EXHIBIT 10.3
SUBSCRIPTION AGREEMENT
This Subscription Agreement (the "Subscription Agreement") is made and entered
into this 12th day of January, 2000, by and between ----------------
("Purchaser"), an individual residing at ---------------------------------------
-----, and AmeriStar Corp. and/or assigns (the "Company"), with offices located
in care of AmeriStar Network, Inc., 000 Xxxxx Xxxx Xxxxx, Xxxxx X-000, Xx.
Xxxxxx, XX 00000.
Purchaser and the Company may collectively be referred to herein as the
"Parties".
RECITALS
WHEREAS, Purchaser desires to purchase and the Company desires to sell Eight
Million (8,000,000) shares of the common stock of the Company (the "Stock"), and
the Parties are simultaneously entering into a Loan Agreement (the "Loan
Agreement"), which is attached hereto and incorporated herein, pursuant to which
Purchaser intends to loan the Company an aggregate of Sixty-Five Million U.S.
Dollars (US$65,000,000);
WHEREAS, Purchaser has represented to the Company that Purchaser may be able to
utilize the Stock to obtain the funds aggregating Sixty-Five Million U.S.
Dollars (US$65,000,000) to loan to the Company in accordance with the terms and
conditions of this Agreement; and
WHEREAS, the Company and Purchaser are willing to comply with the herein
contained terms and conditions for the transfer and delivery of the Company's
Stock to Purchaser as hereinafter set forth with the understanding by the
Parties that such Stock as is so transferred to Purchaser will be under the
control and ownership of the Purchaser during the term of and conditioned upon
the performance of this Agreement.
NOW, THEREFORE, in consideration of the herein contained recitals, the mutual
covenants set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:
1. RECITALS
The foregoing recitals shall be deemed to be a part of this agreement for
all purposes and not merely recitals.
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2. TRANSFER OF THE STOCK
a. The Company acknowledges that it is concurrently herewith delivering
its certificates representing an aggregate of Eight Million
(8,000,000) shares of the Company's Stock, which shall be issued as
sixteen certificates each representing 500,000 shares (the Stock and
the certificates issued in Purchaser's name shall be hereinafter
referred to as the "Purchaser's Stock"). Purchaser shall have the
right to cause the Company to issue any such new certificate in the
name of Purchaser's assignee(s), and for purposes hereof, such
certificates shall be considered to be issued in Purchaser's name.
b. The purchase price for the first Five Million (5,000,000) shares of
the Company's Stock purchased hereunder shall be Seven U.S. Dollars
($7.00) per share, and the purchase price for the balance of Three
Million (3,000,000) shares of the Company's Stock purchased hereunder
shall be Ten U.S. Dollars ($10.00) per share, such purchase price paid
in accordance with the provisions of subparagraph e of this Paragraph
2.
c. Upon execution of this Agreement and the issuance of the stock
certificates in Purchaser's name, said certificates shall be delivered
to Purchaser's attorney, Xxxx X. Xxxxxx ("Purchaser's Attorney"), for
subsequent deposit in Purchaser's account or accounts at a bank or
other depository located in the United States to be designated by
Purchaser ("Designated Accounts"). Purchaser shall have and enjoy all
incidents and indices of ownership of Purchaser's Stock. Purchaser
intends to utilize the Designated Accounts and the Stock to raise the
funds for the loan to the Company. Upon deposit of Purchaser's Stock
into the Designated Accounts, Purchaser shall advise the Company of
the location of the Designated Accounts and the depository institution
at which they are located; PROVIDED, HOWEVER, the Company agrees to
not contact said institution or cause or permit same
to be contacted in any way on its behalf, except as is set forth in
Paragraph 3.g.(i) of the Loan Agreement.
d. The Parties intend for the transfer and deposit of the Stock into the
Designated Accounts to be effectuated immediately upon, or within
three (3) business days after, execution of this Agreement, or in the
event the Company has entered into an agreement to merge with a
publicly-held company, then three (3) business days after that merger
has become effective. However, the Parties understand that the
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transfer agent and the depository institution may be governed by
procedures, guidelines and laws that may cause these steps to take
additional time. The Parties shall cooperate and take all reasonable
measures to see that these steps are accomplished as quickly as the
transfer agent and depository institution can effect same, shall not
hamper these procedures in any way, and shall instruct and direct the
transfer agent and depository institution to act with all due and
reasonable haste.
e. Payment shall be made by delivery to the Company of the Notes issued
in accordance with Paragraph 2 of the Loan Agreement, which the
Company shall have delivered into escrow with Purchaser's Attorney, in
accordance with the following schedule:
(i) The Series A Note shall be endorsed to the Company as paid in
full and delivered to the Company by Purchaser's Attorney upon
funding of the Second Traunche and delivery of the Series B Note
to Purchaser (which shall remain in escrow with Purchaser's
Attorney).
