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EXHIBIT 10.9
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT ("AGREEMENT") dated as of February __, 2001 between
GLOBALNET, INC., a Nevada corporation (the "COMPANY"), and the undersigned (the
"INVESTOR").
W I T N E S S E T H:
The Common Shares being acquired by the Investor are part of a private
placement (the "PRIVATE PLACEMENT") of securities of the Company up to 5,350,000
shares ("COMMON SHARES") of common stock, par value $.001, of the Company
("COMMON STOCK") at a price per Common Share of $1.00. There is no minimum
number of Common Shares that must be sold in order for the Private Placement to
become effective.
The Investor hereby tenders this Agreement to the Company and applies for
the purchase of up to _________ Common Shares at a price per Common Share of
$1.00.
In consideration of the foregoing premises contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF COMMON SHARES
Section 1.1 Issuance of Common Shares.
(a) Issuance. Upon the following terms and conditions, the Company
shall issue and sell to the Investor and Investor shall purchase from the
Company, the number of Common Shares indicated next to such Investor's name on
the signature page.
(b) Purchase Price. The purchase price for the Common Shares to be
acquired by each Investor (the "PURCHASE PRICE") shall be the Purchase Price set
forth next to such Investor's name on the signature page.
(c) The Closing.
(i) The closing of the purchase and sale of the Common Shares
(the "CLOSING") shall take place at the offices of the Company on the
date that the Purchase Price is wired by the Investor against delivery
of the certificate for the Common Shares subscribed for hereby. The
date on which the Closing occurs is referred to herein as the "CLOSING
DATE".
(ii) On the Closing Date, the Company shall deliver to each
Investor the Common Shares registered in the name of Investor or its
nominee in such denominations as reasonably requested by such
Investor, and such Investor shall deliver to the Company the Purchase
Price for the Common Shares purchased by such Investor hereunder by
wire transfer in immediately available funds to an account designated
in writing by the Company. In addition, each party shall
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deliver all documents, instruments and writings required to be
delivered by such party pursuant to this Agreement at or prior to
Closing.
Section 1.2 Registration Statement. Contemporaneously with the Closing
Date, the Company and the Investors shall enter into a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A, providing for
the registration of the Common Shares.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to the Investor as of
the date hereof:
(a) Organization and Qualification; Material Adverse Effect. The
Company is a corporation duly incorporated and existing in good standing under
the laws of the State of Nevada and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The Company does
not have any direct or indirect subsidiaries (defined as any entity of which the
Company owns, directly or indirectly, 50% or more of the equity or voting power)
other than the subsidiaries listed on SCHEDULE 2.1(a) attached hereto. Except
where specifically indicated to the contrary, all references in this Agreement
to subsidiaries shall be deemed to refer to all direct and indirect subsidiaries
of the Company. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary other than those in which the failure so to qualify
would not have a Material Adverse Effect. "MATERIAL ADVERSE EFFECT" means any
adverse effect on the business, operations, properties or financial condition of
the entity with respect to which such term is used and which is (either alone or
together with all other adverse effects) material to such entity and other
entities controlling or controlled by such entity taken as a whole, and any
material adverse effect on the transactions contemplated under the Transaction
Documents or any other agreement or document contemplated hereby or thereby.
(b) Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform this Agreement and the
Registration Rights Agreement (the "TRANSACTION DOCUMENTS") and to issue the
Common Shares in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action, and no further consent
or authorization of the Company or its Board of Directors (or any committee or
subcommittee thereof) or stockholders is required, (iii) the Transaction
Documents have been duly executed and delivered by the Company and (iv) the
Transaction Documents constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application.
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(c) Capitalization. The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock; as of December 31, 2000 there
were 32,352,407 shares of Common Stock issued and outstanding; and, except as
set forth on SCHEDULE 2.1(c), no shares of Common Stock were reserved for
issuance to persons other than the Investors. All of the outstanding shares of
the Company's Common Stock have been validly issued and are fully paid and
nonassessable. No shares of capital stock are entitled to preemptive rights and,
except as set forth on SCHEDULE 2.1(c), there are no outstanding options to
acquire shares of Common Stock (excluding the Common Shares). Except as set
forth on SCHEDULE 2.1(c), there are no other scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights exchangeable for or convertible into, any shares of capital stock of the
Company, or contracts, commitments, understandings, or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company or options, Common Shares, scrip, rights to subscribe to, or
commitments to purchase or acquire, any shares, or securities or rights
convertible or exchangeable into shares, of capital stock of the Company. There
are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Common Shares.
