EXHIBIT 10.20
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SUBSCRIPTION AGREEMENT
AND
INVESTMENT LETTER
RxBazaar, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Dear Sirs:
This letter agreement (the "Agreement") will acknowledge that the
undersigned hereby irrevocably subscribes to purchase _______ shares ("Shares"),
of Series B Preferred Stock, $0.001 par value per share ("Series B Preferred
Stock") of RxBazaar, Inc. (the "Company") for the aggregate purchase price set
forth below my signature at the bottom of this Agreement. The Company is
offering (the "Offering") for sale, pursuant to a Confidential Private Placement
memorandum (the "Confidential Memorandum"), up to 3,500,000 shares (the "Maximum
Offering"). The Offering shall be offered on a "best efforts" basis. The Shares
and the shares of Common Stock issuable upon conversion of the Shares in
accordance with the applicable provisions of the Company's certificate of
incorporation, are collectively referred to herein sometimes as the
"Securities." A minimum of 50,000 Shares must be purchased, subject to the right
of the Company to accept subscriptions for lesser amounts.
This Offering is being made to accredited investors pursuant to
exemptions available under the Securities Act of 1933, as amended (the "Act")
and under the securities laws of certain states.
I hereby tender a check payable to the order of "RxBazaar, Inc." or
acknowledge a wire transfer of funds in accordance with the wire transfer
information provided by the Company, in the amount indicated set forth below my
signature at the bottom of this Agreement, a manually executed copy of this
Agreement and an executed copy of my Confidential Prospective Purchaser
Questionnaire.
The offering period for this Offering will terminate upon the earlier
to occur of (1) the date the Maximum Offering is sold or (2) ninety (90) days
from the date of the Confidential Memorandum; provided, however, that the 90-day
period may be extended for up to three additional periods, each such period not
to exceed thirty (30) days, by the Company without notice to any subscriber
(such date or extended date, the "Offering Termination Date"). The Company
reserves the right to hold one or more interim closings prior to the Offering
Termination Date.
The Shares subscribed for herein shall not be deemed issued to or owned
by me until a copy of this Agreement has been executed by me and countersigned
by the Company and a closing has occurred.
The undersigned acknowledges that the Securities purchased hereby have
not been registered under the Act or the securities laws of any state; that the
Securities are being purchased for investment purposes and not with a view to
distribution or resale, nor with the intention of selling, transferring or
otherwise disposing of all or any part of the Securities for any particular
price, or at any particular time, or upon the happening of any particular event
or circumstances, except selling, transferring, or disposing of the Securities
made in full compliance with all applicable provisions of the Act, the rules and
regulations promulgated by the Securities and Exchange Commission (the
"Commission") thereunder, and applicable state securities laws; and that the
Securities must be held indefinitely unless they are subsequently registered
under the Act or an exemption from such registration is available and will
require an opinion of counsel that registration is not required under the Act or
such state securities laws; and that the certificates to be issued will bear a
legend indicating that transfer of the Securities have not been so registered in
the following or similar words:
"The Securities have not been registered under the Securities Act of
1933, as amended (the "Act") or under any state securities law and may
not be pledged, sold, assigned or transferred in the absence of an
effective Registration Statement with respect thereto under the Act
and any applicable state securities law, or unless the Company
receives an opinion of counsel satisfactory to the Company that such
registration is not required. The Company's subscription agreement
with the holder contains additional provisions restricting the
transfer of these securities. A copy of such agreement is available
for inspection at the Company's office."
In connection with the purchase of the Securities, I acknowledge that
the Company will be relying on the information and on the representations set
forth herein, and I hereby represent warrant, agree and acknowledge that:
(a) I have not received any general solicitation or general advertising
regarding the purchase of the Securities.
(b) I have not employed a finder in connection with this transaction.
(c) I am an "accredited investor," as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act. I have sufficient
knowledge and experience of financial and business matters so that I am able to
evaluate the merits and risks of purchasing the Securities.
(d) I do not require for my liquidity needs the funds being used to
purchase the Securities, I have adequate means to provide for my personal needs,
and I possess the ability to bear the economic risk of holding the Securities
purchased hereunder indefinitely, and can afford a complete loss on the purchase
of the Securities.
