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EXHIBIT 2.8
SECURITIES SUBSCRIPTION AGREEMENT
THIS SECURITIES SUBSCRIPTION AGREEMENT dated as of May 4,1998 (the
"Agreement"), is executed in reliance upon the exemption from registration
afforded by Rule 505 of Regulation D ("Regulation D") as promulgated by the
Securities and Exchange Commission ("SEC"), under the Securities Act of 1933, as
amended. Capitalized terms used herein and not defined shall have the meanings
given to them in Regulation D.
This Agreement has been executed by T.C. Equities, Ltd., (hereinafter
"Buyer"), a Bahamas corporation, in connection with the private placement of
70,000 shares of Redeemable Cumulative Convertible Preferred Stock in the
company Next Generation Media, Corp., also known as "Nexgen", a corporation
organized under the laws of Nevada, with its principal executive offices located
at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000 (hereinafter
referred to as "Seller"). Buyer hereby represents and warrants to, and agrees
with Seller:
SECURITIES SUBJECT TO THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY COMPONENT THEREOF OR INTEREST THEREIN MAY
BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN
OPINION OF COUNSEL TO THE OWNER OF SUCH SECURITIES, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES
OR COMPONENT THEREOF OR INTEREST THEREIN, MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.
1. Agreement To Subscribe: Purchase Price
(a) Subscription. The undersigned Buyer hereby subscribes for
and agree to purchase 70,000 shares of Redeemable Cumulative Convertible
Preferred Stock in the company called Next Generation Media, Corp., with a
redemption price of $5.00 per share (hereinafter the "Securities") and a face
value of $350,000.00. The Buyer may redeem at its option 35,000 shares of the
Securities after six (6) months from the date of this transaction, 17,500 shares
of the Securities after nine (9) months from the date of this transaction and
17,500 shares of the Securities after twelve (12) months from the date of this
transaction. Seller shall issue 250,000 warrants for common stock in Nexgen
(hereinafter the "underlying securities") at an exercise price of $0.16 per
warrant valid for period of five (5)
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years from the date of issue.
(b) Payment. The aggregate Purchase Price for the Shares by
the Buyer shall be Three Hundred Fifty Thousand United States Dollars (U.S.
$350,000.00) (the "Purchase Price"), which shall be payable simultaneously with
the delivery of this Agreement by delivering immediately available funds in
United States Dollars by wire transfer to the designated depository of Xxxxx
Xxxxx Xxxxxx, P.C., as Escrow Agent ("Escrow Agent") for closing by delivery of
securities versus payment together with a fully executed Agreement for the
delivery of a controlling interest in UNICO, Inc., a Delaware Corporation.
(c) Closing. Subject to the satisfaction of the conditions set
forth in Sections 7 and 8 hereof, the consummation of the transactions
contemplated hereby will occur on or before May 4, 1998. Immediately following
the closing, Seller shall effectuate the filing of an S-4 registration statement
with the S.E.C. as soon as practicable within a period not to exceed four (4)
weeks of the date of this Agreement, Seller hereby grants to Buyer "piggy back"
registration rights for the underlying shares of the warrants when Seller has an
S-1 registration statement declared effective by the S.E.C.
