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EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
Supply Chain Services Inc. (hereinafter referred to as the "Company") and
the undersigned investor (hereinafter referred to as the "undersigned")
executing this subscription agreement (hereinafter referred to as the
"Subscription Agreement") hereby agree as follows:
1. SUBSCRIPTION FOR SHARES
The undersigned hereby subscribe for and agree to purchase [ ] shares of
the common stock, par value $0.0001 ("Common Stock"), being offered by the
Company at US$0.35 per share ("Shares") described in the Prospectus dated [ ],
2001 of the Company ("Prospectus") subject to the terms and conditions of the
offering described in the Prospectus.
2. OFFERING PERIOD.
The Shares are currently being offered by the Company up to and until [ ],
2001 inclusive ("Termination Date"). The Company has the sole discretion to
extend the offering of Common Stock for up to three thirty-day periods, but in
no event later than [ ], 2001.
3. INVESTOR DELIVERY OF DOCUMENTS AND PAYMENT.
The undersigned hereby tender to the Company (i) the full purchase price by
check or wire; and (ii) two manually executed copies of this Subscription
Agreement. Prior to the acceptance of the subscription by the Company or the
return of the subscription amount, the funds will not be held in an escrow,
trust or of similar nature of account.
4. ACCEPTANCE OR REJECTION OF SUBSCRIPTION.
The Company has the right to reject this subscription for Shares, in whole
or in part for any reason and at any time prior to it being accepted. In the
event of the rejection of this subscription, the subscription amount paid will
be returned promptly to the undersigned without interest or deduction and this
Subscription Agreement will have no force or effect. The Shares subscribed for
herein will not be deemed issued to or owned by the undersigned until two copies
of this Subscription Agreement have been executed by the undersigned and
countersigned by the Company and a closing with respect to this subscription has
occurred.
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5. CLOSING AND DELIVERY OF SHARES.
Closings will occur on a rolling basis from time to time at the discretion
of the Company, at the offices of the Company, at any time prior to the
Termination Date. In the event this subscription is accepted and the purchase
funds are cleared by the bank, the certificates representing the shares will be
delivered promptly to the undersigned, along with a fully executed version of
this Subscription Agreement within ten business days.
6. PROSPECTUS AND PUBLICITY.
6.1 The Company confirms that for the purpose of the offering, this
Subscription Agreement and the Prospectus have been prepared in
accordance with the requirements of the SEC and delivered to the
officers and directors of the Company and possibly one or more NASD
registered brokers/dealers (the "Selling Agents") who may be engaged
in the offer and sale of the Common Stock.
6.2 The Company authorizes its directors and officers and Selling Agents
to distribute copies of the Prospectus after the same has become
effective in connection with the offering.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the undersigned that:
7.1 Incorporation: The Company is duly incorporated and validly existing
under the laws of State of Delaware, with full power and authority to
conduct its business as described in the Prospectus and is a separate
legal entity capable of suing and being sued.
7.2 Validity of Agreement: This Subscription Agreement has been duly
authorized, executed and delivered by the Company and constitutes its
valid and legally binding obligations except to the extent that the
enforcement thereof may be limited by bankruptcy reorganization or
other similar laws relating to or affecting the enforcement of
creditors' rights generally.
7.3 Prospectus: (A) The Prospectus contains all information with respect
to the Company which is material in the context of its offering of
Shares (including all information required by applicable laws and the
relevant SEC notifications and the information which, according to the
nature of the Company, is necessary to enable investors and their
investment advisers to make an informed assessment of the assets and
liabilities, financial position, profits and losses, and prospects of
the Company); (B) the statements contained in it relating to the
Company are in every material aspect true and accurate and not
misleading; (C) the opinions and intentions expressed in it with
regard to the Company are honestly held and have been reached after
considering all relevant circumstances, auditors reports and
professional advice, and are based on reasonable assumptions; (D)
there are no other facts in relation to the Company, the omission of
which would make any statement in the Prospectus in proof or final
form misleading in any material respect; and (E)
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all reasonable enquiries have been made by the Company to ascertain
such facts and to verify the accuracy of all such material information
and statements.
7.4 Outstanding Shares: The outstanding shares of Common Stock of the
Company have been duly authorized and registered under the Securities
Act of 1933, as amended, and validly issued and are fully paid and
non-assessable, and no pre-emptive rights of stockholders exist with
respect to any of the Shares.
