COMMON STOCK SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "AGREEMENT"), dated ___________,
2007, is executed by and between Gottaplay Interactive, Inc., a Nevada
corporation (the "COMPANY"), and each investor tendering to the Company an
executed signature page to this Agreement (each a "PURCHASEr'), with reference
to the following facts:
A. The Company is conducting an offering of units (the "Units") at a
purchase price of $1.25 per Unit, with each Unit consisting of:
i) One share of Common Stock, and
ii) One warrants (the "Warrant #1") (in the form set forth on Exhibit
`B' hereto), each Warrant #1 to purchase one share of common stock for a period
of two (2) years from the date the Company accepts this Agreement at an exercise
price of $1.50 per share.
iii) One warrant (the "Warrant #2") (in the form set forth on Exhibit
`B' hereto), each Warrant #2 to purchase one share of common stock for a period
of three (3) years from the date the Company accepts this Agreement at an
exercise price of $2.50 per share.
In connection with this offering, the Company will accept maximum
investment proceeds of $3,000,000.
B. Each Purchaser has agreed to purchase the number of Units, indicated
on the signature page tendered by the Purchaser to the Company (the "UNITS") at
a per Unit purchase price of $1.25, (with each Purchaser's aggregate purchase
price being herein referred to as the "PURCHASE PRICE").
C. The Company and each Purchaser are entering into this Agreement to
reflect the terms and conditions with respect to the Purchaser's investment in
the Company represented by the Units.
D. As to each Purchaser, this Agreement shall become effective and
binding upon the Company only when (i) this Agreement is accepted by the Company
(as indicated by the Company's execution of this Agreement and countersignature
of the Purchaser's signature page to this Agreement, with such action being
herein referred to as the "ACCEPTANCE") and (ii) delivery is made by the
Purchaser to the Company of the Payment (defined below).
NOW, THEREFORE, in respect of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. SUBSCRIPTION
A. Each Purchaser hereby agrees to subscribe for and to purchase the
number of Units set forth on such Purchaser's signature page hereto (the
"SUBSCRIPTION") in exchange for the Purchase Price (which shall be paid in
United States dollars).
B. With respect to each Purchaser, following (i) the Company's
Acceptance and (ii) the Company's receipt of immediately available funds
representing the Purchaser's Purchase Price (the "PAYMENT"), the Company shall
issue to such Purchaser appropriate certificates the Warrants (collectively the
"Securities") underlying the Units purchased hereby.
2. REPRESENTATIONS AND WARRANTIES
Each Purchaser hereby represents and warrants to the Company as follows:
A. The Purchaser has full capacity, power and authority to execute and
deliver this Agreement. Without limiting the terms of the investment
representations set forth below, the Purchaser represents that the Purchaser:
(i) has had access to the filings made by the Company with the
United States Securities and Exchange Commission, and has had
the opportunity to ask questions and receive answers from the
Company and its officers and directors regarding matters
relevant to the Company and an investment therein (E.G., as
represented by the Subscription) including, without
limitation, (1) the terms ---- and conditions of the
Subscription, (2) the Company's business plan, (3) the
Company's capitalization and charter documents, (4) the status
and nature of the Company's assets, (5) the status and nature
of the Company's liabilities (including amounts and other
obligations owed to third parties), (6) the Company's current
third party arrangements, (7) the early-stage nature of the
Company's business, (8) the business prospects and financial
affairs of the Company, (9) the competitive environment which
the Company and its proposed products and services face, (10)
the status of arrangements between the Company and third
parties regarding intellectual property rights which may be
useful in connection with the Company's business, and, (11)
the Company's imminent need for substantial amounts of
additional financing;
(ii) has had the opportunity to obtain any and all information
which the Purchaser deemed necessary to evaluate the Company
and the investment represented by the Subscription as well as
to verify the accuracy of information otherwise provided to
the Purchaser.
(iii) is experienced in making investments in the unregistered and
restricted securities of development stage companies and
understands that such investments (including the Subscription)
involve a high degree of speculation and risk.
(iv) has such knowledge and experience in financial and business
matters that the Purchaser is capable of evaluating the merits
and risks of the investment in the Company represented by the
Subscription and, by reason of the Purchaser's financial and
business experience, the Purchaser has the capacity to protect
the Purchaser's interest in connection with the Subscription.
(v) is financially able to bear the economic risk of the
investment represented by the Subscription, including a total
loss of such investment.
