OF
PLACES IN THE OFFERING DOCUMENTS AND INCLUDE STATEMENTS REGARDING THE
INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE COMPANY, WITH RESPECT TO (I)
THE COMPANY'S FINANCING PLANS, (II) TRENDS AFFECTING THE COMPANY'S
FINANCIAL CONDITION OR RESULTS OF OPERATIONS, (III) THE IMPACT OF
COMPETITION AND (IV) THE EXPANSION OF CERTAIN OPERATIONS. PROSPECTIVE
INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT
GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES,
AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE IN THE FORWARD-
LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. THE FOLLOWING
INFORMATION IDENTIFIES IMPORTANT FACTORS THAT COULD CAUSE SUCH
DIFFERENCES.
NO OPEATING HISTORY, REVENUE AND ASSETS. The Company has had no
operating history nor any revenues or earnings from operations. The Company
has little or no tangible assets or financial resources. The Company will,
in all likelihood, continue to sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss
which will increase continuously until the Company can consummate a
business combination with a profitable business opportunity. There is no
assurance that the Company can identify such a business opportunity and
consummate such a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success of
the Company's proposed plan of operation will depend to a great extent on
the operations, financial condition and management of the identified
business opportunity. While management intends to seek business
combination(s) with entities having established operating histories, there
can be no assurance that the Company will be successful in locating
candidates meeting such criteria. In the event the Company completes a
business combination, of which there can be no assurance, the success of
the Company's operations may be dependent upon management of the successor
firm or venture partner firm and numerous other factors beyond the
Company's control.
STATE BLUE SKY REGISTRATION; RESTRICTED RESALES OF THE SECURITIES
Transferability of the shares of Common Stock of the Company is very
limited because a significant number of states have enacted regulations
pursuant to their securities or so-called "blue sky" laws restricting or,
in many instances, prohibiting, the initial sale and subsequent resale of
securities of "blank check" companies such as the Company within that
state. In addition, many states, while not specifically prohibiting or
restricting "blank check" companies, would not register the securities of
the Company for sale or resale in their states. Because of these
regulations, the Company currently has no plan to register any securities
of the Company with any state. To ensure that any state laws are not
violated through the reales of the securities of the Company, the Company
will refuse to register the transfer of any securities of the Company, to
residents of any state, which prohibit such resale or if no exemption is
available for such resale. It is not anticipated that a secondary trading
market for the Company's securities will develop in any state until
subsequent to consummation of a Business Combination, if at all.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with
and acquisitions of small private and public entities. A large number
of established and well-financed entities, including venture capital firms,
are active in mergers and acquisitions of companies which may be desirable
target candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently, the Company
will be at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination.
Moreover, the Company will also compete in seeking merger or acquisition
candidates with numerous other small public companies.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no arrangement,
agreement or understanding with respect to engaging in a merger with,
joint venture with or acquisition of, a private or public entity. There
can be no assurance the Company will be successful in identifying and
evaluating suitable business opportunities or in concluding a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluation by the Company.
There is no assurance the Company will be able to negotiate a business
combination on terms favorable to the Company. The Company has not
established a specific length of operating history or a specified level
of earnings, assets, net worth or other criteria which it will require
a target business opportunity to have achieved, and without which the
Company would not consider a business combination in any form with such
business opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no significant
operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company
has neither conducted, nor have others made available to it, results of
market research indicating that market demand exists for the
transactions contemplated by the Company. Moreover, the Company does
not have, and does not plan to establish, a marketing organization.
Even in the event demand is identified for a merger or acquisition
contemplated by the Company, there is no assurance the Company will be
successful in completing any such business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations, even
if successful, will in all likelihood result in the Company engaging in
a business combination with a business opportunity. Consequently, the
Company's activities may be limited to those engaged in by business
opportunities which the Company merges with or acquires. The Company's
inability to diversify its activities into a number of areas may subject
the Company to economic fluctuations within a particular business or
industry and therefore increase the risks associated with the Company's
operations.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company Act of
1940, insofar as the Company will not be engaged in the business of
investing or trading in securities. In the event the Company engages in
business combinations which result in the Company holding passive
investment interests in a number of entities, the Company could be
subject to regulation under the Investment Company Act of 1940. In such
event, the Company would be required to register as an investment
company and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination from
the Securities and Exchange Commission as to the status of the Company
under the Investment Company Act of 1940 and, consequently, any violation
of such Act would subject the Company to material adverse consequences.
