EXHIBIT 10.7
SUBSCRIPTION AGREEMENT
ProGreen Properties, Inc.
c/o Williams, Williams, Rattner & Xxxxxxxx, PC
000 Xxxxx Xxx Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
ProGreen Properties, Inc., a Delaware corporation (the "Company"), is
offering for sale (the "Offering") its 13.5% secured convertible debentures in
the form attached hereto as Exhibit A (the "Debenture" or "Debentures"), due
2015, convertible into Common Stock, par value $.0001 per share (the "Common
Stock") of the Company, at the variable conversion price specified in the
Debenture. The shares of Common Stock into which the Debentures are convertible
are herein referred to as the "Shares".
The purchase price is 100% of the US Dollar principal amount of the
Debenture subscribed for (the "Purchase Price"). No more than five (5) days
following delivery of this Subscription Agreement executed by the Purchaser to
the Company, the Purchaser shall transmit to the Company (in accordance with
instructions to be furnished by the Company) a deposit (the "Deposit") of ten
(10%) percent of Purchase Price of the Debenture for which the Purchaser is
subscribing, together with documentation evidencing that the balance of the
Purchase Price is available for immediate transfer and disbursement to the
Company by the Purchaser upon the Company's request. The Deposit shall be held
by the Company in an escrow account that does not bear interest and shall be
refunded to the Purchaser in the event that the Company's purchase of the
property or properties that were targeted for purchase by the Company with the
proceeds of the Debenture (the "Property to be Purchased") does not close within
ninety (90) days of the date of this Subscription Agreement. This subscription
may be rejected, in whole or in part, by the Company in its sole discretion, and
the Company may accept this Subscription Agreement for a lesser Purchase Price
than the Purchase Price of the Debenture subscribed for herein if the purchase
price of the Property to be Purchased does not equal at least eighty (80%)
percent of the Purchase Price of the Debenture subscribed for.
The undersigned Purchaser hereby tenders this Subscription Agreement
and applies for the purchase of a Debenture in the principal amount set forth on
the signature page (the "Signature Page") hereof with payment of the Deposit.
The Purchaser hereby agrees to transfer and pay to the Company immediately upon
the Company's demand the balance of the Purchase Price, when such balance is
required by the Company for the closing of the purchase of the Property to be
Purchased.
Amount and Method of Payment. Payment of the Purchase Price
required to purchase the principal amount of Debentures subscribed for hereunder
shall be made as directed by the Company. If a subscription is rejected in whole
or in part or if the Offering is terminated for any reason, the Purchaser's
subscription shall be void and all funds received from the Purchaser shall be
returned as soon as practicable to the Purchaser without any interest thereon,
and without charge or deduction.
Representations and Warranties of the Company. The Company
represents and warrants to the subscriber that:
The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has the power
and authority to carry on its business as conducted or proposed to be conducted
by it and to hold title to its property. The Company has the corporate power and
authority to execute and deliver this Subscription Agreement, to conduct such
business and to perform its obligations hereunder.
When (i) the Company has received payment for the Debenture
subscribed for hereby and the Debenture has been issued to the subscriber
therefor, the Debenture will be duly and validly authorized by all necessary
action on the part of the Company and enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law), the Commitment Fee Shares issuable pursuant to Section 6.2
below and the Shares into which the Debenture is convertible, upon issuance
thereof as provided herein and upon the conversion of the Debentures, will be
duly and validly issued, fully paid and non-assessable shares of Common Stock.
This Subscription Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes the valid and
binding agreement of the Company, enforceable in accordance with its terms,
except that such enforcement may be subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting creditors' rights generally and
general principals of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
The Company's execution and delivery of this Subscription
Agreement, the fulfillment of the terms set forth herein and the consummation of
the transactions contemplated herein will not conflict with or constitute a
breach of, or default under (i) the Company's articles of incorporation or
by-laws, (ii) any material agreement, indenture or instrument by which the
Company is bound (except to the extent such conflict, breach or default would
not have a material adverse effect on the value of the assets or the operation
of the business of the Company), or (iii) any law, administrative regulation or
court decree (except to the extent such conflict, breach or default would not
have a material adverse effect on the value of the assets or the operation of
the business of the Company).
