EXHIBIT 10.14
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (the "Agreement") is made and entered into as
of this 3rd day of January, 2005, by and between Savoy Resources Corp., a
Colorado corporation (the "Company"), with its United States offices located at
00000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, and Mr. Jean Xxx Xxxxxxx, 1801
XxXxxx Xxxxxxx Xxxxxx, Xxxxx #0000, Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0 (the
"Investor").
RECITALS:
WHEREAS, the Company is offering for sale up to 3,750,000 units
(individually, a "Unit" and, collectively, the "Units"), each Unit consisting of
one share of common stock, $0.001 par value per share (the "Common Stock"), one
series A warrant exercisable to purchase one share of Common Stock at an
exercise price of $.30 per share for a period of two years through January 2,
2007, and one series B warrant exercisable to purchase one share of Common Stock
at an exercise price of $.45 per share for a period of two years through January
2, 2007, at a per Unit price of $.15 in a transaction exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act"), and the
regulations promulgated thereunder (the "Offering");
NOW, THEREFORE, for and in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. THE SUBSCRIPTION.
1.1 Subscription. The Investor, intending to be legally bound, hereby
irrevocably subscribes for and agrees to purchase 3,700,000 Units.
1.2 Purchase Price. The Investor understands and acknowledges that the
purchase price for each Unit will be $.08 and that the aggregate purchase price
for 3,750,000 Units will be $300,000.00 (the "Issue Price").
2. COMPANY REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the Investor as follows:
2.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado and has all requisite power and authority to execute and deliver this
Agreement and to carry out the transactions contemplated hereby. The Company has
all requisite power and authority to own, lease and operate its assets and
properties and to carry on its business as presently conducted.
2.2 Capitalization. The authorized capital stock of the Company consists of
110,000,000 shares, of which 100,000,000 shares are Common Stock, of which
53,588,000 shares are issued and outstanding, and 10,000,000 shares are
preferred stock, of which no shares are issued and outstanding, as of January 3,
2005.
2.3 Authorization; Enforceability. The execution, delivery and performance
of this Agreement by the Company and the consummation by the Company of the
transaction contemplated hereby have been duly authorized by all necessary
corporate action of the Company, and this Agreement, when duly executed and
delivered by the Investor, will constitute a valid and legally binding agreement
of the Company enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
2.4 Title to Stock. Upon payment by the Investor of the Issue Price,
acceptance by the Company of this Agreement, and delivery by the Company of the
certificate(s) representing 3,750,000 Units purchased in this Offering, the
Units will be duly and validly issued, fully paid and nonassessable.
2.5 Absence of Violation. Neither the execution or delivery of this
Agreement by the Company nor the consummation of the transaction contemplated
hereby by the Company constitutes a violation or default under or conflicts with
any material contract, commitment, lease, instrument or agreement to which the
Company is a party or by which the Company is bound or will result in the
creation of any encumbrance on any of the assets owned by the Company under any
term or provision of the Articles of Incorporation or Bylaws of the Company.
3. INVESTOR REPRESENTATIONS, WARRANTIES AND AGREEMENT.
The Investor hereby represents, warrants to and agrees with the Company as
follows:
3.1 Standing. The Investor has the full and unrestricted legal capacity to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby.
3.2 Authorization; Enforceability. This Agreement, when duly executed and
delivered by the Company, will constitute a valid and legally binding agreement
of the Investor enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
3.4 Absence of Violation. Neither the execution or delivery of this
Agreement by the Investor nor the consummation of the transaction contemplated
hereby by the Investor constitutes a violation or default under or conflicts
with, or will result in the creation of any encumbrance on any of the assets
owned by the Investor under any contract, commitment, lease, instrument or
agreement to which the Investor is a party or by which the Investor is bound.
3.5 Receipt and Review of Certain Information. The Investor has had a
thorough and adequate opportunity to ask questions of the Company, or a person
or persons acting on its behalf, concerning the Company and the terms and
conditions of the investment described in this Agreement, and all such questions
have been answered to the full satisfaction of the Investor. The Investor also
has had the opportunity to review any documents relating to the Company that he
has requested and to otherwise conduct due diligence, and such due diligence
review has been fully satisfactory to the Investor. The Investor understands and
acknowledges that the Company cannot provide assurances with respect to any
projections or predictions as to the future business or financial performance of
the Company.
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3.6 Risk Associated with Investment in the Units. The Investor recognizes
that an investment in the Company involves a high degree of risk for an
indefinite period of time, and he has taken full cognizance of and understands
all of the risks related to the purchase of the Units.
3.7 Not an Underwriter. The Investor is not an "underwriter" as defined in
Section 2(a)(11) of the Securities Act, and is acquiring the Units for
investment purposes only.
