Exhibit 10.3
SUBSCRIPTION AND FUNDING
COMMITMENT AGREEMENT
THIS SUBSCRIPTION AND FUNDING COMMITMENT AGREEMENT ("Agreement") is made and
entered into in duplicate effective this 1st day of February, 2002, by and among
Go Call, Inc., a Delaware corporation ("Parent"), and Phoenix ATM Service Inc.,
a Delaware corporation ("Company").
RECITALS:
A. The Parent desires to provide the funding necessary to reimburse the
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Company for the fees and expenses incurred by the Company in connection with its
formation and, additionally, the Parent desires to make available to the Company
or pay, for and on behalf of the Company, any and all expenses and fees
necessary or appropriate in connection with the (i) preparation and filing with
the Securities and Exchange Commission ("Commission") and any and all other
regulatory authorities, including, but not limited to, the National Association
of Securities Dealers, Inc. ("NASD") and the securities administrators and
commissioners of the various applicable states, provinces and other
jurisdictions, of a Registration Statement on Form SB-2 and any and all
amendments, documents, agreements, instruments, correspondence and other
documents relating thereto in connection with the efforts of the Company to
become a reporting issuer pursuant to the provisions of the Securities Exchange
Act of 1934, as amended ("Exchange Act"); and (ii) participation by the Company
in the Over-The-Counter Bulletin Board electronic quotation service maintained
by the NASD ("Bulletin Board); Additionally, the Parent desires to pay any and
all legal fees, accounting fees, filing fees, courier expenses and other
expenses incurred by the Company in connection with the foregoing; and the
gathering of any and all appropriate information relating thereto.
B. The Parent desires to acquire from the Company, as consideration for the
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funding contemplated by the provisions of Recital A specified above, 2,310,000
shares of the Company's $.001 par value common stock ("Shares"). The Company
desires to issue to the Parent, as consideration for that funding, 2,310,000
shares of the Company's $.001 par value common stock. Those 2,310,000 shares
shall be referred to in this Agreement as the "Shares".
(begin boldface)
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE
DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT TO EACH OTHER AS FOLLOWS:
(end boldface)
1. Agreement to Subscribe and Provide Funding. a. The Parent shall
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unconditionally and irrevocably provide the funds necessary or appropriate to
pay any and all expenses and fees incurred in connection with (i) the formation
of the Company; (ii) the preparation and filing with the Commission and the
NASD, any and all other regulatory authorities, including, but not limited to,
and the securities administrators and commissioners of the various applicable
states, provinces and other jurisdictions of a Registration Statement on Form
SB-2 and any and all amendments, documents, agreements, instruments,
correspondence and other documents relating thereto in connection with the
efforts of the Company to become a reporting issuer pursuant to the provisions
of the Exchange Act; (iii) participation by the Company in the Bulletin Board;
(iv) any and all legal fees, accounting fees, filing fees and similar expenses
incurred by the Company in connection with the foregoing; and (v) the gathering
of any and all appropriate information relating thereto.
b. The Parent hereby irrevocably and unconditionally subscribes for and
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purchases from the Company and the Company hereby agrees to unconditionally and
irrevocably sell and issue to the Shares. The consideration for the Shares shall
be, and hereby is, those funds provided by the Parent for the benefit of the
Company pursuant to Section a of this Paragraph 1.
c. THE PARENT UNDERSTANDS AND AGREES THAT THE PURCHASE OF THE SHARES IS
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ILLIQUID AND INVOLVES SIGNIFICANT SPECULATIVE RISK.
2. Registration Rights. At such time as the Company proposes to register any
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of the Company's securities pursuant to the Securities Act of 1933, as amended
("Securities Act"), the Company will give written notice to the Parent of the
Company's intention to effect such a registration not later than 30 days prior
to the anticipated filing date. The Company shall include in such registration
statement the Shares. The expenses of such registration shall be paid by the
Parent.
