Exhibit 2.1
AMPLIDYNE, INC.
SUBSCRIPTION AGREEMENT
Amplidyne, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Name of Subscriber: Phoenix Opportunity Fund II, L.P.
SUBSCRIPTION AGREEMENT
Amplidyne, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
Ladies and Gentlemen:
1. Subscription.
a. I (sometimes referred to herein as the "Investor"), the
undersigned, intending to be legally bound, hereby irrevocably subscribe for and
agree to purchase, on the terms and conditions described herein, the number of
shares of Series C Convertible Preferred Stock (the "Shares") of Amplidyne,
Inc., a Delaware corporation (the "Company") for the aggregate purchase price
set forth on the Subscription Agreement Signature page hereto. The purchase
price per Share is $.3538.
b. At such time as the Company's shareholders approve an increase in
the Company's authorized common stock to at least 70,675,000 or approve a 10 to
1 reverse split of the outstanding common stock, I agree to irrevocably
subscribe for and agree to purchase, on the terms and conditions described
herein, an additional 228,375 Shares of Series C Convertible Preferred Stock of
the Company for the aggregate purchase price of $80,799.
2. Purchase.
a. I hereby tender to the Company (i) a check made payable to the
order of "Amplidyne, Inc." in the amount indicated above, and (ii) one manually
executed copy of this Agreement, The Company will notify me promptly whether my
subscription has been accepted by the Company.
3. Acceptance or Rejection of Subscription.
a. I understand and agree that the Company reserves the right to
reject this subscription for the Shares, in whole or in part, for any reason and
at any time prior to the Closing (as defined below), notwithstanding prior
receipt by me of notice of acceptance of my subscription.
b. In the event of the rejection of this subscription, my
subscription payment will be promptly returned to me without interest or
deduction and this Agreement shall have no force or effect. In the event my
subscription is accepted and the offering for the Shares is completed, the funds
specified above shall be released to the Company.
4. Closing. The closing and consummation of the transactions contemplated
by this Agreement ("Closing") and this offering for the Shares may occur only
after the Company notifies me of the acceptance of my subscription, and the
Company has received and accepted (i) a fully executed original of this
Agreement and (ii) payment for the Shares in accordance with paragraphs 1 and 2
of this Agreement.
5. Disclosure.
a. Because this offering of the Shares is limited to accredited
investors as defined in Section 2(15) of the Securities Act of 1933, as amended
(the "Securities Act"), and Rule 501 promulgated thereunder, in reliance upon
the exemption contained in Sections 3(b) or 4(2) of the Securities Act and
applicable state securities laws, the Shares are being sold without registration
under the Securities Act. I acknowledge receipt of (1) the Company's Annual
Report on Form 10KSB for the fiscal year ended December 31, 2002, and the
Company's Quarterly Reports on Form 10QSB for the periods ending on March 31,
2003, June 30, 2003 and September 30, 2003 ("Documents") and represent that I
have carefully reviewed and understand such Documents. I have received all
information and materials regarding the Company that I have requested.
b. I fully understand that the Shares are speculative investments
which involve a high degree of risk and possible loss of my entire investment. I
fully understand the nature of the risks involved in purchasing the Shares and I
am qualified by my knowledge and experience to evaluate investments of this
type. I have carefully considered the potential risks relating to the Company
and purchase of its Shares. Both my advisors and I have had the opportunity to
ask questions of, and receive answers from, representatives of the Company or
persons acting on its behalf concerning the Company and the terms and conditions
of a proposed investment in the Company. My advisors and I have also had the
opportunity to obtain additional information necessary to verify the accuracy of
information furnished about the Company. Accordingly, I have independently
evaluated the risks of purchasing the Shares.
6. Company Representations and Warranties and Agreements. The Company
represents and warrants to, and agrees with the undersigned as follows:
a. The Company is duly organized, validly existing and in good
standing under the laws of the State of Delaware with full power and authority
to own, lease, license and use its properties and assets and to conduct the
business in which it is engaged.
b. The Company is duly qualified to transact the business in which
it is engaged as described in the Documents, and is in good standing as a
foreign corporation in every jurisdiction in which its ownership, leasing,
licensing or use of its property or assets or the conduct of its business make
such qualification necessary, except where the failure to be so qualified would
not have a material adverse effect on the Company. The Company has no
subsidiaries.
c. The Company agrees to take all necessary and appropriate steps,
including but not limited to obtaining shareholder consent, to accomplish the
following:
(i) a reverse split of its issued and outstanding Common Stock in a
sufficient ratio to enable the Common Stock issued upon conversion of all
authorized Shares, to represent 80% of the issued and outstanding Common Stock.
