Contract
Exhibit
10.1
THIS
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (“SUBSCRIPTION AGREEMENT”) RELATES TO
AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT
U.S.
PERSONS PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF
1933,
AS AMENDED (THE “1933 ACT”).
NONE
OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE
“SUBSCRIPTION AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR
ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED
OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT. “UNITED
STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933
ACT.
CONFIDENTIAL
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(Offshore
Subscribers)
1. |
Subscription
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1.1 The
undersigned (the “ Subscriber”)
hereby irrevocably subscribes for and agrees to purchase 1,444,444
shares
of the common stock of the Company (“ Common
Stock”)
(each,
a “ Share”)
at a
price per Share of USD $0.90
(such
subscription and agreement to purchase being the “ Subscription”),
for
an aggregate purchase price of USD $1,300,000
(the “
Subscription
Proceeds”).
1.2 On
the
basis of the representations and warranties and subject to the terms and
conditions set forth herein, the Company hereby irrevocably agrees to sell
the
Shares to the Subscriber.
1.3 Subject
to the terms hereof, the Subscription will be effective upon its acceptance
by
the Company.
2. |
Payment
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2.1 The
Subscription Proceeds must accompany this Subscription. The Subscription
Proceeds shall be wired to Aboudi & Xxxxxxxxxx, Law office, counsel to the
Company, pursuant to the wiring instructions set out in Appendix A attached
hereto.
2.2 In
the
event that this Subscription Agreement is not accepted by the Company for
whatever reason, and the Company hereby expressly reserves the right to accept
or reject this Subscription, within 20 days of the delivery of an executed
Subscription Agreement by the Subscriber, this Subscription Agreement, the
Subscription Proceeds (without interest thereon) and any other documents
delivered in connection herewith will be returned to the Subscriber at the
address of the Subscriber as set forth in this Subscription
Agreement.
2.3 Where
the
Subscription Proceeds are paid to the Company, the Company is entitled to treat
such Subscription Proceeds as an interest free loan to the Company until such
time as the Subscription is accepted and the certificates representing the
Shares have been issued to the Subscriber.
3. |
Documents
Required from the
Subscriber
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3.1 The
Subscriber must complete, sign and return to the Company an executed copy of
this Subscription Agreement.
3.2 The
Subscriber shall complete, sign and return to the Company as soon as possible,
on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by the Company in order to enable or show
compliance with the requirements of regulatory authorities and applicable
law.
4. |
Closing
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4.1 Closing
of the offering of the Shares (the “ Closing”)
shall
occur on or before June
30, 2007,
or on
such other date as may be determined by the Company (the “ Closing
Date”).
5. |
Acknowledgments
of the Subscriber
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The
Subscriber acknowledges and agrees as follows:
(i) |
None
of the Shares have been registered under the 1933 Act, or under any
state
securities or “blue sky” laws of any state of the United States, and,
unless so registered, they may not be offered or sold in the United
States
or, directly or indirectly, to U.S. Persons, as that term is defined
in
Regulation S under the 1933 Act (“Regulation S”), except in accordance
with the provisions of Regulation S, pursuant to an effective registration
statement under the 1933 Act, or pursuant to an exemption from, or
in a
transaction not subject to, the registration requirements of the
1933 Act
and in each case in accordance with applicable state and provincial
securities laws;
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(ii) |
the
Subscriber acknowledges that the Company has not undertaken, and
will have
no obligation, to register any of the Shares under the 1933 Act,
except in
accordance with Section 5 of this Subscription
Agreement;
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(iii) |
no
prospectus or offering memorandum within the meaning of the securities
laws has been delivered to or summarized for or seen by the Subscriber
(and, if applicable, others for whom it is contracting hereunder)
in
connection with the Subscription (and, if applicable, others for
whom it
is contracting hereunder) is not aware of any prospectus or offering
memorandum having been prepared by the
Company;
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(iv) |
the
decision to execute this Subscription Agreement and acquire the Shares
hereunder has not been based upon any oral or written representation
as to
fact or otherwise made by or on behalf of the Company, and such decision
is based entirely upon a review of information (the adequacy of which
is
hereby acknowledged) about the Company that is available to any member
of
the public on the XXXXX database maintained by the U.S. Securities
and
Exchange Commission (the “ SEC”)
at xxx.xxx.xxx;
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(v) |
it
has not received, nor has it requested, nor does it have any need
to
receive, any offering memorandum (as defined by or contemplated in
