EXHIBIT 4.1
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (this "Agreement") made as of the last date set
forth on the signature page hereof between Administration for International
Credit & Investment, Inc. (the "Company"), and the undersigned (the
"Subscriber").
W I T N E S S E T H:
WHEREAS, the Company has retained ▇▇▇▇▇▇ Securities, L.P. (the "Placement
Agent") to act as placement agent in a private offering (the "Offering")
consisting of up to 1,750,000 units, each consisting of one share of common
stock, par value $.001 per share ("Common Stock"), one Series A Warrant and one
Series B Warrant (collectively, the "Warrants" and together with the Common
Stock, the "Units"); and
WHEREAS, the Subscriber desires to purchase that number of Units set forth
on the signature page hereof on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
representations and covenants hereinafter set forth, the parties hereto do
hereby agree as follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth and in the
Confidential Offering Memorandum dated February 2005 (such memorandum, together
with all amendments thereof and supplements and exhibits thereto, the
"Memorandum"), the Subscriber hereby irrevocably subscribes for and agrees to
purchase from the Company such number of Units, and the Company agrees to sell
to the Subscriber as is set forth on the signature page hereof, at a per share
price equal to $2.00 per Unit. The purchase price is payable by personal or
business check or money order made payable to "CST&T AAF AICI ESCROW ACCOUNT"
contemporaneously with the execution and delivery of this Agreement by the
Subscriber. Subscribers may also pay the subscription amount by, wire transfer
of immediately available funds to:
NAME: Continental Stock Transfer & Trust Co. AAF
AICI ESCROW ACCOUNT
OR: CST&T AAF AICI ESCROW ACCOUNT
BANK: ▇▇ ▇▇▇▇▇▇ Chase Bank
ACCOUNT: 530-058669
ABA: ▇▇▇▇▇▇▇▇▇
1.2 The Subscriber recognizes that the purchase of the Units involves a
high degree of risk including, but not limited to, the following: (a) the
Company remains a development stage business with limited operating history and
requires substantial funds in addition to the proceeds of the Offering; (b) 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 Units; (c) the Subscriber may not be able to liquidate its
investment; (d) transferability of the Units, including the Common Stock and
Warrants contained therein and Common Stock issuable upon exercise of the
Warrants (defined below) (sometimes hereinafter collectively referred to as the
"Securities") is extremely limited; (e) in the event of a disposition, the
Subscriber could sustain the loss of its entire investment; (f) the Company has
not paid any dividends since its inception and does not anticipate paying any
dividends; and (g) the Company may issue additional securities in the future
which have rights and preferences that are senior to those of the Common Stock.
Without limiting the generality of the representations set forth in Section 1.5
below, the Subscriber represents that the Subscriber has carefully reviewed the
section of the Memorandum captioned "Risk Factors."
1.3 The Subscriber represents that the Subscriber is an "accredited
investor" as such term is defined in Rule 501 of Regulation D ("Regulation D")
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
as indicated by the Subscriber's responses to the questions contained in Article
VII hereof, and that the Subscriber is able to bear the economic risk of an
investment in the Units.
1.4 The Subscriber hereby acknowledges and represents that (a) the
Subscriber has knowledge and experience in business and financial matters, prior
investment experience, including investment in securities that are non-listed,
unregistered and/or not traded on a national securities exchange nor on the
National Association of Securities Dealers, Inc. (the "NASD") automated
quotation system ("NASDAQ"), or the Subscriber has employed the services of a
"purchaser representative" (as defined in Rule 501 of Regulation D), attorney
and/or accountant to read all of the documents furnished or made available by
the Company both to the Subscriber and to all other prospective investors in the
Units to evaluate the merits and risks of such an investment on the Subscriber's
behalf; (b) the Subscriber recognizes the highly speculative nature of this
investment; and (c) the Subscriber is able to bear the economic risk that the
Subscriber hereby assumes.
1.5 The Subscriber hereby acknowledges receipt and careful review of this
Agreement, the Memorandum (which includes the Risk Factors), including all
exhibits thereto, and any documents which may have been made available upon
request as reflected therein (collectively referred to as the "Offering
Materials") and hereby represents that the Subscriber has been furnished by the
Company during the course of the Offering with all information regarding the
Company, the terms and conditions of the Offering and any additional information
that the Subscriber has requested or desired to know, and has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning the Company and the
terms and conditions of the Offering.
1.6 (a) In making the decision to invest in the Units the Subscriber has
relied solely upon the information provided by the Company in the Offering
Materials. To the extent necessary, the Subscriber has retained, at its own
expense, and relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of this Agreement and the
purchase of the Units hereunder. The Subscriber disclaims reliance on any
statements made or information provided by any person or entity in the course of
Subscriber's consideration of an investment in the Units other than the Offering
Materials.