(ii) If necessary, to amend its certificate of incorporation,
by-laws and any other corporate document in order to rescind any existing
anti-takeover provisions or poison pill provision or restriction.
7. Investor Representations and Warranties. I acknowledge, represent and
warrant to, and agree with, the Company as follows:
a. I am aware that my investment involves a high degree of risk and
have read carefully the Documents. I am aware that the Company has limited
capital.
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b. I acknowledge and am aware that there is no assurance as to the
future performance of the Company.
c. I am purchasing the Shares for my own account for investment and
not with a view to or for sale in connection with the distribution of the Shares
and not with any present intention of selling or otherwise disposing of all or
any part of the foregoing securities. I agree that I must bear the entire
economic risk of my investment for an indefinite period of time because, among
other reasons, the Shares have not been registered under the Securities Act or
under the securities laws of any state and, therefore, cannot be resold,
pledged, assigned, or otherwise disposed of unless they are subsequently
registered under the Securities Act and under applicable securities laws of
certain states or an exemption from such registration is available. I understand
that the Company is under no obligation to register the Shares on my behalf, or
to assist me in complying with any exemption from such registration under the
Securities Act or any state securities laws.
d. I recognize that the Shares, as an investment, involve an
extremely high degree of risk including, without limitation, the risk of
economic losses from operations of the Company and the total loss of my
investment. I believe that the investment in the Shares is suitable for me based
upon my investment objectives and financial needs, and I have adequate means for
providing for my current financial needs and contingencies and have no need for
liquidity with respect to my investment in the Company. My investment in the
Shares represents less than 10% of my net worth.
e. I have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Shares and have obtained, in my judgment, sufficient information from the
Company to evaluate the merits and risks of an investment in the Company. I have
not utilized any person as my purchaser representative as defined in Regulation
D promulgated by the Commission pursuant to the Securities Act in connection
with evaluating such merits and risks. I am knowledgeable about and experienced
in investments in the equity securities of non-publicly traded companies,
including early stage companies. I am not acting as an underwriter or a conduit
for sale to the public or to others of unregistered securities, directly or
indirectly, on behalf of the Company or any person with respect to such
securities.
f. I have relied solely upon my own investigation in making a
decision to invest in the Company.
g. I have received no representation or warranty from the Company or
any of its respective officers, directors, employees, or agents with respect to
my investment in the Company and I have received no information (written or
otherwise) from them relating to the Company or its business other than as set
forth herein or in the Documents. I am not participating in the offer as a
result of or subsequent to: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio or (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising.
h. I have had full opportunity to ask questions and to receive
satisfactory answers concerning the offering for the Shares and other matters
pertaining to my investment and all such questions have been answered to my full
satisfaction. I acknowledge and agree that (i) the assumptions underlying any
projections in the Documents, if any, are reasonable, (ii) the future
performance of the Company is subject to numerous factors outside the control of
the Company which factors may adversely affect the Company, the Company's
financial condition and results of operations, and the Company's ability to
achieve economic goals, and (iii) any such projections do not necessarily
reflect the future performance of the Company.
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i. I have been provided an opportunity to obtain any additional
information concerning the offering for the Shares and the Company, and all
other information to the extent the Company possesses such information or can
acquire it without unreasonable effort or expense.
j. It has never been represented, guaranteed or warranted by any
broker, the Company, any of the officers, directors, stockholders, partners,
employees or agents of either, or any other persons, whether expressly or by
implication, that:
i. The Company or the Investor will realize any given
percentage of profits and/or amount or type of consideration,
profit or loss as a result of the Company's activities or the
Investor's investment in the Company; or
ii. The past performance or experience of the management of
the Company, or any other person, will in any way indicate the
predictable results of the ownership of the Shares or of the
Company's activities.
