Exhibit 4.21
UTIX GROUP, INC.
SHARES OF COMMON STOCK
SUBSCRIPTION AGREEMENT
February 10, 2005
New York Holdings Ltd.
3 Xxxxxx Xxxxxx Xxxxxx
Xxx Xxxx 00000, Xxxxxx
Gentlemen:
UTIX Group, Inc., a Delaware corporation (the "COMPANY"), hereby confirms its
agreement with you (the "PURCHASER"), as set forth below.
1. THE SECURITIES. Subject to the terms and conditions herein contained, the
Company proposes to issue and sell to the Purchaser an aggregate of: (a) 812,500
shares (the "SHARES") of the Company's Common Stock, $0.001 par value per share
(the "COMMON STOCK").
The Shares will be offered and sold to the Purchaser without such offers and
sales being registered under the Securities Act of 1933, as amended (together
with the rules and regulations of the Securities and Exchange Commission (the
"SEC") promulgated thereunder, the "SECURITIES ACT"), in reliance on exemptions
therefrom.
In connection with the sale of the Shares, the Company has made available
(including electronically via the Commission's XXXXX system) to Purchaser its
periodic and current reports, forms, schedules, proxy statements and other
documents (including exhibits and all other information incorporated by
reference) filed with the SEC under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT") since February 12, 2004. These reports, forms,
schedules, statements, documents, filings and amendments are collectively
referred to as the "DISCLOSURE DOCUMENTS." All references in this Agreement to
financial statements and schedules and other information which is "contained,"
"included" or "stated" in the Disclosure Documents (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules, documents, exhibits and other information which is incorporated by
reference in the Disclosure Documents.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to and agrees with Purchaser as follows:
(a) Except as set forth on SCHEDULE A attached hereto, the Disclosure
Documents as of their respective dates did not, and will not (after giving
effect to any updated disclosures therein) as of the Closing Date as defined in
Section 3 below, contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The Disclosure
Documents
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and the documents incorporated or deemed to be incorporated by reference
therein, at the time they were filed or hereafter are filed with the Commission,
complied and will comply, at the time of filing, in all material respects with
the requirements of the Securities Act and/or the Exchange Act, as the case may
be, as applicable.
(b) Each of the Company and its subsidiaries has been duly incorporated
and each of the Company and the subsidiaries is validly existing in good
standing as a corporation under the laws of its jurisdiction of incorporation,
with the requisite corporate power and authority to own its properties and
conduct its business as now conducted as described in the Disclosure Documents
and is duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions where its principal business is conducted, except
where the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the business, condition (financial
or other), properties, prospects or results of operations of the Company and the
subsidiaries, taken as a whole (any such event, a "MATERIAL ADVERSE Effect");
all of the outstanding shares of capital stock of the Company and the
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights and are owned free and clear of all liens, encumbrances, equities, and
restrictions on transferability (other than those imposed by the Securities Act
and the state securities or "Blue Sky" laws) or voting; except as set forth in
the Disclosure Documents, all of the outstanding shares of capital stock of the
subsidiaries are owned, directly or indirectly, by the Company.
(c) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized by the Company and, when executed
and delivered by the Company, will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as the enforcement thereof may be limited by (A) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally or (B) general principles of equity and the discretion of the court
before which any proceeding therefore may be brought (regardless of whether such
enforcement is considered in a proceeding at law or in equity) (collectively,
the "ENFORCEABILITY EXCEPTIONS").
(d) The Shares have been duly authorized and, when issued upon payment
thereof in accordance with this Agreement, will have been validly issued, fully
paid and nonassessable. The Common Stock of the Company conforms to the
description thereof contained in the Disclosure Documents. The stockholders of
the Company have no preemptive or similar rights with respect to the Common
Stock.
(e) No consent, approval, authorization, license, qualification, exemption
or order of any court or governmental agency or body or third party is required
for the performance of this Agreement by the Company or for the consummation by
the Company of any of the transactions contemplated thereby, or the application
of the proceeds of the issuance of the Shares as described in this Agreement,
except for such consents, approvals, authorizations, licenses, qualifications,
exemptions or orders (i) as have been obtained on or prior to the Closing Date,
(ii) as are not
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required to be obtained on or prior to the Closing Date that will be obtained
when required, or (iii) the failure to obtain which would not, individually or
in the aggregate, have a Material Adverse Effect.
