SUBSCRIPTION AGREEMENT
Exhibit
10.7
Agreement,
made this ____ day of May, 2007, by and between FLEXIBLE SOLUTIONS INTERNATIONAL
INC., a Nevada corporation (the “Company”), and
__________________________________________________ (the
“Subscriber”).
In
consideration of the mutual promises and covenants herein contained, the parties
hereto agree as follows:
ARTICLE
I
SUBSCRIPTION
1.01
Subscription
Offer. Subject to the terms and conditions hereof and to acceptance by the
Company, Subscriber hereby irrevocably offers to purchase
________
units of common stock with one half warrant exercisable for three years at
a
price of US$4.50
(the “securities”) at a price of US$
3.25
per share, for a total price of $________.
The purchase price is payable in full by wire transfer to Flexible Solutions
International Inc.
| Beneficiary: | |||
| Bank: |
US Bank
0000 Xxxx Xx.
Xxxxxxxx, XX 00000
|
||
| Routing # | 125 000 105 | ||
| Account # | 1 535 9130 8140 | ||
| SWIFT Code (for international use): | USBK44IMT |
1.02
Acceptance
of Subscription.
The
Company reserves the right to reject Subscriber’s offer in whole or in part, for
any reason, and to allocate less than the maximum number of Securities the
Subscriber hereby offers to purchase. Any sale of Securities to Subscriber
shall
not be deemed to occur until the Subscriber’s offer is accepted in writing by
the Company. Subscriber shall not have any recourse against the Company if
a
purchase offer is rejected in whole or in part. The Company shall reasonably
notify the Subscriber in writing of the acceptance of the purchase offer. If
the
purchase offer is accepted, the Company will confirm in writing the Subscriber’s
purchase of the Securities. If the purchase off is rejected in whole or in
part,
the Company will promptly return to Subscriber, without deduction or interest,
all or a rateable portion of the subscription price, as the case may be,
together with all executed documents tendered by the Subscriber. If the purchase
offer is rejected in part only, Subscriber shall immediately complete, execute,
and deliver to the Company new subscription documents for the appropriate
reduced amount.
1.03
Restrictions
on Securities.
The
Securities have not been registered under the Securities Act of 1933 (the ‘Act”)
or any applicable state securities laws.
Term
Sheet. The
term
sheet immediately below shall govern the specifics of the units subscribed
for.
|
Issuer
|
Flexible
Solutions International Inc. (“FSI” or the
Company)
|
|
Issue
|
Common
stock with Warrants
|
|
Pricing
|
$3.25
per unit
|
|
Warrants.
|
FSI
will issue warrants to purchase 50% of the number of shares of common
stock that will be purchased at closing. The warrants will have a
three-year life from date of closing. The exercise price will be
$4.50.
The shares underlying the Warrants will be subject to the same
registration statement as the
Shares.
|
|
Registration
Rights
|
FSI
agrees to file an SB-2 registration statement covering all shares
and
warrants within 45 days of closing. In the event that FSI fails to
file a
registration statement within the 45-day period, a cash penalty equal
to
1/30 of 1% of the investment will accrue for each day thereafter
that a
registration document has not been filed. FSI will respond to all
SEC
comment letters regarding the registration statement within 25 days
of
receipt of the comment letter(s). In the event that FSI does not
respond
within 25 days, a cash penalty equal to 1/30 of 1% of the investment
will
accrue for each day thereafter that a response has not been filed.
Any
cash penalties will be paid to the investor on receipt by the Company
of a
written request.
|
1
| Price Protection |
For
the 12 months following the closing date of this financing, in the
event
the Company issues common stock, or securities convertible or exchangeable
into common stock, at a price less than the Purchase Price then the
Purchase Price and the Warrant Exercise Price will be changed to
this
price and accounted for by the issuance of additional shares and
warrants
to the investors. Employee and consultant options are excluded from
this
provision.
|
| Future Financings |
Investors
shall have the right of participation in any future equity or
equity-linked financings by the Company for a period of 18 months
following the closing in order to maintain their percentage ownership
in
the Company.
|
ARTITCLE
II
REPRESENTAIONS
AND WARRANTIES
2.00 The
Company warrants that it has the authority to accept the subscription and issue
the shares and warrants subscribed for.
2.01.1 The
Company warrants that to its knowledge, no shares of common stock are entitled
to pre-emptive or similar rights.
2.02 The
Company warrants that the shares will be issued as fully paid for and
non-assessable.
