EXHIBIT 4.4
SUBSCRIPTION AGREEMENT
Avenue Entertainment Group, Inc.
00000 Xxxxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Gentlemen:
Subscription. The undersigned is hereby purchasing from Avenue
Entertainment Group, Inc., a Delaware corporation (the "Company"), the number of
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), of the Company set forth on the signature page hereto, for a purchase
price (the "Purchase Price") of $1.04342 per Share.
Closing. Payment of the Purchase Price is being made by electronic wire
transfer in accordance with the following instructions:
Account Name: Avenue Pictures, Inc.
Bank Name: City National Bank
ABA #: 1220-16066
Account #: 0001-222317
or by delivery of a bank check or certified check made payable to "Avenue
Entertainment Group, Inc." against delivery to the undersigned of a certificate
representing the Shares.
3. Transfer Restrictions.
(a) To induce the Company to issue the Shares to the undersigned, the
undersigned agrees for the benefit of the Company that the undersigned will not,
prior to one year from the date hereof, without the prior written consent of the
Company, offer, pledge, hypothecate, sell, contract to sell, grant any option
for the sale of, or otherwise dispose of, directly or indirectly (collectively,
"Dispose Of"), any of the Shares, except that the foregoing restriction shall
not apply to any Shares Disposed Of at death or, if the donee agrees to be bound
by the same restriction, by gift. The provisions of this Section 3(a) shall be
binding upon the undersigned and the successors, assigns, heirs, and personal
representatives of the undersigned.
(b) The undersigned realizes that the Shares are not registered under
the Securities Act of 1933, as amended (the "Act"), or any foreign or state
securities laws. The undersigned agrees that the Shares will not be Disposed Of
except in compliance with the Act, if applicable, and applicable foreign and
state securities laws and the restrictions set forth in Section 3(a). Purchasers
of Shares can only Dispose Of the Shares pursuant to registration under the Act
or pursuant to an exemption therefrom. The undersigned understands that to
Dispose Of the Shares may require in some jurisdictions specific approval by the
appropriate governmental agency or commission in such jurisdiction. The
undersigned has been advised that, except as provided in Section 5, the Company
has no obligation, and does not intend, to cause the Shares to be registered
under the Act or the securities law of any other jurisdiction or to comply with
the requirements for any exemption under the Act, including but not limited to
those provided by Rule 144 and Rule 144A promulgated under the Act, or under the
securities law of any other jurisdiction. The undersigned understands the legal
consequences of the foregoing to mean that the undersigned may have to bear the
economic risk of its investment in the Company for an indefinite period of time.
(c) To enable the Company to enforce the transfer restrictions contained
in Sections 3(a) and 3(b), the undersigned hereby consents to the placing of
legends upon, and stop-transfer orders with the transfer agent of the Common
Stock with respect to, the Shares.
4. Representations and Warranties. To induce the Company to accept the
undersigned's subscription, the undersigned hereby represents and warrants to
the Company that:
(a) the undersigned, if an individual, has reached the age of majority
in the jurisdiction in which he resides; is a bona fide resident of the
jurisdiction contained in the address set forth on the signature page of this
Subscription Agreement; is legally competent to execute this Subscription
Agreement; and does not intend to change residence to another jurisdiction;
(b) the undersigned, if an entity, is duly authorized to execute this
Subscription Agreement and this Subscription Agreement, when executed and
delivered by the undersigned, will constitute a legal, valid, and binding
obligation enforceable against the undersigned in accordance with its terms; and
the execution, delivery, and performance of this Subscription Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate or other necessary action on the part of the
undersigned;
(c) the Shares subscribed for hereby are being acquired by the
undersigned for investment purposes only, for the account of the undersigned and
not with the view to any resale or distribution thereof, and the undersigned is
not participating, directly or indirectly, in a distribution of such Shares and
will not take, or cause to be taken, any action that would cause the undersigned
to be deemed an "underwriter" of such Shares as defined in Section 2(11) of the
Act;
(d) the undersigned has had access to all materials, books, records,
documents, and information relating to the Company, including (i) the Annual
Report on Form 10-KSB for the year ended December 31, 1998, (ii) the Quarterly
Report on Form 10-QSB for the quarter ended March 31, 1999 and (iii) the
Prospectus dated November 7, 1997 (the "November Prospectus");
(e) the undersigned acknowledges and understands that investment in the
Shares involves a high degree of risk, including the risks set forth in the
November Prospectus under the caption "Risk Factors";
