Exhibit 10.7
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 REGULATIONS 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 UNMD STATES OR TO U.S. PERSONS
(AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMIMON FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(Foreign/Overseas Subscribers)
TO: XXXXX.XXX, INC., a Florida Corporation (the "Company")
Purchase of Securities
1. Subscription
1.1 The undersigned (the "Subscriber") hereby irrevocably subscribes for
and agrees to purchase 500,000 units (the "Units") at a price of US$2.00 per
Unit (such subscription and agreement to purchase being the "Subscription"), for
the total purchase price of US$1 Million (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.
1.2 Each Unit will consist of one common share in the capital of the
Company (a "Share") and one non-transferrable share purchase warrant (a "Share
Purchase Warrant") subject to adjustment. One Share Purchase Warrant shall
entitle the holder thereof to purchase one common share in the capital of the
Company (a "Warrant Share"), as presently constituted, at a price of $2.00 per
Warrant Share for a period of the one (1) year commencing from the Closing (as
defined hereafter). The Shares, Share Purchase Warrants and the Warrant Shares
are referred to as the "Securities'.
1.3 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 Units.
1.4 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.
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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.
4. Closing
4.1 Closing of the offering of the Units (the "Closing") shall occur on
February 12, 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 Securities 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 Units
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 any public information which has been filed by the
Company 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
Units 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
theCompany in connection therewith;
(f) 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 Units 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;
(g) the Securities are not listed on any stock exchange or automated
dealer quotation system and no representation has been made to
the Subscriber that any of the Securities will become listed on
any stock
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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;
(h) it is outside the United States when receiving and executing this
Subscription Agreement and is acquiring the Securities as
principal 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
Securities;
(i) the Securities 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);
(j) the Company is under no obligation to register or qualify any of
the Securities 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;
(k) 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 Securities, 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; and (1) this Agreement
is not enforceable by the Subscriber unless it has been accepted
by 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 or a resident of Canada;
(b) it is not acquiring the Securities 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
Securities;
(g) it is purchasing the Units 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 Units for investment purposes and not
for distribution;
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(h) it understands and agrees that none of the Securities has been
registered under the 1933 Act, and they may not be sold except as
permitted in paragraph 6. 1 (i) below;
(i) it understands and agrees (i) that the Units 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, in the
case of common shares issued upon the exercise of a Share
Purchase Warrant, within one year after the date of such
exercise, 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 any of the Securities on which the legend as
set forth below appears, such Securities may be resold, pledged
or transferred only (1) to the Company, (2) so long as the
Securities 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
Securities), (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 Securities),
(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 Securities) 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 Securities from it of the resale restrictions referred to
in clause (A) above, if then applicable, and (C) with respect to
any transfer of the Securities 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 6. 1 (i);
(j) it understands and agrees that the notification requirement
referred to in paragraph 6. 1 (i) above will be satisfied by
virtue of the fact that the legend set out in Schedule A will be
placed on the Securities unless otherwise agreed by the Company;
(k) it understands and agrees that offers and sales of the Securities
prior to the expiration of a period of one year after the date of
original issuance of the Securities (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 Securities 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 Units; 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
6. 10) above shall not be removed from any Securities 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 Securities are not " restricted" within
the meaning of Rule 144;
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(o) if it is acquiring the Units 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;
(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 any of the
Securities;
(r) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase any of the
Securities;
(ii) that any person will refund the purchase price of any of the
Securities;
(iii)as to the future price or value of any of the Securities;
or
(iv) that any of the Securities 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
any of the Securities 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
Units 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 any of the Securities.
8. Legending of Subject Securities
8.1 The Subscriber hereby acknowledges that a legend may be placed on the
certificates representing any of the Securities 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 Units shall
be borne by the Subscriber.
10. Governing Law
10.1 This Subscription Agreement is governed by the laws of the state of
Florida 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 Florida.
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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 Units 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 Units 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 duty given if mailed or transmitted by any standard
form of telecommunication. Notices to the Subscriber shall be directed to the
address on page 7 and notices to the Company shall be directed to it at Suite
702 - 543 Granville Street, Vancouver, B.C. V6C IX8, attention of Xxxxxx 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 WIIEREOF the Subscriber has duly executed this Subscription as of the
date first above mentioned.
DELIVERY INSTRUCTIONS
I. Delivery - please deliver the Share certificates to:
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2. 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
Units as may be required for filing with the appropriate securities commissions
and regulatory authorities.
Dotcom Fund, S.A.
--------------------------------------------
(Name of Subscriber - Please type or print)
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(Signature and, if applicable, Xxxxxx)
X.X. 000, Xxxxxxxxxxxxxx, Xxxxx & Caicos Wands
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(Address of Subscriber)
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(City, State or Province, Postal Code
of Subscriber)
BWI
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(Country of Subscriber)
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A C C E P T A N C E
The above-mentioned Subscription in respect of the Units is hereby accepted by
XXXXX.XXX, INC.
DATED at --------------, the --- day of --------------------, 1999.
XXXXX.XXX, INC.
Per: ----------------------------
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."
