SUBSCRIPTION AGREEMENT
Exhibit 10.1
Cereplast, Inc.
000 X. Xxxxxxxxxxx Xxxx.
Xxxxx 000
Xx Xxxxxxx, XX 00000
000 X. Xxxxxxxxxxx Xxxx.
Xxxxx 000
Xx Xxxxxxx, XX 00000
Gentlemen:
The undersigned (the “Investor”) hereby confirms its agreement with Cereplast, Inc., a Nevada
corporation (the “Company”), as follows:
1. This Subscription Agreement, including the Terms and Conditions for Purchase of Securities
attached hereto as Annex I (collectively, this “Agreement”) is made as of the date set
forth below between the Company and the Investor.
The Company has authorized the sale and issuance to certain investors of up to an aggregate of
3,125,000 units (the “Units”), with each Unit consisting of (i) one share (a “Share,” collectively,
the “Shares”) of its voting common stock, par value $0.001 per share (the “Common Stock”), and (ii)
one warrant (the “Warrant,” collectively, the “Warrants”) to
purchase 0.75 of a share of Common Stock (and the fractional amount being the “Warrant Ratio”), in substantially the form attached
hereto as Exhibit B, for a purchase price
of $1.60 per Unit (the “Purchase Price”). The
Units will not be issued or certificated. The Shares and Warrants are immediately separable and
will be issued separately. The shares of Common Stock issuable upon exercise of the Warrants are
referred to herein as the “Warrant Shares” and, together with the Units, the Shares and the
Warrants, are referred to herein as the “Securities”).
2.
The offering and sale of the Securities (the “Offering”) is being made pursuant to (a) an
effective Registration Statement on Form S-3, No. 333-166307 (the “Registration Statement”) filed
by the Company with the Securities and Exchange Commission (the “Commission”) on April 26, 2010,
amended on May 21, 2010 and declared effective by the Commission on May 26, 2010, including the
Prospectus contained therein (the “Base Prospectus”), (b) if applicable, certain “free writing
prospectuses” (as that term is defined in Rule 405 under the Securities Act of 1933, as amended
(the “Act”)), that have been or will be filed, if required, with the Commission and delivered to
the Investor on or prior to the date hereof (the “Issuer Free Writing Prospectus”), containing
certain supplemental information regarding the Securities, the terms of the Offering and the
Company, (c) if applicable, a Preliminary Prospectus Supplement (the “Preliminary Prospectus
Supplement”) containing certain supplemental information regarding the Securities, the terms of the
Offering and the Company and (d) a Prospectus Supplement (the “Prospectus Supplement” and, together
with the Base Prospectus, the “Prospectus”) containing certain supplemental information regarding
the Securities and the terms of the Offering that will be filed with the Commission and delivered
to the Investor (or made available to the Investor by the filing by the Company of an electronic
version thereof with the Commission).
3. The Company and the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor the Units set forth below for the aggregate purchase
price set forth below. The Units shall be purchased pursuant to the Terms and Conditions for
Purchase of Units attached hereto as Annex I and incorporated herein by this reference as
if fully set forth herein. The Investor acknowledges that the Offering is not being underwritten
by Lazard Capital Markets LLC (the “Placement Agent” or “LCM”) named in the Prospectus Supplement
and that there is no minimum offering amount.
4. The manner of settlement of the Securities included in the Units purchased by the Investor
shall be as follows:
Delivery versus payment (“DVP”) through DTC (i.e., on the Closing Date, the Company
shall deliver the Shares registered in the Investor’s name and address as set forth below
and released by Computershare Investor Services LLC, the Company’s “Transfer Agent”, to the
Investor through DTC at the Closing directly to the account(s) at LCM identified by the
Investor; upon receipt of such Shares, LCM shall promptly electronically deliver such Shares
to the Investor, and simultaneously therewith payment shall be made by LCM by wire transfer
to the Company). NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT
BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:
| (I) | NOTIFY LCM OF THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED
WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR, AND |
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| (II) | CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED
WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE EQUAL
TO THE AGGREGATE PURCHASE PRICE FOR THE UNITS BEING PURCHASED BY THE INVESTOR. |
IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE
PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DVP IN A TIMELY
MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE UNITS OR DOES NOT
MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES AND WARRANTS MAY NOT BE
DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.
5. The executed Warrants included in the Units purchased by the Investor shall be delivered in
accordance with the terms of the Warrants.
