COLOR STARS GROUP
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT ("AGREEMENT") made as of this _ day of _____,
2007 between Color Stars Group., a Nevada corporation (the "COMPANY"), and the
undersigned (the "SUBSCRIBER").
WHEREAS, the Company desires to issue shares of the Company's common
stock, par value $0.0001 per share (the "SHARES") to the Subscriber as
additional consideration for entering into the Credit Agreement, on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
1. SUBSCRIPTION. Subject to the terms and conditions herein, the Company hereby
agrees to issue to the Subscriber _______(_______) shares of the Company's
fully-paid non-assessable restricted common stock.
2. Subscriber acknowledges: (i) this Agreement shall not be deemed to have been
accepted by the Company until the Company indicates its acceptance by returning
to Subscriber a copy of this Agreement executed by the Company; and (ii)
acceptance by the Company of this Agreement is conditioned upon the information
and representations and warranties of Subscriber contained herein being
complete, true and correct as of the date of Subscriber's execution and the date
of Closing (as hereinafter defined).
3. CLOSING. The closing of the issue of the Shares (the "CLOSING") shall be
within seven (7) days of the date hereof. The date of the Closing hereunder
shall be called the "CLOSING DATE".
A stock certificate in the Subscriber's name and representing the
number of Shares purchased by Subscriber pursuant hereto, which certificates
shall bear the legend set forth in Section 4(i)(iv) hereof, shall be delivered
to the Subscriber within thirty (30) business days following the Closing Date.
4. ACCEPTANCE OF SUBSCRIPTION. The Subscriber understands and agrees that the
Company in its sole discretion reserves the right to accept or reject
Subscriber's subscription in whole or in part, or to allot to the Subscriber
fewer than the number of Shares subscribed for herein, at any time prior to the
Closing Date. If the Company rejects the subscription, this Agreement shall
thereafter be of no further force or effect.
5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SUBSCRIBER. The Subscriber
hereby acknowledges, represents and warrants to the Company, on the date hereof
and on the Closing Date, as follows:
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a. The Subscriber understands that the offering and sale of the Shares is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the "ACT") by virtue of Section 4(2) of the Act and the provisions of
Regulation D promulgated thereunder, and in accordance therewith and in
furtherance thereof, the Subscriber represents and warrants and agrees as
follows:
b. The Subscriber and/or the Subscriber's adviser(s) has/have received and
carefully reviewed this Subscription Agreement (including the Company's most
recent audit) which is made a part hereof, and understands the information
contained therein.
c. The Subscriber acknowledges that the Subscriber, or the Subscriber's
attorney, accountant, or adviser(s), has/have had a reasonable opportunity to
inspect all documents and records pertaining to this investment.
d. The Subscriber and/or the Subscriber's adviser(s) has/have had a reasonable
opportunity to ask questions and receive answers from a person or persons acting
on behalf of the Company concerning the offering of the Shares and all such
questions have been answered to the full satisfaction of the Subscriber.
e. In making a decision to invest in the Shares, the Subscriber has not relied
on any information other than information contained in this Agreement.
f. The Subscriber is not subscribing for the Shares as a result of or subsequent
to any advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
presented at any seminar or meeting, or any solicitation of a subscription by a
person other than a representative of the Company.
g. If the Subscriber is a natural person, the Subscriber has reached the age of
majority in the jurisdiction in which the Subscriber resides; the Subscriber has
adequate means of providing for the Subscriber's current financial needs and
contingencies, is able to bear the substantial economic risks of an investment
in the Shares for an indefinite period of time, has no need for liquidity in
such investment, and, at the present time, could afford a complete loss of such
investment.
h. The Subscriber has such knowledge and experience in financial, tax and
business matters so as to enable the Subscriber to utilize the information made
available to the Subscriber to evaluate the merits and risks of an investment in
the Shares, and to make an informed investment decision with respect thereto.
i. The Subscriber is not relying on the Company or any agent of the Company with
respect to any legal, tax or economic advice related to an investment in the
Shares.
j. The Subscriber will not sell or otherwise transfer the Shares without
registration under the Act and applicable state securities law, or pursuant to
an exemption therefrom. The Shares have not been registered under the Act or
under the securities laws of any state and the Company will be under no
obligation to so register the Shares. The Subscriber represents that the
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Subscriber is purchasing the Shares for the Subscriber's own account, for
investment and not with a view to resale or distribution except in compliance
with the Act and applicable state securities laws. The Subscriber has no present
intention to sell the Shares and the Subscriber has no present arrangement
(whether or not legally binding) to sell the Shares to or through any person or
entity; provided, however, that by making the representations herein, the
Subscriber does not agree to hold the Shares for any minimum or other specific
term and reserves the right to dispose of the Shares at any time in accordance
with Federal and state securities law applicable to such disposition.
