THIS 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 SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION
AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE "1933 ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.
SUBSCRIPTION AGREEMENT
(Offshore Subscribers)
TO: Logicom, Inc. (the "Company")
Xxxxx 000
000 Xxxx Xxxxxx
Xxxxxxxxx, XX
Xxxxxx X0X 0X0
Purchase of Units
1. Subscription
1.1 On the basis of the representations and warranties and subject to the terms
and conditions set forth herein, ____________________(the "Subscriber") hereby
irrevocably subscribes for and agrees to purchase ____________ units (the
"Units") at a price per Unit of US$0.84 (such subscription and agreement to
purchase being the "Subscription"), for an aggregate purchase price of
US$__________ (the "Subscription Proceeds").
1.2 Each Unit will consist of one common share in the capital of the Company
(each, a "Share") and one common share purchase warrant (each, a "Warrant")
subject to adjustment. Each Warrant shall be non-transferable and shall entitle
the holder thereof to purchase one share of common stock in the capital of the
Company (each, a "Warrant Share"), as constituted at the date of the completion
of the transactions contemplated in the Share Exchange Agreement dated November
2, 2005 between the Company, Skin Shoes, Inc. and all of the stockholders of
Skin Shoes, Inc., as the same may be amended from time-to-time (the "Share
Exchange Agreement"), for a period of thirty months commencing from the Closing
(as defined hereafter), at a price per Warrant Share of US$1.00. Certificate(s)
representing the Warrants will be in the form attached as Exhibit A. The Shares,
Warrants and the Warrant Shares are referred to as the "Securities".
1.3 On the basis of the representations and warranties and subject to the terms
and conditions set forth herein, the Company hereby irrevocably agrees to sell
the Units to the Subscriber.
1.4 Subject to the terms hereof, the Subscription will be effective upon its
acceptance by the Company.
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2. Payment
2.1 The Subscription Proceeds must accompany this Subscription and shall be paid
by wire transfer to the Company's lawyers pursuant to the wiring instructions
below:
HSBC BANK USA, NEW YORK
ABA NO.: 021 001 088
SWIFT CODE: XXXXXXXX
ACCOUNT NO.: 000050881
For further credit to:
HSBC BANK CANADA
000 XXXX XXXXXXX XXXXXX
XXXXXXXXX, XXXXXXX XXXXXXXX
X0X 0X0 XXXXXX
ACCOUNT NAME: XXXXX XXXXXX LLP
U.S. TRUST ACCOUNT NO.: 491689-002
TRANSIT NO.: 10020
BANK CODE: 16
PLEASE ALSO INSTRUCT YOUR BANKER TO QUOTE
YOUR NAME AND OUR FILE NO. 27839-0002 EPM
The Company's lawyers are authorized to immediately deliver the funds to the
Company subject to the terms of an Escrow Agreement dated December 15, 2005,
between the Company and Xxxxx Xxxxxx LLP, as the same may be amended from
time-to-time (the "Escrow Agreement"), pursuant to which Xxxxx Xxxxxx LLP will
hold a specific amount of money in escrow to be released to the Company on the
terms stated in the Escrow Agreement.
2.2 The Subscriber acknowledges and agrees that this Subscription Agreement, the
Subscription Proceeds and any other documents delivered in connection herewith
will be held on behalf of the Company. In the event that this Subscription
Agreement is not accepted by the Company for whatever reason, which the Company
expressly reserves the right to do, within 30 days of the delivery of an
executed Subscription Agreement by the Subscriber, this Subscription Agreement,
the Subscription Proceeds (without interest thereon) and any other documents
delivered in connection herewith will be returned to the Subscriber at the
address of the Subscriber as set forth in this Subscription Agreement.
2.3 The Company is entitled to treat the Subscription Proceeds as an interest
free loan to the Company until such time as the Subscription is accepted and the
certificates representing the Shares have been issued to the Subscriber.
3. Documents Required from Subscriber
3.1 The Subscriber must complete, sign and return to the Company an executed
copy of this Subscription 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, the OTC Bulletin
Board and applicable law.