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6. The Investor represents that, except as set forth below, (a) it has had no position, office
or other material relationship within the past three years with the Company or persons known to it
to be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory
Authority, Inc. or an Associated Person (as such term is defined under FINRA’s Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of
Investors (as identified in a public filing made with the Commission) of which the Investor is a
part in connection with the Offering of the Units, acquired, or obtained the right to acquire, 20%
or more of the Common Stock (or securities convertible into or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis. Exceptions:
(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)
7. The Investor represents that it has received (or otherwise had made available to it by the
filing by the Company of an electronic version thereof with the Commission) the Base Prospectus
which is a part of the Company’s Registration Statement, the documents incorporated by reference
therein and any free writing prospectus (collectively, the “Disclosure Package”), prior to or in
connection with the receipt of this Agreement. The Investor acknowledges that, prior to the
delivery of this Agreement to the Company, the Investor will receive certain additional information
regarding the Offering, including pricing information (the “Offering Information”). Such
information may be provided to the Investor by any means permitted under the Act, including the
Prospectus Supplement, a free writing prospectus and oral communications.
8. No offer by the Investor to buy Units will be accepted and no part of the Purchase Price
will be delivered to the Company until the Investor has received the Offering Information and the
Company has accepted such offer by countersigning a copy of this Agreement, and any such offer may
be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the
Company (or the Placement Agent on behalf of the Company) sending (orally, in writing or by
electronic mail) notice of its acceptance of such offer. An indication of interest will involve no
obligation or commitment of any kind until the Investor has been delivered the Offering Information
and this Agreement is accepted and countersigned by or on behalf of the Company.
9. The Company acknowledges that the only material, non-public information relating to the
Company it has provided to the Investor in connection with the Offering prior to the date hereof is
the existence of the Offering.
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Number of Units:
Total Warrant Shares:
Purchase price per Unit: $
Aggregate Purchase Price: $
Total Warrant Shares:
Purchase price per Unit: $
Aggregate Purchase Price: $
Please confirm that the foregoing correctly sets forth the agreement between us by signing in the
space provided below for that purpose.
| Dated as of: November ____, 2011 | ||||||||
| INVESTOR | ||||||||
| By: | ||||||||
| Print Name: | ||||||||
| Title: | ||||||||
| Address: | ||||||||
Agreed and Accepted
this _____ day of November, 2011:
this _____ day of November, 2011:
CEREPLAST, INC.
By: |
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| Title: | ||||||
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF UNITS
1. Authorization and Sale of the Units. Subject to the terms and conditions of this
Agreement, the Company has authorized the sale of the Units.
2. Agreement to Sell and Purchase the Units; Placement Agent.
2.1 At the Closing (as defined in Section 3.1), the Company will sell to the Investor,
and the Investor will purchase from the Company, upon the terms and conditions set forth herein,
the number of Units set forth on the last page of the Agreement to which these Terms and Conditions
for Purchase of Units are attached as Annex I (the “Signature Page”) for the aggregate
purchase price therefor set forth on the Signature Page.
2.2 The Company proposes to enter into substantially this same form of Subscription Agreement
with certain other investors (the “Other Investors”) and expects to complete sales of Units to
them. The Investor and the Other Investors are hereinafter sometimes collectively referred to as
the “Investors,” and this Agreement and the Subscription Agreements executed by the Other Investors
are hereinafter sometimes collectively referred to as the “Agreements.”
2.3 Investor acknowledges that the Company has agreed to pay Lazard Capital Markets LLC (the
“Placement Agent” or “LCM”) a fee (the “Placement Fee”) in respect of the sale of Units to the
Investor.
2.4 The Company has entered into a Placement Agent Agreement, dated November [_____], 2011 (the
“Placement Agreement”), with the Placement Agent that contains certain representations, warranties,
covenants and agreements of the Company that may be relied upon by the Investor, which shall be a
third party beneficiary thereof.
3. Closing and Delivery of the Shares, Warrants and Funds.
3.1 Closing. The completion of the purchase and sale of the Units (the “Closing”)
shall occur at a place and time (the “Closing Date”) to be specified by the Company and the
Placement Agent, and of which the Investors will be notified in advance by the Placement Agent, in
accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). At the Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor through DTC the number of Shares included in the Units set forth on the Signature Page
registered in the name of the Investor or, if so indicated on the Investor Questionnaire attached
hereto as Exhibit A, in the name of a nominee designated by the Investor, (b) the Company
shall cause to be delivered to the Investor a Warrant to purchase a number of whole Warrant Shares
as set forth on the signature page hereto and (c) the aggregate purchase price for the Units being
purchased by the Investor will be delivered by or on behalf of the Investor to the Company.
