EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
TNX Television Holdings, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Ladies and Gentlemen:
1. TNX Television Holdings, Inc. (the "Company") is offering up to
5,600,000 Shares of the Company's common stock, $.001 par value per share,
("Common Stock"), at U.S. $1.25 per share (the "Shares"), for an aggregate total
of up to U.S. $7,000,000 (the "Offering"). The Offering shall commence on
February 12, 2004 and will continue for a period of up to 30 days (which period
may be extended by up to an additional 30 days) (the "Offering Period").
Pursuant to the terms of the Offering, the undersigned hereby tenders this
subscription and applies for the purchase of the number of Shares set forth on
the signature page hereto.
2. The undersigned shall send: (i) an executed copy of this subscription
agreement (the "Subscription Agreement") and (ii) either (a) a check in U.S.
funds made payable to, "TNX Television Holdings, Inc." for the full amount of
the purchase price for the Shares for which the undersigned is subscribing, to:
TNX Television Holdings, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Chief Financial Officer
or
(b) a wire transfer of immediately available U.S. funds for the full
amount of the purchase price of the Shares for which the undersigned is
subscribing plus all wire transfer fees to Canaccord Capital (Europe) Limited,
as receiving agent:
Bank Name: XX Xxxxxx Chase, New York
Royal Bank of Canada, Toronto
ABA Number: _______________
Account Name: Canaccord Capital Europe Limited
Account No.: 095914098539
Reference: [Investor's Name]
If the purchase price is paid by wire transfer, the undersigned shall: (i)
include the investor's name in the wire transfer instructions; (ii) request from
the bank or other financial institution that is originating the transfer the
federal wire number with respect to the subscription and retain that number for
future reference; and (iii) deliver a properly completed and executed copy of
this Subscription Agreement to TNX Television Holdings, Inc., 0000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxx,
Chief Financial Officer prior to initiating the wire transfer.
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As soon as possible after the Company's receipt and acceptance of this
subscription and collection of the purchase price, the Company will issue one or
more certificates for the Shares subscribed for by the undersigned together with
a copy of this Subscription Agreement countersigned by the Company.
3. Representations and Warranties. In order to induce the Company to
accept this subscription, the undersigned hereby represents and warrants to, and
covenants with, the Company as follows:
(a) The undersigned has received and carefully reviewed such
information and documentation relating to the Company that the undersigned has
requested, including without limitation, the Company's filings with the United
States Securities and Exchange Commission (the "Commission") and the Company's
Confidential Private Placement Memorandum dated as of February 12, 2004 (the
"Offering Memorandum").
(b) The undersigned has had a reasonable opportunity to ask
questions of and receive answers from the Company concerning the Company and the
Offering, and all such questions, if any, have been answered to the full
satisfaction of the undersigned.
(c) The undersigned understands that the Company has determined that
the exemption from the registration provisions of the Securities Act of 1933, as
amended (the "Securities Act"), provided by Regulation S promulgated under the
Securities Act ("Regulation S") is applicable to the offer and sale of the
Shares, based, in part, upon the representations, warranties and agreements made
by the undersigned herein.
(d) Except as set forth herein, no representations or warranties
have been made to the undersigned by 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 the results of independent
investigation by the undersigned.
(e) The undersigned 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.
(f) Regulation S.
(i) The undersigned understands and acknowledges that: (A) the
Shares acquired pursuant to this Subscription Agreement have not been registered
under the Securities Act and are being sold in reliance upon an exemption from
registration afforded by Regulation S; and that such Shares have not been
registered with any state securities commission or authority; (B) pursuant to
the requirements of Regulation S, the Shares may not be transferred, sold or
otherwise exchanged unless in compliance with the provisions of Regulation S
and/or pursuant to registration under the Securities Act, or pursuant to an
available exemption thereunder; and (C) other than as set forth in Section 4 of
this Subscription Agreement, the Company is under no obligation to register the
Shares under the Securities Act or any state securities law, or to take any
action to make any exemption from any such registration provisions available.