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(b) The Subscriber represents that (i) the Subscriber was contacted
regarding the sale of the Units by the Company (or an authorized agent or
representative thereof) with whom the Subscriber had a prior substantial
pre-existing relationship and (ii) no Units were offered or sold to it by means
of any form of general solicitation or general advertising, and in connection
therewith, the Subscriber did not (A) receive or review any advertisement,
article, notice or other communication published in a newspaper or magazine or
similar media or broadcast over television or radio, whether closed circuit, or
generally available; or (B) attend any seminar meeting or industry investor
conference whose attendees were invited by any general solicitation or general
advertising.
1.7 The Subscriber hereby represents that the Subscriber, either by reason
of the Subscriber's business or financial experience or the business or
financial experience of the Subscriber's professional advisors (who are
unaffiliated with and not compensated by the Company or any affiliate or selling
agent of the Company, directly or indirectly), has the capacity to protect the
Subscriber's own interests in connection with the transaction contemplated
hereby.
1.8 The Subscriber hereby acknowledges that the Offering has not been
reviewed by the United States Securities and Exchange Commission (the "SEC") nor
any state regulatory authority since the Offering is intended to be exempt from
the registration requirements of Section 5 of the Securities Act pursuant to
Regulation D promulgated thereunder. The Subscriber understands that the
Securities have not been registered under the Securities Act or under any state
securities or "blue sky" laws and agrees not to sell, pledge, assign or
otherwise transfer or dispose of the Securities unless they are registered under
the Securities Act and under any applicable state securities or "blue sky" laws
or unless an exemption from such registration is available.
1.9 The Subscriber understands that the Securities comprising the Units
have not been registered under the Securities Act by reason of a claimed
exemption under the provisions of the Securities Act that depends, in part, upon
the Subscriber's investment intention. In this connection, the Subscriber hereby
represents that the Subscriber is purchasing the Securities for the Subscriber's
own account for investment and not with a view toward the resale or distribution
to others. The Subscriber, if an entity, further represents that it was not
formed for the purpose of purchasing the Securities.
1.10 The Subscriber understands that there is no public market for the
Common Stock and that no market may develop for any of such Securities. The
Subscriber understands that even if a public market develops for such
Securities, Rule 144 ("Rule 144") promulgated under the Securities Act requires
for non-affiliates, among other conditions, a one-year holding period prior to
the resale (in limited amounts) of securities acquired in a non-public offering
without having to satisfy the registration requirements under the Securities
Act. The Subscriber understands and hereby acknowledges that the Company is
under no obligation to register any of the Securities under the Securities Act
or any state securities or "blue sky" laws other than as set forth in Article V.
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1.11 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Securities that such Securities
have not been registered under the Securities Act or any state securities or
"blue sky" laws and setting forth or referring to the restrictions on
transferability and sale thereof contained in this Agreement. The Subscriber is
aware that the Company will make a notation in its appropriate records with
respect to the restrictions on the transferability of such Securities. The
legend to be placed on each certificate shall be in form substantially similar
to the following:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE
SECURITIES OR "BLUE SKY LAWS," AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."
1.12 The Subscriber understands that the Company will review this
Agreement and is hereby given authority by the Subscriber to call Subscriber's
bank or place of employment or otherwise review the financial standing of the
Subscriber; and it is further agreed that the Company, at its sole discretion,
reserves the unrestricted right, without further documentation or agreement on
the part of the Subscriber, to reject or limit any subscription, to accept
subscriptions for fractional Units and to close the Offering to the Subscriber
at any time and that the Company will issue stop transfer instructions to its
transfer agent with respect to such Securities.
1.13 The Subscriber hereby represents that the address of the Subscriber
furnished by Subscriber on the signature page hereof is the Subscriber's
principal residence if Subscriber is an individual or its principal business
address if it is a corporation or other entity.
1.14 The Subscriber represents that the Subscriber has full power and
authority (corporate, statutory and otherwise) to execute and deliver this
Agreement and to purchase the Units. This Agreement constitutes the legal, valid
and binding obligation of the Subscriber, enforceable against the Subscriber in
accordance with its terms.
1.15 If the Subscriber is a corporation, partnership, limited liability
company, trust, employee benefit plan, individual retirement account, ▇▇▇▇▇
Plan, or other tax-exempt entity, it is authorized and qualified to invest in
the Company and the person signing this Agreement on behalf of such entity has
been duly authorized by such entity to do so.
1.16 The Subscriber acknowledges that if he or she is a Registered
Representative of an NASD member firm, he or she must give such firm the notice
required by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm in Section 7.4 below.
1.17 The Subscriber acknowledges that at such time, if ever, as the
Securities are registered (as such term is defined in Article V hereof), sales
of the Securities will be subject to state securities laws.
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1.18 (a) The Subscriber agrees not to issue any public statement with
respect to the Subscriber's investment or proposed investment in the Company or
the terms of any agreement or covenant between them and the Company without the
Company's prior written consent, except such disclosures as may be required
under applicable law or under any applicable order, rule or regulation.
(b) 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 use the name of the Subscriber for any offering or in any
registration statement filed pursuant to Article V in which the Subscriber's
shares are included.
