SUBSCRIPTION AGREEMENT
PRIVATE PLACEMENT OF UP TO
FIVE HUNDRED THOUSAND DOLLARS ($500,000) BRIDGE LOAN
HOW TO SUBSCRIBE
The minimum investment which must be made by any subscriber is $______
in the form of a Note (individually, the "Note" and collectively, the "Notes")
of REIT Americas, Inc. (the "Company"). Subscribers can purchase additional
Notes in excess of the minimum amount of $______. Any qualified subscriber who
wishes to purchase a Note should deliver the following items to the Company, at
0000 X. Xxxx Xxxx, Xxxxx 000, Xxxxxx, XX 00000, Attention: Xxxxx Xxxxxxx.
(1) one dated and executed copy of the Subscription Agreement with
all blanks properly completed; and
(2) a check payable to the order of "REIT Americas, Inc." in the
amount being subscribed for.
THE NOTE BEING SUBSCRIBED FOR PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE. THE NOTE MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE NOTE UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND SUCH STATE LAWS AS MAY BE APPLICABLE, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
ADDITIONAL RESTRICTIONS ON TRANSFER OF THE NOTE ARE SET FORTH IN THIS
SUBSCRIPTION AGREEMENT.
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the "Agreement") between REIT Americas, Inc., a
Maryland corporation (the "Company"), and the purchaser identified on the
signature page hereto (the "Subscriber").
BACKGROUND
Subscriber desires to loan, and the Company desires to accept a loan, up
to that amount of loan as set forth in a Promissory Note of even date herewith
between the Subscriber and the Company (the "Note") and as set forth on the
signature page hereto, upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for the other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto, intending
to be legally bound, agree as follows:
1. SUBSCRIPTION FOR NOTE; WARRANTS.
(a) Subscriber hereby subscribes for and agrees to loan up
to that amount set forth on the signature page hereto and as contained in the
Note (the "Purchase Price") on the terms and conditions described herein and as
set forth in the form of Note attached hereto as Exhibit C. The Note shall carry
an interest rate of 8% per annum and the interest should be paid quarterly on
each of April 1st, July 1st, October 1st and January 1st until the Maturity Date
(as hereinafter defined), and a final balloon payment of outstanding principal
and all accrued and unpaid interest on the date that is the earlier of (i)
September 30, 2006 or (ii) the closing of a funding under an S-11 Registration
Statement in excess of $2,000,000 (the "Maturity Date"). All other terms shall
be as specified on the Note attached as Exhibit C hereto.
(b) Subscriber encloses herewith a check payable to the
order of "REIT Americas, Inc." in an amount equal to the Purchase Price.
(c) The Company shall deliver a Warrant to Subscriber
simultaneously with the execution of this Agreement in the form of warrant
attached hereto as Exhibit D. One Warrant will be issued for each one dollar of
the face amount of the Note. The exercise price of the Warrant shall be $.10 per
share and shall have a term that expires on July 30, 2008. The Company shall
also cause to be delivered a Registration Rights Agreement, from the Parent, to
the Subscriber substantially in the form of Exhibit E hereto.
(d) By executing this Subscription Agreement, the Subscriber
acknowledges that the Subscriber has been informed of various matters relating
to the Company, including but not limited to, the Risk Factors described herein.
