THE SHARES OF COMMON STOCK (THE "COMMON SHARES") OFFERED HEREIN
ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY.
SECURITIES PURCHASE AGREEMENT
XXXXXX XXXXXX HOLDING CORPORATION
Private Offering of Common Stock
In connection with the offer (the "Offering") and proposed issuance
of common shares, $0.01 par value per share ("Common Shares"), of Xxxxxx
Xxxxxx Holding Corporation, 00000 Xxxxx Xxxxxx, Xxxxxx, Xxxxx 00000 (the
"Company") at a price of $_____ per share, which represents 80% of the
five-day average closing bid price for the five trading days immediately
preceding the Closing Date, the undersigned prospective investor (the
"Investor") and the Company hereby agree as follows:
1. Subscription. The Investor hereby subscribes for the purchase
of the Common Shares and agrees to purchase the aggregate
number of Common Shares set forth in Paragraph 12 of this
agreement. The Company, in its sole discretion and for any
reason, may accept or reject this purchase in whole or in part
at any time prior to its execution hereof (the "Closing Date").
2. Restricted Shares. Investor recognizes that the Common Shares,
when issued, will not have been registered for public sale
under the Securities Act of 1933 (the "Securities Act") or the
securities laws of any state and that the share certificate
will bear a "Restricted Stock" legend as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
(1) AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER SAID ACT, OR (2) AN OPINION OF COMPANY
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED."
3. Registration Rights. In connection with the issuance of the
Common Shares offered pursuant to this agreement, the Company
will undertake to file a Registration Statement with the
Securities and Exchange Commission ("SEC") for registration of
the Common Shares on or before ___________, or at such earlier
time as may be mutually agreed between the parties, and will
use its best efforts to have such Registration Statement
declared effective at the earliest possible date.
4. Payment of Purchase Price. The Investor shall pay for the
Common Shares by a mutually agreed method of funding to the
Company on or before _________ (the "Closing Date.")
The parties hereby agree that, upon clearance of the funds for
payment of the purchase price, the Company shall cause Common
Share certificate(s) to be issued in the Investor's name and
delivered to Investor.
5. Company's Conditions. The Company's obligation to issue and
sell the Common Shares shall be subject to the satisfaction (or
waiver by it) of the following conditions precedent:
(a) Performance. The Investor shall have tendered payment
for the Common Shares.
(b) Representations. Each representation and warranty made
by the Investor in this agreement shall be true and
correct in all material respects as though made on and as
of the Closing Date.
(c) Legality. No change shall have occurred in any law, rule
or regulation that would prohibit the consummation of any
transaction contemplated hereby.
(d) Litigation. No action, proceeding or investigation
shall have been commenced or threatened, nor shall any
other judgment or decree have been issued or be proposed
to be issued by any court, agency or authority to set
aside, restrain, enjoin or prevent the consummation of any
transaction contemplated hereby.
6. Representations and Warranties. The Investor makes the
representations, declarations and warranties set forth in this
Section with the intent that the same may be relied upon in
determining the Investor's suitability as a purchaser of the
Common Shares. If the Investor includes or consists of more
than one person or entity, the obligations of the Investor
shall be joint and several and the representations and
warranties herein contained shall be deemed to be made by and
be binding upon each such person or entity and their respective
legal representatives, heirs, executors, administrators,
successors and assigns.
(a) No Regulatory Review. The Investor is aware that this
is a limited private offering and that no federal, state
or other agency has made any finding or determination as
to the fairness of the investment nor made any
recommendation or endorsement of the Common Shares.
(b) Ability to Evaluate. The Investor, by reason of the
Investor's knowledge and experience in financial and
business matters, is capable of evaluating the risks and
merits of an investment in the Common Shares.
(c) Investment Intent. The Investor acknowledges that the
purchase of the Common Shares hereunder is being made for
the Investor's own account, or investment purposes only
and not with the present intention of distributing or
reselling the Common Shares in whole or in part. The
Investor further understands that the Common Shares are
not being sold to the Investor in a transaction registered
under the Securities Act of 1933, as amended (the "Act"),
or any other state securities laws. As a result, the
Investor understands that there will be restrictions on
the transfer and sale of the Common Shares. The Investor
further understands that the Company has agreed to file a
Registration Statement with the SEC with respect to the
Common Shares no later than ___________. The Investor
hereby agrees not to sell or otherwise transfer the Common
Shares until the Investor has received notice from the
Company that the Registration Statement has been declared
effective. Investor hereby agrees to exercise the
registration rights granted hereby, and to sell the Common
Shares pursuant to the registration, only in a manner
consistent with the representations and warranties made by
Investor to the Company hereunder. Investor understands
that the SEC may in its discretion comment on certain
aspects of the Registration Statement and the transaction
and that such comments may cause delay in the Registration
Statement becoming effective. The Company shall have no
liability to Investor on account of any such delay
initiated by the SEC.