(ii) The Series B Note shall be endorsed to the Company as paid in
full and delivered to the Company by Purchaser's Attorney upon
funding of the Third Traunche and delivery of the Series C Note
to Purchaser (which shall remain in escrow with Purchaser's
Attorney).
(iii)The Series C Note shall be endorsed to the Company as paid in
full and delivered to the Company by Purchaser's Attorney upon
funding of the Fourth Traunche and delivery of the Series D Note
to Purchaser (which shall remain in escrow with Purchaser's
Attorney).
(iv) The Series D Note shall be endorsed to the Company as paid in
full and delivered to the Company by Purchaser's Attorney upon
funding of the first increment of the Second Funding and delivery
of the Series E Note to Purchaser (which shall remain in escrow
with Purchaser's Attorney).
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(v) The Series E Note shall be endorsed to the Company as paid in
full and delivered to the Company by Purchaser's Attorney upon
funding of the second increment of the Second Funding and
delivery of the Series F Note to Purchaser (which shall remain in
escrow with Purchaser's Attorney).
(vi) The Series F Note shall be endorsed to the Company as paid in
full and delivered to the Company by Purchaser's Attorney upon
funding of the third increment of the Second Funding and delivery
of the Series G Note to Purchaser (which shall remain in escrow
with Purchaser's Attorney).
(vii)The Series G Note shall be endorsed to the Company as paid in
full and delivered to the Company by Purchaser's Attorney upon
the latter of (i) thirty (30) business days of the delivery of
the Series G Note to Purchaser's Attorney, or (ii) on the day
subsequent to condition (i) set forth in Paragraph 2.c of the
Loan Agreement has been met.
3. RIGHTS AND PRIVILEGES INCIDENT TO OWNERSHIP OF STOCK
a. At all times, unless provided otherwise herein, Purchaser shall have
and enjoy all rights of ownership and possession of Purchaser's Stock
free and clear of any claim of the Company or any person or entity
claiming by, through, under or against the Company or any of the
persons or entities comprising the Company. This includes the right to
vote, the right to receive dividends, and the right to alienate or
encumber Purchaser's Stock.
b. In the event of the termination of performance hereunder such that the
Company will be receiving return of any of Purchaser's Stock, such
Purchaser's Stock as the Company receives back shall be free and clear
of any claim of the Purchaser or any person or entity claiming by,
through, under or against the Purchaser.
c. The Company shall include, at its sole expense, Purchaser's Stock in
any registration statement filed with the Securities and Exchange
Commission (the "SEC") pursuant to a public offering. Purchaser shall
have the right, at any time and at its sole expense, to require the
Company to file a registration statement with the SEC to register
Purchaser's Stock, and in the event the Company does not file such a
registration statement within a reasonable time, Purchaser shall be
provided with injunctive relief, as well as money damages, and the
expense of such registration shall be borne solely by the Company.
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4. CONTINUING REPRESENTATIONS AND WARRANTIES, SAVINGS CLAUSE, INDEMNIFICATION
a. The Company represents and warrants, which representations and
warranties shall continue so long as there remains any performance
hereunder due by any of the Parties and which shall survive this
transaction and its full performance, as follows:
(i) that Purchaser's Stock shall be shares of the capital stock of
the Company that are non-assessable and non-callable and that the
Company will produce proof of such no later than the time for
producing letters of intent regarding acquisition of or
investment in Targets as provided elsewhere herein;
(ii) that the transactions set forth herein and contemplated hereby
are fully and completely authorized by the Company, do not
conflict with and are not in violation of any of the minutes or
organizational documents of the Company or any contracts to which
the Company may be a party;
(iii)that the Company is and shall be in full compliance with all
requirements of applicable jurisdictions and the Securities
Exchange Act of 1934, as amended and all applicable securities
laws;
(iv) that the transaction set forth herein and contemplated hereby is
not in violation of the provisions of the Securities Exchange Act
of 1934, as amended; and
(v) that the Company has reviewed this Agreement in its entirety and
has obtained independent advice of counsel before executing same,
or has decided of its own volition not to seek such counsel
and/or to follow advice of such counsel.
b. If any term, covenant, condition or provision of this agreement or the
application thereof, at any time or to any extent, is held invalid or
unenforceable, the remainder of this agreement shall not be affected,
and each other term, covenant, condition, and provision of this
agreement shall be valid and enforceable to the fullest extent
permitted by law.