3.8 Financial Ability. The Investor has the financial ability to bear the
economic risk of his investment, including a total loss of the investment, has
adequate means for providing for current needs and personal contingencies and
has no need for liquidity with respect to his investment in the Company. The
Investor recognizes that the purchase of Units involves a high degree of risk in
that (i) an investment in the Company is highly speculative and only an investor
who can afford the loss of his entire investment should consider investing in
the Company and the Units; (ii) an investor may not be able to liquidate his
investment; (iii) transferability of the Units is expected to be extremely
limited; and (iv), in the event of a disposition, an investor could sustain the
loss of his, her or its entire investment.
3.9 Age of Majority; Address. The Investor is at least eighteen (18) years
of age. The address set forth above is the Investor's correct home address, and
the Investor has no present intention of changing such address.
3.10 NASD. The Investor acknowledges that if he is a registered
representative of a National Association of Securities Dealers (the "NASD")
member firm, he must give such firm the notice required by the NASD's Rules of
Fair Practice.
3.11 No Broker. The Investor has not retained any finder, broker, agent,
financial advisor or other intermediary in connection with the transactions
contemplated by this Agreement and agrees to indemnify and hold harmless the
Company from liability for any compensation to any such intermediary retained by
the Investor and the fees and expenses of defending against such liability or
alleged liability.
3.12 Accuracy of Investor's Representations, Warranties and Agreements. The
representations, warranties and agreements of the Investor set forth in this
Agreement are true and accurate as of the date hereof and shall be true and
accurate as of the date of the acceptance hereof by the Company and the sale of
the Units to the Investor. If in any respect such representations, warranties
and/or agreements shall not be true and accurate at any time prior thereto, the
Investor promptly shall give written notice of such fact to the Company
specifying which representations, warranties and/or agreements are not true and
accurate and the reasons therefor. No representation or warranty of the Investor
in this Agreement contains or will contain any untrue or misleading statement or
omits or will omit any fact necessary to make the statements contained herein or
therein, in light of the circumstances under which made, not misleading.
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3.13 Regulation S. The Investor understands that the Units to be purchased
by him pursuant to this Agreement have not been registered under the Securities
Act in reliance on an exemption contained in Regulation S promulgated under the
Securities Act ("Regulation S"), and that the Company is relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings of the Investor set forth herein in order to determine the
applicability of such exemptions and the Investor's suitability to acquire the
Units.
3.14 Non-U.S. Person. The Investor is not, and at the time of the
acquisition of the Units will not be, a "U.S. person" as defined in Regulation S
under the Securities Act. The Investor is not, and at the time of the
acquisition of the Units will not be, acquiring the Units for the benefit of a
"U.S. person" as defined in Regulation S under the Securities Act. Upon
consummation of the transactions contemplated by this Agreement, the Investor
will be the sole beneficial owner of the Units issued to it pursuant to this
Agreement, and the Investor has not pre-arranged any sale with any purchaser or
purchasers in the United States. For purposes of this Agreement, a "U.S.
person'" includes, without limitation, any natural person resident in the United
States, any partnership or corporation organized or incorporated under the Laws
of the United States (other than certain branches of non-U.S. banks or insurance
companies), any estate of which any executor or administrator is a U.S. person
or any trust of which any trustee is a U.S. person (with certain exceptions) and
any agency or branch of a foreign entity located in the United States, but does
not include a natural person not resident in the United States. The "United
States" means the United States of America, its territories and possessions, any
state of the United States and the District of Columbia.
3.15 Outside the U.S. The Investor is outside the United States as of the
date of the execution and delivery of this Agreement and will be outside the
United States at the time of the purchase of the Units as contemplated by this
Agreement; provided, however, that delivery of the Units may be elected in the
United States through the Investor's agent as long as the Investor is outside
the United States at the time of such delivery.
3.16 Limitation on Transfer. The Investor understands that the Units cannot
be offered for sale, sold or otherwise transferred unless in accordance with the
provisions of Regulation S of the Securities Act, pursuant to registration under
the Securities Act or pursuant to an available exemption from registration under
the Securities Act. The Investor has no present intention to sell or otherwise
transfer the Units except in accordance with the provisions of Regulation S of
the Securities Act, pursuant to registration under the Securities Act or
pursuant to an available exemption from registration under the Securities Act.
The Investor understands that the Company is required, under Rule 903 of
Regulation S, to refuse to register the transfer of any of the Units to be
received by the Investor pursuant to this Agreement that are not transferred
pursuant to a registration statement under the Securities Act, in compliance
with Regulation S under the Securities Act or otherwise pursuant to an available
exemption from registration.
3.17 No Short Position. The Investor covenants that the Investor will not,
directly or indirectly, or through one or more intermediaries, maintain any
short position in the Units during the Distribution Compliance Period, as
defined in Regulation S.
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3.19 No Hedging Transactions. The Investor hereby agrees not to engage in
hedging transactions with regard to the Units unless in compliance with the
provisions of Regulation S, pursuant to registration under the Securities Act or
pursuant to an exemption from the registration requirements of the Securities
Act.
3.20 Limitations on Resale. The Investor will resell the Units only in
accordance with the provisions of Regulation S of the Securities Act, pursuant
to registration under the Securities Act or pursuant to an available exemption
from registration under the Securities Act.
3.21 ERISA. No part of the funds used by the Investor to acquire the
membership interests constitutes assets of any "employee benefit plan'" within
the meaning of ss.3(3) of ERISA or other "benefit plan investor'" (as defined in
U.S. Department of Labor Regulations ss.2510.3-101 et seq., as amended) or
assets allocated to any insurance company separate account or general account in
which any such employee benefit plan or benefit plan investor (or related trust)
has any interest. The foregoing representations, warranties and agreements shall
survive the Closing.
4. TERMINATION.
Either of the parties hereto may terminate this Agreement if the Company
terminates the Offering or consummation thereof is prohibited by law, rule or
regulation.
5. INDEMNITY.
The Investor agrees to indemnify and hold harmless the Company and the
Company's officers, directors, employees and affliates and each other person, if
any, who controls any thereof, against any loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever) arising out of
or based upon any false representation or warranty or breach or failure by the
Investor to comply with any covenant or agreement made by the Investor in this
Agreement or in any other document furnished by the Investor to any of the
foregoing in connection with the transactions contemplated hereunder.
6. MISCELLANEOUS.
6.1 Notices. All notices, requests, consents and other communications
herein shall be in writing and shall be deemed to be delivered (i) on the date
delivered, if personally delivered or transmitted via facsimile with return
confirmation of such transmission; (ii) on the second business day after the
date sent, if sent by recognized overnight courier service; and (iii) on the
fifth (5th) day after the date sent, if mailed by first-class certified mail,
postage prepaid and return receipt requested, as follows:
(a) If to the Company: Savoy Reources Corp. 00000
Xxxxxxxx Xxxxx Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx, President
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with a copy to:
Xxxx & Associates
00000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxx, Esq.
(b) If to the Investor, addressed to the Investor at the
address set forth above, or at such other address as the Investor shall
designate by written notice to the Company.
6.2 Governing Law. Notwithstanding the place where this Agreement may be
executed by any of the parties hereto, the parties expressly agree that this
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Colorado, without regard to principles of conflicts of law.
6.3 Severability. The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and
effect.
6.4 No Implied Waiver. The failure of either the Company or the Investor to
enforce any of the provisions of this Agreement, or the waiver of any of the
provisions of this Agreement in any instance, shall not be construed as a
general waiver or relinquishment on its part of that provision. No waiver or
modification of any provision of this Agreement shall be implied. In order to be
effective, a waiver or modification of a provision of this Agreement shall be in
writing and must be signed by the party against which it is to be enforced.
6.5 Further Assurances. The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement. The Investor hereby agrees to provide to the Company such
additional information as may be requested by the Company from time to time.
6.6 Amendments. This Agreement may only be amended, modified or
supplemented by an agreement in writing executed by a duly authorized
representative of the Company and the Investor.
6.7 Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and assigns.
6.8 Entire Agreement. This instrument contains the entire agreement, and
supersedes any prior communications, understandings or agreements, of the
parties with respect to the subject matter hereof.
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6.9 Assignability. This Agreement is not transferable or assignable by the
Investor without the prior written consent of the Company.
6.10 Interpretation. The captions or headings in this Agreement are
strictly for convenience and shall not be considered in interpreting this
Agreement or as amplifying or limiting any of its contents. Terms defined or
used in this Agreement in the singular form shall be interpreted to apply to the
plural form as well, and vice versa, as the identity of the parties or objects
referred to may require. References to "business days" exclude Saturdays,
Sundays and holidays during which nationally chartered banks in New York City
are authorized or required to close.
6.11 Entire Agreement. This Agreement constitutes the entire and final
agreement and understanding between the Company and the Investor with respect to
the subject matter of this Agreement and supersedes all prior agreements
relating to the subject matter of this Agreement, which are of no further force
or effect.
6.12 Section Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.13 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.
6.14 Provisions Surviving Termination. Provisions contained in this
Agreement that by their sense and content are intended to survive termination of
this Agreement shall so survive, including without limitation the provisions of
Sections 3, 4, 5 and 6.
6.15 Joint Preparation. This Agreement shall be deemed to have been
prepared jointly by the parties hereto and any uncertainty or ambiguity existing
herein shall not be interpreted against either party by reason of its or his
drafting of this Agreement, but shall be interpreted according to the
application of rules of interpretation for arms' length agreements.
6.16 Attorneys' Fees. In the event of any litigation between the parties
hereto, the non-prevailing party shall pay the reasonable expenses, including
the attorneys' fees, of the prevailing party in connection therewith.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
THE COMPANY: THE INVESTOR:
SAVOY RESOURCES CORP
By: /s/ XX Xxxxxx /s/ Xxxx Xxx Xxxxxxx
------------- ------------------------
Xxxxxx X. Xxxxxx, President Xxxx Xxx Xxxxxxx
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