EXHIBIT 10.9
eB2B COMMERCE, INC.
SUBSCRIPTION AGREEMENT made as of this 1st day of May, 2001
between eB2B Commerce, Inc., a corporation organized under the laws of the State
of New Jersey with offices at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx
00000 (the "Company"), and the undersigned (the "Subscriber").
WHEREAS, the Company desires to issue a minimum of 30 (the
"Minimum Offering") and a maximum of 70 (the "Maximum Offering") units ("Units")
in a private placement (the "Bridge Financing"), each Unit consisting of: (i)
$100,000 principal amount of 7% convertible promissory notes (the "Notes"), in
the form attached as an exhibit to the confidential term sheet dated April 4,
2001 (the "Term Sheet"), and (ii) two-year warrants (the "Warrants") to purchase
200,000 shares of the Company's common stock, $.0001 par value (the "Common
Stock") at an exercise price equal to $1.00 per share, the Warrants to be
governed by the warrant agreement in the form attached as an exhibit to the Term
Sheet (the "Warrant Agreement") on the terms and conditions hereinafter set
forth and the Subscriber desires to acquire the number of Units set forth on the
signature page hereof;
WHEREAS, the Notes are initially convertible into either
shares (the "Preferred Shares") of the Company's series C convertible preferred
stock (the "Preferred Stock") having the rights and preferences set forth in the
Certificate of the Designations, Powers, Preferences and Rights (the
"Designation") attached as an exhibit to the Term Sheet or into shares of Common
Stock;
WHEREAS, Gruntal & Co., LLC and Commonwealth Associates, L.P.
(each a "Placement Agent" and collectively, the "Placement Agents") are acting
as placement agents in connection with the Bridge Financing.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants hereinafter set forth, the parties hereto do hereby agree
as follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY AND COVENANTS
OF SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth,
the Subscriber hereby subscribes for and agrees to purchase from the Company
such number of Units as is set forth upon the signature page hereof at a price
equal to $100,000 per Unit and the Company agrees to sell such Units to the
Subscriber for said purchase price subject to the Company's right to sell to the
Subscriber such lesser number of Units as the Company may, in its sole
discretion, deem necessary or desirable. The purchase price is payable by
certified or bank check made payable to "American Stock Transfer & Trust
Company, as Escrow Agent for eB2B Commerce, Inc." or by wire transfer of funds,
contemporaneously with the execution and delivery of this Subscription
Agreement. The Notes and Warrants will be delivered by the Company within 10
days following the consummation of the Bridge Financing as set forth in Article
III hereof.
1.2 The Subscriber 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 investors who can afford the loss of their entire
investment should consider investing in the Company and the Units; (ii) an
investment in the Units is illiquid; (iii) transferability of the securities
comprising the Units is extremely limited; and (iv) the Company will be unable
to repay the Notes without obtaining additional financing, as well as other risk
factors as more fully set forth in the Term Sheet or in the Company's filings
with the United States Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 (the "Exchange Act") or the Securities Act of
1933, as amended (the "Securities Act").
1.3 The Subscriber represents and warrants that he is an
"accredited investor" as such term in defined in Rule 501 of Regulation D
promulgated under the Securities Act, as indicated by his responses to the
investor questionnaire to be completed in connection with the Bridge Financing
(the "Investor Questionnaire"), and that he is able to bear the economic risk of
an investment in the Units. The Subscriber further represents and warrants that
the information furnished in the Investor Questionnaire is accurate and complete
in all material respects.
1.4 The Subscriber acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities
with a limited trading market and that he recognizes the highly speculative
nature of this investment.
1.5 The Subscriber hereby represents that he has been
furnished by the Company during the course of this transaction with all
information regarding the Company that he has requested or desires to know and
that he has been afforded the opportunity to ask questions of and receive
answers from duly authorized officers or other representatives of the Company
concerning the terms and conditions of the Bridge Financing. The Subscriber
represents that he was not induced to invest by any form of general solicitation
or general advertising including, but not limited to, the following: (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over the news or radio; and
(ii) any seminar or meeting whose attendees were invited by any general
solicitation or advertising.
1.6 The Subscriber acknowledges that this offering of Units
may involve tax consequences and that neither the Company nor either of the
Placement Agents has provided him with tax advice or information. The Subscriber
acknowledges that he must retain his own professional advisors to evaluate the
tax and other consequences of an investment in the Units.