4. Closing
4.1 Closing of the offering of the Securities (the "Closing") shall occur on or
before _____________, 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:
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(a) none of the Securities have been or will be 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, directly or indirectly, to
U.S. Persons, as that term is defined in Regulation S under the 1933
Act ("Regulation S"), except in accordance with the provisions of
Regulation S, pursuant to an effective registration statement under
the 1933 Act, or pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the 1933 Act and in
each case only in accordance with applicable state securities laws;
(b) other than as set out herein, the Company has not undertaken, and
will have no obligation, to register any of the Securities under the
1933 Act or any other securities legislation;
(c) it has received and carefully read this Subscription Agreement;
(d) the decision to execute this Subscription Agreement and purchase the
Securities 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 ("SEC") in
compliance, or intended compliance, with applicable securities
legislation, including, by way of example and not in limitation, the
Share Exchange Agreement, which was filed as an exhibit to the
Company's Form 8-K filed with the SEC on November 7, 2005 (as the
same may be amended from time-to-time);
(e) it and its advisor(s) have had a reasonable opportunity to ask
questions of and receive answers from the Company in connection with
the sale of the Securities hereunder, and to obtain additional
information, to the extent possessed or obtainable by the Company
without unreasonable effort or expense;
(f) the books and records of the Company were available upon reasonable
notice for inspection, subject to certain confidentiality
restrictions, by the Subscriber during reasonable business hours at
its principal place of business and that all documents, records and
books in connection with the sale of the Securities hereunder have
been made available for inspection by him and his attorney and/or
advisor(s);
(g) all information which the Subscriber has provided to the Company is
correct and complete as of the date the Subscription Agreement is
signed, and if there should be any change in such information prior
to this Subscription Agreement being executed by the Company, the
Subscriber will immediately provide the Company with such
information;
(h) the Company is entitled to rely on the representations and
warranties of the Subscriber contained in this Subscription
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 Subscription Agreement;
(i) the Subscriber 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;
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(j) the Subscriber has been advised to consult the Subscriber's own
legal, tax and other advisors with respect to the merits and risks
of an investment in the Securities and with respect to applicable
resale restrictions, and it is solely responsible (and the Company
is not in any way responsible) for compliance with:
(i) any applicable laws of the jurisdiction in which the
Subscriber is resident in connection with the distribution of
the Securities hereunder, and
(ii) applicable resale restrictions;
(k) none of the Securities are 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 exchange or automated dealer quotation system, except that
currently certain market makers make market in the common shares of
the Company on the National Association of Securities Dealers,
Inc.'s OTC Bulletin Board;
(l) the Subscriber 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;
(m) none of the Securities may 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 Distribution Compliance Period
(as defined herein);
(n) the Company will refuse to register any transfer of the Securities
not made in accordance with the provisions of Regulation S, pursuant
to an effective registration statement under the 1933 Act or
pursuant to an available exemption from the registration
requirements of the 1933 Act and in each case in accordance with
applicable state securities laws;
(o) neither the SEC nor any other securities commission or similar
regulatory authority has reviewed or passed on the merits of the
Securities;
(p) no documents in connection with the sale of the Securities hereunder
have been reviewed by the SEC or any state securities
administrators;
(q) there is no government or other insurance covering any of the
Securities;
(r) the issuance and sale of the Securities to the Subscriber will not
be completed if it would be unlawful or if, in the discretion of the
Company acting reasonably, it is not in the best interests of the
Company;
(s) the Subscriber is purchasing the Securities pursuant to an exemption
from the registration and the prospectus requirements of applicable
securities legislation on the basis that the Subscriber is an
accredited investor of the Company and, as a consequence:
(i) is restricted from using most of the civil remedies available
under securities legislation,
(ii) may not receive information that would otherwise be required
to be provided under securities legislation, and
(iii) the Company is relieved from certain obligations that would
