Subscription AGREEMENT
EXHIBIT
10.8
THIS
SUBSCRIPTION AGREEMENT (“Agreement”) is made and entered into as of this
31st day of
December 2004, by and between SmartVideo Technologies, Inc., (the “Company”), a
Delaware corporation, and ________________ (the “Purchaser”).
Background
The
Company has authorized the issuance, sale, and delivery to Accredited Investors
only of _______ units consisting of two (2) shares of common stock, par value
$0.001 (the “Shares”), of the Company and one (1) Common Stock Purchase Warrant.
The minimum investment is $50,000 although
subscriptions for less than that amount may be sold at the discretion of the
Company. The proceeds from the sale of the Shares will be used for Company
operations. The Purchaser will receive one (1) Warrant (the “Warrant”) to
purchase additional Shares of Common Stock, par value $0.001. The Warrant shall
have an exercise price of $3.50 per Share. The form of Warrant is attached
hereto as Exhibit “A”. (The Units, the Warrants, and the Warrant Shares
underlying the Warrants are hereinafter sometimes collectively referred to as
the “Securities”). The Company and Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration pursuant
to Section 4(2) and/or Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”).
Agreement
For and
in consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Purchaser hereby agree as
follows:
Section
1 Sale
of Securities.
Section
1.1 Authorization,
Issuance, and Sale. The
Company agrees to issue, sell and deliver to Purchaser and Purchaser agrees to
purchase from the Company the number of Units set forth adjacent to the caption
“Securities Purchased” on the signature page to this Agreement at a purchase
price of Four Dollars and Fifty Cents ($4.50) per Unit (the “Purchase Price”)
for an aggregate amount of $_________. In addition, the Purchaser shall receive
a Common Stock Purchase Warrant to purchase ________ additional Shares at an
exercise price of $3.50 per Share of Common Stock, par value $0.001 purchased
pursuant to this Agreement.
Section
1.2 Form
of Payment. Tender
of the aforesaid Funds, together with this Agreement shall be made by delivery
of same to the Company at SmartVideo Technologies, Inc., 0000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000 to the attention of Xxxxxxx X. Xxxxxxx, Xx.,
CEO. Purchaser shall pay the Purchase Price for the Securities to be issued and
sold to Purchaser by a wire transfer, check, certified check or cashiers check
payable to SmartVideo Technologies, Inc. Wire transfers shall be in the form of
immediately available funds to an account designated in writing by the Company.
It is contemplated that the initial acceptance of the agreement shall occur
through the exchange of signature pages delivered via facsimile and the wire
transfer of the Purchase Price with originally signed documents to follow by
overnight delivery.
Section
1.3 Acceptance
of Agreement. The
Company shall have the right to accept or reject this Agreement, in whole or in
part, in its sole discretion. In the event that the Agreement is not accepted by
the Company, all Funds shall be returned to the undersigned without interest and
without deducting any of the expenses of the offering.
Section
2 Purchaser’s
Representations and Warranties.
As an
inducement to the Company to make an offer to the undersigned, the undersigned
hereby represents and warrants to the Company as follows:
| 1. |
The
undersigned is an “Accredited Investor” within the meaning of Rule 501(a),
promulgated under the Securities Act of 1933 as amended (the “Securities
Act”), and, together with his financial advisors, if any, have such
knowledge and expertise in financial and business matters as to be capable
of evaluating the merits and risks involved in an investment in the
Shares. |
| 2. |
The
address set forth at the end of this Agreement is the undersigned’s true
and correct address, and he has no present intention of becoming a
resident of any other state or jurisdiction. |
| 3. |
The
undersigned has received and read or reviewed, and is familiar with the
terms and conditions and other information set forth in this Agreement,
and he confirms that all documents, records and books pertaining to the
investment in the Company and requested by him, have been provided to the
undersigned. |
| 4. |
The
undersigned has had an opportunity to ask of the Company, or a person or
persons acting on its behalf, any and all relevant questions of and
receive answers from the Company in connection with any aspect of the
Company and the terms and conditions of this investment, and has received
answers which the undersigned considers to be responsive to such
questions. |
| 5. |
The
undersigned understands that the Shares, the Warrants and the shares of
the Company’s common stock to be issued upon exercise of the Warrants have
not been registered under the Securities Act in reliance on an exemption
for private offerings and he further understands that he is purchasing
Securities without being furnished any offering literature or prospectus
other than this Agreement. |
| 6. |
The
Securities for which the undersigned hereby subscribes, including the
shares of common stock underlying the Warrants, are being acquired, or in
the case of the shares underlying the Warrants, will be acquired, solely
for his own account for investment and are not being purchased with a view
to or for the resale, distribution, transfer, fractionalization or other
disposition thereof, and the undersigned has no present plans to enter
into such contract, undertaking, agreement or
arrangements. |
| 7. | (a) The undersigned acknowledges and is aware of the following: |
(i)
That
there are substantial restrictions on the transferability of the Securities;
that other than as set forth in this Agreement, the Securities will not be, and
investors in the Company will have no rights to require that the Securities be,
registered under the Securities Act, except as set forth in the Registration
Rights Agreement attached hereto as Exhibit “C.”
