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EXHIBIT 10.18
FORM OF
XXXXXXXXXX.XXX, INC.
SUBSCRIPTION AGREEMENT
If and when accepted by XxxxXxxxxx.Xxx, Inc. (the "COMPANY"),
this Subscription Agreement will be a binding subscription by the undersigned
person (the "INVESTOR") to purchase the number of shares of the ____________
stock of the Company (the "SHARES") set forth on the signature page hereof. Each
part of this Subscription Agreement must be completed by the Investor and, by
execution hereof, the Investor acknowledges that the Company is relying upon the
accuracy and completeness hereof in complying with its obligations under
applicable securities laws.
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THE CAPITAL STOCK REFERRED TO HEREIN HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS, AND CANNOT
BE RESOLD UNLESS SUBSEQUENTLY REGISTERED UNDER THE ACT AND SUCH LAWS OR UNLESS
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
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THIS SUBSCRIPTION AGREEMENT, is made and entered into by and
between the Company and the Investor with respect to the Investor's purchase of
the Shares.
In consideration of the mutual representations and warranties
set forth herein and the Company's agreement to sell to the Investor the number
of Shares set forth below, upon the terms and conditions set forth herein, the
Investor and the Company agrees and represent as follows:
1. SUBSCRIPTION
1.1. PURCHASE OF SHARES
The Investor hereby subscribes to purchase the number of
Shares set forth below at a price of $_______ per Share. Simultaneously with the
execution of this Subscription Agreement, the Investor is paying to the Company
the amount set forth on the signature page below. Except as otherwise provided
by law, the Investor may revoke this subscription only if, prior to the date of
its acceptance by the Company and the same of the Shares, the Investor notifies
the Company of such revocation in writing.
1.2 ACCEPTANCE AND IRREVOCABILITY OF SUBSCRIPTION; BINDING OBLIGATION
The Investor understand and acknowledges that:
(a) This subscription may be accepted or rejected in whole or
in part by the Company in its sole and absolute discretion, and, in the event
that the Investor's subscription is
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not accepted, the Investor's subscription payment shall be returned promptly to
the Investor and this Agreement shall be terminated for all purposes.
(b) Except as otherwise provided by law, this subscription is
irrevocable and this Subscription Agreement constitutes a valid and binding
obligation of the Investor, enforceable in accordance with its terms, except
that the Investor shall have no obligations hereunder in the event that this
subscription is for any reason or the offering of the Shares is for any reason
canceled or terminated.
1.3. UNREGISTERED ISSUANCE OF SHARES; RESTRICTED SECURITIES
The Investor understands and acknowledges that:
(a) No federal or state agency has made any finding or
determination as to the fairness of this offering for investment, not any
recommendation or endorsement of the Shares.
(b) Since the Shares have not been registered under the
Securities Act of 1933, as amended, (the "ACT") or applicable state securities
laws, the economic risk of the investment must be borne indefinitely by the
Investor, and the Shares cannot be sold by the Investor unless subsequently
registered under the Act and such laws or unless an exemption from such
registration is available. There is no assurance that the Shares will ever be so
registered in the future. The Company is not obligated to file a notification
under Regulation A of the Act or a registration statement under the Act with
respect to the Shares. Rule 144, adopted under the Act, governing the possible
disposition of the Shares, is not currently available, there is no assurance
that Rule 144 will be available in the future, and the Company has not
covenanted with the Investor to take any action necessary to make Rule 144
available for a limited resale of the Shares. There is no assurance that there
will be any market for resale of the Shares.
(c) The certificates representing the Shares will bear a
legend indication the restriction on transfers to which the Shares are subject,
and any transfer agent employed or utilized by the Company shall be instructed
not to effect transfer of the Shares without prior written authorization from
the Company (or if the Company serves as its own transfer agent, a notation will
be made in the Company's records indicating the transfer restrictions to which
the Shares are subject).
(d) The Company is relying upon the Investor's representations
that the Investor meets the criteria for investment set forth below and upon the
information and representations concerning the Investor in this Agreement. The
Investor affirms that all such information is accurate and complete and may be
relied upon in determining whether the Investor is qualified to participate in
this offering and otherwise for purposes of determining the availability of an
exemption from registration for the offer and sale of the Shares.
