SUBSCRIPTION AGREEMENT
SUBSCRIPTION
AGREEMENT
(the
“Agreement”),
dated
as of November
25, 2008,
by and
between Vinyl
Products, Inc.,
a
corporation incorporated under the laws of the state of Nevada (the
“Company”),
and
the Purchaser listed on the signature page hereto (the “Purchaser”).
WHEREAS:
A. The
Company and the Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “Securities
Act"),
and
Rule 506 of Regulation D promulgated thereunder.
B. The
Company has authorized the issuance of the Company’s common stock, par value
$0.0001 per share (the “Common
Stock”).
C. The
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms
and
conditions stated in this Agreement, the number of shares of Common Stock set
forth on the signature page hereto at a price of $1.00 per share.
NOW,
THEREFORE,
the
Company and the Purchaser hereby agree as follows:
1. PURCHASE
AND SALE OF COMMON STOCK.
(a) Purchase
of Common Stock.
(i) Upon
the
execution hereof, the Company shall issue and sell to the Purchaser, and the
Purchaser shall purchase from the Company the number of shares (the
“Shares”)
of
Common Stock as is set forth on the Subscriber Information and Signature
Page.
(ii) Purchase
Price.
The
purchase price for the shares of Common Stock to be purchased by the Purchaser
(the “Purchase
Price”)
shall
be the amount set forth on such Subscriber Information and Signature
Page.
(b) Form
and Time of Payment; Delivery of Certificates.
(i) Simultaneous
with the transmission of this Agreement to the Company, Purchaser shall deliver
a check made payable to the Company in the full amount of the Purchase
Price.
(ii) Promptly
after receipt of the signature pages to this Agreement from Purchaser and the
Purchase Price, the Company will deliver to Purchaser notice of acceptance
of
such the Purchaser's subscription. The Company will deliver a certificate
evidencing the Shares in the name of the Purchaser to the address set forth
on
the signature page hereof as soon as practicable thereafter.
2. PURCHASER’S
REPRESENTATIONS AND WARRANTIES.
The
Purchaser represents and warrants that:
(a) No
Public Sale or Distribution.
The
Purchaser is acquiring the Shares for its own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that the Purchaser has no present intention of selling, granting any
participation in, pledging or otherwise distributing the same to any Person.
and
not with a view towards, or for resale in connection with, the public sale,
distribution, pledge, hypothecation of or any part thereof in a manner that
would violate the Securities Act; provided,
however,
that by
making the representations herein, the Purchaser does not agree to hold the
Shares for any minimum or other specific term and reserves the right to dispose
of the Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. The Purchaser does not
presently have any agreement or understanding, directly or indirectly, with
any
Person to sell, pledge, hypothecate or encumber all or any portion of the
Shares. As used in this Agreement, the term “Person”
means
an individual, corporation, partnership, association, joint-stock company,
trust, unincorporated organization and a government or any department or agency
thereof.
(b) Purchaser
Status.
The
Purchaser (i) has a preexisting personal or business relationship with the
Company or one or more of its officers, directors, controlling persons or
managers; and (ii) is an "accredited investor" as such term is defined in Annex
A hereto.
(c)
Risk
of Investment.
The
Purchaser is aware that an investment in the Shares involves a number of very
significant risks and has the ability to bear the economic risks of such
Purchaser's investment.
(d) Knowledge
and Experience.
Purchaser has such knowledge and experience in financial, investment and
business matters as to be capable of evaluating the merits and risks of such
Purchaser's investment in the Shares and has sought such accounting, legal
and
tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Shares.
(e) Reliance
on Exemptions.
The
Purchaser understands that the Shares are being offered and sold to it in
reliance on specific exemptions from the registration requirements of United
States Federal and California securities laws and that the Company is relying
in
part upon the truth and accuracy of, and the Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the
Shares.
(f) No
General Solicitation or Advertising.
The
Purchaser acknowledges that it is not purchasing the Shares as a result of
or in
connection with any general solicitation or general advertising, as such terms
are used in Regulation D under the Securities Act.
(g) Independent
Evaluation.
The
Purchaser has independently evaluated the merits of its decision to purchase
the
Shares, and the Purchaser confirms that it has relied only on the advice of
or
any representations by any other Person not affiliated with the Company in
making such decision.
(h) Information.