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c. The Company hereby holds Purchaser harmless and indemnifies Purchaser
from and against any and all claims, assertions, actions, causes of
action, damages, losses, costs and attorneys fees that may arise in
connection with this Agreement and this transaction and which may be
claimed or asserted by persons or entities not party to this
Agreement, except as may be asserted by Purchaser or any persons or
entities claiming by, through, under or against Purchaser. For
purposes of this paragraph, Purchaser shall be deemed to include
Purchaser's officers, agents, directors, stockholders, employees and
attorneys.
5. NOTICES
Any notice required or advisable hereunder, from the Company to Purchaser
or from Purchaser to the Company, shall be deemed served effective upon
receipt by the intended recipient and shall be given only by personal
delivery or by registered or certified mail return receipt requested,
addressed to the Company or to the Purchaser. The Parties may communicate
by facsimile transmission, but notices given in this manner shall be deemed
as received only if such receipt is explicitly or implicitly acknowledged
by the intended recipient. Notices received by a majority of the persons
and entities in the Company group shall be deemed as received by all of
them if such notices have been sent to all of them. For purposes hereof,
the following addresses and fax numbers are furnished:
The Company:
AmeriStar Corp., c/o AmeriStar Network, Inc., 000 Xxxxx Xxxx
Xxxxx, Xxxxx X-000, Xx. Xxxxxx, Xxxx; Fax: 000-000-0000.
Purchaser:
-----------------------------------
6. CONFIDENTIALITY
a. This agreement will be maintained confidential and will not be
reproduced in any manner whatsoever to any person or entity not a
Party hereto, excluding attorneys engaged by any of the Parties, court
order or government order. Both Parties agree not to circumvent the
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legitimate interests of the other, and to maintain strict
confidentiality regarding the transaction.
b. Each Party shall maintain the confidentiality of trade secrets,
techniques and contacts of the other Party.
7. BROKERS
The Parties represent and agree that there are no brokers or finders or any
other persons or entities who may be entitled to brokerage or finder's or
introducer's fees, with the sole exception of Xxx Xxxxx, for whom Purchaser
agrees to be solely responsible for the payment of any and all fees that
may inure to him as a result of the transaction contemplated herein;
Purchaser holds the Company harmless in connection with same. In all other
events, each party hereto hereby indemnifies and holds the other harmless
in the event any person or entity claims or asserts a claim to brokerage or
finder's or introducer's fees or the like, and each indemnitor shall
provide such indemnification in the event a claim is made through that
indemnitor. All such indemnification shall include liability, loss, damage,
costs and attorneys fees.
8. ACCREDITED INVESTOR REPRESENTATIONS
a. DISCLAIMER: THE SECURITIES BEING PURCHASED PURSUANT TO THIS
SUBSCRIPTION AGREEMENT HAVE NOT BEEN FILED OR REGISTERED WITH OR
APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), NOR
HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION SUPPLIED TO PURCHASER. NO STATE SECURITIES LAW
ADMINISTRATOR HAS PASSED ON OR ENDORSED THE MERITS OF THIS TRANSACTION
OR THE ACCURACY OR THE ADEQUACY OF THE INFORMATION SUPPLIED TO
PURCHASER. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
b. Purchaser has received all materials relating to the Company which
Purchaser has requested. The Company has answered all inquiries that
Purchaser or his or her representatives have put to it relating to
this transaction. Purchaser has taken all the steps necessary to
evaluate the merits and risks of an investment in the Company.
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c. Purchaser has such knowledge and experience in finance, securities,
investments and other business matters so as to be able to protect his
interests in connection with this transaction, ad his investment in
the Company is not material when compared to his total financial
capacity.
d. Purchaser understands the various risks of an investment in the
Company and can afford to bear such risks, including, but not limited
to, the risks of losing his entire investment. Purchaser is aware that
the purchase of the Stock is a speculative investment involving a high
degree of risk, that there is no guarantee that he will realize any
gain from this investment and that he could lose the entire amount of
his investment.