2.03 Status
of
Subscriber. Subscriber, if an individual, is at least 21 years of age. If an
association, each individual member of the association is at least 21 years
of
age.
2.04 Access
to
Information. Because of Subscriber’s pre-existing business or personal
relationship with the Company or with the officers and directors of the Company,
or by reason of the business or financial experience of Subscriber or his
professional advisors who are unaffiliated with a and who are not compensated
by
the Company, or an affiliate thereof, Subscriber had the capacity to protect
his
own interests in connection with the offer and sale of the
Securities.
2.05 Understanding
of Investment Risks.
Subscriber understands that there is a limited market for the Securities and
no
assurance that a wider market will develop, and that realization of the
objectives of the Company is subject to significant economic and business
risks.
2.06 Understanding
of Nature of Securities. Subscriber understands that:
| a) |
The
Securities have not been registered under the Act or any state securities
laws:
|
| b) |
The
Securities cannot be sold or transferred for value without registration
under the Act and applicable state laws or exemption
therefrom:
|
| c) |
Only
the Company can register the Securities under the Act and applicable
state
securities laws:
|
| d) |
The
Company has made representation to Subscriber that the Company will
register the Securities under the Act or any applicable state securities
laws by filing a registration statement within 30 days of receipt of
the
subscription and will use its best efforts to ensure that the registration
statement becomes effective as soon as possible after the
subscription.
|
2.07
Investment
Intent.
Subscriber represents and warrants that:
| a) |
Subscriber
is acquiring the Securities for the Subscriber’s own account and not for
or on behalf of any other person;
|
| b) |
Subscriber
is acquiring the Securities for investment and not for distribution
or
with the intent to divide Subscriber’s participation with others or of
reselling or otherwise distributing the
Securities;
|
2
| c) |
Neither
Subscriber not anyone acting on Subscriber’s behalf has paid any
commission or other remuneration to any person in connection with the
purchase of the Securities; and
|
| d) |
Subscriber
will not sell the Securities without registration under the Act and
any
applicable state securities law or exemption
there-from.
|
2.06
Residence
of Subscriber.
The
residence of Subscriber set forth below is the true and correct residence of
Subscriber and he or she has no present intention of becoming a resident or
domiciliary of any other state, county or jurisdiction.
2.07
Further
Assurances.
Subscriber will execute and deliver to the Company any document, or do any
other
act or thing, which the Company may reasonably request in connection with the
acquisition of the Securities.
2.08
Non-disclosure.
Subscriber has not distributed any written materials furnished to Subscriber
by
the Company to anyone other than the Subscriber’s professional
advisors.
2.09
Ability
to Bear Economic Risk.
Subscriber is able to bear the economic risk of an investment in the Securities
and to maintain his investment in the Securities for an indefinite period of
time, and, further, could bear a total loss of the investment and not change
his
standard of living, which existed at the time of such investment.
2.10
For
Partnerships, Corporations, Trusts, or Other Entities Only. If the Subscriber
is
a partnership, corporation, trust, or other entity,
| a) |
Subscriber
has enclosed with this agreement appropriate evidence of the authority
of
the individual executing this agreement to act on its behalf
.
|
| b) |
Subscriber
has the full power and authority to execute this Subscription Agreement
on
behalf of such entity and to make the representation and warranties
made
herein on its behalf and this investment in the Company has been
affirmatively authorized by the governing board of such entity and
is not
prohibited by the governing documents of he
entity.
|
ARTICLE
III
MISCELLANEOUS
PROVISIONS
3.01
Captions
and Headings.
The
Article and Section headings throughout this Agreement are for convenience
of
reference only and shall in no way be deemed to define, limit or add to any
provision of this Agreement.
3.02
Entire
Agreement; Amendment.
This
Agreement states the entire agreement and understanding of the parties and
shall
supersede all prior agreements and understanding. No Amendment of the Agreement
shall be made without the express written consent of the parties.
3.03
Severability.
The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect any other provision hereof, which shall be construed in all
respects as if such invalid or unenforceable provision were
omitted.
3.04
Governing
Law.
This
agreement shall be governed and construed in accordance with the laws of the
State of Nevada.
3.05
Notices.
All
notices, requests, demands, consents, and other communications hereunder shall
be transmitted in writing and shall be deemed to have been duly given when
hand
delivered or sent by certified mail, postage prepaid, with return receipt
requested, addresses to the parties as follows: to the Company, at 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0, and to Subscriber, at
the
address indicated below. Any party may change its address for purposes of this
Section by giving notice as provided herein.
