EXHIBIT 10.12
THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF
SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS
DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT").
NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(THE "AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, AND, UNLESS
SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S.
PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(Foreign/Overseas Subscribers)
TO: KODIAK GRAPHICS COMPANY, a Nevada Corporation (the "Company")
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Purchase of Shares
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1. Subscription
1.1 The undersigned (the "Subscriber") hereby irrevocably subscribes for and
agrees to purchase 555,555 shares (the "Shares") at a price of US$1.50 per Share
(such subscription and agreement to purchase being the "Subscription"), for the
total purchase price of US$833,332.50 (the "Subscription Proceeds"), which is
tendered herewith, on the basis of the representations and warranties and
subject to the terms and conditions set forth herein. This Subscription is part
of a private placement of up to US$2,500,000.
1.2 The Company hereby irrevocably agrees to sell, on the basis of the
representations and warranties and subject to the terms and conditions set forth
herein, to the Subscriber the Shares.
1.3 Subject to the terms hereof, the Subscription will be effective upon its
acceptance by the Company.
2. Payment
2.1 The Subscription Proceeds must accompany this Subscription and shall be
paid by certified cheque or bank draft drawn on a U.S. chartered bank made
payable to the Company. If the funds are wired to the Company or to its agent or
lawyers, those agents or lawyers are authorized to immediately deliver the funds
to the Company.
3. Documents Required from Subscriber
3.1 The Subscriber must complete, sign and return to the Company two (2)
executed copies of this Agreement.
3.2 The Subscriber shall complete, sign and return to the Company as soon as
possible on request by the Company any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities, stock exchanges and
applicable law.
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4. Closing
4.1 Closing of the offering of the Shares (the "Closing") shall occur on May
15, 1999 or on such other date as may be determined by the Company (the "Closing
Date").
5. Acknowledgements of Subscriber
5.1 The Subscriber acknowledges and agrees that:
(a) the Shares have not been registered under the 1933 Act, or under any
state securities or "blue sky" laws of any state of the United States,
and, unless so registered, may not be offered or sold in the United
States or to U.S. Persons, as that term is defined in Regulation S
under the 1933 Act ("Regulation S"), except pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the 1933 Act;
(b) the decision to execute this Agreement and purchase the Shares agreed
to be purchased hereunder has not been based upon any oral or written
representation as to fact or otherwise made by or on behalf of the
Company and such decision is based entirely upon a review of the news
releases of the Company and any public information filed with the
Securities and Exchange Commission in compliance, or intended
compliance, with applicable securities legislation. If the Company has
presented a business plan to the Subscriber, the Subscriber
acknowledges that the business plan may not be achieved or be
achievable;
(c) by execution hereof the Subscriber has waived the need for the Company
to communicate its acceptance of the purchase of the Shares pursuant
to this Agreement;
(d) the Company is entitled to rely on the representations and warranties
and the statements and answers of the Subscriber contained in this
Agreement, and the Subscriber will hold harmless the Company from any
loss or damage it or they may suffer as a result of the Subscriber's
failure to correctly complete this Agreement;
(e) it will indemnify and hold harmless the Company and, where applicable,
its respective directors, officers, employees, agents, advisors and
shareholders from and against any and all loss, liability, claim,
damage and expense whatsoever (including, but not limited to, any and
all fees, costs and expenses whatsoever reasonably incurred in
investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or
threatened) arising out of or based upon any representation or
warranty of the Subscriber contained herein or in any document
furnished by the Subscriber to the Company in connection herewith
being untrue in any material respect or any breach or failure by the
Subscriber to comply with any covenant or agreement made by the
Subscriber to the Company in connection therewith;
(f) the issuance and sale of the Shares to the Subscriber will not be
completed if acceptance would be unlawful or if, in the discretion of
the Company, acting reasonably, acceptance is not in the best
interests of the Company;
