GEEKS ON CALL HOLDINGS, INC. SUBSCRIPTION AGREEMENT
EXHIBIT
10.20
Exhibit
A
| TO: |
000
Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxx 00000
|
| AND TO: |
Xxxxxxxx
& Xxxxxxxxx, Inc.
000
Xxxx Xxxx Xxxxxx
00xx
Xxxxx
Xxxxxxxx,
Xxxxxxxx 00000
|
Ladies
and Gentlemen:
I
understand that Geeks On Call Holdings, Inc., a Delaware corporation (the
“Company”), is offering to a limited number of investors units (collectively,
the “Units” and individually, a “Unit”) at a price of $20,000 per Unit (the
"Unit Price") and that each Unit will consists of (a) the number of shares
of
the Company’s .001 par value per share common stock (“Common Stock”) equal to
the Unit Price divided by the issue price per share of Common Stock and (b)
common stock purchase warrants (collectively, the “Warrants” and individually, a
“Warrant”), each Warrant being exercisable for a number of shares equal to one
half (1/2) of the number of shares of Common Stock purchased, at an exercise
price per share of 125% of the issue price of the Common Stock.
Based
on
these premises, I hereby confirm my agreement (the “Subscription Agreement”)
with you as follows:
1. On
the
date hereof, I agree to purchase from the Company, and upon acceptance of
my
subscription and in reliance on my representations, warranties, and covenants
contained herein, the Company will issue and sell to me, such Units of the
Company as are set forth on the signature page hereof or such lesser number
of
Units as the Company may allocate me for $20,000 per Unit, for an aggregate
amount set forth on the signature page.
2. I
shall
purchase the Units by delivering to SunTrust Bank, N.A. (the “Escrow Agent”) a
certified check or wire transfer in an amount equal to the number of Units
I am
purchasing multiplied by the purchase price of $20,000 per Unit.
3. I
represent, warrant, and agree as follows:
(a) I
am
authorized to consummate the purchase of the Units, or, if an individual,
I am
of the full age of majority and have all requisite legal capacity and competence
to consummate the purchase of the Units.
(b) I
am an
“accredited investor” as defined by Rule 501(a) promulgated under the Securities
Act of 1933, as described in the Accredited Investor Certificate attached
hereto
as Appendix
1.
(c) I
have
had an opportunity to ask questions of and receive answers from representatives
of the Company concerning the investment in the Units. I have reviewed the
Private Placement Memorandum dated August 8, 2008 (including the “Risk Factors”
section contained therein) and all other materials I have requested in
connection with my decision to make this investment (the “Information”) and have
had access to the additional information, if any, concerning the Company
as I
have considered necessary in connection with my investment decision to acquire
the Units. I alone, or with the assistance of my professional advisors, have
such knowledge and experience in financial and business matters that I am
capable of evaluating the merits and risks of the investment in the Units.
I
acknowledge that I have conducted my own due diligence with respect to the
Company, the Units, and any other matter which I believe to be material to
my
decision to invest in the Company and further acknowledge that I am making
my
investment decision based on this due diligence.
(d) I
understand that the Units to be issued pursuant to this Subscription Agreement
have not been passed on as to the fairness or recommended or endorsed by
any
U.S. federal or state agency and their issuance will not be registered under
the
Securities Act of 1933 or the securities laws of any state, in reliance upon
exemptions from registration contained in the Securities Act of 1933 and
such
laws. The Company’s reliance upon such exemptions is based in part upon my
representations, warranties, and agreements contained in this Subscription
Agreement.
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(e) I
am
purchasing the Units for my own account and not for distribution or resale
to
others in violation of U.S. federal or state securities laws, and I agree
that I
will not sell or otherwise transfer the Units, the shares of Common Stock,
the
Warrants, or the underlying shares of Common Stock unless the securities
have
been registered under the Securities Act of 1933 and applicable state securities
laws or an exemption therefrom is available.
(f) The
certificates representing the shares of Common Stock, the Warrants and the
shares of Common Stock underlying the Warrants will contain a legend stating
that their issuance has not been registered under the Securities Act of 1933
or
any state securities laws and referring to the above restrictions on
transferability and sale. A notation will also be made in the records of
the
Company so that transfers of the Units will not be effected in the records
of
the Company without compliance with these restrictions.