otherwise apply under securities legislation;
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(t) 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 not be available if the offering is part of
a plan or scheme to evade the registration provisions of the 1933
Act; and
(u) this Subscription 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) the Subscriber is not a U.S. Person;
(b) the Subscriber is not acquiring the Securities for the account or
benefit of, directly or indirectly, any U.S. Person;
(c) the Subscriber is resident in the jurisdiction set out under the
heading "Name and Address of Subscriber" on the signature page of
this Subscription Agreement and the sale of the Securities to the
Subscriber as contemplated in this Subscription Agreement complies
with or is exempt from the applicable securities legislation of the
jurisdiction of residence of the Subscriber;
(d) the Subscriber has the legal capacity and competence to enter into
and execute this Subscription Agreement 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 Agreement on behalf
of the Subscriber;
(e) if the Subscriber is a corporation or other entity, the entering
into of this Subscription Agreement and the transactions
contemplated hereby do not and will 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;
(f) the Subscriber has duly executed and delivered this Subscription
Agreement and it constitutes a valid and binding agreement of the
Subscriber enforceable against the Subscriber;
(g) the Subscriber is acquiring the Securities as principal for its own
account for investment purposes only and not for the account of any
other person and not for distribution, assignment or resale to
others, and no other person has a direct or indirect beneficial
interest in such Securities, and it has not subdivided its interest
in the Securities with any other person;
(h) the Subscriber is outside the United States when receiving and
executing this Subscription Agreement and is acquiring the
Securities as principal for the Subscriber's own account for
investment purposes only, and not with a view to, or for, resale,
distribution or fractionalisation thereof, in whole or in part, and
no other person has a direct or indirect beneficial interest in the
Securities;
(i) the Subscriber is aware that an investment in the Company is
speculative and involves certain risks, including the possible loss
of the entire investment and it has carefully read and considered
the matters set forth under the heading "Risk Factors" appearing in
the Company's Form 10-KSB and any other filings filed with the SEC;
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(j) the Subscriber has made an independent examination and investigation
of an investment in the Securities and the Company and has depended
on the advice of its legal and financial advisors and agrees that
the Company will not be responsible in any way whatsoever for the
Subscriber's decision to invest in the Securities and the Company;
(k) the Subscriber (i) has adequate net worth and means of providing for
its current financial needs and possible personal contingencies,
(ii) has no need for liquidity in this investment, and (iii) is able
to bear the economic risks of an investment in the Securities for an
indefinite period of time;
(l) the Subscriber understands and agrees that the Company and others
will rely upon the truth and accuracy of the acknowledgements,
representations and agreements contained in this Subscription
Agreement and agrees that if any of such acknowledgements,
representations and agreements are no longer accurate or have been
breached, the Subscriber shall promptly notify the Company;
(m) the Subscriber has the legal capacity and competence to enter into
and execute this Subscription Agreement and to take all actions
required pursuant hereto;
(n) the Subscriber has duly executed and delivered this Subscription
Agreement and it constitutes a valid and binding agreement of the
Subscriber enforceable against the Subscriber in accordance with its
terms;
(o) the Subscriber is not an underwriter of, or dealer in, the common
shares of the Company, nor is the Subscriber participating, pursuant
to a contractual agreement or otherwise, in the distribution of the
Securities;
(p) it is not an underwriter of, or dealer in, the common shares of the
Company, nor is the Subscriber participating, pursuant to a
contractual agreement or otherwise, in the distribution of the
Securities;
(q) the Subscriber understands and agrees that none of the Securities
have been or will, except as set forth in this Agreement, be
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,
directly or indirectly, to U.S. Persons, as that term is defined in
Regulation S under the 1933 Act ("Regulation S"), except in
accordance with the provisions of Regulation S, pursuant to an
effective registration statement under the 1933 Act, or pursuant to
an exemption from, or in a transaction not subject to, the
registration requirements of the 1933 Act and in each case only in
accordance with applicable state securities laws;
(r) the Subscriber understands and agrees that offers and sales of any
of the Securities prior to the expiration of a period of one year
