Exhibit 10.25
SUBSCRIPTION AGREEMENT
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December 16, 2004
The Board of Directors
Rush Financial Technologies, Inc.
00000 Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Gentlemen:
1. Subscription. On the terms set forth below, the undersigned hereby
subscribes for the shares of Common Stock (the "Shares") and Stock Purchase
Warrants (the "Warrants") in Rush Financial Technologies, Inc., a Texas
corporation (the "Company") set forth on the Signature Page. In connection with
such subscription, the undersigned hereby tenders to the Company two executed
counterparts of this Subscription Agreement, together with a check acceptable to
the Company in an amount equal to the full purchase price of the Shares and
Warrants subscribed for hereunder as set forth on the Signature Page. The
undersigned understands and agrees that the Company may decline to accept this
subscription, in which case all instruments tendered herewith will be promptly
returned. If the Company accepts this subscription, such acceptance will be
signified by executing the acknowledgment on the appropriate page of each copy
hereof tendered by the undersigned and causing one such acknowledged copy to be
returned to the undersigned.
2. Delivery of Information. The undersigned acknowledges constructive
receipt of the Company's disclosure materials on file with the Securities and
Exchange Commission. In addition, the undersigned has received all other
information deemed material by the Subscriber to the making of an informed
decision whether to invest in the Company.
3. Representations, Warranties, and Covenants of the Undersigned. The
undersigned hereby represents and warrants to and covenants with the Company as
follows:
(a) The undersigned understands that the following information is
being furnished to determine whether sales of the Shares may be made to
the undersigned pursuant to Section 4(2) of the Securities Act of 1933
(the "1933 Act") and applicable state securities laws. The undersigned
understands that the information contained herein will be relied upon
for purposes of such determination, and the Shares will not be
registered under the 1933 Act in reliance upon the exemption from
registration provided by Section 4(2) of the 1933 Act. The undersigned
represents and warrants to the Company and its officers, directors,
agents and employees that; (i) the information contained herein is
complete and accurate and may be relied upon by such parties, and (ii)
the undersigned will notify the Company immediately of any change in
any of such information occurring prior to the closing of the purchase
of any Shares by the undersigned. All information furnished herein or
hereby is for the sole use of the Company and the Company's
representatives and counsel, and will be held in confidence by such
persons, except that this Agreement may be furnished to such parties as
may be deemed desirable to establish compliance with federal, state or
foreign securities laws.
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(b) The undersigned has adequate net worth and means of providing
for his/her current needs and possible personal contingencies, and the
undersigned has no need, and anticipates no need in the foreseeable
future, to sell the Shares for which the undersigned hereby subscribes.
The undersigned is able to bear the economic risks of this investment
and, consequently, without limiting the generality of the foregoing,
the undersigned is able to hold his/her Shares for an indefinite period
of time and has a sufficient net worth to sustain a loss of his/her
entire investment in the Company in the event such loss should occur.
The overall commitment by the undersigned to investments that are not
readily marketable is not disproportionate to his/her net worth, and
his/her acquisition of Shares will not cause such overall commitment to
become excessive. The undersigned is an "Accredited Investor" as
defined by SEC Regulation D.
(c) The undersigned has such knowledge and experience in financial
and business matters that the undersigned is capable of evaluating the
merits and risks of an investment in the Shares.
(d) The undersigned confirms that all documents, records, and
books pertaining to the undersigned's proposed investment in the
Company have been made available to the undersigned.
(e) The undersigned has had an opportunity to ask questions of and
receive satisfactory answers from the Company, or any person or persons
acting on the Company's behalf, concerning the terms and conditions of
this investment, and all such questions have been answered to the full
satisfaction of the undersigned.
(f) The Shares for which the undersigned hereby subscribes will be
acquired for the undersigned's own account for investment, and not with
the view toward resale or redistribution in a manner which would
require registration under the 1933 Act, and the undersigned does not
now have any reason to anticipate any change in the undersigned's
circumstances or other particular occasion or event which would cause
the undersigned to sell his/her Shares.
(g) The undersigned represents that it has been called to his/her
attention, that an investment in the Shares involves a high degree of
risk which may result in the loss of the total amount of the
undersigned's investment.
(h) The undersigned is now a bona fide individual resident of the
state set forth herein, and the address and social security number or
federal tax identification number set forth herein is the true and
correct residence and social security number or federal tax
identification number of the undersigned. The undersigned has no
present intention of becoming a resident of any other state or
jurisdiction.
(i) The undersigned acknowledges that the Company has made
available to the undersigned or the undersigned's personal advisors the
opportunity to obtain additional information to verify the accuracy of
the information contained in the disclosure materials and to evaluate
the merits and risks of this investment, including, but not limited to,
the income tax consequences of the investment. The undersigned
represents that, by reason of his/her business and financial
experience, the undersigned has acquired the capacity to protect
his/her own interest in investments of this nature. In reaching the
conclusion that the undersigned desires to acquire the Shares, the
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undersigned has carefully evaluated his/her financial resources and
investment position and the risks associated with this investment, and
acknowledges that he/she is able to bear the economic risks of this
investment.