2. REPRESENTATIONS AND WARRANTIES AS TO SUITABILITY STANDARDS.
Subscriber hereby represents and warrants that:
(a) Subscriber has such knowledge and experience in
financial and business matters that Subscriber is capable of evaluating the
merits and risks of the prospective investment in the Company and of protecting
his own interests in connection therewith;
(b) Subscriber is acquiring the Note for Subscriber's own
account, not on behalf of other persons, and for investment and not with a view
to resale or distribution;
(c) Subscriber can bear the economic risk of losing
Subscriber's entire investment;
(d) Subscriber's overall commitment to investments which are
not readily marketable is not disproportionate to Subscriber's net worth,
Subscriber's investment in the Note will not cause such overall commitment to
become excessive, and the investment is suitable for Subscriber when viewed in
light of Subscriber's other securities holdings and Subscriber's financial
situation and needs;
(e) Subscriber has adequate means of providing for
Subscriber's current needs and personal contingencies;
(f) Subscriber recognizes that the Company is newly formed
and that any investment in the Company involves substantial risk, and Subscriber
has evaluated and fully understands all risks in Subscriber's decision to
purchase Note hereunder, including, without limitation, the Risk Factors set
forth on Exhibit "A" attached hereto;
(g) Subscriber understands that the offer and sale of the
Securities have not been submitted to, reviewed by, nor have the merits of this
investment been endorsed or approved by any state or federal agency, commission,
authority or self regulatory organization;
(h) Subscriber understands the business in which the Company
is engaged;
(i) If Subscriber is an individual, Subscriber is at least
18 years of age and a bona fide resident and domiciliary (not a temporary or
transient resident) of the state or country indicated on the signature page
hereof and Subscriber has no present intention of becoming a resident of any
other state or jurisdiction;
(j) If Subscriber is not an individual, Subscriber is
domiciled in the state or country indicated on the signature page hereof, has no
present intention of becoming domiciled in any other state or jurisdiction and
is an "Institutional Investor" as defined under the "blue sky" or securities
laws or regulations of the state in which it is domiciled; and;
(k) Subscriber otherwise meets any special suitability
standards applicable to Subscriber's state or country of residence or domicile.
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(l) Subscriber is an "Accredited Investor" as such term is
defined in Rule 501 of Regulation D under the Securities Act of 1993, as amended
(the "Securities Act"), which definition is set forth on Exhibit "B" attached
hereto.
(m) All of the written information pertaining to the
Subscriber which the Subscriber has heretofore furnished to the Company, and all
information pertaining to the Subscriber which is set forth in this Subscription
Agreement, is correct and complete as of the date hereof and, if there should be
any material change in such information hereafter, the Subscriber shall promptly
furnish such revised or corrected information to the Company. Subscriber
otherwise meets any special suitability standards applicable to the Subscriber's
state of residence.
(n) Subscriber acknowledges that Xxxxxx Xxxxx Securities,
Inc. is the placement agent with respect to the sale of securities hereunder and
that Xxxxxx Xxxxx Securities, Inc. will be compensated as follows: (i) Xxxxxx
Xxxxx Securities, Inc. shall be paid eight percent (8%) of the total proceeds
resulting from the sale of the Notes, payable at each closing from subscription
proceeds, and (ii) the Company will pay Xxxxxx Xxxxx Securities, Inc. a
non-accountable expense allowance in the amount of three percent (3%) of the
total proceeds resulting from the sale of the Notes. In addition, the Company
has engaged the services of Xxxxxx Xxxxx Securities, Inc. as a financial
consultant for a period of twelve months with compensation equal to 100,000
shares of Series A Preferred Stock of the Company, which convert into common
stock of the Company at a ratio of ten shares of common stock for each share of
preferred stock.
3. TRANSFER RESTRICTIONS.
(a) Subscriber represents that he understands that the sale
or transfer of the Securities (being the Note and Warrant issued hereunder) are
severely restricted and that:
(i) The Securities have not been registered under
the Securities Act or the laws of any other jurisdiction by reason of a specific
exemption or exemptions from registration under the Securities Act and
applicable state securities laws, and that the Company's reliance on such
exemptions is predicated on the accuracy and completeness of the Subscriber's
representations, warranties, acknowledgments and agreements herein. The
Securities cannot be sold or transferred by Subscriber unless subsequently
registered under applicable law or an exemption from registration is available.
The Company is not required to register the Securities or to make any exemption
from registration available;
(ii) The right to sell or transfer any of the
Securities will be restricted as described in this Subscription Agreement which
include restrictions against sale or transfer in violation of applicable
securities laws, the requirement that an opinion of counsel be furnished that
any proposed sale or transfer will not violate such laws and other restrictions
and requirements; and
(iii) There will be no public market for the
Securities and Subscriber may not be able to sell or otherwise transfer the
Securities. Accordingly, the Subscriber must bear the economic risk of
Subscriber's investment for an indefinite period of time.
(b) Subscriber agrees that he will not offer to sell, sell
or transfer the Securities or any part thereof or interest therein without
registration under the Securities Act and applicable state securities laws or
without providing to the Company an opinion of counsel acceptable to the Company
that such offer,
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sale or transfer is exempt from registration under the Securities Act and under
applicable state securities laws.