(g) I
acknowledge that an investment in the Company is speculative and involves
a high
degree of risk, including the loss of my entire investment in the Company.
(h) I
understand and acknowledge that the Units, the shares of Common Stock, the
Warrants and the shares of Common Stock underlying the Warrants have not
been
registered under the Securities Act of 1933 or the securities laws of any
state
of the United States, and are, therefore, “restricted securities” within the
meaning of Rule 144 under the Securities Act of 1933, and that the offer
and
sale of the Units to me will be made in reliance upon an exemption from
registration available to the Company for offers and sales to “accredited
investors” pursuant to Rule 506 of the Securities Act of 1933 and similar
exemptions under applicable state securities laws.
(i) I
acknowledge that I have not purchased the Units, the shares of Common Stock
or
the Warrants as a result of any “general solicitation or general advertising”
(as those terms are used in Regulation D under the Securities Act of 1933),
including, but not limited to, any advertisements, articles, notices or other
communications published in any newspaper, magazine or similar media or on
the
Internet or broadcast over radio, television or the Internet, or any seminar
or
meeting whose attendees have been invited by general solicitation or general
advertising.
(j) I
agree
that if I decide to offer, sell, pledge or otherwise transfer any of the
shares
of Common Stock, the Warrants or the shares of Common Stock underlying the
Warrants, I will not offer, sell, pledge or otherwise transfer any such
securities, directly or indirectly, unless: (1) the transfer is pursuant
to an
effective registration statement under the Securities Act of 1933 and applicable
state securities laws or (2) the transfer is made in another transaction
that
does not require registration under the Securities Act of 1933 or any applicable
state securities laws, after I have furnished to the Company an opinion of
counsel of recognized standing in form and substance satisfactory to the
Company
to that effect.
(k) I
understand and acknowledge that upon the original issuance of the shares
of
Common Stock, the Warrants and the shares of Common Stock underlying the
Warrants and until the time as the same is no longer required under applicable
requirements of the Securities Act of 1933 or applicable state securities
laws,
certificates representing the securities, and all certificates issued in
exchange therefor or in substitution thereof, shall bear the following
legend(s):
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). THESE
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
SUCH SECURITIES ARE REGISTERED UNDER THE 1933 ACT AND THE SECURITIES LAWS
OF ALL
APPLICABLE STATES OF THE UNITED STATES OR ARE OFFERED AND SOLD IN A TRANSACTION
THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE
SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE
COMPANY AN OPINION OF COUNSEL, OF RECOGNIZED STANDING, OR OTHER EVIDENCE
OF
EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY AS TO THE AVAILABILITY
OF AN
EXEMPTION.”
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(l) I
consent
to the Company making a notation on its records or giving instructions to
any
transfer agent of the shares of Common Stock, the Warrants or the shares
of
Common Stock underlying the Warrants in order to implement the restrictions
on
transfer set forth and described herein.
(m) I
understand that the Warrants may not be exercised unless an exemption from
registration is available under the Securities Act of 1933 and any applicable
state securities laws and the Company has received an opinion of counsel
of
recognized standing to that effect in form and substance satisfactory to
the
Company; provided, however, that a holder who is an “accredited investor” at the
time of exercise of the Warrant and that purchased Units in the Company’s
private placement will not be required to deliver an opinion of counsel in
connection with the exercise of Warrants that are a part of those Units.
4. I
acknowledge that the Information is confidential, and I agree that all the
Information shall be kept in confidence by me; provided
that
this obligation shall not apply to any Information that (i) is part of the
public knowledge or literature and readily accessible as of the date hereof;
(ii) becomes part of the public knowledge or literature and readily accessible
by publication (except as a result of a breach of this provision); or (iii)
is
rightfully received, free of confidentiality obligations, from a third party
(except a third party who discloses the Information in violation of any
confidentiality agreement). Further, this obligation does not prohibit my
discussion of the Information with my counsel, accountant, or other financial
adviser solely for the purpose of assisting my analysis and assessment of
the
Information and an investment in the Company, provided that such parties
are
bound by confidentiality restrictions no less strict than those contained
herein.
