SUBSCRIPTION AGENT AGREEMENT December ____, 2007
December
____, 2007
Interwest
Transfer Company
0000
Xxxx
Xxxxxx Xxxxxxxx Xxxx, Xxxxx 000
P.O.
Xxx
00000
Xxxx
Xxxx
xxxx, XX 00000
Attention:
Xx. Xxxxxxx Xxxx
Ladies
and Gentlemen:
In
connection with your appointment as Subscription Agent in the transaction
described herein, MangoSoft, Inc. (the "Company"),
hereby confirms its arrangements with you as follows:
1.
Rights
Offering—The
Company is conducting an offering (the "Rights
Offering")
to the
holders of shares of its common stock, par value $0.001 per share (the
"Common
Stock"),
on
December 21, 2007 (the "Record
Date”),
the
right (each a "Right
" and
together the "Rights")
to
subscribe for share(s) of Common Stock. Except as set forth under
Paragraph 6 below, Rights shall cease to be exercisable at 5:00 p.m.,
Eastern Standard Time, on January 29, 2008 or such later date of which the
Company notifies you orally and confirms in writing (the "Expiration
Date").
2,400,000 Rights are being issued in respect of 3,413,038 shares of Common
Stock
held on the Record Date. One Right and payment in full of the subscription
price
of $0.50 per share (the "Subscription
Price")
are
required to subscribe for one share of Common Stock. Rights are evidenced by
nontransferable subscription certificates in registered form ("Subscription
Certificates
"). Each
holder of Subscription Certificates who exercises the right to subscribe for
all
shares that can be subscribed for with the Rights evidenced by such Subscription
Certificates (the "Basic
Subscription Right")
will
have the right to subscribe for additional shares, if any, available as a result
of any unexercised Rights (such additional subscription right being referred
to
hereafter as the "Over-subscription
Privilege
"). The
Rights Offering will be conducted in the manner and upon the terms set forth
in
the Company's Prospectus dated December 21, 2007 (the "Prospectus"),
which
is incorporated herein by reference and made a part hereof as if set forth
in
full herein.
2.
Appointment
of Subscription Agent—You
are
hereby appointed as Subscription Agent to effect the Rights Offering in
accordance with the Prospectus. Each reference to you in this letter is to
you
in your capacity as Subscription Agent unless the context indicates
otherwise.
3.
Delivery
of Documents—Enclosed
herewith are the following, the receipt of which you acknowledge by your
execution hereof:
(a)
a
copy of
the Prospectus;
(b)
a
draft
form of Subscription Certificate (with instructions);
(c)
resolutions
adopted by the Board of Directors of the Company in connection with the Rights
Offering, certified by the Chief Executive Officer of the Company;
and
(d)
Notice
of
Guaranteed Delivery.
As
soon as is reasonably practical, you shall mail or cause to be mailed to each
holder of shares of Common Stock at the close of business on the Record Date,
a
Subscription Certificate evidencing the Rights to which such holder is entitled
(including instructions), a Notice of Guaranteed Delivery, a Prospectus and
an
envelope addressed to you (together, the "Subscription
Documents").
Prior
to mailing, you will print out a sufficient number of blank Subscription
Certificates which you will prepare and issue in the names of holders of Common
Stock of record at the close of business on the Record Date and for the number
of Rights to which they are entitled. Prior to printing, you will send a final
draft copy of a blank Subscription Certificate to the Company, for the Company's
final review.
Subscription
Documents will not be mailed to holders having a registered address outside
the
United States, or to those holders having APO of FPO addresses. The Rights
to
which such Subscription Documents relate will be held by you for such holders'
accounts until instructions are received to exercise the Rights.4.
Subscription
Procedure—
(a)
Upon
your
receipt prior to 5:00 p.m., Eastern Standard time, on the Expiration Date
(by mail or delivery), as Subscription Agent, of (i) any Subscription
Certificate completed and endorsed for exercise, as provided on the reverse
side
of the Subscription Certificate (except as provided in Paragraph 6 hereof),
and (ii) payment in full of the Subscription Price in U.S. funds by check,
bank draft, wire transfer or money order payable at par (without deduction
for
bank service charges or otherwise) to the order of Interwest Transfer Company,
you shall as soon as practicable after the Expiration Date, but after performing
the procedures described in subparagraphs (b) and (c) below, mail to
the subscriber's registered address on the books of the Company certificates
representing the shares duly subscribed for (pursuant to the Basic Subscription
Right and the Additional Subscription Privilege) and furnish a list of all
such
information to the Company.
(b)
As
soon
as practicable after the Expiration Date you shall calculate the total number
of
shares that are available for the Over-subscription Privilege. The
Over-subscription Privilege may only be exercised by holders who subscribe
to
all the shares that can be subscribed for under the Basic Subscription Right.
