Contract
Exhibit
10.1
THIS
SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE
TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT
TO
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“1933 ACT”).
NONE
OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT (THE “SUBSCRIPTION
AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.
(Offshore
Subscribers)
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Skins
Inc. (the “Company”)
00
Xxxx 00xx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx, XX 00000
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Purchase
of Units
1.
Subscription
1.1 On
the
basis of the representations and warranties and subject to the terms and
conditions set forth herein, ____________________(the “Subscriber”)
hereby
irrevocably subscribes for and agrees to purchase ____________ units (the
“Units”)
at a
price per Unit of US$0.75 (such subscription and agreement to purchase being
the
“Subscription”),
for an
aggregate purchase price of US$__________ (the “Subscription
Proceeds”).
1.2 Each
Unit
will consist of one share of common stock of the Company (each, a “Share”)
and one
common share purchase warrant (each, a “Warrant”)
subject
to adjustment. Each Warrant shall be non-transferable and shall entitle the
holder thereof to purchase one share of common stock in the capital of the
Company (each, a “Warrant
Share”)
for a
period of thirty (30) months commencing from the Closing (as defined hereafter),
at a price per Warrant Share of US$1.00. Certificate(s) representing the
Warrants will be in the form attached as Exhibit
A.
The
Shares, Warrants and the Warrant Shares are referred to as the “Securities”.
1.3 On
the
basis of the representations and warranties and subject to the terms and
conditions set forth herein, the Company hereby irrevocably agrees to sell
the
Units to the Subscriber.
1.4 Subject
to the terms hereof, the Subscription will be effective upon its acceptance
by
the Company.
2.
Payment
2.1 At
the
Closing (as defined below), the Subscription Proceeds shall be paid by wire
transfer to the Company pursuant to the wiring instructions below:
Skins
Footwear Inc.
Wachovia
Bank
Account
# 2000013527206
Routing
# 000000000
2.2 The
Subscriber acknowledges and agrees that this Subscription Agreement and any
other documents delivered in connection herewith will be held on behalf of
the
Company. In the event that this Subscription Agreement is not accepted by the
Company for whatever reason, which the Company expressly reserves the right
to
do, within 15 days of the delivery of an executed Subscription Agreement by
the
Subscriber, this Subscription Agreement and any other documents delivered in
connection herewith will be returned to the Subscriber at the address of the
Subscriber as set forth in this Subscription Agreement. At the Closing, the
Company will provide a fully executed Subscription Agreement to the Subscriber
and the Subscriber shall effect the wire transfer of the Subscription Proceeds
to the Company.
3.
Documents
Required from Subscriber
3.1 The
Subscriber must complete, sign and return to the Company an executed copy of
this Subscription Agreement.
3.2 The
Subscriber shall complete, sign and return to the Company as soon as possible,
on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities, the OTC Bulletin
Board and applicable law.
4.
Closing
4.1 Closing
of the offering of the Securities (the “Closing”)
shall
occur on or before May 9, 2007, or on such other date as may be determined
by
the Company (the “Closing
Date”).
At the
Closing, the Company shall (i) provide a fully executed Subscription Agreement
to the Subscriber, (ii) provide a fully executed Warrant agreement to the
Subscriber, and (iii) deliver irrevocable instructions to its transfer agent
to
deliver a stock certificate representing the Shares to the Subscriber at the
address indicated at the end of this Subscription Agreement (with a copy of
such
instructions to the Subscriber). At the Closing, the Subscriber shall effect
the
wire transfer of the Subscription Proceeds to the Company pursuant to Section
2
hereof.
5.
Acknowledgements
of Subscriber
5.1 The
Subscriber acknowledges and agrees that:
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(a)
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none
of the Securities have been or will be registered under the 1933
Act, or
under any state securities or “blue sky” laws of any state of the United
States, and, unless so registered, may not be offered or sold in
the
United States or, directly or indirectly, to U.S. Persons, as that
term is
defined in Regulation S under the 1933 Act (“Regulation
S”),
except in accordance with the provisions of Regulation S, pursuant
to an
effective registration statement under the 1933 Act, or pursuant
to an
exemption from, or in a transaction not subject to, the registration
requirements of the 1933 Act and in each case only in accordance
with
applicable state securities laws;
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(b)
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other
than as set out herein, the Company has not undertaken, and will
have no
obligation, to register any of the Securities under the 1933 Act
or any
other securities legislation;
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(c)
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it
has received and carefully read this Subscription
Agreement;
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(d)
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the
decision to execute this Subscription Agreement and purchase the
Securities agreed to be purchased hereunder has not been based upon
any
oral or written representation as to fact or otherwise made by or
on
behalf of the Company and such decision is based entirely upon a
review of
any public information which has been filed by the Company with the
Securities and Exchange Commission (“SEC”)
in compliance, or intended compliance, with applicable securities
legislation, and the Subscriber acknowledges that it has received
and
reviewed a copy of the Company’s Form 10-KSB for the year ended December
31, 2006 as filed with the SEC;
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(e)
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it
and its advisor(s) have had a reasonable opportunity to ask questions
of
and receive answers from the Company in connection with the sale
of the
Securities hereunder, and to obtain additional information, to the
extent
possessed or obtainable by the Company without unreasonable effort
or
expense;
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(f)
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the
books and records of the Company were available upon reasonable notice
for
inspection, subject to certain confidentiality restrictions, by the
Subscriber during reasonable business hours at its principal place
of
business and that all documents, records and books in connection
with the
sale of the Securities hereunder have been made available for inspection
by him and his attorney and/or
advisor(s);
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(g)
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all
information which the Subscriber has provided to the Company is correct
and complete as of the date the Subscription Agreement is signed,
and if
there should be any change in such information prior to this Subscription
Agreement being executed by the Company, the Subscriber will immediately
provide the Company with such
information;
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(h)
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the
Company is entitled to rely on the representations and warranties
of the
Subscriber contained in this Subscription Agreement and the Subscriber
will hold harmless the Company from any loss or damage it or they
may
suffer as a result of the Subscriber’s failure to correctly complete this
Subscription Agreement;
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(i)
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the
Subscriber will indemnify and hold harmless the Company and, where
applicable, its respective directors, officers, employees, agents,
advisors and shareholders from and against any and all loss, liability,
claim, damage and expense whatsoever (including, but not limited
to, any
and all fees, costs and expenses whatsoever reasonably incurred in
investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or
threatened) arising out of or based upon any representation or warranty
of
the Subscriber contained herein or in any document furnished by the
Subscriber to the Company in connection herewith being untrue in
any
material respect or any breach or failure by the Subscriber to comply
with
any covenant or agreement made by the Subscriber to the Company in
connection therewith;
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(j)
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the
Subscriber has been advised to consult the Subscriber’s own legal, tax and
other advisors with respect to the merits and risks of an investment
in
the Securities and with respect to applicable resale restrictions,
including without limitation registration restrictions under Rule
415 of
the 1933 Act, and it is solely responsible (and the Company is not
in any
way responsible) for compliance
with:
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(i)
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any
applicable laws of the jurisdiction in which the Subscriber is resident
in
connection with the distribution of the Securities hereunder,
and
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(ii)
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applicable
resale restrictions;
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(k)
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none
of the Securities are listed on any stock exchange or automated dealer
quotation system and no representation has been made to the Subscriber
that any of the Securities will become listed on any stock exchange
or
automated dealer quotation system, except that currently certain
market
makers make market in the common shares of the Company on the National
Association of Securities Dealers, Inc.’s OTC Bulletin
Board;
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(l)
