SUBSCRIPTION AGREEMENT
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Aquagenix, Inc.
0000 X.X. 00xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Gentlemen:
Pursuant to the discussion between Aquagenix, Inc., a Delaware corporation
(the "Company") and Alexander Enterprise Holdings Corp., a British Virgin
Islands corporation (the "Undersigned"), the Undersigned is writing to advise
you of the following terms and conditions under which the Undersigned hereby
offers to subscribe (the "Offer") for the purchase of shares ("Shares") of the
Company's Common Stock, par value $.01 per share, in an amount to be determined
pursuant to Section 2(a) hereof, and Sixty Thousand (60,000) warrants
("Warrants") at an aggregate purchase price of $700,000.
1. SUBSCRIPTION. Subject to the terms and conditions hereinafter set
forth in this Subscription Agreement, the Undersigned hereby offers to purchase
the Shares and Warrants for an aggregate purchase price of $700,000.
If the Offer is accepted, the Shares and Warrants shall be paid for
by the delivery of $700,000 by wire transfer payable to Aquagenix, Inc.,
BankAtlantic, 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx, 00000; ABA
#000000000, Account #0055937302, and the certificates evidencing the Shares and
Warrants shall be delivered
to the Undersigned immediately thereafter.
2. DESCRIPTION OF SHARES AND WARRANTS.
(a) SHARES. "Shares" that the Undersigned shall receive pursuant to this
Subscription Agreement shall mean that number of shares of the Company's Common
Stock equal to $700,000 divided by the Fair Market Value (as defined herein) of
the Company's shares of Common Stock on the date of the Notice (as defined
herein). Notice to receive all or any portion of the amount of Shares shall be
determined at the option of the Undersigned any time commencing ninety (90) days
from the date hereof and ending on December 31, 1998. The Undersigned shall
deliver written notice ("Notice") to the Company via telecopy on the day of
exercising its right to receive the Shares and delivering the original Notice to
the Company by express courier within three (3) business days of exercise, which
Notice shall indicate the amount of Shares to be received pursuant to that
Notice and the calculation of the purchase price. Each such conversion shall
reduce the principle amount of the Undersigned's initial investment by the
amount stated in the Notice. The term "Fair Market Value' of the Company's
shares of Common Stock shall mean 85% of the average closing bid price of the
Company's Common Stock, as reported by the principal exchange on which the
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Common Stock is traded, the Nasdaq National Market System or the National
Quotation Bureau, Incorporated, as the case may be, for ten consecutive trading
days immediately prior to the date of the Notice. Notwithstanding anything
contained herein to the contrary, the maximum amount of Shares that the
Undersigned can receive pursuant to this Subscription Agreement shall not exceed
19.99% of the Company's currently issued and outstanding shares of Common Stock.
(b) WARRANTS. Each Warrant entitles the Undersigned to purchase one
share of Common Stock at $8.00 per share (the "Warrant Exercise Price")
commencing on the date hereof and continuing for a period of two years from the
date hereof. The Warrants shall be in substantially the same form as attached
hereto as Exhibit A.