(j) The Shares and Warrants have been offered to the undersigned
without any form of general solicitation or advertising of any type by
or on behalf of the Company or any of its officers, directors,
employees or agents, or any other person.
(k) The undersigned understands that neither the Securities
Exchange Commission nor any securities administrator of any state has
made any finding or determination relating to the fairness of an
investment in the Shares, and that neither the Securities Exchange
Commission nor any securities administrator of any state has or will
recommend or endorse any offering of the Shares.
4. Limitation on Transfer of Shares and Warrants. The undersigned
acknowledges that he/she is aware that there are substantial restrictions on the
transferability of the Shares and Warrants. The Shares and Warrants will not be
registered under the 1933 Act or applicable state securities laws, and the
Shares and Warrants may not be, and the undersigned agrees that they shall not
be, sold, unless such sale is registered or exempt from such registration under
the 1933 Act or state securities laws or regulations. The undersigned also
acknowledges that he/she shall be responsible for compliance with all conditions
on transfer imposed by any securities administrator of any state and for any
expenses incurred by the Company for legal or accounting services in connection
with reviewing such a proposed transfer and/or issuing an opinion in connection
therewith. The Company agrees to include the listing of the Shares and Warrants
in the next SEC Registration Statement filed by the Company, and intends to use
its best efforts to make the Registration Statement effective.
5. Compliance with Securities Laws. The undersigned understands and agrees
that the following restrictions and limitations are applicable to the
undersigned's purchase and resale or other transfers of the Shares and Warrants
pursuant to the 0000 Xxx.
(a) The undersigned agrees that the Shares and Warrants shall not
be sold or otherwise transferred unless the Shares and Warrants are
registered under the 1933 Act and state securities laws, or are exempt
therefrom.
(b) A legend in substantially the following form has been or will
be placed on the certificate(s) or other document(s), if any,
evidencing the Shares and Warrants:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED,
EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH
TRANSFER, OR SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY
TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
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(c) Stop transfer instructions have been or will be imposed with
respect to the Shares and Warrants so as to restrict resale or other
transfer thereof, subject to the further items hereof, including the
provisions of the legend set forth in subparagraph (b) above.
6. Registration Rights. If at any time the Company shall prepare and file
one or more registration statements under the Act with respect to a public
offering of equity or debt securities of the Company, or of any such securities
of the Company held by its security holders, other than a registration statement
on Forms X-0, X-0, or similar form, the Company will include in any such
registration statement such information as is required, and such number of
shares of Common Stock held by the undersigned to permit a public offering of
such shares of Common Stock as required; provided, however, that if, in the
written opinion of the Company's managing underwriter, if any, for such
offering, the inclusion of the shares requested to be registered, when added to
the securities being registered by the Company or the selling security
holder(s), would exceed the maximum amount of the Company's securities that can
be marketed without otherwise materially and adversely affecting the entire
offering, then the Company may exclude from such offering that portion of the
shares required to be so registered so that the total number of securities to be
registered is within the maximum number of shares that, in the opinion of the
managing underwriter, may be marketed without otherwise materially and adversely
affecting the entire offering. The Company shall use its best efforts to obtain
promptly the effectiveness of such registration statement and maintain the
effectiveness thereof for at least 180 days and to register or qualify the
subject shares of Common Stock underlying this Warrant for sale in up to five
(5) states identified by the undersigned. The Company shall bear all fees and
expenses other than the fees and expenses of the undersigned's counsel incurred
in the preparation and filing of such registration statement and related state
registrations, to the extent permitted by applicable law, and the furnishing of
copies of the preliminary and final prospectus thereof to the undersigned.
IN WITNESS WHEREOF, subject to acceptance by the Company, the undersigned has
completed this Subscription Agreement to evidence his/her subscription for the
Shares and Warrants set forth below:
Number of Shares (at $0.24 per Share): 2,083,334
Number of Stock Purchase Warrants: 2,083,334
Total subscription amount: $500,000
Shares and Warrants to be registered as follows: Bonanza Master Fund, Ltd.
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(Owner Name)
000 Xxxxxxxx Xxxxx, Xxxxx 0000 /s/ Bernay Box
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Address Signature
Xxxxxx, Xxxxx 00000 Bernay Box
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Name(s) typed or printed
00-0000000
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Tax I.D. or Social Security Number
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Subscription Accepted:
RUSH FINANCIAL TECHNOLOGIES, INC.
December 23, 2004 By: /s/ X. X. Xxxxx, Xx.
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Date X.X. Xxxxx, Xx., President
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