3.2 Conditions to the Obligations of the Parties.
(a) Conditions to the Company’s Obligations. The Company’s obligation to issue and
sell the Units to the Investor shall be subject to: (i) the receipt by the Company of the purchase
price for the Units being purchased hereunder as set forth on the Signature Page and (ii) the
accuracy of the representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing Date.
(b) Conditions to the Investor’s Obligations. The Investor’s obligation to purchase
the Units is subject to (i) the accuracy of the representations and warranties made by the Company
and the fulfillment of those undertakings of the Company to be fulfilled prior to the Closing Date,
including the representations and warranties and undertakings of the Company in the Placement
Agreement, (ii) the satisfaction of the conditions contained in the Placement Agreement, (iii) the
Placement Agreement being in full force and effect and not having been terminated and (iv) the
Placement Agent not having determined that the conditions to the closing in the Placement Agreement
have not been satisfied. The Investor understands and agrees that, in the event that the Placement
Agent in its sole discretion determines that the conditions to closing in the Placement Agreement
have not been satisfied or if the Placement Agent Agreement may be terminated for any other reason
permitted by such Agreement, then the Placement Agent may, but shall not be obligated to, terminate
such Agreement, which shall have the effect of terminating this Subscription Agreement pursuant to
Section 13 below.
3.3 Delivery of Funds.
No later than one (1) business day after the execution of this Agreement by the Investor and
the Company, the Investor shall confirm that the account or accounts at the Placement Agent to be
credited with the number of Securities included in the Units being purchased by the Investor have a
minimum balance equal to the aggregate purchase price for the Units being purchased by the
Investor.
3.4 Delivery of Securities included in the Units.
No later than one (1) business day after the execution of this Agreement by the Investor and
the Company, the Investor shall notify LCM of the account or accounts at LCM to be credited with
the Securities being purchased by such Investor. On the Closing Date, the Company shall (i)
deliver the Shares to the Investor through DTC directly to the account(s) at LCM identified by
Investor, (ii) the Company shall cause to be physically delivered to the Investor a Warrant to
purchase a number of whole Warrant Shares as set forth on the signature page hereto and (iii)
simultaneously therewith, payment shall be made by LCM by wire transfer to the Company.
4. Representations, Warranties and Covenants of the Investor.
The Investor acknowledges, represents and warrants to, and agrees with, the Company and the
Placement Agent that:
4.1 The Investor (a) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Units, including investments in securities
issued by the Company and investments in comparable companies, (b) has answered all questions on
the Signature Page and the Investor Questionnaire and the answers thereto are true and correct as
of the date hereof and will be true and correct as of the Closing Date and (c) in connection with
its decision to purchase the number of Units set forth on the Signature Page, has received and is
relying only upon the Disclosure Package and the documents incorporated by reference therein and
the Offering Information.
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4.2 (a) No action has been or will be taken in any jurisdiction outside the United States by
the Company or the Placement Agent that would permit an offering of the Securities, or possession
or distribution of offering materials in connection with the issue of the Securities in any
jurisdiction outside the United States where action for that purpose is required, (b) if the
Investor is outside the United States, it will comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its
possession or distributes any offering material, in all cases at its own expense and (c) the
Placement Agent is not authorized to make and has not made any representation, disclosure or use of
any information in connection with the issue, placement, purchase and sale of the Units, except as
set forth or incorporated by reference in the Base Prospectus or the Prospectus Supplement or any
free writing prospectus.
4.3 (a) The Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law) and except as to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation (including any federal or
state securities law, rule or regulation).
4.4 The Investor understands that nothing in this Agreement, the Prospectus, the Disclosure
Package, the Offering Information or any other materials presented to the Investor in connection
with the purchase and sale of the Units constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors and made such investigation as it, in its
sole discretion, has deemed necessary or appropriate in connection with its purchase of the Units.
The Investor also understands that there is no established public trading market for the Warrants
being offered in the Offering, and that the Company does not expect such a market to develop. In
addition, the Company does not intend to apply for listing the Warrants on any securities exchange.