(e) During the transaction and prior to purchase, I have read this
Agreement and the Company's Confidential Private Placement Memorandum relating
to this Offering and have had a full opportunity to ask questions of and receive
answers from the Company and its officers and authorized representatives
regarding the terms and conditions of this Agreement and the transactions
contemplated hereby, as well as the affairs of the Company and related matters,
including without limitation the proposed merger with SB Merger Corp. as
described in the Confidential Private Placement Memorandum.
(f) I understand that a restrictive legend will be placed upon the
certificates representing the Securities purchased hereunder, and that the
instructions will be placed upon the Company's records for the Securities
prohibiting the transfer of the Securities absent full compliance with the Act
and applicable state securities laws.
(g) I understand that the Company intends to use a portion of the
proceeds from the sale of the Securities in this Offering for working capital
and general corporate purposes, including the repayment of debt.
(h) I understand that the purchase price of the Securities being
purchased hereby has been arbitrarily determined and bears no relationship to
the assets or book value of the Company, or other customary investment criteria.
(i) I understand that this Agreement is subject to the Company's
acceptance and may be rejected by the Company at any time prior to the closing
or termination of the Offering, as the case may be, in its sole discretion, for
any reason or no reason at all, notwithstanding prior receipt by me of notice of
acceptance of my subscription. In the event that this subscription is rejected
in whole or in part, or if the sale of the Shares is not consummated for any
reason by the close of the offering period, in which event this subscription
shall be deemed to be rejected, this Agreement and any other agreement entered
into between the undersigned and the Company relating to this subscription shall
thereafter have no force or effect and the Company shall promptly return or
cause the return of that applicable portion of the purchase price of the Shares
to the undersigned without interest, and this Agreement shall thereafter have no
force or effect to that extent. In the event my subscription is accepted, the
funds specified above shall be released to the Company and the Shares will be
delivered to me.
(j) There is no contract, undertaking, agreement or arrangement with
any person to sell, transfer or pledge to such person or anyone else the
Securities or any part thereof, and I have no present plans to enter into any
such contract, undertaking, agreement or arrangement.
(k) Any certificate representing Securities shall carry substantially
the following legend, insofar as is consistent with applicable law:
"The shares of common stock represented by this certificate are subject
to restrictions on transfer set forth in a Subscription Agreement dated as of
________________, 2002. A copy of the Subscription Agreement is available for
inspection without charge at the office of the Treasurer of the Company."
(l) Without the written consent of the underwriter of the Company's
initial public offering, if any, of securities of the Company (a "Company IPO")
I will not sell or otherwise dispose of any Securities acquired hereby for the
period commencing from issuance and ending on the date of termination of any
such restriction binding the Company's officers or directors in connection with
a Company IPO, and (2) I shall effect any sales of such Securities solely
through such underwriter for the period commencing on the date of issuance and
ending twenty-four (24) months after the effective date of such registration
statement. I shall compensate the underwriter in accordance with its customary
compensation practices, and if I am a Pennsylvania resident I will comply with
ss.204.011 of the Pennsylvania Blue Sky Regulations to the extent applicable. I
understand that there can be no assurance that a Company IPO will be undertaken
or successfully completed, or if undertaken, will be completed in any reasonable
time period. I further understand that any such undertaking would be subject to
numerous conditions including, but not limited to, negotiation and finalization
of an underwriting agreement that
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itself would have substantial and material preconditions and qualifications. In
addition, the securities markets generally have from time to time been volatile,
experiencing significant price and volume fluctuations which have had and may
have a negative impact upon the securities industry generally, including
broker-dealers specifically. In the event the Company was unable to successfully
complete a Company IPO, the Shares offered hereby would likely be without value,
and I understand that I might lose my entire investment.
(m) I am not a member of the NASD. I have not, for a period of 12
months prior to the date of this Agreement, been affiliated or associated with
any company, firm, or other entity which is a member of the NASD. I do not own
stock or other interest in, and I am not a creditor of, any member of the NASD
(other than interests acquired in open market purchases).
