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Exhibit 4.6
SUBSCRIPTION AND STOCK PURCHASE AGREEMENT
SUBSCRIPTION AND STOCK PURCHASE AGREEMENT, dated as of the date set
forth on the signature pages hereto, between Telechips Corporation, a Nevada
corporation, with its principal offices at 0000 Xxxxxxxx Xxxx, Xxxx, Xxxxxx
00000 (the "Company"), and the SUBSCRIBER specified on the signature page
hereof (the "Subscriber" and, collectively, with other Subscribers executing a
copy of this Agreement, the "Subscribers").
BACKGROUND
The Company is offering, pursuant to the Company's Private Placement
Memorandum, as supplemented by Supplement dated October 18, 1994 and Second
Supplement dated March 23, 1995 (as supplemented, the "Memorandum") and on the
terms and conditions hereinafter set forth, a minimum of seven (7) and a
maximum of twenty (20) (subject to adjustment as set forth in the Memorandum)
units (each, a "Unit") made up of its capital stock, each consisting of 40,000
shares of Series A Common Stock, par value $0.01 per share, of the Company
("Common Stock") and 50,000 shares of Series A 10% Redeemable Preferred Stock,
par value $1.00 per share, of the Company (the "Series A Redeemable Preferred
Stock"), at a purchase price of $100,000 per Unit (the "Unit Offering"). The
Subscriber wishes to subscribe for the number of Units specified on the
signature page hereto on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
SUBSCRIPTION FOR UNITS
1.1 SUBSCRIPTION. Subject to the terms and conditions hereof and
as more fully described in the Memorandum, the Subscriber hereby subscribes for
and agrees to purchase the number of Units, or portions of a Unit, specified on
the signature page hereto as a purchase price of $100,000 per Unit.
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1.2 ACCEPTANCE OR REJECTION OF SUBSCRIPTION IN WHOLE OR IN PART.
This Agreement shall not become effective against the Company until executed by
it and delivered to the Subscriber. Prior to such execution, the Company may
reject the Subscriber's subscription in its entirety, or in part, in its sole
discretion. The purchase price is payable by certified or bank check made
payable to "United States Trust Company of New York - Special Account Re:
Telechips Corporation", as escrow agent, contemporaneously with the execution
and delivery of this Subscription and Stock Purchase Agreement. The
Certificates for the Common Stock and Preferred Stock will be delivered by the
Company within 10 days following the consummation of this offering as set forth
in Section 5.1 hereof.
1.3 SUBSCRIPTION PERIOD. The subscription period will begin as of
September 8, 1994 and will terminate at 11:59 p.m., Eastern time, on October
31, 1994, unless extended by the Company and X. X. Xxxxx Investment Banking
Corp. (the "Placement Agent") (the "Termination Date").
1.4 SEGREGATED BANK ACCOUNT. All funds hereunder shall be
deposited by the Placement Agent in a segregated non-interest bearing bank
account maintained by it.
ARTICLE II
REPRESENTATIONS OF THE SUBSCRIBER; INDEMNIFICATION
2.1 REPRESENTATIONS. The Subscriber hereby represents, warrants
and agrees as follows:
(a) POWER AND AUTHORITY. If the Subscriber is an entity,
(i) the Subscriber is authorized to (A) enter into this Agreement, (B) perform
its obligations under this Agreement and (C) consummate the transactions that
are subject to this Agreement; (ii) the person signing this Agreement on behalf
of the Subscriber has been duly authorized to execute and deliver this
Agreement and all other instruments executed and delivered on behalf of the
Subscriber in connection with the purchase of the Unit(s); (iii) the signature
of the person signing this Agreement is binding upon the Subscriber; and (iv)
the Subscriber was not organized for the purpose of entering into this
Agreement of acquiring the Units. If the Subscriber is an individual, the
Subscriber is at least 21 years of age.
(b) COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. The
execution and delivery of this Agreement and the consummation of the
transaction contemplated hereby will not conflict with, or result in any
violation of or default under, any provision of the charter, bylaws, trust
agreement, partnership agreement or other organizational document, as the case
may be, if the Subscriber is an entity, of the Subscriber or any agreement or
other instrument to which the Subscriber is a party or by which the Subscriber
or any of its
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properties is bound, or any permit, franchise, judgment, decree, statute, rule
or regulation applicable to the Subscriber or its business or properties.
(c) ACCREDITED INVESTOR. The Subscriber is an
"accredited investor" (as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act of 1933, as amended (the "Act")), as indicated by his
responses to the Confidential Investor Questionnaire.
(d) INVESTMENT INTENT. The Subscriber will acquire the
Units for his, her or its own account for investment and not with a view to
distribution, resale, subdivision or fractionalization thereof, and the
Subscriber has no present plans to enter into any contract, undertaking,
agreement or arrangement for distribution, resale, subdivision or
fractionalization of the Units.