applicable securities legislation) or any other document (other than
financial statements or any other continuous disclosure documents,
the
contents of which are prescribed by statute or regulation) describing
the
business and affairs of the Company which has been prepared for delivery
to, and review by, prospective subscribers in order to assist them
in
making an investment decision in respect of the Shares, and it has
not
become aware of any advertisement including without limitation in
printed
media of general and regular paid circulation or on radio or television
with respect to the distribution of the
Shares;
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(vi) |
no
securities commission or similar regulatory authority has reviewed
or
passed on the merits of the Shares;
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(vii) |
there
is no government or other insurance covering any of the
Shares;
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(viii) |
there
are risks associated with an investment in the Shares including,
by way of
example and not in limitation, the specific risks identified in the
Company’s most recent periodic reports filed with the SEC and available
for viewing at the SEC’s website at xxx.XXX.xxx
;
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(ix) |
the
Subscriber has not acquired the Shares as a result of, and will not
itself
engage in, any “directed selling efforts” (as that term is defined in
Regulation S under the 0000 Xxx) in the United States in respect
of the
Shares which would include any activities undertaken for the purpose
of,
or that could reasonably be expected to have the effect of, conditioning
the market in the United States for the resale of the Shares; provided,
however, that, following the period of restriction from sale or transfer
of the Shares described in subsection 1.4 of this Subscription, the
Subscriber may sell or otherwise dispose of the Shares pursuant to
registration thereof under the 1933 Act and any applicable state
and
provincial securities laws or under an exemption from such registration
requirements;
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(x) |
the
Subscriber and the Subscriber’s advisor(s) have had a reasonable
opportunity to ask questions of and receive answers from the Company
in
connection with the distribution of the Shares hereunder, and to
obtain
additional information, to the extent possessed or obtainable without
unreasonable effort or expense, necessary to verify the accuracy
of the
information about the Company;
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(xi) |
the
Subscriber will indemnify the Company and its directors, officers,
employees, agents, advisors and shareholders against, and will hold
them
harmless from and against any and all loss, liability, claim, damage
and
expense whatsoever (including, but not limited to, any and all fees,
costs
and expenses whatsoever reasonably incurred in investigating, preparing
or
defending against any claim, lawsuit, administrative proceeding or
investigation whether commenced or threatened) arising out of or
based
upon any representation or warranty of the Subscriber contained herein
or
in any document furnished by the Subscriber to the Company in connection
herewith being untrue in any material respect or any breach or failure
by
the Subscriber to comply with any covenant or agreement made by the
Subscriber to the Company in connection
therewith;
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(xii) |
the
Shares are not listed on any stock exchange or automated dealer
quotation
system and no representation has been made to the Subscriber that
any of
the Shares will become listed on any stock exchange or automated
dealer
quotation system except that currently the Company’s common shares are
quoted on the “Pink Sheets” operated by the
OTC;
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(xiii) |
the
Company will refuse to register any transfer of the Shares not
made in
accordance with the provisions of Regulation S, pursuant to an
effective
registration statement under the 1933 Act or pursuant to an available
exemption from the registration requirements of the 1933 Act and
in
accordance with applicable state and provincial securities
laws;
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(xiv) |
the
statutory and regulatory basis for the exemption from U.S registration
requirements claimed for the offer of the Shares, although in technical
compliance with Regulation S, would not be available if the offering
is
part of a plan or scheme to evade the registration provisions of
the 1933
Act or any applicable state or provincial securities
laws;
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(xv) |
the
Subscriber has been advised to consult the Subscriber’s own legal, tax and
other advisors with respect to the merits and risks of an investment
in
the Shares and with respect to applicable resale restrictions,
and it is
solely responsible (and the Company is not in any way responsible)
for
compliance with:
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(a) |
any
applicable laws of the jurisdiction in which the Subscriber is
resident in
connection with the distribution of the Shares hereunder,
and,
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(b) |
applicable
resale restrictions; and,
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(xvi) |
this
Subscription Agreement is not enforceable by the Subscriber unless
it has
been accepted by the Company.