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the
Subscriber is outside the United States when receiving and executing
this
Subscription Agreement and is acquiring the Securities as principal
for
its own account, for investment purposes only, and not with a view
to, or
for, resale, distribution or fractionalization thereof, in whole
or in
part, and no other person has a direct or indirect beneficial interest
in
such Securities;
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(m)
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none
of the Securities may be offered or sold to a U.S. Person or for
the
account or benefit of a U.S. Person (other than a distributor) prior
to
the end of the Distribution Compliance Period (as defined
herein);
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(n)
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the
Company will refuse to register any transfer of the Securities not
made in
accordance with the provisions of Regulation S, pursuant to an effective
registration statement under the 1933 Act or pursuant to an available
exemption from the registration requirements of the 1933 Act and
in each
case in accordance with applicable state securities
laws;
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(o)
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neither
the SEC nor any other securities commission or similar regulatory
authority has reviewed or passed on the merits of the
Securities;
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(p)
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no
documents in connection with the sale of the Securities hereunder
have
been reviewed by the SEC or any state securities administrators;
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(q)
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there
is no government or other insurance covering any of the
Securities;
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(r)
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the
issuance and sale of the Securities to the Subscriber will not be
completed if it would be unlawful or if, in the discretion of the
Company
acting reasonably, it is not in the best interests of the
Company;
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(s)
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the
Subscriber is purchasing the Securities pursuant to an exemption
from the
registration and the prospectus requirements of applicable securities
legislation on the basis that the Subscriber is an accredited investor
of
the Company and, as a consequence:
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(i)
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is
restricted from using most of the civil remedies available under
securities legislation,
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(ii)
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may
not receive information that would otherwise be required to be provided
under securities legislation, and
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(iii)
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the
Company is relieved from certain obligations that would otherwise
apply
under securities legislation;
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(t)
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the
statutory and regulatory basis for the exemption claimed for the
offer and
sale of the Securities, although in technical compliance with Regulation
S, would not be available if the offering is part of a plan or scheme
to
evade the registration provisions of the 1933 Act;
and
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(u)
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this
Subscription Agreement is not enforceable by the Subscriber unless
it has
been accepted by the Company.
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6.
Representations,
Warranties and Covenants of the Subscriber
6.1 The
Subscriber hereby represents and warrants to and covenants with the Company
(which representations, warranties and covenants shall survive the Closing)
that:
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(a)
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the
Subscriber is not a U.S. Person;
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(b)
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the
Subscriber is not acquiring the Securities for the account or benefit
of,
directly or indirectly, any U.S.
Person;
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(c)
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the
Subscriber is resident in the jurisdiction set out under the heading
“Name
and Address of Subscriber” on the signature page of this Subscription
Agreement and the sale of the Securities to the Subscriber as contemplated
in this Subscription Agreement complies with or is exempt from the
applicable securities legislation of the jurisdiction of residence
of the
Subscriber;
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(d)
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the
Subscriber has the legal capacity and competence to enter into and
execute
this Subscription Agreement and to take all actions required pursuant
hereto and, if the Subscriber is a corporation, it is duly incorporated
and validly subsisting under the laws of its jurisdiction of incorporation
and all necessary approvals by its directors, shareholders and others
have
been obtained to authorize execution and performance of this Subscription
Agreement on behalf of the
Subscriber;
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(e)
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if
the Subscriber is a corporation or other entity, the entering into
of this
Subscription Agreement and the transactions contemplated hereby do
not and
will not result in the violation of any of the terms and provisions
of any
law applicable to, or the constating documents of, the Subscriber
or of
any agreement, written or oral, to which the Subscriber may be a
party or
by which the Subscriber is or may be
bound;
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(f)
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the
Subscriber has duly executed and delivered this Subscription Agreement
and
it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber;
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(g)
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the
Subscriber is acquiring the Securities as principal for its own account
for investment purposes only and not for the account of any other
person
and not for distribution, assignment or resale to others, and no
other
person has a direct or indirect beneficial interest in such Securities,
and it has not subdivided its interest in the Securities with any
other
person;
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(h)
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the
Subscriber is outside the United States when receiving and executing
this
Subscription Agreement and is acquiring the Securities as principal
for
the Subscriber’s own account for investment purposes only, and not with a
view to, or for, resale, distribution or fractionalisation thereof,
in
whole or in part, and no other person has a direct or indirect beneficial
interest in the Securities;
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(i)
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the
Subscriber is aware that an investment in the Company is speculative
and
involves certain risks, including the possible loss of the entire
investment and it has carefully read and considered the matters set
forth
under the heading “Risk Factors” appearing in the Company’s Form 10-KSB
and any other filings filed with the
SEC;
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(j)
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the
Subscriber has made an independent examination and investigation
of an
investment in the Securities and the Company and has depended on
the
advice of its legal and financial advisors and agrees that the Company
will not be responsible in any way whatsoever for the Subscriber’s
decision to invest in the Securities and the
Company;
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(k)
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the
Subscriber (i) has adequate net worth and means of providing for
its
current financial needs and possible personal contingencies, (ii)
has no
need for liquidity in this investment, and (iii) is able to bear
the
economic risks of an investment in the Securities for an indefinite
period
of time;
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(l)
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the
Subscriber understands and agrees that the Company and others will
rely
upon the truth and accuracy of the acknowledgements, representations
and
agreements contained in this Subscription Agreement and agrees that
if any
of such acknowledgements, representations and agreements are no longer
accurate or have been breached, the Subscriber shall promptly notify
the
Company;
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(m)
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the
Subscriber has the legal capacity and competence to enter into and
execute
this Subscription Agreement and to take all actions required pursuant
hereto;
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(n)
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the
Subscriber has duly executed and delivered this Subscription Agreement
and
it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber in accordance with its
terms;
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(o)
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the
Subscriber is not an underwriter of, or dealer in, the common shares
of
the Company, nor is the Subscriber participating, pursuant to a
contractual agreement or otherwise, in the distribution of the
Securities;
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(p)
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it
is not an underwriter of, or dealer in, the common shares of the
Company,
nor is the Subscriber participating, pursuant to a contractual agreement
or otherwise, in the distribution of the
Securities;
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(q)
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the
