EXHIBIT 4
SUBSCRIPTION AGREEMENT
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
1. SUBSCRIPTION: The undersigned, the Xxxx X. Xxxxx 1997 Five-Year Trust (the
"Subscriber") hereby subscribes for the purchase of 1,500,000 shares (the
"Shares") of common stock, $.001 par value (the "Common Stock"), of
Environmental Solutions Worldwide, Inc., a Florida corporation (the
"Company"), in consideration of the sum of $.40 per share of Common Stock
for an aggregate purchase price of $600,000 and submits the total
subscription price with this Subscription Agreement (the undersigned's
"Subscription").
The undersigned's subscription is subject to the following terms and
conditions:
a. No certificate(s) for the Shares will be issued to the undersigned
until the entire subscription price as set forth in Paragraph 1 above
is paid; and
b. The subscription by a subscriber must be accepted by the company.
c. The certificate(s) representing the Shares delivered pursuant to this
Subscription Agreement shall bear a restrictive legend substantially
as follows:
The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended, nor any other applicable
securities act (the "Acts"), and may not be sold, transferred,
assigned, pledged or otherwise distributed, unless there is an
effective registration statement under such Acts covering such
securities or the Company receives an opinion of counsel for the
holder of these securities (concurred on by counsel for the Company)
stating that such sale, transfer, assignment, pledge or distribution
is exempt from or in compliance with the registration and prospectus
delivery requirements of such Acts.
2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER. The Subscriber hereby
represents and warrants to the Company:
a. THE UNDERSIGNED SUBSCRIBER UNDERSTANDS THAT THE COMMON STOCK BEING
OFFERED HEREBY HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES AGENCY
OR ANY FOREIGN SECURITIES AGENCY.
b. The undersigned Subscriber is not an underwriter and is acquiring the
Shares solely for investment for his, her or its own account and not
with a view to, or for, resale in connection with any distribution in
violation of any federal securities act, state securities act or any
other applicable federal or state laws;
c. The undersigned Subscriber understands the speculative nature and
risks of investments associated with the Company, and confirms that
the Shares would be suitable and consistent with his, her or its
investment program; that his, her or its financial position enable
him, her or it to bear the risks of this investment; and that there is
no public market for the Shares subscribed for herein;
d. The Shares subscribed for herein may not be transferred, encumbered,
sold, hypothecated, or otherwise disposed of, if such disposition will
violate any federal and/or state securities acts. Disposition shall
include, but is not limited to acts of selling, assigning,
transferring, pledging, encumbering, hypothecating, giving, and any
form of conveying, whether or not voluntary;
e. Except as set forth in Section 4 hereof, the Company is not required
to register or seek an exemption from registration under any federal
securities act, state securities act, or any foreign securities act
respecting the offer and issuance of the Shares.
f. The Subscriber has had the opportunity to ask questions of the Company
and has received additional information from the Company to the extent
that the Company possessed such information, necessary to evaluate the
merits and risks of any investment in the Company. Further, the
Subscriber has been given an opportunity to question the appropriate
executive officers of the Company; and, copies of all registration
statements and reports filed with the United States Securities and
Exchange Commission (the "SEC"), including the company's most recent
10-KSB, 10-QSB, Proxy statement, and periodic reports as filed on Form
8-K (the "SEC Reports").
g. The Subscriber has sufficient knowledge and experience in financial
matters to evaluate the merits and risks of this investment and
further, the Subscriber is capable of reading and interpreting
financial statements;
h. The Subscriber acknowledges that it is an "accredited investor" within
the meaning of Regulation D as promulgated under the Securities Act of
1933, as amended (the "Securities Act"); and
i. The Subscriber acknowledges that if he, she or it is a resident of the
State of Florida, he, she or it has the privilege of declaring this
transaction null and void, provided that the Subscriber communicates
such intention to the Company in writing within three (3) days of the
of the tender of his, her or its consideration.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF COMPANY: The Company hereby
represents and warrants to, and agrees with, the Subscriber as follows:
a. Organization and Qualification. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of
the State of Florida and is qualified to transact business and is in
good standing as a foreign company in every jurisdiction in which its
ownership, leasing, licensing, or use of property or assets or the
conduct of its business makes such qualification necessary, except in
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such jurisdictions where the failure to be so qualified or in good
standing would not have a material adverse effect on the business,
results of operations, financial condition, or prospects of the
Company. The Company has all required power and authority to own its
property and to carry on its business as now conducted and proposed to
be conducted.
