SUBSCRIPTION AGREEMENT
Exhibit
10.2
THIS
SUBSCRIPTION AGREEMENT (“Subscription Agreement”) is made as of this []st day of
[] 2009, by and among Ironclad Performance Wear Corporation, a Nevada
corporation (the “Company”) and the undersigned subscriber (the
“Subscriber”).
A. The
Company intends to obtain subscriptions, from one or more purchasers, including
Subscriber, and in one or more closings as determined by the Company on the
terms and conditions set forth herein, for the purchase and sale of 50,000,000
shares of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), at a purchase price per share of $0.05 (collectively, the “Offering”);
and
B. The
Company and Subscriber are executing and delivering this Subscription Agreement
in reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “Act”), and Rule 506 of
Regulation D (“Regulation D”) as promulgated by the United States Securities and
Exchange Commission under the Act;
C. The
Offering began on October 6, 2008 and will terminate (if subscription for all,
and not less than all, of the Common Stock offered has not earlier occurred) at
5:00 PM Pacific Daylight Time on January 30, 2009, unless extended by the
Company in its sole discretion.
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
1. Subscription
Procedure
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 shares of
Common Stock as is set forth upon the signature page hereof (the “Shares”) at a
price of $0.05 per share (the “Purchase Price”). The Company agrees
to sell such Shares to the Subscriber at a price per share equal to the Purchase
Price.
1.2 On
or prior to the closing of the purchase of the Shares in the Offering (the
“Closing”), the Subscriber shall deliver to the Company the following: (i) this
Agreement, duly executed by the Subscriber, and (iii) the aggregate Purchase
Price in United States Dollars, which Subscriber and Company agree shall be made
as an offset of $50,000.00 against amounts currently due to Subscriber from
Comapany.
1.3 On
or prior to the Closing, the Company shall deliver to the Subscriber this
Agreement, duly executed by the Company.
1.4 The
Closing shall occur on the date (the “Closing Date”) that all of the conditions
set forth in Sections
1.2 and 1.3 have been
satisfied or duly waived. The Closing of the purchase and sale of the
Shares shall take place at the offices of Xxxxxx Xxxxxxxx & Markiles, LLP,
00000 Xxxxxxx Xxxxxxxxx, 00xx Xxxxx,
Xxxxxxx Xxxx, Xxxxxxxxxx 00000, on the Closing Date or at such other locations
or remotely by facsimile transmission or other electronic means as the parties
may mutually agree.
1.5 The
certificates for the Shares bearing the name of the individual partners of
Subscriber as set forth on EXHIBIT A will be
delivered by the Company no later than fifteen (15) days following the Closing
Date. The Subscriber hereby authorizes and directs the Company to
deliver the securities to be issued to the Subscriber pursuant to this
Subscription Agreement to the business address of subscriber indicated on the
signature page hereto.
1.6 The
Company may, in its sole discretion, terminate or withdraw the Offering in its
entirety at any time prior to a closing in relation thereto. The Company shall
not be required to allocate among investors on a pro rata basis in the event of
an over-subscription of the total number of Shares offered in the Offering. Subscriber understands
that 30,000,000 shares must be sold prior to release of funds to the Company
hereunder.
2. Representations and
Covenants of Subscriber
2.1 The
Subscriber recognizes that the purchase of the Shares involves a high degree of
risk in that (i) the Company may need additional capital but has no assurance of
additional necessary capital; (ii) 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 Shares; (iii) an
investor may not be able to liquidate its investment; (iv) transferability of
the Shares is extremely limited; (v) an investor could sustain the loss of its
entire investment; and (vi) the Company is and will be subject to numerous other
risks and uncertainties, including without limitation, significant and material
risks relating to the business and operations of the Company, and the industries
and markets in which the Company will compete, all as more fully set forth
herein and in the reports filed by the Company pursuant to the Securities
Exchange Act of 1934, as amended (all reports so filed by the Company are
referred to herein as the “SEC Reports”), and the Confidential Memorandum
previously distributed to the Subscriber.
2.2 The
Subscriber represents that both it and each of its Partners are an “accredited
investor” as such term is defined in Rule 501 of Regulation D promulgated under
the Act, and that it is able to bear the economic risk of an investment in the
Shares.
2.3 The
Subscriber acknowledges that it has prior investment experience, including
without limitation, investment in non-listed and non-registered securities, or
it has employed the services of an investment advisor, attorney or accountant to
read all of the documents furnished or made available by the Company both to it
and to all other prospective investors in the Common Stock and to evaluate the
merits and risks of such an investment on its behalf, and that it recognizes the
highly speculative nature of this investment.