1.7 The Subscriber acknowledges that the Bridge Financing has
not been reviewed by the SEC because of the Company's representations that this
is intended to be a nonpublic offering pursuant to Sections 4(2) or 3(b) of the
Securities Act. The Subscriber represents that the Notes and Warrants comprising
his Units are being purchased for his own account, for investment and not for
distribution or resale to others. The Subscriber agrees that he will not sell or
otherwise transfer the Notes or the Warrants unless they are registered under
the Securities Act or unless an exemption from such registration is available.
1.8 The Subscriber understands that Rule 144 (the "Rule")
promulgated under the Securities Act requires, among other conditions, a one
year holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the
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registration requirements under the Securities Act. The Subscriber understands
that the Company makes no representation or warranty regarding its fulfillment
in the future of any reporting requirements under the Exchange Act, or its
dissemination to the public of any current financial or other information
concerning the Company, as is required by the Rule as one of the conditions of
its availability. The Subscriber understands and hereby acknowledges that the
Company is under no obligation to register the securities comprising the Units
under the Securities Act, with the exception of certain registration rights set
forth in Article IV herein. The Subscriber agrees that the Company may, if it
desires, permit the transfer of the Notes, the Warrants, the Preferred Shares
(collectively, the "Securities") and the shares of Common Stock issuable upon
conversion of the Notes or Preferred Shares (collectively, the "Conversion
Shares") and exercise of the Warrants (the "Warrant Shares") out of his name
only when his request for transfer is accompanied by an opinion of counsel
reasonably satisfactory to the Company that neither the sale nor the proposed
transfer results in a violation of the Securities Act or any applicable state
"blue sky" laws.
1.9 The Subscriber consents to the placement of a legend on
any certificate or other document evidencing the Securities stating that they
have not been registered under the Securities Act and setting forth or referring
to the restrictions on transferability and sale thereof, and to the issuance of
stop transfer instructions with respect thereto.
1.10 The Subscriber acknowledges that if he is a Registered
Representative of an NASD member firm, he must give such firm the notice
required by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm on the signature page hereof.
1.11 If the undersigned Subscriber is a partnership,
corporation, trust or other entity, such partnership, corporation, trust or
other entity further represents and warrants that: (i) it was not formed for the
purpose of investing in the Company; (ii) it is authorized and otherwise duly
qualified to purchase and hold the Units; and (iii) that this Subscription
Agreement has been duly and validly authorized, executed and delivered
constitutes the legal, binding and enforceable obligation of the undersigned.
1.12 The Subscriber hereby represents that the address of
Subscriber furnished by him at the end of this Subscription Agreement is the
undersigned's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.
1.13 The Subscriber hereby represents that, except as set
forth in the Term Sheet or the exhibits thereto (collectively, the "Offering
Documents"), no representations or warranties have been made to the Subscriber
by the Company or any agent, employee or affiliate of the Company, including the
Placement Agents, and in entering into this transaction, the Subscriber is not
relying on any information, other than that contained in the Offering Documents
and the results of independent investigation by the Subscriber.
1.14 The Subscriber acknowledges that at such time as the
Conversion Shares and the Warrant Shares (collectively, the "Reserved Shares")
are registered, sales of such securities will be subject to state securities
laws, including those of states which may require any securities sold therein to
be sold through a registered broker-dealer or in reliance upon an exemption from
registration.
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1.15 The Subscriber acknowledges that the Maximum Offering may
be increased by up to 30 Units ($3,000,000) without notice to Subscribers.
II. REPRESENTATIONS BY THE COMPANY
2.1 The Company represents and warrants to the Subscriber that
at the date hereof and at each Closing (as hereinafter defined):
(a) The Company is a corporation duly organized, existing and
in good standing under the laws of the State of New Jersey and has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this
Subscription Agreement by the Company will have been duly approved by the board
of directors of the Company and all other actions required to authorize and
effect the offer and sale of the Units and the securities contained therein will
have been duly taken and approved.
(c) The Units have been duly and validly authorized and when
issued and paid for in accordance with the terms hereof, will be the binding
obligations of the Company.
(d) The Company will at all times have authorized and reserved
a sufficient number of Preferred Shares, Conversion Shares and Warrant Shares to
provide for conversion of the Notes and the Preferred Shares and exercise of the
Warrants.