b. Validity of Transaction. The Company has all requisite power and
authority to execute, deliver, and perform this Agreement and to issue
the Shares to the Subscriber. All necessary corporate proceedings of
the Company have been duly taken to authorize the execution, delivery,
and performance of this Agreement and to authorize the issuance and
sale of the Shares. This Agreement has been duly authorized, executed,
and delivered by the Company, is the legal, valid, and binding
obligation of the Company enforceable in accordance with its terms.
c. Consents. Except as to filings which may be required under applicable
state securities regulations, no consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or
filing with, any federal, state, local, or other governmental
authority or of any court or other tribunal is required by the Company
in connection with the transactions contemplated hereby. No consent of
any party to any contract, agreement, instrument, lease, license,
arrangement, or understanding to which the Company is a party, or by
which any of its properties or assets is bound, is required for the
execution, delivery, or performance by the Company of this Agreement
and the execution, delivery, and performance of this Agreement by the
Company will not violate, result in a breach of, conflict with, or
entitle any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, arrangement, or
understanding, or violate or result in a breach of any term of the
Certificate of Incorporation or the By-laws of the Company, or
violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree binding on the Company or to
which any of its operations, business, properties, or assets is
subject.
d. Issuance; Authorization. All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and are validly
issued, fully paid and non-assessable. The issuance, sale and delivery
of the Shares to be issued are duly authorized, have been reserved for
issuance and, upon issuance in accordance with the terms hereof, will
be validly issued, fully paid, and non-assessable, will not have been
issued in violation of any pre-emptive right of the equity holders,
and the Subscriber will have good title to the Shares, free and clear
of all liens, security interests, pledges, charges or encumbrances of
any kind.
e. No Violation or Conflict; No Default. Neither the nature of the
business of the Company nor the execution, delivery or performance of
this Agreement, or any related documents by the Company, nor the
compliance with its obligation hereunder or thereunder, nor the
consummation of the transactions contemplated hereby, nor the
issuance, sale or delivery of the Shares will:
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(1) Violate or conflict with any provisions of the Company's Certificate
of Incorporation or By-laws;
(2) Violate or conflict with any applicable laws, except where such
violation would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on the condition (financial
or otherwise), earnings, properties, business, prospects or results of
operations of the Company (a "Material Adverse Effect");
(3) Violate, be in conflict with, or constitute a breach or default (or
any event which, with the passage of time or notice or both, would
become a default under), or permit the termination of, or require the
consent of any person or entity under, result in the creation or
imposition of any lien or other encumbrance upon any property of the
Company under, result in the loss by the Company or modification in
any manner adverse to the Company of any right or benefit under, or
give to any other person or entity any right of termination,
amendment, acceleration, repurchase or repayment, increased payments
or cancellation under, any mortgage indenture, note, debenture,
agreement, lease, license, permit, franchise or other instrument or
obligation, whether written or oral (collectively, "Contracts") to
which the Company is a party or by which their properties may be bound
or affected except as would not, individually or in the aggregate,
reasonable be expected to have a Material Adverse Effect; or
(4) The Company is not in default under any Contract, the Certificate of
Incorporation or the By-laws of the Company or any applicable
judgments or orders, except where such default would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
f. Offering. Subject in part to the truth and accuracy of the Subscriber's
representations set forth in this Agreement, the offer, sale and issuance
of the Shares as contemplated by this Agreement are exempt from the
registration of any applicable state and federal securities laws, and
neither the Company nor any authorized agent acting on its behalf will take
any action hereafter that would cause the loss of such exemption. The
foregoing representation applies only to federal and state laws. The
Company expresses no opinion with respect to foreign law.