Representations and Warranties of Purchaser. In order to
induce the Company to accept this subscription, the Purchaser hereby represents
and warrants to, and covenants with, the Company as follows:
The undersigned understands that neither the Debentures, nor
the Commitment Fee Shares, nor the Shares issuable upon conversion of the
Debentures (collectively referred to herein as the "Securities"), have been
registered under the United States Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state in the United States, by
reason of their contemplated issuance in transactions exempt from the prospectus
and delivery requirements of the Securities Act pursuant to Section 4(2) of the
Securities Act, and that the reliance on such exemption from registration is
predicated in part on these representations and warranties of the Purchaser. The
Purchaser acknowledges that a restrictive legend consistent with the foregoing
has been or will be placed on the Debentures, and on the certificates evidencing
the Commitment Fee Shares and the Shares. The Purchaser understands that neither
the Securities and Exchange Commission of the United States ("SEC") nor any
state securities commission has approved the Securities, or passed upon or
endorsed the merits of the investment or reviewed or confirmed the accuracy or
determined the adequacy of any information furnished to the Purchaser in
connection with the Offering.
The Purchaser is acquiring the Securities solely for the
account of the Purchaser, for investment purposes only, and not with a view
towards the resale or distribution thereof. The Purchaser further agrees not to
transfer the Securities in violation of the Securities Act, or any applicable
state securities law, and no one other than the Purchaser has any beneficial
interest in the Securities;
The Purchaser agrees that it will not sell or otherwise
dispose of any of the Securities to a U.S. person (as defined in Regulation S
under the Securities Act) unless such sale or other disposition (i) has been
registered under the Securities Act or, in the opinion of counsel, is exempt
from registration under the Securities Act and (ii) has been registered or
qualified or, in the opinion of such counsel, is exempt from registration or
qualification under the applicable state securities laws. The Purchaser may not
sell, transfer, or otherwise dispose of the Securities, except in compliance
with the applicable rules of the SEC and applicable state securities
authorities;
The Purchaser is not a "U.S. person" as defined in Regulation
S under the Securities Act and has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of the
Purchaser's investment in the Company. The Purchaser has the financial ability
to bear the economic risks of its entire investment for an indefinite period,
would be able to sustain a complete loss of its investment, and the Purchaser
has no need for liquidity with respect to its investment in the Company;
Each of the Purchaser, and if applicable, the Purchaser's
representative, has carefully reviewed the following documents constituting the
periodic reports filed by the Company with the SEC:
A. ANNUAL REPORT ON FORM 10-KT FOR THE FISCAL YEAR ENDED APRIL 30,
2009, FILED AUGUST 13, 2009;
B. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JULY 31, 2009,
FILED SEPTEMBER 14, 2009; AND
C. CURRENT REPORTS ON FORM 8-K AND 8-K/A, FILED RESPECTIVELY ON JULY 28
AND SEPTEMBER 16, 2009.
The Purchaser acknowledges and agrees that the foregoing shall be supplemented
by subsequent periodic reports filed by the Company with the SEC pursuant to the
Securities Exchange Act of 1934, as amended. The foregoing enumerated periodic
reports and the subsequent periodic reports filed by the Company are hereinafter
collectively referred to as the "Company Reports".
The Purchaser, and if applicable, the Purchaser's
representative, has had a reasonable opportunity to ask questions of and receive
answers from the Company concerning the Company and the Offering and to verify
the accuracy of any representation or information set forth in the Company
Reports, and all such questions, if any, have been answered to the full
satisfaction of the Purchaser;
The Purchaser has full power and authority to execute and
deliver this Subscription Agreement and to perform the Purchaser's obligations
hereunder, and this Subscription Agreement is a legally binding obligation of
the Purchaser enforceable against Purchaser in accordance with its terms; and
3.8 The Purchaser acknowledges that the Company may
pay a fee or commission not exceeding five (5%) of the Purchase Price
to a financial institution advising, or assisting or acting for, the
Purchaser in this transaction.
