EXHIBIT 10.20
FORM OF SECURITIES PURCHASE AGREEMENT
Print Name of Subscriber:
Number of Units Subscribed For:
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SUBSCRIPTION AGREEMENT
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For the Purchase of Units
of
Electronic Game Card, Inc.
The undersigned (sometimes also referred to as the "subscriber") hereby
subscribes for the number of Units (the "Units" or "Securities") listed on the
signature page with each Unit consisting of 25,000 shares of common stock, $.001
par value ("Common Stock"), of Electronic Game Card, Inc., a Nevada corporation
(the "Company") and one Common Stock Purchase Warrant ("Warrant"), at a purchase
price of $25,000 per Unit. Each Warrant entitles the holder thereof to purchase
12,500 shares of Common Stock at a purchase price of $1.00 per share, subject to
adjustment in certain circumstances, at any time commencing upon issuance and
thereafter until the third anniversary of the date of issuance. The Warrant will
be evidenced by a common stock purchase warrant containing anti-dilution
provisions and other terms and conditions customarily contained in Warrant
agreements and shall have a mandatory call if our Common Stock trades at $6.00
or more for a minimum of sixty (60) consecutive days on the Over-The-Counter
Bulletin Board or other exchange on which our Common Stock trades. The Units
will be offered on a best efforts basis. The Units shall be offered only to
"Accredited Investors", as such term is defined under Rule 501(a) of the
Securities Act of 1933 (the "Act"), including without limitation entities within
such definition, without registration, pursuant to the exemption from
registration created by Regulation D under the Act. The Offering will commence
on the date of the "Offering Documents", as hereinafter defined, and shall
terminate on January 14, 2004, unless extended by the Company, at our sole
discretion, without notice to any Subscriber (the "Offering Period"). Terms not
herein defined shall have the meanings stated in the Offering Documents. The
undersigned agrees to pay the purchase price listed on the signature page as a
subscription for the Units being purchased hereunder. The entire purchase price
is due and payable upon the execution of this Subscription Agreement, and shall
be paid by check, subject to collection, or by wire transfer, made payable to
the order of City National Bank, Escrow Agent for Electronic Game Card, Inc. The
undersigned acknowledges that City National Bank is acting solely as Escrow
Agent in connection with the offering of the Units and makes no recommendation
with respect thereto. City National Bank has made no investigation regarding the
offering, the Company or any other person or entity involved in the offering.
The Company and the Placement Agent shall have the right to reject this
subscription in whole or in part. Upon receipt and acceptance by the Company of
subscriptions to purchase 40 Units, the Company will hold a closing on and issue
the corresponding Units ("First Closing"). As additional subscriptions are
received and accepted by the Company and Placement Agent, the Company will hold
additional closings as the Company and Placement Agent deem necessary until it
has received and accepted subscriptions for the entire offering or the
Termination Date, whichever occurs first. The undersigned acknowledges that the
Units being purchased hereunder are not registered under the 1933 Act, or the
securities laws of any State, that absent an exemption from registration
contained in those laws, the issuance and sale of the Units would require
registration, and that the Company's reliance upon such exemption is based upon
the undersigned's representations, warranties, and agreements contained in the
Offering Materials.
1. The undersigned represents, warrants, and agrees as follows:
(a) The undersigned agrees that this Subscription Agreement is and shall be
irrevocable.
(b) The undersigned has carefully read this Subscription Agreement and the
Private Placement Memorandum dated December 11, 2003 (the "Offering
Materials"), 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
Materials and to obtain such additional written 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 desires in order to evaluate the investment.
The undersigned further acknowledges that he or she fully understands
the Offering Materials, and the undersigned has had the opportunity to
discuss any questions regarding any of the Offering Materials with his
or her counsel or other advisor. Notwithstanding the foregoing, the
only information upon which the undersigned has relied is that set
forth in the Offering Materials and his or her own independent
investigation. The undersigned acknowledges that the undersigned has
received no representations or warranties from the Company, the
Placement Agent, or their respective officers, directors, stockholders,
employees or agents in making this investment decision other than as
specifically set forth in the Offering Materials.