(e) NO GENERAL SOLICITATION. The Subscriber is unaware
of, and is in no way relying on, any form of general solicitation or general
advertising in connection with the offer and sale of Units. The Subscriber is
purchasing the Units without being furnished any offering or sales literature
or prospectus other than the Memorandum.
(f) ACCESS. The Subscriber has received and carefully
reviewed the Memorandum and all exhibits thereto and the terms of this
Agreement. The Subscriber acknowledges that the Company has made available to
the Subscriber or its representatives all agreements, documents, records and
books that the Subscriber or its representatives have requested relating to an
investment in the Units, that all documents which could be reasonably provided
have been made available for his inspection and review and that such
information and documents have, in his opinion afforded him with all the same
information that would be provided pursuant to a Registration Statement filed
with the Securities and Exchange Commission in accordance with the Act. The
Subscriber has had an opportunity to ask questions of, and receive answers
from, a person or persons acting on behalf of the Company, concerning the terms
and conditions of this investment, and answers have been provided to all of
such questions to the full satisfaction of the Subscriber. No oral
representations have been made or oral information furnished to the Subscriber
or its representatives in connection with the offering of the Units which were
in any way inconsistent with the Memorandum.
(g) NO REGISTRATION. The Subscriber acknowledges that,
in reliance upon applicable exemptions, neither the Units nor the securities of
the Company represented thereby have been registered under the Act, or any
state securities laws. Accordingly, no Units or securities represented thereby
may be sold, pledged, hypothecated or otherwise transferred unless registered
under the Act and any applicable state securities laws, or any exemption from
such registration is available, and such transfer is expressly permitted
hereby. The Company has no obligation to register any of the securities being
offered hereunder except as set forth in Article IV herein.
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(h) ECONOMIC LOSS AND SOPHISTICATION. The Subscriber (i)
has adequate means of providing for his, her or its current needs and possible
personal contingencies, (ii) has no need for liquidity in this investment,
(iii) can bear the economic risk of losing his, her or its entire investment in
the Units, (iv) does not have an overall commitment to investments which are
not readily marketable that is disproportionate to his, her or its net worth,
and the Subscriber's investment in the Units will not cause such overall
commitment to become disproportionate to his, her or its net worth, and (v)
recognizes the highly sensitive nature of this investment. The Subscriber has
prior investment experience, including investment in nonlisted and
non-registered securities, and has such knowledge and experience in financial
and business matters that he, she or it is capable of evaluating the risks and
merits of this investment, and it has employed the services of an investment
advisor, attorney or accountant to read all of the documents furnished or made
available by the Company and to evaluate the merits and risks of such an
investment in the Company.
(i) PRINCIPAL PLACE OF BUSINESS OR RESIDENCE. The
address set forth on the signature page to this Agreement is the Subscriber's
true and correct principal place of business or residence, if an individual,
and the Subscriber has no present intention of moving its principal place of
business or residence, as the case may be, to any other state or jurisdiction.
(j) NO FEES. Neither the Subscriber, nor anyone acting
on the Subscriber's behalf, has taken any action which has resulted, or will
result, in any claims for brokerage commission or finders' fees by any person
in connection with the transaction contemplated by this Agreement.
(k) NEW ENTERPRISE. The Subscriber recognizes that the
Company is newly organized and has no financial or operating history and that
investment in the Units involves significant risks, including those set forth
under the caption "Risk Factors" in the Memorandum. The Subscriber further
recognizes 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) an investor may not be able to
liquidate this investment, (iii) transferability of the Units and securities
represented thereby is extremely limited, (iv) in the event of a disposition,
the investor could sustain a loss of this entire investment, and (v) the
Company will require additional significant financing in order to continue its
business.
(l) NO REVIEW OF MEMORANDUM. The Subscriber understands
that the Memorandum will not be filed with or reviewed by any state securities
regulatory authority or the Securities and Exchange Commission. The Subscriber
agrees that he, she or it will not transfer the Units without registration
thereof under applicable Federal and state securities or "blue sky" laws unless
such transfer is exempt from registration under such laws.
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(m) NO MARKET FOR UNITS. The Subscriber realizes that
he, she or it may not be able to sell or dispose of the Units or any securities
represented thereby as there will be no public market therefor. In addition,
the Subscriber understands that the right to transfer the Units or any
securities represented thereby will be subject to the conditions set forth
herein including restrictions against transfer without first having offered the
Units or the securities proposed to be transferred to the Company.
(n) INFORMATION PROVIDED BY SUBSCRIBER. All information
which the Subscriber has provided to the Company, including all information
contained in the Investor Questionnaire which is attached hereto as Schedule I,
concerning itself, its financial position, and its knowledge of financial and
business matters, is correct and complete as of the date set forth on the
signature page hereof and, if there should be any adverse change in such
information prior to acceptance hereof by the Company, he, she or it will
immediately provide the Company with such information.
(o) CRIMINAL HISTORY. Neither the Subscriber nor, if the
Subscriber is an entity, any of its partners, officers, directors or five
percent or more shareholders, has been convicted of a crime constituting a
felony.