The shares available for additional subscriptions will be those that have not
been subscribed and paid for pursuant to the Basic Subscription Right (the
"Remaining
Shares").
Where
there are sufficient Remaining Shares to satisfy all additional subscriptions
by
holders exercising their rights under the Over-subscription Privilege, each
holder shall be allotted the number of Additional Shares subscribed for. If
the
aggregate number of Shares subscribed for under the Over-subscription Privilege
exceeds the number of Remaining Shares, the number of Remaining Shares allotted
to each participant in the Over-subscription Privilege shall be the product
(disregarding fractions) obtained by multiplying the number of Remaining Shares
by a fraction of which the numerator is ownership of shares of each participant
in the Over-subscription Privilege round and the denominator is the total
ownership of all stockholders participating in the Over-subscription Privilege
round. Any fractional share to which persons exercising their Over-subscription
Privilege would otherwise be entitled pursuant to such allocation shall be
rounded to the next whole share.
2
(c)
As
soon
as is practicable after the Expiration Date you shall provide the Company with
a
report (the “Over-subscription Report”) that sets forth (i) the total number of
shares subscribed for, (ii) the total number of shares not subscribed for,
(iii)
the aggregate Over-subscription Privilege exercised by their shareholders,
(iv)
a list of the shareholders exercising the Over-subscription Privilege, (v)
the
number of shares subscribed for by each shareholder pursuant to their exercise
of the Over-subscription Privilege, (vi) the amount of funds tendered by each
shareholder with respect to their exercise of the Over-subscription Privilege,
(vii) a column next to each shareholder’s name for the Company to fill in the
number of shares to be issued to each shareholder pursuant to the exercise
of
the Over-subscription Privilege, and (viii) a column indicating the amount,
if
any, to be refunded to each shareholder who exercised the Over-subscription
Privilege. Based on the foregoing, and after the Company has completed the
Over-subscription Report as required by the immediately preceding sentence,
you
will issue the requisite number of shares pursuant to the Over-subscription
Privilege as well as provide all refunds, if any and as appropriate.
(d)
Upon
calculating the number of shares to which each subscriber is entitled pursuant
to the Over-subscription Privilege and assuming payment for the additional
shares subscribed for has been delivered, you shall mail, as contemplated in
subparagraph (a) above, the certificates representing the additional
securities which the subscriber has been allotted. If a lesser number of shares
is allotted to a subscriber under the Over-subscription Privilege than the
subscriber has tendered payment for, you shall remit the difference to the
subscriber by check without interest or deduction at the same time as
certificates representing the securities allotted pursuant to the
Over-subscription Privilege are mailed.
(e)
Funds
received by you pursuant to the Basic Subscription Right and the
Over-subscription Privilege shall be held by you in a segregated account. You
shall invest and reinvest such funds in your Time Deposit Open Account or,
if
directed by the Company, a money market fund which has been placed in its
highest rating category by Standard & Poors or Xxxxx'x. Upon mailing
certificates representing the securities and refunding subscribers for
additional shares
subscribed for but not allocated, if any, you shall promptly remit to the
Company all funds received in payment of the Subscription Price for shares
sold
in the Rights Offering (together with all interest earned thereon).
3
5.
Defective
Exercise of Rights; Lost Subscription Certificates—The
Company shall have the absolute right to reject any defective exercise of Rights
or to waive any defect in exercise. Unless requested to do so by the Company,
you shall not be under any duty to give notification to holders of Subscription
Certificates of any defects or irregularities in subscriptions. If you believe
that any exercise of Rights is defective, you should notify the Company, who
will make the final determination as to whether such exercise is or is not
defective. Subscriptions will not be deemed to have been made until any such
defects or irregularities have been cured or waived within such time as the
Company shall determine. If requested by the Company, you shall as soon as
practicable return Subscription Certificates with the defects or irregularities
which have not been cured or waived to the holder of the Rights. If an
exercising holder has not indicated the number of Rights being exercised, or
if
the Subscription Price payment forwarded by such holder to you is not sufficient
to purchase the number of shares subscribed for, at the Company's discretion
the
holder may be deemed to have exercised the maximum number of whole Rights which
may be exercised for the Subscription Price delivered. If any Subscription
Certificate is alleged to have been lost, stolen or destroyed, you should
provide for an affidavit of lost certificate and indemnity agreement in a
standard form typically used by you.
6.