1.19 The Subscriber agrees to hold the Company and its directors,
officers, employees, affiliates, controlling persons and agents 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 (a) any sale or distribution of the Securities by the Subscriber in
violation of the Securities Act or any applicable state securities or "blue sky"
laws; or (b) any false representation or warranty or any breach or failure by
the Subscriber to comply with any covenant made by the Subscriber in this
Agreement (including the Confidential Investor Questionnaire contained in
Article VII herein) or any other document furnished by the Subscriber to any of
the foregoing in connection with this transaction.
II. REPRESENTATIONS BY AND COVENANTS OF THE COMPANY
The Company hereby represents and warrants to the Subscriber that:
2.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Oregon and has full corporate power and authority to conduct its
business.
2.2 Capitalization and Voting Rights. The authorized, issued and
outstanding capital stock of the Company is as set forth on Schedule 2.2
attached hereto and all issued and outstanding shares of the Company are validly
issued, fully paid and nonassessable. Except as set forth in the Offering
Materials, there are no outstanding options, warrants, agreements, convertible
securities, preemptive rights or other rights to subscribe for or to purchase
any shares of capital stock of the Company. Except as set forth in the Offering
Materials and as otherwise required by law, there are no restrictions upon the
voting or transfer of any of the shares of capital stock of the Company pursuant
to the Company's Articles of Incorporation (the "Articles of Incorporation"),
By-Laws or other governing documents or any agreement or other instruments to
which the Company is a party or by which the Company is bound.
2.3 Authorization; Enforceability. The Company has all corporate right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All corporate action on the part of the
Company, its directors and stockholders necessary for the (i) authorization
execution, delivery and performance of this Agreement by the Company; and (ii)
authorization, sale, issuance and delivery of the Securities contemplated hereby
and the performance of the Company's obligations hereunder has been taken. This
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Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies,
and to limitations of public policy. The Common Stock, when issued and fully
paid for in accordance with the terms of this Agreement, will be validly issued,
fully paid and nonassessable. The issuance and sale of the Common Stock
contemplated hereby will not give rise to any preemptive rights or rights of
first refusal on behalf of any person which have not been waived in connection
with this offering.
2.4 No Conflict; Governmental Consents.
(a) The execution and delivery by the Company of this Agreement and
the consummation of the transactions contemplated hereby will not result in the
violation of any material law, statute, rule, regulation, order, writ,
injunction, judgment or decree of any court or governmental authority to or by
which the Company is bound, or of any provision of the Articles of Incorporation
or By-Laws of the Company, and will not conflict with, or result in a material
breach or violation of, any of the terms or provisions of, or constitute (with
due notice or lapse of time or both) a default under, any lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or instrument
to which the Company is a party or by which it is bound or to which any of its
properties or assets is subject, nor result in the creation or imposition of any
lien upon any of the properties or assets of the Company.
(b) No consent, approval, authorization or other order of any
governmental authority is required to be obtained by the Company in connection
with the authorization, execution and delivery of this Agreement or with the
authorization, issue and sale of the Units, except such filings as may be
required to be made with the SEC, NASD, NASDAQ and with any state or foreign
blue sky or securities regulatory authority.
2.5 Licenses. Except as otherwise set forth in the Memorandum, the Company
has sufficient licenses, permits and other governmental authorizations currently
required for the conduct of its business or ownership of properties and is in
all material respects in compliance therewith.
2.6 Litigation. The Company knows of no pending or threatened legal or
governmental proceedings against the Company which could materially adversely
affect the business, property, financial condition or operations of the Company
or which materially and adversely questions the validity of this Agreement or
any agreements related to the transactions contemplated hereby or the right of
the Company to enter into any of such agreements, or to consummate the
transactions contemplated hereby or thereby. The Company is not a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality which could materially
adversely affect the business, property, financial condition or operations of
the Company. There is no action, suit, proceeding or investigation by the
Company currently pending in any court or before any arbitrator or that the
Company intends to initiate.
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2.7 Disclosure. The information set forth in the Offering Materials as of
the date hereof contains no untrue statement of a material fact nor omits to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
2.8 Investment Company. The Company is not an "investment company" within
the meaning of such term under the Investment Company Act of 1940, as amended,
and the rules and regulations of the SEC thereunder.
2.9 Placement Agent. The Company has engaged, consented to and authorized
the Placement Agent to act as agent of the Company in connection with the
transactions contemplated by this Agreement. The Company will pay the Placement
Agent a commission in the form of both cash and warrants (the "Introduction
Warrants") and will reimburse the Placement Agent's reasonable out-of-pocket
expenses incurred in connection with the Offering, and the Company agrees to
indemnify and hold harmless the Subscribers from and against all fees,
commissions or other payments owning by the Company to the Placement Agent or
any other person or firm acting on behalf of the Company hereunder.
2.10 Intellectual Property.
(i) To the best of its knowledge, the Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes necessary for its business as now conducted and as presently
proposed to be conducted, without any known infringement of the rights of
others. Except as disclosed in the Memorandum, there are no material outstanding
options, licenses or agreements of any kind relating to the foregoing
proprietary rights, nor is the Company bound by or a party to any material
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes of any other person or
entity other than such licenses or agreements arising from the purchase of "off
the shelf" or standard products. The Company has not received any written
communications alleging that the Company has violated or, by conducting its
business as presently proposed to be conducted, would violate any of the
patents, trademarks, service marks, trade names, copyrights or trade secrets or
other proprietary rights of any other person or entity.