Subscriber understands and agrees that none of the Securities have
been or
will, except as set forth in this Agreement, be registered under
the 1933
Act, or under any state securities or “blue sky” laws of any state of the
United States, and, unless so registered, may not be offered or sold
in
the United States or, directly or indirectly, to U.S. Persons, as
that
term is defined in Regulation S under the 1933 Act (“Regulation
S”),
except in accordance with the provisions of Regulation S, pursuant
to an
effective registration statement under the 1933 Act, or pursuant
to an
exemption from, or in a transaction not subject to, the registration
requirements of the 1933 Act and in each case only in accordance
with
applicable state securities laws;
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(r)
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the
Subscriber understands and agrees that offers and sales of any of
the
Securities prior to the expiration of a period of one year after
the date
of original issuance of the Securities (the one year period hereinafter
referred to as the “Distribution
Compliance Period”)
shall only be made in compliance with the safe harbor provisions
set forth
in Regulation S, pursuant to the registration provisions of the 1933
Act
or an exemption therefrom, and that all offers and sales after the
Distribution Compliance Period shall be made only in compliance with
the
registration provisions of the 1933 Act or an exemption therefrom
and in
each case only in accordance with applicable state securities
laws;
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(s)
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the
Subscriber acknowledges that it has not acquired the Securities as
a
result of, and will not itself engage in, any “directed selling efforts”
(as defined in Regulation S under the 0000 Xxx) in the United States
in
respect of any of the Securities which would include any activities
undertaken for the purpose of, or that could reasonably be expected
to
have the effect of, conditioning the market in the United States
for the
resale of any of the Securities; provided, however, that the Subscriber
may sell or otherwise dispose of any of the Securities pursuant to
registration of any of the Securities pursuant to the 1933 Act and
any
applicable state securities laws or under an exemption from such
registration requirements and as otherwise provided
herein;
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(t)
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the
Subscriber understands and agrees not to engage in any hedging
transactions involving any of the Securities unless such transactions
are
in compliance with the provisions of the 1933 Act and in each case
only in
accordance with applicable state securities
laws;
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(u)
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the
Subscriber understands and agrees that the Company will refuse to
register
any transfer of the Securities not made in accordance with the provisions
of Regulation S, pursuant to an effective registration statement
under the
1933 Act or pursuant to an available exemption from the registration
requirements of the 1933 Act;
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(v)
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the
Subscriber (i) is able to fend for itself in the Subscription; (ii)
has
such knowledge and experience in financial and business matters as
to be
capable of evaluating the merits and risks of its investment in the
Securities and the Company; and (iii) has the ability to bear the
economic
risks of its prospective investment and can afford the complete loss
of
such investment;
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(w)
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the
Subscriber is not aware of any advertisement of any of the Securities
and
is not acquiring the Securities as a result of any form of general
solicitation or general advertising including advertisements, articles,
notices or other communications published in any newspaper, magazine
or
similar media or broadcast over radio or television, or any seminar
or
meeting whose attendees have been invited by general solicitation
or
general advertising; and
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(x)
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no
person has made to the Subscriber any written or oral
representations:
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(i)
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that
any person will resell or repurchase any of the
Securities,
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(ii)
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that
any person will refund the purchase price of any of the
Securities,
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(iii)
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as
to the future price or value of any of the Securities,
or
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(iv)
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that
any of the Securities will be listed and posted for trading on any
stock
exchange or automated dealer quotation system or that application
has been
made to list and post any of the Securities of the Company on any
stock
exchange or automated dealer quotation system, except that currently
the
Company’s common shares are quoted on the over-the-counter market operated
by the NASD’s Over-The-Counter Bulletin
Board.
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6.2 In
this
Subscription Agreement, the term “U.S. Person” shall have the meaning ascribed
thereto in Regulation S.
7.
Representations
and Warranties will be Relied Upon by the
Company
7.1 The
Subscriber acknowledges that the representations and warranties contained herein
are made by it with the intention that such representations and warranties
may
be relied upon by the Company and its legal counsel in determining the
Subscriber’s eligibility to purchase the Securities under applicable securities
legislation, or (if applicable) the eligibility of others on whose behalf it
is
contracting hereunder to purchase the Securities under applicable securities
legislation. The Subscriber further agrees that by accepting delivery of the
certificates representing the Securities, it will be representing and warranting
that the representations and warranties contained herein are true and correct
as
at the Closing Date with the same force and effect as if they had been made
by
the Subscriber on the Closing Date and that they will survive the purchase
by
the Subscriber of the Securities and will continue in full force and effect
notwithstanding any subsequent disposition by the Subscriber of such
Securities.
8.
Resale
Restrictions
8.1 The
Subscriber acknowledges that any resale of the Securities will be subject to
resale restrictions contained in the securities legislation applicable to each
Subscriber or proposed transferee. The Subscriber acknowledges that the
Securities have not been registered under the 1933 Act of the securities laws
of
any state of the United States. The Securities may not be offered or sold in
the
United States unless registered in accordance with United States federal
securities laws and all applicable state securities laws or exemptions from
such
registration requirements are available.
8.2 The
Subscriber acknowledges that restrictions on the transfer, sale or other
subsequent disposition of the Securities by the Subscriber may be imposed by
securities laws in addition to any restrictions referred to in Section
8.1
above,
and, in particular, the Subscriber acknowledges and agrees that none of the
Securities may be offered or sold to a U.S. Person or for the account or benefit
of a U.S. Person (other than a distributor) prior to the end of the Distribution
Compliance Period.
9.
Acknowledgement
and Waiver
9.1 The
Subscriber has acknowledged that the decision to purchase the Securities was
solely made on the basis of information available to the Subscriber on the
XXXXX
database maintained by the SEC at xxx.xxx.xxx.
The
Subscriber hereby waives, to the fullest extent permitted by law, any rights
of
withdrawal, rescission or compensation for damages to which the Subscriber
might
be entitled in connection with the distribution of the Securities.
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10.
Legending
of Subject Securities
10.1 The
Subscriber hereby acknowledges that that upon the issuance thereof, and until
such time as the same is no longer required under the applicable securities
laws
and regulations, the certificates representing any of the Securities will bear
a
legend in substantially the following form:
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“THESE
SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO
ARE NOT
U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE
UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY,
NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN
REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS,
AND,
UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES
OR,
DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH
APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
WITH
THE 1933 ACT.”
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10.2 The
Subscriber hereby acknowledges and agrees to the Company making a notation
on
its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Subscription Agreement.
11.
Costs
11.1 The
Subscriber acknowledges and agrees that all costs and expenses incurred by
the
Subscriber (including any fees and disbursements of any special counsel retained
by the Subscriber) relating to the purchase of the Securities shall be borne
by
the Subscriber.
12.
Resale
Registration.
On
or
prior to the date (the “Filing
Date”)
that is
thirty (30) days after the Closing, the Company shall prepare and file with
the
SEC a "resale" Registration Statement providing for the resale of the Shares
and
the Warrant Shares (collectively, the “Registrable
Securities”)
for an
offering to be made on a continuous basis pursuant and subject to Rule 415,
which was promulgated by the SEC pursuant to the 1933 Act, as such Rule may
be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC having substantially the same effect as such Rule (“Rule
415”).
