Exhibit 10.3
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT made as of this 5th day of January 2006,
between Marco Hi-Tech JV Ltd., a New York corporation, with offices at Xxx Xxxx
Xxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 and the undersigned (the
"Subscriber"). The term Company as used herein is defined as set forth in the
PPM (as defined below).
WHEREAS, pursuant to a Confidential Memorandum dated January 5, 2006,
(the "PPM"), the Company is offering in a private placement (the "Offering") to
accredited investors up to 150 Units for a purchase price of $25,000 per Unit to
a maximum of $3,750,000. Each Unit consists of 10,000 shares of the Company's
common stock, par value $0.001 per share (the "Common Stock"), and a three-year
warrant to purchase 2,500 shares of Common Stock at $5.00 per share (the
"Warrants"); and
WHEREAS, the Subscriber desires to subscribe for the number of Units
set forth on the signature page hereof, on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto do hereby agree as
follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase from the Company such
number of Units as is set forth upon the signature page hereof, at a price equal
to $25,000 per Unit, and the Company agrees to sell such Units to the Subscriber
for said purchase price, subject to the Company's right to sell to the
Subscriber such lesser number of Units (or no Units) as the Company may, in its
sole discretion, deem necessary or desirable. The purchase price is payable by
wire transfer of immediately available funds to the account of the Company,
pursuant to the wire instructions attached hereto as EXHIBIT A.
1.2 The Subscriber recognizes that the purchase of Units involves a
high degree of risk in that (i) an investment in the Company is highly
speculative and only investors who can afford the loss of their entire
investment should consider investing in the Company and the Units; (ii) the
Units are not registered under the Securities Act of 1933, as amended (the
"Act"), or any state securities law; (iii) there is no trading market for the
Units, none is likely ever to develop, and the Subscriber may not be able to
liquidate his, her or its investment; (iv) transferability of the Units is
extremely limited; and (v) an investor could suffer the loss of his, her or its
entire investment.
1.3 The Subscriber is an "accredited investor" as such term in
defined in Rule 501 of Regulation D promulgated under the Act, and that the
Subscriber is able to bear the economic risk of an investment in the Units.
1.4 The Subscriber has prior investment experience (including
investment in non listed and non registered securities), and has read and
evaluated, or has employed the services of an investment advisor, attorney or
accountant to read and evaluate, all of the documents furnished or made
available by the Company to the Subscriber and to all other prospective
investors in the Units, including the PPM, as well as the merits and risks of
such an investment by the Subscriber. The Subscriber's overall commitment to
investments which are not readily marketable is not disproportionate to the
Subscriber's net worth, and the Subscriber's investment in the Units will not
cause such overall commitment to become excessive. The Subscriber, if an
individual, has adequate means of providing for his or her current needs and
personal and family contingencies and has no need for liquidity in his or her
investment in the Units. The Subscriber is financially able to bear the economic
risk of this investment, including the ability to afford holding the Units for
an indefinite period or a complete loss of this investment.
1.5 The Subscriber acknowledges receipt and careful review of the
PPM, the draft Current Report on Form 8-K with regard to the Company's merger
with a publicly-traded company, all supplements to the PPM, and all other
documents furnished in connection with this transaction (collectively, the
"Offering Documents") and has been furnished by the Company during the course of
this transaction with all information regarding the Company which the Subscriber
has requested or desires to know; and the Subscriber has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning the terms and
conditions of the Offering, and any additional information which the Subscriber
has requested.
1.6 The Subscriber acknowledges that the purchase of Units may
involve tax consequences to the Subscriber and that the contents of the Offering
Documents do not contain tax advice. The Subscriber acknowledges that the
Subscriber must retain his, her or its own professional advisors to evaluate the
tax and other consequences to the Subscriber of an investment in the Units. The
Subscriber acknowledges that it is the responsibility of the Subscriber to
determine the appropriateness and the merits of a corporate entity to own the
Subscriber's Units and the corporate structure of such entity.
1.7 The Subscriber acknowledges that this Offering has not been
reviewed by the Securities and Exchange Commission (the "SEC") or any state
securities commission, and that no federal or state agency has made any finding
or determination regarding the fairness or merits of the Offering. The
Subscriber represents that the Units are being purchased for his, her or its own
account, for investment only, and not with a view toward distribution or resale
to others. The Subscriber agrees that he, she or it will not sell or otherwise
transfer the Units or the Common Stock and Warrants comprising the Units, unless
they are registered under the Act or unless an exemption from such registration
is available, as the same may be amended from time to time.
1.8 The Subscriber understands that the provisions of Rule 144 under
the Act are not available for at least one (1) year to permit resales of the
Units or the Common Stock and Warrants comprising the Units, and there can be no
assurance that the conditions necessary to permit such sales under Rule 144 will
ever be satisfied. The Subscriber understands that the Company is under no
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obligation to comply with the conditions of Rule 144 or take any other action
necessary in order to make any exemption for the sale of the Units or the Common
Stock and Warrants comprising the Units without registration available.
