Exhibit 4.3
Name of Subscriber ___________________
SUBSCRIPTION AGREEMENT
(FOR ACCREDITED INVESTORS ONLY)
Pivot Rules, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
i. Subscription. I (sometimes referred to herein as the
"Investor") hereby subscribe for and agree to purchase ____
Units (as defined below) of securities of Pivot Rules, Inc.
("Company"), a New York corporation, on the terms and
conditions described herein and in the Confidential Term
Sheet dated November __, 1996, together with all
supplements, if any ("Term Sheet"), relating to this
offering. The purchase price per Unit is $100,000 and the
aggregate amount subscribed for hereby is
$____________________. The Company and GKN Securities Corp.,
which is acting as the placement agent for this offering
("GKN" or the "Placement Agent"), have the mutual discretion
to accept offers for fractional Units.
ii. Description of Units. Each Unit consists of:
(1) a $100,000 principal amount interest-bearing secured
subordinated convertible promissory note ( "Note"),
that will have principal and interest thereon payable
upon the earliest of (i) the 24-month anniversary of
the date of the closing of this offering ("Closing"),
(ii) the date of successful consummation by the
Company of an initial public offering of its
securities, as described in Section 4.1 of the Note (
"Consummation Date"), (iii) the date of consummation
of a sale by the Company of all or substantially all
of its assets, (iv) the date of consummation of the
sale or exchange (including by way of merger) of all
or substantially all of the outstanding shares of the
Common Stock, no par value, of the Company ("Common
Stock"), (v) the date of consummation of certain
mergers or consolidations of the Company, as described
in Section 4.2 of the Note, or (vi) an "Offering
Termination" as defined in Section 5 of the Note. In
the event of an Offering Termination, the Note is
convertible, at the option of the holder, into shares
of the Company's Common Stock at a conversion rate of
$2.50 per share;
(2) a warrant to purchase 40,000 shares of the Company's
Common Stock exercisable at any time or from time to
time during the period commencing January 1, 1998 and
ending December 31, 2002 at an initial exercise price
of $2.50 per share ("Warrants"); provided, however,
that on the effective date of the registration
statement with respect to the initial public offering
contemplated by the letter of intent, dated October 3,
1996 ("Letter of Intent") between the Company and GKN
("GKN Offering"), the Warrants will automatically
convert (on a one-for-one basis) into warrants bearing
identical terms to those to be issued as part of the
securities to be offered to the public in the GKN
Offering ("Public Warrants").
iii. Purchase.
(1) I hereby tender to GKN cash or a check made payable to
the order of "GKN Securities Corp.--Pivot Rules
Special Account" in the amount indicated above, two
manually executed copies of this Subscription
Agreement and an executed copy of my Purchaser
Questionnaire.
(2) This offering will continue until the earlier of the
Closing or ________ __, 1996, unless such latter date
is extended, without notice to the Investor, by mutual
consent of GKN and the Company for a period of up to
30 days ("Termination Date"). Prior to the Termination
Date, my cash or check delivered herewith will be held
by GKN in a segregated, non-interest bearing bank
account subject to the terms and conditions contained
herein. If less than fifteen (15) Units offered
pursuant to the Term Sheet are sold and paid for by
the Termination Date, my payment will be returned to
me without interest or deduction. Upon completion or
termination of this offering, I will be notified
promptly by GKN as to whether my subscription has been
accepted by the Company.
iv. Acceptance or Rejection of Subscription.
(1) I understand and agree that the Company and GKN
reserve the right to reject this subscription for the
Units, as a whole or in part and at any time prior to
the Closing or Termination Date, notwithstanding prior
receipt by me of notice of acceptance of my
subscription, if in either of their judgment they deem
such action to be in the best interests of the
Company; and
(2) In the event of rejection of this subscription, my
subscription payment will be returned promptly to me
without interest or deduction and this Subscription
Agreement shall have no force or effect. In the event
my subscription is accepted, the funds specified above
shall be released to the Company and the Note and
certificate representing the Warrants will be
delivered to GKN to hold on my behalf until otherwise
instructed.
(3) Effective upon acceptance of my subscription by the
Company, I shall become a party to a security
agreement relating to all of the Company's assets (the
"Security Agreement"), a copy of which is annexed as
Exhibit B to the Term Sheet. I agree to be bound by
the terms and conditions of such Security Agreement
and acknowledge that my execution of this Subscription
Agreement shall be deemed to be the valid execution by
me of the Security Agreement.