The
Registration Statement shall be on Form SB-2 (except if the Company is not
then
eligible to register for resale the Registrable Securities on Form SB-2, in
which case such registration shall be on another appropriate form in accordance
with the Securities Act and the rules promulgated thereunder). The Company
shall
(i) not permit any securities other than the Registrable Securities and the
securities to be listed on Exhibit
B
hereto
to be included in the Registration Statement and (ii) use its reasonable best
efforts to cause the Registration Statement to be declared effective under
the
Securities Act as promptly as possible after the filing thereof, but in any
event prior to the date (the “Effectiveness
Date”)
that
is 150 days after the earlier of (i) the date of filing of the Registration
Statement, and (ii) the Filing Date, and to keep such Registration Statement
continuously effective under the Securities Act until such date as is the
earlier of (x) the date when all Registrable Securities covered by such
Registration Statement have been sold or (y) the date on which the Registrable
Securities may be sold without any restriction pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter,
addressed to the Company's transfer agent to such effect (the "Effectiveness
Period").
Notwithstanding anything to the contrary set forth in this Subscription
Agreement, in the event the SEC does not permit the Company to register the
“resale” of all of the Registrable Securities anticipated to be so registered on
such Registration Statement pursuant to Rule 415, the Company shall register
in
the Registration Statement such number of Registrable Securities as is permitted
by the SEC, and the number of Registrable Securities to be included in such
Registration Statement or any subsequent registration statement shall be
determined on a pro rata basis among the Subscribers or in such amounts as
agreed upon by the Subscribers, where the amount of Shares and Warrant Shares
to
be registered for a Subscriber to cut back proportionately or as mutually agreed
upon. In the event the SEC does not permit the Company to register all of the
Registrable Securities in the Registration Statement, the Company shall use
its
best efforts to register the Registrable Securities, subject to the foregoing
sentence, that were not registered in the Registration Statement as promptly
as
possible and in a manner permitted by the SEC.
-8-
13.
Registration
Procedures.
13.1 In
connection with the Company's registration obligations hereunder, the Company
shall:
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(a)
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not
less than five (5) business days prior to the filing of the Registration
Statement or any related prospectus or any amendment or supplement
thereto
(including any document that would be incorporated therein by reference),
the Company shall (i) furnish to the Subscriber copies of all such
documents proposed to be filed, which documents (other than those
incorporated by reference) will be subject to the review of the
Subscriber, and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries
as
shall be necessary, in the reasonable opinion of the Subscriber,
to
conduct a reasonable investigation within the meaning of the Securities
Act. Unless otherwise advised by outside counsel to the Company,
the
Company shall not file the Registration Statement or any such prospectus
or any amendments or supplements thereto to which the Subscriber
shall
reasonably object in writing within three (3) business days of its
receipt
thereof.
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(b)
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(i)
Prepare and file with the SEC such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to
keep the
Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and
file
with the Commission such additional Registration Statements as necessary
in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related prospectus to be amended
or
supplemented by any required prospectus supplement, and as so supplemented
or amended to be filed pursuant to Rule 424 (or any similar provisions
then in force) promulgated under the Securities Act; (iii) respond
as
promptly as possible, but in no event later than ten (10) business
days,
to any comments received from the SEC with respect to the Registration
Statement or any amendment thereto and as promptly as possible provide
the
Subscriber true and complete copies of all correspondence from and
to the
SEC relating to the Registration Statement; and (iv) comply in all
material respects with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the applicable period
in
accordance with the intended methods of disposition by the Subscriber
thereof set forth in the Registration Statement as so amended or
in such
prospectus as so supplemented. The
Company and the Subscriber agree that the Subscriber will suffer
damages
if the Company fails to cause the Registration Statement to be declared
effective by the Commission on or before the Effectiveness Date.
The
Company and the Subscriber further agree that it would not be feasible
to
ascertain the extent of such damages with precision. Accordingly,
if the
Company fails to cause the Registration Statement to be declared
effective
by the Commission on or before the Effectiveness Date, the Company
shall
pay an amount in cash as liquidated damages to the Subscriber equal
to
.025% for each day after the Effectiveness Date until the Registration
Statement is declared effective by the Commission. Notwithstanding
anything to the contrary contained herein, in no event shall any
liquidated damages be payable with respect to the delay caused solely
due
to a Rule 415 comment by the SEC.
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(c)
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Notify
the Subscriber as promptly as possible (and, in the case of (i)(A)
below,
not less than five (5) days prior to such filing) and (if requested
by any
such person) confirm such notice in writing no later than one (1)
business
day following the day (i)(A) when a prospectus or any prospectus
supplement or post-effective amendment to the Registration Statement
is
filed; (B) when the SEC notifies the Company whether there will be
a
"review" of such Registration Statement and whenever the SEC comments
in
writing on such Registration Statement and (C) with respect to the
Registration Statement or any post-effective amendment, when the
same has
become effective; (ii) of any request by the SEC or any other Federal
or
state governmental authority for amendments or supplements to the
Registration Statement or prospectus or for additional information;
(iii)
of the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement covering any or all of the Registrable
Securities or the initiation of any proceedings for that purpose;
(iv) if
at any time any of the representations and warranties of the Company
contained in any agreement contemplated hereby ceases to be true
and
correct in all material respects; (v) of the receipt by the Company
of any
notification with respect to the suspension of the qualification
or
exemption from qualification of any of the Registrable Securities
for sale
in any jurisdiction, or the initiation or threatening of any proceeding
for such purpose; and (vi) of the occurrence of any event that makes
any
statement made in the Registration Statement or prospectus or any
document
incorporated or deemed to be incorporated therein by reference untrue
in
any material respect or that requires any revisions to the Registration
Statement, prospectus or other documents so that, in the case of
the
Registration Statement or the prospectus, as the case may be, it
will not
contain any untrue statement of a material fact or omit to state
any
material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances under which
they
were made, not misleading.
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-9-
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(d)
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Use
its reasonable best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of, (i) any order suspending the effectiveness
of
the Registration Statement or (ii) any suspension of the qualification
(or
exemption from qualification) of any of the Registrable Securities
for
sale in any jurisdiction, at the earliest practicable
moment.
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(e)
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If
requested by the Subscriber, (i) promptly incorporate in a prospectus
supplement or post-effective amendment to the Registration Statement
such
information as the Company reasonably agrees should be included therein
and (ii) make all required filings of such prospectus supplement
or such
post-effective amendment as soon as practicable after the Company
has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective
amendment.
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(f)
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Furnish
to the Subscriber, without charge, at least one conformed copy of
each
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to
be
incorporated therein by reference, and all exhibits to the extent
requested by the Subscriber (including those previously furnished
or
incorporated by reference) promptly after the filing of such documents
with the SEC.
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(g)
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Promptly
deliver to the Subscriber, without charge, as many copies of the
prospectus or prospectuses (including each form of prospectus) and
each
amendment or supplement thereto as the Subscriber may reasonably
request;
and the Company hereby consents to the use of such prospectus and
each
amendment or supplement thereto by the Subscriber in connection with
the
offering and sale of the Registrable Securities covered by such prospectus
and any amendment or supplement
thereto.