Without an active market, the liquidity of the Warrants will be limited.
4.5 Since the date on which the Placement Agent first contacted the Investor about the
Offering, the Investor has not disclosed any information regarding the Offering to any third
parties (other than its legal, accounting and other advisors) and has not engaged in any purchases
or sales involving the securities of the Company (including, without limitation, any Short Sales
involving the Company’s securities). The Investor covenants that it will not engage in any
purchases or sales involving the securities of the Company (including Short Sales) prior to the
time that the transactions contemplated by this Agreement are publicly disclosed. The Investor
agrees that it will not use any of the Securities acquired pursuant to this Agreement to cover any
short position in the Common Stock if doing so would be in violation of applicable securities laws.
For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box,
and all types of direct and indirect stock pledges, forward sales contracts, options, puts, calls,
short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act)
and similar arrangements (including on a total return basis), and sales and other transactions
through non-US broker dealers or foreign regulated brokers.
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4.6 Survival of Representations, Warranties and Agreements; Third Party Beneficiary.
Notwithstanding any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company and the Investor
herein will survive the execution of this Agreement, and the delivery to the Investor of the Shares
and Warrants being purchased and the payment therefor. The Placement Agent and Lazard Fréres & Co.
shall be third party beneficiaries with respect to the representations, warranties and agreements
of the Investor in Section 4 hereof.
5. Notices. All notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International Federal Express or
facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed and (iv) if delivered by facsimile, upon electronic
confirmation of receipt and will be delivered and addressed as follows:
| (a) | if to the Company, to: |
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Cereplast, Inc. X. Xxxxxxxxxxx Xxxx., Xxxxx 000 Xx Xxxxxxx, XX 902 Attention: Xxxxxxx Xxxxxxx, CFO Facsimile: 000-000-0000 |
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with copies to: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP 00 Xxxxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Attention: Xxxxxxx Xxxxxxxxx, Esq. Fax: 000-000-0000000 Walnut Street, Suite 1800 |
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| (b) | if to the Investor, at its address on the
Signature Page hereto, or at such other address or addresses as may have
been furnished to the Company in writing. |
6. Changes. This Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.
7. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this Agreement.
8. Severability. In case any provision contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein will not in any way be affected or impaired thereby.
9. Governing Law. This Agreement will be governed by, and construed in accordance with, the
internal laws of the State of New York, without giving effect to the principles of conflicts of law
that would require the application of the laws of any other jurisdiction.
10. Counterparts. This Agreement may be executed in two or more counterparts, each of which
will constitute an original, but all of which, when taken together, will constitute but one
instrument, and will become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties. The Company and the Investor acknowledge and agree that
the Company shall deliver its counterpart to the Investor along with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission).
11. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s signed counterpart to this Agreement, together with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission), shall constitute
written confirmation of the Company’s sale of the Units to such Investor.
12. Press Release. The Company and the Investor agree that the Company shall, prior to the
opening of the financial markets in New York City on the business day immediately after the date
hereof, (a) issue a press release announcing the Offering and disclosing all material information
regarding the Offering and (b) file a Current Report on Form 8-K with the Securities and Exchange
Commission including a form of this Agreement, the Placement Agreement and the form of Warrant as
exhibits thereto.
13. Termination. In the event that the Placement Agreement is terminated by the Placement
Agent pursuant to the terms thereof, this Agreement shall terminate without any further action on
the part of the parties hereto.
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EXHIBIT A
CEREPLAST, INC.
INVESTOR QUESTIONNAIRE
Pursuant to Section 3 of Annex I to the Agreement, please provide us with the
following information:
1. The exact name in which your Shares and Warrants are to be registered. You
may use a nominee name if appropriate: |
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2. The relationship between the Investor and the registered holder listed in
response to item 1 above: |
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3. The mailing address of the registered holder listed in response to item 1
above: |
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4. The Social Security Number or Tax Identification Number of the registered
holder listed in the response to item 1 above: |
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5. Name of DTC Participant (broker-dealer at which the account or accounts to
be credited with the Shares are maintained): |
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6. DTC Participant Number: |
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7. Name of Account at DTC Participant being credited with the Shares: |
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8. Account Number at DTC Participant being credited with the Shares: |
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EXHIBIT B
FORM OF WARRANT
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