SUBSCRIPTION AGREEMENT
Exhibit 10.1
TO: FitLife
Brands, Inc. (the “Company”)
RE: Purchase
of Securities of FitLife Brands, Inc.
Instructions:
Complete and sign
this Subscription Agreement. Please be sure to initial the
appropriate “accredited investor” category in Box
C.
A
completed and originally executed copy of, and the other documents
required to be delivered with, this Subscription Agreement, must be
delivered to the following address:
Xxxxxxx
Xxxxxx
Chief
Financial Officer
0000 X.
000xx
Xxxxxx
Xxxxx,
Xxxxxxxx 00000
(000) 000-0000
xxxxxxx@xxxxxxxxxxxxx.xxx
1. The undersigned
(the “Subscriber”) hereby irrevocably
subscribes for and agrees to purchase from the Company the number
of units of the Company (“Units”) at the price and for the
aggregate consideration set forth in Box A of Section 6 below (the
“Subscription
Price”). Each Unit shall have a purchase price of
$1,000 per Unit, and will consist of one share of the
Company’s Series A Convertible Preferred stock, par value
$0.01 per share (“Series A
Preferred”) (a “Share”) and a warrant to purchase
that number of shares of Company common stock, par value $0.01 per
share (“Common
Stock”), equal to 30% of the shares of Common Stock
issuable upon conversion of the Series A Preferred purchased by the
Subscriber (the “Conversion
Shares”), provided that no warrant will be exercisable
for a fractional share (each warrant to purchase shares of Common
Stock, a “Warrant”). Any Warrant to
purchase fractional shares to which a purchaser may otherwise be
entitled shall be rounded down to the nearest whole share. The
Subscriber acknowledges that this Subscription Agreement is subject
to acceptance by the Company. The Company may also accept this
Subscription Agreement in part. The Subscriber agrees that if this
Subscription Agreement is not accepted in full, any funds related
to the portion of this Subscription Agreement not accepted will be
returned to the undersigned, without interest.
2. By executing this
Subscription Agreement, the Subscriber represents, warrants and
covenants (on its own behalf and, if applicable, on behalf of each
beneficial purchaser for whom it is contracting hereunder) to the
Company (and acknowledges that the Company is relying thereon)
that:
(a)
it is authorized to
consummate the purchase of the Units;
(b)
it understands that
the Shares, Conversion Shares, Warrants and the shares of Common
Stock issuable upon exercise of the Warrants (collectively, the
“Securities”)
have not been, and may never be, registered under the Securities
Act of 1933, as amended (the “Securities Act”), or any
applicable state securities laws, and that the offer and sale of
Shares and Warrants to it is being made in reliance on a private
placement exemption available under Section 4(a)(2) of the
Securities Act and Rule 506 of Regulation D under the Securities
Act (“Regulation D”) to accredited
investors (“Accredited
Investors”), as defined in Rule 501(a) of Regulation
D;
(c)
it has had access
to such information, if any, concerning the Company as it has
considered necessary in connection with its investment decision to
acquire the Units, and it acknowledges that it has been offered the
opportunity to ask questions and receive answers from management of
the Company concerning the terms and conditions of the offering of
the Units, and to obtain any information that the Company possesses
or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of the information contained in
the Company’s filings with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”) (the “Public Filings”);
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(d)
it 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
Units and is able to bear the economic risks of, and withstand the
complete loss of, such investment;
(e)
it is relying on
the information contained in the Public Filings in making its
investment decision with respect to the Units. It acknowledges that
the Company has not made any representations or given any
information to it with respect to the Company or the offer or sale
of the Units other than the information contained in the Public
Filings;
(f)
it is an Accredited
Investor acquiring the Units for its own account or, if the Units
are to be purchased for one or more accounts (“investor
accounts”) with respect to whom it is exercising sole
investment discretion, each such investor account is an Accredited
Investor on a like basis. In each case, the undersigned has
completed Box C of Section 6 to indicate under which category of
Rule 501(a) the investor qualifies as an Accredited
Investor;
(g)
it is not acquiring
the Units with a view to any resale, distribution or other
disposition of the Units in violation of federal or applicable
state securities laws, and, in particular, it has no intention to
distribute either directly or indirectly any of the Units in the
U.S. or to U.S. persons; provided,
however, that the holder may sell or otherwise dispose of
any of the Units pursuant to registration thereof under the
Securities Act and any applicable state securities laws or pursuant
to an exemption from such registration requirements;
(h)
in the case of the
purchase by the Subscriber of the Units as agent or trustee for any