7.5 Financial Statements: (A) The financial statements of the Company
appearing in the Prospectus which relate to historical information
have been audited or extracted from audited financial statements and
were prepared in accordance with accounting principles generally
accepted in, and pursuant to, the relevant laws of the United States
of America consistently applied except as disclosed in the Prospectus
and present fairly the financial position of the Company at the dates,
and the results of operations and changes in financial position of the
Company for the periods in respect of which they have been prepared;
and (B) Since the date of the last audited financial statements of the
Company referred to in the Prospectus there has been no change nor any
development or event involving a prospective change which is or might
reasonably be expected to be materially adverse to the condition
(financial or other), prospects, results of operations or general
affairs of the Company except as disclosed in the Prospectus.
7.6 Litigation: On March 30, 2001, the President of the Company, Xx.
Xxxxxx Xxx'x former employer, United States Consolidation Limited
("USCL"), served process on Xx. Xxxxxx Xxx and the Company's
subsidiaries. In its writ served to Xx. Xxx, it was claimed by USCL
that Xx. Xxx has violated implied non-competition terms in his
contract and breached his trust and fiduciary duties to USCL. USCL
alleges to have suffered loss and damage from contracts which were
entered into by Xxxxxx Xxx for and on behalf of USCL which were
against the interests of USCL and seeks equitable compensation from
Xx. Xxxxxx Xxx, and an account from the Company's subsidiaries. Xx.
Xxxxxx Xxx has hired Messrs. Xxxx Xxxx & Company, as his, and the
Company's subsidiaries' counsel, and Messrs. Xxxx Xxxx & Company and
Xx. Xxxxxx Xxx believe they can mount a strong defense against USCL's
claims.
7.7 Possession of Licenses and Permit: (A) The Company possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by it; (B) the Company is in compliance with
the terms and conditions of all such Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a
material adverse effect on the condition (financial or other),
prospects, results of operations or general affairs of the Company;
(C) all of the Licenses are valid and in full force and effect; and
(D) the Company has not received any notice of proceedings relating to
the revocation or modification of any such Licenses which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would
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result in a material adverse effect on the condition (financial or
other), prospects, results of operations or general affairs of the
Company.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DIRECTORS AND OFFICERS OF
THE COMPANY AND THE SELLING AGENTS.
8.1 Each of the directors and officers of the Company and Selling Agent
represents and warrants to the Company that it has full power and
authority to enter into and perform its duties and obligations under
and in connection with this Subscription Agreement and has taken all
action (corporate or otherwise) necessary to authorize the execution
of this Subscription Agreement and the performance hereunder, and this
Subscription Agreement constitutes valid and binding obligations of
each of the directors and officers.
8.2 The directors and officers of the Company and Selling Agents shall
perform their obligations and duties under this Subscription Agreement
to the best of their abilities and shall exercise all due skill,
diligence and care in performance of their duties hereunder so that
these activities are done properly.
8.3 No action has been or will be taken in any jurisdiction (other than
the State of Delaware) by the directors and officers of the Company or
the Selling Agents that would permit a public offering of Shares or
possession for distribution of the Prospectus (in preliminary, draft
or final form) or any other offering or publicity material relating to
the Shares, in any country or jurisdiction where action for that
purpose is required.
9. INDEMNITY.
9.1 The obligations of the parties hereto other than the Company are made
on the basis of the foregoing representations and warranties of the
Company and with the intention that they shall remain true and
accurate in all material respects up to and including the Termination
Date, the Company will indemnify each such party from and against any
loss, liability, cost, claim, action, demand or expense (including,
but not limited to, all reasonable costs, charges and expenses paid or
incurred in disputing or defending any of the foregoing) which any of
them may incur or which may be made against any of them arising out of
or in relation to or in connection with any breach by the Company of
any such representation or warranty, or any other undertaking or
obligation contained in this Subscription Agreement.