k. The Subscriber recognizes that investment in the Shares involves substantial
risks, including the risk of loss of the entire amount of such investment, and
has taken full cognizance of and understands all of the risks related to the
purchase of the Shares.
l. The Subscriber's overall commitment to investments that are not readily
marketable is reasonable in relation to the Subscriber's net worth.
m. The Subscriber is an "ACCREDITED INVESTOR" as that term is defined in Rule
501 (a) of Regulation D under the Act and as described on Appendix 1 attached
hereto. The Subscriber further represents and warrants that any information
furnished by the Subscriber to the Company is accurate and complete in all
material respects.
n. The Subscriber understands that the Shares are being offered and sold in
reliance on a transactional exemption from the registration requirements of
Federal and state securities law and that the Company is relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings of the Subscriber set forth in this Agreement in order to
determine the applicability of such exemptions and the suitability of the
Subscriber to acquire the Shares.
o. The Subscriber understands that there is no public trading market for the
Shares and none can be expected to develop, and that the securities must be held
indefinitely unless registered under the Act or an exemption from registration
is available. The Subscriber has been advised or is aware of the provisions of
Rule 144 promulgated under the Act.
p. The Subscriber hereby agrees to provide such information and to execute and
deliver such documents, as the Company may deem reasonably appropriate with
regard to the Subscriber's suitability or otherwise in connection with this
Agreement.
q. The execution, delivery and performance of this Agreement by the Subscriber:
(i) will not constitute a default under or conflict with any agreement or
instrument to which the Subscriber is a party or by which it or its assets are
bound, (ii) will not conflict with or violate any order, judgment, decree,
statute, ordinance or regulation applicable to the Subscriber (including,
without limitation, any applicable laws relating to permissible legal
investments) and (iii) does not require the consent of any person or entity,
other than those that will have been obtained prior to the Closing Date.
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r. This Agreement has been duly authorized, executed and delivered by the
Subscriber and constitutes the valid and binding agreement of the Subscriber
enforceable against it in accordance with its terms.
s. The Subscriber has not retained, or otherwise entered into any agreement or
understanding with, any broker or finder in connection with the purchase of the
Shares by the Subscriber, and the Company will not incur any liability for any
fee, commission or other compensation on account of any such retention,
agreement or understanding by the Subscriber.
t. The Subscriber understands, acknowledges and agrees that in making an
investment decision, the Subscriber has relied solely on the Subscriber's own
examination of the Company, including the merits and risks involved. The Shares
have not been recommended by any federal or state securities commission or
regulatory authority. Furthermore, the foregoing authorities have not confirmed
the accuracy or determined the adequacy of this Agreement.
u. The Subscriber, if executing this Agreement in a representative or fiduciary
capacity, has all requisite power and authority to execute and deliver this
Agreement in such capacity and on behalf of the subscribing individual, xxxx,
partnership, trust, estate, corporation, or other entity for whom the Subscriber
is executing this Agreement, and such individual, xxxx, partnership, trust,
estate, corporation, or other entity has all requisite power and authority to
enter into this Agreement and make an investment in the Shares.
v. The representations, warranties, and agreements of the Subscriber contained
in this Agreement shall be true and correct in all material respects on and as
of the Closing Date as if made on and as of such date and shall survive the
execution and delivery of this Agreement and the purchase of the Shares.
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w. For as long as is required by applicable laws, the certificates representing
the Shares shall bear a legend in substantially the following form, together
with any legend required by applicable state laws, and the Subscriber shall not
transfer any or all of the Shares or any interests therein, except in accordance
with the terms of such legends:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"ACT") or applicable state securities laws, and may be
offered, sold or otherwise transferred only if so registered
under the Act and applicable state securities laws or if the
holder has delivered to the Company an opinion of counsel,
which counsel and opinion shall be reasonably satisfactory to
the Company, that an exemption from such registration is
available."
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Subscriber as follows:
a. The Company has been duly organized, is validly existing as a corporation and
is in good standing under the laws of the State of Nevada. The Company is duly
qualified and in good standing in each jurisdiction in which the character or
location of its properties or the nature or conduct of its business makes such
qualification necessary, except where the failure to be so qualified or in good
standing would not, in the aggregate, have a material adverse effect on the
financial condition of the Company. The Company has all requisite power and
authority, and all material consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all applicable
public, regulatory or governmental agencies and bodies, to own, lease and
operate its properties and conduct its business as now being conducted.
b. The Company has full corporate power and authority to enter into this
Agreement and to issue and sell the Shares on the terms and conditions set forth
herein. The execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby: (i) have been duly and
validly authorized and approved by all necessary corporate action on the part of
the Company; (ii) will not constitute a default under or conflict with (A) the
Company's charter or bylaws; or (B) any material agreement or other instrument
to which the Company is a party or by which the Company is bound; (iii) will not
conflict with or violate any order, judgment, decree, statute, ordinance or
regulation applicable to the Company; and (iv) does not require the consent of
any person or entity, other than those that will have been obtained prior to the
Closing Date.
c. This Agreement has been duly authorized, and when executed and delivered by
the Company, will constitute valid and binding obligations of the Company
enforceable against it in accordance with their respective terms.
d. The representations, warranties and agreements of the Company contained
herein shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date and shall survive the execution
and delivery of this Agreement and the sale of the Shares.
