SUBSCRIPTION AGREEMENT
EXHIBIT
4.2
_______
___, 2007
To: |
The
Board of Directors
|
Stone
Consulting Services, Inc.
00
Xxxxx
Xxxxxx
Xxxxxx,
XX 00000
1. Subject
to the terms and conditions hereinafter set forth, the undersigned, with an
address set forth on the signature page attached hereto (the "Purchaser" or
“Investor”), hereby subscribes for and purchases the number of shares of common
stock, par value $.001 per share ("Common Stock" or the “Shares”) set forth on
the signature page hereof of Stone Consulting Services, Inc. (the "Company"),
a
Delaware corporation, with offices at 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000. The
Company is offering up to 500,000 Shares at a purchase price of $.10 per Share
or an aggregate of $50,000 (the “Offering”).
2. Upon
acceptance of this Subscription Agreement (the “Agreement”) by the Company, it
will issue and sell to the Purchaser the number of Shares subscribed for at
a
price of $.10 per Share. The purchase price for the Shares is payable upon
execution of this Agreement in United States Dollars either by bank cashier's
check, wire transfer payable to the order of the Company, or as otherwise
determined by the Company’s Board of Directors. Such purchase price shall be
payable against delivery of Common Stock certificates in definitive form which
shall be registered in the Purchaser's name as set forth on the signature page
hereof.
3. The
Purchaser is aware that:
(a) An
investment in the Shares to be sold hereby involves a high degree of risk and
restricted transferability. Accordingly, the Purchaser acknowledges that the
Purchaser can afford a loss of the Purchaser's entire investment. Neither the
United States Securities and Exchange Commission ("SEC"), nor any state agency
nor any other agency or authority outside the United States has passed upon
the
adequacy or accuracy of this Offering or made any finding or determination
as to
the fairness of this investment. Any representation to the contrary is a
criminal offense.
(b) The
Shares have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or the securities laws of any state or the laws or
regulations of any jurisdiction outside the United States. The Shares will
be
offered and sold in reliance on exemptions from the registration requirements
of
these laws, including, but not limited to, Section 4(2) of the Securities Act
and Rule 506 of
Regulation D promulgated by the SEC thereunder.
(c) An
investment in the Company depends on the Purchaser's particular circumstances.
No information concerning the Company other than that disclosed herein has
been
provided to the Purchaser. The Purchaser is cautioned not to construe this
Subscription Agreement, or any prior or subsequent communications as
constituting legal advice. The Company and its officers, directors, employees
and representatives make no representations or warranties with respect to the
Company except as specifically set forth herein.
(d) This
Subscription Agreement does not constitute an offer to sell the Shares to or
a
solicitation of an offer to buy the Shares from anyone in any state or in any
other jurisdiction in which an offer or solicitation is not
authorized.
(e) No
other
Offering literature or advertising in any form is being employed in the sale
and
purchase of the Shares except for this Subscription Agreement, the Company’s
Executive Summary, the Purchaser Questionnaire and any other instruments or
documents required to be signed in connection with the Offering (the “Offering
Documents”). No person is authorized to give any information or to make any
representation not contained in the Subscription Agreement. Any representation
not contained herein must not be relied upon as having been authorized by the
Company or its officers. This Subscription Agreement and the Offering Documents
(as defined below) are confidential, and any distribution or reproduction of
it,
in whole or in part, or the divulgence of any of its contents, without the
prior
written consent of the Company, is prohibited.
(f) (i)
The
Purchaser must bear the economic risk of investment in the Company for an
indefinite period of time since the Shares have not been registered under the
Securities Act and, therefore, cannot be sold unless they are subsequently
registered under the Securities Act or an exemption from such registration
is
available and a favorable opinion of counsel for the Company to such effect
is
obtained; (ii) the Company will place a legend on the certificate(s) evidencing
the Shares stating that they have not been registered under the Securities
Act
and may not be sold, transferred, pledged, hypothecated or otherwise disposed
of
in the absence of either an effective registration statement or an available
exemption from the registration provisions of the Securities Act; (iii) the
Company will instruct its transfer agent to make a notation in its records
with
respect to the restrictions on the sale, transfer or disposition of the Shares;
and (iv) this investment in the Company would not likely be a fully liquid
investment even after registration.