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(ii) If the undersigned is: (A) an individual, the undersigned
represents and warrants that he or she is not a U.S. person and is not acquiring
the Shares for the account of any U.S. person; (B) a corporation, the
undersigned represents and warrants that it is not organized or incorporated
under the laws of the United States; and (C) a corporation, the undersigned
represents and warrants that no director or executive officer is a national or
citizen of the United States; The undersigned further represents and warrants
that he, she or it is not otherwise deemed to be a U.S. Person. For purposes of
this Subscription agreement, the term "U.S. Person" shall have the meaning
ascribed it such term pursuant to Regulation S.
(iii) The undersigned, if not an individual, was not formed
specifically for the purpose of acquiring the Shares purchased pursuant to this
Subscription Agreement.
(iv) The undersigned is purchasing the Shares for its own
account for investment only and has no intention of selling or distributing the
Shares and no other person, including, without limitation, a U.S. Person, has
any interest in or participation in the Shares or any right, option, security
interest, pledge or other interest in or to the Shares. The undersigned
recognizes that an investment in the Shares involves a high degree of risk,
including a risk of total loss of the undersigned. The undersigned understands,
acknowledges and agrees that it must bear the economic risk of its investment in
the Shares for an indefinite period of time and has knowledge and experience in
financial and business matters such that it is capable of evaluating the risks
of the investment in the Shares and the undersigned understands, acknowledges
and agrees that prior to any such offer or sale, the Company may require,
subject to the fulfillment of the Company's obligations under Section 4 of this
Subscription Agreement, as a condition to effecting a transfer of the Shares, an
opinion of counsel, acceptable to the Company, as to the registration or
exemption therefrom under the Securities Act and any state securities acts, if
applicable
(v) The undersigned will, after the expiration of the
Restricted Period, as set forth under Regulation S Rule 903(b)(3)(iii)(A),
offer, sell, pledge or otherwise transfer the Shares only in accordance with
Regulation S, or pursuant to an available exemption under the Securities Act
and, in any case, in accordance with applicable state securities laws. The
undersigned covenants that neither it nor any affiliate, nor any other person or
entity acting on its or their behalf, has the intention of entering, or will
enter into any hedging transaction in violation of the provisions of Regulation
S. The transactions contemplated by this Subscription Agreement have neither
been pre-arranged with a purchaser who is in the United States or who is a U.S.
Person, nor are they part of a plan or scheme to evade the registration
provisions of the United States federal securities laws.
(vi) The offer leading to the sale evidenced hereby was made
in an "offshore transaction." For purposes of Regulation S, the undersigned
understands that an "offshore transaction" as defined under Regulation S is any
offer or sale not made to a person in the United States and either (A) at the
time the buy order is originated, the purchaser is outside the United States, or
the seller or any person acting on his behalf reasonably believes that the
purchaser is outside the United States; or (B) for purposes of (1) Rule 903 of
Regulation S, the transaction is executed in, or on or through a physical
trading floor of an established foreign exchange that is located outside the
United States or (2) Rule 904 of Regulation S, the transaction is executed in,
on or through the facilities of a designated offshore securities market, and
neither the seller nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United States.
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(vii) Neither the undersigned nor any affiliate of the
undersigned or any person acting on its behalf, has made or is aware of any
"directed selling efforts" in the United States, which is defined in Regulation
S to be any activity undertaken for the purpose of, or that could reasonably be
expected to have the effect of, conditioning the market in the United States for
any of the Shares being purchased hereby.
(viii) The undersigned understands that the Company is the
seller of the Shares which are the subject of this Subscription Agreement, and
that, for purposes of Regulation S, a "distributor" is any underwriter, dealer
or other person who participates, pursuant to a contractual arrangement, in the
distribution of securities offered or sold in reliance on Regulation S and that
an "affiliate" is any partner, officer, director or any person directly or
indirectly controlling, controlled by or under common control with any person in
question. The undersigned agrees that it will not, during the Restricted Period
set forth under Rule 903(b)(iii)(A), act as a distributor, either directly or
though any affiliate, nor shall it sell, transfer, hypothecate or otherwise
convey the Shares other than to a non-U.S. Person.