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(h)
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Prior
to any public offering of the Registrable Securities, use its reasonable
best efforts to register or qualify or cooperate with the Subscriber
in
connection with the registration or qualification (or exemption from
such
registration or qualification) of such Registrable Securities for
offer
and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as the Subscriber requests in writing, to
keep
each such registration or qualification (or exemption therefrom)
effective
during the Effectiveness Period and to use commercially reasonable
efforts
to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided,
however,
that the Company shall not be required to qualify generally to do
business
in any jurisdiction where it is not then so qualified or to take
any
action that would subject it to general service of process in any
such
jurisdiction where it is not then so subject or subject the Company
to any
material tax in any such jurisdiction where it is not then so
subject.
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(i)
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Cooperate
with the Subscriber to facilitate the timely preparation and delivery
of
certificates representing Registrable Securities to be sold pursuant
to a
Registration Statement, which certificates shall be free of all
restrictive legends (provided that the issuance of such unlegended
certificates is in compliance with applicable securities laws), and
to
enable such Registrable Securities to be in such denominations and
registered in such names as the Subscriber may request in writing
at least
two (2) business days prior to any sale of Registrable
Securities.
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-10-
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(j)
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Upon
the occurrence of any event contemplated by Section 13.1(c)(vi),
as promptly as possible, prepare a supplement or amendment, including
a
post-effective amendment, to the Registration Statement or a supplement
to
the related prospectus or any document incorporated or deemed to
be
incorporated therein by reference, and file any other required document
so
that, as thereafter delivered, neither the Registration Statement
nor such
prospectus will contain an untrue statement of a material fact or
omit to
state a material fact required to be stated therein or necessary
to make
the statements therein, in the light of the circumstances under which
they
were made, not misleading.
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(k)
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Use
its reasonable best efforts to cause all Registrable Securities relating
to the Registration Statement to continue to be listed on the OTC
Bulletin
Board or
any other securities exchange, quotation system or market, if any,
on
which similar securities issued by the Company are then listed or
traded.
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(l)
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Comply
in all material respects 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 not later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is
a fiscal year) or such extended period as is permitted under the
Securities Act commencing on the first day of the first fiscal quarter
of
the Company after the effective date of the Registration Statement,
which
statement shall conform to the requirements of Rule
158.
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(m)
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The
Company may require the Subscriber to furnish to the Company information
regarding itself and the distribution of such Registrable Securities
as is
required by law to be disclosed in the Registration Statement, and
the
Company may exclude from such registration the Registrable Securities
of
the Subscriber if it unreasonably fails to furnish such information
within
a reasonable time after receiving such
request.
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(n)
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If
the Registration Statement refers to the Subscriber by name or otherwise
as the holder of any securities of the Company, then the Subscriber
shall
have the right to require (if such reference to the Subscriber by
name or
otherwise is not required by the Securities Act or any similar federal
statute then in force) the deletion of the reference to such Holder
in any
amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be
required.
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(o)
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The
Subscriber covenants and agrees that (i) it will not sell any Registrable
Securities under the Registration Statement until it has received
copies
of the prospectus as then amended or supplemented as contemplated
in
Section 13.1(g)
and notice from the Company that such Registration Statement and
any
post-effective amendments thereto have become effective as contemplated
by
Section 13.1(c)
and (ii) it and its officers, directors or Affiliates, if any, will
comply
with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities
pursuant to the Registration
Statement.
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(p)
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The
Subscriber agrees by its acquisition of such Registrable Securities
that,
upon receipt of a notice from the Company of the occurrence of any
event
of the kind described in Section 13.1(c)(ii),
13.1(c)(iii),
13.1(c)(iv),
13.1(c)(v),
13.1(c)(vi)
or 13.1(q),
the Subscriber will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until the Subscriber's
receipt
of the copies of the supplemented prospectus and/or amended Registration
Statement contemplated by Section 13.1(j),
or until it is advised in writing (the "Advice")
by the Company that the use of the applicable prospectus may be resumed,
and, in either case, has received copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by reference
in
such prospectus or Registration
Statement.
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-11-
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(q)
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If
(i) there is material non-public information regarding the Company
which
the Company's Board of Directors (the "Board")
reasonably determines not to be in the Company's best interest to
disclose
and which the Company is not otherwise required to disclose, or (ii)
there
is a significant business opportunity (including, but not limited
to, the
acquisition or disposition of assets (other than in the ordinary
course of
business) or any merger, consolidation, tender offer or other similar
transaction) available to the Company which the Board reasonably
determines not to be in the Company's best interest to disclose,
then the
Company may (x) postpone or suspend filing of a registration statement
for
a period not to exceed 30 consecutive days or (y) postpone or suspend
effectiveness of a registration statement for a period not to exceed
20
consecutive days; provided that the Company may not postpone or suspend
effectiveness of a registration statement under this Section 13.1(q)
for more than 45 days in the aggregate during any 360 day period;
provided,
however,
that no such postponement or suspension shall be permitted for consecutive
20 day periods arising out of the same set of facts, circumstances
or
transactions.
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13.2 Registration
Expenses.
All
fees
and expenses incident to the performance of or compliance with this Agreement
by
the Company, except as and to the extent specified in this Section 13.2,
shall
be borne by the Company whether or not the Registration Statement is filed
or
becomes effective and whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses referred to in
the
foregoing sentence shall include, without limitation, (i) all registration
and
filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with any securities exchange or market on which
Registrable Securities are required hereunder to be listed, (B) with respect
to
filing fees required to be paid to the National Association of Securities
Dealers, Inc. and the NASD Regulation, Inc. and (C) in compliance with state
securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Subscriber in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of
such
jurisdictions as the Subscriber may designate)), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is requested by the Subscriber), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement, including, without limitation, the Company's independent public
accountants (including the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for all of
its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
14.
Indemnification.
14.1 Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless the Subscriber, the officers, directors, agents, brokers
(including brokers who offer and sell Registrable Securities as principal as
a
result of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees of the Subscriber, each person who
controls the Subscriber (within the meaning of Section 15 of the Securities
Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling person, to the fullest extent permitted
by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "Losses"),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, any prospectus
or
any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any prospectus or form of prospectus
or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that (i)
such untrue statements or omissions are based solely upon information regarding
the Subscriber furnished in writing to the Company by or on behalf of the
Subscriber expressly for use therein, and (ii) that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any untrue
statement, allegedly untrue statement, omission or alleged omission made in
any
preliminary prospectus but eliminated or remedied in the final prospectus (filed
pursuant to Rule 424 of the Securities Act), such indemnity agreement shall
not
inure to the benefit of the Subscriber or any underwriter, broker or other
person acting on behalf of holders of the Registrable Securities, from whom
the
person asserting any loss, claim, damage, liability or expense purchased the
Registrable Securities which are the subject thereof, if a copy of such final
prospectus had been made available to such person and the Subscriber or such
underwriter, broker or other person acting on behalf of the Subscriber and
such
final prospectus was not delivered to such person with or prior to the written
confirmation of the sale of such Registrable Securities to such person. The
Company shall notify the Subscriber promptly of the claim, threat or assertion
of any proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
-12-
14.2 Indemnification
by Subscriber.
