EXHIBIT 10.28
MANAGEMENT SUBSCRIPTION AGREEMENT
This Management Subscription Agreement (this "Agreement"), dated as of
November 1, 1997, is made by [SEE ITEM 1 IN ANNEX A] (the "Investor") for the
benefit of WGL Holdings, Inc., a Delaware corporation (the "Corporation").
R E C I T A L S
A. The Corporation, the former shareholders of Xxxxxx Xxxxxxxxxx Ltd., a
New York corporation (the "Company"), and the Company entered into that certain
Stock Purchase Agreement, dated June 19, 1997 (the "Stock Purchase Agreement"),
pursuant to which such former shareholders agreed to sell to the Corporation (or
its assignee) all of the shares of capital stock of the Company (the
"Acquisition").
B. The Corporation assigned its rights to purchase such shares of
capital stock of the Company to WGL Acquisition Corp., an indirect wholly-owned
subsidiary of the Corporation.
C. The Investor desires to subscribe for shares of common stock of the
Corporation.
D. The Corporation is willing to sell, on the terms and subject to the
conditions herein set forth, the Shares (as hereinafter defined) to the
Investor.
E. Concurrently herewith, the Investor is executing and delivering to
the Corporation that certain promissory note, dated the date of this Agreement,
payable to the Corporation in the amount of [SEE ITEM 2 IN ANNEX B] (the "Note")
and that certain Pledge Agreement, dated the date of this Agreement, in favor of
the corporation (the "Pledge Agreement") pursuant to which the Investor agrees
to pledge the Shares as security for all obligations of the Investor pursuant to
the Note.
F. The purchase of the Shares of the Corporation pursuant to this
Agreement will complete the subscription for shares of the Corporation by the
Investor originally contemplated by the Corporation as of the date of the
Acquisition, the first stage of which was completed in July 1997.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Investor, by
executing this Agreement, acknowledges, covenants, agrees, represents and
warrants that:
(1) SUBSCRIPTION. The Investor hereby subscribes to purchase and agrees
to purchase [SEE ITEM 3 IN ANNEX A] shares (the "Shares") of the common stock,
par value $.001 per share ("Common Stock"), of the Corporation for the price of
ONE DOLLAR ($1.00) per share, for an aggregate purchase price of [SEE ITEM 2 IN
ANNEX A]. The purchase price shall be paid to the Corporation pursuant to the
Note, which shall be
executed by the Investor and delivered by the Investor to the Corporation on the
date hereof, and the shares of Common Stock issued upon delivery of the Note
shall be duly authorized, fully paid and nonassessable. The Investor hereby
agrees to execute and deliver, substantially simultaneously with the Investor's
execution and delivery of the Note and prior to the issuance of the Shares, the
Pledge Agreement and, immediately upon issuance of the Shares, to deliver the
certificate(s) representing the Shares to the Corporation in accordance with the
Pledge Agreement. The Corporation's obligation to issue and sell the Shares to
the Investor is subject to satisfaction of the following conditions:
(a) The Investor shall have duly executed and delivered the
Note in accordance with this paragraph (1);
(b) The Investor shall have duly executed and delivered the
Pledge Agreement in accordance with this paragraph (1); and
(c) the Investor shall in all material respects have performed
all obligations and agreements, and complied with all covenants and conditions,
contained in this Agreement and the Pledge Agreement, to be performed or
complied with by the Investor on or prior to the date hereof.
(2) KNOWLEDGE AND EXPERIENCE. The Investor, or the Investor together
with his representative for purposes of investing in the Shares (the "Investor
Representative"), has such knowledge and experience in financial, tax and
business matters, including substantial experience in evaluating and investing
in common stock and other securities (including the common stock and other
securities of new and speculative companies), so as to enable the Investor
and/or his Investor Representative to utilize the information referred to in
paragraph (5) and any other information made available to the Investor and/or
his Investor Representative in order to evaluate the merits and risks of an
investment in the Shares and to make an informed investment decision with
respect thereto.
(3) INVESTOR REPRESENTATIVE. The Investor's Investor Representative, if
any, (i) is a "purchaser representative" within the meaning of such term as
defined in Regulation D ("Regulation D") promulgated under the Securities Act of
1933, as amended (the "Securities Act"), (ii) has been acknowledged by the
Investor, by identification by the Investor in the space provided below, to be
the Investor's "purchaser representative" in connection with evaluating the
merits and risks of the Investor's prospective investment in the Shares and
(iii) has made all disclosures to the Investor as are required to be made by a
"purchaser representative" pursuant to Regulation D. The Investor's Investor
Representative is: NONE (insert "None" if the Investor has no Investor
Representative).
(4) INVESTMENT FOR OWN ACCOUNT. The Investor is acquiring the Shares for
his own account, for investment purposes only and not with a view to, and not
for offer or sale in connection with, any distribution or resale of the Shares.
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(5) ADEQUATE INFORMATION. The Corporation has made available and the
Investor and/or his Investor Representative has reviewed the Stock Purchase
Agreement (including the Exhibits and Schedules thereto) and such other
information which the Investor and/or his Investor Representative considers
necessary or appropriate to evaluate the risks and merits of an investment in
the Shares.
(6) OPPORTUNITY TO QUESTION. The Investor and/or his Investor
Representative has had the opportunity to question, and has questioned, to the
extent deemed necessary or appropriate, representatives of the Corporation so as
to receive answers and verify information obtained in the Investor's and/or his
Investor Representative's examination of the Corporation, including the
information referred to in paragraph (5) and any other documents or information
that the Investor and/or his Investor Representative has reviewed in relation to
the Investor's investment in the Shares.