1.4. STOCKHOLDERS' AGREEMENT
Upon acceptance of his subscription by the Company, the
Investor will be required to execute the Stockholders' Agreement among the
Company and its stockholders (the "STOCKHOLDER' AGREEMENT") prior to his receipt
of the certificates representing the shares purchased pursuant hereto. The
Investor hereby represents and warrants that he has read and understands the
Stockholders' Agreement, including the provisions that impose significant
restrictions on the transfer, pledge or other disposition of the Shares.
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2. COMPANY REPRESENTATIONS AND WARRANTIES
The Company hereby represents, warrants and agrees that:
2.1. ORGANIZATION AND STANDING
The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Georgia and has the full and
unrestricted corporate power and corporate authority to execute and deliver this
Agreement and to carry out the transactions contemplated hereby. The Company is
qualified and in good standing as a foreign corporation in every jurisdiction
where the nature of its business or the character of its properties makes such
qualification necessary. The Company has the full and unrestricted corporate
power and corporate authority to own, operate and lease its properties and to
carry on its business.
2.2. AUTHORIZATION
The execution, delivery and performance of this Agreement by
the Company, the fulfillment of and the compliance with the respective terms and
provisions hereof and the due consummation of the transaction contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of the Company (none of which actions have been modified or
rescinded, and all of which actions are in full force and effect).
2.3. BINDING OBLIGATION
When executed by the Company, the Subscription Agreement
(including these representations and warranties) will constitute a valid and
binding obligation of the Company, enforceable in accordance with its terms.
2.4. TITLE TO STOCK
Upon acceptance by the Company of this Subscription Agreement,
payment of the purchase price and delivery by the Company to the Investor of
certificates for the Shares, the Shares will be duly authorized, validly issued
and outstanding, fully paid and nonassessable, and the Investor will acquire
good, valid and marketable title thereto, free and clear of all mortgages,
liens, pledges, charges, claims, security interests, agreements, encumbrances
and equities whatsoever, except as provided in the Stockholders' Agreement
entered into among the Company and its stockholders.
2.5. LITIGATION
There are no claims, actions, suits, proceedings or
investigation pending or threatened or reasonably anticipated against or
affecting the Company or any of its assets or business or this Subscription
Agreement, at law or in equity, by or before any court, arbitrator or
governmental authority, domestic or foreign, except those that should not have a
material adverse effect on the Company and except for pending or anticipated
federal, state, and local regulatory proceedings involving or affecting the
Company.
2.6. CONSENTS
The Company is not subject to any law, ordinance, regulation,
rule, order, judgment, injunction, decree, charter, bylaw, contract, commitment,
lease, agreement, instrument or other restriction or any kind that would prevent
the Company's consummation of this Subscription Agreement or any of the
transactions contemplated hereby without the consent of any third party, that
would require the consent of
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any third party to the consummation of this Subscription Agreement or any of the
transactions contemplated hereby, or that would result in any penalty,
forfeiture or other termination as a result of such consummation (except, in
each case, to the extent that consents and/or waivers have been obtained).
2.7. ABSENCE OF VIOLATION
Neither the execution or delivery of this Subscription
Agreement nor the consummation of the transactions contemplated hereby
constitutes a violation or default under or conflicts with, or will result in
the creation of any encumbrance of any of the assets owned by the Company under,
any term or provision of the Articles of Incorporation or Bylaws of the Company,
or any material contract, commitment, lease, instrument, or agreement to which
the Company is a party or by which the Company is bound.
3. INVESTOR REPRESENTATIONS AND WARRANTIES
The Investor hereby represents, warrants and agrees that:
3.1. INVESTMENT INTENT
The Investor is acquiring the Shares for his own account as
principal, for investment, and not with a view to resale or distribution. The
Investor agrees not to sell, hypothecate or otherwise dispose of the Shares
unless such Shares have been registered under the Act and applicable state
securities laws or an exemption from registration requirements of the Act and
such laws is available.