The
Purchaser and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Shares which have been requested by the
Purchaser, including a draft of a Current Report on Form 8-K we will file with
the Securities and Exchange Commission by November 26, 2008 that includes
audited and pro forma financial statements as described therein. The Purchaser
and its advisors, if any, have been afforded the opportunity to ask questions
of
the Company and have received answers to any such questions. Neither such
inquiries nor any other due diligence investigations conducted by the Purchaser
or its advisors, if any, or its representatives shall modify, amend or affect
the Purchaser’s right to rely on the Company’s representations and warranties
contained herein. The Purchaser confirms that, in making a decision to invest
in
the Shares, he has relied exclusively on the information contained in the
Offering Documents by independent investigations of the Company made by him
and/or his representatives. The undersigned has not received nor has he relied
upon any oral or written representations in connection with the offering of
the
Shares which are in any way inconsistent with the information contained herein
or in the Offering Documents.
(i) No
Governmental Review.
The
Purchaser understands that no United States agency or any other government
or
governmental agency has (i) passed on or made any recommendation or endorsement
of the Shares or the fairness or suitability of the investment in the Shares,
(ii) have such authorities passed upon or endorsed the merits of the offering
of
the Shares or (iii) has determined if the Offering Documents are truthful or
complete.
2
(j) Transfer
or Resale.
The
Purchaser understands and agrees that: (i) the Shares have not been registered
under the Securities Act or any state securities laws; (ii) the Shares only
may
be offered, sold, assigned, pledged or otherwise transferred if they are
subsequently registered or qualified under the Securities Act or an exemption
from such registration or qualification requirements is available for the
proposed offer, sale, transfer, assignment or pledge of any interest in the
Shares; (iii) if the Purchaser seeks to transfer or sell the Shares or any
interest therein, the Company will require a written opinion of counsel
reasonably satisfactory to the Company that such transfer or sale is exempt
from
registration under the Securities Act and (iv) the Company is not obligated
to
recognize any transfer, sale or pledge of the Shares not in conformity with
the
terms of this Agreement.
(k) Legend.
The
Purchaser understands and agrees that upon the original issuance thereof, and
until such time as the same is no longer required under applicable requirements
of the Securities Act or applicable state securities laws, the certificates
or
other instruments representing the Shares and all certificates or other
instruments issued in exchange therefor or in substitution thereof, shall bear
a
legend substantially in the form set forth below, and that the Company will
make
a notation on its records and give instructions to any transfer agent of the
Shares in order to implement the restrictions on transfer set forth and
described herein:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS.”
(l) Validity;
Enforcement.
This
Agreement has been duly and validly authorized, executed and delivered on behalf
of the Purchaser and constitutes the legal, valid and binding obligation of
the
Purchaser enforceable against the Purchaser in accordance with its terms, except
as such enforceability may be limited by general principles of equity or to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.
(m) Residency.
For
purposes of United States securities laws, the Purchaser is a resident of that
jurisdiction specified on the Omnibus Signature Page.
(n) Compliance
with Local Laws.
Purchaser has complied with all local laws and regulations of the jurisdiction
in which it is domiciled or from which it is purchasing the Shares.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to the Purchaser that:
(a) Organization
and Qualification.
The
Company is duly organized and validly existing in good standing under the laws
of the State of Nevada and has the requisite power and authorization to own
its
properties and to carry on its business as now being conducted. The Company
is
duly qualified as a foreign entity to do business and is in good standing in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not
have
a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect”
means
any material adverse effect on the business, properties, assets, operations,
results of operations or financial condition of the Company or on the
transactions contemplated hereby.
3
(b) Authorization;
Enforcement; Validity.
The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and to issue the Shares in
accordance with the terms hereof. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby, including the issuance of the Shares, have been duly
authorized by the Company’s Board of Directors and no further filing, consent,
or authorization is required by the Company, its Board of Directors or its
stockholders in connection therewith. This Agreement has been duly executed
and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by general principles of equity
or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.
(c) Issuance
of Shares.
The
Shares have been duly authorized by the Company, and when duly issued and
delivered and paid for as provided herein, will be validly issued, fully paid
and non-assessable, and free from all taxes, liens and charges with respect
to
the issuance (but not the acquisition, holding or disposition)
thereof.
(d) No
Conflicts.
The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby (including
the issuance of the Shares) will not (i) result in a violation of the Articles
of Incorporation, Bylaws or other organizational document of the Company or
(ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights
of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or (iii) result in
a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to the Company or by which any
property or asset of the Company is bound or affected, except, in the case
of
clauses (ii) and (iii), for such violations as would not be reasonably expected
to have a Material Adverse Effect.