(c) The undersigned is aware that the purchase of the Units is a
speculative investment involving a high degree of risk and that there
is no guarantee that the undersigned will realize any gain from this
investment, and that the undersigned could lose the total amount of the
undersigned's investment. The undersigned acknowledges that the
undersigned has specifically and carefully reviewed and is aware of all
of the risk factors related to the purchase of Units.
(d) The undersigned understands that no federal or state agency or
authority has made any finding or determination regarding the fairness
of this Offering of the Units for investment, or any recommendation or
endorsement of this Offering of the Units.
(e) The undersigned is purchasing the Units for the undersigned's own
account, with the intention of holding the Units, with no present
intention of dividing or allowing others to participate in this
investment or of reselling or otherwise participating, directly or
indirectly, in a distribution of the Units, and shall not make any
sale, transfer, or pledge thereof without registration under the 1933
Act and any applicable securities laws of any state or other
jurisdiction or unless an exemption from registration is available
under those laws to the satisfaction of the Company and its counsel.
(f) The undersigned represents that the undersigned, if an individual, has
adequate means of providing for his or her current needs and personal
and family contingencies and has no need for liquidity in this
investment in the Units. The undersigned represents that the
undersigned is an "Accredited Investor" as defined in Rule 501(a) of
Regulation D promulgated under the 1933 Act, as evidenced by meeting at
least one of the following standards:
(i) the Investor is a natural person and had individual income
(i.e., not including, if applicable, income of the Investor's
spouse) in excess of $200,000 in the two previous years and
reasonably expects to have income in excess of $200,000 in the
present year, or he, she and his or her spouse had joint
income in excess of $300,000 in the two previous years and
reasonably expect to have joint income of $300,000 in the
present year;
(ii) the Investor is a natural person and his or her net worth at
the time of his or her purchase of the Units (i.e., excess of
total assets over total liabilities), inclusive of home, home
furnishings and automobiles, either individually or jointly
with his or her spouse, exceeds $1,000,000;
(iii) the Investor is an organization defined in Section 501(c) (3)
of the Internal Revenue Code, business trust, partnership, or
corporation with total assets in excess of $5,000,000, which
was not formed for the specific purpose of acquiring the
Units;
(iv) any trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Units, whose
purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii);
(v) the Investor is an employee benefit plan within the meaning of
ERISA and (i) the Investor's investment decision is made by a
plan fiduciary, as defined in Section 3(21) of ERISA, that is
either a bank, savings and loan association, insurance
company, or registered investment advisor, (ii) the Investor's
total assets are in excess of $5,000,000 or (iii), if a
self-directed plan, the Investor's investment decisions are
made solely by persons who are Accredited Investors;
(vi) the Investor is a bank as defined in Section 3(a)(2) of the
Securities Act; any savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities
Act whether acting in its individual or fiduciary capacity;
any broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; an insurance company as
defined in Section 2(13) of the Securities Act; an investment
company registered under the Investment Company Act of 1940,
as amended; a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958; any plan
established and maintained by a state, its political
subdivisions, or any agency or instrumentality thereof, for
the benefit of its employees, if such plan has total assets in
excess of $5,000,000; or a private business development
company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940; or
(vii) the Investor is an entity in which all of the equity owners
would qualify as "Accredited Investors." The undersigned has
no reason to anticipate any material change in his or her
personal financial condition for the foreseeable future.
(g) The undersigned ahs truthfully completed the Confidential Purchaser
Questionnaire included in the Offering Materials.
(h) The undersigned is financially able to bear the economic risk of this
investment, including the ability to hold the Units indefinitely or to
afford a complete loss of his or her investment in the Units.