(4) By my becoming a party to the Security Agreement, I am
(i) appointing GKN as my agent to take any and all
action that may be necessary or required to enforce my
rights under the Note and the Security Agreement, (ii)
agreeing that GKN will be reimbursed for any
out-of-pocket costs and expenses incurred by it as my
agent (such reimbursement to be either from the
collection of the Note or from me), (iii) agreeing to
indemnify GKN and hold it harmless from any
liabilities under the Security Agreement, and (iv)
acknowledging that GKN as agent shall have such
rights, duties and obligations as set forth in such
Security Agreement. I have read the Security Agreement
and understand that GKN as agent has no obligations in
any way to monitor the Company's performance.
v. Closing. The Closing of this offering will occur at the
offices of Xxxxxxxx Xxxxxx & Xxxxxx ("GM&M") upon the
receipt and acceptance by the Company of subscriptions for
fifteen (15) Units. The Units subscribed for herein shall
not be deemed issued to or owned by me until two copies of
this Subscription Agreement have been executed by me and
countersigned by the Company and a Closing has occurred. At
the Closing, my Note and the certificates representing my
Warrants shall be delivered to GM&M, as custodian, to be
held for my benefit until the consummation of the GKN
Offering or such earlier time as I may request their
delivery to me. I hereby authorize GM&M, upon the
consummation of the GKN Offering, to (i) deliver the Note to
the Company upon full payment of all principal and interest
due thereon and deliver the proceeds of such payment to the
Placement Agent for credit to my account with the Placement
Agent and (ii) deliver the certificates representing my
Warrants to the Company in exchange for certificates
representing an equal number of Public Warrants and deliver
such certificates representing the Public Warrants to the
Placement Agent for my account.
vi. Disclosure.
(1) Because this offering is limited to accredited
investors as defined in Section 2(15) of the
Securities Act of 1933, as amended ("Securities Act"),
and Rule 501 promulgated thereunder, in reliance upon
exemptions contained in Section 4(2) and Rules 505 and
506 of the Securities Act and applicable state
securities laws, the Units are being sold without
registration under the Securities Act. Accordingly,
the Company is offering the Units utilizing the Term
Sheet rather than a more detailed private offering
memorandum that contains the kind of information
specified in Rule 502(b)(2) promulgated under the
Securities Act. I acknowledge receipt of the Term
Sheet, including all
exhibits listed therein, and acknowledge that I have
had an adequate opportunity to receive, and have
received, all information and materials regarding the
Company that I have requested.
(2) I fully understand that the Units are speculative
investments which involve a high degree of risk of
loss of my entire investment. I fully understand the
nature of the risks involved in purchasing the Units
and I am qualified by my knowledge and experience to
evaluate in- vestments of this type. I have carefully
considered the potential risks relating to the Company
and purchase of its Units and have, in particular,
reviewed each of the risks set forth in the Term
Sheet. Both my advisors and I have had the opportunity
to ask questions of and receive answers from
representatives of the Company or persons acting on
its behalf concerning the Company and the terms and
conditions of a proposed investment in the Company and
my advisors and I have also had the opportunity to
obtain additional information necessary to verify the
accuracy of information furnished about the Company.
Accordingly, I have independently evaluated the risks
of purchasing the Units.
vii. Planned Public Offering - Registration Rights; Lock-Up.
(1) The Units are being offered pursuant to the Term Sheet
to which this Subscription Agreement is Exhibit D.
Annexed as Exhibit F to the Term Sheet is a copy of
the Letter of Intent that the Company has received
from GKN with regard to the Company's proposed GKN
Offering. There can be no assurance that a
registration statement ("Registration Statement") will
be filed or, if filed, declared effective by the
Securities and Exchange Commission ("Commission") or,
if the Registration Statement is declared effective by
the Commission, that the Company successfully will be
able to consummate the GKN Offering.
(2) To facilitate the closing of the proposed GKN
Offering, I agree that the Units, the Notes and the
Warrants (and the shares of Common Stock underlying
the Warrants) included in the Units offered hereby may
not be sold or otherwise transferred until one year
after the date upon which the Registration Statement
with respect to the GKN Offering is declared effective
("Effective Date") by the Securities and Exchange
Commission ("Holding Period"), unless (i) GKN, in its
sole discretion, agrees to the sale of all or part of
such securities at an earlier date and (ii) if I am a
Pennsylvania resident, I comply with 204.011 of the
Pennsylvania Blue Sky Regulations. The parties hereto
agree that GKN is intended to be a third-party
beneficiary of this Subscription Agreement and that no
modification of the "lock-up" provisions contained in
this Section 7b may be made without the prior written
consent of GKN.