(g) it has been advised to consult its own legal, tax and other advisors
with respect to the merits and risks of an investment in the Shares
and with respect to applicable resale restrictions and it is solely
responsible (and the Company is not in any way responsible) for
compliance with applicable resale restrictions;
(h) the Shares are not listed on any stock exchange or automated dealer
quotation system and no representation has been made to the Subscriber
that the Shares will become listed on any stock exchange or automated
dealer quotation system; except that currently certain market makers
make market in shares of the Company on the non-NASDAQ
Over-the-Counter Bulletin Board;
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(i) it is outside the United States when receiving and executing this
Subscription Agreement and is acquiring the Shares for its own
account, for investment purposes only, and not with a view to, or for,
resale, distribution or fractionalization thereof, in whole or in
part, and no other person has a direct or indirect beneficial interest
in such Shares; or, if not, it is an accredited investor as defined by
US securities laws;
(j) the Shares may not be offered or sold to a U.S. Person or for the
account or benefit of a U.S. Person (other than a distributor) prior
to the end of the Restricted Period (as defined herein), if
applicable;
(k) the Company is under no obligation to register or qualify the Shares
on behalf of the Subscriber or to assist the Subscriber in complying
with any exemption from registration and qualification under the 1933
Act and applicable state securities laws, or any form of exemption
therefrom;
(l) in the view of the Securities and Exchange Commission, the statutory
and regulatory basis for the exemption claimed for the offer and sale
of the Shares, although in technical compliance with Regulation S,
would nonetheless not be available if the offering is part of a plan
or scheme to evade the registration provisions of the 1933 Act;
(m) this Agreement is not enforceable by the Subscriber unless it has been
accepted by the Company; and
(n) the Company will pay a finders fee, in cash, equal to 2.8% of the
gross proceeds received by the Company from the sale of the Shares.
The subscriber further acknowledges that the finder and its officers,
directors, employees and affiliates may, from time to time, hold
positions in securities of the Company.
6. Representations, Warranties and Covenants of the Subscriber
6.1 The Subscriber hereby represents and warrants to and covenants with the
Company (which representations, warranties and covenants shall survive the
Closing) that:
(a) it is not a U.S. Person;
(b) it is not acquiring the Shares for the account or benefit of, directly
or indirectly, a U.S. Person;
(c) the Subscriber has the legal capacity and competence to enter into and
execute this Subscription and to take all actions required pursuant
hereto and, if the Subscriber is a corporation, it is duly
incorporated and validly subsisting under the laws of its jurisdiction
of incorporation and all necessary approvals by its directors,
shareholders and others have been obtained to authorize execution and
performance of this Subscription on behalf of the Subscriber;
(d) the entering into of this Subscription and the transactions
contemplated hereby do not result in the violation of any of the terms
and provisions of any law applicable to, or the constating documents
of, the Subscriber or of any agreement, written or oral, to which the
Subscriber may be a party or by which the Subscriber is or may be
bound;
(e) the Subscriber has duly executed and delivered this Subscription and
it constitutes a valid and binding agreement of the Subscriber
enforceable against the Subscriber;
(f) it is not an underwriter of, or dealer in, the securities of the
Company, nor is the Subscriber participating, pursuant to a
contractual agreement or otherwise, in the distribution of the Shares;
(g) it is purchasing the Shares for its own account or for an account with
respect to which it exercises sole investment discretion, and that it
or such account is an accredited investor as that term is defined in
Rule 501 under the 1933 Act (an "Accredited Investor") acquiring the
Shares for investment purposes and not for distribution;
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(h) it understands and agrees that none of the Shares has been registered
under the 1933 Act, and they may not be sold except as permitted in
paragraph (i) below;
(i) it understands and agrees (i) that the Shares are being offered only
in a transaction not involving any public offering within the meaning
of the 1933 Act, and (ii) that (A) if within one year after the date
of original issuance of the Shares, or if within three months after it
ceases to be an affiliate (within the meaning of Rule 144 under the
1933 Act ("Rule 144")) of the Company, it decides to resell, pledge or