(i) The undersigned represents that the undersigned's overall
commitment to investments which are not readily marketable is
not disproportionate to the undersigned's net worth, and the
undersigned's investment in the Units will not cause such
overall commitment to become excessive. The undersigned
understands that the statutory basis on which the
(ii) Units are being sold to the undersigned and others would not
be available if the undersigned's present intention were to
hold the Units for a fixed period or until the occurrence of a
certain event. The undersigned realizes that in the view of
the Securities and Exchange Commission, a purchase now with a
present intent to resell by reason of a foreseeable specific
contingency or any anticipated change in the market value, or
in the condition of the Company, or that of the industry in
which the business of the Company is engaged or in connection
with a contemplated liquidation, or settlement of any loan
obtained by the undersigned for the acquisition of the Units,
and for which such Units may be pledged as security or as
donations to religious or charitable institutions for the
purpose of securing a deduction on an income tax return,
would, in fact, represent a purchase with an intent
inconsistent with the undersigned's representations to the
Company and the Securities and Exchange Commission would then
regard such sale as a sale for which the exemption from
registration is not available. The undersigned will not
pledge, transfer or assign this Subscription Agreement, or any
interest herein or any obligation or right hereunder without
first obtaining the written consent of the Company and the
Placement Agent.
(j) The undersigned represents that the funds provided for this investment
are either separate property of the undersigned, community property
over which the undersigned has the right of control, or are otherwise
funds as to which the undersigned has the sole right of management.
(k) FOR PARTNERSHIPS, CORPORATIONS, TRUSTS, OR OTHER ENTITIES ONLY: If the
undersigned is a partnership, corporation, trust or other entity,
(i) the undersigned has enclosed with this Subscription Agreement
appropriate evidence of the authority of the individual
executing this Subscription Agreement to act on its behalf
(e.g., if a trust, a certified copy of the trust agreement; if
a corporation, a certified corporate resolution authorizing
the signature and a certified copy of the articles of
incorporation; or if a partnership, a certified copy of the
partnership agreement),
(ii) the undersigned represents and warrants that it was not
organized or reorganized for the specific purpose of acquiring
the Units,
(iii) the undersigned has the full power and authority to execute
this Subscription Agreement on behalf of such entity and to
make the representations and warranties made herein on its
behalf, and
(iv) this investment in the Company has been affirmatively
authorized, if required, by the governing board of such entity
and is not prohibited by the governing documents of the
entity. (l) The address shown under the undersigned's
signature at the end of this Subscription Agreement is the
undersigned's principal residence if he or she is an
individual or its principal business address if a corporation
or other entity. (m) The undersigned has such knowledge and
experience in financial and business matters as to be capable
of evaluating the merits and risks of an investment in the
Units. (n) The undersigned acknowledges that the certificates
for the securities comprising the Units which the undersigned
will receive will contain a legend substantially as follows:
THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED
EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF SUCH LAWS IS AVAILABLE.
The undersigned further acknowledges that stop transfer orders will be placed
upon the certificates for the Securities comprising the shares of Common Stock
in accordance with the 0000 Xxx.
(o) The undersigned acknowledges that the Company has agreed to include the
shares of Common Stock that are included in the Units and the shares of
Common Stock underlying the Warrants (the "Warrant Shares") (with such
shares of Common Stock and warrant Shares being collectively referred
to as the "Securities") in a registration statement to be filed with
the Securities and Exchange Commission (the "Commission") within
forty-five (45) days from the last Closing pursuant to the Offering
(the "Registration Statement") and to use our best commercially
reasonable efforts to have such Registration Statement declared
effective by the Commission within ninety (90) days from the final
Closing. The Company shall use its good faith efforts to keep such
Registration Statement continuously effective as long as the delivery
of a prospectus thereunder is required under the Act and its
regulations [including but not limited to Rule 144 thereunder or its
successor regulations ("Rule 144")] in connection with the disposition
of the Securities; provided, that it is agreed and acknowledged that
such obligation of the Company to maintain the effectiveness of the
Registration Statement shall cease upon the ability of the subscribers
to sell or otherwise dispose of all of the Securities covered by the
Registration Statement in a single three (3) month period in compliance
with Rule 144; provided further, that notwithstanding the Company's
obligation to maintain the effectiveness of the Registration Statement
pursuant to the immediately preceding proviso, and notwithstanding the
duration of any Blackout Period or periods of Suspension, such
obligation to maintain the effectiveness of the Registration Statement
shall cease under all circumstances no later than the third anniversary
of the date of the final Closing of the Offering (the "Final Date").