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6. |
Representations,
Warranties and Covenants of the
Subscriber
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(i) |
the
Subscriber has the legal capacity and competence to enter into and
execute
this Subscription Agreement and to take all actions required pursuant
hereto and, if the Subscriber is a corporation, it is duly incorporated
and validly subsisting under the laws of its jurisdiction of incorporation
and all necessary approvals by its directors, shareholders and others
have
been obtained to authorize execution and performance of this Subscription
Agreement on behalf of the
Subscriber;
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(ii) |
the
entering into of this Subscription Agreement and the transactions
contemplated hereby do not result in the violation of any of the
terms and
provisions of any law applicable to the Subscriber or of any agreement,
written or oral, to which the Subscriber may be a party or by which
the
Subscriber is or may be bound;
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(iii) |
the
Subscriber has duly executed and delivered this Subscription Agreement
and
it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber in accordance with its
terms;
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(iv) |
the
Subscriber is not acquiring the Shares for the account or benefit
of,
directly or indirectly, any U.S. Person, as that term is defined
in
Regulation S;
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(v) |
the
Subscriber is not acquiring the Shares for the account or benefit
of,
directly or indirectly, any U.S.
Person;
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(vi) |
the
Subscriber is not a U.S. Person, as that term is defined in Regulation
S;
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(vii) |
the
Subscriber is resident in the jurisdiction set out under the heading
“Name
and Address of Subscriber” on the signature page of this Subscription
Agreement;
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(viii) |
the
sale of the Shares to the Subscriber as contemplated in this Subscription
Agreement complies with or is exempt from the applicable securities
legislation of the jurisdiction of residence of the
Subscriber;
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(ix) |
the
Subscriber is acquiring the Shares for investment only and not with
a view
to resale or distribution and, in particular, it has no intention
to
distribute either directly or indirectly any of the Shares in the
United
States or to U.S. Persons, as that term is defined in Regulation
S;
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(x) |
the
Subscriber is outside the United States when receiving and executing
this
Agreement and is acquiring the Shares as principal for the Subscriber’s
own account, for investment purposes only, and not with a view to,
or for,
resale or public distribution thereof, in whole or in part, and no
other
person has a direct or indirect beneficial interest in such
Shares;
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(xi) |
the
Subscriber is not an underwriter of, or dealer in, the common shares
of
the Company, nor is the Subscriber an affiliate of any such underwriter
of
or dealer in the Shares, nor is it participating, pursuant to a
contractual agreement or otherwise, in any distribution of the
Shares;
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(xii) |
the
Subscriber (i) is able to fend for him/her/itself in the Subscription;
(ii) has such knowledge and experience in business matters as to
be
capable of evaluating the merits and risks of its prospective investment
in the Shares; and (iii) has the ability to bear the economic risks
of its
prospective investment and can afford the complete loss of such
investment;
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(xiii) |
the
Subscriber understands and agrees that none of the Shares have
been
registered under the 1933 Act, or under any state securities or
“blue sky”
laws of any state of the United States, and, unless so registered,
may not
be offered or sold in the United States or, directly or indirectly,
to
U.S. Persons except in accordance with the provisions of Regulation
S,
pursuant to an effective registration statement under the 1933
Act, or
pursuant to an exemption from, or in a transaction not subject
to, the
registration requirements of the 1933
Act;
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(xiv) |
if
the Subscriber is acquiring the Shares as a fiduciary or agent for
one or
more investor accounts, the Subscriber has sole investment discretion
with
respect to each such account and it has full power to make the foregoing
acknowledgements, representations and agreements on behalf of such
account;
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(xv) |
the
Subscriber has not acquired the Shares as a result of, and will not
itself
engage in, any “directed selling efforts” (as defined in Regulation S
under the 0000 Xxx) in the United States in respect of the Shares
which