(3) Upon the Effective Date, such Warrants shall be
automatically converted (on a one-for-one basis) into
the Public Warrants to be sold
to the public in the GKN Offering. I understand that
the terms of the Warrants included in the Units are
different from the terms of the Public Warrants which
have a higher exercise price, are redeemable by the
Company at a price of $.01 per Warrant if the price of
the Company's Common Stock reaches certain levels, and
may be different in other material respects.
(4) The Company, at its cost and expense (except
commissions or discounts and fees of the Investor's
own professionals, if any), agrees to include the
Public Warrants and shares of Common Stock underlying
the Public Warrants ("Registerable Securities") in the
Company's Registration Statement to be filed in
connection with the GKN Offering, and the Company
shall keep the Registration Statement or a substitute
registration statement current and effective until all
of the Registerable Securities are sold or an
exemption from the registration requirements of the
Securities Act is available.
(5) So long as the Registrable Securities are not included
in a current and effective registration statement, the
Investor shall have the right to "piggyback" the
Registerable Securities on each registration statement
filed by the Company during the seven year period
following the consummation of the GKN Offering (except
registration statements filed on Form S-4 and Form
S-8), all at the Company's cost and expense (except
commissions or discounts and fees of the Investor's
own professionals, if any); provided, however, that
this subparagraph (e) shall not apply to any
Registerable Securities if such Registerable
Securities may then be sold within a six-month period
under Rule 144, assuming the Investor's compliance
with the provisions of such Rule, and the Company
delivers an opinion of counsel to that effect to the
transfer agent; and provided, further, that if the
offering (other than the GKN Offering) with respect to
which a registration statement is filed is managed by
an independent underwriter, then (i) if in the
reasonable judgment of the managing underwriter, which
shall be evidenced by a writing delivered to such
Investor, the sale of the Registerable Securities in
connection with the proposed offering would have a
material adverse effect on the offering, the Investor
shall not sell his Registerable Securities under such
registration statement until 90 days after the
effective date of such registration statement, and
(ii) if securities are to be registered for the
benefit of any other selling security holder ("Selling
Holder"), the Investor shall be entitled to sell
immediately under such registration statement a
percentage of the total number of Registerable
Securities of a particular class of securities owned
by him equal to the highest percentage of that class
to be sold under such registration statement
(vis-a-vis the total number of securities of that
class owned) by any such Selling Holder, with the
Investor being entitled to sell the balance of his
Registerable Securities under such registration
statement commencing 90 days after the effective date
of the registration statement. The Company shall give
the Investor three weeks' notice of the intended
filing date of any
registration statement, other than a registration
statement filed on Form S-4 or Form S-8, and the
Investor shall have two weeks after receipt of such
notice to notify the Company of its intent to include
the Registerable Securities in the registration
statement. The Company shall keep any registration
statement onto which the Investor has "piggybacked"
his Registerable Securities current and effective for
a period up to 180 days from the date on which the
Investor is first entitled to sell the total number of
his Registerable Securities registered thereunder.
(6) Notwithstanding the foregoing, I acknowledge and agree
that, if necessary to obtain Nasdaq listing for the
Common Stock, and with GKN's consent, (i) the Holding
Period may be made unconditional and absolute and
extended for up to one additional year, and (ii) the
Public Warrants and shares of Common Stock underlying
the Public Warrants described in Section 7d hereof may
be excluded or withdrawn from the Company's
Registration Statement to be filed in connection with
the GKN Offering.
(7) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless the Investor
against any and all loss, liability, claim, damage and
expense whatsoever (including but not limited to any
and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any
litigation, commenced or threatened, whether arising
out of any action between the Investor and the Company
or between the Investor and any third-party or
otherwise) to which the Investor may become subject
under the Securities Act, the Securities Exchange Act
of 1934 ("Exchange Act") or any other statute or at
common law or otherwise or under the laws of foreign
countries, arising out of or based upon any untrue
statement or alleged untrue statement of a material
fact contained in (i) the Registration Statement (as
from time to time amended and supplemented); (ii) in
any post-effective amendment or amendments thereto or
any substitute registration statement in which the
Registrable Securities are included; or (iii) any
application or other document or written communication
("application") executed by the Company or based upon
written information furnished by the Company in any
jurisdiction in order to qualify the Registrable
Securities under the securities laws thereof or filed
with the Securities and Exchange Commission, any state
securities commission or agency, Nasdaq or any
securities exchange; or the omission or alleged
omission therefrom of a material fact required to be
stated therein or necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading, unless such statement
or omission was made in reliance upon, and in strict
conformity with, written information furnished to the
Company with respect to the Investor by or on behalf
of the Investor expressly for use in the Registration
Statement, or any amendment or supplement thereof, or
in any application, as the case may be. The Company
agrees promptly to notify the Investor of the
commencement of any litigation or proceedings against
the Company or any of its officers, directors or
controlling persons in connection with the issue and
sale of the Registrable Securities or in connection
with the Registration Statement or Prospectus.
