MILK BOTTLE CARDS INC. SUBSCRIPTION AGREEMENT
c/o
Xxxxxxx X. Xxxx
0000
Xxxx
Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxxxx 00000
Dear
Xx.
Xxxx:
The
undersigned hereby subscribes to purchase _______ units (the “Units”) of
securities, each Unit consisting of one share of Series A Preferred Stock (the
“Series A Preferred”) of Milk bottle Cards Inc., a Nevada corporation (the
“Company”), and one warrant (a “Warrant”) for the purchase of one share of
common stock, par value $.001 per share (the “Common Stock”), of the Company, in
accordance with the following paragraphs. This subscription agreement is one
of
a series of subscription agreements representing an aggregate of up to two
million one hundred thousand dollars of Units (the “Offering”). This
subscription may be rejected in whole or in part by the Company, in its sole
and
absolute discretion for any reason or for no reason. Any questions regarding
this document or the investment described herein should be directed to Xxxxxxx
X. Xxxx, 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000; (000)
000-0000.
1. Purchase.
Subject
to the terms and conditions hereof, the undersigned hereby irrevocably agrees
to
purchase __________ Units at $1.05 per Unit for a total purchase price of
$___________, and tenders such purchase price by means of a check (cashiers,
certified, or personal), money order, or wire transfer made payable to: “Xxxxx
Xxxx LLP Client Trust Account, as Escrow Agent for Milk Bottle Cards
Inc.”
2. Representations
and Warranties of the Undersigned.
The
undersigned hereby makes the following representations and warranties to the
Company, and the undersigned agrees to indemnify, hold harmless, and pay all
judgments of the claims against the Company for any liability or injury,
including, but not limited to, that arising under federal or state securities
laws, incurred as a result of any misrepresentation herein or any warranties
made by the undersigned.
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(a)
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The
undersigned is the sole and true party in interest and is not purchasing
for the benefit of any other
person;
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(b)
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The
undersigned confirms receipt and careful review of all written material
provided by, or on behalf of, the Company in respect of its business
and
prospects, the pending transaction with ForgeHouse LLC, and all
information provided by the Company to its stockholders in its Information
Statement on Schedule 14C. The undersigned understands that all books,
records, and documents of the Company relating to this investment
have
been and remain available for inspection by the undersigned upon
reasonable notice. The undersigned confirms that all documents requested
by the undersigned have been made available, and that the undersigned
has
been supplied with all of the additional information concerning this
investment that has been requested. The undersigned confirms that
he has
obtained sufficient information, in his judgment or that of his
independent purchaser representative, if any, to evaluate the merits
and
risks of this investment. The undersigned confirms that he has had
the
opportunity to obtain such independent legal and tax advice and financial
planning services as the undersigned has deemed appropriate prior
to
making a decision to subscribe for the Units. In making a decision
to
purchase the Units, the undersigned has relied exclusively upon his
experience and judgment, or that of his purchaser representative,
if any,
upon such independent investigations as he, or they, deemed appropriate,
and upon information provided by the Company in writing or found
in the
books, records, or documents of the
Company;
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(c)
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The
undersigned has such knowledge and experience in financial and business
matters that the undersigned is capable of an evaluation of the merits
and
risks of this investment;
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(d)
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The
undersigned is aware that an investment in the Company is highly
speculative and subject to substantial risks. The undersigned is
capable
of bearing the high degree of economic risk and burdens of this venture,
including, but not limited to, the possibility of a complete loss,
the
lack of a sustained and orderly public market, and limited transferability
of the component parts of the Units, which may make the liquidation
of
this investment impossible for the indefinite
future;
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(e)
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The
offer to sell the Units was directly communicated to the undersigned
by
such a manner that the undersigned, or his purchaser representative,
if
any, was able to ask questions of and receive answers from the Company
or
a person acting on its behalf concerning the terms and conditions
of this
transaction. At no time, except in connection and concurrently with
such
communicated offer, was the undersigned presented with or solicited
by or
through any leaflet, public promotional meeting, television advertisement,
or any other form of general
advertising;
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(f)
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The
Units are being acquired solely for the undersigned’s own account, for
investment, and are not being purchased with a view to resale,
distribution, subdivision, or fractionalization
thereof;
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(g)
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The
undersigned understands that the Units and their component parts
have not
been registered under the Securities Act of 1933, as amended (the