(f) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
thereby and the fulfillment of the terms thereof will not violate, conflict with
or constitute or result in a breach of or a default under (or an event that,
with notice or lapse of time, or both, would constitute a breach of or a default
under) any of (i) the terms or provisions of any contract, indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or agreement or instrument to which any of the Company or
the subsidiaries is a party or to which any of their respective properties or
assets are subject, (ii) the certificate of incorporation or bylaws of any of
the Company or the subsidiaries (or similar organizational document).
(g) The audited consolidated financial statements included in the
Disclosure Documents present fairly the consolidated financial position, results
of operations, cash flows and changes in shareholders' equity of the entities,
at the dates and for the periods to which they relate and have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis; and the auditors engaged by the Company is an independent certified
public accountant as required by the Securities Act for an offering registered
thereunder.
Except as described in the Disclosure Documents, there is not pending or,
to the knowledge of the Company, threatened any action, suit, proceeding,
inquiry or investigation, governmental or otherwise, to which any of the Company
or the subsidiaries is a party, or to which their respective properties or
assets are subject, before or brought by any court, arbitrator or governmental
agency or body, that, if determined adversely to the Company or any such
Subsidiary, would, individually or in the aggregate, have a Material Adverse
Effect or that seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Shares to be sold hereunder or
the application of the proceeds therefrom or the other transactions described in
the Disclosure Documents.
(h) Each of the Company and the subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect, and has paid all taxes shown as due thereon; and
other than tax deficiencies which the Company or any Subsidiary is contesting in
good faith and for which adequate reserves have been provided in accordance with
generally accepted accounting principles, there is no tax deficiency that has
been asserted against the Company or any Subsidiary that would, individually or
in the aggregate, have a Material Adverse Effect.
(i) None of the Company or the subsidiaries is, or immediately after the
Closing Date will be, required to register as an "investment company" or a
company "controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT").
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3. PURCHASE, SALE AND DELIVERY OF THE SHARES. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Purchaser, and Purchaser agrees to purchase from the
Company, 812,500 Shares at $0.40 per Share for a total of $325,000.
One or more certificates in definitive form for the Shares that the Purchaser
have agreed to purchase shall be delivered by or on behalf of the Company,
against payment by or on behalf of the Purchaser, of the purchase price therefor
by wire transfer of immediately available funds to the account of the Company
previously designated by it in writing. Such delivery of and payment for the
Shares shall be made at the offices of the Company (the "CLOSING"), or at such
date as the Purchaser and the Company may agree upon, such time and date of
delivery against payment being herein referred to as the "CLOSING DATE."
Payment for the Shares shall be made by wire transfer of immediately available
funds to an account designated by the Company
4. REGISTRATION OF SHARES. Given the Company's intent to file a Registration
Statement under the Securities Act of 1933, as amended, pursuant to an Amended
Securities Agreement with Great Court Capital, LLC dated December 23, 2004, the
Company will use its best efforts and will incur all costs to register the
shares purchased hereunder.
5. CONDITIONS OF THE PURCHASER OBLIGATIONS. The obligation of Purchaser to
purchase and pay for the Shares is subject to the following conditions unless
waived in writing by the Purchaser:
(a) The representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects (other than
representations and warranties with a Material Adverse Effect qualifier, which
shall be true and correct as written) on and as of the Closing Date; the Company
shall have complied in all material respects with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date.
(b) None of the issuance and sale of the Shares pursuant to this Agreement
shall be enjoined (temporarily or permanently) and no restraining order or other
injunctive order shall have been issued in respect thereof; and there shall not
have been any legal action, order, decree or other administrative proceeding
instituted or, to the Company's knowledge, threatened against the Company or
against any Purchaser relating to the issuance of the Shares or any Purchaser'
activities in connection therewith or any other transactions contemplated by
this Agreement or the Disclosure Documents.
6. Representations and Warranties of the Purchaser.
(a) Purchaser represents and warrants to the Company that the Shares to be
acquired by it hereunder are being acquired for its own account for investment
and with no intention of distributing or reselling such Shares or any part
thereof or interest therein in any transaction which would be in violation of
the securities laws of the United States of America or any State.
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By executing this Agreement, Purchaser further represents that such Purchaser
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to any Person with respect to
any of the Shares.