(p) NO PROMISE OF EMPLOYMENT BY COMPANY. The Subscriber
understands and acknowledges that the subscription for and purchase of the
Units shall in no way be construed as granting the Subscriber any right to
employment by the Company or any of its affiliates.
(q) NO PUBLIC MARKET. The Subscriber understands that
there is no public market for the securities comprising the Units. The
Subscriber understands that even if a public market develops for the Company's
Units, Rule 144 (the "Rule") promulgated under the Act requires, among other
conditions, a two year holding period prior to the resale (in limited amounts)
of securities acquired in a non-public offering without having to satisfy the
registration requirements under the Act. The Subscriber understands that the
Company makes no representation or warranty regarding its fulfillment in the
future of any reporting requirements under the Securities Exchange Act of 1934,
as amended, or its dissemination to the public of any current financial or
other information concerning the Company, as is required by the Rule as one of
the conditions of its availability. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the securities
comprising the Units under the Act with the exception of certain registration
rights set forth in Article IV herein. The Subscriber consents that the
Company may, if it desires, permit the transfer of the securities comprising
the Units out of his name only when his request for transfer is accompanied by
an opinion of counsel reasonably satisfactory to the Company that neither the
sale nor the proposed transfer results in a violation of the Act or any
applicable state "blue sky" laws (collectively "Securities Laws"). 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
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liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Confidential Investor
Questionnaire or any sale or distribution by the undersigned Subscriber in
violation of any Securities Laws.
(r) LEGEND. The Subscriber consents to the placement of
a legend on any certificate or other document evidencing the Preferred Stock
and Common Stock comprising his Units stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof.
(s) SUBSCRIBER REVIEW; REJECTION OF SUBSCRIPTION. The
Subscriber understands that the Company will review this Subscription Agreement
and the Confidential Investor Questionnaire and is hereby given authority by
the undersigned to call his bank or place of employment or otherwise review the
financial standing of the Subscriber; and it is further agreed that the Company
reserves the unrestricted right to reject or limit any subscription and to
close the offer at any time.
(t) NASD MEMBER FIRM. The Subscriber acknowledges that
if he is a Registered Representative of an NASD member firm, he must give such
firm the notice required by the NASD's Rules of Fair Practice, receipt of which
must be acknowledged by such firm on the signature page hereof.
(u) INDEPENDENT INVESTIGATION. The Subscriber hereby
represents that, except as set forth herein and in the Memorandum, 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 herein and in the Memorandum and the results of Subscriber's own
independent investigation.
2.1 INDEMNIFICATION. The Subscriber acknowledges that he, she or
it understands the meaning and legal consequences of the representations and
warranties contained in this Article II and that the Company, its officers,
directors, agents and representatives have relied upon such representations and
warranties. The Subscriber agrees to indemnify and hold harmless the Company,
its officers, directors, agents and representatives, or anyone acting on their
behalf, from and against all damages, losses, costs and expenses (including
reasonable attorneys' fees) which they may incur by reason of the failure of
the Subscriber to fulfill any of the terms or conditions of this Agreement or
by reason of any breach of the representations and warranties made by the
Subscriber herein or in any documents provided by the Subscriber to the
Company.
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ARTICLE III
RESTRICTIONS ON TRANSFER
3.1 RESTRICTIONS ON TRANSFER. The Subscriber acknowledges and
agrees that no Units or any securities represented thereby may be sold,
conveyed or otherwise transferred unless (a) expressly permitted under Section
3.2 or 3.3 hereof, (b) the transferee thereof shall agree in writing to be
bound by, and any Units or securities represented thereby transferred to such
transferee will be held by such transferee subject to, the terms and condition
of this Agreement and (c) such Units or securities shall have been registered
under all applicable securities laws or the Company shall have received an
opinion of counsel to Subscriber reasonably acceptable to the Company that such
registration is not required.
3.2 PERMITTED TRANSFEREES. A Subscriber may transfer all or any
portion of the Units or securities represented thereby to (a) any entity which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Subscriber, (b) any executive officer, director, shareholder
or partner of such Subscriber, (c) the spouse or any issue or adopted child of
such Subscriber or (d) a trust (inter vivos or testamentary) primarily for the
benefit of any person referred to in (c) above.
3.3 TERMINATION OF RESTRICTIONS. The obligations of the
Subscriber pursuant to this Article III shall terminate upon the consummation
of a public offering of the securities of the Company pursuant to a
registration statement filed pursuant to the Act (other than a registration
statement on Form S-8 or any successor form). Notwithstanding the foregoing,
the Subscriber understands that the Company has no commitments or the like with
respect to an initial public offering or any other type of future financing.