(ii) Except as disclosed in the Memorandum, the Company is not aware
that any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with their duties to the Company or that would conflict with the
Company's business as presently conducted.
(iii) Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as presently conducted, will, to the Company's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any employee is now obligated.
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(iv) To the Company's knowledge, no employee of the Company, nor any
consultant with whom the Company has contracted, is in violation of any term of
any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company because of the nature of the business conducted by
the Company; and to the Company's knowledge the continued employment by the
Company of its present employees, and the performance of the Company's contracts
with its independent contractors, will not result in any such violation. The
Company has not received any written notice alleging that any such violation has
occurred. Except as described in the Memorandum, no employee of the Company has
been granted the right to continued employment by the Company or to any
compensation following termination of employment with the Company except for any
of the same which would not have a material adverse effect on the business of
the Company. The Company is not aware that any officer, key employee or group of
employees intends to terminate his, her or their employment with the Company,
nor does the Company have a present intention to terminate the employment of any
officer, key employee or group of employees.
2.11 Title to Properties and Assets; Liens, Etc. The Company has good and
marketable title to its properties and assets, including the properties and
assets reflected in the most recent balance sheet included in the Financial
Statements, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those
resulting from taxes which have not yet become delinquent; (b) liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company; and (c)
those that have otherwise arisen in the ordinary course of business. The Company
is in compliance with all material terms of each lease to which it is a party or
is otherwise bound.
2.12 Obligations to Related Parties. Except as described in the
Memorandum, there are no obligations of the Company to officers, directors,
stockholders, or employees of the Company other than (a) for payment of salary
or other compensation for services rendered, (b) reimbursement for reasonable
expenses incurred on behalf of the Company and (c) for other standard employee
benefits made generally available to all employees (including stock option
agreements outstanding under any stock option plan approved by the Board of
Directors of the Company). Except as may be disclosed in the Memorandum, the
Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
III. TERMS OF SUBSCRIPTION
3.1 Pending the sale of the Units, all funds paid hereunder shall be
deposited with Continental Stock Transfer & Trust Company.
3.2 Certificates representing the Common Stock and Warrants purchased by
the Subscriber pursuant to this Agreement will be prepared for delivery to the
Subscriber within 15 business days following the Closing at which such purchase
takes place. The Subscriber hereby authorizes and directs the Company to deliver
the certificates representing the Common Stock and Warrants purchased by the
Subscriber pursuant to this Agreement directly to the Subscriber's residential
or business address indicated on the signature page hereto.
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IV. CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS
4.1 The Subscriber's obligation to purchase the Units at the Closing at
which such purchase is to be consummated is subject to the fulfillment on or
prior to such Closing of the following conditions, which conditions may be
waived at the option of each Subscriber to the extent permitted by law:
(a) Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the date of such
Closing shall have been performed or complied with in all material respects.
(b) No Legal Order Pending. There shall not then be in effect any
legal or other order enjoining or restraining the transactions contemplated by
this Agreement.
(c) No Law Prohibiting or Restricting Such Sale. There shall not be
in effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person, which shall not have been
obtained, to issue the Securities (except as otherwise provided in this
Agreement).
(d) Acquisition by Public Company. The Company shall have been
acquired by a corporation whose stock is publicly traded on the Over-the-Counter
Bulletin Board.
V. REGISTRATION RIGHTS
5.1 Definitions. As used in this Agreement, the following terms shall have
the following meanings.
(a) The term "Acquisition" shall mean the acquisition of the Company
by a corporation whose stock is publicly traded on the Over-the-Counter Bulletin
Board.
(b) The term "Holder" shall mean any person owning or having the
right to acquire Registrable Securities or any permitted transferee of a Holder.
(c) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
order of effectiveness of such registration statement or document.
(d) The term "Registrable Securities" shall mean: (i) the Common
Stock (including the Common Stock issuable upon exercise of the Warrants); (ii)
the shares of Common Stock issuable upon exercise of the Introduction Warrants;
and (iii) any other shares of Common Stock with respect to which the Company has
granted or may in the future grant registration rights pursuant to separate
agreements; provided, however, that securities shall only be treated as
Registrable Securities if and only for so long as they (A) have not been
disposed of pursuant to a registration statement declared effective by the SEC;
(B) have not been sold in a transaction exempt from the registration and
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prospectus delivery requirements of the Securities Act so that all transfer
restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale; (C) are held by a Holder or a permitted transferee of
a Holder pursuant to Section 5.11; and (D) may not be disposed of under Rule
144(k) under the Securities Act without restriction.
