EXHIBIT 4.1
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (The "Agreement") is made as of the
__________day of _______________, 2001 by and among SONUS
COMMUNICATION HOLDINGS, INC., a Delaware corporation ("Sonus" or
the "Company"), and the investors who complete and return to
Sonus the attached Schedule A, which is expressly made a part
hereof the (the "Investors").
WITNESSETH
WHEREAS, the Company desires to sell to the Investors up to 150
Units (the "Units" as defined in Section 1 Below) offered by the
Company, subject to the terms and conditions set forth herein;
and
WHEREAS, the Investors desire to purchase such Units;
NOW, THEREFORE, in consideration for the mutual covenants and
agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Units.
Each Unit sold hereunder shall include one $1000 8%
Convertible Debenture of the Company (the "Debenture"))
and a common stock purchase warrant, which entitles the
holder to purchase 16,000 shares of the common stock of
the Company, par value $.0001 per share (the "Common
Stock")for $.01 per share (the "Warrant"), as adjusted in
accordance with the terms of the Warrant.
2. Purchase and Sale of Units.
a. Sale and Issuance. Subject to the terms and
conditions of the Agreement, each Investor agrees,
severally but not jointly, to purchase at the
Closing (as hereinafter defined), and Sonus agrees
to sell and issue at the Closing, the number of
Units set forth on the Investor's signature page,
attached hereto as Schedule A, for the purchase
price of $1000 per Unit, to be paid by check subject
to collection, or wire transfer, from Investor and
delivered to Sonus upon execution and delivery
hereof by Investor.
b. Maximum Offering. The offering of the Units
("offering") shall be conducted by Sonus. There is
no minimum subscription for Units or minimum
aggregate offering. The maximum subscription is 150
Units or $150,000. Subject to the foregoing,
closings will be held at the discretion of the
Company, upon receipt of subscriptions and
acceptance thereof by Sonus. An executed copy of
the Subscription Agreement, and a statement of
accredited investors (if not already filed with the
Company), together with the purchase price, should
be returned to the Company. All funds will be held
at Commercial Bank of New York, pending Closing, and
will be returned in full, without interest, if Sonus
rejects a subscription or terminates the Offering.
This Offering shall terminate on_________, unless
extended by the Company in its sole discretion (the
"Termination Date").
c. Closings. The purchase and sale of the Units shall
take place at a closing at the office of the
Company, 00 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX
00000, upon receipt of acceptable subscriptions by
Sonus, or at such other time and place as Sonus may
designate (the "Closing"); provided that all
Closings shall take place no later than the
Termination Date. At the Closing, Sonus shall
accept the subscription payments against delivery to
its transfer agent of irrevocable instructions
directing the transfer agent to issue to the
Investors certificates representing the portion of
their Units comprised of Debentures and against
issuance of the Warrants to Investors.
3. Representations and Warranties of Sonus.
a. Organization, Good Standing and Qualification.
Sonus is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware, and has all requisite power and
authority to carry on its business as now conducted.
Sonus is duly qualified to transact business and is
in good standing, in each jurisdiction in which the
failure to so qualify would have a material adverse
effect on its business.
b. Capitalization. The authorized capital of Sonus
consists of 1000,000,000 shares of Common Stock, par
value $.0001, of which 12,092,285 are issued and
outstanding, not including any options, warrants or
convertible securities.
c. Authorization. Corporate action on the part of the
Company necessary for the authorization, execution
and delivery of this Agreement, the performance of
all obligations of the Company hereunder and the
authorization, issuance and delivery of the Units,
to the extent that the foregoing requires
performance on or prior to the Closing, has been
taken or will be taken on or prior to the Closing,
and Company has requisite corporate power and
authority to enter into this Agreement.