(e) The issuance of (i) the Preferred Shares or Common Stock,
as the case may be, upon conversion of the Notes in accordance with the terms
thereof, (ii) the Warrant Shares upon the exercise of the Warrants in accordance
with the terms of the Warrant Agreement, and (iii) the Common Stock upon
conversion of the Preferred Shares in accordance with the terms of the
Designation, shall be, against payment therefor (if any), validly issued, fully
paid and nonassessable.
(f) The Company has obtained, or is in the process of
obtaining, all licenses, permits and other governmental authorizations necessary
to the conduct of its business, except where the failure to obtain any of the
same would not be reasonably likely to have a material adverse effect on the
Company; such licenses, permits and other governmental authorizations obtained
are in full force and effect; and the Company is in all material respects
complying therewith.
(g) The Company knows of no pending or threatened legal or
governmental proceedings to which the Company is a party which would be
reasonably likely to materially adversely affect the business, property,
financial condition or operations of the Company.
(h) The Company is not in violation of or default under, nor
will the execution and delivery of this Subscription Agreement, the issuance of
the Units, and the incurrence of the obligations herein and therein set forth
and the consummation of the transactions herein or therein contemplated, result
in a violation of, or constitute a default under, the Company's articles of
incorporation or by-laws, any material obligations, agreement, covenant or
condition contained in any bond, debenture, note or other evidence of
indebtedness or in any material contract, indenture, mortgage, loan agreement,
lease, joint venture or other agreement or
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instrument to which the Company is a party or by which it or any of its
properties may be bound or any material order, rule, regulation, writ,
injunction, or decree of any government, governmental instrumentality
or court, domestic or foreign.
III. TERMS OF SUBSCRIPTION
3.1 The subscription period will begin as of the date hereof
and will terminate at 11:59 PM Eastern time on April 16, 2001, unless extended
by mutual agreement of the Company and the Placement Agents for up to an
additional 30 days (the "Termination Date"); provided, however, that the
Placement Agents shall have the right to the 30-day extension if 50 Units have
been subscribed for prior to April 12, 2001. Such extension may be effected
without notice to the Subscribers. Of the Xxxxx, 00 will be offered on a "best
efforts-all or none" basis and the remaining Units will be offered on a "best
efforts" basis.
3.2 As compensation for the Placement Agents' services in
connection with the Bridge Financing, the Company shall (A) pay to the Placement
Agents a placement fee equal to 10% of the aggregate purchase price of the Units
sold in the Bridge Financing, (B) reimburse the accountable expenses of the
Placement Agents, and (C) issue to the Placement Agents or their designees
five-year options (the "Agents' Options") to purchase that number of Units as
equals 15% of the Units issued to investors in the Bridge Financing at a price
equal to $100,000 per Unit; provided, however, that with respect to Units
purchased by any investor introduced by the Company to the Placement Agents and
for whom the Company is obligated to pay a finder's fee to an unrelated third
party, the Company shall, in lieu of the fees specified in the preceding part of
this sentence, (A) pay to the Placement Agents a placement fee equal to 7% of
the aggregate purchase price of the Units sold to such investors and (B) issue
to the Placement Agents or their respective designees Agents' Options to
purchase that number of Units as equals 10% of the Units issued to such
investors. The Company shall also pay all expenses in connection with the
qualification of the Units under the securities or blue sky laws of the states
which the Placement Agents shall designate, including legal fees and filing
fees.
3.3 Pending the sale of the Units, all funds paid hereunder
shall be deposited by the Company in escrow with American Stock Transfer & Trust
Company. If the Company shall not have obtained subscriptions (including this
subscription) for purchases of $3,000,000 of Units on or before the Termination
Date, then this subscription shall be void and all funds paid hereunder by the
Subscriber, without interest, shall be promptly returned to the Subscriber,
subject to paragraph 3.5 hereof. If 30 Units have been subscribed for at or
prior to the Termination Date, then all subscription proceeds shall be paid over
to the Company within five business days thereafter at an initial closing (the
"Initial Closing"). In such event, placements of additional Units may continue
until the Termination Date, with subsequent releases of funds (each, a
"Closing") to be at the mutual consent of the Company and the Placement Agents.