(8) If any action is brought against the Investor in
respect of which indemnity may be sought against the
Company pursuant to Section 7g, the Investor shall
promptly notify the Company in writing of the
institution of such action and the Company shall
assume the defense of such action, including the
employment and reasonable fees of counsel (subject to
the reasonable approval of the Investor) and payment
of actual expenses. The Investor shall have the right
to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at
the expense of the Investor unless (i) the employment
of such counsel shall have been authorized in writing
by the Company in connection with the defense of such
action, or (ii) the Company shall not have employed
counsel to have charge of the defense of such action,
or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses
available to it or them which are different from or
additional to those available to the Company (in which
case the Company shall not have the right to direct
the defense of such action on behalf of the
indemnified party or parties), in any of which events
the fees and expenses of not more than one additional
firm of attorneys selected by the Investor shall be
borne by the Company. Notwithstanding anything to the
contrary contained herein, if the Investor shall
assume the defense of such action as provided above,
the Company shall have the right to approve the terms
of any settlement of such action which approval shall
not be unreasonably withheld.
(9) The Investor agrees to indemnify and hold harmless the
Company against any and all loss, liability, claim,
damage and expense whatsoever (including but not
limited to any and all legal or other expenses
reasonably incurred in investigating, preparing or
defending against any litigation, commenced or
threatened, whether arising out of any action between
the Investor and the Company or between the Company
and any third-party or otherwise) to which the Company
may become subject under the Securities Act, the
Exchange Act or any other statute or at common law or
otherwise or under the laws of foreign countries,
arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained
in (i) the Registration Statement (as from time to
time amended and supplemented); (ii) in any
post-effective amendment or amendments thereto or any
substitute registration statement in which the
Registrable Securities are included; or (iii) any
application or other document or written communication
("application") executed by the Company or based upon
written information furnished by the Company in any
jurisdiction in order to qualify the Registrable
Securities under the securities laws thereof or filed
with the Securities and Exchange Commission, any state
securities commission or
agency, Nasdaq or any securities exchange; or the
omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading, but only with respect to untrue statements
or omissions, or alleged untrue statements or
omissions in the Registration Statement or any
amendment or supplement thereto or in any application
in reliance upon, and in strict conformity with,
written information furnished to the Company with
respect to the Investor by or on behalf of the
Investor expressly for use in the Registration
Statement or any amendment or supplement thereto or in
any such application.
viii. Investor Representations and Warranties. I acknowledge,
represent, and warrant to, and agree with, the Company (and
GKN may rely thereon) as follows:
(1) I am aware that my investment involves a high degree
of risk as disclosed in the Term Sheet and have
carefully read the Term Sheet including the section
thereof entitled "Risk Factors;"
(2) I acknowledge and am aware that there is no assurance
as to the future performance of the Company;
(3) I acknowledge that there may be certain adverse tax
consequences to me in connection with my purchase of
Units and the Company and GKN have advised me to seek
the advice of experts in such areas prior to making
this investment;
(4) I acknowledge that there can be no assurance that the
Company will file the Registration Statement for its
proposed GKN Offering, that such Registration
Statement will be declared effective by the Commission
or, if declared effective, that the Company
successfully will close the proposed GKN Offering. If
the proposed GKN Offering is not closed and the
Company does not receive alternative financing, which
it does not anticipate, the Company may not have the
funds to pay the Notes or to fund the Company's
operating expenses;
(5) I am purchasing the Units for my own account for
investment and not with a view to or for sale in
connection with the distribution of the Units or the
Notes or the Warrants contained in the Units nor with
any present intention of selling or otherwise
disposing of all or any part of the Units, the Notes
or the Warrants. I agree that I must bear the economic
risk of my investment for an indefinite period of time
because, among other reasons, the Units have not been
registered under the Securities Act or under the
securities laws of any state and, therefore, cannot be
resold, pledged, assigned, or otherwise disposed of
unless they are subsequently registered under the
Securities Act and under applicable securities laws of
certain states or an exemption from such registration
is available. I understand that, other than as
described herein, the Company is under no obligation
to register the
Units on my behalf or to assist me in complying with
any exemption from such registration under the
Securities Act or any state securities laws.