(g) This
subscription is and shall be irrevocable, but the Purchaser's obligations
hereunder will terminate if this subscription is not accepted by the Company
pursuant to the terms contained herein. The Company may reject this Subscription
Agreement for any reason or no reason, at its sole discretion.
4.
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The
Purchaser hereby makes the following representations, warranties,
and
covenants to the Company:
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(a) The
Purchaser has sufficient available financial resources to provide adequately
for
the Purchaser's current needs, including all possible contingencies, and can
bear the economic risk of a complete loss of the Purchaser's investment
hereunder without materially affecting the Purchaser's financial
condition.
(b) The
Purchaser has such knowledge and experience in financial and business matters
that the Purchaser is capable of evaluating the merits and risks of an
investment in the Company and of making an informed investment decision. The
Purchaser acknowledges that the Purchaser also has significant prior investment
experience, and that the Purchaser recognizes the highly speculative nature
of
this investment.
(c) The
Purchaser is, and will be at the time it purchases the Shares, an “accredited
investor” as defined in Rule 501(a) of Regulation D promulgated under
the Securities Act. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Securities Exchange Act of 1934, as
amended (the “1934 Act”). The Purchaser has the authority and is duly and
legally qualified to purchase and own the Shares.
(d) The
Purchaser is familiar with the financial condition and prospects of the
Company's business and has been furnished all materials relating to the Company
and its activities, the Offering, the sale and purchase of the Shares, or
anything set forth in this Subscription Agreement or the Offering Documents,
which the Purchaser has requested for the purpose of evaluating the merits
and
risks regarding the purchase of the Shares, and has been afforded the
opportunity to obtain any additional information necessary to verify the
accuracy of any representations or information set forth in this
Agreement.
(e) The
Purchaser has had the opportunity to meet and confer with the Company, its
officers, directors and employees, regarding all aspects of the Company's
business and received sufficient answers to all inquiries that the Purchaser
has
put to them concerning the Company and its activities and the purchase and
sale
of the Shares.
(f) The
Purchaser has not been furnished any Offering literature other than the Offering
Documents and the Purchaser has relied only on the information contained herein
and therein and in the information furnished or made available to the Purchaser
by the Company as described in subparagraphs (d) and (e) above.
Furthermore,
as set forth above, no representations or warranties have been made to the
Purchaser, or to the Purchaser's advisers, by the Company, or its officers,
directors, employees or representatives with respect to the business of the
Company, the financial condition of the Company, and/or the economic, tax,
or
any other aspects or consequences of a purchase of Shares, and the Purchaser
has
not relied upon any information concerning this sale and purchase of the Shares,
written or oral, other than contained in this Agreement or provided by the
Company upon request.
(g) The
Purchaser is relying upon the Purchaser's own counsel, accountant, business
advisor(s) and/or others, concerning legal, tax, business and related aspects
of
the Purchaser's subscription hereunder and the Purchaser's investment in the
Company.
(h) The
Purchaser is acquiring the Shares for which the Purchaser hereby subscribes
for
the Purchaser's own account, as principal, for investment purposes only, and
no
other person has a direct or indirect beneficial interest in the Shares. The
Purchaser agrees that the Purchaser will not sell, transfer or otherwise dispose
of any of the Shares unless they are registered under the Securities Act or
unless an exemption from such registration is available.
(i) The
Purchaser is not directly or indirectly in any way affiliated with any entity
that is a competitor of the Company, exclusive of an equity ownership of not
more than 2% in any publicly owned corporation.
(j) The
Purchaser is authorized and qualified to become a shareholder in, and authorized
to make its investment in, the Company and any person signing this Agreement
on
behalf of the Purchaser has been authorized to do so.