3.2. QUALIFICATION OF INVESTOR
(a) The Investor is an executive officer or director of the
Company. The Investor's overall commitment to investments that are not readily
marketable is reasonable in relation to his net worth, and his acquisition of
the Shares will not cause such overall commitment to become excessive. The
Investor has adequate net worth and means of providing for his current needs and
personal contingencies to sustain a complete loss of his investment in the
Company, and he has no need for liquidity in his investment in the Shares. The
Investor is capable of understanding and has evaluated the merits and risks of
investing in the Company. The Investor is aware that his right to transfer the
Shares is restricted by the Stockholders' Agreement, the Act, and applicable
state securities laws, and of the absence of a market for the Shares. The
Investor has substantial experience in making investment decisions of this type.
If needed, the Investor has discussed with his professional legal, tax and/or
financial advisors the suitability of an Investment in the Company for his
particular tax and financial situation.
(b) All information that the Investor has provided to the
Company concerning himself and his financial position is correct and complete as
of the date set forth below, and if there should be any material change in such
information prior to sale of the Shares to the Investor, he will immediately
provide such changed information to the Company.
3.3. RECEIPT AND REVIEW OF CERTAIN INFORMATION
The Investor has had the opportunity to ask questions of the
officers of the Company concerning the Company, the terms and conditions of the
offering, and an investment in the Shares. The Company has made available to him
and/or his attorney, accountant, or investor representative all documents that
he or they have requested relating thereto and has
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provided answers to all of such questions. In evaluating the suitability of an
investment in the Shares, the Investor has not relied upon any representations
or other information (whether oral or written) other than as contained in any
documents or written answers to questions so furnished to him by the Company.
The Investor also understands and acknowledges that the Company cannot provide
assurances with respect to any projections or predictions as to the future
business or financial performance of the Company.
3.4. RISK ASSOCIATED WITH INVESTMENT IN THE SHARES
THE INVESTOR RECOGNIZES THAT AN INVESTMENT IN THE COMPANY
INVOLVES A HIGH DEGREE OF RISK, AND HE HAS TAKEN FULL COGNIZANCE OF AND
UNDERSTANDS ALL OF THE RISK FACTORS RELATED TO THE PURCHASE OF THE SHARES.
3.5. ACCURACY OF INVESTOR'S REPRESENTATIONS, WARRANTIES, AND AGREEMENTS
The representations, warranties, and statements of the
Investor set forth in this Agreement (including, without limitation, in Appendix
A hereto) are true and accurate as of the date hereof and shall be true and
accurate as of the date of the acceptance hereof by the Company and the sale of
the Shares to the Investor. If in any respect such representations, warranties,
and agreements shall not be true and accurate at any time prior thereto, the
Investor promptly shall give written notice of such fact to the Company
specifying which representations, warranties, and agreements are not true and
accurate and the reasons thereof.
4. INDEMNIFICATION
The Investor agrees to indemnify the Company and each officer
and director of the Company against any and all liability, costs, and expenses
arising out of or resulting from any misrepresentation, breach of warranty or
breach of covenant by the Investor contained herein or with respect to any
offer, sale, distribution, or other disposition of the Shares or any
solicitation of any offer to buy, purchase, or otherwise acquire the Shares
acquired by the Investors hereunder.
5. MISCELLANEOUS
5.1. PRONOUNS
All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, neuter or plural as the identity of
the person or persons may require.
5.2. NOTICES
Notices required or permitted to be given hereunder shall be
in writing and shall be deemed to be sufficiently given when personally
delivered (including delivery by an express or overnight delivery service), when
received by facsimile transmission or when sent by registered mail, return
receipt requested, addressed, if to the Investor, at the address appearing on
the signature page hereof, and if to the Company, at the address of its
principal offices in Atlanta, Georgia, or to such other address as may be
furnished from time to time by notice given in accordance with this Section.
5.3. WAIVER
Failure of the Company to exercise any right or remedy under
this Subscription Agreement, or delay by the Company in exercising same, will
not operate as a waiver thereof.
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No waiver by the Company will be effective unless and until it is in writing and
signed by the Company.