3
IN
WITNESS WHEREOF, the parties have executed this Agreement the day and year
first
above written.
|
“Company”
|
|
| By: Xxx X’Xxxxx, President | |
| Authorized Officer | |
| “Subscriber(s)” | |
|
Name(s)
exactly as you wish your interest
in
the company to be registered
|
1) _________________________________ |
|
(please
print)
|
|
| 2) _________________________________ | |
|
(please
print)
|
|
| Title, if Subscriber is not a person | 1) _________________________________ |
| 2) _________________________________ | |
| Signatures | 1) _________________________________ |
|
(signature)
|
|
| 2) _________________________________ | |
|
(signature)
|
|
| Primary Address | 1) _________________________________ |
| ___________________________________ | |
| ___________________________________ | |
| 2) _________________________________ | |
| ___________________________________ | |
| ___________________________________ | |
| Mailing Address (if different from above) | 1) _________________________________ |
| ___________________________________ | |
| ___________________________________ | |
| 2) _________________________________ | |
| ___________________________________ | |
| ___________________________________ | |
| Contact Telephone Number(s) | 1) _________________________________ |
| 2) _________________________________ | |
| Tax Identification Number | 1) _________________________________ |
| 2) _________________________________ | |
Flexible
Solutions Subscription Agree Equity 5-4-07
4
Warrant
to Purchase Common Stock
| 1. |
Introduction.
Agreement made May 4th
2007, between Flexible Solutions International Inc., with offices at
000
Xxxxxxxxx Xx., Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0 (the “Company”), and
_______________________________________________Grantee”).
|
| 2. |
Grant
of Warrant.
The Company grants to Grantee this warrant to purchase shares of the
Company’s common stock (the “Shares”) in the amounts, at the price, and
subject to all the terms and conditions set out in this
agreement.
|
| 3. |
Grant
Date of Warrant.
The grant date of this warrant is May 4th
2007.
|
| 4. |
Total
Number of Warrants Available.
The total number of Shares that may be purchased by Grantee pursuant
to
this Agreement is ______________ shares, as set forth in Paragraph
5.
|
| 5. |
Warrant
Price.
The price at which Grantee may buy the Shares is four dollars fifty
cents
(US$4.50) per Share.
|
| 6. |
When
Warrant Exercisable:
Grantee may exercise the warrant rights at any time after the grant
date
but not later than three years from the grant
date.
|
| 7. |
Warrant
Not Transferable.
Grantee’s warrant rights may be exercised only by the Grantee or Grantee’s
personal representative during Grantee’s lifetime and are not transferable
except by will or by the laws of descent and distribution should Grantee
die intestate. The warrant rights may not be sold, assigned, pledged,
or
hypothecated, and any attempt to do so shall be void. The warrant rights
are not subject to levy, attachment, or other process of law, and any
attempt to levy, attach, or otherwise transfer the warrant rights or
place
liens upon them shall be void.
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| 8. |
Termination
of the Warrant.
Except as otherwise provided herein, this Agreement shall expire May
3rd
2010, three years from the date of grant (the “Warrant
Period”).
|
| 9. |
The
Company’s Merger, Reorganization, Etc.
If, during the warrant period but before Grantee has exercised all
of the
warrant rights with regard to the total number of Shares available
for
purchase by Grantee, the Sharers of the Company’s common stock are changed
into or exchanged for a different number or different kind of shares
or
other securities, either the Company’s or those of another company, this
Agreement shall remain in force. However, there shall be substituted
for
each of the Shares the number and kind of shares or other securities
for
which each Share of the Company’s common stock was exchanged or into which
each Share was changed. The shares or securities substituted for each
Share of the Company’s common stock may be purchased by Grantee under this
Agreement for a price appropriately adjusted for the substituted
securities.
|
1
| 10. |
Declaration
of Stock Dividends.
If
the Company issues a common stock dividend on the Company’s common stock,
the number of Shares that may be purchased by Grantee thereafter shall
be
adjusted as follows: To each of the un-purchased Shares, there shall
be
added the number of Shares issued as a dividend on each Share of
outstanding common stock; each of the Shares together with the additional
Shares applicable to that Share shall be bought as one unit for the
price
set out for each of the Shares in Paragraph
5.
|
| 11. |
Other
Changes in the Company’s Stock.