3. REPRESENTATIONS AND WARRANTIES.
(i) In order to induce the Company to accept this Subscription
Agreement, the Undersigned hereby represents and warrants to, and covenants
with, the Company as follows:
(a) The Undersigned has received and reviewed the Company's Annual
Reports on Form 10-KSB for the years ended December 31, 1994, 1995 and
1996 and the Form 10-QSB for the quarter ended June 30, 1997 (collectively
the "Disclosure Documents");
(b) The Undersigned has had a reasonable opportunity to ask
questions of and receive answers from the Company concerning the Company,
the Shares and Warrants, and all such questions, if any, have been
answered to the full satisfaction of the Undersigned;
(c) The Undersigned has such knowledge and expertise in financial
and business matters that the Undersigned is capable of evaluating the
merits and risks involved in an investment in the Company;
(d) Except as set forth herein and in the Disclosure Documents, no
representations or warranties have been made to the Undersigned by or on
behalf of the Company or any agent, employee or affiliate of the Company
and in entering into this transaction the Undersigned is not relying upon
any information, other than that contained in the Disclosure Documents and
the results of independent investigation by the Undersigned;
(e) The Undersigned understands that (A) the Shares and Warrants
have not been registered under the Act or the securities laws of any
state, based upon an exemption from such registration requirements for
non-public offerings pursuant to an exemption under the Act; (B) the
Shares and Warrants are and will be "restricted securities", as said term
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is defined in Rule 144 of the Rules and Regulations promulgated under the
Act; (C) the Shares and Warrants may not be sold or otherwise transferred
unless they have been first registered under the Act and all applicable
state securities laws, or unless exemptions from such registration
provisions are available with respect to said resale or transfer; (D)
other than as set forth in the Disclosure Documents and this Subscription
Agreement, the Company is under no obligation to register the Shares or
Warrants under the Act or any state securities laws, or to take any action
to make any exemption from any such registration provisions available; (E)
the certificates for the Shares and Warrants will bear a legend to the
effect that the transfer of the securities represented thereby is subject
to the provisions hereof; and (F) stop transfer instructions will be
placed with the transfer agent for the Shares and Warrants;
(f) The Undersigned is acquiring the Shares and Warrants solely
for the account of the Undersigned, for investment purposes only, and not
with a view towards the resale or distribution thereof;
(g) The Undersigned will not sell or otherwise transfer any of the
Shares or Warrants, or any interest therein, unless and until (i) said
Shares and Warrants shall have first been registered under the Act and all
applicable state securities laws; or (ii) the Undersigned shall have first
delivered to the Company a written opinion of counsel (which counsel and
opinion (in form and substance) shall be reasonably satisfactory to the
Company), to the effect that the proposed sale or transfer is exempt from
the registration provisions of the Act and all applicable state securities
laws;
(h) The Undersigned is a corporation duly organized under the laws
of the British Virgin Islands, has full power and authority to execute and
deliver this Subscription Agreement and to perform the obligations of the
Undersigned hereunder; and this Subscription Agreement is a legally
binding obligation of the Undersigned in accordance with its terms;
(i) The Undersigned is an "accredited investor," as such term is
defined in Regulation D of the Rules and Regulations promulgated under the
Act and the Undersigned understands that the Company has determined that
the exemption from the registration provisions of the Securities Act of
1933, as amended (the "Act"), which is based upon non-public offerings are
applicable to the offer and sale of the Shares and Warrants, based, in
part, upon the representations, warranties and agreements made by the
Undersigned herein and in the this Subscription Agreement; and
(j) Funding of this Subscription Agreement shall be made by wire
transfer of funds on or before 2:30 P.M. on __________, October ____,
1997.
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(ii) In order to induce the undersigned to enter into this Subscription
Agreement, the Company hereby represents and warrants to, and covenants with the
Company, as follows:
(a) The Company is a corporation duly organized under the laws of
Delaware; has full power and authority to execute and deliver this
Subscription Agreement and perform its obligations hereunder, and
this Agreement is a legally binding obligation of the Company in
accordance with its terms;
(b) The Shares and Warrants when issued and paid for in accordance with
the terms of this Subscription Agreement will be validly issued and
fully paid and non-assessable; the holders thereof will not be
subject to any personal liability as such holders; all corporate
action required to be taken for the authorization, issuance and sale
of the Shares and Warrants has been duly and validly taken;
(c) The execution and delivery of the Subscription Agreement does not
(i) conflict with or will conflict with, result in a material breach
of, or constitute a default under (x) the articles or bylaws of the
Company; (y) any material contract, indenture mortgage, deed of
trust or other material agreement or instrument to which the Company
is a party or by which any of the properties or assets of the
Company may be bound; and
(d) The Company has filed with the Securities and Exchange Commission
("SEC") the Disclosure Documents which reports do not contain any
material misstatements of facts or omit to state any material facts.
Since the date of filing of the last such report there has been no
material adverse change in the business or financial condition of
the Company. Except as disclosed in the Disclosure Documents, there
are no pending or threatened litigations or other proceedings which
could have a material adverse effect on the business or financial
condition of the Company.
4. UNDERTAKING TO REGISTER SHARES. The Company shall file a
registration statement for the Shares within thirty days from the date hereof
and will use its best efforts to cause such registration statement to become
effective as soon as reasonably possible.