9.2 If any action, claim or demand shall be brought or alleged against an
indemnified party in respect of which indemnity is to be sought
against the Company under this Clause, the indemnified party shall
promptly notify the Company in writing, and the Company shall have the
option to assume the defence thereof, with counsel satisfactory to the
indemnified party (who shall not,
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except with the consent of the indemnified party, also be counsel of
the Company). If the Company elects to assume the defence thereof and
retains such legal advisers, the indemnified party shall bear the fees
and expenses of any additional legal advisers retained by it. If the
Company does not elect to assume the defence thereof or fails to
employ legal advisers satisfactory to the indemnified party to
represent the indemnified party within a reasonable period of time
after notice of commencement of the action, it will reimburse the
indemnified party at its election to assume the defence thereof. The
Company shall not be liable to indemnify any indemnified party for any
settlement of any such action effected without the authority and
written consent of the Company which consent shall not be unreasonably
withheld.
9.3 Each of the directors and officers of the Company and Selling Agents
will indemnify the Company from and against any and all losses,
liabilities, claims, damages, demands, actions or expenses (including
but not limited to, all reasonable costs, charges and expenses paid or
incurred in disputing or defending any of the foregoing) which the
Company may incur or which may be made against the Company arising out
of or relating to in connection with any breach by any of the
directors and officers of the Company and Selling Agents of any
representation and/or warranty, or any other undertaking or duties or
obligations contained in this Subscription Agreement.
10. UNDERTAKINGS OF THE COMPANY.
The Company covenants and undertakes to the undersigned and all other
parties hereto as follows:
10.1 Prospectus: The Company shall be responsible for all material
information contained in the Prospectus. The Company shall take all
necessary steps to ensure that the Prospectus shall be sufficient so
as to satisfy all SEC requirements and other requirements of
applicable law and regulations. The other parties hereto shall have no
liability for the accuracy or completeness of anything contained in
the Prospectus except information provided by them.
10.2 Amendments to the Prospectus: The Company shall promptly notify its
directors and officers and the Selling Agents if at any time on or
prior to the Termination Date there shall have come to its notice any
circumstance or any event as a result of which the Prospectus would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light
of the circumstances under which they are made when such Prospectus is
delivered, not misleading or if for any other reason it shall be
necessary to amend or supplement the Prospectus.
11. REPRESENTATIONS AND WARRANTIES OF THE UNDERSIGNED.
The undersigned represents and warrants to the Company that:
11.1 The undersigned has read the Prospectus and fully understands the
Prospectus, including the Section entitled "Risk Factors". The
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undersigned understands that there is no assurance as to the future
performance of the Company. The undersigned have not relied on
information other than what can be found in the Prospectus in making
his/her/its decision to invest in the Shares.
11.2 The undersigned has received no representation or warranty from the
Company or any of its respective offices, employees or agents in
respect of his/her/its investment in the Company.
11.3 The information provided herein in relation to the undersigned is true
and complete as of the date hereof and will be true and complete as of
the date of which the purchase of Shares becomes effective. If, prior
to the final consummation of the offer and sale of the Shares, there
should be any change in such information of any of such information
becomes incorrect or incomplete, the undersigned warrants that
he/she/it will notify the Company and supply the Company promptly with
corrective information.
12. ENTITY AUTHORITY.
If the investor/undersigned is a corporation, partnership, company, trust,
employee benefit plan, individual retirement account, Xxxxx Plan, or other
tax-exempt entity, this investment has been duly authorized by all necessary
corporate or other action by such entity and is qualified to become an investor
in the Company and the undersigned on behalf of such entity has been duly
authorized by such entity to do so.
13. GOVERNING LAW AND JURISDICTION.
This Subscription Agreement will be deemed to have been made and delivered
in the Hong Kong Special Administrative Region and will be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal laws of the Hong Kong Special Administrative Region. Each of the
Company and the undersigned hereby (i) agrees that any legal suit, action or
proceeding arising out of or relating to this Subscription Agreement will be
instituted exclusively in the courts of the Hong Kong Special Administrative
Region, (ii) waives any objection to the venue of any such suit, action or
proceeding and the right to assert that such forum is not a convenient forum for
such suit, action or proceeding, (iii) irrevocably consents to the jurisdiction
of the courts of the Hong Kong Special Administrative Region in any such suit,
action or proceeding, (iv) agrees to accept and acknowledge service of any and
all process that may be served in any such suit, action or proceeding in the
courts of the Hong Kong Special Administrative Region; and (v) agrees that
service of process upon it mailed by certified mail to its address set forth on
the signature page hereto will be deemed in every aspect effective service of
process upon it in any suit, action or proceeding.