otherwise transfer the Shares on which the legend as set forth below
appears, such Shares may be resold, pledged or transferred only (1) to
the Company, (2) so long as the Shares are eligible for resale
pursuant to Rule 144A under the 1933 Act ("Rule 144A"), to a person
whom the seller reasonably believes is a qualified institutional
investor buyer ("QIB") as that term is defined in Rule 144A(a)(1) that
purchases for its own account or for the account of a QIB to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A (as indicated by the box checked by the
transferor on the certificate of transfer on the reverse of the
Shares), (3) in an offshore transaction in accordance with Regulation
S (as indicated by the box checked by the transferor on the
certificate of transfer on the reverse of the Shares), (4) to an
Institutional Accredited Investor (as indicated by the box checked by
the transferor on the certificate of transfer on the reverse of the
Shares) who has certified to the Company that such transferee is an
Institutional Accredited Investor and is acquiring such security for
investment purposes and not for distribution, (5) pursuant to an
exemption from registration provided by Rule 144 (if applicable) under
the 1933 Act, or (6) pursuant to an effective registration statement
under the 1933 Act, in each case in accordance with any applicable
securities laws of any state of the United States, (B) the purchaser
will, and each subsequent holder is required to, notify any purchaser
of the Shares from it of the resale restrictions referred to in clause
(A) above, if then applicable, and (C) with respect to any transfer of
the Shares by an Institutional Accredited Investor, such holder will
deliver to the Company such certificates and other information as it
may reasonably require to confirm that the transfer by it complies
with the restrictions set forth in this paragraph (i);
(j) it understands and agrees that the notification requirement referred
to in paragraph (i) above will be satisfied by virtue of the fact that
the legend set out in Schedule A will be placed on the Shares unless
otherwise agreed by the Company;
(k) it understands and agrees that offers and sales of the Shares prior to
the expiration of a period of one year after the date of original
issuance of the Shares (the "Restricted Period") shall only be made in
compliance with the safe harbor provisions set forth in Regulation S,
pursuant to the registration provisions of the 1933 Act or an
exemption therefrom, and that all offers and sales after the
Restricted Period shall be made only in compliance with the
registration provisions of the 1933 Act or an exemption therefrom;
(l) it will not sell or otherwise transfer the Shares except as permitted
under the 1933 Act and applicable state securities laws or an
exemption therefrom;
(m) it (i) is able to fend for itself in the Subscription; (ii) has such
knowledge and experience in business matters as to be capable of
evaluating the merits and risks of its prospective investment in the
Shares; and (iii) has the ability to bear the economic risks of its
prospective investment and can afford the complete loss of such
investment;
(n) it understands and agrees that the legend set forth in paragraph (j)
above shall not be removed from any Shares purchased by it pursuant to
this Subscription unless there is delivered to the Company such
satisfactory evidence, which may include an opinion of counsel
licensed to practice law in one of the states of the United States of
America, as may be reasonably required by the Company, that such
Shares are not "restricted" within the meaning of Rule 144;
(o) if it is acquiring the Shares as a fiduciary or agent for one or more
investor accounts, it has sole investment discretion with respect to
each such account and it has full power to make the foregoing
acknowledgments, representations and agreements on behalf of such
account;
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(p) it understands and agrees that the Company and others will rely upon
the truth and accuracy of the acknowledgments, representations and
agreements contained in sections 5 and 6 hereof and agrees that if any
of such acknowledgments, representations and agreements are no longer
accurate or have been breached, it shall promptly notify the Company;
(q) the Subscriber is not aware of any advertisement of the Shares;
(r) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase any of the Shares;
(ii) that any person will refund the purchase price of any of the
Shares;
(iii) as to the future price or value of any of the Shares; or
(iv) that the Shares will be listed and posted for trading on any
stock exchange or automated dealer quotation system or that
application has been made to list and post the Shares of the
Company on any stock exchange or automated dealer quotation
system.
6.2 In this Subscription, the term "U.S. Person" shall have the meaning
ascribed thereto in Regulation S.