“Securities Act”), or any state securities laws, in reliance upon
exemptions from regulation for non-public offerings. The undersigned
understands that the Units and any interest therein may not be, and
agrees
that the Units and any interest therein will not be, resold or otherwise
disposed of by the undersigned unless the Units or the relevant interests
therein are subsequently registered under the Securities Act and
under
appropriate state securities laws or unless the Company receives
an
opinion of counsel satisfactory to it that an exemption from registration
is available;
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(h)
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The undersigned has been informed of and understands the following: |
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(1)
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There
are substantial restrictions on the transferability of the Units
and their
component parts;
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(2)
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No
federal or state agency has made any finding or determination as
to the
fairness for public investment, nor any recommendation nor endorsement,
of
Units or their component parts;
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(i)
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None
of the following information has ever been represented, guaranteed,
or
warranted to the undersigned, expressly or by implication by any
broker,
the Company, or agent or employee of the foregoing, or by any other
person:
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(1)
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The
approximate or exact length of time that the undersigned will be
required
to remain as a holder of the Units or their component
parts;
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(2)
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The
amount of consideration, profit, or loss to be realized, if any,
as a
result of an investment in the
Company;
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(3)
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That
the past performance or experience of the Company, its officers,
directors, associates, agents, affiliates, or employees or any other
person will in any way indicate or predict economic results in connection
with the plan of operations of the Company or the return on the
investment;
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(j)
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The
undersigned has not distributed any information relating to this
investment to anyone other than his purchaser representative, if
any, and
no other person except such personal representative and the undersigned
has used this information;
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(k)
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The
undersigned hereby agrees to indemnify the Company and to hold it
harmless
from and against any and all liability, damage, cost, or expense,
including its attorneys’ fees and costs, incurred on account of or arising
out of:
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(1)
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Any
material inaccuracy in the declarations, representations, and warranties
hereinabove set forth;
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(2)
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The
disposition of the Units or any part thereof by the undersigned,
contrary
to the foregoing declarations, representations, and
warranties;
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(3)
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Any
action, suit, or proceeding based
upon:
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(i)
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the
claim that said declarations, representations, or warranties were
inaccurate or misleading or otherwise cause for obtaining damages
or
redress from the Company; or
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(ii)
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the
disposition of the Units or any part
thereof.
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3. Right
of First Refusal.
The
Company hereby grants to the undersigned the right of first refusal to purchase
a pro rata share of New Securities (as defined in Section 3(a), below) that
the
Company may, from time to time, propose to sell and issue. The undersigned’s pro
rata share, for purposes of this right of first refusal, is a fraction, the
numerator of which is the number of shares of Common Stock (or underlying the
Series A Preferred and underlying the Warrants and assuming full conversion
or
exercise thereof) owned by the undersigned immediately prior to the issuance
of
New Securities and the denominator of which is the total number of shares of
Common Stock outstanding (or underlying the Series A Preferred and underlying
the Warrants and assuming full conversion or exercise thereof) owned by each
of
the subscribers in this Offering (including those owned by the undersigned)
immediately prior to the issuance of New Securities. The undersigned shall
have
a right of over-allotment such that if any other such subscriber fails to
exercise its right to purchase its pro rata share of New Securities, the
undersigned (and each other purchasing subscriber) may purchase the
non-purchasing other subscriber’s portion on a pro rata basis within ten (10)
days from the date such non-purchasing subscriber fails to exercise its right
to
purchase its pro rata share of New Securities. This right of first refusal
shall
be subject to the following provisions:
(a) “New
Securities” shall mean any (x) capital stock of the Company, whether now
authorized or not, (y) rights, options, or warrants to purchase such capital
stock, and (z) securities of any type whatsoever that are, or may become,