(ix) The undersigned acknowledges that the Shares will bear a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
OFFERED AND SOLD IN AN "OFFSHORE TRANSACTION" IN
RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER
THAN IN ACCORDANCE WITH REGULATION S, PURSUANT TO
REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY. THE
SHARES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE
SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH
TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE
SECURITIES ACT.
(g) Neither the undersigned, nor any affiliate of the undersigned or
any person acting on its behalf, has recently sold shares of unregistered Common
Stock of the Company.
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(h) If the undersigned is an individual, the undersigned certifies
that he or she has not been designated a "suspected terrorist" as defined in
Executive Order 13224. If the undersigned is a corporation, trust, partnership,
limited liability company or other organization, the undersigned certifies that
the undersigned has not been designated, and is not owned or controlled by, a
"suspected terrorist" as defined in Executive Order 13224. The undersigned
hereby acknowledges that the Company seeks to comply with all applicable laws
covering money laundering and related activities. In furtherance of those
efforts, the undersigned hereby represents, warrants and agrees that: (a) none
of the cash or property that the undersigned will pay or will contribute to the
Company has been or shall be derived from, or related to, any activity that is
deemed criminal under United States law; and (b) no contribution or payment by
the undersigned to the Company, to the extent that they are within the
undersigned's control, shall cause the Company to be in violation of the United
States Bank Secrecy Act, the United States Money Laundering Control Act of 1986
or the United States International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001. The undersigned shall promptly notify the Company if any
of these representations ceases to be true and accurate regarding the
undersigned. The undersigned agrees to provide the Company any additional
information regarding the undersigned that the Company deems necessary or
convenient to ensure compliance with all applicable laws concerning money
laundering and similar activities. The undersigned understands and agrees that
if at any time it is discovered that any of the foregoing representations are
incorrect, or if otherwise required by applicable law or regulation related to
money laundering similar activities, the Company may undertake appropriate
actions to ensure compliance with applicable law or regulation, including but
not limited to segregation and/or redemption of the undersigned's investment in
the Company. The undersigned further understands that the Company may release
confidential information about the undersigned and, if applicable, any
underlying beneficial owners, to proper authorities if the Company, in its sole
discretion, determines that it is in the best interest of the Company in light
of relevant rules and regulations under the laws set forth in subsection (b)
above.
(i) The undersigned understands that if the maximum amount of the
Shares offered pursuant to the Offering are not subscribed for, or if certain
assumptions contained in the Company's business plan prove to be incorrect, the
Company may have inadequate funds to fully develop its business and may need
additional financing or other capital investments to fully implement its
business plan.
4. (a) The undersigned understands that this subscription is not binding
upon the Company until the Company accepts it, which acceptance is at the sole
discretion of the Company and is to be evidenced by the Company's execution of
this Subscription Agreement where indicated. This Subscription Agreement shall
be null and void if the Company does not accept it as aforesaid. In the event
the Company does not accept the Offering proceeds, the Offering will not be
completed and all Offering proceeds will thereafter be promptly returned to
investors without interest or deduction.
(b) Subject to applicable state securities laws, the subscription
delivered to the Company by the undersigned pursuant to this Subscription
Agreement is not subject to revocation by the undersigned, but may be rejected
by the Company, in whole or in part, in the Company's sole discretion, in which
event the purchase price and execution copy of the Subscription Agreement
submitted will be returned (by mail) to the undersigned without interest or
deduction within 15 business days thereafter.
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5. Registration Rights. In order to induce the undersigned to purchase the
Shares, the Company agrees as follows:
(i) On the 90th day following the Closing Date (the "Filing
Date"), the Company shall prepare and file with the Commission a "resale"
registration statement (the "Registration Statement") covering the Shares for an
offering to be made on a continuous basis pursuant to Rule 415 of the Securities
Act. The Registration Statement shall be on Form S-1 (except if the Company is
not then eligible to register for resale the Shares on Form S-1, in which case
such registration shall be on another appropriate form in accordance herewith).
(ii) If the Registration Statement is not filed on or prior to
the Filing Date, the Company shall pay, as damages to the undersigned, an amount
equal to 15% of the investment of the undersigned in the Shares, payable in
additional shares of Common Stock valued at $1.25 per share.
6. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. ("Xxxxx Xxxxx"),
our counsel, has neither conducted due diligence nor confirmed any of the
information which is contained in this Subscription Agreement or any other
materials distributed to the undersigned. Xxxxx Xxxxx has merely prepared this
Subscription Agreement to set forth the information supplied by the management
of the Company, and Xxxxx Xxxxx has not made any independent evaluation of the
factual information which is contained herein. Accordingly, Xxxxx Xxxxx makes no
representation regarding the veracity of this Subscription Agreement or any
other materials distributed to the undersigned.
7. With regard to the Offering, the Company has entered into an engagement
agreement with Canaccord Capital (Europe) Limited, ("Canaccord"), 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxx, X0X 0XX, under which Canaccord will act as receiving
agent for the Offering. Canaccord will receive from the Company a fee consisting
of five percent of the gross proceeds raised in the Offering payable upon
closing of the Offering, regardless of whether investors to whom Canaccord
introduced the Company actually purchase Shares in the Offering.
8. The Company has agreed to list the Shares for trading on the AIM as
soon as practicable after the closing of the Offering, subject to the approval
of the London Stock Exchange.
9. The undersigned understands that the Company may, in its sole
discretion, reject this subscription, in whole or in part, and/or reduce this
subscription in any amount and to any extent, whether or not pro rata reductions
are made of any other investor's subscription.
10. The Shares are subject to standard anti-dilution provisions in the
event of forward or reverse stock splits or recapitalizations. For example, if
the Company engages in a two for one reverse stock split, a holder of 100,000
Shares will be affected as follows:
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Pre-Split Ownership:
100,000 Shares
Post-Split Ownership:
50,000 Shares
11. The undersigned agrees to indemnify the Company 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 undersigned
of any representation, warranty or covenant made by the undersigned.
12. Neither this Subscription Agreement nor any of the rights of the
undersigned hereunder may be transferred or assigned by the undersigned.
13. Except as otherwise provided herein, this Subscription Agreement (i)
may only be modified by a written instrument executed by the undersigned and the
Company; (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 New York 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 their respective heirs, legal representatives,
successors and permitted assigns.
14. Unless the context otherwise requires, all personal pronouns used in
this Subscription Agreement, whether in the masculine, feminine or neuter
gender, shall include all other genders.
15. 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, to the address set forth on the signature page
hereto; and if to the Company, to TNX Xxxxxxxxxx Xxxxxxxx, Xxx.,0000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: President or to
such other address as the Company or the undersigned shall have designated to
the other by like notice.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this ______ day of _________________ 2004.
Number of Shares Subscribed for ___________________________
ORGANIZATION SIGNATURE: INDIVIDUAL SIGNATURE:
______________________________________
Print name of Organization Signature
By: ____________________________ ______________________________________
Name: Print Name
Title:
______________________________________
Additional Signature of Joint Owner
____________________________________
Print Name
(ALL SUBSCRIBERS SHOULD PLEASE PRINT INFORMATION BELOW EXACTLY
AS YOU WISH IT TO APPEAR IN THE RECORDS OF THE COMPANY)
_______________________________ ______________________________________
Name Social Security Number of Individual
or other Taxpayer I.D. Number
Address: Address for notices if different:
_______________________________ ______________________________________
Number and Street Number and Street
_______________________________ ______________________________________
City State Zip Code City State Zip Code
Please check the box to indicate form of ownership (if applicable):
--------------------------------------------------------------------------------
TENANTS-IN-COMMON [_] JOINT TENANTS WITH RIGHT COMMUNITY PROPERTY [_]
(Both Parties must OF SURVIVORSHIP [_] (Both Parties must
sign `above) (Both Parties must sign above)
sign above)
--------------------------------------------------------------------------------
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ACCEPTANCE OF SUBSCRIPTION
The foregoing subscription is hereby accepted by TNX Television Holdings,
Inc. this ____ day of __________________, 2004, for __________________________
Shares.
TNX TELEVISION HOLDINGS, INC.
By: _____________________________
Name:
Title:
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