(n) Except for any rescission rights that may be provided under
applicable laws, I am not entitled to cancel, terminate, or revoke my
subscription, and any agreements made in connection herewith shall survive my
death or disability.
(o) I hereby agree to indemnify and hold harmless the Company, and its
officers, directors, stockholders, employees, agents and attorneys against any
and all losses, claims, demands, liabilities and expenses (including reasonable
legal or other expenses) incurred by each such person in connection with
defending or investigating any claims or liabilities, whether or not resulting
in any liability to such person to which any such indemnified party may become
subject under the Act, under any other statute, at common law or otherwise,
insofar as such losses, claims, demands, liabilities and expenses (i) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact made by the undersigned in this Agreement or the Confidential
Prospective Purchaser Questionnaire, (ii) arise out of or are based upon any
breach by the undersigned of any representation, warranty or agreement contained
herein, or (iii) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
including any post-effective amendment or amendments thereto in which shares of
Common Stock of the undersigned are included in reliance upon written
information furnished to the Company with respect to the undersigned by or on
behalf of the undersigned expressly for use in such registration statement.
The Company represents, warrants and agrees that:
(a) The Company has been duly incorporated and is validly existing as a
corporation under the laws of Delaware and has the requisite corporate power to
own its properties and to carry on its business as proposed to be conducted.
(b) As of the date hereof, the authorized capital stock of the Company
consists of 70,000,000 shares of which (i) 60,000,000 shares are designated in
the Company's Restated Certificate of Incorporation as common stock, par value
$0.001 per share, of which 4,762,792 shares were issued and outstanding as of
February 1, 2002, and (ii) 10,000,000 shares are designated as preferred stock,
par value $0.001 per share, of which 2,466,667 shares are designated as Series A
Convertible Preferred Stock and are issued and outstanding and convertible into
493,333 shares of Common Stock, and 4,000,000 shares are designated as Series B
Preferred Stock and none were issued and outstanding. All of the Company's
issued and outstanding shares have been validly issued and are fully paid and
nonassessable. No shares of Common Stock are subject to preemptive rights or any
other similar rights or liens or encumbrances suffered or permitted by the
Company.
(c) This Agreement has been duly authorized by the Company and when
executed and delivered in receipt of full consideration will constitute the
valid and binding agreement, enforceable in accordance with its terms (except to
the extent that the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally), and the
Company has full corporate power and authority necessary to enter into this
Agreement and to perform its obligations hereunder.
(d) No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Company
or any of its affiliates or of any third party or of the stockholders of the
Company is required for execution by the Company of this Agreement or the
performance of its obligations hereunder including, without limitation, the
issuance and sale of the Series B Preferred Stock (except for registration of
the underlying Common Stock under the Securities Act pursuant to the relevant
provisions hereof and notices of sale required to be filed with the Securities
and Exchange Commission pursuant to Regulation D promulgated under the
Securities Act of 1933 or any state securities law authority pursuant to
applicable blue sky laws).
(e) Neither the sale of the Series B Preferred Stock pursuant to this
Agreement, nor the performance of its obligations under this Agreement by the
Company will violate, conflict with, result in a breach of, or constitute a
default (or an event which with the giving or the lapse of time or both would be
reasonably likely to constitute a default) under (A) the Restated Certificate of
Incorporation or by-laws of the Company or any decree, judgment, order, law,
treaty, rule regulation or determination applicable to the Company of any court,
governmental agency or body, or arbitrator having jurisdiction over
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the Company or its subsidiaries or over the properties or assets of the Company,
the violation, conflict, breach or default of which would have a material
adverse effect on the Company.
(f) The shares of Common Stock issuable upon conversion of the Series B
Preferred Stock have been duly and validly authorized and when issued upon
receipt of full consideration therefor will be fully paid and nonassessable, and
are not subject to any preemptive or other similar rights of the holders of any
securities of the Company.
(g) None of the Company, any affiliate of the Company, or any person
acting on behalf of the Company or any such affiliate has engaged, or will
engage in any general solicitation or general advertising with respect to the
Securities.