1.9 The Subscriber agrees to hold the Company and its directors,
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 misrepresentation made by
the Subscriber contained herein or any sale or distribution by the Subscriber in
violation of the Act (including without limitation the rules promulgated
thereunder), any state securities laws, or the Company's certificate of
incorporation or by-laws, as amended from time to time.
1.10 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Units stating that they have not
been registered under the Act and setting forth or referring to the restrictions
on transferability and sale thereof.
1.11 The Subscriber understands that the Company will review and rely
on this Subscription Agreement without making any independent investigation; and
it is agreed that the Company reserves the unrestricted right to reject or limit
any subscription and to withdraw the Offering at any time.
1.12 The Subscriber hereby represents that the address of the
Subscriber furnished at the end of this Subscription Agreement is the
undersigned's principal residence if the Subscriber is an individual or its
principal business address if it is a corporation or other entity.
1.13 The Subscriber acknowledges that if the Subscriber is a
Registered Representative of an NASD member firm, the Subscriber must give such
firm the notice required by the NASD's Conduct Rules, receipt of which must be
acknowledged by such firm on the signature page hereof.
1.14 The Subscriber hereby represents that, except as expressly set
forth in the Offering Documents, no representations or warranties have been made
to the Subscriber by the Company or any agent, employee or affiliate of the
Company and in entering into this transaction, the Subscriber is not relying on
any information, other than that contained in the Offering Documents and the
results of independent investigation by the Subscriber.
1.15 All information provided by the Subscriber in the Investor
Questionnaire attached as EXHIBIT B to the PPM is true and accurate in all
respects, and the Subscriber acknowledges that the Company will be relying on
such information to its possible detriment in deciding whether the Company can
sell these securities to the Subscriber without giving rise to the loss of an
exemption from registration under the applicable securities laws.
1.16 The Subscriber is aware that the Company has not entered into any
agreement or understanding providing for the purchase of any business or assets
other than those referred to in the PPM and no such agreements have been made,
or are being negotiated, and that by execution of this Subscription Agreement,
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the Subscriber consents to any and all resulting terms of such purchases which
will be in the sole discretion of the Company over which the Subscriber will
have no effective influence.
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to the Subscriber that as
of the date of the closing of this Offering (the "Closing Date"):
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power to conduct the business which it conducts and proposes to
conduct.
(b) The execution, delivery and performance of this Subscription
Agreement by the Company have been duly authorized by the Company and all other
corporate action required to authorize and consummate the offer and sale of the
Units have been duly taken and approved.
(c) The Units have been duly and validly authorized and issued.
(d) The Company has obtained, or is in the process of obtaining,
all licenses, permits and other governmental authorizations necessary to the
conduct of its business, except where the failure to so obtain such licenses,
permits and authorizations would not have a material adverse effect on the
Company. Such licenses, permits and other governmental authorizations obtained
are in full force and effect, except where the failure to be so would not have a
material adverse effect on the Company, and the Company is in all material
respects complying therewith.
(e) The Company knows of no pending or threatened legal or
governmental proceedings to which the Company is a party which would materially
adversely affect the business, financial condition or operations of the Company.
(f) The Company is not in violation of or default under, nor
will the execution and delivery of this Subscription Agreement or the issuance
of the Units, or the consummation of the transactions herein contemplated,
result in a violation of, or constitute a default under, the Company's
certificate of incorporation or by-laws, any material obligations, agreements,
covenants or conditions contained in any bond, debenture, note or other evidence
of indebtedness or in any material contract, indenture, mortgage, loan
agreement, lease, joint venture or other agreement or instrument to which the
Company is a party or by which it or any of its properties may be bound or any
material order, rule, regulation, writ, injunction, or decree of any government,
governmental instrumentality or court, domestic or foreign.
III. COVENANTS BY THE COMPANY
The Company agrees Subscribers shall have the certain registration
rights with respect to the shares of Common Stock underlying the Units issued to
Subscribers pursuant to the terms of the Registration Rights Agreement annexed
hereto as EXHIBIT C.
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IV. TERMS OF SUBSCRIPTION
4.1 Subject to Section 4.2 hereof, the subscription period will begin
as of January 5, 2006 and will terminate at 11:59 PM Eastern Time, on February
28, 2006, unless sooner terminated by the Company, or extended by the Company.
4.2 The Subscriber has effected a wire transfer in the full amount of
the purchase price for the Units to the Company's account in accordance with the
wire instructions set forth on EXHIBIT A hereto.
4.3 The Subscriber hereby authorizes and directs the Company to
deliver any certificates or other written instruments representing the Units to
be issued to such Subscriber pursuant to this Subscription Agreement to the
address indicated on the signature page hereof.