g. Patents, Trademarks, etc. To the Company's knowledge, the Company owns, or
has the right to use, all patents, trademarks, service marks, trade names,
copyrights, licenses, trade secrets or other proprietary rights necessary
to its business as now conducted without conflicting with or infringing
upon the right or claimed right of any person under or with respect to any
of the foregoing. Except
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for hardware and software licenses entered into in the ordinary course of
business, the Company is not bound by or a party to any options, licenses
or agreements of any kind with respect to patents, trademarks, service
marks, trade names, copyrights, licenses, trade secrets or other
proprietary rights of any other person or entity. The Company has not
received any communications alleging that the Company has violated the
patents, trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or entity. The
Company is not aware of any violation by a third party of any of the
Company's patents, trade marks, service marks, trade names, copyrights,
trade secrets or other proprietary rights.
h. Litigation, etc. To the best of the Company's directors and executive
officers knowledge and except as stated herein on Schedule 3(h) hereto,
there is no action, suit, proceeding or investigation pending or threatened
in writing, against the Company or any of its officers, which, either in
any single case or in the aggregate, would result in any material adverse
change in the business, properties, financial condition, results of
operations or prospects of the Company, or in any material impairment of
the right or ability of the Company to carry on its business as now
conducted or as proposed to be conducted, or in any material liability on
the part of the Company, and none which questions the validity of this
Agreement, with the exception of an informal investigation initiated by the
SEC. (See Form 10 KSB and 10QSB Legal proceedings). The Company is not a
party or subject to any writ, order, decree or judgment, and there is no
such action, suit, proceeding or investigation by the Company currently
pending or which the Company intends to initiate.
i. Foreign Corrupt Practices Act. Neither the Company nor any director,
officer, agent, or other person acting on behalf of the Company has, in the
course of his or its actions for or on behalf of the Company violated any
provision of the United States Foreign Corrupt Practices Act of 1977, as
amended or the regulations there under.
j. Related Party Transactions. Except as set forth in the SEC Reports, no
director, officer or affiliate of the Company or a related party thereto is
a party to any material transaction, arrangement or agreement with the
Company.
k. Disclosure. All information relating to or concerning the Company set forth
in this Subscription Agreement and the SEC Reports is true and correct in
all material respects and the Company has not omitted to state any material
fact necessary in order to make the statements made herein or therein, in
light of the circumstances under which they were made, not misleading. The
Company has timely filed all SEC Reports, including for purposes of
determining the availability of Form S-3. No event or circumstance,
including claim or litigation proceeding, whether actual or threatened, has
occurred or exists with respect to the Company or its business or property
or financial condition which has not been publicly disclosed or which has
not been disclosed to Subscriber.
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4. REGISTRATION OF SHARES:
a. The Company agrees to file a registration statement for all shares of
Common Stock owned by the Subscriber (including the Shares) and all
shares of Common Stock issuable to the Subscriber upon exercise or
conversion of warrants or other convertible securities of the Company
within one hundred and twenty (120) days of the Company's acceptance
of the subscription. The registration statement shall be on Form S-3
or such other appropriate form that the Company is then eligible to
file for the registration and resale of the Shares. The Company shall
use its best efforts to cause the registration statement to be
declared effective under the Securities Act as promptly as possible
after the filing thereof, and shall use its best efforts to keep such
registration statement continuously effective under the Securities Act
until the earlier of (i) sale of all of the Common Stock registered
thereunder or (ii) the date on which all of the shares of Common Stock
registered thereunder may be resold by the Subscriber without
registration by reason of rule 144(k) under the Securities Act. The
Company shall pay all expenses incident to such registration other
than selling commissions of the Subscriber. The Company shall furnish
the Subscriber such numbers of copies of a prospectus complying with
the requirements of the Securities Act, and such other documents as
the Subscriber may reasonably request in order to facilitate the
public sale or other disposition of the Common Stock (including the
Shares) beneficially owned by the Subscriber.