ARTICLE IV
REGISTRATION RIGHTS
4.1 DEMAND REGISTRATION. To the extent that any Registrable
Securities (as defined below) have not been registered in the Company's initial
public offering of the Company's equity securities (the "IPO"), if at any time
after six (6) months following the closing of the IPO but not more than four
(4) years from the Termination Date, the Company shall receive a written
request therefor (the "Demand Notice") from any record holder or holders of an
aggregate of more than fifty percent (50%) of the holders of Series A Common
Stock sold in the Unit Offering then outstanding (the "Requesting Holders"),
the Company shall prepare and file with the SEC a registration statement under
the Act covering the Series A Common Stock (the "Registrable Securities") which
are the subject of such request and shall use its best efforts to cause such
registration statement to become
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effective. In addition, upon the receipt of such request, the Company shall
promptly give written notice to all other record holders of Series A Common
Stock that such registration is to be effected. The Company shall include in
such registration statement such Registrable Securities for which it has
received written requests to register by such other record holders within
thirty (30) days after the delivery of the Company's written notice to such
other record holders.
In the event that at the time of the Demand Notice the Company
is in the process of preparing a registration statement under the Act relating
to an underwritten public offering, then no holder of securities of the
Company, including Requesting Holders may include securities in such
registration if in the good faith judgment of the managing underwriter of such
public offering the inclusion of such securities would interfere with the
successful marketing of the securities being underwritten. Shares to be
excluded from an underwritten public offering shall be selected in a manner
provided in Section 4.2 below. To the extent only a portion of the Registrable
Securities held by a Requesting Holder is included in the underwritten public
offering, a registration statement covering those Registrable Securities which
are excluded from the underwritten public offering will be filed within 120
days of the consummation of the underwritten public offering.
The obligation of the Company under this Section 4.1 shall be
limited to one registration statement. The Company shall pay the expenses
described in Section 4.5 for the registration statement filed pursuant to this
Section 4.1, except for underwriting discounts and commission and legal fees of
the Requesting Holders, which shall be borne by the Requesting Holders.
4.2 "PIGGYBACK" REGISTRATION RIGHTS
If the Company shall determine to proceed with the actual
preparation and filing (i) a registration statement relating to an IPO or (ii)
an additional registration statement under the Act in connection with the
proposed offer and sale of any of its securities by it or any of its security
holders (other than a registration statement on Form X-0, X-0 or other limited
purpose form) from and after six (6) months following the closing of an IPO but
not more than four (4) years from the Termination Date, then the Company will
give written notice of its determination to all record holders of the
Registrable Securities. Upon the written request from the Requesting Holders
(as defined in Section 4.1) within thirty (30) days after receipt of any such
notice from the Company, the Company will, except as herein provided, cause all
such Registrable Securities to be included in such registration statement, all
to the extent requisite to permit the sale or other disposition by the
prospective seller or sellers of the Registrable Securities to be so
registered; provided, further, that nothing herein shall prevent the Company
from, at any time, abandoning or delaying any registration. If any registration
pursuant to this Section 4.2 shall be underwritten in whole or in part, the
Company may require that the Registrable Securities requested for inclusion
pursuant to this Section 4.2 be included in the underwriting on the
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same terms and conditions as the securities otherwise being sold through the
underwriters. In the event that the Registrable Securities requested for
inclusion pursuant to this Section 4.2 together with any other shares which
have similar piggyback registration rights (such shares and the Registrable
Securities being collectively referred to as the "Requested Stock") would (a)
in the case of a public offering that is not the IPO, constitute more than 15%
of the total number of shares to be included in a proposed underwritten public
offering, and (b) in the case of an IPO or any other public offering, if in the
good faith judgment of the managing underwriter of the IPO or such public
offering the inclusion of all of the Requested Stock originally covered by a
request for registration would reduce the number of shares to be offered by the
Company or interfere with the successful marketing of the shares of stock
offered by the Company, the number of shares of Requested Stock otherwise to be
included in the underwritten public offering may be reduced pro rata (by number
of shares) among the holders thereof requesting such registration or excluded
in their entirety if so required by the underwriter. To the extent only a
portion of the Requested Stock is included in the underwritten public offering,
those shares of Requested Stock which are thus excluded from the underwritten
public offering shall be withheld from the market by the holders thereof for a
period, not to exceed 120 days, which the managing underwriter reasonably
determined is necessary in order to effect the underwritten public offering.
The obligation of the Company under this Section 4.2 shall be
limited to two (2) registration statements.
4.3 LOCK UP PROVISION. In connection with the Company's IPO, the
Subscriber hereby agrees to be subject to the lock-up for 180 days or such
longer period following the IPO as required by the underwriter(s) of the IPO.
During such period, Subscriber agrees not to sell any shares of Common Stock
without the prior written consent of the underwriter(s).