2. Buyer Representations and Covenants: Access to Information.
In connection with the purchase and sale of the Securities, Buyer
represents and warrants to, and covenants and agrees with Seller as follows:
(i) Buyer is purchasing the Securities for its own account and
Buyer is qualified to purchase the Securities under the laws of its jurisdiction
of residence, is an accredited investor under the 1933 Act, and the offer and
sale of the Securities will not violate the securities or other laws of such
jurisdiction; Buyer is not, and on the closing date will not be, an affiliate of
Seller;
(ii) All offers and sales of any of the Securities by Buyer
shall be made in compliance with any applicable securities laws of any
applicable jurisdiction and in accordance with Rule 505 or pursuant to
registration of securities under the 1933 Act and subject to the requirements
described in the preamble of this Agreement;
(iii) The transactions contemplated by this Agreement are not
and will not be part of a plan or scheme by Buyer, to evade the registration
provisions of the 1933 Act;
(iv) Buyer understands that the Securities are not registered
under the 1933 Act and are being offered and sold to it in reliance on specific
exclusions from the registration requirements of Federal and State securities
laws, and that
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Seller is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgements and understandings of Buyer set forth
herein in order to determine the applicability of such exclusions and the
suitability of Buyer and any purchaser from Buyer to acquire the Securities;
(v) Buyer has not conducted or permitted and shall not conduct
or permit any general solicitation relating to the offer and sale of any of the
Securities;
(vi) Buyer has the full right, power and authority to enter
into this Agreement and to consummate the transaction contemplated herein. This
Agreement has been duly authorized, validly executed and delivered on behalf of
Buyer and is a valid and binding agreement in accordance with its terms, subject
to general principles of equity and to bankruptcy or other laws affecting the
enforcement of creditors' rights generally;
(vii) The execution and delivery of this Agreement and the
consummation of the purchase of the Securities, and the transactions
contemplated by this Agreement do not and will not conflict with or result in a
breach by Buyer of any of the terms of provisions of, or constitute a default
under, the articles of incorporation or by-laws (or similar constitutive
documents) of Buyer or any indenture, mortgage, deed of trust, or other material
agreement or instrument to which Buyer is a party or by which it or any of its
properties or assets are bound, or any existing applicable law, rule or
regulation of the United States or any State thereof or any applicable decree,
judgment or order of any Federal or State court, Federal or State regulatory
body, administrative agency or other United States governmental body having
jurisdiction over Buyer or any of its properties or assets;
(viii) All invitation, offers and sales of or in respect of,
any of the Securities, by Buyer and any distribution of Buyer of any documents
relating to any offer by it of any of the Securities will be in compliance with
applicable laws and regulations;
(ix) Buyer will not make any offer or sale of the Securities
by any means which would not comply with the laws and regulations of the
territory in which such offer or sale takes place;
(x) Buyer has been advised to consult its own legal and tax
advisors with respect to applicable resale restrictions and applicable tax
considerations and it is solely responsible (and Seller is not in any way
responsible) for compliance with applicable resale restrictions and applicable
tax legislation;
(xi) No Government Recommendation or Approval. Buyer
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understands that no Federal or State or foreign government agency has passed on
or made any recommendation or endorsement of the Securities;
(xii) Current Public Information. Buyer acknowledges that the
Company is a "Reporting Issuer" and is current with filings, and Buyer and its
advisors, if any, have been furnished with the opportunity to ask questions
about, and request copies of materials relating to, the business, finances and
operations of Seller. Buyer further acknowledges that it and its advisors, if
any, have received complete and satisfactory answers to such inquiries, to the
extent made; on the basis of the foregoing, the Buyer believes that an
investment pursuant to the terms hereof is an appropriate and suitable
investment for the Buyer,
(xiii) Buyer's Sophistication. Buyer acknowledges that the
purchase of the Securities involves a high degree of risk, including the total
loss of Buyer's investment. Buyer has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
purchasing the Securities. Buyer understands that, at the time of issuance, the
Securities are not being registered under the 1933 Act, and therefore Buyer must
bear the economic risk of this investment for the period up to any registration.
(xiv) Tax Status. Buyer is not a "10-percent Shareholder"(as
defined in Section 871(h)(3)(B) of the U.S. Internal Revenue Code of 1986, as
amended) of Seller.
(xv) High Degree of Risk. The Buyer realizes that this
investment involves a high degree of risk, including the total loss of the
investment.
(xvi) Ability to Bear the Risk. The Buyer is able to bear the
economic risk of the investment.
(xvii) Forward Looking Information. The Buyer acknowledges and
understands that any information provided about the Company's future plans and
prospects is uncertain and subject to all of the uncertainties inherent in
future predictions.
(xviii) Accredited Investor Status. The undersigned represents
and warrants that it is an "accredited investor" as defined in Regulation D.
(xix) Independent Investigation. The Buyer in electing to
subscribe for the Securities hereunder, has relied solely upon the
representations and warranties of the Company set forth in this Agreement and on
independent investigation made by it and its representatives, if any, and the
Buyer has been given no oral or written representation or assurance from the
Company or any representation of the Company other than as set forth in this
Agreement or in a document executed by a duly authorized
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representative of the Company making reference to this Agreement.
3. Seller Representations and Covenants.
(a) Reporting Company Status. Seller is a "Reporting Issuer"
and is current in its filings with the Securities and Exchange Commission.
Seller's Common Stock (the "Common Stock"), is not yet listed on any exchange
however after the filing of an S-1 registration statement Seller shall
immediately list the shares to have the stock listed on NASDAQ or other
equivalent national stock exchange.