5.2 Piggyback Registration.
(a) The Company agrees that if, at any time, and from time to time,
after the earlier to occur of (i) an Acquisition and (ii) a Trading Event, the
Board of Directors of the Company (the "Board") shall authorize the filing of a
registration statement under the Securities Act (other than a registration
statement on Form ▇-▇, ▇▇▇▇ ▇-▇ or any other form that does not include
substantially the same information as would be required in a form for the
general registration of securities) in connection with the proposed offer of any
of its securities by it or any of its stockholders, the Company shall: (A)
promptly notify each Holder that such registration statement will be filed and
that the Registrable Securities then held by such Holder will be included in
such registration statement at such Holder's request; (B) cause such
registration statement to cover all of such Registrable Securities issued to
such Holder for which such Holder requests inclusion; (C) use best efforts to
cause such registration statement to become effective as soon as practicable;
and (D) take all other reasonable action necessary under any federal or state
law or regulation of any governmental authority to permit all such Registrable
Securities that have been issued to such Holder to be sold or otherwise disposed
of, and will maintain such compliance with each such federal and state law and
regulation of any governmental authority for the period necessary for such
Holder to promptly effect the proposed sale or other disposition.
(b) Notwithstanding any other provision of this Section 5.2, the
Company may at any time, abandon or delay any registration commenced by the
Company. In the event of such an abandonment by the Company, the Company shall
not be required to continue registration of shares requested by the Holder for
inclusion, the Holder shall retain the right to request inclusion of shares as
set forth above and the withdrawn registration shall not be deemed to be a
registration request for the purposes of Section 5.2(c) below.
(c) Each Holder shall have the right to request inclusion of any of
its Registrable Securities in a registration statement as described in this
Section 5.2, up to three times.
5.3 Mandatory Registration. The Company agrees that it will file a
registration statement covering the resale of the Registrable Securities as soon
as practicable, but in any event within 90 days from the final Closing date of
the Offering.
5.4 Registration Procedures. Whenever required under this Article V to
include Registrable Securities in a Company registration statement, the Company
shall, as expeditiously as reasonably possible:
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(a) Use best efforts to (i) cause such registration statement to
become effective, and (ii) cause such registration statement to remain effective
until the earliest to occur of (A) such date as the sellers of Registrable
Securities (the "Selling Holders") have completed the distribution described in
the registration statement and (B) such time that all of such Registrable
Securities are no longer, by reason of Rule 144(k) under the Securities Act,
required to be registered for the sale thereof by such Holders. The Company will
also use its best efforts to, during the period that such registration statement
is required to be maintained hereunder, file such post-effective amendments and
supplements thereto as may be required by the Securities Act and the rules and
regulations thereunder or otherwise to ensure that the registration statement
does not contain any untrue statement of material fact or omit to state a fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading; provided, however, that if applicable rules under the Securities Act
governing the obligation to file a post-effective amendment permits, in lieu of
filing a post-effective amendment that (i) includes any prospectus required by
Section 10(a)(3) of the Securities Act or (ii) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the Company may incorporate by reference information
required to be included in (i) and (ii) above to the extent such information is
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement, and the prospectus used in connection with such
registration statement, as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Make available for inspection upon reasonable notice during the
Company's regular business hours by each Selling Holder, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by such Selling Holder or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Selling
Holder, underwriter, attorney, accountant or agent in connection with such
registration statement.
(d) Furnish to the Selling Holders such numbers of copies of a
prospectus, including a preliminary prospectus as amended or supplemented from
time to time, in conformity with the requirements of the Securities Act, and
such other documents as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them.
(e) Use best efforts to register and qualify the securities covered
by such registration statement under such other federal or state securities laws
of such jurisdictions as shall be reasonably requested by the Selling Holders;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions,
unless the Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act.
11
(f) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Selling Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(g) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, (i) when the registration
statement or any post-effective amendment and supplement thereto has become
effective; (ii) of the issuance by the SEC of any stop order or the initiation
of proceedings for that purpose (in which event the Company shall make every
effort to obtain the withdrawal of any order suspending effectiveness of the
registration statement at the earliest possible time or prevent the entry
thereof); (iii) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such purpose; and (iv)
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(h) Cause all such Registrable Securities registered hereunder to be
listed on each securities exchange or quotation service on which similar
securities issued by the Company are then listed or quoted or, if no such
similar securities are listed or quoted on a securities exchange or quotation
service, apply for qualification and use best efforts to qualify such
Registrable Securities for inclusion on the New York Stock Exchange, American
Stock Exchange or listing on a quotation system of the National Association of
Securities Dealers, Inc.
(i) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(j) Cooperate with the Selling Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing the Registrable Securities to be sold, which
certificates will not bear any restrictive legends; and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, shall request at least two business days prior to
any sale of the Registrable Securities to the underwriters.
(k) In connection with an underwritten offering, cause the officers
of the Company to provide reasonable assistance in the preparation of, any "road
show" presentation to potential investors as the managing underwriter may
determine.
(l) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 50
calendar days after the end of any 3-month period (or 105 calendar days after
the end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts underwritten offering, and
(ii) if not sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Company, after the effective date of a
registration statement, which statements shall cover said period.
