EXHIBIT 10.28
SUBSCRIPTION AGREEMENT
Medstrong International Corporation
000 Xxxxxxxxx Xxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Gentlemen:
Section 1. Purchase and Sale. The undersigned subscriber ("Purchaser"), hereby
tenders this Subscription Agreement and applies for the purchase of the number
of shares set forth on the signature page hereof (the "Shares") of Common Stock,
par value $0.001 per share (the "Common Stock"), of Medstrong International
Corporation, a Delaware corporation (the "Company"), as a part of an offering by
the Company (the "Offering") of 2,600,000 shares of Common Stock. Together with
this Subscription Agreement, the Purchaser is delivering the full amount of the
purchase price for the Shares (the "Purchase Price") for which the Purchaser is
subscribing. This subscription may be rejected, in whole or in part, by the
Company in its sole discretion. The undersigned purchaser hereby tenders this
Subscription Agreement and applies for the purchase of the number of Shares set
forth on the signature page hereof (the "Signature Page") at the purchase price
per of Ten ($.10) Cents per Share.
Section 2. Amount and Method of Payment. Payment of the Purchase Price required
to purchase the number of Shares subscribed for hereunder shall be made as
directed by the Company in the amount of the Purchase Price for the Shares
subscribed for. If a subscription is rejected in whole or in part or if the
Offering is terminated for any reason, the Purchaser's subscription shall be
void and all funds received from the Purchaser shall be returned as soon as
practicable to the Purchaser without any interest thereon, and without charge or
deduction.
Section 3. Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser that:
3.1 The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the power and
authority to carry on its business as conducted or proposed to be conducted by
it and to hold title to its property, which business and property is described
in the Company Reports (as hereinafter defined). The Company has the corporate
power and authority to execute and deliver this Subscription Agreement, to
conduct such business and to perform its obligations hereunder and consummate
the transactions contemplated this Subscription Agreement.
3.2 When (i) the Company has received payment in accordance with the provisions
of this Subscription Agreement, and (ii) certificates evidencing the shares of
Common Stock that comprise the Shares subscribed for hereby have been issued to
the Purchaser, the Shares will be validly issued, fully paid and non-assessable
shares of Common Stock.
3.3 As of the date of the Company Reports (and as of the effective date of each
supplement thereto or amendment thereof) and to the best of the Company's
knowledge after due inquiry, the Company Reports do not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
3.4 Except as disclosed in the Company Reports, there are no actions, suits,
proceedings or investigations pending or, to the best of the Company's
knowledge, threatened against or affecting the Company which could prevent or
interfere with or adversely affect the execution and delivery by the Company of
this Subscription Agreement or the performance by the Company of its obligations
hereunder or the offering, issuance and sale of the Shares, or which,
individually or in the aggregate, would have a material adverse effect on the
value of the assets or the operation of the business of the Company.
3.5 Except as otherwise disclosed in the Company Reports, all requisite
authorizations, approvals or orders from any court, governmental or regulatory
official or body necessary to permit the Company to conduct its business as
described in the Company Reports have been obtained.
3.6 This Subscription Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes the valid and binding agreement of
the Company, enforceable in accordance with its terms, except that (i) such
enforcement may be subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar
laws relating to or affecting creditors' rights generally and general principles
of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law) and (ii) the indemnification provisions of this
Subscription Agreement may be held to violate public policy (under either
federal or state law) in the context of the offer or sale of securities.
3.7 The Company's execution and delivery of this Subscription Agreement, the
fulfillment of the terms set forth herein and the consummation of the
transactions contemplated herein will not conflict with or constitute a breach
of, or default under (i) the Company's articles of incorporation or by-laws,
(ii) any material agreement, indenture or instrument by which the Company is
bound, or (iii) any law, administrative regulation or court decree.
3.8 The financial statements of the Company contained in the Company Reports
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby, and present fairly
the financial position of the Company as of the respective dates indicated. In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) have been made which are considered necessary for a fair
presentation of such information for the periods presented.
3.9 The sale of the Shares has been duly and validly authorized by the Company.
Except as disclosed in the Company Reports, there are no outstanding options,
warrants or other rights to purchase or otherwise acquire any shares of Common
Stock or any security convertible into such shares of Common Stock.
