MORO CORPORATION
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is made as of this 1rst day of August 2000,
by and between GREENWOOD PARTNERS, L.P., a Delaware limited partnership
("Greenwood"), and MORO CORPORATION, a Delaware corporation (the "Company").
Background
As more fully set forth herein, Greenwood desires to purchase from the
Company, and the Company desires to sell to Greenwood, 50,000 shares of Common
Stock, par value $.001, of the Company (the "Stock") as well as a warrant to
purchase up to 100,000 shares of Common Stock, in the form attached hereto as
Exhibit "A" (the "Warrant").
Agreement
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. Purchase. Subject to the terms hereof, the Company hereby sells the
Stock and Warrant to Greenwood, and Greenwood hereby purchases the Stock and
Warrant from the Company. Greenwood has delivered to the Company the aggregate
amount of $25,000 in full payment for the Stock (i.e, $.50 per share). The
Company shall promptly instruct its transfer agent to deliver to Greenwood a
certificate representing the Stock registered in the name of Greenwood and has
delivered to Greenwood the certificate evidencing the Warrant.
2. Representations and Warranties of Greenwood. Greenwood hereby makes
the following representations and warranties to the Company:
X. Xxxxxxxxx has received and reviewed each of the following, and
understands that each of the following items are incorporated by reference
herein: (i) the Company's Form 10-QSB Quarterly Report for the quarterly period
ended June 30, 2000; (ii) the Company's Form 10-QSB Quarterly Report for the
quarterly period ended March 31, 2000;(iii) the Company's Annual Report on Form
10- KSB for the fiscal year ended December 31, 1999; and (iv) the Company's Form
8-K Current Report filed with the Securities and Exchange Commission on June 16,
1999 (File No. 000-26828).
X. Xxxxxxxxx understands that each of the Stock, Warrant and the
shares of Common Stock underlying the Warrant ("Warrant Shares") is being
offered and sold under an exemption from registration under the Securities Act
of 1933, as amended (the
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"Act"), and offering exemptions contained in the securities laws of other
jurisdictions; that Greenwood is purchasing the Stock and Warrant without being
furnished any offering literature or prospectus of any sort relating to the
Company; that all documents, records and books pertaining to this investment and
the Company have been made available by the Company to Greenwood and Greenwood's
representatives; and that the books and records of the Company will be and have
been available upon reasonable notice for inspection by Greenwood during
reasonable business hours at the Company's offices.
X. Xxxxxxxxx understands that neither the Stock, Warrant or Warrant
Shares have been and except as provided otherwise herein or in the Warrant will
not be registered under the Act or any state securities laws, and that in order
to sell or transfer such Stock, Warrant or Warrant Shares, such securities must
either be registered under such laws or an appropriate exemption from
registration must be available. Except as provided herein, the Company does not
intend to, and has not agreed to, register the Stock under any of such laws.
X. Xxxxxxxxx is a bona fide resident and domiciliary of the
Commonwealth of Pennsylvania and has no present intention of becoming a resident
or domiciliary of any other jurisdiction.
X. Xxxxxxxxx is an Accredited Investor (as defined in Regulation D
under the Act). The term Accredited Investor includes: (i) a corporation not
formed for the specific purpose of acquiring the Stock with total assets in
excess of $5,000,000; or (ii) a corporation with all of the equity owners being
Accredited Investors (as defined in Regulation D under the Act); or (iii) a
broker-dealer registered with the SEC.
X. Xxxxxxxxx confirms that Greenwood understands and has fully
considered for purposes of this investment that there are substantial
restrictions on the transferability of the Stock, Warrant and the Warrant Shares
and there will be no established public market for the Stock or Warrant and no
liquidity is present in connection with the Stock or Warrant.
X. Xxxxxxxxx has such knowledge and experience in financial and
business matters that Greenwood is capable of evaluating the merits and risks of
an investment in the Stock and of making an informed investment decision.
X. Xxxxxxxxx confirms that in making Greenwood's decision to
purchase the Stock and Warrant hereby subscribed for Greenwood has relied solely
upon Greenwood's own independent investigation of the Company and not on any
representations, warranties, or statements made by or on behalf of the Company
(other than those made herein), and that Greenwood has been given
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the opportunity to ask questions of and to receive answers from the Company
concerning the Company, its financial condition and business, and to obtain any
additional information which the Company possesses or can acquire without
unreasonable effort or expense, and Greenwood believes it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Stock and Warrant.
I. The Stock and Warrant hereby subscribed for is being acquired by
Greenwood in good faith solely for Greenwood's own account for investment
purposes only and is not being purchased with a view to or for the resale,
distribution, subdivision or fractionalization thereof; Greenwood has no
contract, understanding, undertaking, agreement or arrangement, formal or
informal, with any person to sell, transfer or pledge to any person the Stock or
Warrant for which Greenwood hereby subscribes for or any part thereof; Greenwood
understands that the legal consequences of the foregoing representations and
warranties are that Greenwood must bear the economic risk of an investment in
the Stock and Warrant for an indefinite period of time because the Stock or
Warrant has not been registered under the Act or applicable state securities
laws and therefore cannot be sold unless the Stock or Warrant is subsequently
registered under the Act or applicable state securities laws (which the Company
is not obligated to do) or an exemption from such registration is available.