Late
Delivery—If
prior
to 5:00 p.m., Eastern Standard time, on the Expiration Date you receive
(i) payment in full of the Subscription Price for the shares of Common
Stock being subscribed for and (ii) a guarantee notice substantially in the
form of the Notice of Guaranteed Delivery delivered with the Subscription
Certificate, from a financial institution having an office or correspondent
in
the United States, or a member firm of any registered United States national
securities exchange or of the National Association of Securities
Dealers, Inc. stating the certificate number of the Subscription
Certificate relating to the Rights, the name and address of the exercising
subscriber, the number of Rights represented by the Subscription Certificate
held by such exercising subscriber, the number of shares of Common Stock being
subscribed for pursuant to the Rights and guaranteeing the delivery to you
of
the Subscription Certificate evidencing such Rights within three American Stock
Exchange ("AMEX")
trading days following the date of the Notice of Guaranteed Delivery, then
the
Rights may be exercised even though the Subscription Certificate was not
delivered to you prior to 5:00 p.m., Eastern Standard time, on the
Expiration Date, provided that within three AMEX trading days following the
date
of the Notice of Guaranteed Delivery you receive the properly completed
Subscription Certificate evidencing the Rights being exercised, with signatures
guaranteed if required.
7.
Delivery—You
shall
deliver to the Company the exercised Subscription Certificates in accordance
with written directions received from the Company and shall deliver to the
subscribers who have duly exercised Rights at their registered addresses
certificates representing the securities subscribed for as instructed on the
reverse side of the Subscription Certificates.
4
8.
Reports—You
shall
notify the Company by telephone on and before the close of business on each
business day during the period commencing 5 business days after the mailing
of
the Subscription Certificates and ending at the Expiration Date (and in the
case
of guaranteed deliveries ending three AMEX trading days after the Expiration
Date) (each a "Daily
Notice"),
which
Daily Notice shall thereafter be confirmed in writing, of (i) the number of
Rights exercised on the day prior to the date of such Daily Notice,
(ii) the number of Rights subject to guaranteed exercises on the day prior
to such Daily Notice, (iii) the number of Rights for which defective
exercises have been received on the day prior to such Daily Notice, and
(iv) the cumulative total of the information set forth in clauses
(i) through (iii) above. At or before 5:00 p.m., Eastern Standard
time, on the first AMEX trading day following the Expiration Date you shall
certify in writing to the Company the cumulative total through the Expiration
Date of all the information set forth in clauses (i) through
(iii) above. At or before 10:00 a.m., Eastern Standard time, on the
sixth AMEX trading day following the Expiration Date you will execute and
deliver to the Company a certificate setting forth the number of Rights
exercised pursuant to a Notice of Guaranteed Delivery and as to which
Subscription Certificates have been timely received. You shall also maintain
and
update a listing of holders who have fully or partially exercised their Rights
and holders who have not exercised their Rights. You shall provide the Company
or its designees with such information compiled by you pursuant to this
Paragraph 8 as any of them shall request.
9.
Future
Instructions—With
respect to notices or instructions to be provided by the Company hereunder,
you
may rely and act on any written instruction signed by any one or more of the
following authorized officer of the Company:
|
Xxxx
Xxxxxxx
|
|
Chief
Executive Officer
|
10.
Amendment—The
Company reserves the right, in its sole discretion, to: (a) terminate the
Rights Offering prior to delivery of the Common Stock for which holders have
subscribed pursuant to the exercise of Rights; (b) extend the Expiration
Date to a later date and time; or (c) amend or modify the terms of the
Rights. If the Company materially amends the terms of the Rights, an amended
Prospectus will be distributed to holders of record of Rights and to holders
of
Rights who have previously exercised Rights. All holders of Rights who exercised
Rights prior to such amendment or within four business days after the mailing
of
the amended Prospectus will be given the opportunity to confirm the exercise
of
Rights by executing and delivering a consent form.
11.
Payment
of Expenses—The
Company will pay you compensation for acting in your capacity as Subscription
Agent hereunder pursuant to the schedule attached as Exhibit A
hereto.
12.
Counsel—You
may
consult with counsel satisfactory to you, which may be counsel to the Company,
and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered
or
omitted
by you hereunder in good faith and in accordance with such advice and opinion
of
such counsel.
5
13.
Indemnification—The
Company covenants and agrees to indemnify and hold you harmless against any
costs, expenses (including reasonable fees of legal counsel), losses or damages,
which may be paid, incurred or suffered by or to which you may become subject
arising from or out of, directly or indirectly, any claim or liability resulting
from your actions as Subscription Agent pursuant hereto; provided that such
covenant and agreement does not extend to such costs, expenses, losses and
damages incurred or suffered by you as a result of, or arising out of, your
own
gross negligence, misconduct or bad faith or that of any employees, agents
or
independent contractors used by you in connection with performance of your
duties as Subscription Agent hereunder.
14.