(d) Investment Information. The investor has received and
reviewed pertinent information regarding the Company,
including the most recent SEC Forms 10-K and 10-Q prior to
the execution of this Agreement and is capable of
understanding and evaluating the information contained
therein. Specifically, the Investor is fully aware of the
risks relating to the business of the Company and purchase
of the Common Shares. The Investor will rely solely upon
its independent investigation and analysis in making the
decision to purchase the Common Shares. In particular,
and without limiting the generality of the foregoing, the
Investor has not relied on, and the Investor's decision to
subscribe for Common Shares has not been influenced by:
(i) newspaper, magazine or other media articles or reports
related to the Company or its business; (ii) promotional
literature or other materials used by the Company for
sales or marketing purposes, or (iii) any other written or
oral statement of the Company or persons purporting to
represent the Company. The Investor has had the
opportunity to discuss all aspects of this transaction
with management of the Company, has made or has had the
opportunity to make such inspection of the books and
records of the Company as the Investor has deemed
necessary in connection with this investment, and any
questions asked have been answered to the satisfaction of
the Investor.
(e) Confidentiality. The Investor understands that the
Offering is confidential. The Investor has not
distributed information on the Offering to anyone other
than such legal or financial advisors as the Investor has
deemed necessary for purposes of evaluating an investment
in the Common Shares.
(f) Authorization and Formation of Investor. The
Investor, if a corporation, partnership, trust or other
form of business entity, is authorized and otherwise duly
qualified to purchase and hold the Common Shares and such
entity has not been formed for the specific purposes of
acquiring Common Shares in the Offering. If the Investor
is one of the aforementioned entities, it hereby agrees
that upon request of the Company it will supply the
Company with any additional written information that may
be requested by the Company.
(g) Accredited Investor Status. The Investor is an
"accredited investor" as such term is defined in Rule
501(a) of Regulation D under the Act and within the
meaning of similar regulations under state securities laws
for the reasons indicated in the "Investor
Acknowledgments" accompanying this Agreement. If the
Investor is an individual, he or she is of majority age
and his or her marital status is as indicated in the
"Investor Acknowledgments." If the Investor is an entity,
the person executing this Securities Purchase Agreement on
behalf of the Investor is of majority age.
7. Reliance on Representations and Warranties: Indemnity.
The Investor understands that the Company will rely on the
representations and warranties of the Investor herein in
determining whether a sale of the Common Shares to the Investor
is in compliance with federal and applicable state securities
laws. The Investor hereby agrees to indemnify the Company and
its affiliates, and hold the Company and its affiliates and
agents harmless from and against any and all liability, damage,
cost or expense (including reasonable attorneys' fees) incurred
on account of or arising out of: (a) any inaccuracy in the
Investor's declarations, representations and warranties set
forth in this Subscription Agreement; (b) the disposition of
any of the Common Shares which the Investor will receive,
contrary to the Investor's declarations, representations and
warranties in this Subscription Agreement; (c) any lawsuit or
proceeding based upon a claim that said declarations,
representations or warranties were inaccurate or misleading or
otherwise cause for obtaining damages or redress from the
Company or any of its affiliates or the disposition of all or
any part of the Investor's Common Shares; and (d) the
Investor's failure to fulfill any or all of the Investor's
obligations herein.
8. Updating Information. All of the information set forth
herein with respect to the Investor, including, without
limitation, all of the representations and warranties set forth
in Paragraph 6 of this agreement, is correct and complete as of
the date hereof and, if there should be any material change in
such information prior to the acceptance of this subscription
by the Company, the Investor will immediately furnish the
revised or corrected information to the Company.
9. Notices. Any notice or other communications required or
permitted hereunder shall be sufficiently given if in writing
and sent by registered or certified mail, postage prepaid,
return receipt requested, if to the Company at the address set
forth on the first page of this Subscription Agreement, and to
Investor, at the address set forth in Paragraph 12 of this
Subscription Agreement, or, to such other address as either the
Company or the Investor shall designate to the other by notice
in writing in accordance with this Paragraph 9.
10. Governing Law. This Subscription Agreement shall be governed by
and construed in accordance with the laws of Texas.
11. Representations and Warranties of the Company. The Company
represents and warrants to Investor as follows:
(a) The Company has legal capacity, power and authority to
enter into and perform this Agreement and to consummate
the transaction contemplated hereby.
(b) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
(c) The execution and delivery of this agreement and the
performance of the obligations imposed hereunder will not
result in a violation of any order, decree or judgment of
any court or governmental agency having jurisdiction over
Company or Company's properties, will not conflict with,
constitute a default under, or result in the breach of,
any contract agreement or other instrument to which the
Company is a party or is otherwise bound and no consent,
authorization or order of, or filing or registration with,
any court or governmental agency is required for the
execution, delivery and performance of this agreement.
(d) There is no litigation or proceeding or, to the best of
the Company's knowledge, threatened, against the Company
which would affect the validity or performance of this
agreement.
