Exhibit 10.1
TASTY FRIES, INC.
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT ("Subscription Agreement") made as of this 13th day
of April 2005 between Tasty Fries, Inc., a Nevada corporation with offices
located at 000 Xxxxxx Xxxxxxx, Xxxxx Xxx, Xxxx Xxxx, Xxxxxxxxxxxx 00000 (the
"Company"), and the undersigned (the "Subscriber").
WHEREAS, pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"), and Rule 506 promulgated thereunder, the Company
desires to sell and the Subscriber desires to purchase 250,000 shares of the
Company's Series A Preferred Stock in a private placement (the "Offering") on
the terms and conditions set forth herein;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
I. SUBSCRIPTION FOR SECURITIES; REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
1.1 Subscription for Securities. Subject to the terms and conditions
hereinafter set forth, the Subscriber hereby subscribes for and agrees to
purchase from the Company 250,000 shares of the Company's Series A Preferred
Stock ("Shares"), at a purchase price of $1.00 per share and the Company agrees
to sell such Shares to the Subscriber for said purchase price.
1.2 Reliance on Exemptions. The Subscriber acknowledges that the
Offering has not been reviewed by the United States Securities and Exchange
Commission (the "SEC") or any state agency because it is intended to be a
nonpublic offering exempt from the registration requirements of the Securities
Act and state securities laws. The Subscriber understands that the Company is
relying in part upon the truth and accuracy of, and the Subscriber's compliance
with the representations, warranties, agreements, acknowledgments and
understandings of the Subscriber set forth herein in order to determine the
availability of such exemptions and the eligibility of the Subscriber to acquire
the Shares.
1.3 Investment Purpose. The Subscriber represents that the Shares
are being purchased for its own account, for investment purposes only and not
for distribution or resale to others in contravention of the registration
requirements of the Securities Act. The Subscriber agrees that it will not sell
or otherwise transfer the Shares unless they are registered under the Securities
Act or unless an exemption from such registration is available.
1.4 Accredited Investor. The Subscriber represents and warrants that
it is an "accredited investor" as such term is defined in Rule 501 of Regulation
D promulgated under the Securities Act, and that it is able to bear the economic
risk of any investment in the Shares.
1.5 Risk of Investment. The Subscriber recognizes that the purchase
of the Shares involves a high degree of risk in that: (a) an investment in the
Company is highly speculative and only investors who can afford the loss of
their entire investment should consider investing in the Company and the Shares;
(b) transferability of the Shares is limited; and (c) the Company may require
substantial additional funds to operate its business and subsequent equity
financings will dilute the ownership and voting interests of Subscriber.
1.6 Prior Investment Experience. The Subscriber acknowledges that it
has prior investment experience and that it recognizes the highly speculative
nature of this investment.
1.7 Information. The Subscriber acknowledges careful review of this
Subscription Agreement as well as the Company's filings with the Securities and
Exchange Commission, as required pursuant to the Securities and Exchange Act of
1934, and specifically the Company's current reports on Form 8-K filed with the
Securities and Exchange Commission on March 23, 2005, April 1, 2005 and April
13, 2005, which are available on the Internet at xxx.xxx.xxx (collectively, the
"Offering Documents"), all of which the undersigned acknowledges have been
provided to the undersigned. The undersigned has been given the opportunity to
ask questions of, and receive answers from, the Company concerning the terms and
conditions of this Offering and the Offering Documents and to obtain such
additional information, to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense, necessary to verify the
accuracy of same as the undersigned reasonably desires in order to evaluate the
investment. The undersigned understands the Offering Documents, and the
undersigned has had the opportunity to discuss any questions regarding any of
the Offering Documents with its counsel or other advisor. Notwithstanding the
foregoing, the only information upon which the undersigned has relied is that
set forth in the Offering Documents. The undersigned has received no
representations or warranties from the Company, its employees, agents or
attorneys in making this investment decision other than as set forth in the
Offering Documents. The undersigned does not desire to receive any further
information.