If
there area any changes in the number or kind of Shares outstanding
that
affect the Company’s common stock or the stock or other securities into
which the Company’s common stock has been changed, other than those
described in Paragraphs 10 and 11, a majority of the Company’s Board of
Directors may make such changes in the Shares available for purchase
under
this Agreement as the Board of Directors deems appropriate. Any adjustment
in the Shares available for purchase made in accordance with this
Paragraph shall be binding upon Grantee.
|
| 12. |
The
Company’s Liquidation, Dissolution, Etc.
If
the Company liquidates or dissolves or enters into a merger or
consolidation in which the Company is not the surviving company, the
Company shall give Grantee at least one month’s notice prior to the
liquidation, dissolution, merger, or consolidation. Grantee shall have
the
right to exercise this Warrant in full, to the extent that is had not
been
previously exercised, within the one-month period. To the extent that
Grantee’s warrant rights have not been exercised on the effective date of
the liquidation, dissolution, merger, or consolidation, they shall
terminate.
|
| 13. |
Manner
in Which Warrant Is Exercised During Grantee’s
Lifetime.
Any of Grantee’s warrant rights may be exercised by Grantee or Grantee’s
personal representative during Grantee’s lifetime by written notice
addressed to the Company’s corporate Secretary, signed by Grantee or
Grantee’s personal representative. The notice shall state the number of
Shares to be purchased and shall be accompanied by a certified check
payable to the Company for the purchase price of Shares purchased.
Immediately following payment of the check, the Company shall issue
a
certificate or certificates for the Shares purchased in Grantee’s or
Grantee’s personal representative’s name and deliver it or them to the
person who signed the notice.
|
| 14. |
Manner
in Which Warrant Is Exercised After Grantee’s
Death.
If
Grantee has not fully exercised the warrant rights before Grantee’s death,
then the persons designated by Grantee in writing on file with the
Company
or, if no such persons have been designated, Grantee’s executor or
administrator, may exercise any of Grantee’s warrant rights during the
warrant period. The rights shall be exercised in the same manner as
provided in Paragraph 14 except that the person entitled to exercise
the
rights shall be substituted for Grantee or Grantee’s personal
representative.
|
| 15. |
Cashless Exercise.
The Warrant Holder may choose cashless exercise. The Holder must notify
the Company in an Exercise Notice of its election to utilize cashless
exercise, in which event the Company shall issue to the Holder the
number
of Warrant Shares determined as follows:
|
2
X
= Y
[(A-B)/A]
Where:
X
= the number of Warrant Shares to be issued to the Holder.
Y
= the
number of Warrant Shares with respect to which this Warrant is being
exercised.
A
= the
average of the closing prices for the five Trading Days immediately prior to
(but not including) the Exercise Date.
B
= the
Exercise Price.
| l |
For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder,
and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally
issued.
|
| 16. |
Violation
of Law.
The warrant granted by this Agreement may not be exercised if its exercise
would violate any applicable state securities law, any registration
under
or any requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules of an exchange
on
which the Shares are traded, any other federal law, or any law of
applicable state securities laws.
|
| 17. |
Unregistered
Stock.
If a registration statement for the Shares is not in effect or if
Grantee’s attorneys require a writing from Grantee to avoid violation of
the Securities Act of 1933, as amended, the Company may require a written
commitment form the person exercising the warrant before delivery of
the
certificate or certificates for the Shares. The Commitment shall be
in a
form prescribed by the Company. It will state that it is the intent
of the
person exercising the warrant to acquire the Shares for investment
only
and not the intent of transferring or reselling them; that the person
exercising the warrant has been told that the Shares may be “restricted
shares” pursuant to Rule 144 of the Securities and Exchange Commission and
that any resale, transfer, or other distribution of the Shares may
only be
made on conformity with Rule 144, the Securities Act of 1933, as amended,
or any other federal statute, rule or regulation. The Company may place
a
legend on the face of the certificate or certificates in accordance
with
this Commitment and may refuse to permit transfer of the Shares unless
it
receives satisfactory evidence that the transfer will not violate Rule
144, the Securities Act of 1933, as amended, or any other federal statute,
rule, or regulation.
|
| Grantee | Flexible Solutions International Inc. |
|
__________________________________
|
__________________________________
Xxx
X’Xxxxx, CEO
|
Flexible
Sol. Warrant to Purch. - Equity 5-4-07
3