convertible into capital stock; provided,
however,
that
the term “New Securities” does not include (i) securities issued in connection
with this Offering; (ii) securities issued upon conversion of the Series A
Preferred issued in this Offering or the exercise of the Warrants granted in
this Offering; (iii) securities issued (other than for cash) in connection
with
a merger, acquisition, or consolidation; (iv) securities issued pursuant to
the
conversion or exercise of convertible or exercisable securities issued or
outstanding on or prior to the date hereof; (v) any borrowings by the Company,
direct or indirect, from financial institutions, whether or not presently
authorized, including any type of loan or payment evidenced by any type of
debt
instrument, provided such borrowings shall be approved by not less than one
of
the directors elected by the holders of the Series A Preferred (if any shall
then hold office); (vi) securities issued to employees, consultants, officers
or
directors of the Company pursuant to any stock option, stock purchase, or stock
bonus plan, agreement, or arrangement approved by the Company’s Board of
Directors; (vii) securities issued in connection with bona fide strategic
license agreements or other partnering arrangements so long as such issuances
are not for the purpose of raising capital and so long as such issuance is
approved by the Company’s Board of Directors, including the affirmative vote of
not less than one of the directors elected by the holders of the Series A
Preferred (if any shall then hold office); (viii) securities issued to vendors
or customers or to other persons in similar commercial situations with the
Company if such issuance is approved by the Company’s Board of Directors,
including the affirmative vote of not less than one of the directors elected
by
the holders of the Series A Preferred (if any shall then hold office); (ix)
securities issued in connection with obtaining lease financing, whether issued
to a lessor, guarantor, or other person; (x) securities issued in a public
offering pursuant to a registration under the Securities Act with an aggregate
offering price to the public of at least $10,000,000; (xi) securities issued
in
connection with any stock split, stock dividend, or recapitalization of the
Company; (xii) securities issued as payment of dividends; and (xiii) any right,
option, or warrant to acquire any security exercisable or convertible into
the
securities excluded from the definition of New Securities pursuant to
subsections (i) through (xiii) above. In addition to the foregoing, the right
of
first offer in this Section 3 shall not be applicable with respect to the
undersigned or any other such subscriber, as applicable, in any subsequent
offering if (i) at the time of such offering, the
undersigned or any other such subscriber, as applicable, is
not an
“accredited investor,” as that term is then defined in Rule 501(a) of the
Securities Act and (ii) such other offering is otherwise being offered only
to
accredited investors.
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(b) In
the
event the Company proposes to undertake an issuance of New Securities, it shall
give the undersigned and each other such subscriber, as applicable, written
notice of its intention, describing the type of New Securities, and their price
and the general terms upon which the Company proposes to issue the same. The
undersigned and each other such subscriber, as applicable, shall have twenty
(20) days after giving of such notice to agree to purchase the undersigned’s or
any other such subscriber’s, as applicable, pro rata share of such New
Securities for the price and upon the terms specified in the notice by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased.
(c) In
the
event the undersigned or any other such subscriber, as applicable, shall fail
to
exercise fully the right of first refusal within such twenty (20)-day period
and
after the expiration of the ten (10)-day period for the exercise of the
over-allotment provisions of this Section 3, the Company shall have sixty (60)
days thereafter to sell or enter into an agreement (pursuant to which the sale
of New Securities covered thereby shall be closed, if at all, within sixty
(60)
days from the date of said agreement) to sell the New Securities with respect
to
which the undersigned’ and each other such subscriber’s, as applicable, right of
first refusal option set forth in this Section 3 was not exercised, at a price
and upon terms no more favorable to the purchasers thereof than specified in
the
Company’s notice pursuant to Section 3(b), above. In the event the Company has
not sold within such sixty (60)-day period or entered into an agreement to
sell
the New Securities in accordance with the foregoing within sixty (60) days
from
the date of such agreement, the Company shall not thereafter issue or sell
any
New Securities, without first again offering such securities to the undersigned
and any other such subscriber, as applicable, in the manner provided in Section
3(b), above.
(d) The
right
of first refusal granted under this Agreement shall expire upon, and shall
not
be applicable to, the sale of Common Stock of the Company to the public effected
pursuant to a registration statement filed with, and declared effective by,
the
Securities and Exchange Commission under the Securities Act, resulting in
aggregate proceeds of more than $10,000,000 and in any event shall expire on
January 22, 2010.
(e) The
right
of first refusal set forth in this Section 3 may not be assigned or transferred,
except that (i) such right is assignable by the undersigned to any wholly owned
subsidiary or parent of, or to any corporation or entity that is, within the
meaning of the Securities Act, controlling, controlled by, or under common
control with, any the undersigned and (ii) such right is assignable between
and
among the undersigned and each other such subscriber, as
applicable.