All the information which the undersigned has furnished to the
Company, or which is set forth herein, is correct and complete as of the date of
this Subscription Agreement, and if there should be any material change in such
information, the Purchaser will immediately furnish such revised or corrected
information to the Company.
Binding Effect. The Purchaser understands that this
subscription is not binding upon the Company until the Company accepts it, which
acceptance is at the sole discretion of the Company and is to be evidenced by
the Company's execution of the Signature Page where indicated. This Subscription
Agreement shall be null and void if the Company does not accept it as aforesaid.
Upon acceptance by the Company and receipt of the full Purchase Price, the
Company will issue to the Purchaser a Debenture in the principal amount set
forth on the Signature Page hereof.
Restrictive Legend and Stop-Transfer Instructions;
Commitment Fee.
The Purchaser shall comply with all of the following
restrictions prior to reselling any of the Securities:
Until the Securities have been registered with the SEC, the
Purchaser shall notify the Company about any proposed resale to a U.S. Person
(as defined above) which notice must be received by the Company at least five
(5) business days prior to such resale;
All offers or sales of the Securities by the Purchaser in the
United States or to U.S. persons may only be made pursuant to an effective
registration statement filed under this Securities Act or by an exemption from
registration under this Securities Act and in compliance with all applicable
state securities laws; and
(c) Any certificate or certificates representing the
Securities shall bear an appropriate legend evidencing the preceding
restrictions.
6.2 Upon receipt by the Company of the Deposit for
the Debenture or Debentures subscribed for by the Purchaser pursuant
to this Subscription Agreement, the Company shall issue to the
Purchaser a number of shares of Common Stock equal to one share for
each dollar of the principal amount of the Debenture or Debentures
subscribed for hereunder (the "Commitment Fee Shares").
Confidentiality. The Purchaser acknowledges and agrees that
all information relating to the Company and the Offering shall be kept
confidential by the Purchaser, except as otherwise required by law or made
public other than by or through the undersigned.
Nontransferability. Neither this Subscription Agreement nor
any of the rights of the Purchaser hereunder may be transferred or assigned by
the Purchaser and any attempted assignment shall be null and void.
Amendment; Entire Agreement; Governing Law. This Subscription
Agreement (i) may only be modified by a written instrument executed by the
Purchaser and the Company, (ii) together with the Debenture purchased hereby,
sets forth the entire agreement of the Purchaser and the Company with respect to
the subject matter hereof and supersedes all prior agreements and understandings
between or among the parties with respect to the subject matter hereof, (iii)
shall be governed by the laws of the State of Delaware applicable to contracts
made and to be wholly performed therein, and (iv) shall inure to the benefit of,
and be binding upon, the Company and the Purchaser and their respective legal
representatives, successors and permitted assigns.
Notices. All notices, request, demands, claims and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed, to the
following address and facsimile numbers (or to such other addresses or facsimile
numbers which such party shall subsequently designate in writing to the other
party): (a) If to the Company: ProGreen Properties, Inc., 000 Xxxxx Xxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx, 00000, Facsimile _______________; or
(b) If to the Purchaser: to the address set forth in the Signature Page to the
Subscription Agreement.
Pronouns; Counterparts. Unless the context otherwise requires,
all personal pronouns used in this Subscription Agreement, whether in the
masculine, feminine or neuter gender, shall include all other genders. This
Subscription Agreement may be executed in counterparts and by facsimile and each
of such counterparts shall constitute an original, and all of which together
shall constitute one and the same document.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands and seals as of the date and year first written above.
Principal Amount of Debentures subscribed: _____________________________________
Amount of Deposit deposited with the Company: __________________________________
Deliver my Debenture to:
Name:
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Address:
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Purchaser (please print)
By:
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Signature; Title:
Address:
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Facsimile No:
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E-mail: _________________________________
ACCEPTED:
PROGREEN PROPERTIES, INC.
By:
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Xxx Xxxxxxxx, Chief Executive Officer
Date: ____________________________________
EXHIBIT A