5.4. GOVERNING LAW
This Subscription Agreement shall be enforced, governed and
construed in accordance with the laws of the State of Georgia (but not including
the choice-of-law rules thereof). This Subscription Agreement and the rights,
powers and duties set forth herein shall be binding upon the Investor, his
heirs, estate, legal representatives, successors and assigns, and shall inure to
the benefit of the Company, its successors and assigns. In the event that any
provision of this Subscription Agreement is invalid or unenforceable under any
application statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provisions hereof
which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability or any other provision hereof.
IN WITNESS WHEREOF, the Investor has executed this Agreement
as of the date set forth below.
Dated , 1999
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Signature of Investor
The foregoing Subscription is accepted as of _______ ___, 1999.
XXXXXXXXXX.XXX, INC.
By
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Name:
Title:
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APPENDIX A
ADDITIONAL INFORMATION TO BE COMPLETED BY INVESTOR:
(Please print or type)
NUMBER OF SHARES SUBSCRIBED FOR: __________ Shares
TOTAL PRICE OF SHARES SUBSCRIBED FOR: $ _________
INVESTOR'S RESIDENCE ADDRESS: ___________________________
___________________________
___________________________
Telephone: ___________________________
INVESTOR'S BUSINESS ADDRESS: ___________________________
___________________________
___________________________
Telephone: ___________________________
LIST THE STATE IN WHICH INVESTOR CURRENTLY:
Votes: ___________________________
Files state income tax returns: ___________________________
Maintains a driver's license: ___________________________
INVESTOR'S TAXPAYER ID/SOCIAL SECURITY NUMBER: _______________________
EMPLOYER AND POSITION:
(Identify current employer and position, and also list previous employers and
positions since January 1, 1993.)
________________________________________________________________
________________________________________________________________
________________________________________________________________
SEND CORRESPONDENCE TO INVESTOR'S: Home: _____________ Office: ___________
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INVESTOR'S UNDERGRADUATE AND ANY POSTGRADUATE EDUCATION AND DEGREES:
Year
School Degree Received
________________________________________________________________
________________________________________________________________
________________________________________________________________
ADDITIONAL QUESTIONS AND INFORMATION:
1. Have you, or has any partnership of which you were a general partner,
even been subject to bankruptcy, reorganization, or debt restructuring?
Yes ___ No ___. If yes, please describe.
________________________________________________________________
2. Are you involved in any litigation which if any adverse decisions
occurred would adversely affect your financial condition? Yes ___
No ___. If yes, please describe.
________________________________________________________________
3. Have you even been refused a letter of credit or a surety contract
which supported your payments under any debt obligations within the
last two years? Yes ___ No ___. If yes, please describe.
________________________________________________________________
4. Please describe the nature of any securities in which you have
previously invested (e.g., marketable or restricted stock, bonds or
debentures, limited partnership interests, etc.):
________________________________________________________________
________________________________________________________________
5. Please indicate in the space provided below any additional information
which you think may be helpful in enabling the Company to determine
whether your knowledge and experience in financial and business matters
is sufficient to enable you to evaluate the merits and risks of this
investment.
________________________________________________________________
________________________________________________________________
________________________________________________________________
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Schedule to Exhibit 10.18
The following table sets forth the officer or director who entered into a
subscription agreement substantially similar to Exhibit 10.18, and the number of
shares, class of stock and per share purchase price set forth in such person's
agreement:
Name Number of Shares Class of Stock Price Per Share
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Xxxxx Xxxxxxxx 100,000 Class A Preferred $1.50
Xxxxxxx Xxxxxx 7,500 Class A Preferred $1.50
Xxxx Xxxxxxxx 10,000 Class A Preferred $1.50
Xxxxxx Xxxxxxxxx 16,667 Class A Preferred $1.50
Xxxxxx Xxxxxxx 10,000 Class A Preferred $1.50
Xxxx Xxxxxxxx 20,000 Common $2.00
Xxx Xxxxxxxxxx 100,000 Class A Preferred $1.50
Xxx Xxxxxxxxxx 100,000 Common $2.00
Xxxx Xxxxxx 20,000 Common $2.00
Xxxx Xxxxxxx 7,000 Class A Preferred $1.50
Xxx Xxxxx 20,000 Class A Preferred $1.50