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(ii) That
there never has been any representation, guarantee, or warranty made to the
undersigned by any broker, the Company, its officers, directors, agents
(including without limitation, the Agents), or employees or any other person,
expressly or by implication, as to:
| (a) |
The
approximate or exact length of time that he will be required to remain as
owner of the Securities. |
| (b) |
The
percentage of profits and/or amount of or type of consideration, profit or
loss (including tax credits and/or benefits) to be realized, if any, as a
result of this investment. |
| (c) |
The
past performance or experience on the part of the Company, its personnel,
affiliates, agents, employees or of any other person, will in any way
indicate the predictable results of the ownership of
Securities. |
(iii)
That the
Company will rely on the offer to purchase being made by the undersigned hereby
and that, accordingly, this offer may not be canceled, rescinded or otherwise
revoked by the undersigned.
(b)
The
Purchaser is making the foregoing representations and warranties with the intent
that they may be relied upon by the Company in determining the suitability of
the sale of the Securities to the Purchaser for purposes of Federal and State
securities laws.
| 8. | The Purchaser further acknowledges that the Purchaser has been advised that the Securities being purchased by the Purchaser hereunder have not been registered under the provisions of the Securities Act and that the Company has represented to the Purchaser (assuming the veracity of the representations of the Purchaser made herein) that the Shares have been offered and sold by the Company in reliance upon an exemption from registration provided in Section 4(2) of the Securities Act and Regulation D thereunder. |
| 9. |
In
entering into this Agreement and in purchasing the Securities, the
Purchaser further acknowledges that: |
(a)
The
Company has informed the Purchaser that the Securities have not been offered for
sale by means of general advertising or solicitation.
(b)
The
Securities and the shares of common stock underlying the Warrants may not be
resold by the Purchaser in absence of registration under the Securities Act or
exemption from registration. In particular, the undersigned is aware that the
Securities and the shares of common stock underlying the Warrants will be
“restricted securities,” as such term is defined in Rule 144 promulgated under
the Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144
until the conditions thereof are met.
(c)
The
following legend shall be placed on the Certificate(s) evidencing the
Securities:
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THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.
(d)
The
Company may place a stop transfer order on its transfer books against the
Securities. Such stop order will be removed, and further transfer of the
Securities will be permitted upon an effective registration of the respective
Securities, or the receipt by the Company of an opinion of counsel satisfactory
to the Company that such further transfer may be effected pursuant to an
applicable exemption from registration.
(e) The
purchase of the Securities involves risks which the Purchaser has evaluated, and
the Purchaser is able to bear the economic risk of the purchase of such
securities and the loss of its entire investment.
| 10. | The undersigned has completed the Investor Questionnaire attached hereto as Exhibit “D” and has delivered it herewith and represents and warrants that it is accurate and true in all respects and that it accurately and completely sets forth the financial condition of the undersigned on the date hereof. The undersigned has no reason to expect there will be any material adverse change in his financial condition. |
| 11. | The undersigned has reached the age of majority in the state in which the undersigned resides, has adequate means of providing for the undersigned's current needs and personal contingencies, is able to bear the substantial economic risks of an investment in the Securities for an indefinite period of time, has no need for liquidity in such investment, and the undersigned is prepared to lose his entire investment in the Securities. |
| 12. | The undersigned's overall commitment to investments that are not readily marketable is not, and his acquisition of Securities will not cause such overall commitment to become, disproportionate to his net worth. |
| 13. | The Purchaser acknowledges that the Purchaser has made his own investigation concerning the business and affairs of the Company. |
| 14. | The undersigned understands that the Company shall have the right to accept or reject this subscription in whole or in part. Unless this subscription is accepted in whole or in part by the Company, this subscription shall be deemed rejected in whole. |
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| 15. | It never has been represented, guaranteed or warranted by the Company, or any of its officers, directors, stockholders, employees or agents, or any other persons, whether expressly or by implication, that: |
(i)
the
Company or the undersigned 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 undersigned's investment in the Company; or
(ii) the past
performance or experience of the management of the Company, or of any other
person, will in any way indicate the predictable results of the ownership of the
Purchased Securities or of the Company's activities.