4.4 REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Section 4.1 or 4.2 to effect the registration of
Registrable Securities under the Act, the Company will:
(a) prepare and file with the SEC a registration
statement with respect to such securities, and use its best efforts to cause
such registration statement to become and remain effective for such period as
may be reasonably necessary to effect the sale of such securities, not to
exceed three months;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for such period
as may be reasonably necessary to effect the sale of such securities, not to
exceed three months;
(c) furnish to the security holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the
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registration statement, preliminary prospectus, final prospectus and such other
documents as such underwriters may reasonably request in order to facilitate
the public offering of such securities;
(d) use its best efforts to register or qualify the
securities covered by such registration statement under such state securities
or blue sky laws of such jurisdictions as such participating holders may
reasonably request in writing within twenty (20) days following the original
filing of such registration statement, except that the Company shall not for
any purpose be required to execute a general consent to service of process or
to qualify to do business as a foreign corporation in any jurisdiction wherein
it is not so qualified;
(e) notify the security holders participating in such
registration, promptly after it shall receive notice thereof, of the time when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(f) notify such holders promptly of any request by the
SEC for the amending or supplementing of such registration statement or
prospectus or for additional information;
(g) prepare and file with the SEC promptly upon the
request of any such holders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such holders (and
concurred in by counsel for the Company), is required under the Act or the
rules and regulations thereunder in connection with the distribution of Common
Stock by such holder;
(h) prepare and promptly file the SEC and promptly notify
such holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Act, any event shall have occurred as the
result of which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(i) advise such holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
SEC suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued.
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4.5 EXPENSES.
(a) With respect to each registration requested pursuant
to Section 4.1 hereof, and with respect to each inclusion of Registrable
Securities in a registration statement pursuant to Section 4.2 hereof, all
fees, costs and expenses of and incidental to such registration, inclusion and
public offering (as specified in paragraph (b) below) in connection therewith
shall be borne by the Company, provided, however, that any security holders
participating in such registration shall bear their pro rata share of the
underwriting discount and commissions and transfer taxes.
(b) The fees, costs and expenses of registration to be
borne by the Company as provided in paragraph (a) above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees
and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified (except as provided in 4.5(a) above). Fees and
disbursements of counsel and accountants for the selling security holders and
any other expenses incurred by the selling security holders not expressly
included above shall be borne by the selling security holders.
4.6 INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each
holder of Registrable Securities which are included in a registration statement
pursuant to the provisions of Sections 4.1 or 4.2 hereof, its directors and
officers, and any underwriter (as defined in the Act) for such holder and each
person, if any, who controls such holder or such underwriter within the meaning
of the Act, from and against, and will reimburse such holder and each such
underwriter and controlling person with respect to, any and all loss, damage,
liability, cost and expense to which such holder or any such underwriter or
controlling person may be come subject under the Act or otherwise, insofar as
such losses, damages, liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, damage,
liability, cost or expenses arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by such holder, such underwriter or such
controlling person in writing specifically for use in the preparation thereof.
(b) Each holder of Registrable Securities included in a
registration pursuant to the provision of Sections 4.1 or 4.2 hereof will
indemnify and hold harmless the
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Company, its directors and officers, any controlling person and any underwriter
from and against, and will reimburse the Company, its directors and officers,
any controlling person and any underwriter with respect to, any and all loss,
damage, liability, cost or expense to which the Company or an controlling
person and/or any underwriter may become subject under the Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by
any untrue statement or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by or on behalf of such
holder specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party
pursuant to the provisions of paragraph (a) or (b) of this Section 4.7 of
notice of the commencement of any action involving the subject matter of the
foregoing indemnity provisions such indemnified party will, if a claim thereof
is to be made against the indemnifying party pursuant to the provisions of said
paragraph (a) or (b), promptly notify the indemnifying party of the
commencement thereof; but the omission to so notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than hereunder. In case such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to participate in, and, to
the extent that it may wish, jointly with any other indemnified party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, provided, however, if the defendants in any action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties which are different from or in addition to
those available to the indemnified party, or if there is a conflict of interest
which would prevent counsel for the indemnifying party from also representing
the indemnified party, the indemnified party or parties have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party or parties. After notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for the legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the
indemnified party shall have employed counsel in accordance with the provisions
of the preceding sentence, (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after the notice of the commencement of the
action of (iii) the
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indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
ARTICLE V
TERMS OF SUBSCRIPTION
5.1 SUBSCRIPTION FOR UNITS. The subscription period will begin as
of September 8, 1994 and will terminate at 11:59 PM Eastern time on October 31,
1994, unless earlier terminated by the Company and the Placement Agent or
extended by the Company and the Placement Agent for up to an additional six (6)
months (the "Termination Date"). The minimum subscription per subscriber shall
be one Unit; provided, however, that smaller investments may be accepted at the
discretion of the Placement Agent and the Company, all as more fully described
in the Memorandum.
5.2 PLACEMENT AGENT. Placement of the Units will be made by the
Placement Agent, who will receive a placement fee as set forth in Article 6.2.