12
(m) If the offering is underwritten and at the request of any
Selling Holder, use its best efforts to furnish on the date that Registrable
Securities are delivered to the underwriters for sale pursuant to such
registration: (i) opinions dated such date of counsel representing the Company
for the purposes of such registration, addressed to the underwriters and the
transfer agent for the Registrable Securities so delivered, respectively, to the
effect that such registration statement has become effective under the
Securities Act and such Registrable Securities are freely tradable, and covering
such other matters as are customarily covered in opinions of issuer's counsel
delivered to underwriters and transfer agents in underwritten public offerings
and (ii) a letter dated such date from the independent public accountants who
have certified the financial statements of the Company included in the
registration statement or the prospectus, covering such matters as are
customarily covered in accountants' letters delivered to underwriters in
underwritten public offerings.
5.5 Furnish Information. It shall be a condition precedent to the
obligation of the Company to take any action pursuant to this Article V with
respect to the Registrable Securities of any Selling Holder that such Holder
shall furnish to the Company such information regarding the Holder, the
Registrable Securities held by the Holder, and the intended method of
disposition of such securities as shall be reasonably required by the Company to
effect the registration of such Holder's Registrable Securities.
5.6 Registration Expenses. The Company shall bear and pay all Registration
Expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to registrations pursuant to Section 5.2
for each Holder, but excluding underwriting discounts and commissions relating
to Registrable Securities and excluding any professional fees or costs of
accounting, financial or legal advisors to any of the Holders.
5.7 Underwriting Requirements. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 5.2 to include any of the Holders' Registrable
Securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling stockholders according to
the total amount of securities entitled to be included therein owned by each
selling stockholder or in such other proportions as shall mutually be agreed to
by such selling stockholders). For purposes of the preceding parenthetical
concerning apportionment, for any selling stockholder who is a holder of
Registrable Securities and is a partnership or corporation, the partners,
retired partners and stockholders of such holder, or the estates and family
members of any such partners and retired partners and any trusts for the benefit
13
of any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
5.8 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Article.
5.9 Indemnification. In the event that any Registrable Securities are
included in a registration statement under this Article V:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Securities Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, or the Exchange Act, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation by the Company of the Securities Act, the
Exchange Act, or any rule or regulation promulgated under the Securities Act, or
the Exchange Act, and the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this Section 5.9(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for any
such loss, claim, damage, liability, or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each Selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers, each person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter or
other Holder, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
14
Section 5.9(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 5.9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, further, that, in no event shall any
indemnity under this Section 5.9(b) exceed the greater of the cash value of the
(i) gross proceeds from the Offering received by such Holder or (ii) such
Holder's investment pursuant to this Agreement as set forth on the signature
page attached hereto.
(c) Promptly after receipt by an indemnified party under this
Section 5.9 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 5.9,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly notified, to assume the defense thereof with counsel selected by
the indemnifying party and approved by the indemnified party (whose approval
shall not be unreasonably withheld); provided, however, that an indemnified
party (together with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
5.9, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 5.9.
(d) If the indemnification provided for in this Section 5.9 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the alleged
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
15
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in an underwriting agreement
entered into in connection with an underwritten public offering are in conflict
with the foregoing provisions, the provisions in such underwriting agreement
shall control.
(f) The obligations of the Company and Holders under this Section
5.9 shall survive the completion of the Offering.
5.10 Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after 90 days after the
effective date of the registration statement filed in connection with an
Acquisition;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (ii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.
5.11 Permitted Transferees. The rights to cause the Company to register
Registrable Securities granted to the Holders by the Company under this Article
V may be assigned in full by a Holder in connection with a transfer by such
Holder of its Registrable Securities if: (a) such Holder gives prior written
notice to the Company; (b) such transferee agrees to comply with the terms and
provisions of this Agreement; (c) such transfer is otherwise in compliance with
this Agreement; and (d) such transfer is otherwise effected in accordance with
applicable securities laws. Except as specifically permitted by this Section
5.11, the rights of a Holder with respect to Registrable Securities as set out
herein shall not be transferable to any other Person, and any attempted transfer
shall cause all rights of such Holder therein to be forfeited.
5.12 Termination of Registration Rights The right of any Holder to request
inclusion in any registration pursuant to Section 5.2 shall terminate if all
shares of Registrable Securities held by such Holder may immediately be sold
under Rule 144(k).
16
VI. MISCELLANEOUS
6.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, or delivered by hand against written receipt therefor,
addressed as follows:
if to the Company, to it at:
Administration for International Credit & Investment, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer
With a copy to:
Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, Esq.
if to the Subscriber, to the Subscriber's address indicated on
the signature page of this Agreement.
Notices shall be deemed to have been given or delivered on the date of mailing,
except notices of change of address, which shall be deemed to have been given or
delivered when received.
6.2 Except as otherwise provided herein, this Agreement shall not be
changed, modified or amended except by a writing signed by the parties to be
charged, and this Agreement may not be discharged except by performance in
accordance with its terms or by a writing signed by the party to be charged.