would include any activities undertaken for the purpose of, or that
could
reasonably be expected to have the effect of, conditioning the market
in
the United States for the resale of the Shares; provided, however,
that
unless provided otherwise herein, the Subscriber may sell or otherwise
dispose of the Shares pursuant to registration of the Shares pursuant
to
the 1933 Act and any applicable state and provincial securities laws
or
under an exemption from such registration requirements and as otherwise
provided herein;
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(xvi) |
in
addition to the restrictions on sale or transfer in this Subscription,
the
Subscriber understands and agrees that offers and sales of any of
the
Shares prior to the expiration of a period of one year after the
date of
original issuance of the Shares (the one year period hereinafter
referred
to as the “ Distribution
Compliance Period”)
shall only be made in compliance with the safe harbor provisions
set forth
in Regulation S, pursuant to the registration provisions of the 1933
Act
or an exemption therefrom, and that all offers and sales after the
Distribution Compliance Period shall be made only in compliance with
the
registration provisions of the 1933 Act or an exemption therefrom
and in
each case only in accordance with applicable state and provincial
securities laws;
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(xvii) |
the
Subscriber understands and agrees not to engage in any hedging
transactions involving any of the Shares unless such transactions
are in
compliance with the provisions of the 1933 Act and in each case only
in
accordance with applicable state and provincial securities
laws;
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(xviii) |
the
Subscriber understands and agrees that the Company will refuse to
register
any transfer of the Shares not made in accordance with the provisions
of
Regulation S, pursuant to an effective registration statement under
the
1933 Act or pursuant to an available exemption from the registration
requirements of the 1933 Act;
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(xix) |
the
Subscriber is not aware of any advertisement of any of the Shares;
and
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(xx) |
no
person has made to the Subscriber any written or oral
representations:
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(a) |
that
any person will resell or repurchase any of the
Shares;
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(b) |
that
any person will refund the purchase price of any of the
Shares;
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(c) |
as
to the future price or value of any of the Shares;
or
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(d) |
that
any of the Shares will be listed and posted for trading on any stock
exchange or automated dealer quotation system or that application
has been
made to list and post any of the Shares on any stock exchange or
automated
dealer quotation system; except that the Company’s Common Stock is
currently quoted on the Pink
Sheets.
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7.1 |
Acknowledgment
and Waiver
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7.1 The
Subscriber has acknowledged that the decision to purchase the Shares was solely
made on the basis of publicly available information provided to the Subscriber.
The Subscriber hereby waives, to the fullest extent permitted by law, any rights
of withdrawal, rescission or compensation for damages to which the Subscriber
might be entitled in connection with the distribution of the
Shares.
8. |
Legending
of the Subject Shares
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8.1 The
Subscriber hereby acknowledges that that upon the issuance thereof, and until
such time as the same is no longer required under the applicable securities
laws
and regulations, the certificates representing any of the Shares will bear
a
legend in substantially the following form:
“THESE
SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S.
PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF THE
SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE
1933
ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE
OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED HEREIN) OR, DIRECTLY OR
INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE
ONLY
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
WITH THE 1933 ACT. “ UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY
REGULATION S UNDER THE 1933 ACT.”
8.2 The
Subscriber hereby acknowledges and agrees to the Company making a notation
on
its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Subscription Agreement.
9. |
Commission
to an Agent
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9.1 The
Subscriber understands that upon Closing the Company may, in its sole
discretion, approve the payment of a commission to an agent or agents, such
commission to be calculated on the basis of a percentage of the gross proceeds
of the Offering raised from Subscribers introduced to the Company by such
agent(s).