Furthermore, I hereby acknowledge and agree that I
will not sell, transfer, give, or otherwise dispose
of, either publicly or privately, the Units or any
securities underlying the Units during the Holding
Period without the prior written consent of GKN. I
hereby authorize the Company to place a legend
denoting the restrictions on the Note and the Warrants
to be issued;
(6) I am not a member of the National Association of
Securities Dealers, Inc. ("NASD"). I have not, for a
period of 12 months prior to the date of this
Subscription Agreement, been affiliated or associated
with any company, firm, or other entity which is a
member of the NASD. I do not own stock or other
interest in, and I am not a creditor of, any member of
the NASD (other than interests acquired in open market
purchases);
(7) I have the financial ability to bear the economic risk
of my investment in the Company (including its
complete loss), have adequate means for providing for
my current needs and personal contingencies, and have
no need for liquidity with respect to my investment in
the Company;
(8) I have such knowledge and experience in financial and
business matters as to be capable of evaluating the
merits and risks of an investment in the Units and
have obtained, in my judgment, sufficient information
from the Company to evaluate the merits and risks of
an investment in the Company. I have not utilized any
person as my purchaser representative in connection
with evaluating such merits and risks;
(9) I have relied solely upon my own investigation in
making a decision to invest in the Company;
(10) I have received no representation or warranty from the
Company or the Placement Agent or any of their
respective officers, directors, employees or agents in
respect of my investment in the Company and I have
received no information (written or otherwise) from
them relating to the Company or its business other
than as set forth in the Term Sheet. I am not
participating in the offer as a result of or
subsequent to: (i) any advertisement, article, notice
or other communication published in any newspaper,
magazine or similar media or broadcast over television
or radio; or (ii) any seminar or meeting whose
attendees have been invited by any general
solicitation or general advertising;
(11) I have had full opportunity to ask questions of and to
receive satisfactory answers concerning the offering
and other matters pertaining to my investment and all
such questions have been answered to my full
satisfaction;
(12) I have been provided an opportunity to obtain any
additional information concerning the offering, the
Company and all other information to the extent the
Company possesses such information or can acquire it
without unreasonable effort or expense;
(13) I am an "accredited investor" as defined in Section
2(15) of the Securities Act and in Rule 501
promulgated thereunder;
(14) I understand that (i) the Units have not been
registered under the Securities Act or the securities
laws of certain states in reliance on specific
exemptions from registration thereunder, (ii) no
securities administrator of any state or the Federal
government has recommended or endorsed this offering
or made any findings or determination relating to the
fairness of an investment in the Company, and (iii)
the Company is relying on my representations and
agreements for the purpose of determining whether this
transaction meets the requirements of the exemptions
referred to in clause (i) hereto;
(15) I understand that (i) since neither the offer nor sale
of the Units has been registered under the Securities
Act or the securities laws of any state, the Units may
not be sold, assigned, pledged or otherwise disposed
of unless they are so registered or an exemption from
such registration is available, (ii) it is not
anticipated that there will be any market for the
resale of the Units, and (iii) except as set forth
herein, the Company has no obligation or intention to
register the Notes and the Warrants (including the
Common Stock underlying the Warrants) or the Units
under the Securities Act or the securities laws of any
states, or to take action so as to permit sales of the
Units pursuant thereto;
(16) I understand that I am urged to seek independent
advice from my professional advisors relating to the
suitability of an investment in the Company in view of
my overall financial needs and with respect to the
legal and tax implications of such investment;
(17) If the Investor is a corporation, company, trust,
employee benefit plan, individual retirement account,
Xxxxx Plan, or other tax-exempt entity, it is
authorized and qualified to become an Investor in the
Company and the person signing this Subscription
Agreement on behalf of such entity has been duly
authorized by such entity to do so;
(18) The information contained in my Purchaser
Questionnaire, as well as any information which I have
furnished to the Company with respect to my financial
position and business experience, is correct and
complete as of the date of this Subscription
Agreement, and, if there should be any material change
in such information prior to the Closing, I will
promptly furnish such revised or corrected information
to the Company;
(19) I hereby acknowledge and am aware that except for any
rescission rights that may be provided under
applicable laws, I am not entitled to cancel,
terminate, or revoke this subscription, and any
agreements made in connection herewith shall survive
my death or disability; and
(20) I acknowledge that, in order to obtain Nasdaq listing
for the Common Stock, it may be necessary for (i) the
Holding Period to be made absolute and unconditional
and extended for up to one additional year, and (ii)
the Public Warrants and Common Stock underlying the
Public Warrants held by me to be excluded or withdrawn
from any Registration Statement filed in connection
with the GKN Offering.
ix. Indemnification.