2.4 The
Subscriber acknowledges receipt and careful review of this Subscription
Agreement and hereby represents that it has been furnished or given access
by the Company during the course of this Offering with or to all information
regarding the Company and its respective financial condition and results of
operation which it had requested or desired to know; that all documents which
could be reasonably provided have been made available for its inspection and
review; that it has been afforded the opportunity to ask questions of and
receive answers from duly authorized representatives of the Company concerning
the terms and conditions of the Offering, and any additional information which
it had requested. The Subscriber further represents and acknowledges
that the Subscriber has not seen or received any advertisement or general
solicitation with respect to the sale of any of the securities of the Company,
including, without limitation, the Shares.
2.5 The
Subscriber acknowledges that this offering of Common Stock may involve tax
consequences, and that the contents hereof do not contain tax advice or
information. The Subscriber acknowledges that it must retain its own
professional advisors to evaluate the tax and other consequences of an
investment in the Shares.
2.6 The
Subscriber acknowledges that this offering of Common Stock has not been reviewed
or approved by the United States Securities and Exchange Commission (“SEC”)
because the Offering is intended to be a nonpublic offering pursuant to Section
4(2) of the Act. The Subscriber represents that the Shares are being
purchased for its own account and not for distribution or resale to others;
provided however, that the Subscriber does not agree to hold any such securities
for a minimum or specified term and reserves the right to sell, transfer or
otherwise dispose of the Shares at any time in accordance with this Agreement or
with federal and state securities laws. The Subscriber agrees that it
will not sell or otherwise transfer any of the securities comprising the Shares
unless they are registered under the Act or unless an exemption from such
registration is available and, upon the Company’s request, the Company receives
an opinion of counsel reasonably satisfactory to the Company confirming that an
exemption from such registration is available for such sale or
transfer.
2.7 The
Subscriber understands that Rule 144 (the “Rule”) promulgated under the Act
requires, among other conditions, a six month holding period prior to the resale
(in limited amounts) of securities acquired in a non-public offering, such as
the Offering, without having to satisfy the registration requirements under the
Act or comply with an exemption therefrom. The Subscriber understands
that the Company makes no representation or warranty regarding its fulfillment
in the future of any reporting requirements under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), or its dissemination to the public of any
current financial or other information concerning the Company, as is required by
Rule 144 as one of the conditions of its availability. The Subscriber agrees to
hold the Company and its respective directors, officers and controlling persons
and their respective heirs, representatives, successors and assigns harmless and
to indemnify them against all liabilities, costs and expenses incurred by them
as a result of any misrepresentation made by him, her or it contained herein or
any sale or distribution by the undersigned Subscriber in violation of any
federal or state securities laws.
2.8 The
Subscriber consents to the placement of one or more legends on any certificate
or other document evidencing its Shares stating that they have not been
registered under the Act and are subject to the terms of this Subscription
Agreement, and setting forth or referring to the restrictions on the
transferability and sale thereof. The Company agrees to remove any such legend
from any Share that is sold pursuant to an effective registration statement or
Rule 144.
2.9 The
Subscriber understands that the Company will review this Subscription Agreement
and, if the Subscriber is a natural person, the Company is hereby given
authority by the undersigned to call its bank or place of
employment. The Subscriber further authorizes the Company to review
the financial standing of the Subscriber.
2.10 The
Subscriber hereby represents that the address of Subscriber furnished by it at
the end of this Subscription Agreement is the undersigned's principal residence
if it is an individual or its principal business address if it is a corporation
or other entity.
2.12 The
Subscriber hereby represents that, except as set forth herein and in the SEC
Reports, no representations or warranties have been made to the Subscriber by
either the Company or its agents, employees or affiliates and in entering into
this transaction, the Subscriber is not relying on any information, other than
that contained herein or in the SEC Reports.
2.13 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 Shares; and (iii) that this Subscription Agreement has been duly and
validly authorized, executed and delivered and constitutes the legal, binding
and enforceable obligation of the undersigned, subject to bankruptcy, insolvency
and similar laws protecting creditors rights, and to equitable principles which
may, among other things, constrain the enforcement of indemnity
provisions.
2.14 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 Shares or
any use of this Subscription Agreement, including (i) the legal requirements
within its jurisdiction for the purchase of the Shares, (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 Shares. Subscriber's subscription
and payment for, and its continued beneficial ownership of the Shares, will not
violate any applicable securities or other laws of the Subscriber's
jurisdiction, except to the extent such laws were violated by actions taken by
the Company.