1.8 No Representations. The Subscriber hereby represents that,
except as expressly set forth in the Offering Documents, no representations or
warranties have been made to the Subscriber by the Company or any agent,
employee or affiliate of the Company, and in entering into this transaction the
Subscriber is not relying on any information other than that contained in the
Offering Documents and the results of independent investigation by the
Subscriber.
1.9 Tax Consequences. The Subscriber acknowledges that the Offering
may involve tax consequences and that the contents of the Offering Documents do
not contain tax advice or information. The Subscriber acknowledges that it must
retain its own professional advisors to evaluate the tax and other consequences
of an investment in the Shares.
1.10 Transfer or Resale. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the Shares
under the Securities Act except as contained herein. The Subscriber consents
that the Company may, if it desires, permit the transfer of the Shares out of
the Subscriber's name only when the Subscriber's request for transfer is
accompanied by an opinion of counsel reasonably satisfactory to the Company that
neither the sale nor the proposed transfer results in a violation of the
Securities Act or any applicable state "blue sky" laws.
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1.11 Legends. The Subscriber understands that the certificates
representing the Shares, until such time as they have been registered under the
Securities Act, shall bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such
certificates or other instruments):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR (B) AN OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS, OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.
The legend set forth above shall be removed and the Company shall
issue a certificate without such legend to the holder of the Shares upon which
it is stamped, if (a) such Securities are being sold pursuant to a registration
statement under the Securities Act, (b) such holder delivers to the Company an
opinion of counsel, in a reasonably acceptable form, to the Company that a
disposition of the Shares is being made pursuant to an exemption from such
registration, or (c) such holder provides the Company with reasonable assurance
that a disposition of the Securities may be made pursuant to the Rule 144 under
the Securities Act without any restriction as to the number of securities
acquired as of a particular date that can then be immediately sold.
1.12 No General Solicitation. The Subscriber represents that the
Subscriber was not induced to invest by any form of general solicitation or
general advertising including, but not limited to, the following: (a) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over the news or radio; and
(b) any seminar or meeting whose attendees were invited by any general
solicitation or advertising.
1.13 Validity; Enforcement. If the Subscriber is a corporation,
partnership, trust or other entity, the Subscriber represents and warrants that:
(a) it is authorized and otherwise duly qualified to purchase and hold the
Shares; and (b) that this Subscription Agreement has been duly and validly
authorized, executed and delivered and constitutes the legal, binding and
enforceable obligation of the undersigned. If the Subscriber is an individual,
the Subscriber represents and warrants that this Subscription Agreement has been
duly and validly executed and delivered and constitutes the legal, binding and
enforceable obligation of the undersigned.
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1.14 Address. The Subscriber hereby represents that the address of
the Subscriber furnished by the Subscriber at the end of this Subscription
Agreement is the undersigned's principal residence if the Subscriber is an
individual or its principal business address if it is a corporation or other
entity.
1.15 Foreign Subscriber. If the Subscriber is not a United States
person, such Subscriber hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares or any use of this Subscription
Agreement, including: (a) the legal requirements within its jurisdiction for the
purchase of the Shares; (b) any foreign exchange restrictions applicable to such
purchase; (c) any governmental or other consents that may need to be obtained;
and (d) the income tax and other tax consequences, if any, that may be relevant
to the purchase, holding, redemption, sale or transfer of the Shares. Such
Subscriber's subscription and payment for, and its continued beneficial
ownership of the Shares, will not violate any applicable securities or other
laws of the Subscriber's jurisdiction.
II. REGISTRATION RIGHTS
2.1 The Company agrees that if, at any time, and from time to time,
after the date hereof the Board of Directors of the Company (the "Board") shall
authorize the filing of a registration statement under the Securities Act (other
than a registration statement on Form X-0, Xxxx X-0 or any other form that does
not include substantially the same information as would be required in a form
for the general registration of securities) in connection with the proposed
offer of any of its securities by it or any of its stockholders, the Company
shall: (A) promptly notify the Subscriber that such registration statement will
be filed and that the shares of common stock underlying the Shares (the
"Registrable Securities") then held by the Subscriber will be included in such
registration statement; (B) cause such registration statement to cover all of
such Registrable Securities issued to the Subscriber; (C) use best efforts to
cause such registration statement to become effective as soon as practicable;
and (D) take all other reasonable action necessary under any federal or state
law or regulation of any governmental authority to permit all such Registrable
Securities that have been issued to such holder to be sold or otherwise disposed
of, and will maintain such compliance with each such federal and state law and
regulation of any governmental authority for the period necessary for such
holder to promptly effect the proposed sale or other disposition.