4. Representations and Warranties of Investors. Each Investor
hereby represents and warrants to Sonus as follows:
a. Power and Authority; Binding Obligation. Investor
has full power and authority to enter into this
Agreement. This Agreement has been duly duly
executed and delivered by Investor and, assuming due
authorization, execution and delivery by Sonus,
constitutes Investor's valid and legally binding
obligation enforceable against the Investor in
accordance with its terms, subject to the effect of
any applicable bankruptcy, reorganization,
insolvency (including, without limitation, all laws
relating to fraudulent transfers), moratorium or
similar laws affecting creditors' rights generally,
subject, as to enforceability, to the effect of
general principles of equity (regardless of whether
such enforceability is considered in a proceeding in
equity or at law) and subject to the effect of
applicable securities laws as to rights of
indemnification.
b. Purchase Entirely for Own Account, Etc. The Units
to be purchased by Investor hereunder will be
acquired for investment for Investor's own account,
not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof.
Investor has no present intention of selling,
granting any participation in, or otherwise
distributing the Units. Investor does not have any
contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation
to any person with respect to the Units. The
Investor has not construed the contents of the
agreement, or any additional agreement with respect
tot the proposed investment n the Units or any prior
or subsequent communications form Sonus, or any of
its officers, employees or representatives, as
investment, or legal advice, or as information
necessarily applicable to such Investor's particular
financial situation. The investor has consulted its
own financial advisor, tax advisor, legal counsel
and accountant, as necessary or desirable, as to
matters concerning his investment in the Units.
c. Disclosure. Investor has received or reviewed all
the information, which such Investor has requested
for the purposes of determining the merits of the
Units as an investment. Investor has had an
opportunity to ask questions and receive answers
from the Company regarding the Company, its
business, and the terms and conditions of the
offering of Units. INVESTOR ACKNOWLEDGES AND AGREES
THAT THE PURCHASE OF THE UNITS INVLVES A HIGH DEGREE
OF RISK, AND MAY RESULT IN A LOSS OF THE ENTIRE
AMOUNT INVESTED. THERE IS NO ASSURANCE THAT THE
COMPANY'S OPERATIONS WILL BE PROFITABLE IN THE
FUTURE OR THAT ANY PUBLIC MARKET FOR THE UNITS WILL
BE AVAILABLE.
d. Accredited Investor. Investor is an accredited
investor as defined in Rule 501(a) of Regulation D
under the Securities Act of 1933, as amended
("Securities Act"). The information provided by
Investor on the Statement of Accredited Investor,
previously filed with the Company is still true and
correct in all respects as of the date first set
forth above. Investor is capable of bearing the
economic risk of an investment in the Units,
including the possible loss of Investor's entire
investment. Investor has such knowledge and
experience in financial or business matters that it
is capable of evacuating the merits and risks of an
investment in the Units offered hereby. If other
than an individual, Investor has not been organized
solely for the purpose of acquiring the Units.
e. Restricted Securities: Investor understand that the
Units being purchased hereunder are "restricted
securities" as defined in the Securities Act, and
that under federal and state securities laws the
Units may be resold without registration under the
Securities Act only in certain limited
circumstances. Investor is familiar with Rule 144
promulgated by the Commission under the Securities
Act, and understands the resale limitations imposed
thereby and by the Securities Act generally.
Investor also acknowledges that the Units are
subject to significant restrictions on transfer,
pledge or hypothecation.
f. Legends. It is understood that certificates or
other evidence of the Units may bear the following
legend, as well as any legend required by the laws
of any state:
" "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED THE ABSENCE OR A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED
PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE
SECURITIES ACT OF 1933, AS AMENDED."
g. Consents and Approvals; No Conflict.
(i) The execution and delivery of this Agreement by
the Investor does not, and the performance of the
Agreement by the Investor will not, require any
consent, approval, authorization or other action by,
or filing with or notification to, any governmental
or regulatory authority, except where failure to
obtain such consent, approval, authorization or
action, or to make such filing or notification,
would not prevent Investor from performing any of
its material obligations under this Agreement.
(ii) The execution, delivery and performance of this
Agreement by the Investor does not (A) in the
case of any Investor that is not an individual,
conflict with or violate the charter or by-
laws, partnership or other governing documents
of such Investor, or (B) except as would not
have a material adverse effect on the ability
of the Investor to consummate the transaction
contemplated by this Agreement, conflict with
or violate any law, rule, regulation, order,
writ, judgement, injunction, decree,
determination or award applicable to the
Investor.