The
Subscriber shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents and employees
of
such controlling persons, to the fullest extent permitted by applicable law,
from and against all Losses (as determined by a court of competent jurisdiction
in a final judgment not subject to appeal or review), as incurred, arising
solely out of or based solely upon any untrue statement of a material fact
contained in the Registration Statement, any prospectus, or any form of
prospectus, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any prospectus or form of prospectus or supplement
thereto, in the light of the circumstances under which they were made) not
misleading, to the extent, but only to the extent, that such untrue statement
or
omission is contained in any information so furnished in writing by the
Subscriber to the Company specifically for inclusion in the Registration
Statement or such prospectus. Notwithstanding anything to the contrary contained
herein, the Subscriber shall be liable under this Section 14.2
for only
that amount as does not exceed the lesser of (i) the dollar amount of the net
proceeds received by the Subscriber upon the sale of the Registrable Securities
giving rise to such indemnification obligation and (ii) the aggregate purchase
price paid by the Subscriber for the Securities pursuant to this
Agreement.
14.3 Contribution.
If a
claim for indemnification under Section 14.1
or
14.2
is
unavailable to an indemnified party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other from
the offering of the Registrable Securities. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate
to
reflect not only the relative benefits referred to in the foregoing sentence
but
also the relative fault, as applicable, of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates
to
information supplied by, such indemnifying party or indemnified party, and
the parties'
relative intent, knowledge, access to information and opportunity to correct
or
prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include any reasonable
attorneys' or other reasonable fees or expenses incurred by such party in
connection with (i) any
proceeding to the extent such party would have been indemnified for such fees
or
expenses if the indemnification provided for in this Section was available
to
such party in accordance with its terms
or (ii)
enforcing any rights under this Section 14.
In no
event shall the Subscriber be required to contribute an amount under this
Section 14.3
in
excess of the net proceeds received by the Subscriber upon sale of the
Subscriber’s Registrable Securities pursuant to the Registration Statement
giving rise to such contribution obligation.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 14.3
were
determined by pro rata allocation or by any other method of allocation that
does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
-13-
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the indemnifying parties may have to the indemnified
parties. Notwithstanding anything to the contrary contained herein, the
Subscriber shall be liable under this Section 14.3
for only
that amount as does not exceed the net proceeds to the Subscriber as a result
of
the sale of Registrable Securities pursuant to such Registration
Statement.
15.
Rule
144.
As
long
as the Subscriber owns any Registrable Securities, the Company covenants to
timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. As
long
as the Subscriber owns any Registrable Securities, if the Company is not
required to file reports pursuant to Section 13(a) or 15(d) of the Exchange
Act,
it will prepare and furnish to the Subscriber and make publicly available in
accordance with Rule 144(c) promulgated under the Securities Act annual and
quarterly financial statements, together with a discussion and analysis of
such
financial statements in form and substance substantially similar to those that
would otherwise be required to be included in reports required by Section 13(a)
or 15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings would have been required to have been
made
under the Exchange Act. The Company further covenants that it will take such
further action as the Subscriber may reasonably request in writing, all to
the
extent required from time to time to enable the Subscriber to sell the
Registrable Securities without registration under the Securities Act within
the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions relating to such sale
pursuant to Rule 144.
16.
Governing
Law
16.1 This
Subscription Agreement is governed by the laws of the State of Nevada and the
federal laws of the United States applicable therein.
17.
Survival
17.1 This
Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the purchase of the Securities by the Subscriber pursuant
hereto.
18.
Assignment
18.1 This
Subscription Agreement is not transferable or assignable.
19.
Severability
19.1 The
invalidity or unenforceability of any particular provision of this Subscription
Agreement shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription Agreement.
20.
Entire
Agreement
20.1 Except
as
expressly provided in this Subscription Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Subscription Agreement contains the entire agreement between the parties with
respect to the sale of the Securities and there are no other terms, conditions,
representations or warranties, whether expressed, implied, oral or written,
by
statute or common law, by the Company or by anyone else.
-14-
21.
Notices
21.1 All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form
of
telecommunication. Notices to the Subscriber shall be directed to the address
on
the signature page of this Subscription Agreement and notices to the Company
shall be directed to it at Skins Inc., 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx,
XX 00000, Attention: Xxxx Xxxxx, Chief Executive Officer.
22.
Counterparts
and Electronic Means
22.1 This
Subscription Agreement may be executed in any number of counterparts, each
of
which, when so executed and delivered, shall constitute an original and all
of
which together shall constitute one instrument. Delivery of an executed copy
of
this Subscription Agreement by electronic facsimile transmission or other means
of electronic communication capable of producing a printed copy will be deemed
to be execution and delivery of this Subscription Agreement as of the date
hereinafter set forth.
-15-
23. Delivery
Instructions
23.1 The
Subscriber hereby directs the Company to deliver the Share Certificates and
the
Warrant Certificates to:
(name)
(address)
23.2 The
Subscriber hereby directs the Company to cause the Shares and the Warrants
to be
registered on the books of the Company as follows:
(name)
(address)
23.3 The
undersigned hereby acknowledges that it will deliver to the Company all such
additional completed forms in respect of the Subscriber’s purchase of the
Securities as may be required for filing with the appropriate securities
commissions and regulatory authorities.
IN
WITNESS WHEREOF
the
Subscriber has duly executed this Subscription Agreement as of the date of
acceptance by the Company.
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-16-
ACCEPTANCE
The
above-mentioned Subscription Agreement in respect of the Units is hereby
accepted by Skins Inc.
DATED
at
New York, New York, United States of America, the 21st day of May,
2007.
Per: /s/
Xxxx
Xxxxx
Xxxx
Xxxxx
Chief
Executive Officer
EXHIBIT
A TO
THE SUBSCRIPTION AGREEMENT
THE
SECURITIES REPRESENTED HEREBY AND THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS
NOT
A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).
NONE
OF THE SECURITIES REPRESENTED HEREBY OR THE SECURITIES INTO WHICH THIS SECURITY
IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE
SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY
OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
1933
ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE
1933 ACT.
THESE
WARRANTS WILL EXPIRE AND BECOME NULL AND VOID
AT
5:00
P.M. (EASTERN STANDARD TIME) ON NOVEMBER 20, 2009.
SHARE
PURCHASE WARRANTS
TO
PURCHASE SHARES OF COMMON STOCK
incorporated
in the State of Nevada
THIS
IS
TO CERTIFY THAT _____________________, (the “Holder”)
of
________________, has the right to purchase, upon and subject to the terms
and
conditions hereinafter referred to, up to _______________ fully paid and
non-assessable common shares (the “Shares”)
in the
capital of Skins Inc. (hereinafter called the “Company”)
on or
before 5:00 p.m. (Eastern Standard Time) on the date which is thirty months
from the date of issue of this Warrant as set forth above (the “Expiry
Date”)
at a
price per Share (the “Exercise
Price”)
of US
$1.00 on the terms and conditions attached hereto as Appendix “A” (the
“Terms
and Conditions”).