(k) The
Purchaser understands that the Shares have not been registered under the
Securities Act and that the issuance of the securities is being effectuated
pursuant to an exemption from the registration requirements under the Securities
Act, in accordance with Regulation D, and that reliance on such exemption is
based, in part, upon the information being supplied hereunder by the
Purchaser.
(l) All
the
information which the Purchaser has furnished the Company with respect to
Purchaser's financial position and business experience and all representations
provided by the Purchaser are correct and complete as of the date of this
Agreement and as of the date of the purchase of the Shares, and, if there should
be any material change in such information prior to the consummation of the
Purchaser's investment in the Company, the Purchaser will immediately furnish
such revised or corrected information to the Company.
5. The
representations and warranties of the Purchaser and the Company contained herein
shall survive the delivery of this Agreement, the receipt of payment for the
Shares by the Company and the issuance and delivery of the Shares. The
Purchaser, on the one hand, and the Company, on the other, agree to hold each
other and their respective directors, officers, employees, agents, trustees,
counsel 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 breach by either the
Purchaser or the Company of any such representations and warranties, or as
a
result of any violation of any securities laws.
6. The
Company hereby makes the following representations, warranties and covenants
to
the Purchaser, each of which is true and correct as of the date
hereof:
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to own and lease its properties, to carry on its business as
currently conducted and to consummate all of the transactions contemplated
by
this Agreement. The Company is duly qualified as a foreign corporation for
the
transaction of business and is in good standing as a foreign corporation in
each
jurisdiction in which the conduct of its business or ownership or leasing of
its
properties requires it to be so qualified, except where the failure to be so
qualified would not have a material adverse effect on the business, financial
condition or prospects of the Company.
(b) The
authorized capital stock of the Company consists of 55,000,000 shares, each
with
a $.001 par value. Fifty million (50,000,000) shares are designated as Common
Stock and five million (5,000,000) shares are designated as preferred stock
(the
“Preferred Stock”). As of the date hereof, the issued and outstanding capital
stock of the Company consists of 4,500,000 shares of Common Stock and no shares
of Preferred Stock. All of the issued and outstanding shares of the Company
are
duly authorized, validly issued, fully paid and non-assessable. All of the
4,500,000 shares of issued and outstanding Common Stock are held by Xxxxxxx
Xxxxx, the Company’s founder, President and sole director.
(c) The
Board
of Directors of the Company has approved the terms of this Agreement and
authorized its execution, delivery and performance.
(d) The
Company is not in violation or material default under, nor will its execution,
delivery and performance of this Agreement result in a material violation of,
or
constitute a material default under, its Certificate of Incorporation or
By-Laws, as amended, or any instrument of indebtedness, mortgage or security
agreement, lease or other agreement or instrument to which the Company is a
party or by which it or any of its properties may be bound.
(e) There
are
no pending or threatened legal or governmental proceedings to which the Company
is a party which have not been disclosed, which could materially and adversely
affect the business, property, financial condition or operations of the
Company.
(f) The
Shares of Common Stock have been duly and validly authorized and, when issued
and paid for in accordance with the terms of this Agreement, all such Shares
will be fully paid and nonassessable.
(g) This
Agreement is a legal, valid and binding agreement of the Company enforceable
in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other laws affecting the rights of creditors generally
or by equitable principles.
(h) With
respect to the Company, this Agreement and the Offering Documents do not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which
they were made, not misleading.
7. The
Purchaser agrees that the Purchaser cannot cancel, terminate or revoke this
Agreement or any of the Purchaser's agreements hereunder and that this Agreement
is not transferable or assignable by the Purchaser; provided, however, the
obligation hereunder will terminate if this subscription is not accepted by
the
Company pursuant to the terms contained herein.
8. The
use
of the proceeds to be realized by the Company in the Offering will be for
working capital purposes including, but not limited to, organizational expenses
and legal and accounting fees.