(b) Purchaser understands that the Shares have not been registered under
the Securities Act and may not be offered, resold, pledged or otherwise
transferred except (a) pursuant to an exemption from registration under the
Securities Act (and, if requested by the Company, based upon an opinion of
counsel acceptable to the Company) or pursuant to an effective registration
statement under the Securities Act and (b) in accordance with all applicable
securities laws of the states of the United States and other jurisdictions.
Purchaser agrees to the imprinting, so long as appropriate, of the
following legend on the Shares:
THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ("TRANSFERRED")
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. IN THE ABSENCE OF SUCH REGISTRATION, SUCH SHARES MAY NOT BE
TRANSFERRED UNLESS, IF THE COMPANY REQUESTS, THE COMPANY HAS RECEIVED A
WRITTEN OPINION FROM COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
COMPANY STATING THAT SUCH TRANSFER IS BEING MADE IN COMPLIANCE WITH ALL
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
The legend set forth above may be removed if and when the Shares are
disposed of pursuant to an effective registration statement under the Securities
Act or in the opinion of counsel to the Company experienced in the area of
United States Federal securities laws such legends are no longer required under
applicable requirements of the Securities Act. The Shares shall also bear any
other legends required by applicable Federal or state securities laws, which
legends may be removed when in the opinion of counsel to the Company experienced
in the applicable securities laws, the same are no longer required under the
applicable requirements of such securities laws. The Company agrees that it will
provide Purchaser, upon request, with a substitute certificate, not bearing such
legend at such time as such legend is no longer applicable. Purchaser agrees
that, in connection with any transfer of the Shares by it pursuant to an
effective registration statement under the Securities Act, such Purchaser will
comply with all prospectus delivery requirements of the Securities Act. The
Company makes no representation, warranty or agreement as to the availability of
any exemption from registration under the Securities Act with respect to any
resale of Shares.
(c) Purchaser is an "accredited investor" within the meaning of Rule 501(a) of
Regulation D under the Securities Act. No Purchaser learned of the opportunity
to purchase Shares or any other security issuable by the Company through any
form of general advertising or public solicitation.
(d) Purchaser represents and warrants to the Company that it has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Shares, having been represented by
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counsel, and has so evaluated the merits and risks of such investment and is
able to bear the economic risk of such investment and, at the present time, is
able to afford a complete loss of such investment.
(e) Purchaser represents and warrants to the Company that (i) the purchase
of the Shares to be purchased by it has been duly and properly authorized and
this Agreement has been duly executed and delivered by it or on its behalf and
constitutes the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity; (ii) the purchase of the Shares
to be purchased by it does not conflict with or violate its charter, by-laws or
any law, regulation or court order applicable to it; and (iii) the purchase of
the Shares to be purchased by it does not impose any penalty or other onerous
condition on the Purchaser under or pursuant to any applicable law or
governmental regulation.
(f) Purchaser acknowledges it or its representatives have reviewed the
Disclosure Documents and further acknowledges that it or its representatives
have been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Shares and the merits
and risks of investing in the Shares; (ii) access to information about the
Company and the Company's financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment in the Shares; and (iii) the opportunity to obtain such additional
information which the Company possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy and completeness of
the information contained in the Disclosure Documents.
(g) Purchaser represents and warrants to the Company that it has based its
investment decision solely upon the information contained in the Disclosure
Documents and such other information as may have been provided to it or its
representatives by the Company in response to their inquiries, and has not based
its investment decision on any research or other report regarding the Company
prepared by any third party ("THIRD PARTY REPORTS"). Purchaser understands and
acknowledges that (i) the Company does not endorse any Third Party Reports and
(ii) its actual results may differ materially from those projected in any Third
Party Report.
(h) Purchaser understands and acknowledges that (i) any forward-looking
information included in the Disclosure Documents supplied to Purchaser by the
Company or its management is subject to risks and uncertainties, including those
risks and uncertainties set forth in the Disclosure Documents; and (ii) the
Company's actual results may differ materially from those projected by the
Company or its management in such forward-looking information.
(i) Purchaser understands and acknowledges that (i) the Shares are offered
and sold without registration under the Securities Act in a private placement
that is exempt from the registration provisions of the Securities Act and (ii)
the availability of such exemption depends in part on, and that the Company and
its counsel will rely upon, the accuracy and truthfulness of the foregoing
representations and Purchaser hereby consents to such reliance.
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7. TERMINATION.