| 16. | Purchaser is able to bear the economic risks of the investment in the Purchased Securities, including the risk of a complete loss of Purchaser's investment therein. |
| 17. | Purchaser understands and agrees that the Securities will be issued and sold to Purchaser without registration under any state law relating to the registration of securities for sale, and will be issued and sold in reliance on the exemptions from registration under the Securities Act of 1933 (the “1933 Act“) provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated thereunder. |
| 18. | The Securities cannot be offered for sale, sold, or transferred by Purchaser other than pursuant to: (A) an effective registration under the 1933 Act or in a transaction otherwise in compliance with the 1933 Act; and (B) evidence satisfactory to the Company of compliance with the applicable securities laws of other jurisdictions. The Company shall be entitled to rely upon an opinion of counsel satisfactory to it with respect to compliance with the above laws. |
| 19. | Purchaser has had the opportunity to ask questions of and receive answers from the Company and any person acting on its behalf, and to obtain all material information reasonably available with respect to the Company and its affairs, and has received satisfactory answers to all such questions and received all documents and other information requested of the Company. |
| 20. | Purchaser has full power and authority to execute, deliver, and perform this Agreement without the consent or approval of any other person which has not been obtained on or prior to the date hereof. |
| 21. | This Agreement is the legal, binding, and valid obligation of Purchaser, enforceable against Purchaser in accordance with its terms. |
| 22. | The information concerning Purchaser on the Investor Questionnaire, the form of which is attached as Exhibit C hereto, is true and correct in all material respects. |
The
foregoing representations and warranties are true and accurate as of the date
hereof and shall be true and accurate as of the date of delivery of the Funds to
the Company and shall survive such delivery.
If in any
respect such representations and warranties shall not be true and accurate prior
to delivery of the Funds pursuant to Paragraph I hereof, the undersigned shall
give written notice of such fact to the Company, specifying which
representations and warranties are not true and accurate and the reasons
therefor.
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Section
3 Representations
of the Company
The
Company hereby represents and warrants to Purchaser as follows:
Section
3.1 Organization,
Standing, Power, and Authority. The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware. The Company has all requisite power and
authority to own, lease, and operate all properties and assets to be owned or
leased by it, and to conduct the business proposed to be conducted by it.
Section
3.2 Validity
and Authorization. The
execution, delivery and performance of this Agreement by the Company is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, moratorium, reorganization or other similar laws and
legal and equitable principles limiting or affecting the rights of creditors
generally and/or (b) general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
Section
4. General
Provisions
Section
4.1 Governing
Laws. This
Agreement shall be construed, administered, and enforced according to the laws
of the State of Delaware. The parties hereto agree that any appropriate state
court located in Xxxxxx County, Georgia, or any Federal Court sitting in the
Northern District of Georgia, Atlanta Division, shall have exclusive
jurisdiction of any case or controversy arising under or in connection with this
Agreement and shall be a proper forum in which to adjudicate such case or
controversy. The parties hereto consent to the jurisdiction of such
courts.
Section
4.2 Successors.
This
Agreement shall be binding upon and inure to the benefit of the heirs, legal
representatives, successors, and permitted assigns of the parties.
Section
4.3 Severability.
In the
event that any one or more of the provisions or portion thereof contained in
this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, the same shall not invalidate or otherwise affect
any other provisions of this Agreement, and this Agreement shall be construed as
if the invalid, illegal, or unenforceable provision or portion thereof had never
been contained herein.
Section
4.4 Entire
Agreement. This
Agreement expresses the entire understanding and agreement of the parties with
respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
Section
4.5 Headings.
Paragraph
headings used herein are for convenience of reference only and shall not be
considered in construing this Agreement.
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COMPANY
SIGNATURE PAGE
TO
IN
WITNESS WHEREOF, the Company has caused this Subscription Agreement to be duly
executed as of the date first written above.
|
SMARTVIDEO
TECHNOLOGIES, INC. | ||
| |
|
|
| By: | /s/ | |
|
Xxxxxxx X. Xxxxxxx, Xx. | ||
| President & CEO | ||
Corporate
Seal
[Signatures
of Purchaser on following pages.]
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PURCHASER
SIGNATURE PAGE
TO
IN
WITNESS WHEREOF, Purchaser has executed this Subscription Agreement as of this
____ day of December 2004.
| PURCHASER: | ||
| |
|
|
| By: | /s/ | |
|
Purchaser Signature | ||
|
Purchaser’s
Name, Address and Facsimile Number |
|
|
Securities
Purchased |
Units:
A
Unit Shall Consist of:
Shares
of Common Stock:
Warrant:
|
|
Name
in which Shares and Warrants are to be registered: |