3.4 The Subscriber hereby authorizes and directs the Company
to deliver certificates representing the securities to be issued to such
Subscriber pursuant to this Subscription Agreement either (a) to the residential
or business address indicated in the Investor Questionnaire or (b) directly to
the Subscriber's account, if any, maintained with either of the Placement
Agents.
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3.5 The Subscriber hereby authorizes and directs the Company
to return any funds for unaccepted subscriptions to the same account from which
the funds were drawn, including any customer account maintained with a Placement
Agent.
3.6 If the Subscriber is not a United States person, such
Subscriber hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the securities comprising the Units or any use of this
Subscription Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Units, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the securities comprising the Units (and the Subscriber
consents to the withholding of U.S. federal income tax with respect to interest
on the Notes). Such Subscriber's subscription and payment for, and his or her
continued beneficial ownership of the Units, will not violate any applicable
securities or other laws of the Subscriber's jurisdiction.
IV. REGISTRATION RIGHTS
4.1 Automatic Registration. The Company hereby agrees with the
holders of the Securities or their transferees (collectively, the "Holders")
that no later than three months following the date of the Initial Closing, the
Company shall prepare and file a registration statement under the Securities Act
with the SEC covering the Reserved Shares, and the Company will use its best
efforts to cause such registration to become effective as promptly as
practicable and within two months thereafter. In the event that the Company's
registration statement has not been declared effective by the SEC within six
months following the date of the Initial Closing or if the registration
statement has been suspended beyond periods mutually agreed upon by the Company
and the Placement Agents, then the conversion price of the Notes and the
Preferred Shares and the exercise price of the Warrants shall be reduced by 5%
for each month or portion thereof that such registration statement is not
effective or has been suspended until such time as the registration statement is
declared effective or the suspension ceases and the prospectus may be used. The
Company's obligation to keep the registration statement effective shall continue
until the Reserved Shares are eligible for resale pursuant to Rule 144(k) under
the Securities Act.
4.2 "Piggyback" Registration Rights. At any time commencing
six months after the Initial Closing, if the Company shall determine to proceed
with the actual preparation and filing of a registration statement under the
Securities Act in connection with the proposed offer and sale of any of its
securities by it or any of its security holders (other than a registration
statement on Form X-0, X-0 or other limited purpose form), the Company will give
written notice of its determination to all record holders of the Securities.
Upon the written request from any record holders participating in the Bridge
Financing (the "Requesting Holders"), within 15 days after receipt of any such
notice from the Company, the Company will, except as herein provided, cause all
such Reserved Shares to be included in such registration statement, all to the
extent requisite to permit the sale or other disposition by the prospective
seller or sellers of the Reserved Shares to be so registered; provided, further,
that nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration. If any registration pursuant to this Section 4.2
shall be underwritten in whole or in part, the Company may require that the
Reserved Shares requested for inclusion pursuant to this Section 4.2 be included
in the underwriting on the same terms and conditions as the securities otherwise
being sold through the
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underwriters. In such event, the Requesting Holders shall, if requested by the
underwriters, execute an underwriting agreement containing customary
representations and warranties by selling stockholders and a lock-up on shares
not being sold. If in the good faith judgment of the managing underwriter of
such public offering the inclusion of all of the Reserved Shares originally
covered by a request for registration (the "Requested Stock") would reduce the
number of shares to be offered by the Company or interfere with the successful
marketing of the shares of stock or other securities offered by the Company, the
number of shares of Requested Stock otherwise to be included in the underwritten
public offering may be reduced pro rata (by number of shares) among the holders
thereof requesting such registration or excluded in their entirety if so
required by the underwriter. To the extent only a portion of the Requested Stock
is included in the underwritten public offering, those shares of Requested Stock
which are thus excluded from the underwritten public offering shall be withheld
from the market by the holders thereof for a period, not to exceed 90 days,
which the managing underwriter reasonably determines is necessary in order to
effect the underwritten public offering.
The obligation of the Company under this Section 4.2 shall not
apply to Reserved Shares that at such time are eligible for immediate resale
pursuant to Rule 144(k) under the Securities Act.