6.3 Subject to the provisions of Section 5.11, this 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 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.
6.4 Upon the execution and delivery of this Agreement by the Subscriber,
this Agreement shall become a binding obligation of the Subscriber with respect
to the purchase of Common Stock as herein provided, subject, however, to the
right hereby reserved by the Company to enter into the same agreements with
other subscribers and to add and/or delete other persons as subscribers.
6.5 NOTWITHSTANDING THE PLACE WHERE THIS 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 NEW YORK WITHOUT REGARD TO SUCH STATE'S PRINCIPLES OF CONFLICTS
17
OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR
RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE SUPREME
COURT OF THE STATE OF NEW YORK IN AND FOR THE COUNTY OF NEW YORK OR THE FEDERAL
COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES
HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID
VENUE.
6.6 In order to discourage frivolous claims the parties agree that unless
a claimant in any proceeding arising out of this Agreement succeeds in
establishing his claim and recovering a judgment against another party
(regardless of whether such claimant succeeds against one of the other parties
to the action), then the other party shall be entitled to recover from such
claimant all of its/their reasonable legal costs and expenses relating to such
proceeding and/or incurred in preparation therefor.
6.7 The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect. If any
provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions shall be deemed dependent upon any other covenant
or provision unless so expressed herein.
6.8 It is agreed that a waiver by either party of a breach of any
provision of this Agreement shall not operate, or be construed, as a waiver of
any subsequent breach by that same party.
6.9 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 Agreement.
6.10 This Agreement may be executed in two or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
6.11 Nothing in this Agreement shall create or be deemed to create any
rights in any person or entity not a party to this Agreement, except (a) for the
holders of Registrable Securities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
VII. CONFIDENTIAL INVESTOR QUESTIONNAIRE
7.1 The Subscriber represents and warrants that he, she or it comes within
one category marked below, and that for any category marked, he, she or it has
truthfully set forth, where applicable, the factual basis or reason the
Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS
SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish
any additional information which the Company deems necessary in order to verify
the answers set forth below.
Category A ____ The undersigned is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently exceeds
$1,000,000.
Explanation. In calculating net worth you may include equity in personal property and
real estate, including your principal residence, cash, short-term investments, stock
and securities. Equity in personal property and real estate should be based on the
fair market value of such property less debt secured by such property.
Category B ____ The undersigned is an individual (not a partnership, corporation, etc.) who had an
income in excess of $200,000 in each of the two most recent years, or joint income
with his or her spouse in excess of $300,000 in each of those years (in each case
including foreign income, tax exempt income and full amount of capital gains and
losses but excluding any income of other family members and any unrealized capital
appreciation) and has a reasonable expectation of reaching the same income level in
the current year.
Category C ____ The undersigned is a director or executive officer of the Company which is issuing and
selling the Securities.
Category D ____ The undersigned is a bank; a savings and loan association; insurance company;
registered investment company; registered business development company; licensed small
business investment company ("SBIC"); or employee benefit plan within the meaning of
Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is
either a bank, savings and loan association, insurance company or registered
investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is
a self directed plan with investment decisions made solely by persons that are
accredited investors. (describe entity)
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Category E ____ The undersigned is a private business development company as defined in section
202(a)(22) of the Investment Advisors Act of 1940. (describe entity)
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19
Category F ____ The undersigned is either a corporation, partnership, Massachusetts business trust, or
non-profit organization within the meaning of Section 501(c)(3) of the Internal
Revenue Code, in each case not formed for the specific purpose of acquiring the Common
Stock and with total assets in excess of $5,000,000. (describe entity)
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Category G ____ The undersigned is a trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the Securities, where the purchase is directed by a
"sophisticated investor" as defined in Regulation 506(b)(2)(ii) under the Act.
Category H ____ The undersigned is an entity (other than a trust) in which all of the equity owners
are "accredited investors" within one or more of the above categories. If relying
upon this Category alone, each equity owner must complete a separate copy of this
Agreement. (describe entity)
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Category I ____ The undersigned is not within any of the categories above and is therefore not an
accredited investor.
The undersigned agrees that the undersigned will notify the Company at any time on or
prior to the Closing Date in the event that the representations and warranties in this
Agreement shall cease to be true, accurate and complete.
7.2 SUITABILITY (please answer each question)
(a) For an individual Subscriber, please describe your current
employment, including the company by which you are employed and its
principal business:
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
(b) For an individual Subscriber, please describe any college or
graduate degrees held by you:
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
(c) For all Subscribers, please list types of prior investments:
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
20
(d) For all Subscribers, please state whether you have participated in
other private placements before:
YES_______ NO_______
(e) If your answer to question (d) above was "YES", please indicate
frequency of such prior participation in private placements of:
Public Private Public or Private VoIP or other
Companies Companies Communications Companies
--------- --------- ------------------------
Frequently
--------------------------- --------------------------- ---------------------------
Occasionally
--------------------------- --------------------------- ---------------------------
Never
--------------------------- --------------------------- ---------------------------
(f) For individual Subscribers, do you expect your current level of
income to significantly decrease in the foreseeable future:
YES_______ NO_______
(g) For trust, corporate, partnership and other institutional
Subscribers, do you expect your total assets to significantly
decrease in the foreseeable future:
YES_______ NO_______
(h) For all Subscribers, do you have any other investments or contingent
liabilities which you reasonably anticipate could cause you to need
sudden cash requirements in excess of cash readily available to you:
YES_______ NO_______
(i) For all Subscribers, are you familiar with the risk aspects and the
non-liquidity of investments such as the securities for which you
seek to subscribe?