5. I
acknowledge that the Company and its officers, directors, employees, agents,
and
affiliates are relying on the truth and accuracy of the foregoing
representations and warranties in offering Units for sale to me without having
first registered the issuance of the Units, the shares of Common Stock or
the
Warrants under the Securities Act of 1933 and applicable state securities
laws.
I also understand the meaning and legal consequences of the representations
and
Warranties in this Subscription Agreement, and I agree to indemnify and hold
harmless the Company and each of its officers, managers, directors, affiliates,
agents, and employees from and against any and all loss, damage or liability,
including costs and expenses (including reasonable attorneys’ fees), due to or
arising out of a breach of any of the representations or warranties or any
failure to fulfill any covenants or agreements contained in this Subscription
Agreement. All representations, warranties, and covenants contained in this
Subscription Agreement and the indemnification contained in this Paragraph
5
shall survive the acceptance of this Subscription Agreement and the sale
of the
Units. I acknowledge that this Subscription Agreement will not be deemed
to be
accepted until it is signed by the Company and returned to me. Notwithstanding
the foregoing, however, no representation, warranty, acknowledgement, or
agreement made herein by the undersigned shall in any manner be deemed to
constitute a waiver of any rights granted to me under United States federal
or
state securities laws.
6. I
acknowledge that:
| (i) |
no
securities commission or similar regulatory authority has reviewed or
passed on the merits of the Units and underlying securities of this
offering; and
|
| (ii) |
there
is no government or other insurance covering the Units and underlying
securities under this offering; and
|
| (iii) |
there
are risks associated with the purchase of the Units;
and
|
| (iv) |
there
are restrictions on my ability to resell the Units and underlying
securities and it is my responsibility to find out what those restrictions
are and to comply with them before selling the Units and any of the
underlying securities.
|
7. This
Subscription Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended or modified
only by a writing executed by the party to be bound thereby. This Subscription
Agreement may be executed in multiple counterparts, each of which shall
constitute an original but all of which shall constitute but one and the
same
instrument. This Subscription Agreement may be executed and delivered by
facsimile transmission, which will constitute the legal delivery hereof.
This
Subscription Agreement shall be governed by and construed in accordance with
the
laws of the Commonwealth of Virginia.
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8. Correspondence
addressed to me should be sent to the address listed below until such time
as I
shall notify the Company, in writing, of a different address to which the
correspondence and notices are to be sent.
9. I
acknowledge that this Subscription Agreement is a subscription to purchase
Units
in the aggregate amount set forth below.
Signature
Page to Follow.
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SIGNATURE
PAGE TO THE
SUBSCRIPTION
AGREEMENT
WITH
IN
WITNESS WHEREOF,
I have
executed this Subscription Agreement as of the date set forth
below:
______________________________________________________________________
Name:
Please
indicate form of ownership the undersigned desires for the Units: ¨
Individual, ¨
Joint
Tenants with Right of Survivorship(1), ¨
Tenants
in Common(2), ¨
Qualified Trust, ¨
Custodian for _________________________________________.
State
of Residence:
______________________________________________________________________
Address:
________________________________________________________________
______________________________________________________________________
Phone
Number: ____________________________________________________________________
E-mail
Address: ____________________________________________________________________
S.S.#
or Tax Identification #: ___________________________________________________________
No.
of Units: _______________________________________________________________________
Aggregate
Purchase Price: ____________________________________________________________
Date:
___________________________________________________________________________
Accepted:
By:
_______________________________________________________________________________________
Name:
_________________________________________________________________________________
Title:
__________________________________________________________________________________
Date:
___________________________________________________________________________
No.
of
Units: ______________________________________________________________________
| (1) |
When
securities are held as Joint Tenants with right of Survivorship,
upon the
death of one owner, ownership of the securities will pass automatically
to
the surviving owner(s).
|
|
(2)
|
When
securities are held as Tenants in Common, upon the death of one
owner,
ownership of the securities will be held by the surviving owner(s)
and by
the heirs of the deceased owner.