(p) The Company may delay the filing or the effectiveness of the
Registration Statement for a period not to exceed 90 days (a "Blackout
Period") if the Board of Directors of the Company, in its reasonable
judgment, determines that such registration would interfere with any
pending material financing, acquisition, corporate reorganization or
any other material corporate development involving the Company or any
of its subsidiaries or would require premature disclosure thereof;
provided, however, that the aggregate number of days included in all
Blackout Periods during any consecutive 12 months shall not exceed 90
days.
(q) The Company agrees to pay all Registration Expenses in connection with
the Registration Statement. All Selling Expenses relating to Securities
registered on behalf of the subscriber pursuant to the Registration
Statement shall be borne by the subscriber. For purposes of this
Subscription Agreement, "Registration Expenses" shall mean (i) all
registration, listing, qualification and filing fees, (ii) fees and
disbursements of counsel for the Company, (iii) accounting fees
incident to any such registration, (iv) blue sky fees and expenses, (v)
all expenses of any persons in preparing or assisting in preparing,
printing, distributing, mailing and delivering the Registration
Statement, any prospectus, any underwriting agreements, transmittal
letters, securities sales agreements, securities certificates and other
documents relating to the performance of and compliance with this
Subscription Agreement, (vi) the expenses incurred in connection with
making road show presentations and holding meetings with potential
investors to facilitate the distribution and sale of the Securities
which are customarily borne by the issuer, (vii) underwriter fees,
excluding discounts and commissions, and (viii) all internal expenses
of the Company (including all salaries and expenses of officers and
employees performing legal or accounting duties); provided, however,
Registration Expenses shall not include any Selling Expenses. For
purposes of this Subscription Agreement, "Selling Expenses" shall mean
underwriting discounts, selling commissions and stock transfer taxes
applicable to the Securities registered on behalf of the subscriber.
(r) The Registration Statement will not be deemed to have become effective
(and the related registration will not be deemed to have been effected)
unless it has been declared effective by the Commission prior to a
request by the subscriber that such Registration Statement be
withdrawn.
(s) At any time or from time to time, the subscriber may elect to have its
Securities sold in an underwritten offering and may select the
investment banker or investment bankers and manager or managers that
will serve as lead and co-managing underwriters with respect to the
offering of its Securities, subject to the consent of the Company which
shall not be unreasonably withheld.
(t) The subscriber agrees, as a condition to the registration obligations
with respect to the subscriber provided herein, to furnish to the
Company such information regarding the subscriber required to be
included in the Registration Statement, the ownership of Securities by
the subscriber and the proposed distribution by the subscriber of such
Securities as the Company may from time to time reasonably request in
writing.
(u) The subscriber agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind which the Company reasonably
regards as requiring subscriber to discontinue sale of the Securities
pursuant to the Registration Statement, the subscriber will forthwith
discontinue disposition of the Securities pursuant to the affected
Registration Statement until the subscriber's receipt of the copies of
any supplemented or amended prospectus as shall be required in the
reasonable opinion of the Company, and, if so directed by the Company,
the subscriber will deliver to the Company (at the expense of the
Company), all copies in its possession, other than permanent file
copies then in the subscriber's possession, of any prospectus covering
such Securities which was current at the time of receipt of such
notice.