Section 4. Representations and Warranties of Purchaser. In order to induce the
Company to accept this subscription, the Purchaser hereby represents and
warrants to, and covenants with, the Company as follows:
4.1 The undersigned understands that the Shares have not been registered under
the United States Securities Act of 1933, as amended (the "Securities Act"), or
the securities laws of any state in the United States, by reason of their
contemplated issuance in transactions exempt from the prospectus and delivery
requirements of the Securities Act pursuant to Section 4(2) of the Securities
Act, and that the reliance on such exemption from registration is predicated in
part on these representations and warranties of the Purchaser. The Purchaser
acknowledges that a restrictive legend consistent with the foregoing has been or
will be placed on the certificates evidencing the Shares. The Purchaser
understands that neither the Securities and Exchange Commission ("SEC") nor any
state securities commission has approved the Shares or passed upon or endorsed
the merits of the investment or reviewed or confirmed the accuracy or determined
the adequacy of any information furnished to the Purchaser in connection with
this offering.
4.2 The Purchaser is acquiring the Shares solely for the account of the
Purchaser, for investment purposes only, and not with a view towards the resale
or distribution thereof. The Purchaser further agrees not to transfer the Shares
in violation of the Securities Act, or any applicable state securities law, and
no one other than the Purchaser has any beneficial interest in the Shares;
4.3 The Shares are "restricted securities", as said term is defined in Rule 144
promulgated under the Securities Act;
4.4 The Purchaser agrees that it will not sell or otherwise dispose of any of
the Shares unless such sale or other disposition (i) has been registered under
the Securities Act or, in the opinion of counsel, is exempt from registration
under the Securities Act and (ii) has been registered or qualified or, in the
opinion of such counsel, is exempt from registration or qualification under the
applicable state securities laws. The Purchaser may not sell, transfer, or
otherwise dispose of the Shares, except in compliance with the applicable rules
of the SEC and applicable state securities authorities;
4.5 The Purchaser is (i) an "accredited investor", as such term is defined in
Rule 501(a) of Regulation D promulgated under the Securities Act and is
sufficiently knowledgeable to understand the risks involved in purchasing the
Shares, and (ii) the Purchaser, or the Purchaser through its representative, or
if the Purchaser is a corporation, partnership, limited liability company, trust
or other entity, the Purchaser, by and through its officers, directors, members,
trustees, employees or other advisors, (I) is experienced in evaluating an
investment in the Company, (II) has determined that an investment in the Company
is a suitable investment for the Purchaser and (III) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the Purchaser's investment in the Company. The Purchaser has
the financial ability to bear the economic risks of its entire investment for an
indefinite period, would be able to sustain a complete loss of its investment,
and the Purchaser has no need for liquidity with respect to its investment in
the Company. If the Purchaser is a natural person, the Purchaser has adequate
means for providing for current needs and personal contingencies;
4.6 The Purchaser is not an officer, director or "affiliate" (as that term is
defined in Rule 405 promulgated under the Securities Act) of the Company;
4.7 The Purchaser, and if applicable, the Purchaser's representative, has
received and carefully reviewed the following documents constituting the
periodic reports filed by the Company with the SEC:
A. ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEARS ENDED DECEMBER 31, 2005;
AND
B. QUARTERLY REPORTS ON FORM 10 QSB FOR THE FISCAL QUARTERS ENDED MARCH 31,
JUNE 30 AND SEPTEMBER 30, 2006.
The Purchaser acknowledges and agrees that the foregoing shall be
supplemented by subsequent periodic reports filed by the Company with the SEC
pursuant to the Securities Exchange Act of 1934, as amended. The foregoing
enumerated periodic reports and the subsequent periodic reports filed by the
Company are hereinafter collectively referred to as the "Company Reports".
4.8 The Purchaser, and if applicable, the Purchaser's representative, has had a
reasonable opportunity to ask questions of and receive answers from the Company
concerning the Company and to verify the accuracy of any representation or
information set forth in the Company Reports, and all such questions, if any,
have been answered to the full satisfaction of the Purchaser;
4.9 The Purchaser, and if applicable, the Purchaser's representative, has
received from the Company, and has reviewed, such information which the
Purchaser considers necessary or appropriate to evaluate the risks and merits of
an investment in the Shares, including, without limitation, the Company Reports
and, in particular, the Purchaser acknowledges that, as shown in the financial
statements included in the Company's quarterly report on Form 10-QSB for the
nine month period ended September 30, 2006, the Company has no revenues and has
current liabilities in excess of $1,000,000;
4.10 Except as set forth in this Subscription Agreement, no representations or
warranties have been made to the Purchaser, and if applicable, the Purchaser's
representative, by the Company or any agent, employee or affiliate of the
Company. The Purchaser has relied solely on the representations, warranties,
covenants and agreements of the Company in this Subscription Agreement and on
the Purchaser's examination and independent investigation in making its decision
to acquire the Shares;
4.11 The Purchaser understands that the Shares are being offered and sold
expressly conditioned upon the satisfaction of specific exemptions from the
registration requirements of the federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein in order to determine the applicability of such exemptions and the
suitability of the Purchaser to acquire such securities;
4.12 The Purchaser has full power and authority to execute and deliver this
Subscription Agreement and to perform the Purchaser's obligations hereunder, and
this Subscription Agreement is a legally binding obligation of the Purchaser
enforceable against Purchaser in accordance with its terms; and
4.13 The Purchaser has not incurred any obligation for any finder's, or broker's
agent's fees or commission in connection with the transactions contemplated
hereby.