(d) Issuance of Common Shares. The Common Shares have been duly
authorized and, when sold and paid for in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
holders of such Common Shares shall be entitled to all rights and preferences
accorded to a holder of Common Stock. Subject to the provisions of SCHEDULE
2.1(d), the outstanding shares of Common Stock are currently listed on the
Nasdaq Small-Cap Market (the "Approved Market").
(e) No Conflicts. The execution, delivery and performance the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby and the issuance of the Common
Shares, do not and will not (i) result in a violation of the Company's Charter
or By-Laws or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture, patent, patent license or instrument to which the
Company or any of its subsidiaries is a party (collectively, "COMPANY
AGREEMENTS"), or (iii) result in a violation of any federal, state, local or
foreign law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and regulation of any self-regulatory
organizations to which the Company or its securities are subject) applicable to
the Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected, except (other than in
the case of clause (i) above) where such violation would not reasonably be
expected to have a Material Adverse Effect. The business of the Company and its
direct and indirect subsidiaries is being conducted in material compliance with
(i) its Charter and By-Laws, (ii) all Company Agreements and (iii) all
applicable laws, ordinances or regulations of any governmental entity, except
(other than in the case of clause (i) above) where such violation would not
reasonably be expected to have a Material Adverse Effect. Except for filings,
consents and approvals required under applicable state and federal securities
laws or the rules and regulations of the Approved Market and covered by the
Registration Rights Agreement, the Company is not required under federal, state,
local or foreign law, rule or regulation to obtain any consent, authorization or
order of, or make any filing or
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registration with, any court or governmental agency or self-regulatory
organization in order for it to execute, deliver or perform any of its
obligations under the Transaction Documents, or to issue and sell the Common
Shares except for the registration provisions provided in the Registration
Rights Agreement.
(f) SEC Documents; No Non-Public Information; Financial Statements. The
Common Stock of the Company is registered pursuant to Section 12(g) of the
Exchange Act and the Company and its subsidiaries have timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Exchange Act, including
all such proxy information, solicitation statement and registration statements,
and any amendments thereto required to have been filed (all of the foregoing
including filings incorporated by reference therein being referred to herein as
the "SEC DOCUMENTS"). As of their respective dates, the SEC Documents complied
in all material respects, with the requirements of the Exchange Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of the statements made in any such SEC Documents is, or has
been, required to be amended or updated under applicable law (except for such
statements as have been amended or updated in subsequent filings prior to the
date hereof).
(g) Financial Statements. The financial statements of the Company and
its subsidiaries included in the SEC Documents comply as to form and substance
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes, may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company and its subsidiaries as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). The audited financial statements of the Company for
the fiscal year ending December 31, 1999 have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material respects the
financial position of the Company and its subsidiaries, as the case may be, as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
(h) No Material Adverse Change. Except as disclosed in the SEC
Documents and as disclosed on SCHEDULE 2.1(l), since December 31, 1999, no
Material Adverse Effect has occurred or exists, and no event or circumstance has
occurred that with notice or the passage of
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time or both is reasonably likely to result in a Material Adverse Effect with
respect to the Company.
(i) No Undisclosed Liabilities. The Company and its subsidiaries have
no liabilities or obligations not disclosed, other than those liabilities
incurred in the ordinary course of the Company's or its subsidiaries' respective
businesses since December 31, 1999, which liabilities, individually or in the
aggregate, do not or would not have a Material Adverse Effect on the Company or
its direct or indirect subsidiaries.
(j) No Undisclosed Events or Circumstances. No material event or
circumstance has occurred or exists with respect to the Company or its direct or
indirect subsidiaries or their respective businesses, properties, prospects,
operations or financial condition, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.
(k) No General Solicitation. Neither the Company, nor any of its
affiliates or any person acting on its or their behalf has engaged in any form
of general solicitation or general advertising (within the meaning of Regulation
D under the Common Shares Act) in connection with the offer or sale of the
Common Shares.