2.15 The
Subscriber understands and acknowledges that (i) the Shares are being offered
and sold to Subscriber without registration under the Act in a private placement
that is exempt from the registration provisions of the Act under Section 4(2) of
the Act and (ii) the availability of such exemption depends in part on, and that
the Company will rely upon the accuracy and truthfulness of, the foregoing
representations, and such Subscriber hereby consents to such
reliance.
3. Representations by the
Company
Except
as set forth in the SEC Reports, the Company represents and warrants to the
Subscriber that:
3.1 Organization and
Authority. The Company (i) is a corporation validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
(ii) has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as presently conducted, and (iii)
has all requisite corporate power and authority to execute, deliver and perform
its obligations under this Subscription Agreement, and to consummate the
transactions contemplated hereby.
3.2 Qualifications. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in all jurisdictions where such qualification is necessary and where
failure so to qualify could have a material adverse effect on the business,
properties, operations, condition (financial or other), results of operations or
prospects of the Company, taken as a whole.
3.3 Capitalization of the
Company. Of the authorized capital stock of the Company, on
October 6, 2008, there were outstanding 42,464,504 shares of Common Stock,
options to purchase an aggregate of 5,667,705 shares of Common Stock, and
warrants to purchase an aggregate of 10,454,518 shares of Common Stock. Except
as a result of the purchase and sale of the Shares or as disclosed in the SEC
Reports, there are no additional outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any person any right to subscribe for or acquire from the Company, any
shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional
shares of Common Stock, or securities or rights convertible or exchangeable into
shares of Common Stock. Except as described herein, the issuance and
sale of the Shares will not obligate the Company to issue shares of Common Stock
or other securities to any person (other than the Subscriber) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. The shares
of the Company’s capital stock outstanding immediately prior to the closing are
or will be duly authorized and validly issued and are or will be fully paid and
nonassessable. None of the outstanding shares of Common Stock or
options, warrants, or rights or other securities entitling the holders to
acquire Common Stock has been issued in violation of the preemptive rights of
any security holder of the Company. The Common Stock to be issued to
the Subscriber has been duly authorized, and when issued and paid for in
accordance with this Subscription Agreement, the Common Stock will be duly and
validly issued, fully paid and non-assessable. The Common Stock is
eligible for quotation on the OTC Bulletin Board, the Company and the Common
Stock meets the criteria for continued quotation and trading on the OTC Bulletin
Board, the Company has not received any notice from FINRA or any other
self-regulatory organization or governmental agency that the Company may not be
in compliance with such criteria, and no suspension of trading in the Common
Stock is in effect.
3.4 Corporate
Authorization. This Subscription Agreement has been duly and
validly authorized by the Company. This Subscription Agreement,
assuming due execution and delivery by the Subscriber, when executed and
delivered by the Company, will be, a valid and binding obligation of the
Company, enforceable in accordance with its respective terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors’ rights generally and general principles of equity,
regardless of whether enforcement is considered in a proceeding in equity or at
law.
3.5 Non-Contravention. The
execution and delivery of this Subscription Agreement by the Company, the
issuance of the Shares as contemplated hereunder, and the completion by the
Company of the other transactions contemplated by the Offering do not and will
not, with or without the giving of notice or the lapse of time, or both, (i)
result in any violation of any provision of the articles of incorporation or
by-laws or similar instruments of the Company, (ii) conflict with or result in a
breach by the Company of any of the terms or provisions of, or constitute a
default under, or result in the modification of, or result in the creation or
imposition of any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company, pursuant to any agreements, instruments or
documents filed as exhibits to the SEC Reports or any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company is a party or by
which the Company or any of its properties or assets are bound or affected, in
any such case which would have a material adverse effect on the business,
properties, operations, condition (financial or other), results of operations or
prospects of the Company, taken as a whole, or the validity or enforceability
of, or the ability of the Company to perform its obligations hereunder, (iii)
violate or contravene any applicable law, rule or regulation or any applicable
decree, judgment or order of any court, United States federal or state
regulatory body, administrative agency or other governmental body having
jurisdiction over the Company or any of its properties or assets that would have
a material adverse effect on the business, properties, operations, condition
(financial or other), results of operations or prospects of the Company, taken
as a whole, or the validity or enforceability of, or the ability of the Company
to perform its obligations hereunder, or (iv) have any material adverse effect
on any permit, certification, registration, approval, consent, license or
franchise necessary for the Company to own or lease and operate any of its
properties and to conduct any of its business or the ability of the Company to
make use thereof.