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1.
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ONE
(1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO PURCHASE ONE SHARE.
THIS CERTIFICATE REPRESENTS __________________
WARRANTS.
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2.
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These
Warrants are issued subject to the Terms and Conditions, and the
Warrant
Holder may exercise the right to purchase Shares only in accordance
with
those Terms and Conditions.
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3.
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Nothing
contained herein or in the Terms and Conditions will confer any right
upon
the Holder hereof or any other person to subscribe for or purchase
any
Shares at any time subsequent to the Expiry Date, and from and after
such
time, this Warrant and all rights hereunder will be void and of no
value.
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IN
WITNESS WHEREOF the Company has executed this Warrant Certificate this 21st
day
of May, 2007.
Per: /s/
Xxxx
Xxxxx
Xxxx
Xxxxx,
Chief
Executive Officer
PLEASE
NOTE THAT ALL SHARE CERTIFICATES MUST BE LEGENDED AS FOLLOWS DURING THE CURRENCY
OF APPLICABLE HOLD PERIODS:
THE
SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION
TO A
PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION
S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).
NONE
OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT,
OR
ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED
OR
SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO
U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
THE
1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT,
OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
1933
ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE
1933 ACT.
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APPENDIX
“A”
TERMS
AND
CONDITIONS dated May 21, 2007, attached to the Warrants issued by Skins
Inc.
1.
INTERPRETATION
1.1 Definitions
In
these
Terms and Conditions, unless there is something in the subject matter or context
inconsistent therewith:
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(a)
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“Company”
means Skins Inc. until a successor corporation will have become such
as a
result of consolidation, amalgamation or merger with or into any
other
corporation or corporations, or as a result of the conveyance or
transfer
of all or substantially all of the properties and estates of the
Company
as an entirety to any other corporation and thereafter “Company” will mean
such successor corporation;
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(b)
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“Company’s
Auditors”
means an independent firm of accountants duly appointed as auditors
of the
Company;
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(c)
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“Director”
means a director of the Company for the time being, and reference,
without
more, to action by the directors means action by the directors of
the
Company as a Board, or whenever duly empowered, action by an executive
committee of the Board;
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(d)
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“herein”,
“hereby”
and similar expressions refer to these Terms and Conditions as the
same
may be amended or modified from time to time; and the expression
“Article”
and “Section,” followed by a number refer to the specified Article or
Section of these Terms and
Conditions;
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(e)
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“person”
means an individual, corporation, partnership, trustee or any
unincorporated organization and words importing persons have a similar
meaning;
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(f)
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“shares”
means the common shares in the capital of the Company as constituted
at
the date hereof and any shares resulting from any subdivision or
consolidation of the shares;
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(g)
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“Warrant
Holders”
or
“Holders”
means the holders of the Warrants;
and
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(h)
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“Warrants”
means the warrants of the Company issued and presently authorized
and for
the time being outstanding.
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1.2 Gender
Words
importing the singular number include the plural and vice versa and words
importing the masculine gender include the feminine and neuter
genders.
1.3 Interpretation
not affected by Headings
The
division of these Terms and Conditions into Articles and Sections, and the
insertion of headings are for convenience of reference only and will not affect
the construction or interpretation thereof.
1.4 Applicable
Law
The
Warrants will be construed in accordance with the laws of the State of Nevada
and the federal law of the United States applicable therein.
2.
ISSUE
OF WARRANTS
2.1 Additional
Warrants
The
Company may at any time and from time to time issue additional warrants or
grant
options or similar rights to purchase shares of its capital stock.
2.2 Warrants
to Rank Pari
Passu
All
Warrants and additional warrants, options or similar rights to purchase shares
from time to time issued or granted by the Company, will rank pari
passu
whatever
may be the actual dates of issue or grant thereof, or of the dates of the
certificates by which they are evidenced.
2.3 Issue
in substitution for Lost Warrants
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(a)
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In
case a Warrant becomes mutilated, lost, destroyed or stolen, the
Company,
at its discretion, may issue and deliver a new Warrant of like date
and
tenor as the one mutilated, lost, destroyed or stolen, in exchange
for and
in place of and upon cancellation of such mutilated Warrant, or in
lieu
of, and in substitution for such lost, destroyed or stolen Warrant
and the
substituted Warrant will be entitled to the benefit hereof and rank
equally in accordance with its terms with all other Warrants issued
or to
be issued by the Company.
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(b)
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The
applicant for the issue of a new Warrant pursuant hereto will bear
the
cost of the issue thereof and in case of loss, destruction or theft
furnish to the Company such evidence of ownership and of loss,
destruction, or theft of the Warrant so lost, destroyed or stolen
as will
be satisfactory to the Company in its discretion and such applicant
may
also be required to furnish indemnity in amount and form satisfactory
to
the Company in its discretion, and will pay the reasonable charges
of the
Company in connection therewith.
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2.4 Warrant
Holder Not a Shareholder
The
holding of a Warrant will not constitute the Holder thereof a shareholder of
the
Company, nor entitle him to any right or interest in respect thereof except
as
in the Warrant expressly provided.
3.
NOTICE
3.1 Notice
to Warrant Holders
Any
notice required or permitted to be given to the Holders will be in writing
and
may be given by prepaid registered post, electronic facsimile transmission
or
other means of electronic communication capable of producing a printed copy
to
the address of the Holder appearing on the Holder’s Warrant or to such other
address as any Holder may specify by notice in writing to the Company, and
any
such notice will be deemed to have been given and received by the Holder to
whom
it was addressed if mailed, on the third day following the mailing thereof,
if
by facsimile or other electronic communication, on successful transmission, or,
if delivered, on delivery; but if at the time or mailing or between the time
of
mailing and the third business day thereafter there is a strike, lockout, or
other labour disturbance affecting postal service, then the notice will not
be
effectively given until actually delivered.
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3.2 Notice
to the Company
Any
notice required or permitted to be given to the Company will be in writing
and
may be given by prepaid registered post, electronic facsimile transmission
or
other means of electronic communication capable of producing a printed copy
to
the address of the Company set forth below or such other address as the Company
may specify by notice in writing to the Holder, and any such notice will be
deemed to have been given and received by the Company to whom it was addressed
if mailed, on the third day following the mailing thereof, if by facsimile
or
other electronic communication, on successful transmission, or, if delivered,
on
delivery; but if at the time or mailing or between the time of mailing and
the
third business day thereafter there is a strike, lockout, or other labour
disturbance affecting postal service, then the notice will not be effectively
given until actually delivered:
00
Xxxx
00xx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxx Xxxxx, Chief Executive Officer
Fax
No.
(000) 000-0000
with
a
copy, which shall not constitute notice, to:
Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
00000
Xxxxx Xxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention:
Xxx X. Xxxx, Esq.