|
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APPENDIX
I
ACCREDITED
INVESTOR CERTIFICATE
***
ALL INFORMATION WILL BE TREATED CONFIDENTIALLY ***
In
connection with the purchase by the undersigned purchaser of the purchaser’s
units, the purchaser, on its own behalf and on behalf of each of the beneficial
purchasers (if any) for whom the purchaser is acting, hereby represents,
warrants, covenants and certifies to the Company and Xxxxxxxx & Xxxxxxxxx,
Inc. (and acknowledges that the Company and Xxxxxxxx & Strudwick, Inc. and
their respective counsel are relying thereon) that the purchaser and each
of the
beneficial purchasers (if any) for whom the purchaser is acting is an
“accredited investor” as defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, because it falls within the “accredited investor”
category or categories marked below (PLEASE
XXXX EACH APPLICABLE CATEGORY BELOW USING “P” FOR THE PURCHASER AND “BP” FOR
EACH BENEFICIAL PURCHASER):
|
_____
|
Category 1.
|
A
bank, as defined in Section 3(a)(2) of the Securities
Act of 1933,
whether acting in its individual or fiduciary capacity;
or
|
|
_____
|
Category
2.
|
A
savings and loan association or other institution as defined in
Section
3(a)(5)(A) of the Securities
Act of 1933,
whether acting in its individual or fiduciary capacity;
or
|
|
_____
|
Category
3.
|
A
broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; or
|
|
_____
|
Category
4.
|
An
insurance company as defined in Section 2(13) of the Securities
Act of 1933;
or
|
|
_____
|
Category
5.
|
An
investment company registered under the Investment Company Act
of 1940;
or
|
|
_____
|
Category
6.
|
A
business development company as defined in Section 2(a)(48) of
the
Investment Company Act of 1940; or
|
|
_____
|
Category
7.
|
A
small business investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; or
|
|
_____
|
Category
8.
|
A
plan established and maintained by a state, its political subdivision
or
any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, with total assets in excess of
US
$5,000,000; or
|
|
_____
|
Category
9.
|
An
employee benefit plan within the meaning of the Employee Retirement
Income
Security Act of 1974 in which the investment decision is made by
a plan
fiduciary, as defined in Section 3(21) of such Act, which is either
a
bank, savings and loan association, insurance company or registered
investment advisor, or an employee benefit plan with total assets
in
excess of US$5,000,000 or, if a self-directed plan, the investment
decisions are made solely by persons who are accredited investors;
or
|
|
_____
|
Category 10.
|
A
private business development company as defined in Section 202(a)(22)
or
the Investment Advisors Act of 1940; or
|
|
_____
|
Category 11.
|
A
tax-exempt organization described in Section 501(c)(3) of the U.S.
Internal Revenue Code of 1986, a corporation, or similar business
trust,
or a partnership not formed for the specific purpose of acquiring
the
securities offered, with total assets in excess of US $5,000,000;
or
|
|
_____
|
Category
12.
|
A
director, executive officer or general partner of the Company or
a
director, executive officer or general partner of a general partner
of the
Company; or
|
|
_____
|
Category
13.
|
A
natural person whose individual net worth, or joint net worth with
that
person’s spouse, at the time of this purchase exceeds U S$1,000,000;
or
|
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|
_____
|
Category
14.
|
A
natural person who had an individual income in excess of US $200,000
in
each of 2006 and 2007 or joint income with that person’s spouse in excess
of US $300,000 in each of 2006 and 2007 and has a reasonable expectation
of reaching the same income level in 2008; or
|
|
_____
|
Category
15.
|
A
trust, with total assets in excess of US $5,000,000, not formed
for the
specific purpose of acquiring the securities offered, whose purchase
is
directed by a sophisticated person as described in Rule 506(b)(2)(ii)
of
Regulation D under the Securities Act of 1933; or
|
|
_____
|
Category
16.
|
An
entity in which all of the equity owners are accredited
investors.
|
DATED
this________ day of ,
2008.
|
Name
and Address of Purchaser
|
||
|
(Name
of Purchaser - please print)
|
||
| By: | ||
|
(Official
Capacity or Title of Signatory on Behalf of an Entity , or, if
purchaser
is an Individual, Please Note Individual - please print)
|
||
| Signature of Purchaser (or Authorized Signing Authority of Purchaser) | ||
| (Please print name of individual whose signature appears above if different than the name of the Purchaser printed above.) | ||
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