after the date of original issuance of the Securities (the one year
period hereinafter referred to as the "Distribution Compliance
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 Distribution Compliance Period shall be
made only in compliance with the registration provisions of the 1933
Act or an exemption therefrom and in each case only in accordance
with applicable state securities laws;
(s) the Subscriber acknowledges that it has not acquired the Securities
as a result of, and will not itself engage in, any "directed selling
efforts" (as defined in Regulation S under the 0000 Xxx) in the
United States in respect of any of the Securities which would
include any activities undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for the resale of any of the Securities;
provided, however, that the Subscriber may sell or otherwise dispose
of any of the Securities pursuant to registration of any of the
Securities pursuant to the 1933 Act and any applicable state
securities laws or under an exemption from such registration
requirements and as otherwise provided herein;
-7-
(t) the Subscriber understands and agrees not to engage in any hedging
transactions involving any of the Securities unless such
transactions are in compliance with the provisions of the 1933 Act
and in each case only in accordance with applicable state securities
laws;
(u) the Subscriber understands and agrees that the Company will refuse
to register any transfer of the Securities not made in accordance
with the provisions of Regulation S, pursuant to an effective
registration statement under the 1933 Act or pursuant to an
available exemption from the registration requirements of the 1933
Act;
(v) the Subscriber (i) is able to fend for itself in the Subscription;
(ii) has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its
investment in the Securities and the Company; and (iii) has the
ability to bear the economic risks of its prospective investment and
can afford the complete loss of such investment;
(w) the Subscriber is not aware of any advertisement of any of the
Securities and is not acquiring the Securities as a result of any
form of general solicitation or general advertising including
advertisements, articles, notices or other communications published
in any newspaper, magazine or similar media or broadcast over radio
or television, or any seminar or meeting whose attendees have been
invited by general solicitation or general advertising; and
(x) 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, except that currently the Company's common shares are quoted
on the over-the-counter market operated by the NASD's
Over-The-Counter Bulletin Board.
6.2 In this Subscription Agreement, the term "U.S. Person" shall have the
meaning ascribed thereto in Regulation S.
7. Representations and Warranties will be Relied Upon by the Company
7.1 The Subscriber acknowledges that the representations and warranties
contained herein are made by it with the intention that such representations and
warranties may be relied upon by the Company and its legal counsel in
determining the Subscriber's eligibility to purchase the Securities under
applicable securities legislation, or (if applicable) the eligibility of others
on whose behalf it is contracting hereunder to purchase the Securities under
applicable securities legislation. The Subscriber further agrees that by
accepting delivery of the certificates representing the Securities on the
Closing Date, it will be representing and warranting that the representations
and warranties contained herein are true and correct as at the Closing Date with
the same force and effect as if they had been made by the Subscriber on the
Closing Date and that they will survive the purchase by the Subscriber of the
Securities and will continue in full force and effect notwithstanding any
subsequent disposition by the Subscriber of such Securities.
8. Resale Restrictions
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8.1 The Subscriber acknowledges that any resale of the Securities will be
subject to resale restrictions contained in the securities legislation
applicable to each Subscriber or proposed transferee. The Subscriber
acknowledges that the Securities have not been registered under the 1933 Act of
the securities laws of any state of the United States. The Securities may not be
offered or sold in the United States unless registered in accordance with United
States federal securities laws and all applicable state securities laws or
exemptions from such registration requirements are available.
8.2 The Subscriber acknowledges that restrictions on the transfer, sale or other
subsequent disposition of the Securities by the Subscriber may be imposed by
securities laws in addition to any restrictions referred to in Section 8.1
above, and, in particular, the Subscriber acknowledges and agrees that none of
the Securities may 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
Distribution Compliance Period.
9. Acknowledgement and Waiver
9.1 The Subscriber has acknowledged that the decision to purchase the Securities
was solely made on the basis of information available to the Subscriber on the
XXXXX database maintained by the SEC at xxx.xxx.xxx. 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 Securities.