4. Transferability.
The
undersigned agrees not to transfer or assign the obligations or duties contained
in this Subscription Agreement or any of the undersigned’s interest herein
except to a subsidiary or affiliate of the undersigned. The undersigned agrees
not to sell, transfer, or assign any of its right, title, and interest in and
to
the Units except to a subsidiary or affiliate of the undersigned.
5. Accredited
Investor; non-U.S. Person/Offshore Transaction.
The
undersigned is either an “accredited investor” or is not a “U.S. Person,” as
those terms are defined in Rule 501(c) of Regulation D or in Rule 902(k),
respectively, each promulgated under the Securities Act. If the undersigned
is
not a U.S. Person, the offer or sale of the Units was made in an “offshore
transaction,” as that term is defined in Rule 902(h), as promulgated under the
Securities Act.
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6. Understandings
of the Purchaser.
The
undersigned acknowledges, understands, and agrees that:
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(a)
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The
Company reserves the right to reject all or any part of this subscription
in their sole and absolute discretion for any cause or for no
cause;
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(b)
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The
undersigned will be promptly notified by the Company whether this
subscription has been accepted, either in whole or in part, and if
not
accepted in whole, agrees to accept the return of a proportionate
part of
the funds tendered to the Company as a refund or a return, and in
either
case without interest thereon or deduction therefrom;
and
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(c)
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The
Units and their component parts shall be deemed issued and owned
by the
undersigned upon the Company’s receipt of the purchase price therefor and
its acceptance thereof.
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7. State
Securities Laws.
The
offering and sale of the Units is intended to be exempt from qualification
under
the securities laws of Nevada and ________________ [insert
the state of residence or domicile of the undersigned].
8. Regulation
D.
Notwithstanding anything herein to the contrary, every person or entity who,
in
addition to or in lieu of the undersigned, is deemed to be a “purchaser”
pursuant to Regulation D promulgated under the Securities Act or any state
law,
does hereby make and join in making all of the covenants, representations,
and
warranties made by the undersigned.
9. Acceptance.
Execution and delivery of this Subscription Agreement shall constitute an
irrevocable offer to purchase the Units indicated, which offer may be accepted
or rejected in whole or in part by the Company in its sole and absolute
discretion for any cause or for no cause. Acceptance of this offer by the
Company shall be indicated by its execution hereof.
10. Binding
Agreement.
The
undersigned agrees that the undersigned may not cancel, terminate, or revoke
this Subscription Agreement or any agreement of the undersigned made hereunder,
and that this Subscription Agreement shall survive the death or disability
of
the undersigned and shall be binding upon the heirs, successors, assigns,
executors, administrators, guardians, conservators, or personal representatives
of the undersigned.
11. Choice
of Law; Forum.
Notwithstanding the place where this Subscription Agreement or any counterpart
hereof may be executed by any of the parties hereto, the parties expressly
agree
that all the terms and provisions hereof shall be construed under the laws
of
the State of Nevada and that any actions related hereto shall be brought in
a
court of competent jurisdiction located in Xxxxx County, Nevada.
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IN
WITNESS WHEREOF, the undersigned has executed this Subscription Agreement on
the
date set forth on the signature page.
The
undersigned desires to take title in the Units and their component parts as
an
__________________ [individual, trust, partnership, corporation]. The exact
spelling of name(s) under which title to the Units and their component parts
shall be taken, and the exact location for delivery of the Units and their
component parts, is (please print):
Name(s) __________________________________________________________________
(address) _____________________________
_____________________________
_____________________________
_____________________________
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SIGNATURE
PAGE
Purchase
Price subscribed: $ _____________________ Number
of
Units subscribed: ________________
_________________________________________________________________________________________________
Name
of
Purchaser(s) (Please print or type)
_____________________________
Signature
_____________________________
Signature
Social
Security/Tax Identification Number:
_____________________________
Mailing
Address: _____________________________
_____________________________
_____________________________
_____________________________
Executed
at ______________________,
this
____________ day
of
January, 2008.
(location)
SUBSCRIPTION
ACCEPTED:
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DATE: January
__, 2008
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