(e) Consents.
The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by
this
Agreement in accordance with the terms hereof, other than notification filings
under federal and state securities laws.
(f) No
General Solicitation.
Neither
the Company, nor any of its affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of
the
Shares.
(g) Absence
of Litigation.
There
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the best knowledge of the Company, threatened against or affecting the
Company or any of the Company’s officers or directors in their capacities as
such, other than actions, suits, proceedings or investigations claiming damages,
fines, penalties or other payments which would not have a Material Adverse
Effect.
(h) No
Integrated Offering.
None of
the Company, its affiliates, or any Person acting on their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers
to buy any security, under circumstances that would require registration of
the
Shares under the Securities Act or cause this offering of the Shares to be
integrated with prior offerings by the Company for purposes of the Securities
Act. None of the Company, its affiliates or any Person acting on their behalf
will take any action or steps referred to in the preceding sentence that would
require registration of the Shares under the Securities Act or cause the
offering of the Shares to be integrated with other offerings.
(i) No
Registration.
Assuming the accuracy of the representations and warranties of the Purchaser
contained in Section 2 hereof and the Purchaser’s compliance with the agreements
set forth therein and in Section 4 hereof, it is not necessary in connection
with the offer, issuance, sale and delivery of the Shares in the manner
contemplated by this Agreement to register the offer or sale of any of the
Shares under the Securities Act.
4
4. OTHER
AGREEMENTS BETWEEN THE PARTIES.
(a) Integration.
None of
the Company, any of its affiliates (as defined in Rule 501(b) under the
Securities Act) or any person acting on behalf of the Company or such affiliates
will sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) which will be
integrated with the sale of the Shares in a manner which would require the
registration under the Securities Act of the Shares and the Company will take
all action that is appropriate or necessary to assure that its offerings of
other securities will not be integrated for purposes of the Securities
Act.
(b) Indemnification
by Purchaser.
(i)
For
Certain Transfers. The Purchaser agrees to hold the Company and its directors,
officers and controlling persons and their respective heirs, affiliates,
representatives, successors and assigns harmless, and to indemnify them against
any and all liabilities, costs and expenses incurred by any of them as a result
of any sale, transfer or disposition of the Shares or the Shares by the
Purchaser in violation of any federal or state securities laws, any applicable
state securities laws, any breach of this Agreement or as a result of any
misrepresentation herein.
(ii)
For
Inaccuracy of Purchaser’s Representations and Information Provided Herein. The
Purchaser acknowledges and understands that neither the offer nor sale of the
Shares is being registered under the Securities Act. The Company is relying
on
exemptions from the registration provisions of the Securities Act and state
securities laws in making the Offering. In view thereof, the Purchaser agrees
to
indemnify and hold the Company, its officers, director, agents, affiliates
and
each other person, if any, who controls the Company, within the meaning of
Section 15 of the Securities Act, and any other registered owner of the
securities of the Company, harmless from and against any and all damages,
losses, liabilities, costs and expenses (including all costs incurred in
prosecuting such rights and reasonable attorneys' fee), which it or they may
incur in investigating, preparing, or defending against any litigation commenced
or threatened, or any claim whatsoever, arising out of or based upon any false
representation or warranty made by the Purchaser herein or by reason of the
failure of the Purchaser to fulfill any of the terms or conditions of this
Agreement.
(c) Confidentiality.
(i) The
Purchaser has not distributed nor will it distribute any documents received
from
the Company relating to the offering of the Shares or this Agreement to any
person other than its advisors and representatives and shall keep confidential
and shall not use the trade secrets and other non-public information provided
to
it by the Company or its agents in connection with the transactions contemplated
hereby.
(ii)
The
Company will treat all information provided to it by the undersigned as
confidential. The Purchaser understands, however, that the Company may present
the subscription documents to such parties as it deems appropriate if called
upon to establish that the proposed offer and sale of the Shares is exempt
from
registration under the Securities Act and applicable state securities laws.
Further, the Purchaser understands that the offering is required to be reported
to the Securities and Exchange Commission, NASDAQ and to various state
securities and “blue sky” regulators.
5. MISCELLANEOUS.
(a) Governing
Law; Submission to Jurisdiction.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of California. Each party hereby irrevocably submits to
the
exclusive jurisdiction of the state courts sitting in the City of Santa Xxxx,
California or the federal court sitting in Orange County, California for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that
the
venue of such suit, action or proceeding is improper.
5
(b) Counterparts.