(b) Current Publication Information. To the extent requested
by the Buyer, Seller has furnished Buyer with copies of materials relating to
the business finances and operations of the Seller's business.
(c) Concerning the Securities. The issuance, sale and delivery
of the Securities have been duly authorized by all required corporate action on
the part of Seller, and when issued, sold and delivered in accordance with the
terms hereof and thereof for the consideration expressed herein and therein,
will be duly and validly issued, fully paid and non-assessable. The Common Stock
issuable upon the close of this Agreement has been duly and validly reserved for
issuance and, upon issuance shall be duly and validly issued, fully paid, and
non-assessable and will not subject the holders thereof, if such persons are
non-U.S. persons, to personal liability by reason of being such holders. There
are no pre-emptive rights of any shareholder of Seller.
(d) Subscription Agreement. This Agreement has been duly
authorized, validly executed and delivered on behalf of Seller and is a valid
and binding agreement in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors' rights generally.
(e) Non-contravention. The execution and delivery of this
Agreement and the consummation of the issuance of the Securities and the
transactions contemplated by this Agreement do not and will not conflict with or
result in a breach by Seller of any of the terms or provisions of, or constitute
a default under, the articles of incorporation or by-laws of Seller, or any
indenture, mortgage, deed of trust, or other material agreement or instrument to
which Seller is a party or by which it or any of its properties or assets are
bound, or any existing applicable law, rule or regulation of the United States
or any State thereof or any applicable decree, judgment or order of any Federal
or State court, Federal or State regulatory body, administrative agency or other
United States governmental body having jurisdiction over Seller or any of its
properties or assets.
(f) Approvals. Seller is not aware of any
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authorization, approval or consent of any U.S. governmental body which is
legally required for the issuance and sale of the Securities as contemplated by
this Agreement.
(g) Filings. Seller undertakes and agrees pursuant to the sale
of its securities under Regulation D to make all necessary filings in connection
with the sale of its securities as required by the laws and regulations of the
United States.
(h) No Prior Offerings. Seller has not undertaken any
offerings in the last six (6) months which should be integrated into the
transaction.
(i) Non-Dilution. Seller agrees that, after the close of the
merger, it shall not dilute the net share value or interest of the Buyer in the
Company either by issuing additional common shares or by the means of reverse
stock split. In the event that, after the close of the merger, additional shares
of the Company are issued to any of the principals, the Buyer shall receive an
equal number of shares, pari passu, to retain its equity position in the
Company. However, after the close of the merger, in the event that Seller needs
to issue additional shares within twelve months from the date of this agreement,
as part of an offer to raise capital in the first six months, Buyer will consent
to such dilution and in consideration Seller will accelerate Buyers option to
redeem 35,000 shares as set out in Clause 1 (a) and repay to Buyer the amount of
$175,000.00 at the close of Seller's funding transaction and provided, that
Seller shall remain obligated to redeem the remaining issued and outstanding
Redeemable Cumulative Convertible Preferred Stock as otherwise required. In the
event that such consent is required in the second six month period, Seller shall
accelerate the remaining obligations to Buyer, which shall then be fully
discharged. In all other respects, the terms of Clause 1 (a) shall remain
unchanged. Nexgen shall have, as of the date of closing, no more than,
3,700,000 shares of issued and outstanding common stock and 320,000 shares of
issued and outstanding preferred stock. There shall be no more than 450,000
options to purchase common stock of Nexgen at $.50 per share and the Seller
represents that no additional options shall be granted to any party after the
date hereof.
(j) Obligation to Provide Information. Seller agrees that it
shall keep Buyer informed as to the progress of any registration statement and
filings with the SEC and provide copies of all such filings to Buyer.
4. Exemption; Reliance on Representations. Buyer understands that the
offer and sale of the Securities are not being registered under the 1933 Act at
the time of issue.
5. Instructions.
(a) Subject to Section 11 hereof it shall be the
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Seller's responsibility to take all necessary actions and to bear all such costs
to issue the Securities and deliver them to the Escrow Agent prior to the
closing of this transaction as provided herein, including the responsibility and
cost for delivery of any necessary opinion letter to the transfer agent, if so
required, provided Buyer provides such certificates and information as may be
reasonably required to support that opinion. The Buyer, in whose name the
certificate of Securities is to be registered, shall be treated as a shareholder
of record on and after the issuance of the Securities.