Section 5. All the information which the undersigned has furnished to the
Company, or which is set forth herein, is correct and complete as of the date of
this Subscription Agreement, and if there should be any material change in such
information, the Purchaser will immediately furnish such revised or corrected
information to the Company.
Section 6. Restrictive Legend and Stop-Transfer Instructions.
6.1 The Purchaser shall comply with all of the following restrictions prior to
reselling any of the Shares:
(a) Until the Shares have been registered with the SEC, the Purchaser shall
notify the Company about any proposed resale which notice must be received
by the Company at least five (5) business days prior to such resale;
(b) All offers or sales of such securities by the Purchaser in the United
States or to U.S. persons may only be made pursuant to an effective
registration statement filed under the Securities Act or pursuant to an
exemption from registration under this Securities Act and in compliance
with all applicable state securities laws; and
(c) If requested by the Company, the Purchaser shall provide a satisfactory
opinion from legal counsel that the Purchaser's resale complies with this
Section 6.1.
6.2 Any certificate or certificates representing the Shares shall bear an
appropriate legend evidencing the preceding restrictions in substantially the
following form:
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM.
Section 7. Indemnification.
The undersigned Purchaser agrees to indemnify and hold harmless the Company and
its employees, agents, attorneys and affiliates from and again st all damages,
losses, costs and expenses (including attorneys' fees) which they may incur by
reason for the failure of the undersigned to fulfill any of the terms or
conditions of this Agreement, or by reason of any breach of any of the
representations and warranties made by the undersigned herein or in any document
provided by the undersigned Purchaser to the Company
Section 8. Confidentiality. The Purchaser acknowledges and agrees that all
information relating to the Company and this offering shall be kept confidential
by the Purchaser, except as otherwise required by law or made public other than
by or through the undersigned.
Section 9. Nontransferability. Neither this Subscription Agreement nor any of
the rights of the Purchaser hereunder may be transferred or assigned by the
Purchaser and any attempted assignment shall be null and void.
Section 10. Amendment; Entire Agreement; Governing Law. This Subscription
Agreement (i) may only be modified by a written instrument executed by the
Purchaser and the Company, (ii) sets forth the entire agreement of the Purchaser
and the Company with respect to the subject matter hereof and supersedes all
prior agreements and understandings between or among the parties with respect to
the subject matter hereof, (iii) shall be governed by the laws of the State of
Florida applicable to contracts made and to be wholly performed therein, and
(iv) shall inure to the benefit of, and be binding upon, the Company and the
Purchaser and their respective successors and permitted assigns.
Section 11. Notices. All notices, request, demands, claims and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following address and facsimile numbers
(or to such other addresses or facsimile numbers which such party shall
subsequently designate in writing to the other party): (a) If to the Company:
Medstrong International Corporation, 000 Xxxxxxxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx,
XX 00000 ; and (b) If to the Purchaser: to its address set forth on the
Signature Page.
Section 12. Pronouns; Counterparts. Unless the context otherwise requires, all
personal pronouns used in this Subscription Agreement, whether in the masculine,
feminine or neuter gender, shall include all other genders. This Subscription
Agreement may be executed in counterparts and by facsimile and each of such
counterparts shall constitute an original, and all of which together shall
constitute one and the same document.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals as
of November 27, 2006.
Number of Shares subscribed: _________________________________________
Aggregate Purchase Price of Shares subscribed, $______________________
Purchaser (please print)
By:
-------------------------------------
Signature; Title
Address:
____________________________________
____________________________________
____________________________________
Facsimile No:
E-mail: ____________________________________
MEDSTRONG INTERNATIONAL CORPORATION
By: /s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx, President