5.3 ESCROW ACCOUNT. Pending the sale of the Units, all funds paid
hereunder shall be deposited by the Company in escrow with the United States
Trust Company of New York, 000 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx. If the
Company shall not have obtained subscriptions (including this subscription) for
purchases of seven (7) Units on or before the Termination Date, then this
subscription shall be void and all funds paid hereunder by the Subscriber,
without interest, shall be promptly returned to the Subscriber, subject to
Section 5.5 hereof. If seven (7) Units are sold at or prior to the Termination
Date, then all subscription proceeds shall be paid over to the Company within
ten days thereafter. In such event, placements of additional Units may continue
until the Termination Date, with subsequent releases of funds to be at the
mutual consent of the Company and the Placement Agent.
5.4 DELIVERY OF SECURITIES. The Subscriber hereby authorizes and
directs the Company to deliver the securities to be issued to such Subscriber
pursuant to this Subscription Agreement either to the residential or business
address indicated on the signature page hereto or directly to the Subscriber's
account maintained by the Placement Agent, if any. (If the Subscriber does not
desire the securities to be delivered to such account, the Subscriber should
delete this Section 5.4.)
5.5 RETURN OF FUNDS. The Subscriber hereby authorizes and directs
the Company to return any funds for unaccepted subscriptions to the same
account from which the funds were drawn, including any customer account
maintained with the Placement Agent.
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ARTICLE VI
MISCELLANEOUS
6.1 NOTICES. Any notice or other communication given hereunder
shall be deemed sufficient if in writing and sent by registered or certified
mail, return receipt requested, addressed to the Company, at its principal
office at 0000 Xxxxxxxx Xxxx, Xxxx, Xxxxxx 00000, Attention: President, and to
the Subscriber at its address on the signature page of this Agreement, in each
case, or to such other address as such party may designate in writing. Notices
shall have been deemed to have been given on the date of mailing, except
notices of change of address which shall have been deemed to have been given
when received.
6.2 PLACEMENT AGENT AGREEMENT AND RIGHTS. The Units are being
sold on a "best efforts minimum/maximum" basis through the Placement Agent. The
Company and the Placement Agent have entered into an agreement (the "Placement
Agent Agreement") pursuant to which the Placement Agent is entitled to receive
from the Company a cash fee equal to 10.0% of the gross proceeds from the sale
of Units. The Placement Agent shall also receive a non-accountable expense
allowance equal to 3% of the gross proceeds of sales of Units, of which $15,000
has already been paid by the Company. Additionally, the Placement Agent is
entitled to receive warrants for the purchase of Series A Common Stock at the
exercise price of $1.25 per share equal to 20% of the shares of Series A Common
Stock sold through this Offering. In addition, the holders of the Series A
Common Stock issuable upon exercise of the Placement Agent's Warrants will have
certain demand and "piggyback" registration rights.
6.3 COUNTERPARTS; ENTIRE AGREEMENT. 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 Units. This Agreement and the
Investor Questionnaire annexed hereto constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof.
6.4 PUBLICITY AND INFORMATION. Each of the Company and the
Subscriber shall maintain in confidence and shall not disseminate or disclose
information concerning this Agreement or the Memorandum, the terms hereof and
thereof and the transactions contemplated hereby or thereby, and any and all
information concerning the Company, or any of its affiliates not otherwise
available to the general public, except as otherwise required by law, rule,
regulation or order of any nation, state, subdivision, agency or court thereof
and except for press release or public announcements by the Company describing
the transactions contemplated by the Memorandum.
6.5 AMENDMENTS. This Agreement and the Investor Questionnaire
annexed hereto may be modified or amended only by a writing signed by the
parties hereto, and this
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Agreement may not be discharged except by performance in accordance with its
terms or by a writing signed by the party to be charged.
6.6 SURVIVAL. The representations and warranties of the
Subscriber set forth herein shall survive the purchase and sale of the Units
pursuant hereto.
6.7 USE OF GENDER. All pronouns and any variations thereof used
herein shall be deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the applicable person or persons may require.
6.8 GOVERNING LAW. This Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of New York,
without regard to the principles of conflicts of law thereof. This Agreement
and the rights, powers and duties set forth herein shall be binding upon the
Subscriber and the Company and their legal representatives, successors and
assigns and shall inure to their benefit and the benefit of their respective
successors and assigns.
6.9 SEVERABILITY. The determination by a court of competent
jurisdiction that any provision of this Agreement is invalid or unenforceable
shall not offset any other provision of this Agreement, which shall remain in
full force and effect.
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INVESTOR NOTICES AND LEGENDS
BLUE SKY LEGENDS
ARKANSAS
The undersigned hereby represents that his net worth set forth in the
Private Placement Questionnaire is correct and that he is able to bear the
economic risk of an investment in the Offering. The undersigned further
represents that, at a minimum, such investment shall not exceed 20% of his net
worth (alone or jointly with a spouse) at the time of purchase.
CONNECTICUT
The undersigned acknowledges that the Securities have not been
registered under the Connecticut Uniform Securities Act, as amended (the "Act")
and are subject to restrictions on transferability and sale of securities as
set forth herein. The undersigned hereby agrees that such Securities will not
be transferred or sold without registration under the Act or exemption
therefrom.