(e) Upon consummation of the transaction contemplated hereby,
the Investor will own the Common Shares free and clear of
all liens, claims, charges and other encumbrances and the
delivery of the Common Shares to Investor pursuant to this
agreement will transfer legal and valid title thereto,
free and clear of all liens, claims, charges and other
encumbrances.
(f) The Company will pay all transfer fees and expenses.
(g) The Common Shares when issued and delivered will be duly
and validly authorized and issued fully-paid and
nonassessable and will not subject the holders thereof to
personal liability by reason of being such holders. There
are no preemptive rights of any shareholder of the
Company.
(h) The Company hereby agrees to indemnity and hold harmless
the Investor from and against any liability, damage, cost
or expense incurred as a result of breach by the Company
of any representation, warranty or covenant of the Company
hereunder.
12. Signatures. The Investor declares under penalty of perjury
that the statements, representations and warranties contained
herein and in the following Investor Acknowledgments are true,
correct and complete and that this Securities Purchase
Agreement was executed as of ____________.
INVESTOR: ______________________________
______________________________
(Signature) (Title)
______________________________
(Print Name)
Exact Name(s) in which ownership of Securities is to be registered:
______________________________________
Principal Place of Business: _________________________________________
_________________________________________
_________________________________________
Federal Tax ID Number: __________________________________________
Amount of Subscription $ ______________
AGREED AND ACCEPTED:
XXXXXX XXXXXX HOLDING CORPORATION
By:______________________________
Xxxxxxx X. Xxxxxx
President and CEO
APPENDIX "A"
INVESTOR ACKNOWLEDGMENTS
In order to induce the Company to accept the foregoing Securities
Subscription Agreement, the Investor expressly acknowledges the following
by placing his or her initials (or, if the Investor is a person other
than an individual, the initials of an individual duly empowered to act
for the Investor) in each of the spaces provided below:
THE INVESTOR HAS RECEIVED, HAS CAREFULLY REVIEWED INFORMATION ON THE
COMPANY AND HAS MADE AN INDEPENDENT INVESTIGATION AND ANALYSIS OF THE
INVESTMENT.
THE INVESTOR HAS CAREFULLY READ THE FOREGOING SECURITIES
SUBSCRIPTION AGREEMENT AND IN PARTICULAR, HAS CAREFULLY READ AND
UNDERSTANDS THE INVESTOR'S REPRESENTATIONS AND WARRANTIES MADE THEREIN
AND CONFIRMS THAT ALL SUCH REPRESENTATIONS AND WARRANTIES ARE TRUE AND
CORRECT.
THE INVESTOR QUALIFIES UNDER THE FOLLOWING CATEGORY OR CATEGORIES OF
DEFINITIONS OF "ACCREDITED INVESTOR" (INDICATE EACH APPLICABLE CATEGORY):
(1) The Investor is a natural person whose individual net worth, or
joint net worth with that person's spouse, exceeds $1,000,000.
(______) Yes (______) No
(2) The Investor is a natural person who had an individual income
in excess of $200,000 in each of the two most recent years or
joint income with that person's spouse in excess of $300,000 in
each of those years and has a reasonable expectation of
realizing the same income level in the current year.
(______) Yes (______) No
(3) The Investor is a broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
(______) Yes (______) No
(4) The Investor is an insurance company, a registered securities
broker or dealer, a licensed Small Business Investment Company,
a registered investment company, a business development company
as defined in Section 2(a)(48) of the Investment Company Act of
1940 or a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940.
(______) Yes (______) No
(5) The Investor is an organization described in Section 501(c)(3)
of the Internal Revenue Code of 1986, as amended, or a
corporation, Massachusetts or similar business trust or
partnership, not formed for the specific purpose of acquiring
the Units, with total assets in excess of $5,000,000.
(______) Yes (______) No
(6) The Investor is a trust with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring
the Units offered, whose purchase is directed by a person who
has such knowledge and experience that he or she is capable of
evaluating the merits and risks of the proposed investment.
(______) Yes (______) No
(7) The Investor is a bank, savings and loan association or similar
institution acting in its individual or fiduciary capacity, or
an employee benefit plan with total assets in excess of
$5,000,000.
(______) Yes (______) No
(8) The Investor is a Plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of
a state or its political subdivisions for the benefit of its
employees, with total assets in excess of $5,000,000.
(______) Yes (______) No
(9) The Investor is an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 ("ERISA"),
the investment decisions for which are made by a plan
fiduciary, as defined in Section 3(21) of ERISA, which is
either a bank, savings and loan association, insurance company,
or registered investment adviser, or is an employee benefit
plan that has total assets in excess of $5,000,000.
(______) Yes (______) No
(10) The Investor is an entity in which all of the equity owners are
accredited investors or individuals who are accredited
investors (as defined above).
(______) Yes (______) No
IN WITNESS WHEREOF, the Investor has executed and delivered this
Investor Acknowledgment as of the day and year specified above.
Official Signatory of Investor:
_______________________________
(Signature)
Name Printed: _______________________
Title: ______________________________