2. Indemnification and Contribution with respect to the Registration
Statement.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each person who participates as an underwriter of the
Securities pursuant to the Registration Statement, the subscriber and
their respective partners, directors, officers and employees and each
person, if any, who controls any subscriber or underwriter within the
meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") as follows:
(i) against any and all losses, liabilities, claims, damages,
judgments and reasonable expenses whatsoever, as incurred,
arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement pursuant to which Securities were registered under
the Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
fact contained in any prospectus, including all documents
incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading;
(ii) against any and all losses, liabilities, claims, damages,
judgments and reasonable expenses whatsoever, as incurred, to
the extent of the aggregate amount paid in settlement of any
litigation, investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any other claim
whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the
Company; and
(iii) against any and all reasonable expense whatsoever, as incurred
(including fees and disbursements of counsel), incurred in
investigating, preparing or defending against any litigation,
investigation or proceeding by any governmental agency or
body, commenced or threatened, in each case whether or not
such person is a party, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission; provided, however, that this indemnity
agreement does not apply to the subscriber or underwriter with
respect to any loss, liability, claim, damage, judgment or
expense to the extent arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
prospectus, or the omission or alleged omission therefrom of a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, in any such case made in reliance upon and in
conformity with written information furnished to the Company
by the subscriber or underwriter expressly for use in a
Registration Statement (or any amendment thereto) or any
prospectus (or any amendment or supplement thereto); and
provided further, in the case of an offering that is not an
underwritten offering, the Company will not be liable to the
subscriber under the indemnity agreement in this Section 2(a)
for any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense that arises out of
the subscriber's failure to send or give a copy of the final
prospectus (as its may then be amended or supplemented) to the
person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the
written confirmation of the sale of the Securities to such
person if such statement or omission was corrected in such
final prospectus (as it may then be amended or supplemented)
and the Company has previously furnished copies thereof in
accordance with this Agreement.
(b) Indemnification by the subscriber. The subscriber agrees to indemnify
and hold harmless the Company, and each underwriter and each of their
respective partners, directors, officers and employees (including each
officer of the Company who signed the Registration Statement), and each
person, if any, who controls the Company or any underwriter within the
meaning of Section 15 of the Act, against any and all losses,
liabilities, claims, damages, judgments and expenses described in the
indemnity contained in paragraph (a) of this Section (provided that any
settlement of the type described therein is effected with the written
consent of the subscriber), as incurred, but only with respect to
untrue statements or alleged untrue statements of a material fact
contained in any prospectus or the omissions or alleged omissions
therefrom of a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, in any such case made in reliance upon and in conformity
with written information furnished to the Company by the subscriber
expressly for use in such Registration Statement (or any amendment
thereto) or such prospectus (or any amendment or supplement thereto).
(c) Conduct of Indemnification Proceedings. Each indemnified party or
parties shall give reasonably prompt notice to each indemnifying party
or parties of any action or proceeding commenced against it in respect
of which indemnity may be sought hereunder, but which it or they may
have under this indemnity agreement, except to the extent that the
indemnifying party is materially prejudiced by such failure to give
notice. If the indemnifying party or parties so elects within a
reasonable time after receipt of such notice, the indemnifying party or
parties may assume the defense of such action or proceeding at such
indemnifying party's or parties' expense with counsel chosen by the
indemnifying party or parties and approved by the indemnified party
defendant in such action or proceeding, which approval shall not be
unreasonably withheld; provided, however, that, if such indemnified
party or parties determines in good faith that a conflict of interest
exists and that therefore it is advisable for such indemnified party or
parties to be represented by separate counsel or that, upon advice of
counsel, there may be legal defenses available to it or them which are
different from or in addition to those available to the indemnifying
party, then the indemnifying party or parties shall not be entitled to
assume such defense and the indemnified party or parties shall be
entitled to separate counsel (limited in each jurisdiction to one
counsel for all underwriters and another counsel for all other
indemnified parties under this Subscription Agreement) at the
indemnifying party's or parties' expense. If an indemnifying party or
parties is not so entitled to assume the defense of such action or does
not assume such defense, after having received the notice referred to
in the first sentence of this paragraph, the indemnifying party or
parties will pay the reasonable fees and expenses of counsel for the
indemnified party or parties (limited in each jurisdiction to one
counsel for all underwriters and another counsel for all other
indemnified parties under this Subscription Agreement). No indemnifying
party or parties will be liable for any settlement effected without the
written consent of such indemnifying party or parties, which consent
shall not be unreasonably withheld. If an indemnifying party is
entitled to assume, and assumes, the defense of such action or
proceeding in accordance with this paragraph, such indemnifying party
or parties shall not, except as otherwise provided in this subsection
(c), be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action or
proceeding.