(1) I hereby agree to indemnify and hold harmless the
Company and GKN, as Placement Agent, their respective
officers, directors, shareholders, employees, agents
and attorneys against any and all losses, claims,
demands, liabilities, and expenses (including
reasonable legal or other expenses) incurred by each
such person in connection with defending or
investigating any such claims or liabilities, whether
or not resulting in any liability to such person, to
which any such indemnified party may become subject
under the Securities Act, under any other statute, at
common law or otherwise, insofar as such losses,
claims, demands, liabilities and expenses (i) arise
out of or are based upon any untrue statement or
alleged untrue statement of a material fact made by me
and contained in this Subscription Agreement or my
Purchaser Questionnaire, or (ii) arise out of or are
based upon any breach by me of any representation,
warranty, or agreement contained herein.
(2) I hereby agree to indemnify and hold harmless GKN, as
Agent under the Security Agreement, its officers,
directors, shareholders, employees, agents and
attorneys against any and all losses, claims, demands,
liabilities, and expenses (including reasonable legal
or other expenses) incurred by each such person in
connection with defending or investigating any such
claims or liabilities, whether or not resulting in any
liability to such person, to which any such
indemnified party may become subject under any
statute, at common law or otherwise, insofar as such
losses, claims, demands, liabilities and expenses,
arise out of or are based upon GKN's action or
inaction as agent under the Security Agreement (except
to the extent that the Security Agreement provides
that no such indemnification is possible).
x. Severability. In the event any part or parts of this
Subscription Agreement are found to be void, the remaining
provisions of this Subscription Agreement shall nevertheless
be binding with the same effect as though the void part or
parts were deleted.
xi. Counterparts. This Subscription Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and
the same instrument. The execution of this Subscription
Agreement may be by actual or facsimile signature.
xii. Benefit. This Subscription Agreement shall be binding upon
and inure to the benefit of the parties hereto (and GKN to
the extent it is a third party beneficiary hereof or
otherwise given rights hereunder) and their legal
representatives, successors and assigns. GKN shall be deemed
to be a third party beneficiary with respect to any sections
hereof which so state or which otherwise indicate that GKN
would be entitled to rely on the representations, warranties
or covenants made by me therein.
xiii. Notices and Addresses. All notices, offers, acceptance and
any other acts under this Subscription Agreement (except
payment) shall be in writing, and shall be sufficiently
given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, by facsimile delivery
or, if mailed, postage prepaid, by certified mail, return
receipt requested, as follows:
To Subscriber: At the address set forth on the signature
page of this Subscription Agreement
To The Company: Pivot Rules, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: E. Xxxxxxx Xxxxx
Chief Executive Officer
Fax: 000-000-0000
In either case
with copies to: GKN Securities Corp.
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Coventry
Vice President
Fax: 000-000-0000
Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxx Xxxxxx, Esq.
Fax: 000-000-0000
Shereff, Friedman, Xxxxxxx
& Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: 000-000-0000
or to such other address as any of them, by notice to the others may designate
from time to time. Time shall be counted to, or from, as the case may be, the
delivery in person or five (5) days after mailing.
xiv. Governing Law. This Subscription Agreement and any dispute,
disagreement, or issue of construction or interpretation
arising hereunder, whether relating to its execution, its
validity, the obligations provided therein or performance
shall be governed by, and interpreted according to the law
of, the State of New York without regard to principles of
conflict of law.
xv. Venue. The Company (a) agrees that any legal suit, action or
proceeding arising out of or relating to this Agreement
shall be instituted exclusively in New York State Supreme
Court, County of New York or in the United States District
Court for the Southern District of New York, (b) waives any
objection to the venue of any such suit, action or
proceeding and the right to assert that such forum is not a
convenient forum, and (c) irrevocably consents to the
jurisdiction of the New York State Supreme Court, County of
New York, and the United States District Court for the
Southern District of New York in any such suit, action or
proceeding. The Company further agrees to accept and
acknowledge service of any and all process which may be
served in any such suit, action or proceeding in the New
York State Supreme Court, County of New York, or in the
United States District Court for the Southern District of
New York and agrees that service of process upon it mailed
by certified mail to its address shall be deemed in every
respect effective service of process upon it in any such
suit, action or proceeding.
xvi. Oral Evidence. This Subscription Agreement constitutes the
entire subscription agreement between the parties and
supersedes all prior oral and written agreements between the
parties hereto with respect to the subject matter hereof.