10. Legending of Subject Securities
10.1 The Subscriber hereby acknowledges that that upon the issuance thereof, and
until such time as the same is no longer required under the applicable
securities laws and regulations, the certificates representing any of the
Securities will bear a legend in substantially the following form:
"THESE SECURITIES WERE ISSUED 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").
ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE
BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS,
AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED
STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN)
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH
THE 0000 XXX."
10.2 The Subscriber hereby acknowledges and agrees to the Company making a
notation on its records or giving instructions to the registrar and transfer
agent of the Company in order to implement the restrictions on transfer set
forth and described in this Subscription Agreement.
11. Costs
11.1 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 Securities shall be
borne by the Subscriber.
12. Resale Registration.
On or prior to the date (the "Filing Date") that is 30 days after the date
of completion of the transaction contemplated in the Share Exchange Agreement,
the Company shall prepare and file with the SEC a "resale" Registration
Statement providing for the resale of the Shares and the Warrant Shares
(collectively, the "Registrable Securities") for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement shall be on
Form SB-2 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form SB-2, in which case such registration shall be on
another appropriate form in accordance with the Securities Act and the rules
promulgated thereunder). The Company shall (i) not permit any securities other
than the Registrable Securities and the securities to be listed on Exhibit B
hereto to be included in the Registration
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Statement and (ii) use its reasonable best efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event prior to the date (the
"Effectiveness Date") that is 120 days after the earlier of (i) the date of
filing of the Registration Statement, and (ii) the Filing Date, and to keep such
Registration Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or (y) the date on which
the Registrable Securities may be sold without any restriction pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect (the
"Effectiveness Period").
13. Registration Procedures.
13.1 In connection with the Company's registration obligations hereunder, the
Company shall:
(a) not less than five (5) business days prior to the filing of the
Registration Statement or any related prospectus or any amendment or
supplement thereto (including any document that would be
incorporated therein by reference), the Company shall (i) furnish to
the Subscriber copies of all such documents proposed to be filed,
which documents (other than those incorporated by reference) will be
subject to the review of the Subscriber, and (ii) cause its officers
and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary, in the
reasonable opinion of the Subscriber, to conduct a reasonable
investigation within the meaning of the Securities Act. Unless
otherwise advised by outside counsel to the Company, the Company
shall not file the Registration Statement or any such prospectus or
any amendments or supplements thereto to which the Subscriber shall
reasonably object in writing within three (3) business days of its
receipt thereof.
(b) (i) Prepare and file with the SEC such amendments, including
post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective
as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional
Registration Statements as necessary in order to register for resale
under the Securities Act all of the Registrable Securities; (ii)
cause the related prospectus to be amended or supplemented by any
required prospectus supplement, and as so supplemented or amended to
be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; (iii) respond as
promptly as possible, but in no event later than ten (10) business
days, to any comments received from the SEC with respect to the
Registration Statement or any amendment thereto and as promptly as
possible provide the Subscriber true and complete copies of all
correspondence from and to the SEC relating to the Registration
Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect
to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance
with the intended methods of disposition by the Subscriber thereof
set forth in the Registration Statement as so amended or in such
prospectus as so supplemented. The Company and the Subscriber agree
that the Subscriber will suffer damages if the Company fails to
cause the Registration Statement to be declared effective by the
Commission on or before the Effectiveness Date. The Company and the
Subscriber further agree that it would not be feasible to ascertain
the extent of such damages with precision. Accordingly, if the
Company fails to cause the Registration Statement to be declared
effective by the Commission on or before the Effectiveness Date, the
Company shall pay an amount in cash as liquidated damages to the
Subscriber equal to .025% for each day after the Effectiveness Date
until the Registration Statement is declared effective by the
Commission.