9. Upon
the
completion of the Offering, the Company shall pay Xxxxxx Associates, L.P. an
advisory fee of $12,000 (the “Advisory Fee”) in connection with services
provided by Xxxxxx Associates, L.P. with respect to the Offering.
10. Miscellaneous.
(a) All
notices or other communications given or made hereunder shall be in writing
and
shall be delivered by hand, against written receipt, sent by overnight courier
service or mailed by registered or certified mail, return receipt requested,
postage prepaid, to the Purchaser at the Purchaser's address set forth below
and
to the Company at its address set forth above. Notices shall be deemed given
on
the date of receipt or, if mailed, five business days after mailing, except
notices of change of address, which shall be deemed given when
received.
(b) Notwithstanding
the place where this Agreement may be executed by the Purchaser or the Company,
the parties agree that all the terms and provisions hereof shall be construed
in
accordance with and governed by the laws of the State of Delaware without regard
to principles of conflict of laws.
(c) This
Agreement constitutes the entire agreement between the Purchaser and the Company
with respect to the subject matter hereof and may be amended only by a writing
executed by both parties.
(d) If
the
Purchaser is more than one person, the obligations of the Purchaser shall be
joint and several, and the representations and warranties herein contained
shall
be deemed to be made by, and be binding upon each such person and such person's
heirs, executors, administrators, successors and assigns. This Agreement shall
be binding upon and inure to the benefit of each of the Purchaser and the
Company and their respective heirs, legal representatives, successors and
assigns.
(e) The
Purchaser and the Company each hereby submit to the exclusive jurisdiction
of
the courts of the State of California located in Los Angeles County, California,
and of the federal courts located in Los Angeles County, California with respect
to any action or legal proceeding commenced by either of them with respect
to
this Agreement or the Shares. Each of them irrevocably waives any objection
they
now have or hereafter may have respecting the venue of any such action or
proceeding brought in such a court or respecting the fact that such court is
an
inconvenient forum and consents to the service of process in any such action
or
proceeding by means of registered or certified mail, return receipt requested,
in care of the address set forth above or below or at such other address as
either of them shall furnish in writing to the other.
(f) THE
PURCHASER AND THE COMPANY EACH HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING INVOLVING ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT, FRAUD
OR
OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
SHARES.
(g) In
order
to discourage frivolous claims, should it become necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
the successful party will be awarded reasonable attorneys' fees at all trial
and
appellate levels, including expenses and costs.
(h) The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
(i) The
waiver by either the Purchaser or the Company of a breach of any provision
of
this Agreement shall not operate, or be construed, as a waiver of any subsequent
breach of any provision of this Agreement.
(j) The
Purchaser and the Company agree to execute and deliver all further documents,
agreements and instruments and to take such other further action as may be
necessary or appropriate to carry out the purposes and intent of this
Agreement.
(k) This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which shall together constitute one and the
same
instrument.
IN
WITNESS WHEREOF, the Purchaser has signed this Subscription Agreement as of
the
date indicated below.
Number
of
Shares subscribed
for
(at
$.10 per share): ________.
Amount
of
check enclosed or
wire
transfer amount: $________.
Dated
________ __, 2007
Signature
of Investor
|
(Name
of Investor - Please Print)
|
Social
Security Number of Investor
|
Address
of Investor
|
Signature
of Investor
|
(Name
of Investor - Please Print)
|
Note:
If
two investors are signing, please check the manner in which the ownership is
to
be legally held (the indicated manner shall be construed as if written out
in
full accordance with applicable laws or regulations):
___ JT
TEN: As joint tenants with right of survivorship and not as tenants in
common.
___ TEN
COM: As tenants in common.
___ TEN
ENT: As tenants by the entireties.
SPECIAL
EXECUTION PAGE FOR SUBSCRIPTION BY AN ENTITY
(Not
applicable to subscriptions by individuals)
IN
WITNESS WHEREOF, subject to acceptance by the Company, the undersigned has
completed this Subscription Agreement to evidence its subscription for Shares
of
Stone Consulting Services, Inc., on this
day of
,
2007.