(7) NO OTHER REPRESENTATIONS. No oral or written representations have
been made or oral or written information furnished to the Investor and/or his
Investor Representative in connection with the Investor's acquisition of the
Shares which were in any way inconsistent with the information set forth in the
information reviewed by the Investor and/or his Investor Representative.
(8) INDEPENDENT DECISION. Neither the Investor nor his Investor
Representative is relying on the Corporation or the references to any legal or
other opinion in the materials reviewed by the Investor and/or his Investor
Representative with respect to the tax considerations of the Investor relating
to his investment in the Shares. The Investor has relied solely on the
representations, warranties, covenants and agreements contained in the Stock
Purchase Agreement (including the Exhibits and Schedules thereto), or his
Investor Representative's examination and independent investigation and his
Investor Representative's advice in making his decision to acquire the Shares.
(9) FINANCIAL CONDITION. The Investor's financial condition and income
are such that (i) the Investor is under no present need to dispose of any
portion of the Shares to satisfy any existing or contemplated undertaking or
indebtedness and (ii) the Investor is able to bear the economic risk of
investment in the Shares, including the risk of losing his entire investment and
the risk of not being able to sell or transfer any of the Shares for an
indefinite period of time.
(10) RESTRICTED SECURITIES. The Investor understands that he may be
required to bear the economic risk of investment in the Shares for an indefinite
period of time because the Shares may not, without full compliance with the
registration and prospectus delivery requirements of the Securities Act, be
offered, sold or delivered except in a transaction exempt from, or not subject
to, the registration and prospectus delivery requirements of the Securities Act.
(11) RESTRICTIONS ON RESALE OR TRANSFER. The Investor will not transfer
or pledge any or all of the Shares in violation of the Securities Act or any
applicable Blue Sky Laws and in the event that the Investor pledges any of the
Shares (other than
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pursuant to the Pledge Agreement), the Investor will advise the pledgee of the
transfer restrictions imposed on the Shares by this Agreement and will use his
best efforts to obtain an undertaking from such pledgee not to transfer such
Shares in violation of the Securities Act or applicable Blue Sky Laws.
(12) RESTRICTIVE LEGEND. The certificates from time to time evidencing
the Shares may, at the Corporation's option, bear a legend which provides that
the Shares may not be transferred unless the Corporation is delivered a legal
opinion, satisfactory to the Corporation in its sole discretion, to the effect
that such transfer may be made without compliance with the registration and
prospectus delivery requirements of the Securities Act and applicable Blue Sky
Laws. Such legal opinion shall be given by counsel satisfactory to the
Corporation, at the Investor's expense.
(13) FURTHER ACTIONS. The Investor shall take all further actions
necessary to facilitate the issuance of the Shares to the Investor under an
appropriate exemption from registration under the Securities Act and applicable
Blue Sky Laws, including, without limitation, providing the Corporation with
such information as the Corporation may require to complete a Form D and any
related or similar forms or applications required under the Securities Act or
applicable Blue Sky Laws.
(14) AUTHORIZATION. The Investor has full power and authority to execute
this Agreement and to invest in the Shares; this Agreement constitutes the valid
and legally binding obligation of such Investor, enforceable against such
Investor in accordance with its terms.
The provisions hereof shall inure to the benefit of the Corporation, its
successors and assigns and shall be binding upon the Investor, his legal
representatives, heirs and assigns. Nothing in this Agreement shall limit any of
the rights and obligations of the parties under the Stock Purchase Agreement
(including the Exhibits and Schedules thereto), or otherwise or any other
document delivered in connection therewith.
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IN WITNESS WHEREOF, the Investor has executed this Management
Subscription Agreement as of November 1, 1997.
INVESTOR
/S/ [SEE ITEM 1 IN ANNEX A]
-----------------------------------
[SEE ITEM 1 IN ANNEX A]
The undersigned hereby makes, as to himself and for the benefit of the
Corporation, the acknowledgements, covenants, agreements, representations and
warranties set forth in paragraphs (2), (3), (5), (6), (7) and (8) above.
INVESTOR REPRESENTATIVE
-----------------------------------
Acknowledged and Accepted
as of November 1, 1997:
WGL HOLDINGS, INC.
By: [SEE ITEM 4 IN ANNEX A]
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ANNEX A
The foregoing form of Management Subscription Agreement was
entered into by six Investors. The information omitted from the foregoing form
of Management Subscription Agreement with respect to such Investors, which are
designated below as parties A through F, respectively, is set forth below:
ITEM 1
Party A: Xxxxxx X. Xxxxxxx
Party B: Xxxxx X. Xxxxxxx
Party C: Xxxxx X. XxXxxxxx
Party D: Xxxxxx X. Xxxxxx
Party E: Xxxxxx X. Xxxxxxx
Party F: Xxxxxxx X. Xxxx
ITEM 2
Party A: $570,000.00
Party B: $142,000.00
Party C: $256,000.00
Party D: $268,000.00
Party E: $180,000.00
Party F: $268,000.00
ITEM 3
Party A: FIVE HUNDRED SEVENTY THOUSAND (570,000)
Party B: ONE HUNDRED FORTY-TWO THOUSAND (142,000)
Party C: TWO HUNDRED FIFTY-SIX THOUSAND (256,000)
Party D: TWO HUNDRED SIXTY-EIGHT THOUSAND (268,000)
Party E: ONE HUNDRED EIGHTY THOUSAND (180,000)
Party F: TWO HUNDRED SIXTY-EIGHT THOUSAND (268,000)
ITEM 4
Party A: /S/ XXXXX X. XXXXXXXX
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Xxxxx X. XxXxxxxx
Vice President Administration and Secretary
Party B: /S/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
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Party C: /S/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Party D: /S/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Party E: /S/ XXXXXX X. XXXXXXX
-------------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Party F: /S/ XXXXXX X. XXXXXXX
-------------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
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