k. I am an "accredited investor" as defined in Section 2(15) of the
Securities Act and in Rule 501 promulgated thereunder and have executed the
attached Confidential Investor Questionnaire.
l. I understand that (i) the Shares have not been registered under
the Securities Act, or the securities laws of certain states in reliance on
specific exemptions from registration, (ii) no securities administrator of any
state or the federal government has recommended or endorsed this offering for
the Shares or made any finding or determination relating to the fairness of an
investment in the Company, and (iii) the Company is relying on my
representations and agreements for the purpose of determining whether this
transaction meets the requirements of the exemptions afforded by the Securities
Act and certain state securities laws.
m. I understand that (i) since neither the offer nor sale of the
Shares has been registered under the Securities Act or the securities laws of
any state, the Shares may not be sold, assigned, pledged or otherwise disposed
of unless they are so registered or an exemption from such registration is
available, and (ii) it is not anticipated that there will be any market for the
resale of the Shares.
n. I have been urged to seek independent advice from my professional
advisors relating to the suitability of an investment in the Company in view of
my overall financial needs. I acknowledge that there may be certain adverse tax
consequences to me in connection with my purchase of the Shares, and the Company
has advised me to seek the advice of experts in such areas prior to making this
investment.
o. If the Investor is a corporation, company, trust, employee
benefit plan, individual retirement account, Xxxxx Plan, or other tax-exempt
entity, it is authorized and qualified to become an Investor in the Company and
the person signing this Agreement on behalf of such entity has been duly
authorized by such entity to do so.
p. The information contained in this Agreement, as well as any
information which I have furnished to the Company with respect to my financial
position and business experience, is correct and complete as of the date of this
Agreement and, if there should be any material change in such information prior
to the Closing, I shall furnish such revised or corrected information to the
Company.
q. I hereby acknowledge and am aware that I am not entitled to
cancel, terminate, or revoke this subscription, and any agreements made in
connection herewith shall survive my death or disability.
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r. I hereby confirm and agree that all the Shares of the Company
issued to me pursuant to this Agreement shall be subject to the following
transfer restrictions: Subject to compliance with securities laws and the terms
of any agreements among the Company and its stockholders, I may sell or
otherwise transfer Shares (or Common Stock issued upon conversion of Shares).
However, no Shares (or Common Stock issued upon conversion of Shares) may be
transferred to a competitor of the Company or a person that has a strategic
conflict with the Company's business, as determined by the Company in its
reasonable discretion. 8. Indemnification. I hereby agree to indemnify and hold
harmless the Company and its respective officers, directors, members, employees,
agents, and attorneys against any and all losses, claims, demands, liabilities,
and expenses (including reasonable legal or other expenses, including reasonable
attorneys fees) incurred by any such person in connection with defending or
investigating any such claims or liabilities, whether or not resulting in any
liability to such person, to which any such indemnified party may become subject
under the Securities Act, under any other statute, at common law or otherwise,
insofar as such losses, claims, demands, liabilities and expenses (a) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact made by me and contained in this Agreement, or (b) arise out of or
are based upon any breach by me of any representation, warranty, or agreement
made by me contained herein.
9. Conditions of Closing. The closing for the purchase of the Series C
Convertible Preferred Stock will be conditioned upon
(a) Any and all filings or submissions required by applicable
federal or state securities, corporate, tax or other laws or regulations being
declared effective or otherwise approved if the same require such approval; and
(b) All requisite corporate and shareholder approvals, and consents
required from any third party or governmental authorities to the transactions
contemplated herein having been obtained, and
(c) The Company having secured continuing operation of the Company
by the current management by entering into new employment terms and related
contracts with such Company employees and under such terms as the undersigned
and the Company reasonable agree.
10. Severability. In the event any parts of this Agreement are found to be
void, the remaining provisions of this Agreement shall nevertheless be binding
with the same effect as though the void parts were deeted.
11. Transferability. Neither this Agreement, nor any interest of the
Investor herein, shall be assignable or transferable by the Investor in whole or
in part except by operation of law.