GEORGIA
The undersigned hereby represents that he is acquiring the securities
for investment for his own account and that he is aware that transferability
and resale of the securities is restricted by state and federal law.
INDIANA
The undersigned hereby represents that he is acquiring the Securities
for his own investment and that he is aware that transferability and resale of
the Securities is restricted by state and federal law.
MAINE
The undersigned represents that he has (i) a net worth of $200,000
(exclusive of home, furnishings and automobiles); or (ii) a net worth of
$50,000 (exclusive of home, furnishings and automobiles) and an annual income
of $50,000 or more. The undersigned represents that he is purchasing the
securities for his own account and not with a view to resale or distribution.
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MICHIGAN
The undersigned represents that he is acquiring the Securities for
investment and hereby agrees not to resell or transfer such Securities without
registration under the Michigan Securities Act, as amended, or exemption
therefrom.
MISSOURI
The undersigned acknowledges that the Securities have not been
registered under the Missouri Uniform Securities Act, as amended (the "Act")
and are subject to restrictions on transferability and sale of securities as
set forth herein. The undersigned hereby acknowledges that such Securities may
be disposed of only through a licensed broker-dealer. It is a felony to sell
securities in violation of the Missouri Securities Act.
PENNSYLVANIA
The undersigned hereby acknowledges that the Issuer is relying upon
the exemption from registration of securities set forth in Section 203(d) of
the Pennsylvania Securities Act of 1972, as amended (the "Pennsylvania Act"),
in connection with the sale of the Securities to the undersigned.
In accordance with the requirements of Section 203(d) of the
Pennsylvania Act, the undersigned hereby agrees not to sell his Securities
within twelve (12) months from the date of purchase. Additionally, each
Pennsylvania resident who subscribes for any units has the right, pursuant to
the Pennsylvania Act, to withdraw his subscription therefor without incurring
any liability to the seller, underwriter (if any) or any other person, within
two business days from the date of receipt by the issuer of his written binding
contract of purchase, or in the case of a transaction in which there is no
written binding contract or purchase, within two business days after he makes
the initial payment for the securities being offered. To accomplish this
withdrawal, a subscriber need only send a letter or telegram to the issuer at
0000 Xxxxxxxx Xxxx, Xxxx, Xxxxxx 00000, Attn: President, indicating his
intention to withdraw, such letter or telegram should be sent and postmarked
prior to the end of the aforementioned second business day. It is prudent to
send such letter by certified mail, return receipt requested, to have proof
that it was mailed. If the request is made orally (in person or by telephone)
to the issuer, a written confirmation that the request has been received should
be requested.
SOUTH DAKOTA
The undersigned hereby represents that he has either (i) a minimum net
worth (exclusive of home, furnishings and automobiles) of $30,000 and a minimum
annual gross income of $30,000 or (ii) a minimum net worth (exclusive of home,
furnishings and automobiles) of $75,000. The undersigned further represents
that if he is not an accredited
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investor or is an accredited investor solely by reason of his net worth, income
or amount of investment, he shall not make an investment in the offering in
excess of 20% of his net worth (exclusive of home, furnishings and
automobiles).
TEXAS
The undersigned hereby acknowledges that the Securities cannot be sold
unless they are subsequently registered under the Securities Act of 1933, as
amended, and the Texas Securities Act, or an exemption from registration is
available. The undersigned further acknowledges that because the Securities are
not readily transferable, he must bear the economic risk of his investment for
an indefinite period of time.
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SIGNATURE PAGE INVESTORS WHO ARE NOT NATURAL PERSONS
The Subscriber hereby elects to subscribe for _____ Units, at a
purchase price per Unit of $100,000 for a total purchase price of $__________.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized
officer/representative to execute this Subscription and Stock Purchase
Agreement and to initial the Investor Questionnaire attached hereto as Schedule
I, this ________ day of _________________, 1994.
PLEASE MAKE CHECKS PAYABLE TO "THE UNITED STATES TRUST COMPANY, SPECIAL
ACCOUNT" RE: TELECHIPS CORPORATION
COMPANY SUBSCRIBER(2)
Subscription Accepted:
Telechips Corporation
-----------------------------
(Print or Type Name of Entity)
By:_________________________________
----------------------------
(Signature of Authorized
Officer/Representative)
Title:_______________________________
---------------------------
Print or Type Name and Title
of Authorized
Officer/Representative)
ADDRESS:
----------------------------
Street Number and Street
----------------------------
City/State/Zip Code
----------------------------
Telephone Number
----------------------------
Social Security/Taxpayer
Identification Number
_________________
(2) If the 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
Article 3, Section 28(a) and (b) of the Rules of Fair Practice.