4.3 Registration Procedures. To the extent required by Section
4.1 and Section 4.2, the Company will:
(a) prepare and file with the SEC a registration statement
with respect to such securities, and use its best efforts to cause such
registration statement to become and remain effective;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective;
(c) furnish to the Holders participating in such registration
and to the underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably request
in order to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as the Holders may reasonably request in writing
within 20 days following the original filing of such registration statement,
except that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(e) notify the Holders, promptly after it shall receive notice
thereof, of the time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration statement has
been filed;
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(f) notify the Holders promptly of any request by the SEC for
the amending or supplementing of such registration statement or prospectus or
for additional information;
(g) prepare and file with the SEC, promptly upon the request
of any Holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such Holders (and concurred in
by counsel for the Company), is required under the Securities Act or the rules
and regulations thereunder in connection with the distribution of Common Stock
by such Holders;
(h) prepare and promptly file with the SEC and promptly notify
such Holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(i) advise the Holders, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued.
The Holders shall cooperate with the Company in providing the
information necessary to effect the registration of their Reserved Shares,
including completion of customary questionnaires.
4.4 Expenses.
(a) With respect to the registration required pursuant to
Sections 4.1 or 4.2 hereof, all fees, costs and expenses of and incidental to
such registration, inclusion and public offering (as specified in paragraph (b)
below) in connection therewith shall be borne by the Company, provided, however,
that the Holders shall bear their pro rata share of the underwriting discount
and commissions and transfer taxes and the cost of their own counsel.
(b) The fees, costs and expenses of registration to be borne
by the Company as provided in paragraph (a) above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in 4.4(a) above). Fees and
disbursements of counsel and accountants for the Holders and any other expenses
incurred by the Holders not expressly included above shall be borne by the
Holders.
4.5 Indemnification.
(a) The Company will indemnify and hold harmless each Holder
of Reserved Shares which are included in a registration statement pursuant to
the provisions of Section 4.1 or
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Section 4.2 hereof, its directors and officers, and any underwriter (as defined
in the Securities Act) for such Holder and each person, if any, who controls
such Holder or such underwriter within the meaning of the Securities Act, from
and against, and will reimburse such Holder and each such underwriter and
controlling person with respect to, any and all loss, damage, liability, cost
and expense to which such Holder or any such underwriter or controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, damages, liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, damage, liability,
cost or expenses arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by or on behalf of such Holder, such underwriter or such
controlling person in writing specifically for use in the preparation thereof.
(b) Each Holder of Reserved Shares included in a registration
pursuant to the provisions of Section 4.1 or Section 4.2 hereof will indemnify
and hold harmless the Company, its directors and officers, any controlling
person and any underwriter from and against, and will reimburse the Company, its
directors and officers, any controlling person and any underwriter with respect
to, any and all loss, damage, liability, cost or expense to which the Company or
any controlling person and/or any underwriter may become subject under the
Securities Act or otherwise, insofar as such losses, damages, liabilities, costs
or expenses are caused by any untrue statement or alleged untrue statement of
any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in conformity with
written information furnished by or on behalf of such Holder specifically for
use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to
the provisions of paragraph (a) or (b) of this Section 4.5 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party hereunder, except to
the extent that the indemnifying party is actually prejudiced thereby. In case
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, provided, however,
if counsel for the indemnifying party concludes that a single counsel cannot
under applicable legal and ethical considerations, represent both the
indemnifying party and the indemnified party, the indemnified party or parties
have the right to select separate counsel to participate in the defense of such
action on behalf of such indemnified
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party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party pursuant to the provisions of said
paragraph (a) or (b) for any legal or other expense subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless (i) the indemnified party shall have
employed counsel in accordance with the provisions of the preceding sentence,
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after the notice of the commencement of the action or (iii)
the indemnifying party has, in its sole discretion, authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the Company, at its registered office, 000 Xxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxx, Xx.,
Esq. and to the Subscriber at his address indicated on the last page of this
Subscription Agreement. Notices shall be deemed to have been given on the date
of mailing, except notices of change of address and notices sent from outside
the continental United States, which shall be deemed to have been given when
received.