POTENTIAL REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING
BUSINESS COMBINATION. The Company's primary plan of operation is based
upon a business combination with a private concern which, depanding on
the terms of merger or acquisition, may result in the Company issuing
securities to shareholders of any such private company. The issuance
of previously authorized and unissued Common Shares of the Company would
result in reduction in percentage of shares owned by present and
prospective shareholders of the Company and may result in a change in
control or management of the Company.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into
a business combination with an entity that desires to establish a public
trading market for its shares. A business opportunity may attempt to
avoid what it deems to be adverse consequences of undertaking its own
public offering by seeking a business combination with the Company.
Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such
an offering, loss of voting control to public shareholders and the
inability or unwillingness to comply with various federal and state
laws enacted for the protection of investors.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Currently, such transactions may be structured
so as to result in tax-free treatment to both companies, pursuant to
various federal and state tax provisions. The Company intends to
structure any business combination so as to minimize the federal and
state tax consequences to both the Company and the target entity;
however, there can be no assurance that such business combination will
meet the statutory requirements of a tax-free reorganization or that
the parties will obtain the intended tax-free treatment upon a transfer
of stock or assets. A non-qualifying reorganization could result in
the imposition of both federal and state taxes which may have an
adverse effect on both parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Section 13 and 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), require companies subject
thereto to provide certain information about significant acquisitions,
including certified financial statements for the company acquired,
covering one, two or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some
target entities to prepare such statements may preclude consummation of
an otherwise desirable acquisition by the Company. Acquisition prospects
that do not have or are unable to obtain the required audited financial
statements may not be appropriate for acquisition so long as the
reporting requirements of the 1934 Act are applicable.
VIII. MISCELLANEOUS
7.1 Any notice or other communication give hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail,
return receipt requested, addressed to the Company at MAS Acquisiton
VI Corp., c/o Xxxxx Xxxx, President, at 0000 X. Xxxxxxxx Xx., Xxxxxxxxxx,
XX 00000, and to the Subscriber at his address indicated on the last
page of this Agreement. Notices shall be deemed to have been given on
the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
7.2 This Agreement shall not be changed, modified, or amended except by
a writing signed by the parties to be charged, and this Agreement may
not be discharged except by performance in accordance with its terms or
by a writing signed by the party to be charged.
7.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement set forth the entire agreement
and understanding between the parties as to the subject matter thereof
and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
7.4 This Agreement and its validity, construction and performance shall
be governed in all respects by the laws of the State of Indiana.
7.5 This Agreement may be executed in counterparts. Upon the execution
and delivery of this Agreement by the Subscriber, this Agreement shall
become a binding obligation of the Subscriber with respect to the
purchase of the Shares as herein provided.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
MAS Acquisition VI Corp.
/s/ Xxxxx Xxxx
By:_____________________
Xxxxx Xxxx, President
2-1-1999
Date:____________________
Please register the Shares which I am purchasing as follows:
Name: Xxx Xxxxxxx Xxxxxxx, K.B.E.
----------------------------
as (check one):
_X_Individual ___Tenants-in Common ___Existing Partnership
___Joint Tenants ___Corporation ___Trust
___Minor with adult custodian under the Uniform Gift to Minors Act
For the person(s) who will be registered shareholder(s):
Xxx Xxxxxxx Xxxxxxx, K.B.E. 6,850,000
___________________________ _______________________________
Name Number of Shares Subscribed for
at $0.0015 per Share
X.X. Xxx 000
___________________________
Address
Goroka Paupua New Guinea N/A
___________________________ _______________________________
City State Zip Social Security or Taxpayer ID
/s/ Xxxxxxx Xxxxxxx 2-1-1999
___________________________ _______________________________
Signature Date