Neither this Subscription Agreement nor any provision hereof
may be changed, waived, discharged, or terminated orally,
except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver,
discharge, or termination is sought.
xvii. Section Headings. Section headings herein have been inserted
for reference only and shall not be deemed to limit or
otherwise affect, in any matter, or be deemed to interpret
in whole or in part any of the terms or provisions of this
Subscription Agreement.
xviii. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained herein
shall survive the delivery of, and payment for, the Units.
xix. Acceptance of Subscription. The Company may accept this
Subscription Agreement at any time for all or any portion of
the Units subscribed for by executing a copy hereof as
provided and notifying me within a reasonable time
thereafter.
NOTICE TO RESIDENTS OF ALL STATES
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL
OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE
ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTION ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
NOTICE TO CALIFORNIA RESIDENTS: THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE CALIFORNIA
CORPORATIONS CODE BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE
LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS
SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
CALIFORNIA CORPORATIONS CODE, IF SUCH REGISTRATION IS REQUIRED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
COMMISSIONER OF CORPORATIONS, DEPARTMENT OF CORPORATIONS, STATE OF CALIFORNIA,
NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE DEPARTMENT OF CORPORATIONS OF THE STATE OF CALIFORNIA REQUIRES
THAT THE FOLLOWING LEGEND BE PLACED ON CERTIFICATES EVIDENCING SECURITIES SOLD
TO CALIFORNIA INVESTORS: IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF
THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION
THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS
OF THE STATE OF CALIFORNIA EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
NOTICE TO CONNECTICUT RESIDENTS: THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER SECTION 36-485 OF THE CONNECTICUT UNIFORM SECURITIES ACT AND
HAVE BEEN SOLD PURSUANT TO AN EXEMPTION THEREFROM. THESE SECURITIES CANNOT BE
RESOLD OR TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE CONNECTICUT UNIFORM
SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BANKING COMMISSIONER OF
THE STATE OF CONNECTICUT NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO FLORIDA RESIDENTS: THE SECURITIES OFFERED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT, AND
THEY THEREFORE HAVE THE STATUS OF SECURITIES ACQUIRED IN AN EXEMPT TRANSACTION
UNDER S.517.061 OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT. EACH
OFFEREE WHO IS A FLORIDA RESIDENT SHOULD BE AWARE THAT SECTION
517.061(11)(a)(5) OF THE FLORIDA SECURITIES ACT PROVIDES, IN RELEVANT PART, AS
FOLLOWS: "WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN (FLORIDA), ANY SALE IN
(FLORIDA) MADE PURSUANT TO... SECTION 517.061(11) SHALL BE VOIDABLE BY THE
PURCHASER IN SUCH SALE EITHER WITHIN 3 DAYS AFTER THE FIRST TENDER OF
CONSIDERATION IS MADE BY THE PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER OR
AN ESCROW AGENT OR WITHIN 3 DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS
COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER."
THE AVAILABILITY OF THE PRIVILEGE TO VOID SALES PURSUANT TO SECTION
517.061(12) IS HEREBY COMMUNICATED TO EACH FLORIDA OFFEREE. EACH PERSON
ENTITLED TO EXERCISE THE PRIVILEGE TO VOID SALES GRANTED BY SECTION
517.061(11)(a)(5) AND WHO WISHES TO EXERCISE SUCH RIGHT MUST, WITHIN THREE DAYS
AFTER THE TENDER OF THE PURCHASE PRICE OF THE UNITS TO THE COMPANY OR TO ANY
AGENT OF THE COMPANY (INCLUDING ANY DEALER ACTING ON BEHALF OF THE COMPANY OR
ANY SALESMAN OF SUCH DEALER) OR AN ESCROW AGENT CAUSE A WRITTEN NOTICE OR
TELEGRAM TO BE SENT TO THE COMPANY AT THE ADDRESS PROVIDED IN THE MEMORANDUM.