YES_______ NO_______
(j) For all Subscribers, do you understand that there is no guarantee of
financial return on this investment and that you run the risk of
losing your entire investment?
YES_______ NO_______
7.3 MANNER IN WHICH TITLE IS TO BE HELD. (circle one)
(a) Individual Ownership
(b) Community Property
(c) Joint Tenant with Right of Survivorship (both parties must
sign)
(d) Partnership*
(e) Tenants in Common
(f) Company*
21
(g) Trust*
(h) Other*
* If Securities are being subscribed for by an entity, the attached
Certificate of Signatory must also be completed.
7.4 NASD AFFILIATION.
Are you affiliated or associated with an NASD member firm (please check one):
Yes _________ No __________
If Yes, please describe:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* If Subscriber is a Registered Representative with an NASD member firm,
have the following acknowledgment signed by the appropriate party:
The undersigned NASD member firm acknowledges receipt of the notice required by
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
---------------------------------
Name of NASD Member Firm
By:
------------------------------
Authorized Officer
Date:
----------------------------
7.5 The undersigned is informed of the significance to the Company of the
foregoing representations and answers contained in the Confidential Investor
Questionnaire contained in this Article VII and such answers have been provided
under the assumption that the Company will rely on them.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
22
NUMBER OF UNITS _________ X $2.00 = $_________ (THE "PURCHASE PRICE")
------------------------------------- ------------------------------------
Signature Signature (if purchasing jointly)
------------------------------------- ------------------------------------
Name Typed or Printed Name Typed or Printed
------------------------------------- ------------------------------------
Title (if Subscriber is an Entity) Title (if Subscriber is an Entity)
------------------------------------- ------------------------------------
Entity Name (if applicable) Entity Name (if applicable
------------------------------------- ------------------------------------
------------------------------------- ------------------------------------
Address Address
------------------------------------- ------------------------------------
City, State and Zip Code City, State and Zip Code
------------------------------------- ------------------------------------
Telephone-Business Telephone-Business
------------------------------------- ------------------------------------
Telephone-Residence Telephone-Residence
------------------------------------- ------------------------------------
Facsimile-Business Facsimile-Business
------------------------------------- ------------------------------------
Facsimile-Residence Facsimile-Residence
------------------------------------- ------------------------------------
Tax ID # or Social Security # Tax ID # or Social Security #
Name in which securities should be issued:
------------------------------------
Dated: , 2005
------------------
This Subscription Agreement is agreed to and accepted as of
________________ , 2005.
ADMINISTRATION FOR INTERNATIONAL CREDIT
& INVESTMENT, INC.
By:
--------------------------------------
Name:
Title:
23
CERTIFICATE OF SIGNATORY
(To be completed if Units are
being subscribed for by an entity)
I, ____________________________, am the ____________________________ of
__________________________________________ (the "Entity").
I certify that I am empowered and duly authorized by the Entity to execute and
carry out the terms of the Subscription Agreement and to purchase and hold the
Common Stock and Warrants, and certify further that the Subscription Agreement
has been duly and validly executed on behalf of the Entity and constitutes a
legal and binding obligation of the Entity.
IN WITNESS WHEREOF, I have set my hand this ________ day of _________________,
2005
---------------------------------------
(Signature)
24
SCHEDULE 2.2
CAPITALIZATION
I. Authorized:
(i) 52,500,000 shares of Common Stock, par value $.001 per share.
(ii) 12,500,000 shares of Preferred Stock, par value $.01 per share of
which no shares have been designated.
II. Outstanding:
Stockholder Shares of Common Stock
----------- ----------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 18,855,900
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 218,757
▇▇▇▇▇ ▇▇▇▇▇▇▇ 63,000
▇▇▇▇▇ ▇▇▇▇▇▇ 218,400
LG International Financial Ltd. 504,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 63,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 63,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 54,600
▇▇▇▇▇ ▇▇▇▇▇▇ 10,500
▇▇▇ ▇▇▇▇▇▇▇ 105,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,100
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,500
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ III 1,286,809
▇▇▇▇▇▇ ▇▇▇▇▇▇ 420,000
-------------
21,875,566
=============
II. Warrants:
Shares reserved for issuance upon exercise of warrants to ▇▇▇▇▇▇
Securities, L.P.: 200,000. Does not include additional warrants that
▇▇▇▇▇▇ Securities, L.P. is entitled to receive equal to 6% of the amount
of Units sold in the Offering to investors introduced to the Company by
▇▇▇▇▇▇ Securities, L.P.