b. The Company will indemnify and hold harmless the Subscriber, its
officers, trustees, directors and each underwriter of such securities
referred to above, and any person who controls such Subscriber or
underwriter within the meaning of Section 15 of the Securities Act,
against all claims, actions, losses, damages, liabilities and expenses
(including reasonable legal fees), joint or several, to which any of
such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon (i) any untrue statement of any material fact
contained herein or in any registration statement under which such
securities referred to above were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereof, or arise out of or are based upon
the omission to state herein or therein a material fact required to be
stated herein or therein or necessary to make the statements herein or
therein not misleading; (ii) any violation of United States of America
state or federal securities laws; (iii) any failure by the Company to
fulfill and perform any agreement, covenant or undertaking herein or
(iv) any failure or breach of the representations and warranties of
the Company set forth in Section 3 to be accurate, and will promptly
reimburse such Subscriber, its officers, trustees, directors and each
underwriter of such securities, and each such controlling person or
entity for any legal and any other expenses reasonably incurred by
such Subscriber, such underwriter, or such controlling person or
entity in connection with investigating or defending any such loss,
action, claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises directly out
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of or is based primarily upon an untrue statement or omission made in
said registration statement, said preliminary prospectus or said
prospectus, or said amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Subscriber or such underwriter specifically for use in the preparation
thereof.
c. At any time when a prospectus relating to the sale of Common Stock
(including the Shares) by the Subscriber is required to be delivered
under the Securities Act, the Company will promptly notify the
Subscriber of the happening of any event, upon the notification or
awareness of such event by an executive officer of the Company, as a
result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of material
fact or omits to state a material fact required to stated therein or
necessary to make the statements therein not misleading in light of
the circumstances then existing.
d. With a view to making available to the Subscriber the benefits of Rule
144 promulgated under the Securities Act, the Company agrees that it
will use its best efforts to maintain registration of its Common Stock
under Section 12 or 15 of the Exchange Act and to file with the SEC in
a timely manner all reports and other documents required to be filed
by an issuer of securities registered under the Exchange Act so as to
maintain the availability of Rule 144 promulgated under the Securities
Act. Upon the request of any record owner, the Company will deliver to
such owner a written statement as to whether it has complied with the
reporting requirements of Rule 144 promulgated under the Securities
Act
5. STATUS OF PURCHASER:
[X] I am not a member of, or an associate or affiliate of a member of the
National Association of Securities Dealers.
6. CONDITIONS. As a condition of Subscriber's subscription offered hereby, all
representations, warranties and agreements in Section 3 hereof shall be
true and correct. In addition, the Company shall provide or cause to be
provided to Subscriber copies of board resolutions approving the issuance
of the Securities as well as a legal opinion respecting the due
organization and standing of the Company as well as the authorization and
issuance of the Securities each in form and substance as is customary in
transactions as contemplated hereby.
7. MISCELLANEOUS: This Subscription Agreement shall be binding upon the
parties hereto, their heirs, executors, successors, and legal
representatives. The law of the state of New York shall govern the rights
of the parties to this Agreement. This Agreement is not assignable without
the prior written consent of the Company, and any attempt to assign any
rights, duties or obligations which arise under this Agreement without the
Company's prior express written consent shall be void.
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a. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but, when taken together, shall
constitute a single instrument.
b. Entire Agreement. This Agreement shall constitute the entire agreement
between the parties respecting the matters contemplated hereby and shall
supercede any other prior oral or written agreement or understanding
respecting such matters.
c. Survival. The agreements, representations and warranties contained herein
shall survive the closing of the transactions contemplated herein.
d. Brokers and Commissions. The Company shall be responsible for the payment
of any finders' fees relating to or arising out of the transactions
contemplated hereby.
THE REMAINDER OF THIS
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The undersigned Subscriber hereby declares and affirms that he or she
has read the within and foregoing Subscription Agreement, is familiar with the
contents thereof and agrees to abide by these terns and conditions therein set
forth, and knows the statements therein to be true and correct.
IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement this 9th day of August, 2001, at New York, New York.
SUBSCRIBER
Xxxx X. Xxxxx 1997 Five Year Trust No. of Shares: 1,500,000
Aggregate Subscription Price: $600,000
By:
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Name:
Title:
ACCEPTED BY:
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
By
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Name:
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Title:
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Wiring Instruction For U.S. Funds
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BBK:
00010-02242
C.I.B.C.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx, Xxxxxx
U.S. Dollar Account: 00000 0000000
Swift Code: XXXXXXXX
For the account of: Environmental Solutions Worldwide Inc
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