SUCH LETTER OR TELEGRAM MUST BE SENT AND, IF POSTMARKED, POSTMARKED ON OR PRIOR
TO THE END OF THE AFOREMENTIONED THIRD DAY. IF A PERSON IS SENDING A LETTER, IT
IS PRUDENT TO SEND SUCH LETTER BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
ASSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME IT WAS MAILED. SHOULD
A PERSON MAKE THIS REQUEST ORALLY, HE MUST ASK FOR WRITTEN CONFIRMATION THAT
HIS REQUEST HAS BEEN RECEIVED.
NOTICE TO NEW YORK RESIDENTS: THIS PRIVATE PLACEMENT MEMORANDUM HAS
NOT BEEN REVIEWED BY THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE
ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT
OF MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS MADE IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS AND DOCUMENTS
PURPORTED TO BE SUMMARIZED HEREIN.
NOTICE TO PENNSYLVANIA RESIDENTS: THE OFFER AND SALE OF THESE
SECURITIES TO PENNSYLVANIA RESIDENTS IS BEING MADE PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE PENNSYLVANIA SECURITIES ACT OF 1972
("PENNSYLVANIA ACT"), IN ACCORDANCE WITH SECTION 203(d) THEREFROM. A
REQUIREMENT OF SECTION 203(d) IS THAT THE COMPANY OBTAIN THE WRITTEN AGREEMENT
OF EACH PENNSYLVANIA INVESTOR NOT TO SELL THE SECURITIES WITHIN TWELVE MONTHS
AFTER THE DATE OF PURCHASE. UNDER THE PENNSYLVANIA ACT EACH PERSON WHO ACCEPTS
AN OFFER TO PURCHASE THESE SECURITIES MAY ELECT, 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 WHERE THERE IS
NO WRITTEN BINDING CONTRACT OF PURCHASE, WITHIN TWO BUSINESS DAYS AFTER HE
MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED, TO WITHDRAW HIS
ACCEPTANCE AND RECEIVE A FULL REFUND OF ALL MONEYS PAID, WITHOUT INCURRING ANY
LIABILITY.
TO ACCOMPLISH THIS WITHDRAWAL A SUBSCRIBER NEED ONLY SEND A LETTER OR
TELEGRAM TO THE SELLING AGENT AT THE ADDRESS SET FORTH IN THE TEXT OF THE
MEMORANDUM, INCLUDING HIS OR HER 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 ENSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME
WHEN IT WAS MAILED. IF THE REQUEST IS MADE ORALLY (IN PERSON OR BY TELEPHONE,
TO THE SELLING AGENT AT THE NUMBER LISTED IN THE TEXT OF THE MEMORANDUM), A
WRITTEN CONFIRMATION THAT THE REQUEST HAS BEEN RECEIVED SHOULD BE REQUESTED.
Individual Investor Date:
------------------------------
-------------------------- -----------------------------------
Social Security Number Print Name of Investor No. 1
-----------------------------------
Signature of Investor No. 1*
-----------------------------------
Number and Street
-----------------------------------
City, State, Zip Code
-------------------------- -----------------------------------
Social Security Number Print Name of Investor No. 2
-----------------------------------
Signature of Investor No. 2*
-----------------------------------
Number and Street
-----------------------------------
City, State, Zip Code
----------
* The Investor's signature hereto shall constitute (i) the Investor's
signature, as Secured Party, of and on the Security Agreement to be executed
by the Company on the Closing of the Offering, and (ii) the Investor's
agreement to be bound by the terms of such Security Agreement.
Entity Investor
Manner in which Units are to be held:
Individual Ownership
-----
Tenants-in-Common
-----
Joint Tenant with Right of Survivorship
-----
Community Property
-----
Separate Property
-----
Partnership
-----
Trust
-----
Corporation
-----
Other (please indicate)
-----
Corporate or Other Entity Date:
----------------------------
---------------------------- ---------------------------------
Federal ID Number Print Name of Entity
By:
------------------------------
Signature**
Title:
---------------------------------
Number and Street
---------------------------------
City, State, Zip Code
DATED: , 1996.
---------------
-------------------
** The Investor's signature hereto shall constitute (i) the Investor's
signature, as Secured Party, of and on the Security Agreement to be
executed by the Company on the Closing of the offering, and (ii) the
Investor's agreement to be bound by the terms of such Security Agreement.
By signing below the undersigned accepts the foregoing subscription and
agrees to be bound by its terms.
PIVOT RULES, INC.
BY:
------------------------------------
E. Xxxxxxx Xxxxx
Chief Executive Officer