(c) The Subscriber acknowledges that the Securities will
bear the following legend:
"The Securities have not been registered under the
Securities Act of 1933, as amended, or the securities laws of
any state. The Securities may not be offered, sold, transferred,
pledged or otherwise disposed of without an effective
registration statement under the Securities Act of 1933, as
amended, and under any applicable state securities laws or an
opinion of counsel for the Company that the proposed transaction
will be exempt from such registration."
Subscriber further acknowledges that the Company reserves the
right to place a stop order against the Securities and to refuse to effect any
transfers thereof in the absence of an effective registration statement with
respect to the Securities or in the absence of an opinion of counsel to the
Company that such transfer is exempt from registration under the Securities Act
and under applicable state securities laws.
4. SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES.
Subscriber represents and warrants that:
(a) Subscriber has received, has carefully read and
understands the Company's Business Plan;
(b) Subscriber has been furnished with all additional
documents and information which Subscriber has requested;
(c) Subscriber has had the opportunity to ask questions of
and received answers from the Company concerning the Company, the Note and the
Warrants and to obtain any additional information necessary to verify the
accuracy of the information furnished;
(d) Subscriber has relied only on the foregoing information
and documents in determining to make this subscription;
(e) The Executive Summary and other information furnished by
the Company do not constitute investment, accounting, legal or tax advice and
Subscriber is relying on professional advisers for such advice;
(f) All documents, records and books pertaining to
Subscriber's investment have been made available for inspection by Subscriber
and by Subscriber's attorney, and/or Subscriber's accountant and/or Subscriber's
Subscriber representative, and the relevant books and records of the Company
will be available upon reasonable notice, for inspection by investors during
reasonable business hours at the Company's principal place of business;
(g) Subscriber and Subscriber's advisors (which advisors do
not include the Company or its principals, representatives or counsel) have such
knowledge and experience in legal, financial and business matters as to be
capable of evaluating the merits and risks of investing in the Company and of
making an informed investment decision;
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(h) Subscriber understands, acknowledges and agrees that the
Company is relying solely upon the representations and warranties made herein in
determining to sell Subscriber the Note;
(i) The Subscriber has not paid or given any commission or
other remuneration in connection with the purchase of the Note. The Subscriber
has not received any public media advertisements and has not been solicited by
any form of mass mailing solicitation; and
(j) THE SUBSCRIBER ACKNOWLEDGES THAT THE COMMON STOCK OF THE
COMPANY IS NOT CURRENTLY LISTED OR QUOTED ON THE OTC BULLETIN BOARD, NASDAQ OR
ANY OTHER EXCHANGE AND THAT THE COMPANY WILL USE ITS REASONABLE EFFORTS TO
BECOME SO LISTED AFTER THE DATE HEREOF. THE COMPANY MAKES NO ASSURANCE THAT IT
WILL BECOME LISTED OR QUOTED ON ANY EXCHANGE. AS A RESULT, THERE CAN BE NO
ASSURANCE THAT THE COMMON STOCK UNDERLYING THE WARRANTS BEING DELIVERED TO
SUBSCRIBER PURSUANT TO THIS AGREEMENT WILL EVER BE REGISTERED UNDER THE
REGISTRATION RIGHTS AGREEMENT.
(k) The Subscriber understands the meaning and legal
consequences of the foregoing representations and warranties. The Subscriber
certifies that each of the foregoing representations and warranties is true and
correct as of the date hereof and shall survive the execution hereof and the
purchase of the Note.
5. SUBSCRIPTION IRREVOCABLE BY SUBSCRIBER BUT SUBJECT TO ACCEPTANCE
OR REJECTION BY THE COMPANY.
(a) This Subscription Agreement is not, and shall not be,
revocable by Subscriber.
(b) The Company, in its sole discretion, has the right to
terminate or withdraw the offering at any time, to accept or reject
subscriptions in other than the order in which they were received, to reject any
subscription in whole or in part, to allot to Subscriber less than the amount of
Note subscribed for, and to return without interest the amount paid by
Subscriber.