_________________________________
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Name of NASD Member Firm
By:______________________________
Authorized Officer
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Exhibit 4.6
SCHEDULE I
CONFIDENTIAL INVESTOR QUESTIONNAIRE
THIS SECTION MUST BE COMPLETED BY ALL INVESTORS WHO ARE NATURAL PERSONS
ITEM 1. ALL INVESTORS MUST INITIAL THE FOLLOWING LINE:
[ ] I understand that the representations contained in this
Schedule I qualifying me as an "Accredited investor" as that
term is defined in Rule 501 of Regulation D promulgated under
the Act are made for the purpose of inducing a sale of
securities to me. I hereby represent that the statement or
statements initialed below are true and correct in all
respects. I understand that a false representation may
constitute a violation of law and that any person who suffers
damage as a result of a false representation may have a claim
against me for damages.
ITEM 2. ALL INVESTORS MUST INITIAL ANY OF THE FOLLOWING THREE
STATEMENTS THAT APPLY TO THEM:
[ ] (a) I certify that I am an accredited investor
because I have an individual net worth, or my spouse and I
have a combined net worth, in excess of $1,000,000. For
purposes of this Investor Questionnaire, "net worth" means the
excess of total assets at fair market value, including home
and personal property, over total liabilities.
[ ] (b) I certify that I am an accredited investor
because I have an individual annual income in excess of
$200,000, or joint annual income with my spouse in excess of
$300,000, in each of the two most recent years and I
reasonably expect to have an individual annual income in
excess of $200,000, or joint annual income with my spouse in
excess of $300,000, for the current year. For purposes of
this Investor Questionnaire, "income" means adjusted gross
income, as reported for Federal income tax purposes, increased
by the following amounts: (i) the amount of any tax exempt
interest income received, (ii) the amount of losses claimed as
a limited partner in a limited partnership and educated in
arriving at adjusted gross income, (iii) any deduction claimed
for depletion, (iv) deductible amounts contributed to an XXX
or Xxxxx retirement plan and (v) alimony paid.
[ ] (c) I certify that I am an accredited investor
because I am either a director or an executive officer of the
Company. For purposes of this Investor Questionnaire, an
"executive officer" means the president, any vice president in
charge of a principal business unit, division or function, or
any other officer who performs a policy making function, or
any other person who performs similar policy making functions
for the Company.
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THIS SECTION MUST BE COMPLETED BY ALL INVESTORS
WHICH ARE NOT NATURAL PERSONS
ITEM 1. AN INVESTOR WHICH IS A NON-NATURAL PERSON MUST INITIAL EACH OF
THE FOLLOWING STATEMENTS:
[ ] The undersigned understands that the representations contained
in this Schedule I qualifying me an accredited investor as
that term is defined in Rule 501 of Regulation D promulgated
under the Act are made for the purpose of inducing a sale of
securities to it. The undersigned hereby represents that the
statement or statements initialed below are true and correct
in all respects. The undersigned understands that a false
representation may constitute a violation of law and that any
person who suffers damage as a result of a false
representation may have a claim against it for damages.
ITEM 2. AN INVESTOR WHICH IS A NON-NATURAL PERSON MUST INITIAL ANY ONE
OF THE FOLLOWING FIVE STATEMENTS THAT APPLY TO IT:
[ ] (a) The undersigned certifies that it is an
accredited investor because it is either (i) a bank as defined
in Section 3(a)(2) of the Act, savings and loan association or
other institution as defined in Section 3(a)(5)(a) of the Act
whether acting in its individual or fiduciary capacity, (ii) a
broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, (iii) an insurance company as
defined in Section 2(13) of the Act, (iv) a investment company
registered under the Investment Company Act of 1940 or a
business development company as defined Section 2(a)(49) of
such Act, (v) a small business investment company licensed by
the United States Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958,
(vi) a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its
employees, if such plan has total assets in excess of
$5,000,000, or (vii) an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974
if such investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a bank,
savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total
assets in excess of $5,000,000 or, if a self-directed plan,
with investment decisions made solely by persons that are
accredited investors.
[ ] (b) The undersigned certifies that it is an
accredited investor because it is a private business
development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
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[ ] (c) The undersigned certifies that it is an
accredited investor because it is an organization described in
Section 501(c)(3) of the Internal Revenue Code, a corporation,
Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the Units
offered with total assets in excess of $5,000,000.
[ ] (d) The undersigned certifies that it is an
accredited investor because it is a trust, with total assets
in excess of $5,000,000, not formed for the specific purpose
of acquiring the Units offered, whose purchase is directed by
a person who has such knowledge and experience in financial
and business matters that he is capable of evaluating the
merits and risks of the prospective investment.
[ ] (e) The undersigned certifies that it is an
accredited investor because it is an entity in which all of
the equity owners are accredited investors. Each such equity
owner must also property complete and submit an Investor
Questionnaire as if such equity owner was an investor. Such
additional Questionnaires are available upon request from the
Placement Agent.
ITEM 3. NASD AFFILIATION:
[ ] Are you an affiliate or associated person of any
member of the National Association of Securities Dealers,
Inc., and if so, please specify the member and your position.
___________________________________________
Member and Position
----------------------
(Signature)
-----------------------
(Print or Type Name)
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