(l) No Litigation. Except as set forth on SCHEDULE 2.1(l) no litigation
or claim (including those for unpaid taxes) against the Company or any of its
subsidiaries is pending or, to the Company's knowledge, threatened, and no other
event has occurred, which if determined adversely could reasonably be expected
to have a Material Adverse Effect on the Company or could reasonably be expected
to materially and adversely affect the transactions contemplated hereby. There
is no legal proceeding described in the SEC Documents that could reasonably be
expected to have a Material Adverse Effect on the Company.
(m) Brokers. The Company will pay cash consideration equal to six
percent (6%) of the aggregate Purchase Price paid for the Common Shares in
addition to warrants to purchase up to 750,000 shares of Common Stock (based
upon the sale of 5,350,000 Common Shares) for an exercise price of $1.20 per
share at any time prior to February 1, 2004 to brokers and finders used by the
Company in connection with the Private Placement.
(n) Related Party Transactions. None of the officers, directors, or key
employees of the Company is presently a party to any transaction with the
Company or any of its subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
(o) Use of Proceeds. The Company intends to use the proceeds from the
Private Placement for working capital and other general corporate purposes. The
Company is not now, and after the Private Placement under the Transaction
Documents and under all other agreements and the application of the net proceeds
from the Private Placement described in the
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preceding sentence will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(p) Public Reports Not Misleading. The SEC Documents do not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein to make the statements contained therein not misleading at and
as of the respective filing dates.
(q) Public Information. The Company has provided the Investor with all
material public information in connection with the business of the Company and
the transactions contemplated by the Transaction Documents, and no
representations or warranty made, nor any document, statement, financial
statement prepared or furnished by the Company in connection herewith contains
any untrue statement of material fact, or omits to state a material fact
necessary to make the statement or facts contained herein or therein not
misleading.
(r) Tax Status. The Company has made or filed all material federal,
state and local income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless and only to the
extent that the Company has set aside on its books provisions adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside in its books provisions adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no material unpaid taxes
claimed to be due by the taxing authority of any jurisdiction. The Company has
not executed a waiver with respect to any statute of limitations relating to the
assessment or collection of any federal, state or local tax.
(s) Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any Subsidiary has, in the course of his actions
for, or on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provisions of the U.S. Foreign Corrupt Practices Act of 1977
as amended; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.
(t) Acknowledgment Regarding Investors' Purchase of Securities. The
Company acknowledges and agrees that the Investors are acting solely in the
capacity of arm's-length purchasers with respect to this Agreement and the
transactions contemplated herein. The Company further acknowledges that no
Investor is acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this agreement and the transactions
contemplated hereby and that any statement made by any Investor or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is not advice or any recommendation and is
merely incidental to the Investors' purchase of the Common Stock and has not
been publicly relied upon by the Company, its officers or its directors in any
way. The Company further represents to each Investor that the Company's
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decision to enter into this Agreement has been based solely on the independent
evaluation of the Company and its representatives.
(u) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration under the
Securities Act or for purposes of any state securities or blue sky law of the
issuance of the Common Shares to the Investors. The issuance of the Common
Shares to the Investors will not be integrated with any other issuance of the
Company's securities (past, current or future) for purposes of any stockholder
approval provisions applicable to the Company or its securities.
(v) Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient, in
the judgment of the Company's board of directors, to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(w) Form S-1. The Company is eligible to file the Registration
Statement (as defined in the Registration Rights Agreement) on Form S-1 under
the Act and rules promulgated thereunder, and Form S-1 is permitted to be used
for the transactions contemplated hereby under the Act and rules promulgated
thereunder.
Section 2.2 Representations and Warranties of the Investor. In
consideration of the sale of the Common Shares and intending to be legally
bound, the Investor hereby makes the following representations and warranties to
the Company as of the date hereof:
(a) Organization and Qualification. The Investor, if an entity, is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and is duly qualified to do business and in
good standing in each jurisdiction in which the nature of the business conducted
by it makes such qualification necessary except where the failure to be so
qualified or in good standing would not reasonably be expected to have a
Material Adverse Effect on such Investor.
(b) Authorization; Enforcement. (i) The Investor has the requisite
power and authority to enter into and perform the Transaction Documents and to
purchase the Common Shares, (ii) the execution and delivery of the Transaction
Documents by such Investor and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary corporate or
partnership action, and (iii) the Transaction Documents constitute valid and
binding obligations of the Investor enforceable against the Investor in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the
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enforcement of creditors' rights and remedies or by other equitable principles
of general application.