Counterparts. This Agreement may be executed in any number of counterparts,
each
of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement.
(c) Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(d) Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(e) Entire
Agreement; Amendments.
This
Agreement supersedes all other prior oral or written agreements among the
Purchaser, the Company, their affiliates and Persons acting on their behalf
with
respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Purchaser. No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought.
(f) Notices.
All
notices, instructions or other communications required or permitted to be given
pursuant to this Agreement shall be given in writing and delivered by facsimile,
certified mail, return receipt requested or overnight courier by a nationally
recognized courier service to the coordinates for each of the parties set forth
below:
If
to the
Company:
Vinyl
Products, Inc.
0000
Xxxxx Xxxxxxx Xxxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attn.:
Xxxxxx Xxxxx, President
and
if to
the Purchaser, to its address and facsimile number set forth on the Omnibus
Signature Page, or to such other address and/or facsimile number and/or to
the
attention of such other Person as the recipient party has specified by written
notice given to each other party prior to the effectiveness of such change.
All
notices shall be deemed to be given on the same day if delivered by facsimile,
on the following business day if sent by overnight delivery or on the third
business day following the date of mailing. Written confirmation of receipt
(A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt
from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
(g) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns; provided
that no
party shall assign any of its rights or obligations hereunder without the prior
written consent of the other party.
6
(h) No
Third Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
(i) Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
[Purchaser
Information and Signature Pages Follow]
7
COMPANY
SIGNATURE PAGE
IN
WITNESS WHEREOF,
the
Company has caused this Subscription Agreement to be duly executed as of the
date first written above.
|
VINYL
PRODUCTS, INC.
|
|
|
By:
|
|
|
Name:
Xxxxxx Xxxxx
|
|
|
Title:
President
|
|
8
SUBSCRIBER
INFORMATION AND SIGNATURE PAGE
A. General
Information
| 1. |
Subscription
for Shares.
|
a.
Number
of Shares Subscribed For: ________________
b.
Total
Purchase Price
Tendered: ________________
($1
x No.
of Shares Subscribed For)
(Make check payable to "The
Vinyl Fence Company, Inc.")
c.
Name(s) of Subscribers
_________________________________
Social Security Number: _______________________________
_________________________________
Social Security Number:
_______________________________
| 2. |
Principal
Residence:
__________________________________________________________________________
|
Mailing
Address (if other than Principal Residence above):
_________________________________________________________________
Telephone
Number: _________________
Facsimile
Number: ___________________
|
3.
|
Manner
of Ownership of Securities.
|
_____
One
Individual _____ Husband
and Wife
_____
Tenants by the Entirety _____ Tenants
in Common
_____
Joint Tenants with Right of Survivorship
_____
Two or more Individuals (but not husband and wife)
| B. |
Relationship
with Company
|
| l. |
The
undersigned subscriber has either a personal or business relationship
with
the Company or any of its officers or
directors:
|
_______
_________
Yes No
| 2. |
Please
describe the nature of such relationship and the length
thereof:
|
________________________________________________________________
________________________________________________________________
________________________________________________________________
9
| C. |
Accredited
Investor Status
|
| l. |
Please
check the definition of “accredited investor,” if any, that applies to
you.
|
|
¨
|
(a)
|
A
natural person whose individual net worth*,
or joint net worth with that person’s spouse, at the time of purchase
exceeds $1,000,000; or
|
|
¨
|
(b)
|
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.
|
*
For
purposes hereof net worth shall be deemed to include ALL of your assets, liquid
or illiquid (including such items as home, furnishings, automobile and
restricted securities) MINUS any liabilities (including such items as home
mortgages and other debts and liabilities).
**
For
purposes hereof the term “income” is not limited to “adjusted gross income” as
that term is defined for federal income tax purposes, but rather includes
certain items of income which are deducted in computing “adjusted gross income.”
For investors who are salaried employees, the gross salary of such investor,
minus any significant expenses personally incurred by such investors in
connection with earning the salary, plus any income from any other source
including unearned income, is a fair measure of “income” for purposes hereof.
For investors who are self-employed, “income” is generally construed to mean
total revenues received during the calendar year minus significant expenses
incurred in connection with earning such revenues.
[Subscriber
Signature Page Follows]
10
SUBSCRIBER
SIGNATURE PAGE
IN
WITNESS WHEREOF,
the
Purchaser has caused this Subscription Agreement to be duly executed as of
the
date first written above.
|
PURCHASER(S)
|
|
11