(d) Contribution.
(i) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in
this Section is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its
terms in respect of any losses, liabilities, claims, damages,
judgments and expenses suffered by an indemnified party
referred to therein, each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute
to the amount paid or payable by such indemnified party as a
result of such losses, liabilities, claims, damages, judgments
and expenses in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and of the
subscriber (including, in each case, that of their respective
officers, directors, employees and agents) on the other, in
connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages, judgments or
expenses, as well as any other relevant equitable
considerations. The relative fault of the Company on the one
hand and of the subscriber (including, in each case, that of
their respective officers, directors, employees and agents) on
the other, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company,
on the one hand, or by or on behalf of the Holder, on the
other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party
as a result of the losses, liabilities, claims, damages,
judgments and expenses referred to above shall be deemed to
include, subject to the limitations set forth in paragraph (c)
of this Section, any legal or other fees or expenses
reasonably incurred by such party in connection with
investigating or defending any action or claim.
(ii) The Company and the subscriber agree that it would not be just
and equitable if contribution pursuant to this paragraph (d)
were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable
considerations referred to in sub-paragraph (i) above.
Notwithstanding the provisions of this paragraph (d), in the
case of distributions to the public, the subscriber shall not
be required to contribute any amount in excess of the amount
by which (A) the total price at which the Securities sold by
the subscriber and distributed to the public were offered to
the public exceeds (B) the amount of any damages which the
subscriber has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
(iii) For purposes of this Section, each person, if any, who
controls the subscriber or an underwriter within the meaning
of Section 15 of the Act (and their respective partners,
directors, officers and employees) shall have the same rights
to contribution as the subscriber or underwriter; and each
director of the Company, each officer of the Company who
signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the
Act, shall have the same rights to contribution as the
Company.
3. The undersigned expressly acknowledges and agrees that the Company is
relying upon the undersigned's representation contained in the Offering
Materials.
4. The undersigned is not an officer, director, stockholder, employee of,
or consultant to, the Placement Agent. The undersigned does not have
any direct or indirect affiliation with the Placement Agent or any
other member of the National Association of Securities Dealers, Inc.
5. The undersigned subscriber acknowledges that the undersigned
understands the meaning and legal consequences of the representations
and warranties which are contained herein and hereby agrees to
indemnify, save and hold harmless the Company, the Placement Agent and
their respective officers, directors, partners, employees, agents, and
attorneys from and against any and all claims or actions arising out of
a breach of any representation, warranty or acknowledgment of the
undersigned contained in any of the Offering Materials. Such
indemnification shall be deemed to survive any purchase of the Units
and to include not only the specific liabilities, losses, damages or
obligations with respect to which such indemnity is provided, but also
all reasonable costs, expenses, counsel fees and expenses of settlement
relating thereto, whether or not any such liabilities, losses, damages
or obligations shall have been reduced to judgment.
6. The Company has been duly and validly incorporated and is validly
existing and in good standing as a corporation under the laws of the
State of Nevada. The Company has all requisite power and authority, and
all necessary authorizations, approvals and orders required as of the
date hereof to own its properties and conduct its business and to enter
into this Subscription Agreement and the other Offering Materials and
to be bound by the provisions and conditions hereof or therein.