12. Registration Obligations. If the Company shall receive at any time
later than the earlier of (i) sixty days from the date of shareholder approval
of an increase in the Company's authorized common stock to at least 70,675,000
or a 10 to 1 reverse split of the outstanding common stock as contemplated in
Paragraph 1.b above, or (ii) ninety (90) days after the date hereof, a written
request from the holders of forty percent (40%) or more of the Shares of Series
C Convertible Preferred Stock of the Company then outstanding that the Company
file a registration statement under the Securities Act of 1933, as amended, then
the Company shall, use best efforts to effect, as soon as practicable, the
registration under the Act of all common shares underlying the Shares of Series
C Convertible Preferred Stock of the Company then outstanding.
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13. Choice of Law and Jurisdiction. This Agreement will be deemed to have
been made and delivered in New Jersey and Shall be governed by, construed in
accordance with, and enforced under the internal laws of the State of New
Jersey, without regard to the principles of conflicts of law of such state.
14. Counterparts. This 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
Agreement may be by actual or facsimile signature.
15. Benefit. This Agreement shall be binding upon and inure to the benefit
of the parties hereto.
16. Notices and Addresses. All notices, offers, acceptance, and any other
acts under this Agreement (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressee in person, by Federal Express
or other nationally-recognized reputable overnight courier delivery service, by
facsimile delivery, by email (confirmed by Federal Express or other
nationally-recognized reputable overnight courier delivery service) or, if
mailed, postage prepaid, by certified mail, return receipt requested, as
follows:
Investor: At the address designated on the signature page of this
Agreement.
The Company: 00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
or to such other address as any of them, by notice to the others, may designate
from time to time. Notices shall be deemed received (a) on the same day for
deliveries in person or by facsimile or email (with transmission confirmation
sheet), (b) on the following business day for deliveries by Federal Express or
other nationally-recognized reputable overnight courier delivery service or (c)
three days for deliveries by mail, postage prepaid, or by certified mail, return
receipt requested.
17. Oral Evidence. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter herein and supersedes all prior
oral and written agreements between the parties hereto with respect to the
subject matter herein. This Agreement may not be changed, waived, discharged, or
terminated orally, but rather, only by a statement in writing signed by the
party or parties against which enforcement or the change, waiver, discharge, or
termination is sought,
18. Section Headings. Section headings herein have been inserted for
reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Agreement.
19. Survival of Representations, Warranties, and Agreements. The
representations, warranties and agreements contained herein shall survive the
delivery of, and the payment for, the Shares.
20. Acceptance of Subscription. The Company may accept this Agreement at
any time for all or any portion of the Shares subscribed for by executing a copy
hereof as provided and notifying the Investor within a reasonable time
thereafter.
RESIDENTS OF ALL STATES: THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE UPON
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CERTAIN EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID SECURITIES ACT AND
SUCH LAWS. THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH
LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTOR IS AWARE THAT
INVESTOR WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THIS OFFERING FOR THE SHARES OR THE ACCURACY OR ADEQUACY
OF THE BUSINESS SUMMARY OF THE COMPANY.
[remainder of page blank; next page is signature page]
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SUBSCRIPTION AGREEMENT SIGNATURE PAGE
Date: 1/28/04 Number of Shares Subscribed for: 54,325
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Taxpayer ID or SS No.: 00-0000000 Aggregate Purchase Price: $19,220.18
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Manner in Which Title is to be Held (check one):
X Individual Ownership
_____ Community Property
_____ Tenants in Common
_____ Joint Tenant with Right of Survivorship
_____ Other (please indicate)
For Individual Stockholders:
Phoenix Opportunity Fund II, L.P.
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Name of Subscriber
/s/ Xxxxxx Xxxxxx
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Signature (Individual)
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Name of Subscriber (if Joint)
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Signature (if Joint)
Address to Which Correspondence
Should be Directed
C/o Phoenix Capital Holdings, LLC
000 Xxxxx Xxxxxx, Xxxxx 000
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Street
New York, New York 10022
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City, State, Zip Code
Xxxxxx Xxxxxx
---------------------------------------------
Attention
000-000-0000 000-000-0000
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Telephone Fax
xxx.xxxxxx@xxxxxx.xxx
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e-mail
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The foregoing subscription is accepted and the Company hereby agrees to be bound
by its terms.