Fax:
(000) 000-0000
4.
EXERCISE
OF WARRANTS
4.1 Method
of Exercise of Warrants
The
right
to purchase shares conferred by the Warrants may be exercised by the Holder
surrendering the Warrant Certificate representing same, with a duly completed
and executed subscription in the form attached hereto and a bank draft or
certified cheque payable to the Company for the purchase price applicable at
the
time of surrender in respect of the shares subscribed for in lawful money of
the
United States of America, to the Company at the address set forth in, or from
time to time specified by the Company pursuant to, Section 3.2.
4.2 Effect
of Exercise of Warrants
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(a)
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Upon
surrender and payment as aforesaid the shares so subscribed for will
be
deemed to have been issued and such person or persons will be deemed
to
have become the Holder or Holders of record of such shares on the
date of
such surrender and payment, and such shares will be issued at the
subscription price in effect on the date of such surrender and
payment.
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(b)
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Within
ten business days after surrender and payment as aforesaid, the Company
will forthwith cause to be delivered to the person or persons in
whose
name or names the shares so subscribed for are to be issued as specified
in such subscription or mailed to him or them at his or their respective
addresses specified in such subscription, a certificate or certificates
for the appropriate number of shares not exceeding those which the
Warrant
Holder is entitled to purchase pursuant to the Warrant
surrendered.
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4.3 Subscription
for Less Than Entitlement
The
Holder of any Warrant may subscribe for and purchase a number of shares less
than the number which he is entitled to purchase pursuant to the surrendered
Warrant. In the event of any purchase of a number of shares less than the number
which can be purchased pursuant to a Warrant, the Holder thereof upon exercise
thereof will in addition be entitled to receive a new Warrant in respect of
the
balance of the shares which he was entitled to purchase pursuant to the
surrendered Warrant and which were not then purchased.
4.4 Warrants
for Fractions of Shares
To
the
extent that the Holder of any Warrant is entitled to receive on the exercise
or
partial exercise thereof a fraction of a share, such right may be exercised
in
respect of such fraction only in combination with another Warrant or other
Warrants which in the aggregate entitle the Holder to receive a whole number
of
such shares.
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4.5 Expiration
of Warrants
After
the
expiration of the period within which a Warrant is exercisable, all rights
thereunder will wholly cease and terminate and such Warrant will be void and
of
no effect.
4.6 Time
of Essence
Time
will
be of the essence hereof.
4.7 Subscription
Price
Each
Warrant is exercisable at a price per share (the “Exercise Price”) of One Dollar
(US$1.00). One (1) Warrant and the Exercise Price are required to subscribe
for
each share during the term of the Warrants.
4.8 Adjustment
of Exercise Price
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(a)
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The
Exercise Price and the number of shares deliverable upon the exercise
of
the Warrants will be subject to adjustment in the event and in the
manner
following:
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(i)
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If
and whenever the shares at any time outstanding are subdivided into
a
greater or consolidated into a lesser number of shares the Exercise
Price
will be decreased or increased proportionately as the case may be;
upon
any such subdivision or consolidation the number of shares deliverable
upon the exercise of the Warrants will be increased or decreased
proportionately as the case may be.
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(ii)
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In
case of any capital reorganization or of any reclassification of
the
capital of the Company or in the case of the consolidation, merger
or
amalgamation of the Company with or into any other Company (hereinafter
collectively referred to as a “Reorganization”), each Warrant will after
such Reorganization confer the right to purchase the number of shares
or
other securities of the Company (or of the Company’s resulting from such
Reorganization) which the Warrant Holder would have been entitled
to upon
Reorganization if the Warrant Holder had been a shareholder at the
time of
such Reorganization.
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In
any
such case, if necessary, appropriate adjustments will be made in the application
of the provisions of this Article Four relating to the rights and interest
thereafter of the Holders of the Warrants so that the provisions of this
Article Four will be made applicable as nearly as reasonably possible to
any shares or other securities deliverable after the Reorganization on the
exercise of the Warrants.
The
subdivision or consolidation of shares at any time outstanding into a greater
or
lesser number of shares (whether with or without par value) will not be deemed
to be a Reorganization for the purposes of this clause 4.8(a)(ii).
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(b)
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The
adjustments provided for in this Section 4.8
are cumulative and will become effective immediately after the record
date
or, if no record date is fixed, the effective date of the event which
results in such adjustments.
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4.9 Determination
of Adjustments
If
any
questions will at any time arise with respect to the Exercise Price or any
adjustment provided for in Section 4.8,
such
questions will be conclusively determined by the Company’s Auditors, or, if they
decline to so act any other firm of certified public accountants in the United
States of America that the Company may designate and who will have access to
all
appropriate records and such determination will be binding upon the Company
and
the Holders of the Warrants.
-4-
5.
WAIVER
OF CERTAIN RIGHTS
5.1 Immunity
of Shareholders, etc.
The
Warrant Holder, as part of the consideration for the issue of the Warrants,
waives and will not have any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any past, present or future incorporator,
shareholder, Director or officer (as such) of the Company for the issue of
shares pursuant to any Warrant or on any covenant, agreement, representation
or
warranty by the Company herein contained or in the Warrant.
6.
MODIFICATION
OF TERMS, MERGER, SUCCESSORS
6.1 Modification
of Terms and Conditions for Certain Purposes
From
time
to time the Company may, subject to the provisions of these presents, modify
the
Terms and Conditions hereof, for the purpose of correction or rectification
of
any ambiguities, defective provisions, errors or omissions herein.
6.2 Warrants
Not Transferable
The
Warrant and all rights attached to it are not transferable.
DATED
as
of the date first above written in these Terms and Conditions.
| SKINS INC. | ||
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| By: | /s/ Xxxx Xxxxx | |
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Authorized Signatory |
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[FORM
OF NOTICE OF EXERCISE OF WARRANT]
NOTICE
OF EXERCISE OF WARRANT
(To
be executed upon exercise of Warrant)
The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
securities of Skins Inc., as provided for therein, and tenders herewith payment
of the exercise price in full in the form of cash or a certified or official
bank check in same-day funds in the amount of $____________ for _________ such
securities.
Please
issue a certificate or certificates for such securities in the name of (please
print name, address and social security number):
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Name:
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Address:
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SSN/EIN:
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Signature:
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Title
(if applicable):
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Date:
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Note:
The
above signature should correspond exactly with the name on the first page of
this Warrant Certificate.
If
said
number of shares shall not be all the shares purchasable under the within
Warrant Certificate, a new Warrant Certificate is to be issued in the name
of
said undersigned for the balance remaining of the shares purchasable thereunder
rounded up to the next higher whole number of shares.
EXHIBIT
B TO THE SUBSCRIPTION AGREEMENT
LIST
OF SECURITIES TO BE REGISTERED
The
registration statement shall cover 4,000,000 shares of the common stock of
Skins
Inc. and 4,000,000 shares of common stock that may be issued upon the exercise
of warrants (the “Registrable Securities”) sold and issued in this offering
exempt from registration under the 1933 Act under Regulation S.