(c) No Conflicts. The execution, delivery and performance of the
Transaction Documents, the performance thereunder and the consummation by such
Investor of the transactions contemplated hereby and thereby do not and will not
(i) result in a violation of such Investor's organizational documents, or (ii)
conflict with any agreement, indenture or instrument to which such Investor is a
party, or (iii) result in a material violation of any law, rule, or regulation,
or any order, judgment or decree of any court or governmental agency applicable
to the Investor. The Investor is not required to obtain any consent or
authorization of any governmental agency in order for it to perform its
obligations under the Transaction Documents.
(d) Investment Representations.
(i) Access to Other Information. The Investor acknowledges that
the Company has made available to the Investor the opportunity to
examine such additional documents from the Company and to ask
questions of, and receive full answers from, the Company concerning,
among other things, the Company, its financial condition, its
management, its prior activities and any other information which such
Investor considers relevant or appropriate in connection with entering
into this Agreement. Neither such inquiries nor any other due
diligence investigation conducted by Investor or any of its advisors
or representatives shall modify, amend or affect Investor's right to
rely on the Company's representations and warranties contained in
Section 2.1.
(ii) Risks of Investment. The Investor acknowledges that the
Common Shares have not been registered under the Act. The Investor is
familiar with the provisions of Rule 144 and understands that in the
event all of the applicable requirements of Rule 144 are not
satisfied, registration under the Act or some other exemption from the
registration requirements of the Act will be required in order to
dispose of the Common Shares, and that such Investor may be required
to hold the Common Shares for a significant period of time prior to
reselling them, subject to the Company successfully registering the
Common Shares pursuant to the Registration Rights Agreement. The
Investor is capable of assessing the risks of an investment in the
Common Shares and is fully aware of the economic risks thereof.
(iii) Investment Representation. The Investor is purchasing the
Common Shares for its own account and not with a view to distribution
in violation of any securities laws. The Investor has no present
intention to sell the Common Shares in violation of federal or state
securities laws and such Investor has no present arrangement (whether
or not legally binding) to sell the Common Shares to or through any
person or entity.
(iv) Restricted Common Shares. It acknowledges and understands
that the terms of issuance have not been reviewed by the SEC or by any
state securities authorities and that the Common Shares have been
issued in reliance on
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the certain exemptions for non-public offerings under the Act, which
exemptions depend upon, among other things, the representations made
and information furnished by such Investor, including the bona fide
nature of such Investor's investment intent as expressed above.
(v) Ability to Bear Economic Risk. It is an "accredited" investor
as defined in Rule 501 of Regulation D, as amended, under the Act, and
that it (i) is able to bear the economic risk of its investment in the
Common Shares, (ii) is able to hold the Common Shares for an
indefinite period of time, (iii) can afford a complete loss of its
investment in the Common Shares and (iv) has adequate means of
providing for its current needs.
(vi) No Public Solicitation. At no time was the Investor
presented with or solicited by any general mailing, leaflet, public
promotional meeting, newspaper or magazine article, radio or
television advertisement, or any other form of general advertising or
general solicitation in connection with the issuance.
(vii) Reliance by the Company. The Investor understands that the
Common Shares are being offered and sold in reliance on transactional
exemptions from the registration requirements of federal and state
securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth herein
in order to determine the applicability of such exemptions and the
suitability of the Investor to acquire the Common Shares.
(e) Brokers. The Investor has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or similar
payments by the Company relating to this Agreement or the transactions
contemplated hereby.
Section 2.3 Anything in this Section 2 or elsewhere herein to the contrary
notwithstanding, it is understood and agreed by the Company (1) that Investor
has not been asked to agree, nor has he agreed, to desist from purchasing or
selling, long and/or short, securities issued by the Company, or "derivative"
securities based on securities issued by, the Company or to hold the Common
Shares purchased from the Company for any specified term; (2) that past or
future open market or other transactions by Investor, including short sales, and
specifically including, without limitation, short sales or "derivative"
transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the issuer's
publicly-traded securities; (3) that Investor, and counter parties in
"derivative" transactions to which Investor is a party, directly or indirectly,
presently have a "short" position in the common stock of the Company, and (4)
that Investor shall not be deemed to have any affiliation with or control over
any arm's length counter-party in any "derivative" transaction."