(b) The issuance of certificates representing the Securities
hereunder does not in any manner imply that such shares are free from the resale
restrictions more fully described in Section 11 hereof.
6. Registration. Seller acknowledges that Buyer is an offshore trust
company and acknowledges that it shall make no inquiry as to the accredited
status of Buyer and in the event that the Company fails to issue certificates
for the Securities as provided hereunder to the Buyer for any reason other than
the Company's reasonable good faith belief that the representations and
warranties made by the Buyer in this Agreement are invalid or incorrect then the
Seller shall be required, at the request of the Buyer and at the Seller's
expense, to effect the registration of the Underlying Securities as promptly as
is practical. The Seller and the Buyer shall cooperate in good faith in
connection with the furnishing of information required for such registration and
the taking of such other actions as may be legally or commercially necessary in
order to effect such registration. The Seller shall file such a registration
statement within four (4) weeks of Buyer's demand and shall use its diligent
efforts to cause such registration statement to become effective as soon as
practicable thereafter. Such diligent efforts shall include, but not be limited
to, promptly responding to all comments received from the staff of the S.E.C.,
providing Buyer's counsel with a contemporaneous copy of all written
communications from and to the staff of the S.E.C. with respect to such
registration statement and promptly preparing and filing amendments to such
registration statement which are responsive to the comments received from the
staff of the Securities and Exchange Commission. Once declared effective by the
S.E.C., the Seller shall cause such registration statement to remain effective
until the sale by the Buyer of all Underlying Securities registered. The Seller
shall include on the applicable registration form the Buyer as a selling
shareholder in connection with the Underlying Securities and upon the
effectiveness of such registration statement. Buyer shall have the option to
sell the underlying Securities.
7. Authorized and Issued Shares. The Seller shall at all times reserve
and have available all Securities necessary to comply with the terms of this
Agreement.
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8. Delivery Instructions. The Securities being purchased hereunder
shall be delivered to the Escrow Agent at such time and place as shall be
mutually agreed by Seller and Buyer.
9. Conditions to Seller's Obligation To Sell. Seller's obligation to
sell the Securities is conditioned upon:
(a) The receipt and acceptance by Seller of this Agreement
executed by Buyer.
(b) Delivery to the Escrow Agent of good funds by Buyer as
payment in full of the purchase price of the Securities.
(c) All of the representations and warranties of the Buyer
contained in this Agreement shall be true and correct on the Payment Date with
the same force and effect as if made on and as of the Payment Date. The Buyer
shall have performed or complied with all agreements and satisfied all
conditions on its part to be performed, complied with or satisfied at or prior
to the Payment Date.
(d) No order asserting that the transactions contemplated by
this Agreement are subject to the registration requirements of the Act shall
have been issued, and no proceedings for that purpose shall have been commenced
or shall be pending or, to the knowledge of the Company, be contemplated. No
stop order suspending the sale of the Securities shall have been issued, and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Company, contemplated.
(e) No action shall have been taken and no statue, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would prevent the issuance of the Securities. No
injunction, restraining order or order of any nature by a federal or state court
of competent jurisdiction shall have been issued that would prevent the issuance
of the Securities.
10. Conditions To Buyer's Obligation To Purchase. Buyer's obligation to
purchase the Securities is conditioned upon:
(a) The confirmation of receipt and acceptance by Seller of
this Agreement as evidenced by execution of this Agreement by the duly
authorized officer of Seller;
(b) delivery of the Securities to the Escrow Agent; and
(c) the transfer to the Escrow Agent of a fully executed
Agreement for the delivery of controlling interest in UNICO, Inc., a Delaware
Corporation, to the Buyer.
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11. Offering Materials and Resale Restrictions. Except for this
Subscription Agreement, no offering materials and documents have been issued in
connection with the offer and sale of the Securities. The Securities and
Underlying Securities have not been registered under the 1933 Act or applicable
state securities laws; neither Buyer, nor any direct or indirect purchaser of
the Securities from Buyer, may directly or indirectly offer or sell the
Securities or Underlying Securities unless the Securities or Underlying
Securities are registered under 1933 Act, any applicable state securities laws,
or any exemption from the registration requirements of the 1933 Act. Such
statements shall appear (1) on the cover of any prospectus or offering circular
used in connection with the offer or sale of the Securities, (2) in the
underwriting section of any prospectus or offering circular used in connection
with the offer or sale of the Securities, and (3) in any advertisement made or
issued by Seller, Buyer, any other distributor, any of their respective
affiliates, or any person acting on behalf of any of the foregoing. In order to
prevent resale transactions in violation of state securities laws, the Buyer may
only engage in resale transactions, to the extent otherwise permitted, in
jurisdictions in which an applicable exemption is available.