5. Covenants of Investors. Each Investor hereby represents and
warrants to Sonus as follows:
a. Limitations on Disposition. Investor shall not
make any disposition of all or any portion of the
Units unless and until such proposed disposition
shall in all respects comply with the following
terms and conditions:
(i) There is then in effect a registration
statement under the Securities Act covering
such proposed disposition, and such disposition
is made in accordance with such registration
statement; or
(ii) Such Investor shall have notified Sonus of the
proposed disposition and shall have furnished
Sonus with a detailed statement of the
circumstances surrounding the proposed
disposition, and, if requested by Sonus, such
Investor shall have furnished the Company with
an opinion of counsel, in form and substance
satisfactory to Sonus, that such disposition
will not require registration of the Units
under the Securities Act.
b. Confidentiality. Investor shall maintain in
confidence, and shall not use or disclose without
the prior written
consent of Sonus, any information that is furnished
to it by the Company or its agents in connection
with this Agreement. This obligation of
confidentiality shall not apply, however, to any
information (i) in the public domain through no
unauthorized act or failure to act by any Investor,
(ii) lawfully disclosed to such Investor by a third
party who possessed such information without any
obligation of confidentiality, (iii) known
previously by such Investor or lawfully developed by
such Investor independent of any disclosure by Sonus
or its agents or (iv) disclosed to legal or
financial advisors in the ordinary course of
evaluating this investment; provided, however, that
such advisors agree to be bound by the provisions of
this Section 5.b. Investor shall return to Sonus
all materials containing such information upon
request by Sonus in the event that Investor's
subscription is not accepted by Sonus.
6. Conditions of Investor's Obligations at Closing. The
obligations of each Investor hereunder are subject to , and
contingent upon, the fulfillment, on or before each Closing,
of each of the following conditions, the waiver of which shall
not be effective against any Investor who does not consent in
writing thereto:
a. Representations and Warranties. The
representations and warranties of Sonus contained
herein shall be true and correct on and as of the
closing with the same effect as though such
representations and warranties had been made on
and as of the date of such Closing.
b. Performances. Sonus shall have performed and
complied with all agreements, obligations and
covenants contained in this Agreement that are
required to be performed or complied with by it
on or before the Closing; provided that the
obligations of the Investors shall not be subject
to or contingent upon the issuance by Sonus of
the Units to the persons or entities who submit
the attached Schedule A who have not performed or
tendered the performance of their obligations
required to be performed under this Agreement on
or prior to the Closing.
7. Conditions of Sonus's Obligations at Closing. The
obligations of Sonus to each Investor hereunder are subject to
and contingent upon the fulfillment by such Investor, on or
before the Closing, of each of the following conditions.
a. Representations and Warranties. The
representations and warranties of the Investor
contained in Section 3 hereof shall be true and
correct on and as of the Closing with the same
effect as though such representations and
warranties had been made on and as of the date of
such Closing.
b. Payment of Purchase Price by Investors. Each
Investor shall have delivered to Sonus the
purchase price specified in Schedule A attached
hereto, n the manner specified in Section 2
hereof.
c. Statement of Accredited Investor. Each Investor
shall have delivered to Sonus the statement of
Accredited Investor in the form set forth in
Schedule B attached hereto, and the information
provided therein shall be complete and correct on
and as of the Closing with the same effect as
though such information had been provided as of
the date of such Closing.
8. Registration Rights. With regard to the shares of Common
Stock issuable upon conversion of the Debentures or exercise
of the Warrants, the Investors shall only have those
registration rights which are specifically set forth in the
Debentures and the Warrants themselves.