7. The Placement Agent will receive cash commission equal to 10% of the
gross proceeds of the Units sold in this Offering by the Placement
Agent and payment for certain of their expenses. The Company will also
issue warrants to the Placement Agent (the "Placement Agent Warrants")
to purchase such number of Common Stock as equals 10% of the aggregate
number of shares of Common Stock sold in this Offering by the Placement
Agent. The terms of the Placement Agent Warrants will be the same as
the Warrants sold in this Offering. The commission rate for the cash
and non-cash compensation will be 2% on the sale of Units that result
from introductions by the Company.
8. Except as otherwise specifically provided for hereunder, no party shall
be deemed to have waived any of his or her or its rights hereunder or
under any other agreement, instrument or papers signed by any of them
with respect to the subject matter hereof unless such waiver is in
writing and signed by the party waiving said right. Except as otherwise
specifically provided for hereunder, no delay or omission by any party
in exercising any right with respect to the subject matter hereof shall
operate as a waiver of such right or of any such other right. A waiver
on any one occasion with respect to the subject matter hereof shall not
be construed as a bar to, or waiver of, any right or remedy on any
future occasion. All rights and remedies with respect to the subject
matter hereof, whether evidenced hereby or by any other agreement,
instrument, or paper, will be cumulative, and may be exercised
separately or concurrently.
9. The parties have not made any representations or warranties with
respect to the subject matter hereof not set forth herein, and this
Subscription Agreement, together with any instruments executed
simultaneously herewith, constitutes the entire agreement between them
with respect to the subject matter hereof. All understandings and
agreements heretofore entered into between the parties with respect to
the subject matter hereof are merged in this Subscription Agreement and
any such instrument, which alone fully and completely expresses their
agreement.
10. This Subscription Agreement may not be changed, modified, extended,
terminated or discharged orally, but only by an agreement in writing,
which is signed by all of the parties to this Subscription Agreement.
11. The parties agree to execute any and all such other and further
instruments and documents, and to take any and all such further actions
reasonably required to effectuate this Subscription Agreement and the
intent and purposes hereof.
12. If any provision or any portion of any provision of this Subscription
Agreement or the application of any such provision or any portion
thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision not held invalid
or unenforceable to any person or circumstance shall not be affected
thereby.
13. This Subscription Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. The
execution of this Subscription Agreement may be by actual or facsimile
signature.
14. This Subscription Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without
giving effect to conflicts of law principles and the undersigned hereby
consents to the jurisdiction of the courts of the State of New York
and/or the United States District Court located in New York.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOLLOW]
NUMBER OF UNITS: PURCHASE PRICE: $
Manner in Which Title is to be Held: (check one)
1. _____ Individual
2. _____ Joint Tenants with Right of Survivorship (both parties must sign)
3. _____ Married with Separate Property
4. _____ Community Property
5. _____ Tenants in Common
6. _____ Corporation
7. _____ Partnership
8. _____ XXX of _______________________________________________________________
9. _____ Trust, dated opened __________________________________________________
10. _____ Xxxxx of _____________________________________________________________
11. _____ As a Custodian for ___________________________________________________
under the Uniform Gift to Minors Act of the State of ___________________________
12. _____ Other (please indicate)
I
NDIVIDUAL INVESTORS ENTITY INVESTORS
________________________________________________________________________________
Signature (Individual) Name of Entity, if any
______________________________________ _________________________________________
Signature
____________________________________ Its _____________________________________
Signature (all record holders should sign) Title
______________________________________ _________________________________________
Name(s) Typed or Printed Name Typed or Printed
Address to Which Correspondence Address to Which Correspondence
Should be Directed Should be Directed
______________________________________ _________________________________________
______________________________________ _________________________________________
______________________________________ _________________________________________
City, State and Zip Code City, State and Zip Code
______________________________________ _________________________________________
Social Security Number Tax Identification Number
The foregoing subscription is accepted this ______ day of ____________, 200____,
on behalf of
Electronic Game Card, Inc.
Electronic Game Card, Inc.
By: _______________________________
Name:
Title:
[INSERT PURCHASER QUESTIONNAIRE].