7. Acknowledgement and Waiver
7.1 The Subscriber has acknowledged that the decision to purchase the Shares
was solely made on the basis of publicly available information. The Subscriber
hereby waives, to the fullest extent permitted by law, any rights of withdrawal,
rescission or compensation for damages to which the Subscriber might be entitled
in connection with the distribution of the Shares.
8. Legending of Shares
8.1 The Subscriber hereby acknowledges that a legend may be placed on the
certificates representing the Shares to the effect that the securities
represented by such certificates are subject to a hold period and may not be
traded until the expiry of such hold period except as permitted by applicable
securities legislation.
9. Costs
9.1 The Subscriber acknowledges and agrees that all costs and expenses incurred
by the Subscriber (including any fees and disbursements of any special counsel
retained by the Subscriber) relating to the purchase of the Shares shall be
borne by the Subscriber.
10. Governing Law
10.1 This Subscription Agreement is governed by the laws of the state of Nevada
and the federal laws of the United States applicable herein. The Subscriber, in
its personal or corporate capacity and, if applicable, on behalf of each
beneficial purchaser for whom it is acting, irrevocably attorns to the
jurisdiction of the state of Nevada.
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11. Survival
11.1 This Subscription, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the purchase of the Shares by the Subscriber pursuant hereto.
12. Assignment
12.1 This Subscription is not transferable or assignable.
13. Execution
13.1 The Company shall be entitled to rely on delivery by facsimile machine of
an executed copy of this Subscription and acceptance by the Company of such
facsimile copy shall be equally effective to create a valid and binding
agreement between the Subscriber and the Company in accordance with the terms
hereof.
14. Severability
14.1 The invalidity or unenforceability of any particular provision of this
Subscription shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription.
15. Entire Agreement
15.1 Except as expressly provided in this Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Agreement contains the entire agreement between the parties with respect to the
sale of the Shares and there are no other terms, conditions, representations or
warranties, whether expressed, implied, oral or written, by statute or common
law, by the Company or by anyone else.
16. Notices
16.1 All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Subscriber shall be directed to the
address on page 1 and notices to the Company shall be directed to it at 0000
Xxxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx, 00000, attention of Xxxxxxx Xxxxxx.
17. Counterparts
17.1 This Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall constitute an original and all of
which together shall constitute one instrument.
IN WITNESS WHEREOF the Subscriber has duly executed this Subscription as of the
date first above mentioned.
DELIVERY INSTRUCTIONS
1. Delivery - please deliver the Share certificates to:
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Registration - registration of the certificates which are to be delivered
at closing should be made as follows:
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(name)
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(address)
3 The undersigned hereby acknowledges that it will deliver to the Company all
such additional completed forms in respect of the Subscriber's purchase of
the Shares as may be required for filing with the appropriate securities
commissions and regulatory authorities.
Lamplighter Investments Ltd.
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(Name of Subscriber - Please type or print)
/s/ [Illegible]
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(Signature and, if applicable, Office)
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(Address of Subscriber)
Xxxxxx 0
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(City, State or Province, Postal Code of
Subscriber)
Ireland
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(Country of Subscriber)
Handwritten
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00 Xxxxx Xx
Xxxxxxxxxx Xxxxx
Xxxxxxx
XX0 00XX
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A C C E P T A N C E
The above-mentioned Subscription in respect of the Shares is hereby accepted by
KODIAK GRAPHICS COMPANY
DATED at Vancouver, the 6th day of May, 1999.
KODIAK GRAPHICS COMPANY
Per: /s/Xxxxxxx Xxxxxx, President
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Authorized Signatory
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SCHEDULE A - LEGEND
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE ONE YEAR ANNIVERSARY
OF THE ISSUANCE HEREOF OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY
AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN
EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT ("RULE 144A"), TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE 1933 ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4)
TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE 1933 ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND
A CERTIFICATE IN THE FORM ATTACHED TO THIS SECURITY IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY, (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE 1933 ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE 1933 ACT, OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, IN EACH CASE
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES THAT
IT WILL FURNISH TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES
WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE 1933 ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND
NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2)
OF) RULE 902 UNDER REGULATION S UNDER THE 1933 ACT."