3.6 Information
Provided. The Company hereby represents and warrants to the
Subscriber that the information set forth in the SEC Reports and any other
document provided by the Company (or the Company’s authorized representatives)
to the Subscriber in connection with the transactions contemplated by this
Subscription Agreement, does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, it being understood that for purposes of this Section 3.6, any
statement contained in such information shall be deemed to be modified or
superseded for purposes of this Section 3.6 to the
extent that a statement in any document included in such information which was
prepared and furnished to the Subscriber on a later date or filed with the SEC
on a later date modifies or replaces such statement, whether or not such later
prepared and furnished or filed statement so states.
3.7 Absence of Certain
Proceedings. There exists no action, suit, proceeding, inquiry
or investigation before or by any court, public board or body, or governmental
agency pending or threatened against or affecting the Company, in any such case
wherein an unfavorable decision, ruling or finding would have a material adverse
effect on the business, properties, operations, condition (financial or other),
results of operations or prospects of the Company, or the transactions
contemplated hereunder or which could adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations hereunder; and to the Company’s knowledge there is not pending or
contemplated any, and there has been no, investigation by the SEC involving the
Company or any of its current or former directors or officers.
3.8 Compliance with
Law. The Company is not in violation of nor has any liability
under any statute, law, rule, regulation, ordinance, decision or order of any
governmental agency or body or any court, domestic or foreign, except where such
violation or liability would not individually or in the aggregate have a
material adverse effect on the business, properties, operations, condition
(financial or other), results of operations or prospects of the Company, taken
as a whole; and to the knowledge of the Company there is no pending
investigation that would reasonably be expected to lead to such a
claim.
4. Miscellaneous
4.1 Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by verifiable facsimile, overnight courier or registered or
certified mail, return receipt requested, addressed to the Company, at Ironclad
Performance Wear Corporation, 0000 Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxx Xxxxx, Executive Chairman, with a copy to
(which shall not constitute notice) Xxxxxx Xxxxxxxx & Markiles, LLP, 00000
Xxxxxxx Xxxxxxxxx, 00xx Xxxxx,
Xxxxxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxxxx, Esq., and to the
Subscriber at its address indicated on the signature page of this Subscription
Agreement. Notices shall be deemed to have been given when
received.
4.2 This
Subscription Agreement may be amended through a written instrument signed by the
Subscriber and the Company. The Company shall not offer any additional
inducement or consideration to any subscriber unless such inducement or
consideration is offered to all subscribers.
4.3 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 hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
4.4 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 California.
4.5 This
Subscription Agreement may be executed in counterparts.
4.6 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.
4.7 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.
4.8 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.
4.9 The
Company agrees not to disclose the names, addresses or any other information
about the Subscribers, except as required by law, provided that the Company may
provide information relating to the Subscriber as required in any registration
statement under the Act that may be filed by the Company. The Company will file
a Form 8-K on the third business day following the date of the Closing
describing the terms of this Agreement in reasonable detail but subject to any
disclosure limitations imposed on the Company by the relevant rules promulgated
under the Act.
4.10 The
obligation of the Subscriber hereunder is several and not joint with the
obligations of any other subscribers for the purchase of Common Stock in the
Offering (the “Other Subscribers”), and the Subscriber shall not be responsible
in any way for the performance of the obligations of any Other
Subscribers. Nothing contained herein or in any other agreement or
document delivered at the Closing, and no action taken by the Subscriber
pursuant hereto, shall be deemed to constitute the Subscriber and the Other
Subscribers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Subscriber and the Other Subscribers
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Subscription Agreement. The
Subscriber shall be entitled to protect and enforce the Subscriber’s rights,
including without limitation the rights arising out of this Subscription
Agreement, and it shall not be necessary for any Other Subscriber to be joined
as an additional party in any proceeding for such purpose. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party. The Subscriber is not acting as part of
a “group” (as that term is used in Section 13(d) of the 0000 Xxx) in negotiating
and entering into this Subscription Agreement or purchasing the Shares, or
acquiring, disposing of or voting any of the Shares. The Company
hereby confirms that it understands and agrees that the Subscriber is not acting
as part of any such group.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the
day and year first written above.
Subscriber:
Subscription
Agreed to and Accepted:
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Ironclad
Performance Wear Corp. Subscription Agreement
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EXHIBIT
A
SHARE
ALLOCATION
Name Shares
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Ironclad
Performance Wear Corp. Subscription Agreement
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