(f) the undersigned acknowledges that the undersigned has been offered
an opportunity to ask questions of, and receive answers from, officers of the
Company concerning all material aspects of the Company and its business, and
that any request for such information has been fully complied with to the extent
the Company possesses such information or can acquire it without unreasonable
effort or expense;
(g) the undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of an investment in the Company and can afford a complete loss of his
investment in the Company;
(h) the undersigned has never been notified by the Internal Revenue
Service that the undersigned is subject to backup withholding;
(i) the undersigned recognizes that an investment in the Company
involves a high degree of risk and that no governmental agency has passed upon
the issuance of the Shares or made any finding or determination as to the
fairness of this investment;
(j) if the undersigned is purchasing the Shares subscribed for hereby in
a representative or fiduciary capacity, the representations and warranties
contained herein shall be deemed to have been made on behalf of the person or
persons for whom such Shares are being purchased;
(k) the undersigned has not entered into any agreement to pay
commissions to any person with respect to the purchase or sale of the Shares,
except commissions for which the undersigned will be responsible;
(l) the undersigned is an "Accredited Investor" as that term is defined
in Section 501(a) of Regulation D promulgated under the Act. Specifically the
undersigned is (check appropriate item(s)):
(i) a bank as defined in Section 3(a)(2) of the Act, or a savings and
loan association or other institution as defined in Section 3(a)(5)(A)
of the Act whether acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13)
of the Act; an investment company registered under the Investment
Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act; a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; a plan established
and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
$5,000,000; an employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such act,
which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by persons that are
accredited investors;
(ii) a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(iii) an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring Shares, with total assets in excess of $5,000,000;
(iv) a director or executive officer of the Company;
(v) a natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his or her purchase exceeds
$1,000,000;
(vi) a natural person who had an individual income (not including his
or her spouse's income) in excess of $200,000 in 1998 and 1997 or joint
income with his or her spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching such income level in
1999;
(vii) a trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring Shares, whose purchase is
directed by a person having such knowledge and experience in financial
and business matters that he or she is capable of evaluating the merits
and risks entailed in the purchase of Shares; or
(viii) an entity in which all of the equity owners are Accredited
Investors. (If this alternative is checked, the undersigned must
identify each equity owner and provide statements signed by each
demonstrating how each is qualified as an accredited investor.)
5. Registration of Shares Under the Act.
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(a) The Company shall, (i) not later than one year after the date
hereof, file and cause to become effective under the Act a registration
statement (the "Registration Statement") registering under the Act the resale of
the Shares and (ii) after the Registration Statement is declared effective under
the Act, furnish the undersigned with such number of copies of the prospectus
included in the Registration Statement as the undersigned may reasonably request
to facilitate the disposition of the Shares owned by the undersigned.
(b) If at any time during the period that the undersigned owns any
Shares an event (an "Event") shall have occurred that has caused the
Registration Statement to contain an untrue statement of a material fact or to
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, the Company shall (i) give the undersigned a notice (the
"No-Sell Notice") that an Event has occurred, (ii) promptly (or, if in the
reasonable judgment of the Company disclosure of the Event would be detrimental
to the Company, promptly after disclosure of the Event would not be detrimental
to the Company) take all commercially reasonable efforts to cause the
Registration Statement not to contain an untrue statement of a material fact or
to omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, and (iii) give the undersigned a notice (the "Sell
Notice") when the Registration Statement does not contain an untrue statement of
a material fact or to omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they were made. The undersigned shall not sell any
Shares pursuant to the Registration Statement after it has received a No-Sell
Notice until it has received a subsequent Sell Notice.
(c) In connection with the Registration Statement, the undersigned shall
furnish to the Company such information as the Company shall reasonably request.