ARTICLE 3
COVENANTS
Section 3.1 Best Efforts. The parties shall use their best efforts to
satisfy timely each of the conditions described in Article 3 of this Agreement.
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Section 3.2 Form D; Blue Sky Laws. The Company agrees to file a Form D with
respect to the Common Shares as required under Regulation D and to provide a
copy thereof to the Investor promptly after such filing. The Company shall take
such action as the Company shall reasonably determine is necessary to qualify
the Common Shares for sale to the Investor pursuant to this Agreement under
applicable securities or "blue sky" laws of the states of the United States (or
to obtain an exemption from such qualification), and shall provide evidence of
any such action so taken to the Investor.
Section 3.3 Listing. The Company shall promptly secure the listing of the
Common Shares on Nasdaq (subject to official notice of issuance).
ARTICLE 4
CONDITIONS TO CLOSINGS
Section 4.1 Conditions Precedent to the Obligation of the Company to Sell
the Common Shares. The obligation hereunder of the Company to issue and/or sell
the Common Shares to the Investor at the Closing (unless otherwise specified) is
subject to the satisfaction, at or before the Closing, of each of the applicable
conditions set forth below. These conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion.
(a) Accuracy of the Investor's Representations and Warranties. The
representations and warranties of each Investor will be true and correct as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties as of an earlier date, which will be
true and correct as of such date).
(b) Performance by the Investor. The Investor shall have performed all
agreements and satisfied all conditions required to be performed or satisfied by
the Investor at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of or adversely affects any of the
transactions contemplated by the Transaction Documents and no proceeding shall
have been commenced that will have such effect.
(d) Purchase Price. The Company shall have received the aggregate
Purchase Price from the Investor.
Section 4.2 Conditions Precedent to the Obligation of the Investor to
Purchase the Common Shares. The obligation hereunder of the Investor to acquire
and pay for the Common Shares at the Closing (unless otherwise specified) is
subject to the satisfaction, at or before the Closing, of each of the applicable
conditions set forth below.
(a) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company shall be true and correct in all
material respects
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(except for representations and warranties that are already qualified as to
materiality or knowledge, which shall be true and correct) as of the date when
made and as of the Closing Date as though made at that time (except for
representations and warranties as of an earlier date, which shall be true and
correct as of such date).
(b) Performance by the Company. The Company shall have performed all
agreements and satisfied all conditions required to be performed or satisfied by
the Company at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive, judicial or
administrative order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.
(d) Material Adverse Changes. No event which had or is likely to have,
in the judgment of the Investor, a Material Adverse Effect on the Company or any
of its direct or indirect subsidiaries shall have occurred.
(e) Common Shares. The Investor shall have received certificates
representing the Common Shares.
ARTICLE 5
LEGEND AND STOCK
The Company will issue one or more certificates representing the Common
Shares in the name of the Investor and in such denominations to be specified by
the Investor prior to (or from time to time subsequent to) Closing. Each
certificate representing the Common Shares shall be stamped or otherwise
imprinted with a legend substantially in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE TRANSFERRED, ASSIGNED, SOLD
OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED BECAUSE OF AN APPLICABLE EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS.
The Company agrees to reissue Common Shares, as the case may be, without
the legend set forth above at such time as (i) the holder thereof is permitted
to dispose of such Common Shares pursuant to Rule 144 under the Act, (ii) such
Common Shares are sold to a purchaser or purchasers who (in the opinion of
counsel to the seller or such purchaser(s), in form and substance reasonably
satisfactory to the Company and its counsel) are able to dispose of such shares
publicly pursuant to an effective registration or exemption, or (iii) the sale
of the Common Shares is registered under the Act.
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ARTICLE 6
MISCELLANEOUS
Section 6.1 Stamp Taxes. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Common Shares.
Section 6.2 Consent to Jurisdiction; Jury Trial.
(a) THE COMPANY AND THE INVESTOR (I) HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND NEW YORK STATE COURTS SITTING IN NEW YORK COUNTY, NEW
YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES, AND AGREES NOT TO ASSERT IN
ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER.
(b) EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.