Amount
of Commitment
$________
for ________
Shares at $.10 per share
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___ TRUST
—
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(Include
copy of trust agreement)
|
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___ CORPORATION
—
|
(Attach
certified corporate resolution authorizing signature and a copy
of the
articles of incorporation)
|
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___ PARTNERSHIP
—
|
(Attach
a copy of the partnership agreement)
|
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COMPANY
—
|
(Attach
a copy of the operating
agreement)
|
(Please
print the following information exactly as you wish it to appear on the Company
records.)
|
|||
(Name of Investor - Please Print) |
(Address) |
||
(Tax Identification Number) |
(Telephone) |
The
undersigned trustee, partner or corporate officer certifies that she/he has
full
power and authority from the beneficiaries, partners or directors of the entity
named below to execute this Subscription Agreement on behalf of the entity
and
to make the representations and warranties made herein on their behalf and
that
investment in the Company has been affirmatively authorized by the governing
board of such entity and is not prohibited by the governing documents of the
entity.
Dated: ________, 2007 |
(Print
Name of Entity)
|
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By: | ||
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(Print Name and Capacity) |
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(Signature of authorized trustee, partner, or corporate officer) |
*If
Investor is a Registered Representative with an NASD member firm,
have the
following acknowledgement signed by the appropriate
party:
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The
undersigned NASD member firm acknowledges receipt of the notice required
by Rule 3050 of the NASD Conduct Rules.
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Name of NASD Member Firm |
By: | ||||
Authorized
Officer
|
||||
Accepted:
Dated:
_______ __, 2007
STONE CONSULTING SERVICES, INC. | ||
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|
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By: | ||
Xxxxxxx
Xxxxx, President
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NASAA
UNIFORM NOTICE:
IN
MAKING
AN INVESTMENT DECISION, PROSPECTIVE PURCHASERS SHOULD RELY ONLY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SHARES AND THE TERMS OF THIS
OFFERING, 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 ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
A
CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER
AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS OF THE SHARES SHOULD BE AWARE
THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
FOR
CALIFORNIA RESIDENTS:
THE SALE
OF SHARES IN THIS OFFERING HAS NOT BEEN QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS, AND ISSUANCE OF SUCH SECURITIES OR PAYMENT OR
RECEIPT OF ANY CONSIDERATION THEREOF IS UNLAWFUL UNLESS AN EXEMPTION FROM
QUALIFICATION IS PERFECTED.
NOTICE
TO FLORIDA RESIDENTS:
THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR
THE FLORIDA SECURITIES ACT, BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING
TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SHARES CANNOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY
REGISTERED UNDER THE ACT OR THE LAWS OF THIS STATE, IF SUCH REGISTRATION IS
REQUIRED.
THE
FLORIDA SECURITIES ACT PROVIDES, WHERE SALES ARE MADE TO FIVE OR MORE PERSONS
IN
FLORIDA, ANY SALE MADE PURSUANT TO SUB-SECTION 517.061 (11) (A) (5) OF THE
FLORIDA SECURITIES ACT, SHALL BE VOIDABLE BY SUCH FLORIDA PURCHASER EITHER
WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER OR AN ESCROW AGENT OR WITHIN
THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURRED LATER.
FOR
NEW YORK RESIDENTS:
THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR
THE NEW YORK FRAUDULENT
PRACTICES
ACT, BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED
AVAILABILITY OF THE OFFERING. THESE SHARES CANNOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE NEW YORK FRAUDULENT
PRACTICES ACT, IF SUCH REGISTRATION IS REQUIRED.
THE
OFFERING DOCUMENTS HAVE NOT BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL
PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK
HAS
NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING, ANY REPRESENTATION TO
THE
CONTRARY IS UNLAWFUL.