(c) Notify the Subscriber as promptly as possible (and, in the case of
(i)(A) below, not less than five (5) days prior to such filing) and
(if requested by any such person) confirm such notice in writing no
later than one (1) business day following the day (i)(A) when a
prospectus or any prospectus supplement or post-effective amendment
to the Registration Statement is filed; (B) when the SEC notifies
the Company whether there will be a "review" of such Registration
Statement and whenever the SEC comments in writing on such
Registration Statement and (C) with respect to the Registration
Statement or any post-effective amendment, when the same has become
effective; (ii)
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of any request by the SEC or any other Federal or state governmental
authority for amendments or supplements to the Registration
Statement or prospectus or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement covering any or all of the Registrable
Securities or the initiation of any proceedings for that purpose;
(iv) if at any time any of the representations and warranties of the
Company contained in any agreement contemplated hereby ceases to be
true and correct in all material respects; (v) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose; and
(vi) of the occurrence of any event that makes any statement made in
the Registration Statement or prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, prospectus or other documents so that, in
the case of the Registration Statement or the prospectus, as the
case may be, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) Use its reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the
effectiveness of the Registration Statement or (ii) any suspension
of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(e) If requested by the Subscriber, (i) promptly incorporate in a
prospectus supplement or post-effective amendment to the
Registration Statement such information as the Company reasonably
agrees should be included therein and (ii) make all required filings
of such prospectus supplement or such post-effective amendment as
soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or
post-effective amendment.
(f) Furnish to the Subscriber, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and
all exhibits to the extent requested by the Subscriber (including
those previously furnished or incorporated by reference) promptly
after the filing of such documents with the SEC.
(g) Promptly deliver to the Subscriber, without charge, as many copies
of the prospectus or prospectuses (including each form of
prospectus) and each amendment or supplement thereto as the
Subscriber may reasonably request; and the Company hereby consents
to the use of such prospectus and each amendment or supplement
thereto by the Subscriber in connection with the offering and sale
of the Registrable Securities covered by such prospectus and any
amendment or supplement thereto.
(h) Prior to any public offering of the Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate with the
Subscriber in connection with the registration or qualification (or
exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions within the United States as the
Subscriber requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the
Effectiveness Period and to use commercially reasonable efforts to
enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided, however,
that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to
take any action that would subject it to general service of process
in any such jurisdiction where it is not then so subject or subject
the Company to any material tax in any such jurisdiction where it is
not then so subject.
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(i) Cooperate with the Subscriber to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to
be sold pursuant to a Registration Statement, which certificates
shall be free of all restrictive legends (provided that the issuance
of such unlegended certificates is in compliance with applicable
securities laws), and to enable such Registrable Securities to be in
such denominations and registered in such names as the Subscriber
may request in writing at least two (2) business days prior to any
sale of Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section
13.1(c)(vi), as promptly as possible, prepare a supplement or
amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the related prospectus or any document
incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered,
neither the Registration Statement nor such prospectus will contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(k) Use its reasonable best efforts to cause all Registrable Securities
relating to the Registration Statement to continue to be listed on
the OTC Bulletin Board or any other securities exchange, quotation
system or market, if any, on which similar securities issued by the
Company are then listed or traded.
(l) Comply in all material respects with all applicable rules and
regulations of the SEC and make generally available to its security
holders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 not later than 45 days
after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) or such
extended period as is permitted under the Securities Act commencing
on the first day of the first fiscal quarter of the Company after
the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
(m) The Company may require the Subscriber to furnish to the Company
information regarding itself and the distribution of such
Registrable Securities as is required by law to be disclosed in the
Registration Statement, and the Company may exclude from such
registration the Registrable Securities of the Subscriber if it
unreasonably fails to furnish such information within a reasonable
time after receiving such request.
(n) If the Registration Statement refers to the Subscriber by name or
otherwise as the holder of any securities of the Company, then the
Subscriber shall have the right to require (if such reference to the
Subscriber by name or otherwise is not required by the Securities
Act or any similar federal statute then in force) the deletion of
the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that
such reference ceases to be required.
(o) The Subscriber covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has
received copies of the prospectus as then amended or supplemented as
contemplated in Section 13.1(g) and notice from the Company that
such Registration Statement and any post-effective amendments
thereto have become effective as contemplated by Section 13.1(c) and
(ii) it and its officers, directors or Affiliates, if any, will
comply with the prospectus delivery requirements of the Securities
Act as applicable to them in connection with sales of Registrable
Securities pursuant to the Registration Statement.