Notwithstanding any other provision of this Section 2.1, the Company may at any
time, abandon or delay any registration commenced by the Company. In the event
of such an abandonment by the Company, the Company shall not be required to
continue registration of the Registrable Securities, the Holder shall retain the
right to request inclusion of shares as set forth above.
III. MISCELLANEOUS
3.1 Notice. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Subscription Agreement
must be in writing and will be deemed to have been delivered: (a) upon receipt,
when delivered personally, (b) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party), or (c) one (1) business day after deposit
with an overnight courier service, in each case properly addressed to the party
to receive the same. The addresses and facsimile numbers for such communications
shall be:
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If to the Company:
000 Xxxxxx Xxxxxxx, Xxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile:
If to the Subscriber, to its address and facsimile number set forth
at the end of this Subscription Agreement, or to such other address and/or
facsimile number and/or to the attention of such other person as specified by
written notice given to the Company five (5) days prior to the effectiveness of
such change. 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 (a), (b) or (c) above,
respectively.
3.2 Entire Agreement; Amendment. This Subscription Agreement
supersedes all other prior oral or written agreements between the Subscriber,
the Company, their affiliates and persons acting on their behalf with respect to
the matters discussed herein, and this Subscription 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 Subscriber
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Subscription Agreement may be amended or waived
other than by an instrument in writing signed by the Company and the holders of
at least a majority of the Shares then outstanding (determined on an as
exercised to common stock basis) (or if prior to the closing, the Subscribers
purchasing at least a majority of the Shares to be purchased at the closing). No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Shares then outstanding.
3.3 Severability. If any provision of this Subscription 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 Subscription Agreement in that jurisdiction or the validity or
enforceability of any provision of this Subscription Agreement in any other
jurisdiction.
3.4 Governing Law; Jurisdiction; Waiver of Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this
Subscription Agreement shall be governed by the internal laws of the State of
Pennsylvania, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Pennsylvania or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Pennsylvania. Each party hereby irrevocably submits to
the non-exclusive jurisdiction of the state and federal courts sitting in
Pennsylvania 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. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Subscription Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereby irrevocably waives any right it may have,
and agrees not to request, a jury trial for the adjudication of any dispute
hereunder or in connection with or arising out of this Subscription Agreement or
any transaction contemplated hereby.
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3.5 Headings. The headings of this Subscription Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Subscription Agreement.
3.6 Successors And Assigns. This Subscription Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. The Company shall not assign this Subscription Agreement
or any rights or obligations hereunder without the prior written consent of the
holders of at least a majority the Shares then outstanding, except by merger or
consolidation. The Subscriber shall not assign its rights hereunder without the
consent of the Company, which consent shall not be unreasonably withheld.
3.7 No Third Party Beneficiaries. This Subscription 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.
3.8 Survival. The representations and warranties of the Subscriber
contained in Article I and the agreements set forth this Article III shall
survive closing for a period of two years.
3.9 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
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Subscription Agreement and the consummation of
the transactions contemplated hereby.
3.10 No Strict Construction. The language used in this Subscription
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
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3.11 Legal Representation. The Subscriber acknowledges that: (a) it
has read this Subscription Agreement; and (b) it understands the terms and
consequences of this Subscription Agreement and is fully aware of its legal and
binding effect.
3.12 Counterparts. This Subscription Agreement may be executed in
two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement
as of the day and year first written above.
Xxxx Xxxxxxxxx No. of Shares: 250,000
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Name of Subscriber
/s/ XXXX XXXXXXXXX
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Signature
Xxxx Xxxxxxxxx
Name (Please Print)
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Title
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Address of Subscriber
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Taxpayer Identification
Number of Subscriber
Subscription Accepted:
TASTY FRIES, INC.
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
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