3. Indemnification. a. The Company shall indemnify to the most complete extent
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permitted by law, the Parent, the Parent's officers and directors and each
person who controls the Parent (within the meaning of the Securities Act and the
Exchange Act) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact specified in
any registration statement, prospectus or preliminary prospectus or any omission
or alleged omission to specify therein a material fact required to be specified
therein or necessary to make the information specified therein not misleading,
except insofar as the same or caused by or contained in any information
furnished in writing to the Company by the Parent especially for use therein or
by the Parent's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished to the Parent with a sufficient number of copies of the same.
b. In connection with any such registration statement, the Parent shall
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furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with such registration statement or
prospectus, and the Parent shall indemnify, to the most complete extent
permitted by law, the Company, the Company's officers and directors and each
person who controls the Company (within the meaning of the Securities Act and
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Exchange Act) against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact or any
omission or alleged omission of material fact required to be specified in such
registration statement or prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by the Parent.
4. Capacity and Status of the Parent. The Parent has not been formed, or
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recapitalized for the specific purpose of purchasing the Shares. The Parent has
been duly formed and is validly existing in good standing pursuant the laws of
the jurisdiction of its formation, with full and complete power and authority to
enter into the transactions contemplated by this Agreement. This Agreement has
been duly and validly authorized, executed, and delivered by the Parent and
constitutes the valid, binding and enforceable agreement of the Parent.
5. Independent Investigation; Access. The Parent, in making the decision to
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purchase the Shares, has relied upon independent investigations made by the
Parent regarding the Company and the proposed operations of the Company. The
Parent has been furnished with all materials relating to the proposed business
and operations of the Company. The Parent has received complete and satisfactory
answers to any and all inquiries.
6. Adequacy of Investigation. The Parent acknowledges that the Parent is
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acquiring the Shares after what the Parent deems to be adequate investigation of
the business and prospects of the Company by the Parent.
7. No Government Recommendation or Approval. The Parent understands that no
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federal or state agency has passed on or made any recommendation or endorsement
of the Shares.
8. Acquired Shares Not Registered; Indefinite Holding. The Parent understands
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that the Parent must accommodate the economic risk of an investment in the
Shares for an indefinite period of time, because the Shares have not been
registered pursuant to the Securities Act of 1933, as amended ("Securities
Act"). Therefore, the Shares must be held by the undersigned unless the Shares
are subsequently registered pursuant to the Securities Act or an exemption from
such registration is available for the transfer of the Shares.
9. No Disposition of Shares Without Securities Law Compliance. The Parent
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shall not distribute or subdivide the Shares or to offer, sell, pledge,
hypothecate or otherwise transfer or dispose of any of the Shares in the absence
of an effective registration statement pursuant to the Securities Act relating
to such disposition, or an opinion of counsel, satisfactory to the Company and
its counsel, to the effect that registration pursuant to the Securities Act is
not required in respect of such transfer or disposition.
10. Stop-Transfer and Legends of Certificates. The Parent further understands
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that a stop-transfer order will be placed on the stock-transfer books of the
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Company respecting the certificates representing and evidencing the Shares, and
such certificates shall specify, until such time as the Shares shall have been
registered pursuant to the Securities Act or shall have been transferred in
accordance with such an opinion of counsel, the following legends or ones
substantially similar thereto:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT
TO THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT PURSUANT TO THAT ACT, OR AN
AVAILABLE EXEMPTION PURSUANT THERETO.
plus any legend that may be required pursuant to any applicable state law.
11. Private Offering Exemption; Reliance on Representations. The Parent
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understands that the offer and sale of the Shares are not being registered
pursuant to the Securities Act in reliance on the "private offering" exemption
provided by Section 4(2) of the Securities Act and that Company is basing its
reliance on that exemption in part on the representations, warranties, and
agreements specified in this Agreement.
12. Indemnification. Each party agrees to indemnify and hold the other party,
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and such other party's officers, directors, stockholders, attorneys,
accountants, agents, representatives or any other person who may be deemed to
control such other party harmless from any loss, liability, claim, damage or
expense, arising out of the inaccuracy of any of the above representations or
warranties or the breach of any of the agreements specified in this Agreement,
and this indemnification shall survive the purchase and sale of the Shares.
13. Governing Law. This Agreement shall be governed by and interpreted in
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accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have signed this Agreement effective on the date
specified in the Preamble of this Agreement.
Phoenix ATM Service Inc., Go Call Inc.,
a Delaware corporation a Delaware corporation
By: By:
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Its: Authorized Agent Its: Authorized Agent
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