Notices—Unless
otherwise provided herein, all reports, notices and other communications
required or permitted to be given hereunder shall be in writing and delivered
by
hand or confirmed telecopy or by first class U.S. mail, postage prepaid,
shall be deemed given if by hand or telecopy,
upon
receipt or if by U.S. mail, three business days after deposit in the U.S. mail
and shall be addressed as follows:
If
to the
Company, to:
MangoSoft,
Inc.
00
Xxxxxxxxx Xxxxxx, Xxxxx X
XX
X-0
Xxxxxx,
XX 00000
Attn:
Chief Executive Officer
Telephone:
(000) 000-0000
If
to
you, to:
Interwest
Transfer Company
0000
Xxxx
Xxxxxx Xxxxxxxx Xxxx, Xxxxx 000
P.O.
Xxx
00000
Xxxx
Xxxx
xxxx, XX 00000
Attention:
Xx. Xxxxxxx Xxxx
Telephone:
(000) 000-0000
15.
Miscellaneous—
(a)
No Assignment; Delegation.
Neither
this Agreement nor any rights or obligations hereunder may be assigned or
delegated by either party without the prior written consent of the other
party.
(b)
Binding Nature.
This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns. Nothing in this Agreement
is
intended or shall be construed to confer upon any other person any right, remedy
or claim or to impose upon any other person any duty, liability or
obligation.
(c)
Governing Law.
The
validity, interpretation and performance of this Agreement shall be governed
by
the law of New York, without regard to its principles of conflicts of law.
The
parties agree that with respect to all unresolved disputes arising out of this
Agreement they shall submit to the jurisdiction of any state or federal court
sitting in New York.
6
(d)
Severability.
The
parties hereto agree that if any of the provisions contained in the Agreement
shall be determined invalid, unlawful or unenforceable to any extent, such
provisions shall be deemed modified to the extent necessary to render such
provisions enforceable. The parties hereto further agree that this Agreement
shall be deemed severable, and the invalidity, unlawfulness or unenforceability
of this Agreement or of any term or provision hereof.
(e)
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original and all of which together shall be considered one and the
same agreement.
(f)
Captions.
The
captions and descriptive heading herein are for the convenience of the parties
only. They do not in any way modify, amplify, alter or give full notice of
the
provisions hereof.
(g)
Signatures.
Any
facsimile or electronic signature of any party hereto shall constitute a legal,
valid and binding execution hereof by such party.
(h)
Further Actions.
Each
party agrees to perform such further acts and execute such further documents
as
are necessary to effect the purposes of this Agreement.
(i)
Delays or Omissions.
No
delay or omission to exercise any right, power, or remedy accruing to any party
to this Agreement, upon any breach or default of any other party under this
Agreement, shall impair any such right, power, or remedy; nor shall it be
construed to be a
waiver
of, or an acquiescence in any such breach or default or any similar breach
or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character, on the part of any party, of any breach or default under the
Agreement, or any waiver, on the part of any party, of any provisions or
conditions of the Agreement, must be made in writing and shall be effective
only
to the extent specifically set forth in such writing. All remedies, either
under
the Agreement or by law and otherwise afforded to any party, shall be cumulative
and not alternative.
(j)
Other
Matters.
The
parties agree that the duties and obligations of the Subscription Agent are
only
as herein specifically provided and no other and the Subscription Agent shall
incur no liability whatsoever, except as a direct result of its own gross
negligence or wilfull misconduct. In the event the Subscription Agent shall
be
uncertain as to its duties or rights hereunder or shall receive instructions,
demands or claims which, in its opinion, conflict with any of the provisions
of
this Agreement, it shall be entitled to refrain from taking any action, other
than to keep safely the executed subscription agreements and received funds,
until such time as it receives clarifications which, in its opinion, resolves
any such conflict or an interpretation from a court of competent jurisdiction
resolving such conflict. The Subscription Agent shall not be required to
institute legal proceedings of any kind and shall not be required to defend
any
legal proceedings which may be instituted against it in respect of this
agreement or the securities subject to the subscription agreements.
7
(k)
Section Headings.
Section
headings are for the convenience of the parties and do not form a part of
this Agreement.
(l)
Entire Agreement.
This
Agreement contains the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof, and supersedes all prior
and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof. The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms
hereof. The Agreement may not be modified or amended other than by an agreement
in writing.
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remainder of this page has been intentionally left blank]
8
IN
WITNESS WHEREOF, the parties have hereunto set their hands and seals, as of
the
day and year first above written.
Signed
by
MangoSoft, Inc.:
By:_______________________
Name:
Xxxx Xxxxxxx
Title:
Chief Executive Officer
Acknowledged
and Agreed to by Interwest Transfer Company
By:_______________________
Name:
Title:
9
EXHIBIT
A
FEE
SCHEDULE
AS
RIGHTS
AGENT
FOR
MANGOSOFT,
INC.
10