other person, the Subscriber has due and proper authority to act as
agent or trustee for and on behalf of such beneficial purchaser in
connection with the transactions contemplated hereby;
(i)
it is not
purchasing the Units as a result of any general solicitation or
general advertising (as those terms are used in Regulation D under
the Securities Act), 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;
(j)
it understands that
the Securities are “restricted securities” as defined
in Rule 144(a)(3) under the Securities Act and agrees that if it
decides to offer, sell or otherwise transfer the Securities, such
Securities may be offered, sold or otherwise transferred only (A)
to the Company, (B) outside the U.S. in accordance with Rule 904 of
Regulation S under the Securities Act, (C) within the U.S. or to or
for the account or benefit of a U.S. Person in accordance with an
exemption from the registration requirements of the Securities Act
and all applicable state securities laws, (D) in a transaction that
does not require registration under the Securities Act or any
applicable U.S. state securities laws or (E) pursuant to an
effective registration statement under the Securities Act, and in
each case in accordance with any applicable state securities laws
in the U.S. or securities laws of any other applicable
jurisdiction; provided that with respect to sales or transfers
under clauses (C) or (D), only if the holder has furnished to the
Company a written opinion of counsel, reasonably satisfactory to
the Company, prior to such sale or transfer;
(k)
it has been
independently advised as to the applicable holding period and
resale restrictions with respect to trading imposed in respect of
the Securities, by securities legislation in the jurisdiction in
which it resides or to which it is otherwise subject, and confirms
that no representation has been made respecting the applicable
holding periods for the Securities and is aware of the risks and
other characteristics of the Securities and of the fact that the
undersigned may not be able to resell the Securities except in
accordance with applicable securities legislation and
regulations;
(l)
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 the Securities; or
(iii)
as to the future
price or value of any of the Securities;
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(m)
it understands and
acknowledges that certificates representing the Shares and the
Warrants shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH
REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL
TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THESE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
(n)
it consents to the
Company making a notation on its records or giving instructions to
any transfer agent of the Shares in order to implement the
restrictions on transfer set forth and described
herein;
(o)
the office or other
address of the undersigned at which the undersigned received and
accepted the offer to purchase the Units is the address listed in
Box B of Section 6 below;
(p)
if required by
applicable securities laws, regulations, rule or order or by any
securities commission, stock exchange or other regulatory
authority, it will execute, deliver and file, within the approved
time periods, all documentation as may be required thereunder, and
otherwise assist the Company in filing reports, questionnaires,
undertakings and other documents with respect to the issuance of
the Units;
(q)
this subscription
agreement has been duly and validly authorized, executed and
delivered by and constitutes a legal, valid, binding and
enforceable obligation of the Subscriber; and
(r)
it is not an
affiliate (as defined in Rule 144 under the Securities Act) of the
Company and is not acting on behalf of an affiliate of the
Company.
3. The Subscriber
acknowledges that the representations and warranties and agreements
contained herein are made by it with the intention that they may be
relied upon by the Company and its legal counsel in determining its
eligibility or, if applicable, the eligibility of others on whose
behalf it is contracting hereunder, to purchase the Units. The
Subscriber further agrees that by accepting delivery of the Units
or by having its agent accept delivery of the Units on its behalf,
it shall be representing and warranting that the representations,
warranties, acknowledgements and agreements contained herein are
true and correct as at the time of accepting delivery of the Units
with the same force and effect as if they had been made by the
Subscriber at such time and that the representations and warranties
shall survive the purchase by the Subscriber of the Units and shall
continue in full force and effect notwithstanding any subsequent
disposition by the Subscriber of the Units. The Company and its
directors, officers, employees, shareholders and its legal counsel
shall be entitled to rely on the representations and warranties of
the Subscriber contained in this subscription agreement, and the
Subscriber shall indemnify and hold harmless the Company and/or its
legal counsel for any loss, costs or damages any of them may suffer
as a result of any misrepresentations or any breach or failure to
comply with any agreement herein.