e. Purchaser has no need for liquidity of his investment in the Company
and can afford to hold Purchaser's Stock for a substantial period of
time. Purchaser is fully aware that an investment in the Company
involves significant risks which he may have to bear for an indefinite
period of time because (i) the Company has no operating history; (ii)
the transfer of Purchaser's Stock is subject to restrictions; (iii)
the Stock has not been registered under the Securities Act of 1933
(the "Act") or under the securities laws of any state and, therefore,
cannot be resold unless they are subsequently so registered or an
exemption from such registration is available; and (iv) he is
acquiring the Purchaser's Stock for investment and not with a view to
resale or distribution thereof.
f. Purchaser represents that: (i) his commitment to the investment is
reasonable in relation to his net worth; (ii) he has the requisite
knowledge with regard to all of the considerations involved in making
this investment; (iii) he can bear the economic risk of losing his
entire investment; and (iv) his overall commitment to investments
which are not readily marketable is not disproportionate to his net
worth and his investment in Purchaser's Stock will not cause such
overall commitment to become excessive.
g. Purchaser represents that the funds provided for this investment are
either separate property of Purchaser, community property over which
Purchaser has the right of control or are otherwise funds as to which
Purchaser has the sole right of management and that the source of the
funds are not from any criminal enterprise.
h. Purchaser is a natural person who qualifies as an "accredited
investor" as that term is defined in Section 501(a) of Regulation D
promulgated under the Act.
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9. MISCELLANEOUS
a. This agreement constitutes the sole agreement between the Parties
hereto, with respect to the subject matter herein and cannot be
amended or waived except by an instrument in writing signed by the
Party to be bound thereby. Unless and except as otherwise provided
herein, no prior or contemporaneous discussions between or among or
representations of any of the Parties shall be admissible to change,
modify or amend the provisions hereof.
b. This agreement shall be governed and construed in accordance with the
laws of the State of Florida.
c. The Company acknowledges that Purchaser is not acting as a mortgage or
securities broker or dealer or acting in any capacity as an investment
advisor as defined under the Investment Advisors Act of 1940 or other
similar law. This agreement is not intended for the purpose of buying
or trading securities, or offering counsel or advice with respect to
any such activities. This agreement is a single private transaction.
The Company has sought or agrees to seek the advice of counsel in
connection with the negotiation and consummation of any transaction
contemplated hereunder, or has waived such as provided otherwise
herein.
d. All references herein to dollars shall be deemed to mean currency of
the United States of America, United States Dollars.
e. All references herein to the singular, plural, or any gender, shall be
deemed to include the singular, plural, and any or all genders, as
applicable.
f. All references herein to the Stock shall be deemed to include
Purchaser's Stock and all certificates representing Purchaser's Stock.
g. This agreement is the result of negotiation between and among the
Parties. There shall not be applied a rule of construction which
construes any provision hereof or the entirety hereof against the
party who prepared or whose counsel prepared this agreement.
h. The Parties recognize that the Company is contemplating a merger with
another entity, and it is intended that this Agreement shall follow
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such merger so that the surviving entity is bound to this Agreement as
the Company. It is the intent of the Parties that the Stock to be
issued to the Purchaser is the Stock of the surviving entity of such
merger. Purchaser shall be furnished with an executed copy of such
merger agreement which shall contain explicit assumption by the
surviving entity of the rights and duties of the Company under this
Agreement.
i. This agreement may be executed in counterparts, and each counterpart
will be deemed as if signed by all signatories who have signed a
counterpart.
j. Facsimile copies hereof, containing facsimile signatures of the
signatories, shall be deemed as originals and given the same operative
effect and have the same enforceability as originals.
10. PRIOR AGREEMENTS
All prior documents that may appear to be or be deemed to be agreements or
contracts between the Parties related in any way to the Stock are void and
of no effect. The Parties acknowledge that other such documents may have
been signed but were never delivered or deemed delivered by one party to
the other or considered by the Parties to have created a binding obligation
among them. The Parties agree and acknowledge that this Agreement is the
first and final agreement between them in relation to the Notes and
Purchaser's Stock, unless and except as this Agreement may be amended or
modified in the manner permitted herein.
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SIGNATURE PAGE
IN WITNESS THEREOF, the Parties have caused this Agreement to be executed as of
the day first above written.
The Company: Purchaser:
AmeriStar Corp.
/s/ Xxxxx Xxxxxxx Xxxxxxxx, Xx.
------------------------------- ------------------------
Xxxxx Xxxxxxx Xxxxxxxx, Xx. -------------
Chairman of the Board Individually
Purchaser's Attorney, as Escrow Agent:
/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx, Esquire