5. Neither the Undersigned, nor the Undersigned's representatives,
administrators, successors or assigns will offer, sell, transfer, assign,
pledge, hypothecate, encumber or otherwise attempt to directly or indirectly
dispose of any of the Shares, Warrants or shares of Common Stock receivable upon
exercise of the Warrants either pursuant to Rule 144 of the Securities Act of
1933, a registration statement or otherwise, or dispose of any beneficial
interest therein for a period of ninety (90) days following the date of this
Subscription Agreement without the prior written consent of the Company.
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6. The Undersigned understands that this Subscription Agreement is not
binding upon either party unless and until accepted by both parties, which
acceptance is at the sole discretion of each party and is to be evidenced by
each party's execution of this Subscription Agreement where indicated.
7. Each party agrees to indemnify the other and hold it harmless from
and against any and all losses, damages, liabilities, costs and expenses which
it may sustain or incur in connection with the breach by the other party of any
representation, warranty or covenant made by the other party herein.
8. Neither this Subscription Agreement nor any of the rights of the
Undersigned hereunder may be transferred or assigned by the Undersigned.
9. This Subscription Agreement (i) may only be modified by a written
instrument executed by the Undersigned and the Company; and (ii) sets forth the
entire agreement of the Undersigned and the Company with respect to the subject
matter hereof; (iii) shall be governed by the laws of the State of Florida
applicable to contracts made and to be wholly performed therein; and (iv) shall
inure to the benefit of, and be binding upon the Company and the Undersigned and
its respective successors and assigns.
10. All notices or other communications hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally or mailed by
certified or registered mail, return receipt requested, postage prepaid, as
follows: if to the Undersigned, Xxxxxx Xxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxx xx Xxx,
XX00 0XX, and if to the Company, to Aquagenix, Inc., 0000 X.X. 00xx Xxxxxx, Xxxx
Xxxxxxxxxx, Xxxxxxx 00000 or to such other address as the Company or the
Undersigned shall have designated to the other by like notice.
11. JURISDICTIONAL NOTICE
FOR FLORIDA RESIDENTS: EACH FLORIDA RESIDENT WHO SUBSCRIBES FOR THE PURCHASE OF
SECURITIES HEREIN HAS THE RIGHT, PURSUANT TO SECTION 517.061(11)(A)(5) OF THE
FLORIDA SECURITIES ACT, TO WITHDRAW HIS SUBSCRIPTION FOR THE PURCHASE AND
RECEIVE A FULL REFUND OF ALL MOINES PAID WITHIN THREE (3) BUSINESS DAYS AFTER
THE EXECUTION OF THE SUBSCRIPTION AGREEMENT OR PAYMENT FOR THE PURCHASE HAS BEEN
MADE, WHICHEVER IS LATER. WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO
ANY PERSON. TO ACCOMPLISH THIS WITHDRAWAL, A SUBSCRIBER NEED ONLY SEND A LETTER
OR TELEGRAM TO THE COMPANY AT THE ADDRESS SET FORTH IN THIS CONFIDENTIAL TERM
SHEET INDICATING HIS INTENTION TO WITHDRAW.
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FOR RESIDENTS OF ALL STATES: THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN
STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SHARES ARE SUBJECT IN
VARIOUS STATES TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. THE SHARES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OF ADEQUACY OF THE CONFIDENTIAL TERM SHEET. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
12. NO WAIVER. Notwithstanding any of the representations, warranties,
acknowledgements or agreements made herein by the Undersigned, the Undersigned
does not thereby or in any manner waive any rights granted to the Undersigned
under federal or state securities laws.
13. REVOCATION. The Undersigned agrees that he shall not cancel,
terminate or revoke this Subscription Agreement or any agreement of the
Undersigned made hereunder other than as set forth under Section 9 above, and
that this Subscription Agreement shall survive the death or disability of the
Undersigned.
14. MISCELLANEOUS.
(a) This Subscription Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties.
(b) The provisions of this Subscription Agreement shall survive
the execution thereof.
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IN WITNESS WHEREOF, the Undersigned has executed this Subscription
Agreement on the date indicated below.
ALEXANDER ENTERPRISE HOLDINGS
CORP., a British Virgin Islands corporation
By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
Dated: 27 October 1997
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Accepted as of the _27__ day of October, 1997.
AQUAGENIX, INC.
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx, Chief Financial Officer
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