(h) Neither the Company nor any of its affiliates has directly or
indirectly made any offers or sales of any securities or solicited any offers to
buy any security, under circumstances that would require registration of the
Securities under the 1933 Act.
(i) Registration Rights. The Company will use its best efforts, as soon
as practicable after the effectiveness of the merger with SB Merger Corp., if it
occurs, to register on Form SB-2 or other appropriate form under the Securities
Act the resale by the undersigned of the shares of Common Stock issuable upon
conversion of the Series B Preferred Stock, and to keep the registration
effective until the shares of Common Stock may be sold without registration
under Rule 144.
The Company covenants and agrees with the undersigned to comply with
all requirements of Section 4(2) and Section 3(a)(9) applicable to the Company,
and, to the extent applicable, Regulation D under the Securities Act, with
respect to the Offering.
This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts applicable to contracts made and
to be performed entirely within such state.
This Agreement contains the entire agreement of the parties, and there
are no representations, covenants or other agreements except as stated or
referred to herein. Neither this Agreement nor any provision hereof shall be
modified, discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought.
All notices, requests, consents, and other communications under this
Agreement shall be in writing and shall be delivered by hand, sent via overnight
courier, sent by facsimile, or mailed by first class certified or registered
mail, return receipt requested, postage prepaid:
(a) if to the Company, at:
RxBazaar, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
with a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
(b) if to the undersigned, to the address of the undersigned as it
appears in the signature block below.
or to such other person or entity or at such other address as any party
shall designate by notice to the other in accordance with this paragraph.
Notices provided in accordance with this paragraph shall be deemed delivered (i)
upon personal delivery with signature required, (ii) one Business Day after they
have been sent to the recipient by reputable overnight courier service (charges
prepaid and signature required), (iii) upon confirmation, answer back received,
of successful transmission of a facsimile message containing such notice if sent
between 9 a.m. and 5 p.m., local time of the recipient, on any Business Day, and
as of 9 a.m. local time of the recipient on the next Business Day if sent at any
other time, or (iv) three Business Days after deposit in the mail. The term
"Business Day" as used in this paragraph shall mean any day other than Saturday,
Sunday or a day on which banking institutions are not required to be open in
Boston, Massachusetts. Copies of any notices hereunder may be sent by email, but
transmission by such means alone shall not constitute delivery of notice under
the paragraph.
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This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and all of which taken together shall
be deemed to be one and the same instrument.
Dated: ___________________, 200__
ENTITY SUBSCRIBERS SIGN HERE: INDIVIDUAL SUBSCRIBERS SIGN HERE:
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Print Name of Subscriber Print Name of Subscriber
By:
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Signature
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Print Name and Title of Person Signing Signature of Joint Subscriber, if any
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Taxpayer Identification Number Social Security Number
Notice Address: Notice Address (No P.O. Box Numbers):
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Telephone: ( ) Telephone: ( )
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Facsimile: ( ) Facsimile: ( )
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Number of Shares Subscribed For:____________________
Total Purchase Price: $____________________________
Payment Tendered Herewith: $________________________
(Check One)
__________ Individual
__________ Tenants-in-Common
__________ Joint tenants with right of survivorship (each must sign)
__________ Community Property*
__________ In Partnership
__________ As custodian, trustee or agent for _______________
__________ Corporation
* If the investor(s) is a resident of a community property state the
subscription should indicate whether the Securities will be owned as
separate or community property, if the Securities are to be registered
jointly in the name of more than one person and the nature of the joint
ownership should be indicated (i.e., tenants in common, joint tenants with
right of survivorship, tenants by the entirety, or other designation as may
be permitted by law of the investor's domicile).
* * *
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The foregoing subscription is hereby accepted by RxBazaar, Inc. this _____
day of _______________, 200__ for ___________ shares of Series B Preferred
Stock. RxBazaar, Inc., by its execution hereof, hereby confirms its agreement to
be bound by the provisions of this Agreement.
RXBAZAAR, INC.
By:
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Name:
-----------------------------
Title:
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