6. Indemnification. The undersigned understands the meaning and legal
consequences of the representations and warranties made by the undersigned in
this Agreement, and agrees to indemnify and hold harmless the Company and each
of the Company's directors, officers, stockholders, employees, counsel, agents,
successors, and assigns, if any, from and against any and all loss, damage,
liability, or expense (including, without limitation, attorneys' fees), as and
when incurred, due to or arising out of (in each case in whole or in part) any
breach of any representation or warranty made by the undersigned set forth
herein or in any other agreement or other document furnished by the undersigned
to any of the foregoing in connection with this transaction, any failure by the
undersigned to fulfill any of its covenants or agreements set forth herein or
therein, or arising out of the resale or distribution by the undersigned of the
Shares or any portion thereof in violation of the Act or any applicable foreign
or state securities or "blue sky" law.
7. Further Documents. The undersigned agrees that he will execute such
other documents as may be necessary or desirable in connection with the
transactions contemplated hereby.
8. Modification. Neither this Subscription Agreement nor any provisions
hereof shall be waived, modified, discharged, or terminated except by an
instrument in writing signed by the party against whom any such waiver,
modification, discharge, or termination is sought.
9. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or by Federal Express, Express Mail or similar
overnight delivery or courier service or delivered (in person or by telecopy,
telex or similar telecommunications equipment) against receipt to the party to
whom it is to be given, (i) if to the Company, at its address set forth on the
first page hereof, (ii) if to the undersigned, at his address set forth on the
signature page hereto, or (iii) in either case, to such other address as the
party shall have furnished in writing in accordance with the provisions of this
Section 9. Any notice or other communication given by certified mail shall be
deemed given at the time of certification thereof, except for a notice changing
a party's address which shall be deemed given at the time of receipt thereof.
Any notice given by other means permitted by this Section 9 shall be deemed
given at the time of receipt thereof.
10. Counterparts. This Subscription Agreement may be executed through
the use of separate signature pages or in any number of counterparts, and each
such counterpart shall, for all purposes, constitute one agreement binding on
all parties, notwithstanding that all parties are not signatories to the same
counterpart.
11. Entire Agreement. This Subscription Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and there are
no representations, covenants, or other agreements except as stated or referred
to herein.
12. Severability. Each provision of this Subscription Agreement is
intended to be severable from every other provision, and the invalidity or
illegality of any portion hereof shall not affect the validity or legality of
the remainder hereof.
13. Assignability.This Subscription Agreement is not transferable or
assignable by the undersigned.
14. Applicable Law. This Subscription Agreement has been negotiated and
consummated in the State of New York and shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflict of laws.
15. Choice of Jurisdiction.Any action or proceeding arising, directly,
indirectly, or otherwise, in connection with, out of or from this Subscription
Agreement, any breach hereof or any transaction covered hereby shall be resolved
within the City of Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of America.
Accordingly, the parties consent and submit to the jurisdiction of the United
States federal and state courts located within the City of Xxx Xxxx, Xxxxx xx
Xxx Xxxx, Xxxxxx Xxxxxx of America.
16. Taxpayer Identification Number. The undersigned verifies under
penalties of perjury that any Taxpayer Identification Number or Social Security
Number shown on the signature page hereto is true, correct, and complete.
17. Pronouns. Any personal pronoun shall be considered to mean the
corresponding masculine, feminine, or neuter personal pronoun, as the context
requires.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement, this _____ day of __________, 1999.
Number of Shares Subscribed for: _________ Shares
INDIVIDUAL SUBSCRIBER: ENTITY SUBSCRIBER:
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(Signature of Subscriber) (Typed or Printed Name of Subscriber)
____________________________ By: _________________________
(Typed or Printed Name) Name:
Title:
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(Residence Address) (Address)
---------------------------- ----------------------------
(City, State and Zip Code) (City, State and Zip Code)
---------------------------- ----------------------------
(Telephone Number) (Telephone Number)
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(Telecopier Number) (Telecopier Number)
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(Tax I.D. or Social Security Number) (Tax I.D. or Social Security Number)
ACCEPTED:
Avenue Entertainment Group, Inc.
By: __________________________
Name:
Title:
Date: ______________, 1999