(vi) has (1) a preexisting personal or business relationship with
the Company or one or more of its officers, directors or
control persons or (2) by reason of the Purchaser's business
or financial experience, the Purchaser is capable of
evaluating the risks and merits of the investment represented
by the Subscription and of protecting the Purchaser's own
interests in connection with such investment; or,
(vii) is an "accredited investor" as that term is defined in Rule
501 promulgated under the Securities Act of 1933, as amended
(the "ACT"). Without limiting the representation set forth in
the foregoing sentence, the Purchaser confirms that the
Purchaser has reviewed the definition of an "accredited
investor" which is attached hereto as Attachment 1 (which is
not a complete definition of the term, but which includes the
most likely categories of qualification) to confirm the
accuracy of such representation and the Purchaser has noted,
on the Purchaser's signature page hereto, the category(ies)
(by paragraph-number) pursuant to which the Purchaser
qualifies as an "accredited investor".
(viii) If the Purchaser is not a United States Person as defined
under Regulation S of the Act:
aa) The Purchaser of the securities certifies that he/she/it
is not a U.S. person and is not acquiring the securities for
the account or benefit of any U.S. person or is a U.S. person
who purchased securities in a transaction that did not require
registration under the Act;
bb) The Purchaser agrees to resell such securities only in
accordance with the provisions of this Regulation S (Rule 901
through Rule 905 and Preliminary Notes), pursuant to
registration under the Act, or pursuant to an available
exemption from registration; and agrees not to engage in
hedging transactions with regard to such securities unless in
compliance with the Act;
cc) The certificates evidencing the Securities will contain a
legend to the effect that transfer is prohibited except in
accordance with the provisions of this Regulation S (Rule 901
through Rule 905 and Preliminary Notes, pursuant to
registration under the Act, or pursuant to an available
exemption from registration; and that hedging transactions
involving those securities may not be conducted unless in
compliance with the Act;
dd) The Company is required, to refuse to register any
transfer of the securities not made in accordance with the
provisions of Regulation S (Rule 901 through Rule 905 and
Preliminary Notes), pursuant to registration under the Act, or
pursuant to an available exemption from registration;
B. If the Purchaser is an entity, the Purchaser has not been formed for
the purpose of effecting the Subscription or otherwise making an investment in
the Company.
C. The Units are being acquired by the Purchaser (i) solely for
investment purposes, (ii) for the Purchaser's own account only and (iii) not for
sale, transfer or with a view to any distribution of all or any part of such
Units. No other person will have any direct or indirect beneficial interest in
the Units.
D. The Purchaser has not engaged any brokers, finders or agents and has
not incurred, and will not incur, directly or indirectly, any liability for
brokerage or finder's fees or agents' commissions, or any similar charges in
connection with this Agreement and the transactions contemplated hereby.
3. UNDERSTANDINGS AND ACKNOWLEDGEMENTS
A. Each Purchaser acknowledges that the Units have not been registered
under the Act or qualified under any applicable blue sky laws in reliance, in
part, on the representations and warranties herein.
B. Each Purchaser understands that (i) the securities offered as part
of the Units, (the "Securities") are "restricted securities" under the federal
securities laws (E.G., the Act) insofar as the Securities will be acquired from
the Company in a transaction not involving a public offering, (ii) under such
laws and applicable regulations, the Securities may be resold without
registration under the Act only in certain limited circumstances and (iii) in
the absence of registration under the Act (which is not presently contemplated
and with respect to which the Company has no obligation) the Securities must be
held indefinitely. Each Purchaser understands the resale limitations imposed by
the Act and is familiar with Rule 144 under the Act, as presently in effect, and
the conditions which must be met in order for Rule 144 to be available with
respect to the resale of "restricted securities". Each Purchaser understands
that the Company does not presently meet conditions for the availability of Rule
144 under certain circumstances (E.G., the provision of current "public company"
information.)
C. Each Purchaser understands that any certificates evidencing the
Securities making up the Units will bear one or all of the following legends:
(i) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SUCH ACT."
(ii) Any legend required by applicable state securities laws.
(iii) Any legend required by any applicable shareholders' agreement.
4. COVENANTS
A. Without in any way limiting the representations set forth above,
each Purchaser further agrees not to make any disposition of all or any portion
of the Securities purchased hereunder unless and until:
(i) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in
accordance with such registration statement and any applicable
requirements of state securities laws; or,
(ii) Such Purchaser shall have (1) notified the Company of the
proposed disposition, (2) furnished the Company with a detailed
statement of the circumstances surrounding the proposed
disposition, and, (3) furnished the Company with a written opinion
of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of any securities under
the Act or the consent of (or a permit from) any authority under
any applicable state securities laws.
B. In the case of any disposition of any Securities pursuant to Rule
144 under the Act, then in addition to the matters set forth in paragraph
4(a)(ii) above, the Purchaser at issue shall promptly forward to the Company a
copy of any Form 144 filed with the Securities and Exchange Commission (the
"SEC") with respect to such disposition and a letter from the executing broker
satisfactory to the Company evidencing compliance with Rule 144. If Rule 144 is
amended or if the SEC's interpretations thereof in effect at the time of any
such disposition by the Purchaser have changed from the SEC's present
interpretations thereof, the Purchaser at issue shall provide the Company with
such additional documents as the Company may reasonably require.
