EXHIBIT 10.1
FORM OF SUBSCRIPTION AGREEMENT
SZM Distributors, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Gentlemen:
1. Pursuant to the terms of the offer made by SZM Distributors, Inc. (the
"Company"), the undersigned hereby tenders this subscription and applies for the
purchase of the number of shares ("Shares") of the Company's common stock, $.001
par value per share (the "Common Stock") set forth on the signature page hereto,
at a purchase price of US$1.00 per Share.
The Company is offering 2,850,000 Shares ($2,850,000) (the "Offering") at
$1.00 per Share. The Company will only accept subscriptions on or before January
15, 2004 (the "Offering Period"). In the event that less than 2,850,000 Shares
are tendered for subscription during the Offering Period, the Offering will not
be completed and all subscriptions will be promptly returned to subscribers
without interest or deduction.
The subscriber is sending: (1) an executed copy of this subscription
agreement (this "Subscription Agreement") and (2) either a check in US funds
made out to "Gottbetter & Partners, LLP, as Escrow Agent" for the full amount of
the purchase price for the Shares for which the undersigned is subscribing to:
Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or
The subscriber may wire transfer 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:
Gottbetter & Partners, LLP
[ACCOUNT NAME]
[BANK NAME]
[ADDRESS LINE 1]
[ADDRESS LINE 1]
ABA Routing No.:
Account No.:
Reference:
2. 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 U.S.
Securities and Exchange Commission and 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 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 Shares;
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(d) 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 is applicable to the
offer and sale of the Shares, based, in part, upon the representations,
warranties and agreements made by the undersigned herein;
(e) 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;
(f) 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; and
(g) 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 this
Subscription Agreement between the Company and the undersigned, 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;
(ii) (A) The undersigned is not a U.S. person and is not acquiring
the Shares for the account of any U.S. person; (B) if a corporation, it is not
organized or incorporated under the laws of the United States; (C) if a
corporation, no director or executive officer is a national or citizen of the
United States; and (D) it is not otherwise deemed to be a "U.S. Person" within
the meaning of 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
and risk and not for the account or benefit of a U.S. Person as defined in
Regulation S and no other 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 understands, acknowledges and agrees that it must
bear the economic risk of its investment in the Shares for an indefinite period
of time and that prior to any such offer or sale, the Company may require, 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
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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.
(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 purpose 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.
(h) The undersigned is not an Affiliate of the Company. "Affiliate"
shall mean any person that, directly or indirectly, controls, is controlled by
or is under common control with the Company. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with") shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of the Company, whether through the ownership of voting
securities or by contract or otherwise.
(i) After the purchase of the 2,850,000 Shares in the Offering, the
undersigned will not beneficially own more than five percent (5%) of the
outstanding shares of Common Stock of the Company. For these purposes,
beneficial ownership shall be defined and calculated in accordance with Rule
13d-3, promulgated under the Securities Exchange Act of 1934, as amended.
(j) 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.
3. 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. The undersigned
further understands that all the offering proceeds will be placed in escrow with
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Gottbetter & Partners, LLP, the escrow agent. 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.
4. Gottbetter & Partners ("G&P"), 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.
G&P has merely prepared this Subscription Agreement to set forth the information
supplied by the management of the Company, and G&P has not made any independent
evaluation of the factual information which is contained herein. Accordingly,
G&P makes no representation regarding the veracity of this Subscription
Agreement or any other materials distributed to the undersigned.
5. With regard to the offering, the Company has entered into a non-binding
letter of intent with Carnavon Trust Reg., ("Carnavon Trust") Xxxxxxxxxxxx 00,
P.O. Box 461, FL-9490, Vaduz, in which Carnavon Trust will act as placement
agent. In return for the Services, Carnavon Trust will receive from the Company:
(a) 300,000 shares of the Company's common stock as compensation for
the placement of the Offering payable upon closing of the Offering;
6. 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.
7. 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.
8. 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 2:1 reverse stock split, a holder of 100,000 Shares
will be affected as follows:
Pre-Split Ownership:
100,000 Shares
..
Post-Split Ownership:
50,000 Shares
9. 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.
10. Neither this Subscription Agreement nor any of the rights of the
undersigned hereunder may be transferred or assigned by the undersigned.
11. 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.
12. 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.
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13. 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 SZM Distributors, Inc., 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.
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SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this ______ day of January, 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
(AllSubscribers 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):
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TENANTS-IN-COMMON JOINT TENANTS WITH RIGHT OF COMMUNITY PROPERTY
(Both Parties must 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 SZM Distributors, Inc. this
____ day of __________________, 2003, for __________________________ Shares.
SZM DISTRIBUTORS, INC.
By:
---------------------------------
Name:
Title:
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