4. The contract
arising out of the acceptance of this subscription by the Company
shall be governed by and construed in accordance with the laws of
the State of Nebraska and represents the entire agreement of the
parties hereto relating to the subject matter hereof.
5. The Company shall
be entitled to rely on delivery of a facsimile copy of this
Subscription Agreement, and acceptance by the Company of a
facsimile copy of this Subscription Agreement shall create a legal,
valid and binding agreement among the undersigned and the Company
in accordance with the terms hereof.
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BOX
A
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Particulars of Purchase of Units
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Number
of Units subscribed for:
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Subscription
Price ($____ X number of Units
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BOX
B
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Subscriber Information
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Name
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx (2)
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City
and State
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Zip
Code
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Contact
Name
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Alternate
Contact
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Phone
No.
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Fax No.
/ E-mail Address
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BOX C
Accredited Investor Status
The
Subscriber represents and warrants that it is an “accredited
investor,” as defined in Rule 501(a) under the Securities
Act, by virtue of satisfying one or more of the categories
indicated below (please write your
initials on the line next to each applicable
category):
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Category
1.
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A bank,
as defined in section 3(a)(2) of the Securities Act.
A
savings and loan association or other institution, as defined in
section 3(a)(5)(A) of the Securities Act, whether acting in its
individual or fiduciary capacity.
A
broker or dealer registered pursuant to section 15 of the Exchange
Act.
An
insurance company as defined in section 2(a)(13) of the Securities
Act.
An
investment company registered under the Investment Corporation Act
of 1940 or a business development company as defined in section
2(a)(48) of that Act.
A Small
Business Investment Corporation licensed by the U.S. Small Business
Administration under section 301(c) or (d) of the Small Business
Investment Act of 1958.
A plan
established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has
total assets in excess of $5,000,000.
An
employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974 if the investment decision is made by a
plan fiduciary, as defined in section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or
registered investment adviser, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan,
with investment decisions made solely by persons that are
accredited investors.
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Category
2.
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Any
private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940.
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Category
3.
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An
organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, a Massachusetts or similar business trust, or
a partnership, not formed for the specific purpose of acquiring the
Shares, with total assets in excess of $5,000,000.
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Category
4.
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A
director or executive officer of the Company.
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Category
5.
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A
natural person whose individual net worth, or joint net worth with
that person’s spouse, at the time of this purchase exceeds
$1,000,000, excluding the value of the person’s primary
residence, if any.
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Category
6.
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A
natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that
person’s spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income level
in the current year.
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Category
7.
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A
trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the Shares, whose purchase is
directed by a sophisticated person as described in Rule
506(b)(2)(ii) of Regulation D under the U.S. Securities
Act.
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Category
8.
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An
entity in which each of the equity owners is an accredited
investor.
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7. A certified check
or bank draft in the amount of the Subscription Price as set forth
in Box A of Section 6 above, accompanies this Subscription
Agreement.
SIGNATURE OF SUBSCRIBER
Signature
of Subscriber (on its own behalf and, if applicable, on behalf of
each person for whom it is contracting hereunder):
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(Full
Name of Subscriber)
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(Authorized
Signature)
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(Name
and Official Capacity – PLEASE PRINT)
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ACCEPTANCE BY COMPANY
The
Company hereby accepts the above subscription as of this ______ day
of November, 2018.
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(Signature)
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Xxxxxxx
Xxxxxx, Chief Financial Officer
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