X. Xxxxxxxxx consents to the placement of a legend on the
certificate representing the Stock being purchased by Greenwood, which legend
will be in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE
SALE OR OTHER DISPOSITION OF THESE SHARES IS PROHIBITED
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
SATISFACTORY TO IT AND ITS COUNSEL THAT SUCH SALE OR
OTHER DISPOSITION CAN BE MADE WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933 AND OTHER APPLICABLE
STATUTES. BY ACQUIRING THE SHARES REPRESENTED BY THIS
CERTIFICATE, THE HOLDER OF THIS CERTIFICATE REPRESENTS
THAT THE HOLDER HAS ACQUIRED THESE SHARES FOR INVESTMENT
AND THAT THE HOLDER WILL NOT SELL OR OTHERWISE DISPOSE
OF THESE SHARES WITHOUT REGISTRATION OR OTHER COMPLIANCE
WITH THE AFORESAID ACTS AND THE RULES AND REGULATIONS
THEREUNDER."
X. Xxxxxxxxx acknowledges and understands that the Company has an
extremely limited operating history. There can be
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no assurance that the Company consistently conduct profitable operations or have
sufficient funds to achieve its business plan. If the Company's business is not
successful, Greenwood may lose all or substantially all of his investment in the
Stock and Warrant.
L. The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby has been duly authorized by
the general partner of Greenwood and no other corporate proceedings on the part
of Greenwood are necessary to authorize this Agreement or to carry out the
transactions contemplated hereby. Greenwood has the right, power and authority
to enter into and perform this Agreement. This Agreement constitutes the valid
and binding agreement of Greenwood, enforceable in accordance with its terms.
3. Piggyback Registration.
A. If during the period of time that the Stock is not covered by an
effective registration statement under the Act, the Company proposes to register
(including for this purpose a registration effected by the Company for
shareholders other than Greenwood) any of its Common Stock under the Act in
connection with the public offering of such securities by the Company or the
resale of such securities by any shareholder of the Company (other than a
registration relating solely for the sale of securities to participants in a
Company stock plan or an Employee Benefit Plan as defined in Rule 405 under the
Act, or a registration on Form S-4 promulgated under the Act or any successor or
similar form registering stock issuable upon a reclassification, upon a business
combination involving an exchange of securities or upon an exchange offer for
securities of the issuer or another entity), the Company shall, at such time,
promptly give Greenwood written notice of such registration (a "Piggyback
Registration Statement"). Upon the written request of Greenwood given by fax
within ten (10) days after mailing of such notice by the Company, the Company
shall cause to be included in such registration statement under the Act all of
the Stock that Greenwood has requested to be registered ("Piggyback
Registration"); provided, however, that nothing herein shall prevent the Company
from withdrawing or abandoning such registration statement prior to its
effectiveness.
B. In the case of a Piggyback Registration pursuant to an
underwritten public offering by the Company, if the managing underwriter
determines and advises in writing that the inclusion in the related Piggyback
Registration Statement of all Stock proposed to be included would interfere with
the successful marketing of the securities proposed to be registered by the
Company, then the number of such Stock to be included in such Piggyback
Registration Statement, to the extent any such Stock may be included in such
Piggyback Registration Statement, shall be subject to cutback. If required by
the managing underwriter of such an underwritten public
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offering, Greenwood shall enter into an agreement limiting the number of Stock
to be included in such Piggyback Registration Statement and the terms, if any,
regarding the future sale of any such Stock.
C. The Piggyback Registration rights granted herein shall be
effective from and after the date hereof and until the earlier of (i) all of the
Stock has been sold or transferred by Greenwood, or (ii) all of such Stock can
be resold by Greenwood pursuant to Rule 144(k) promulgated under the Act, or
(iii) July 31, 2005. For purposes of subsection (i) of the prior sentence, the
transfer or sale of the Stock by Greenwood to a limited partner shall not
constitute a sale or transfer and the limited partner shall be entitled to all
of the Piggyback Registration rights granted to and subject to all of the
obligations of Greenwood set forth in this Section 3.
4. Transferability of Subscription. Greenwood agrees not to transfer or
assign this Subscription Agreement, or any of the undersigned's interest herein.
Greenwood agrees that subject to the terms hereof, Greenwood shall not cancel,
terminate or revoke this Subscription Agreement.
5. Survival of Representations, Warranties, Covenants, Agreements and
Remedies. Except as specifically provided otherwise herein, all representations,
warranties, covenants, agreements and remedies of the parties hereto, shall
survive the date hereof.
6. Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties hereto with respect to the
transactions contemplated herein, supersedes all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties, and there have been no warranties, representations or
promises, written or oral, made by any of the parties hereto except as herein
expressly set forth herein.
7. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, as well as their respective heirs, personal
representatives, successors and assigns but no party may assign its obligations
hereunder.
8. Waiver, Modification, etc.. Any party to this Agreement may waive
any of the terms or conditions of this Agreement or agree to an amendment or
modification to this Agreement by an agreement in writing executed in the same
manner as this Agreement. No amendment or modification of this Agreement shall
be binding unless in writing executed by the party amending or waiving such term
or condition of this Agreement. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any
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other provision hereof (whether or not similar), nor shall any waiver constitute
a continuing waiver unless otherwise expressly provided.
9. Notice. Any notice or other communications required or permitted
hereunder shall be sufficiently given if sent by certified mail, return receipt
requested, postage prepaid, or by an established overnight delivery service,
addressed as follows:
If to the Company:
Moro Corporation
Bala Pointe, Suite 240
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Chief Executive Officer
If to Greenwood:
Greenwood Partners, L.P.
000 Xxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
10. Delaware Law Controls. This Agreement shall be construed in
accordance with and shall be governed by the laws of the State of Delaware
without regard to its conflicts of law rules.
IN WITNESS WHEREOF, each of the undersigned, intending to be legally
bound hereby, has executed this Subscription Agreement as of the date set forth
above.
GREENWOOD PARTNERS, L.P.
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name:
Title:
MORO CORPORATION
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx,
Chief Executive Officer
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