Section 6.3 Entire Agreement; Amendment. This Agreement, together with
other Transaction Documents and the agreements and documents executed in
connection herewith and therewith, contains the entire understanding of the
parties with respect to the matters covered hereby and thereby, supercedes any
prior understanding, memoranda or other written or oral agreements between or
among any of them respecting the matters covered hereby and thereby and, except
as specifically set forth herein or therein, neither the Company nor any
Investor makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or amended
other than by a written instrument signed by the party against whom enforcement
of any such amendment or waiver is sought.
Section 6.4 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing by mail, facsimile or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
GlobalNet, Inc.
0000 Xxxxx Xxxxxxxx
Xxxxx 000X
Xxxxxxx, Xxxxxxxx 00000
Attention: Pere Xxxxxx
Facsimile: (000) 000-0000
with copies to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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to the Investor:
To the Investor at the address and/or fax number set forth
on the Signature Page of this Agreement.
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
Section 6.5 Indemnity. In consideration of the Investors' execution and
delivery of the Transaction Documents and in addition to all of the Company's
other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless the Investors and all of their partners,
officers, directors, employees, members, stockholders and direct or indirect
investors and any of the foregoing persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "INDEMNITEES")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "INDEMNIFIED LIABILITIES"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in the Transaction Documents or any other
certificate or document contemplated hereby or thereby, (c) any cause of action,
suit or claim brought or made against such Indemnitee by a third party and
arising out of or resulting from (i) the execution, delivery, performance,
breach by the Company or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, or (ii) the
status of the Investor or holder of the Common Shares as investors in the
Company, and (d) the enforcement of this Section. Notwithstanding the foregoing,
Indemnified Liabilities shall not include any liability of any Indemnitee
arising solely out of such Indemnitee's willful misconduct or fraudulent
action(s). To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
Section 6.6 Waivers. No waiver by any party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
Section 6.7 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
Section 6.8 Successors and Assigns. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The parties hereto may amend this
Agreement without notice to or the
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consent of any third party. The Company may not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the holders
of a majority of the outstanding Common Shares. No Investor may assign this
Agreement (in whole or in part) or any rights or obligations hereunder without
the consent of the Company, which consent may not be unreasonably withheld.
Notwithstanding the foregoing, the Investor may assign its rights and
obligations hereunder and may transfer any or all of its Common Shares to any of
its "affiliates," as that term is defined under the Exchange Act, without the
consent of the Company so long as such affiliate is an accredited investor. In
addition, and notwithstanding anything to the contrary contained in this
Agreement or in the Registration Rights Agreement, the Common Shares may be
pledged, and all rights of the Investor under this Agreement or any other
agreement or document related to the transaction contemplated hereby may be
assigned, without further consent of the Company, to a bona fide pledgee in
connection with an Investor's lending arrangements, if any.
Section 6.9 No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
Section 6.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS EXECUTED AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE.
Section 6.11 Survival. The representations and warranties and the
agreements and covenants of the Company and each Investor contained herein shall
survive the Closing.
Section 6.12 Publicity. The Company agrees that it will not disclose, and
will not include in any public announcement, the name of any Investor without
the express written agreement of such Investor, unless and until such disclosure
is required by law or applicable regulation, and then only to the extent of such
requirement. The Company agrees that it will deliver a copy of any public
announcement regarding the matters covered by this Agreement or any agreement
and document executed herewith to each Investor and any public announcement
including the name of an Investor to such Investor, reasonably in advance of the
release of such announcements.
Section 6.13 No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
Section 6.14 Termination. In the event that the Closing shall not have
occurred on or before five (5) business days after the date of this Agreement,
unless the parties agree otherwise, this Agreement shall terminate at the close
of business on such date without penalty or liability of any kind to either
party.
WHEREFORE IN CONSIDERATION, of the foregoing representations, I hereby
submit the following subscription for the below referenced number of Common
Shares as described in this Subscription Agreement, furthermore, I acknowledge I
have received copies of
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all information I deemed necessary or appropriate to evaluate the merits and
risks of an investment in the Common Shares.
Date: ____________________, 2001
_________________ Number of Common Shares
$________________ Cash Payment ($1.00 per Common Share)
____________________________________
Print Name:
_________________________
Address:____________________________
____________________________
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ACCEPTANCE:
GlobalNet, Inc. herewith accepts the foregoing subscription for Common Shares.
GLOBALNET, INC.
By:
------------------------------------
Name:
Title:
