Exhibit 10.86
Subscription Agreement between the
Company and Volcano Trading Limited dated June 30, 1997
Play Co. Toys & Entertainment Corp.
SUBSCRIPTION AGREEMENT
June 30, 1997
Volcano Trading Ltd.
Xxx Xxxxxxxxx, #00
Xxxxxx, Xxxxxxxxxxx XX-0000
Gentlemen/Ladies:
The following sets forth the terms and conditions of your
subscription to provide aggregate of $550,000 into equity of the Company. You
agree to purchase 250,000 Securities of the Series E Preferred Stock and 500,000
Warrants, identical to the Warrants expected to be sold in the Company's initial
public offering, at prices of $2.00 per share and $.10 per Warrant,
respectively.
1. Subscription: the Offering.
(a) By your signature hereto, you hereby subscribe for and agree to
purchase 250,000 Securities of the Company's Series E Preferred Stock and
500,000 Warrants (collectively the "Securities") at prices of $2.00 per share
and $.10 per Warrant, subject to the terms and conditions set forth in this
"Agreement".
(b) The funds for the purchase shall be received by the Company no later
that August 10, 1997.
(c) The Securities purchased shall be delivered against the receipt of full
payment therefore, in the form of cash, certified check or the wire of funds
delivered to the Company.
2. Representations and Warrants by Subscriber. You hereby represent and
warrant as follows:
(a) You have received, read carefully and are familiar with this Agreement,
and the Company's form 10-KSB for the year ended March 31, 1997, respecting the
Company, its business, plans and financial condition: you have received all
materials which have been requested by you; and the Company has answered all
inquiries that you or your representatives have put to it. You have had access
to all additional information necessary to verify the accuracy of the
information set forth in this Agreement and any other
materials furnished herewith, and you have taken all the steps necessary to
evaluate the merits and risks of an investment as proposed hereunder.
(b) You or your purchaser representative have such knowledge and experience
in finance, securities, investments and other business matters so as to be able
to protect your interests in connection with this transaction, and your
investment in the Company hereunder is not material when compared to your total
financial capacity.
(c) You understand the various risks of an investment in the Company as
proposed herein and can afford to bear such risks, including the risk of losing
your entire investment.
(d) You acknowledge that no market for the Securities sold herein presently
exists and none may develop in the future and that you may find it impossible to
liquidate your investment at a time when it may be desirable to do so, or at any
other time.
(e) You have been advised by the Company that the Securities have not been
registered under the Securities Act, and that they will be issued on the basis
of the statutory exemption provided by Sections 4(2) and 4(6) of the Securities
Act, relating to transactions by an issuer not involving any public offering and
under similar exemptions under certain state securities laws, that this
transaction has not been reviewed by, passed on or submitted to any Federal or
state agency or self-regulatory organization where an exemption is being relied
upon, and that the Company's reliance thereon is based in part upon the
representations made by you in this Agreement. You acknowledge that you have
been informed by the Company of, or are otherwise familiar with, the nature of
the limitations imposed by the Securities Act and the rules and regulations
thereunder on the transfer of securities. In particular, you agree that no sale,
assignment or transfer of the Securities shall be valid or effective, and the
Company shall not be required to give any effect to any such sale, assignment or
transfer, unless (i) the sale, assignment or transfer of the Securities is
registered under the Securities Act, it being understood that the Securities are
not currently registered for sale and that the Company has no obligation or
intention to so register the Securities except as contemplated herein, or (ii)
the Securities are sold, assigned or transferred in accordance with all the
requirements and limitations of Rule 144 under the Securities Act, it being
understood that Rule 144 is not available at the present time for the sale of
the Securities, or (iii) such sale, assignment, or transfer is otherwise exempt
from registration under the Securities Act. You acknowledge that the Securities
shall be subject to a stop transfer order and the certificate or certificates
evidencing any Securities shall bear the following or substantially similar
legends and such other legends as may be required by state blue sky laws:
"These securities have not been registered under the
Securities Act of 1933, as amended (the "Act"). Such
securities may not be sold or offered for sale, transferred,
hypothecated or otherwise assigned in the absence of an
effective registration statement with respect thereto under
such Act or an opinion reasonably acceptable to the Company of
counsel reasonably acceptable to
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the Company that an exemption from registration for such sale,
offer, transfer, hypothecation or other assignment is
available under such Act."
3. Transferability. Neither this Agreement, nor any of your interests
herein, shall be assignable or transferable by you in whole or in part except by
operation of law.
4. Commissions. There will be no commissions paid with respect to the sale
of the Securities.
5. Registration Rights. The undersigned shall have the right, on one
occasion, commencing ninety days for the effective date of a registration
statement with respect to the Company's initial public offering of its Series E
Preferred Stock, to demand the registration of the resale of the Securities.
Upon receipt of written notice of its right, the Company shall prepare and file
with the Securities and Exchange Commission a registration statement to enable
the undersigned to sell the Securities. The Company shall use its best efforts
to have the registration statement declared effective.
6. Miscellaneous.
(a) All notices or other communications given or made hereunder shall be in
writing and shall be delivered or mailed to you at your address set forth on the
signature page of this Agreement and to the Corporation at the address set forth
below. Notices hand delivered shall be deemed given upon receipt and notices
sent by mail shall be deed given on the second business day following deposit in
the Shared States mail.
(b) This Agreement shall be construed in accordance with and governed by
the laws of the State of California without reference to that State's conflicts
of laws provisions.
(c) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended only by a
writing executed by all parties hereto.
(d) This Agreement may be executed in one or more counterparts
representing, however, one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year this subscription has been accepted by the Company as set forth
below.
Very truly yours,
Play Co. Toys & Entertainment Corp.
By: ______________________________
Xxxxxxx Xxxxx, President
AGREED TO AND ACCEPTED:
Valcano Trading Ltd.
__________________________
Name:
Title:
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