14. COUNTERPARTS.
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This Subscription Agreement may be executed in one or more counterparts,
each of which will be deemed an original but all of which together will
constitute one and the same instrument. The execution of this Subscription
Agreement may be actual or facsimile signature.
15. BENEFIT.
This Subscription Agreement is binding upon and inures to the benefit of
the parties hereto and their respective heirs, executors, personal
representatives, successors and assigns. The undersigned shall be permitted to
assign this Subscription Agreement upon notice to and written consent of the
Company.
16. NOTICES.
All notices, offers, acceptance and any other acts under this Subscription
Agreement (except payment) must be in writing, and is sufficiently given if
delivered to the addresses in person, by overnight courier service, or, if
mailed, postage prepaid, by certified mail (return receipt requested), and will
be effective three days after being placed in the mail if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. All communications to the
undersigned should be sent to the undersigned's preferred address on the
signature page hereto.
All communications to the Company should be sent to Xx. Xxxxxx Xxx of
8/F, Guangdong Textile Centre, 22 Minden Avenue, Tsimshatsui, Kowloon, Hong
Kong.
Each party may designate another address by notice to the other parties.
17. ORAL EVIDENCE.
This Subscription Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior oral
and written agreements between the parties hereto with respect to the subject
matter hereof. This Subscription Agreement may not be changes, waived,
discharged, or terminated orally, but rather, only by a statement in writing
signed by the party or parties against which enforcement or the change, waiver,
discharge or termination is sought.
18. SECTION HEADINGS.
Section headings herein have been inserted for reference only and will not
be deemed to limit or otherwise affect, in any matter, or be deemed to interpret
in whole or in part, any of the terms or provisions of this Subscription
Agreement.
19. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
The representations, warranties and agreements contained herein will
survive the delivery of, and the payment for, the Shares.
20. ACCEPTANCE OF SUBSCRIPTION.
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The Company may accept this Subscription Agreement at any time for all or
any portion of the Shares subscribed for by executing a copy hereof as provided
and notifying the undersigned within a reasonable time thereafter.
The remainder of this page has intentionally been left blank.
SIGNATURES APPEAR ON THE NEXT PAGE(S)
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SIGNATURE PAGE FOR INDIVIDUAL INVESTORS -- COMPLETE ALL INFORMATION
Name: Name of Joint Investor (if any):
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Residence Address:
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Telephone: (H) (W) Fax
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Occupation: Employer:
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Business Address:
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Send communications to:
[ ] Home [ ] Office [ ] E-Mail
E-mail address:
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Age:
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Social Security Number / Hong Kong Identity Card No.:
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Check manner in which Shares are to be held:
[ ] Individual [ ] Tenants in [ ] Joint Tenants with
Ownership Common Right of Survivorship
(both parties must sign)
[ ] Community [ ] Other (please indicate)
Property
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ALL INVESTORS MUST SIGN AND PRINT The foregoing subscription is accepted
NAME BELOW: the Company hereby agrees to be bound
by its terms.
Supply Chain Services Inc.
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Name:
Title:
Date:
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Investor:
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Name:
Title:
Date:
Joint Investor (if applicable):
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Name:
Title:
Date:
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SIGNATURE PAGE FOR ENTITY INVESTORS -- COMPLETE ALL INFORMATION
Name of Entity:
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Address of Principal Office:
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Telephone: Fax:
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Taxpayer Identification Number:
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Check type of Entity:
[ ] Employee Benefit [ ] Limited [ ] General [ ] Individual Retirement
Plan Trust Partnership Partnership Account
[ ] Limited Liability [ ] Trust [ ] Corporation [ ] Other (please
Company indicate)
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Date of Formation or Incorporation of Entity:
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State of Formation or Incorporation of Entity:
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Describe the business of the Entity:
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List the names and positions of the executive officers, managing members,
partners or trustees authorized to act with respect to investments by the Entity
generally and specify who has the authority to act with respect to this
investment.
NAME POSITION AUTHORITY FOR THIS INVESTMENT (YES OR NO)
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ALL INVESTORS MUST SIGN AND PRINT The foregoing subscription is accepted
NAME BELOW: and the Company hereby agrees to be
bound by its terms.
Supply Chain Services Inc.
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Name:
Title:
Date:
Entity Investor
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For and on behalf of:
Name:
Title:
Date:
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