(p) The Subscriber agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section
13.1(c)(ii), 13.1(c)(iii), 13.1(c)(iv), 13.1(c)(v), 13.1(c)(vi) or
13.1(q), the Subscriber will forthwith discontinue disposition of
such Registrable Securities under the Registration Statement until
the Subscriber's receipt of the copies of the supplemented
prospectus and/or amended Registration Statement contemplated by
Section 13.1(j), or until it is advised in writing (the "Advice") by
the Company that the use of the applicable prospectus may be
resumed, and, in either case, has received copies of any additional
or supplemental filings that are incorporated or deemed to be
incorporated by reference in such prospectus or Registration
Statement.
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(q) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board")
reasonably determines not to be in the Company's best interest to
disclose and which the Company is not otherwise required to
disclose, or (ii) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of
assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction)
available to the Company which the Board reasonably determines not
to be in the Company's best interest to disclose, then the Company
may (x) postpone or suspend filing of a registration statement for a
period not to exceed 30 consecutive days or (y) postpone or suspend
effectiveness of a registration statement for a period not to exceed
20 consecutive days; provided that the Company may not postpone or
suspend effectiveness of a registration statement under this Section
13.1(q) for more than 45 days in the aggregate during any 360 day
period; provided, however, that no such postponement or suspension
shall be permitted for consecutive 20 day periods arising out of the
same set of facts, circumstances or transactions.
13.2 Registration Expenses.
All fees and expenses incident to the performance of or compliance with
this Agreement by the Company, except as and to the extent specified in this
Section 13.2, shall be borne by the Company whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with any
securities exchange or market on which Registrable Securities are required
hereunder to be listed, (B) with respect to filing fees required to be paid to
the National Association of Securities Dealers, Inc. and the NASD Regulation,
Inc. and (C) in compliance with state securities or Blue Sky laws (including,
without limitation, fees and disbursements of counsel for the Subscriber in
connection with Blue Sky qualifications of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as the Subscriber may designate)), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities and of printing prospectuses if the
printing of prospectuses is requested by the Subscriber), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement, including, without limitation, the Company's independent public
accountants (including the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
14. Indemnification.
14.1 Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless the Subscriber, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
of the Subscriber, each person who controls the Subscriber (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and attorneys' fees) and expenses (collectively, "Losses"),
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to
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make the statements therein (in the case of any prospectus or form of prospectus
or supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that (i)
such untrue statements or omissions are based solely upon information regarding
the Subscriber furnished in writing to the Company by or on behalf of the
Subscriber expressly for use therein, and (ii) that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any untrue
statement, allegedly untrue statement, omission or alleged omission made in any
preliminary prospectus but eliminated or remedied in the final prospectus (filed
pursuant to Rule 424 of the Securities Act), such indemnity agreement shall not
inure to the benefit of the Subscriber or any underwriter, broker or other
person acting on behalf of holders of the Registrable Securities, from whom the
person asserting any loss, claim, damage, liability or expense purchased the
Registrable Securities which are the subject thereof, if a copy of such final
prospectus had been made available to such person and the Subscriber or such
underwriter, broker or other person acting on behalf of the Subscriber and such
final prospectus was not delivered to such person with or prior to the written
confirmation of the sale of such Registrable Securities to such person. The
Company shall notify the Subscriber promptly of the claim, threat or assertion
of any proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
14.2 Indemnification by Subscriber. The Subscriber shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents and employees of such controlling persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review), as incurred, arising solely out of or based solely upon
any untrue statement of a material fact contained in the Registration Statement,
any prospectus, or any form of prospectus, or arising solely out of or based
solely upon any omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by the Subscriber to the Company specifically for inclusion
in the Registration Statement or such prospectus. Notwithstanding anything to
the contrary contained herein, the Subscriber shall be liable under this Section
14.2 for only that amount as does not exceed the lesser of (i) the dollar amount
of the net proceeds received by the Subscriber upon the sale of the Registrable
Securities giving rise to such indemnification obligation and (ii) the aggregate
purchase price paid by the Subscriber for the Securities pursuant to this
Agreement.