12. Miscellaneous.
(a) Except as specifically referenced herein, this Agreement
constitutes the entire contract between the parties in conjunction with the
Stock Purchase Agreement, and neither party shall be liable or bound to the
other in any manner by any warranties, representations or covenants except as
specifically set forth therein. Any previous agreement among the parties related
to the transactions described herein is superseded hereby. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than
the parties hereto, and their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided herein. Neither party may assign its rights or
obligations under this Agreement without the written consent of the other party.
(b) Buyer is an independent contractor, and is not the agent
of Seller. Buyer is not authorized to bind Seller, or to make any
representations or warranties on behalf of Seller.
(c) Seller represents that Buyer will receive all the benefits
of the representations in the annexed Nexgen Merger Agreement in relation to the
Seller, its finances, assets, business prospects or otherwise. Buyer will advise
each purchaser, if any, and potential purchaser of the Securities, of the
foregoing sentence, and that such purchaser is relying on its
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own investigation with respect to all such matters, and that such purchaser will
be given access to any and all documents and Seller personnel as it may
reasonably request for such investigation.
(d) All representations and warranties contained in this
Agreement by Seller and Buyer shall survive the closing of the transactions
contemplated by this Agreement.
(e) This Agreement shall be construed in accordance with the
laws of New York applicable to contracts made and wholly to be performed within
the State of New York and shall be binding upon the successors and assigns of
each party hereto, Buyer and Seller hereby waive trial by jury and consent to
exclusive jurisdiction and venue in the State of New York. This Agreement may be
executed in counterparts, and the facsimile transmission of an executed
counterpart to this Agreement shall be effective as an original.
13. Escrow Agent. Seller and Buyer hereby appoint the Escrow Agent to
receive the proceeds of all sales of the Securities(the "Funds") and the
Securities (hereinafter referred to together as the "Escrowed Property"), and to
hold and disburse the Escrowed Property in accordance with the terms of this
Agreement and Escrow Agent accepts such appointment on the following terms and
conditions:
(a) It is specifically understood and agreed that the only
obligation of Escrow Agent hereunder is to disburse the Escrowed Property
pursuant to the terms hereof, and Escrow Agent shall have no obligation to
Seller, Buyer or any other party whatsoever, including but not limited to any
party claiming by or through Seller or Buyer upon such disbursement.
(b) Escrow Agent shall not be under any duty to give the
Escrowed Property any greater degree of care than it gives its own similar
property, and it shall have no liability hereunder, whether for negligence or
otherwise, except for the intentional breach of its duties hereunder. Escrow
Agent shall have no duties or responsibilities except those as expressly set
forth herein, and no implied duties or obligations may be read into this
Agreement against the Escrow Agent.
(c) Escrow Agent may consult with counsel and shall be fully
protected, indemnified and held harmless with respect to any action taken or
omitted by Escrow Agent in good faith on advice of counsel.
(d) Escrow Agent makes no representation as to the validity,
value, genuineness or collectability of the Funds or of the Securities or any
other document or instrument held by or delivered to Escrow Agent.
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(e) Seller and Buyer hereby unconditionally agree to indemnify
the Escrow Agent and hold it harmless from and against any and all taxes (except
those taxes duly payable by Escrow Agent as a result of the compensation derived
by Escrow Agent hereunder, but including any other federal, state and local
taxes of any kind and other governmental charges), expenses, damages, actions,
suits or other charges incurred by or brought or assessed against Escrow Agent:
(i) for anything done or omitted by Escrow Agent in
the performance of its duties hereunder; or
(ii) on account of its acting in its capacity as
Escrow Agent or stakeholder hereunder, except as a result of its intentional
breach of its duties under this Agreement.
(f) The agreements contained herein shall survive any
termination of this Agreement and the duties of the Escrow Agent hereunder.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the date first set forth above.
Official Signatory of Seller:
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NEXT GENERATION MEDIA CORP.
By: /s/ Xxxxxxxx Xxxxxx
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Accepted this 4th day of May, 1998 Title: President
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Official Signatory of Buyer:
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T.C. EQUITIES:
/s/ Xxxxx X. Xxxxxxxx
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