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10. |
Costs
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10.1 The
Subscriber acknowledges and agrees that all costs and expenses incurred by
the
Subscriber (including any fees and disbursements of any special counsel retained
by the Subscriber) relating to the purchase of the Shares shall be borne by
the
Subscriber.
11. |
Governing
Law
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11.1 This
Subscription Agreement is governed by the laws of the State of New York. The
Subscriber, in its personal or corporate capacity and, if applicable, on behalf
of each beneficial purchaser for whom it is acting, irrevocably attorns to
the
jurisdiction of the courts of the State of New York.
12. |
Survival
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12.1 This
Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the purchase of the Shares by the Subscriber pursuant
hereto.
13. |
Assignment
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13.1 This
Subscription Agreement is not transferable or assignable.
14. |
Severability
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14.1
The
invalidity or unenforceability of any particular provision of this Subscription
Agreement shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription Agreement.
15. |
Entire
Agreement
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15. Except
as
expressly provided in this Subscription Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Subscription Agreement contains the entire agreement between the parties with
respect to the sale of the Shares and there are no other terms, conditions,
representations or warranties, whether expressed, implied, oral or written,
by
statute or common law, by the Company, its agents or by anyone
else.
16. |
Notices
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16.1 All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form
of
telecommunication. Notices to the Subscriber shall be directed to the address
on
the signature page of this Subscription Agreement and notices to the Company
shall be directed to it at Beit Hapa’amon, Xxxxx 000, 00 Xxxx’as Street, Kfar
Saba Israel 44425.
16.2 The
Subscriber hereby acknowledges and agrees that it will notify the Company at
the
address or fax number above, or at such other address or fax number as the
Company notifies the Subscriber from time to time is the current address or
fax
number of the Company, to maintain with the Company’s records an updated address
to which the Company may mail or transmit notices and other communications
under
this Subscription Agreement.
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16.3 The
Subscriber hereby acknowledges and agrees that failure by the Subscriber to
provide the notice required in this Section removes all obligations pursuant
to
this Subscription Agreement to provide notice to the Subscriber.
17. |
Reliance,
Indemnity, Notification of Changes and
Survival
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17. The
representations and warranties in this Subscription Agreement are made by the
Subscriber with the intent that they be relied upon by the Company and the
Agent
in determining its suitability as a purchaser of the Shares, and the Subscriber
hereby agrees to indemnify the Company and the Agent against all losses, claims,
costs, expenses and damages or liabilities which any of them may suffer or
incur
as a result of reliance thereon. The Subscriber undertakes to notify the Company
and the Agent immediately of any change in any representation, warranty or
other
information relating to the Subscriber set forth in this Subscription Agreement
(and the exhibits, schedules, forms and appendices thereto) which takes place
prior to the Closing.
17.2 The
representations and warranties of each Subscriber contained in this Section
will
survive the Closing.
18. |
Counterparts
and Electronic Means
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18.1 This
Subscription Agreement may be executed in any number of counterparts, each
of
which, when so executed and delivered, shall constitute an original and all
of
which together shall constitute one instrument. Delivery of an executed copy
of
this Subscription Agreement by electronic facsimile transmission or other means
of electronic communication capable of producing a printed copy will be deemed
to be execution and delivery of this Subscription Agreement as of the date
hereinafter set forth.
19 |
Delivery
Instructions
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19.1 If
delivery address is different from the address in the signatory below, the
Subscriber hereby directs the Company to deliver the Shares to:
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IN
WITNESS WHEREOF
the
Subscriber has duly executed this Subscription Agreement as of the date of
acceptance by the Company.
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(Name
of Subscriber – Please type or print)
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(Signature
and Title)
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(Address
of Subscriber)
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(Country
of Incorporation)
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(Fax
– Please provide)
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(E-mail
Address of Subscriber – Please
provide)
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00
X
X X X X X A N C E
The
above-mentioned Subscription Agreement in respect of the shares is hereby
accepted by the Company.
DATED
at
Kfar Saba, Israel, the __ day of July, 2007.
Per:
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Xxxxxxx
Braunold, CEO
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