9. Miscellaneous.
a. Survival of Warranties. The representations,
warranties and covenants of the Investors
contained in this Agreement shall survive the
execution and delivery of this Agreement and the
Closing.
b. Successors and Assigns. This Agreement may not
be assigned by any party hereto; the terms and
conditions of the Agreement shall inure to the
benefit of, and be binding upon, the respective
successors of the parties. Nothing in this
Agreement, express or implied, is intended to
confer upon any party, other than the parties
hereto or their respective successors, any
rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as
expressly provided in the Agreement.
c. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of
the State of Delaware, without regard to the
principles of conflict of laws thereof.
d. Counterparts. This Agreement may be executed in
one or more counterparts, each of, which shall be
deemed an original, but all of which together
shall constitute one and the same instrument.
e. Titles and Subtitles. The titles and subtitles
used in this Agreement are used for convenience
only and are not to be considered in construing
or interpreting this Agreement.
f. Notices. Unless otherwise provided, any notice
required or permitted hereunder shall be given by
personal service upon the party to be notified,
by nationwide overnight delivery service or upon
deposit with the United States Post Office, by
certified mail, return receipt requested and:
i. if to Sonus, addressed to SONUS COMMUNICATION
HOLDINGS, INC., c/o Mr. Xxxxx Xxxxx, 55 Xxxx
Street, 2nd FL, Xxx Xxxx, XX 00000 with a copy
to Xxxxx X. Xxxxxx, III, Esq., XxXxxxx Xxxxx LLP,
Seven Saint Xxxx Street, Baltimore, Maryland
21202 or at such other address as the Company may
designate by notice to each of the Investors in
accordance with the provisions of the Section 11;
and
ii. if to the Investors, at their respective
addresses indicated on the signature pages
hereof, or at such other addresses as any one or
more Investors may designate by notice to Sonus
in accordance with the provisions of this Section
11.
g. Expenses. Irrespective of whether a Closing is
effected, Sonus and the Investors shall pay all
of their own costs and expenses incurred with
respect to the negotiation, execution, delivery
and performance of this Agreement. If any action
at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary
disbursements in addition to any other relief to
which such party may be entitled.
h. Amendments and Waivers. Any term of this
Agreement may be amended and the observance of
any term of this Agreement may be waived (either
generally or in a particular instance and either
prospectively or retroactively), only with the
written consent of Sonus and a majority in
interest of the Investors purchasing Units in
this Offering.
i. Severability. If one or more provisions of the
Agreement are held to be unenforceable under
applicable law, such provisions shall be excluded
form this agreement and the balance of this
Agreement shall be interpreted as if such
provision were so excluded, and this Agreement
shall be otherwise enforceable in accordance with
its terms.
j. Entire Agreement. This Agreement (including the
exhibits and schedules hereto) with respect to
the subject matter hereof and supersedes all
prior agreements, understandings, negotiations
and discussions, whether oral or written, of the
parties hereto.
10. Releases Subject to and in consideration of the
foregoing, Investor hereby releases and discharges
Xxxxxxxx Xxxxxxxxxx, Xxxxxxx Xxxxxxxxxx, X. Xxxxxxxxxx &
Co., Incorporated, and Quadrant Management, Inc. (the
Releasees), and their principals, parents,
subsidiaries,affiliates, predecessors, successors,
shareholders, current and former officers, current and
former directors, employees, representatives, current and
former attorneys, heirs, and assigns, from any and all
past and present actions, causes of action, suits,
claims, counterclaims, complaints, rights, obligations,
debts, demands, agreements, damages, judgments, promises,
representations, extents, executions, liabilities,
controversies, costs, expenses and attorneys' fees
whatsoever, whether based on federal or state law,
equity, right of arbitrationor otherwise, whether filed
with any federal or state court, regulatory authority,
self-regulating authority or stock exchange (including,
without limitation, the National Association of
Securities Dealers, Inc., TheNASDAQ/AMEX Market Group,
the Securities and Exchange Commission or any affiliates
or successors thereto), whether known or unknown, whether
or not accrued, and whether or not asserted in litigation
or arbitration which they ever had, now have or may
hereafter have from the beginning of the world until the
day of the date of this Agreement relating to the
Company. The Investor also hereby agrees not to
participate in or assist with any class action or other
proceeding brought against any of the Releasees.
IN WITNESS WHEREOF, the parties hereto executed this
Agreement as of the date first above written.
SONUS COMMUNICATION
HOLDING, INC.
By:
___________________________________
Name
Title
(Investor Signature
Pages Follow)