14.3 Contribution. If a claim for indemnification under Section 14.1 or 14.2 is
unavailable to an indemnified party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other from
the offering of the Registrable Securities. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault, as applicable, of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with (i) any proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party in accordance with its terms or (ii)
enforcing any rights under this Section 14. In no event shall the Subscriber be
required to contribute an amount under this Section 14.3 in excess of the net
proceeds received by the Subscriber upon sale of the Subscriber's Registrable
Securities pursuant to the Registration Statement giving rise to such
contribution obligation.
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The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 14.3 were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section are
in addition to any liability that the indemnifying parties may have to the
indemnified parties. Notwithstanding anything to the contrary contained herein,
the Subscriber shall be liable under this Section 14.3 for only that amount as
does not exceed the net proceeds to the Subscriber as a result of the sale of
Registrable Securities pursuant to such Registration Statement.
15. Rule 144.
As long as the Subscriber owns any Registrable Securities, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act and to promptly furnish the Subscriber with true and complete copies of all
such filings. As long as the Subscriber owns any Registrable Securities, if the
Company is not required to file reports pursuant to Section 13(a) or 15(d) of
the Exchange Act, it will prepare and furnish to the Subscriber and make
publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be included
in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as
any other information required thereby, in the time period that such filings
would have been required to have been made under the Exchange Act. The Company
further covenants that it will take such further action as the Subscriber may
reasonably request in writing, all to the extent required from time to time to
enable the Subscriber to sell the Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 promulgated under the Securities Act, including providing any legal
opinions relating to such sale pursuant to Rule 144.
16. Governing Law
16.1 This Subscription Agreement is governed by the laws of the State of Nevada
and the federal laws of the United States applicable therein.
17. Survival
17.1 This Subscription Agreement, 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 Securities by the
Subscriber pursuant hereto.
18. Assignment
18.1 This Subscription Agreement is not transferable or assignable.
19. Severability
19.1 The invalidity or unenforceability of any particular provision of this
Subscription Agreement shall not affect or limit the validity or enforceability
of the remaining provisions of this Subscription Agreement.
20. Entire Agreement
20.1 Except as expressly provided in this Subscription Agreement and in the
agreements, instruments and other documents contemplated or provided for herein,
this Subscription Agreement contains the entire agreement between the parties
with respect to the sale of the Securities 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.
-15-
21. Notices
21.1 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 the signature page of this Subscription Agreement and notices to the
Company shall be directed to it at Logicom, Inc., Suite 600 - 000 Xxxx Xxxxxx,
Xxxxxxxxx, XX Xxxxxx X0X 0X0, Attention: President.
22. Counterparts and Electronic Means
22.1 This Subscription 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. Delivery of an executed
copy of this Subscription Agreement by electronic facsimile transmission or
other means of electronic communication capable of producing a printed copy will
be deemed to be execution and delivery of this Subscription Agreement as of the
date hereinafter set forth.
23. Delivery Instructions
23.1 The Subscriber hereby directs the Company to deliver the Share
Certificates and the Warrant Certificates to:
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(name)
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(address)
23.2 The Subscriber hereby directs the Company to cause the Shares and the
Warrants to be registered on the books of the Company as follows:
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(name)
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(address)
23.3 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 Securities as may be required for filing with the appropriate securities
commissions and regulatory authorities.
IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement
as of the date of acceptance by the Company.
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(Name of Subscriber - Please type or print)
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(Signature and, if applicable, Office)
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(Address of Subscriber)
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(City, State or Province, Postal Code of Subscriber)
---------------------------------------------------------
(Country of Subscriber)
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A C C E P T A N C E
The above-mentioned Subscription Agreement in respect of the Units is hereby
accepted by Logicom, Inc.
DATED at Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, the 20th day of March, 2006.
LOGICOM, INC.
Per:
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Authorized Signatory