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7. TERMINATION. This Agreement may be terminated by the Company or the
Subscriber, after 5 days' prior written notice to the other party, if the
Closing has not occurred by the Termination Date, provided that the failure to
so close was not the result of actions of the party seeking termination. In the
event of termination of this Agreement, the Purchase Price, together with any
accrued interest thereon, if any, shall be returned to Subscriber within five
(5) business days after receipt of such written notice.
8. NASAA UNIFORM LEGEND.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER-ABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
9. MISCELLANEOUS.
a. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, without giving effect to principles of conflicts
of law.
b. In the event any provision of this Agreement is invalid or unenforceable
under any applicable law, statute, rule or regulation, then such provision shall
be deemed inoperative to the extent it may conflict therewith and shall be
deemed modified to conform with such law, statute, rule or regulation. Any
provision hereof which may prove invalid or unenforceable shall not affect the
validity or enforceability of any other provision hereof.
c. Each party shall indemnify each other party against any loss, expense or
damages (including reasonable attorney's fees but excluding consequential
damages) incurred as a result of such parties' breach of any representation,
warranty, covenant or agreement in this Agreement.
d. This Agreement may be executed in counterparts, each of which shall be an
original, but all of which shall constitute one instrument.
e. This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof. Only a writing executed by the
Company and the Subscriber may amend any provision of this Agreement.
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f. 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 Color Stars Group 000 Xxxxxx Xxxxxx., Xxxxx 000, Xxx
Xxxx, XX 00000, Attention: Wei Rur Chen, Chief Executive Officer, and to the
Subscriber at the 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, which shall be deemed to have been given
when received.
IN WITNESS WHEREOF, Subscriber and the Company have executed and dated
this Subscription Agreement as of the dates below.
ENTITY SUBSCRIPTION INDIVIDUAL SUBSCRIPTION
Name of Entity:
----------------------------- ------------------------------
Signature of Subscriber
By:
----------------------------------------- ------------------------------
Signature of Co-Subscriber
(if any)
Name of Signatory: Name(s) of Individual:
Xxxxxx Xxxxx
--------------------------
Taxpayer Identification No.: Social Security No(s):
----------------
Address: Address:
--------------------------------- ----------------------
NUMBER OF SHARES SUBSCRIBED FOR: ______
SUBSCRIPTION ACCEPTED:
COLOR STARS GROUP
BY:
NAME:
TITLE:
DATE:
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APPENDIX I
Pursuant to Rule 501 of Regulation D promulgated under the Securities
Act, an "accredited investor" means:
(a) A bank as defined in Section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; any broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934;
any insurance company as defined in Section 2(13) of the
Securities Act, any investment company registered under the
Investment Company Act of 1940 or a business development company
as defined in Section 2(a)(48) of that act; any Small Business
Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; any plan established and maintained by a
state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees if such plan has total assets in excess
of $5,000,000; any employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 if the
investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such act, which is either a bank, savings and
loan association, insurance company, or registered investment
advisor, or if the employee benefit plan has total assets in
excess of $5,000,000 or, if a self-directed plan, with investment
decision made solely by persons that are accredited investors;
(b) Any private business development company as defined in Section
202 (a)(22) of the Investment Advisers Act of 1940;
(c) Any organization described in Section 501(c)(3) of the Internal
Revenue Code (the "CODE"), corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with total assets in
excess of $5,000,000;
(d) Any director or executive officer of the Company;
(e) Any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase
exceeds $1,000,000;
(f) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of those
years and who reasonably expects to reach the same income level
in the current year;
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(g) Any trust, with assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose
purchase is directed by a person having such knowledge and
experience in financial and business matters so such person is
capable of evaluating the merits and risks of the investment to
be made; or
(h) Any entity in which all of the equity owners are accredited
investors.
In addition, a participant in a defined contribution or profit sharing
plan qualified under Section 401 of the Code may be deemed the purchaser of the
Securities for the purpose of determining whether the plan is an Accredited
Investor if the following conditions are satisfied: (x) the plan trust must
provide for segregated accounts for each plan participant, (y) the plan document
must provide the participant with the power to direct the trustee to make each
particular investment to the extent of the participant's voluntary contributions
plus that portion of employer contributions that have vested to the
participant's benefit, and (z) the investment in the Securities must have been
made pursuant to an exercise by the participant of the power to direct the
investment of his or her account in the plan trust.
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