5.2 This Subscription Agreement shall not be changed, modified
or amended except by a writing signed by the parties to be charged, and this
Subscription Agreement may not be discharged except by performance in accordance
with its terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
5.4 Notwithstanding the place where this Subscription
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed in accordance
with and governed by the laws of the State of New York without regard to such
states laws regarding conflicts of laws. The parties hereby agree that any
dispute which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in New York
City and they hereby submit to the exclusive jurisdiction of the courts of the
State of New York located in New York, New York and of the federal courts in the
Southern District of New York with respect to any action or legal proceeding
commenced by any party, and irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action or proceeding brought
in such a court or respecting the fact that such court is an inconvenient forum,
relating to or arising out of this Subscription Agreement or any acts or
omissions relating to the sale of the securities hereunder, and consent to the
service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
below or such other address as the undersigned shall furnish in writing to the
other.
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5.5 This Subscription Agreement may be executed in
counterparts. Upon the execution and delivery of this Subscription Agreement by
the Subscriber, this Subscription Agreement shall become a binding obligation of
the Subscriber with respect to the purchase of Units as herein provided;
subject, however, to the right hereby reserved to the Company to enter into the
same agreements with other subscribers and to add and/or to delete other persons
as subscribers.
5.6 The holding of any provision of this Subscription
Agreement to be invalid or unenforceable by a court of competent jurisdiction
shall not affect any other provision of this Subscription Agreement, which shall
remain in full force and effect.
5.7 It is agreed that a waiver by either party of a breach of
any provision of this Subscription Agreement shall not operate, or be construed,
as a waiver of any subsequent breach by that same party.
5.8 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
Subscription Agreement.
VI. BLUE SKY LEGENDS
California The sale of securities which are the subject of
this agreement has not been qualified with the Commissioner of Corporations of
the State of California and the issuance of such securities or the payment or
receipt of any part of the consideration for such securities prior to such
qualification is unlawful, unless the sale of securities is exempt from
qualification by Section 25100, 25102 or 25105 of the California Corporations
Code. The rights of all parties to this agreement are expressly conditioned upon
such qualification being obtained, unless the sale is so exempt.
Connecticut The undersigned acknowledges that the Securities
have not been registered under the Connecticut Uniform Securities Act, as
amended (the "Act") and are subject to restrictions on transferability and sale
of securities as set forth herein. The undersigned hereby agrees that such
Securities will not be transferred or sold without registration under the Act or
exemption therefrom.
Pennsylvania The undersigned hereby acknowledges that the
Issuer is relying upon the exemption from registration of securities set forth
in Section 203(d) of the Pennsylvania Securities Act of 1972, as amended (the
"Pennsylvania Act") in connection with the sale of the Securities to the
undersigned.
In accordance with the requirements of Section 203(d) of the
Pennsylvania Act, the undersigned hereby agrees not to sell his Securities
within twelve (12) months from the date of purchase except pursuant to Section
204.01 of the Blue Sky Regulations of the Pennsylvania Securities Act of 1972.
Additionally, the undersigned is aware of the right of withdrawal under Section
207(m) of the Act described in the cover pages of the Term Sheet.
Texas The undersigned hereby acknowledges that the Securities
cannot be sold unless they are subsequently registered under the Securities Act
of 1933, as amended, and the Texas Securities Act, or an exemption from
registration is available. The undersigned further
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acknowledges that because the Securities are not readily transferable, he must
bear the economic risk of his investment for an indefinite period of time.
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IN WITNESS WHEREOF, the parties have executed this
Subscription Agreement as of the day and year first written above.
----------------------------------- ------------------------------------------
Signature of Subscriber Signature of Co-Subscriber
----------------------------------- ------------------------------------------
Name of Subscriber Name of Co-Subscriber
[please print] [please print]
----------------------------------- ------------------------------------------
Address of Subscriber Address of Co-Subscriber
----------------------------------- ------------------------------------------
Social Security or Taxpayer Social Security or Taxpayer Identification
Identification Number of Subscriber Number of Co-Subscriber
-----------------------------------
Subscriber's Account Number
at Commonwealth Associates
-----------------------------------
Dollar Amount of Units Subscribed For
*If Subscriber is a Registered Representative
with an NASD member firm, have the following
acknowledgment signed by the appropriate party:
The undersigned NASD member firm
acknowledges receipt of the notice Subscription Accepted:
required by Rule 3040 of the NASD Conduct Rules
EB2B COMMERCE, INC.
By:
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Name of NASD Member Name:
Title
By
----------------------------------------------------- -------------------------------------------
Authorized Officer Dollar Amount of Unit Subscription Accepted
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