C. In the event of a public offering relating to the Company's
securities, each Purchaser shall enter into a lock-up agreement upon such terms
as shall be requested by the managing underwriter for such offering.
5. REGISTRATION RIGHTS
REGISTRATION RIGHTS AGREEMENT The Company and the Purchaser shall enter
into a registration rights agreement dated the date hereof, in the form attached
hereto as Exhibit "C" with respect to the of common stock issued as part of the
Units and the common stock to be issued upon the exercise of warrants #1 and #2.
6. MISCELLANEOUS
a. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Nevada (without regard to the conflicts of law
principles thereof). All legal actions arising under this Agreement shall be
instituted in, the County of Xxxxxx, State of Washington, and both Company and
Purchaser consent to such jurisdiction and venue.
b. This Agreement, and all documents referenced herein embody the
entire understanding between the parties and supersede any prior understandings,
agreements and arrangements between the parties respecting the subject matter
hereof. There are no representations, warranties, agreements, arrangements or
understandings, oral or written, between the parties hereto relating to the
subject matter of this Agreement which are not fully expressed herein.
c. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. The execution and delivery of signatures for this Agreement may
occur via telecopy, and such telecopied signature pages shall have the force and
effect of original signature pages.
d. If any legal action or proceeding arising out of or relating to this
Agreement is brought by either party, the prevailing party shall be entitled to
receive from the other party, in addition to any other relief that may be
granted, the reasonable attorneys' fees, costs (including without limitation
expert witnesses' fees), and expenses incurred in the action or proceeding by
the prevailing party.
e. NOTICES. Any notice herein required or permitted to be given shall
be in writing and shall be deemed effective: (a) upon personal delivery to the
party notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the
respective Company at the address provided for such Company in this Agreement
executed in connection herewith, and to the Purchaser at the address provided in
this Agreement for such Purchaser, or at such other address as the Company or
the Purchaser may designate by ten days advance written notice to the other
parties hereto.
f. CONSTRUCTION. The parties acknowledge that each party and its
counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.
The undersigned hereby executes and delivers this Agreement to which
this Signature Page is attached, which Agreement and Signature Page, together
with all counterparts of such Agreement and Signature Pages of the other parties
with respect to such Agreement, shall constitute one and the same document in
accordance with the terms of such Agreement.
SIGNATURES ON NEXT PAGE
CATEGORY(IES) PURSUANT TO WHICH PURCHASER QUALIFIES AS AN ACCREDITED INVESTOR:
_____________________ (indicate the applicable section number(s) noted on
Attachment 1 to the Agreement)
Number of Units: ______________
Purchase Price: $_______________
SIGNATURE:
Dated _______ __, 200_ ____________________________________
PURCHASER
Address: ____________________________
-----------------------------
Acknowledged and accepted:
Gottaplay Interactive, Inc., a Nevada corporation
BY:______________________________
Accepted on this __ day of ________________, 200__
Gottaplay Interactive, Inc.
By:_____________________________
Xxxx Xxxxx, CEO
ATTACHMENT "1" TO SUBSCRIPTION AGREEMENT
PARTIAL DEFINITION OF ACCREDITED INVESTOR
An "accredited investor" includes the following categories:
1. Where the investor is an individual (not a partnership, corporation, etc.)
whose individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000;
2. Where the investor is an individual (not a partnership, corporation, etc.)
who had an income in excess of $200,000 in each of the two most recent years, or
joint income with their spouse in excess of $300,000 in each of those years (in
each case including foreign income, tax exempt income and full amount of capital
gains and losses but excluding any income of other family members and any
unrealized capital appreciation), and has a reasonable expectation of reaching
the same income level in the current year.
3. Where the investor is a director or executive officer of the corporation
which is issuing and selling the Units at issue (I.E., the Company inasmuch as
it is issuing and selling the other Securities.)
4. Where the investor is a corporation, partnership, Massachusetts business
trust or nonprofit organization within the meaning of section 501I(3) of the
Internal Revenue Code, in each case not formed for the specific purpose of
acquiring the securities at issue and with total assets in excess of
$5,0000,000.
5. Where the investor is a trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities at issue (I.E., the
other Securities), where the purchase is directed by a "sophisticated person" as
defined in Regulation 506(b)(2)(ii) under the Act;
or
6. Where the investor is an entity in which all of the equity owners of such
entity are "accredited investors" within one or more of the above categories.
PLEASE NOTE THE CATEGORY(IES) PURSUANT TO WHICH YOU QUALIFY AS AN ACCREDITED
INVESTOR ON YOUR SIGNATURE PAGE (IDENTIFYING SUCH CATEGORY(IES) BY THE PARAGRAPH
NUMBER(S) REFERENCED ABOVE).
EXHIBIT B
PURCHASER QUESTIONNAIRE