(c) The Subscriber understands and agrees that this
Subscription Agreement is not binding upon the Company until the Company accepts
it, which acceptance is at the sole discretion of the Company and is to be
evidenced by the Company's completion, execution and delivery of this
Subscription Agreement.
(d) In the event of rejection of this subscription in whole
(but not in part), or in the event the sale of the Note subscribed for by the
Subscriber is not consummated by the Company for any reason (in which event this
Subscription Agreement shall be deemed to be rejected), this Subscription
Agreement and any other agreement entered into between the Subscriber and the
Company relating to this subscription shall thereafter have no force or effect
and the Company shall promptly cause to be returned to the Subscriber the
Purchase Price remitted by the Subscriber, without interest thereon or deduction
therefrom. In the event that this subscription is accepted in part, the Company
shall promptly cause to be returned to the Subscriber that portion of the
Purchase Price remitted by the Subscriber which represents payment for the Note
for which this subscription was not accepted, without interest thereon or
deduction therefrom.
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6. INDEMNIFICATION AND HOLD HARMLESS.
The Subscriber agrees that if the Subscriber breaches any
agreement, representation or warranty the Subscriber has made in this
Subscription Agreement, the Subscriber agrees to indemnify and hold harmless the
Company and its directors, officers, employees, shareholders, financial
advisors, attorneys and accountants against any claim, liability, loss, damage
or expense (including, without limitation, attorneys' fees and other costs of
investigating and litigating claims) caused, directly or indirectly, by the
Subscriber's breach.
7. MISCELLANEOUS.
(a) This Subscription Agreement states the entire
understanding between the parties with respect to the subject matter hereof, and
supersedes all prior oral and written communications and agreements, and all
contemporaneous oral communications and agreements, with respect to the subject
matter hereof. The Company's Executive Summary is not part of this Subscription
Agreement and is subject to change as circumstances require.
(b) This Subscription Agreement, upon acceptance by the
Company, shall bind, benefit, and be enforceable by and against each party
hereto and its successors, assigns, heirs administrators and executors. This
Subscription Agreement is not transferable or assignable by the Subscriber. The
agreements, representations and warranties contained herein shall be deemed to
be made by and be binding upon the Subscriber and such Subscriber's heirs,
executors, administrators, other personal representatives, and their respective
successors and permitted assigns.
(c) If any provision of this Subscription Agreement is
construed to be invalid, illegal or unenforceable, then the remaining provisions
hereof shall not be affected thereby and shall be enforceable without regard
thereto.
(d) Article and section headings in this Subscription
Agreement are for convenience of reference only, do not constitute a part of
this Subscription Agreement, and shall not affect its interpretation.
(e) Words used in this Subscription Agreement shall be
construed to be of such number and gender as the context requires or permits.
Unless a particular context clearly provides otherwise, the words "hereof" and
"hereunder" and similar references refer to this Subscription Agreement in its
entirety and not to any specific Section or subsection.
(f) THIS SUBSCRIPTION AGREEMENT IS MADE UNDER, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
(g) Any notice, demand or other communication which any
party hereto may be required, or may elect, to give to anyone interested
hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a
United States mail letter box, registered or certified mail, return receipt
requested, addressed to such address as may be given herein, or (b) delivered
personally at such address. Notices to the Company shall be addressed to the
Company at 0000 X. Xxxx Xxxx, Xxxxx 000, Xxxxxx, XX 00000, Attention: Xxxxx
Xxxxxxx
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(h) This Subscription Agreement may be executed through the
use of separate signature pages or in any number of counterparts, and each of
such counterparts shall, for all purposes, constitute one agreement binding on
all parties, notwithstanding that all parties are not signatories to the same
counterpart.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Subscription Agreement on the date set forth below.
Print Name of Subscriber(s)
Subscription: I hereby subscribe for, and
------------------------------- agree to purchase a Note for a Purchase
Signature(s) Price of $________.
Residence/Domicile:
Street Number and Street
City/State/Zip Code
-------------------------------
Country
Telephone Number
Social Security/Taxpayer
Identification Number(s)
The Company hereby accepts the foregoing subscription for $________ of a
Note as of September __ , 2005.
By:
-------------------------------
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