AMPLIDYNE, INC.
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx, President
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Accepted Subscription Amount
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Date
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AMPLIDYNE INC.
CONFIDENTIAL INVESTOR QUESTIONNAIRE
This Questionnaire must be completed by each individual who has an
interest in purchasing shares of Series C Convertible Preferred Stock (the
"Shares") of Amplidyne, Inc. (the "Company"). The purpose of this Questionnaire
is to determine whether prospective investors in the Shares meet the standards
established by the Company for the purchase of the Shares and the standards for
an "accredited investor" under Rule 501 adopted by the Securities and Exchange
Commission.
Your answers will at all times be kept strictly confidential. However,
each investor who subscribes to purchase the Shares in the Company hereby agrees
that the Company may present this Questionnaire to such parties as it deems
appropriate to establish the availability under any federal or state securities
laws of an exemption from registration of the Shares and for any other purpose
which the Company deems necessary to establish the Company's compliance with
federal or state law.
Please complete the Questionnaire as thoroughly as possible and sign, date
and return one copy to the attention of Xxxxxxxx X. Xxxxx at the Company, 00
Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000
1. Investor Name: ______________________________________ Age: _________
2. Home address and telephone number:__________________________________
____________________________________________________________________
3. Business address and telephone number: _____________________________
____________________________________________________________________
4. Other states or countries where registered to vote or have driver's
license: ___________________________________________________________
____________________________________________________________________
5. Indicate name(s) in which stock will be held:
Phoenix Opportunity Fund II, L.P.
____________________________________________________________________
6. Describe your employment for the last five years, including the
company by which you are presently employed, its principal business
and your title:
_________________________________
_________________________________
_________________________________
7. For individuals, answer (a), (b) and (c) only:
______________________________________________
(a) Is your net worth (either individually or jointly with your
spouse, if any) including homes, home furnishings and
automobiles, in excess of U.S.$1,000,000 (valuing your assets
on the basis of their current fair market value)?
Yes _____ No _____
(b) Was your individual income for each of the years 2002 and
2003, and is your anticipated individual income for 2004, in
excess of $200,000?
Yes _____ No _____
(c) Was your joint income with your spouse for each of the years
2002 and 2003, and is your anticipated joint income with your
spouse for 2004, in excess of $300,000?
Yes _____ No _____
For entities other than individuals, answer (d), (e), (f) and/or (g), as
appropriate:
(d) (1) If you are completing this Questionnaire on behalf of a
corporation, Massachusetts or similar business trust, or
partnership, was such entity formed for the specific purpose
of acquiring the Series C Preferred Stock?
Yes __X__ No _____
(2) Are the entity's total assets in excess of $5,000,000?
Yes _____ No __X__
(e) (1) If you are completing this Questionnaire on behalf of a
trust other than a Massachusetts or similar business trust,
was the trust formed for the specific purpose of acquiring the
securities offered?
Yes __X__ No _____
(2) Are the trust's investment decisions directed by a
person who has such knowledge and experience in
financial and business matters that he or she is capable
of evaluating the merits and risks of an investment in
the Series C Preferred Stock?
Yes __X__ No _____
(f) If you are completing this Questionnaire on behalf of an
employee benefit plan, within the meaning of the Employee
Retirement Income Security Act of 1974 ("ERISA"), (i) are its
investment decisions made by a plan fiduciary (as defined in
Section 3(21) of ERISA), bank, savings and loan association,
insurance company, or registered investment advisor, or (ii)
do its total plan assets exceed $5,000,000, or (iii) if it is
a self-directed plan, are its investment decisions made solely
by persons who could answer "yes" to one or more of (a)
through (g) hereof?
Yes _____ No __X__
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(g) Are you completing this Questionnaire on behalf of an entity
all beneficial owners of which could answer "yes" to one or
more of (a) through (f) above?
Yes __X__ No _____
I/we hereby certify that the information set forth in this Confidential
Investor Questionnaire is accurate and complete as of the date hereof, and that
the Company may rely on such information in making its determination whether to
accept the undersigned as an investor in the Company.
Signature(s) /s/ Xxxxxx Xxxxxx Date 1/28/04
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