4.4 The Subscriber hereby authorizes and directs the Company to
return any funds, without interest, for unaccepted subscriptions to the same
account from which the funds were drawn.
4.5 If the Subscriber is not a United States person, such Subscriber
shall immediately notify the Company and the Subscriber hereby represents that
the Subscriber is satisfied as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the Units or any
use of this Subscription Agreement, including (i) the legal requirements within
its jurisdiction for the purchase of the Units, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the Units or the securities comprising the Units. Such
Subscriber's subscription and payment for, and continued beneficial ownership
of, the Units and the securities comprising the Units will not violate any
applicable securities or other laws of the Subscriber's jurisdiction.
V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by reputable overnight courier, facsimile
(with receipt of confirmation) or registered or certified mail, return receipt
requested, addressed to the Company, at the address set forth in the first
paragraph hereof, Attention Xxxxxx Xxxxxxx, facsimile (000) 000-0000, and to the
Subscriber at the address indicated on the signature page hereof. Notices shall
be deemed to have been given on the date of mailing or fax, except notices of
change of address, which shall be deemed to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged, and this
Subscription Agreement may not be discharged except by performance in accordance
with its terms or by a writing signed by the party to be charged.
5.3 This Subscription 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 Subscription Agreement sets forth
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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.
5.4 Notwithstanding the place where this Subscription Agreement may
be executed by any of the parties hereto, the parties expressly agree that all
the terms and provisions hereof shall be construed in accordance with and
governed by the laws of the State of Delaware. The parties hereby agree that any
dispute which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in Broward
County, Florida and they hereby submit to the exclusive jurisdiction of the
federal and state courts of the State of Florida located in Broward County with
respect to any action or legal proceeding commenced by any party, and
irrevocably waive any objection they now or hereafter may have respecting the
venue of any such action or proceeding brought in such a court or respecting the
fact that such court is an inconvenient forum, relating to or arising out of
this Subscription Agreement or any acts or omissions relating to the sale of the
securities hereunder, and consent to the service of process in any such action
or legal proceeding by means of registered or certified mail, return receipt
requested, in care of the address set forth below or such other address as the
undersigned shall furnish in writing to the other.
5.5 This Subscription Agreement may be executed in counterparts. Upon
the execution and delivery of this Subscription Agreement by the Subscriber,
this Subscription Agreement shall become a binding obligation of the Subscriber
with respect to the purchase of Units as herein provided; subject, however, to
the right hereby reserved to the Company to (i) enter into the same agreements
with other subscribers, (ii) add and/or to delete other persons as subscribers
and (iii) cut back or reject any subscription.
5.6 The holding of any provision of this Subscription Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Subscription Agreement, which shall remain in full
force and effect.
5.7 It is agreed that a waiver by either party of a breach of any
provision of this Subscription Agreement shall not operate, or be construed, as
a waiver of any subsequent breach by that same party.
5.8 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the day and year first written above.
______________________________ X $25,000 for each Unit = $_____________________.
Number of 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 Right of 8. ___ As a Custodian for
Survivorship ________________________________
Under the Uniform Gift to Minors Act
of the State of
________________________________
3. ___ Community Property 9. ___ Married with Separate Property
4. ___ Tenants in Common 10. ___ Xxxxx
5. ___ Corporation/Partnership/ Limited 11. ___ Tenants by the Entirety
Liability Company
6. ___ XXX 12. ___ Foundation described in Section
501(c)(3)of the Internal Revenue Code
of 1986, as amended.
IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
INDIVIDUAL SUBSCRIBERS MUST COMPLETE PAGE 8
SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 9.
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EXECUTION BY NATURAL PERSONS
________________________________________________________________________________
Exact Name in Which Title is to be Held
_________________________________ ____________________________________
Name (Please Print) Name of Additional Subscriber
_________________________________ ____________________________________
Residence: Number and Street Address of Additional Subscriber
_________________________________ ____________________________________
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 Subscriber)
ACCEPTED this ___ day of _________ 2006,
on behalf Marco Hi-Tech JV Ltd.
By: ________________________________________
Name:
Title:
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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)
[seal] By: ____________________________
Name:
Attest: ________________________________ Title:
(If Entity is a Corporation)
*IF SUBSCRIBER IS A REGISTERED
REPRESENTATIVE WITH AN NASD MEMBER FIRM,
HAVE THE FOLLOWING ACKNOWLEDGEMENT SIGNED
BY THE APPROPRIATE PARTY:
The undersigned NASD member firm
acknowledges receipt of the notice
required by Rule 3050 of the NASD
Conduct Rules
ACCEPTED this ____ day of __________
2006, on behalf of Marco Hi-Tech JV Ltd.
By: ____________________________________
Name:
Title:
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