(a) This Agreement may be terminated in the sole discretion of the Company
by notice to Purchaser if at the Closing Date:
(i) the representations and warranties made by any Purchaser in
Section 6 are not true and correct in all material respects; or
(ii) as to the Company, the sale of the Shares hereunder (i) is
prohibited or enjoined by any applicable law or governmental regulation or
(ii) subjects the Company to any penalty, or in its reasonable judgment,
other onerous condition under or pursuant to any applicable law or
government regulation that would materially reduce the benefits to the
Company of the sale of the Shares to such Purchaser, so long as such
regulation, law or onerous condition was not in effect in such form at the
date of this Agreement.
(b) This Agreement may be terminated in the sole discretion of either
Purchaser by notice to the Company given in the event that the Company shall
have failed, refused or been unable to satisfy all conditions on its part to be
performed or satisfied hereunder on or prior to the Closing Date, or if after
the execution and delivery of this Agreement and immediately prior to the
Closing Date, trading in securities of the Company or in securities generally on
the New York Stock Exchange, the American Stock Exchange, the Nasdaq National or
Small Cap Market or the OTC Bulletin Board shall have been suspended or minimum
or maximum prices shall have been established on any such exchange.
(c) This Agreement may be terminated by mutual written consent of all
parties.
8. NOTICES. All communications hereunder shall be in writing and shall be hand
delivered, mailed by first-class mail, couriered by next-day air courier or by
facsimile and confirmed in writing (i) if to the Company, at the addresses set
forth below, or (ii) if to a Purchaser, to the address set forth for such party
in this Agreement.
If to the Company:
Utix Group, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxx, CEO & President
Telephone: (000) 000-0000
All such notices and communications shall be deemed to have been duly given: (i)
when delivered by hand, if personally delivered; (ii) five business days after
being deposited in the mail, postage prepaid, if mailed certified mail, return
receipt requested; (iii) one business day after being timely delivered to a
next-day air courier guaranteeing overnight delivery; (iv) the date of
transmission if sent via facsimile to the facsimile number as set forth in this
Section or the signature page hereof prior to 6:00 p.m. on a business day, or
(v) the business day following the date of transmission if sent via facsimile at
a facsimile number set forth in this Section or on
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the signature page hereof after 6:00 p.m. or on a date that is not a business
day. Change of a party's address or facsimile number may be designated hereunder
by giving notice to all of the other parties hereto in accordance with this
Section.
9. SURVIVAL CLAUSE. The respective representations, warranties, agreements and
covenants of the Company and the Purchaser set forth in this Agreement shall
survive until the first anniversary of the Closing.
10. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon
Purchaser and the Company and their respective successors and legal
representatives, and nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person. Neither the Company nor the Purchaser may
assign this Agreement or any rights or obligation hereunder without the prior
written consent of the other party.
11. NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay on the part of the
Company or any Purchaser in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to the Company or any Purchaser at law or in equity or otherwise. No
waiver of or consent to any departure by the Company or any Purchaser from any
provision of this Agreement shall be effective unless signed in writing by the
party entitled to the benefit thereof, provided that notice of any such waiver
shall be given to each party hereto as set forth below. Except as otherwise
provided herein, no amendment, modification or termination of any provision of
this Agreement shall be effective unless signed in writing by or on behalf of
each of the Company and the Purchaser.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among the
parties hereto and supersedes all prior agreements, understandings and
arrangements, oral or written, among the parties hereto with respect to the
subject matter hereof and thereof.
13. SEVERABILITY. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby.
14. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE
TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
PROVISIONS RELATING TO CONFLICTS OF LAW TO THE EXTENT THE APPLICATION OF THE
LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE PARTIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ACTIONS, SUITS OR PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AGREEMENT MAY BE
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BROUGHT ONLY IN STATE OR FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK, NEW
YORK AND HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR SUCH
PURPOSE.
15. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
Agreement shall constitute a binding agreement among the Company and the
Purchaser.
Very truly yours,
UTIX GROUP, INC.
By: ___________________________
Name: Xxxxxxx Xxxx
Title: CEO & President
ACCEPTED AND AGREED:
-------------------------
INSERT NAME AND ADDRESS OF INVESTOR:
Number of Shares Purchased at
New York Holdings Ltd Closing: 812,500
3 Xxxxxx Xxxxxx Street Purchase Price: $325,000
Xxx Xxxx, 00000, Xxxxxx
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