SUBSCRIPTION AGREEMENT
August 25, 2005
New Generation Holdings, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
The undersigned investor (the "Investor) hereby agrees with you as
follows:
1. The Investor hereby agrees to purchase five million (5,000,000)
separable units (the "Units") of New Generation Holdings, Inc., a Delaware
corporation (the "Company") for an aggregate purchase price of US$ five hundred
thousand and 00/100 (500,000). Each Unit shall consist of: (a) one (1) share (a
"Share") of Common Stock, par value US$0.001 per share of the Company, and (b) a
warrant (a "Warrant") to purchase one (1) share of Common stock, par value
US$0.001 per share, of the Company for every Share at a price of US$0.35 per
share for a period of three (3) years from the date hereof
2. In connection with its purchase the Investor shall deliver (or has
delivered), in addition to two (2) executed copies of this Agreement, its check,
subject to collection, for the full amount of the purchase price of the Units
payable to the order of "New Generation Holdings, Inc." in the amount set forth
at the end of this Agreement. In lieu of delivery of a check, the Investor may
send a wire transfer of immediately available funds and can get appropriate wire
transfer instructions from the Company. The Investor agrees and acknowledges
that this Subscription Agreement is and shall be irrevocable and that the
purchase price is due and payable upon execution hereof.
3. The Investor represents warrants and agrees as follows, and the
Investor acknowledges that the Investor has full knowledge that the Company
intends to rely on such representations, warranties and agreements:
(a) The Investor understands that this transaction has not been
reviewed or passed upon by any governmental agency, Federal or state; that the
Investor must bear the economic risk of its investment for an indefinite period;
that the Units have not been registered under the United States Securities Act
of 1933, as amended (the "1933 Act") and, therefore, cannot be resold or
otherwise disposed of unless subsequently registered under the 1933 Act or
unless an exemption from such registration is available; that the Investor is
purchasing the Units for investment for the account of the Investor and not with
any view toward resale or other distribution thereof: that the Investor agrees
not to resell or otherwise dispose of all or any part of the Units, except as
permitted by law, including, without limitation, any and all applicable
regulations under the 1933 Act. For the foregoing reasons, an Investor will be
required to retain ownership of the Units and bear the economic risk of its
investment for an indefinite period.
(b) The Investor has no need for liquidity in connection with its
purchase of the Units.
(c) The Investor currently has and had immediately prior to receipt
of any offer regarding the Company such knowledge and experience in financial
and business matters to be able to evaluate the merits and risks of an
investment in the Units.
(d) The Investor is not acquiring the Units with a view to realizing
any benefits under United States Federal income tax laws, and no representations
have been made to the Investor that any such benefits will be available as a
result of the Investor's acquisition, ownership, or disposition of the Units.
(e) One or more of the categories set forth below correctly and in
all respects describes each Investor, and the Investor has no indicated by
signing its name, or by directing its duly authorized representatives to sign in
its name and on its behalf, by circling the category or categories which so
describe it or, if no such categories are applicable, it has so indicated by
signing its name on the blank line that immediately follows:
(i) The Investor is a natural person whose net worth, either
individually or jointly with such person's spouse, at the time of its purchase,
exceeds $1,000,000.
(ii) The Investor is a natural person who had individual
income in excess of $2,000,000 (or joint income with the Investor's spouse in
excess of $300,000) in 2002 and 2003 and reasonably expects to have individual
income in excess of $200,000 (or joint income with the Investor's spouse in
excess of $300,000) in 2004.
(iii) The Investor is a director of executive of the Company.
(iv) The Investor is an entity which falls within one of the
following categories of institutional accredited investors set forth in Rule
501(a) of Regulation D ("Regulation D") under the 1933 Act (sign on blank line
following category of institutional accredited investor which describes the
Investor):
(A) A Bank as defined in Section 3(a)(2) of the 1933
Act or a savings and loan or other institution as defined in Section 3(a)(5)(A)
of the 1933 Act, whether acting in regard to this investment in its individual
or a fiduciary capacity.
(B) An insurance company as defined in Section 2(13)
of the 1933 Act.
(C) An investment company registered under the
Investment Company Act of 1940.
(D) A business development company as defined in
Section 2(a) (48) of the Investment Company Act of 1940.
(E) A Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
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(F) An employee benefit plan within the meaning of
Title I of the Employment Retirement Income Security Act of 1974, if the
investment decision regarding this investment was made by a bank, insurance
company or registered investment adviser, acting as a plan fiduciary, as defined
in Section 3(21) of such act.
(G) An employee benefit plan within the meaning if
Title I of the Employment Retirement Income Security Act of 1974 with total
assets in excess of $5,000,000, whether or not the investment decision regarding
this investment was made by a bank, insurance company or registered investment
adviser.
(H) Private Business Development Company as defined
in Section 202(a)(22) of the Investment Advisers Act of 1970.
(I) An organization described in Section 501(c)(3) of
the Internal Revenue Code, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the Units, with
total assets in excess of $5,000,000.
(J) The Investor is an entity in which all of the
equity holders are accredited investors as set forth in Rule 501(a)(8) of
Regulation D and described in one or more of the categories set forth above in
the subparagraphs of this Paragraph.
4. The Investor understands that its answers to the questions set forth
herein will be kept confidential by the Company. However, the Investor agrees
that the Company may present this Subscription Agreement to those parties that
it deems appropriate if called upon to establish the Company's entitlement to a
limited or private offering exemption under the 1933 Act or any applicable state
securities law.
5. The Investor agrees that upon the request of the Company, at any time
prior to closing of the transactions contemplated hereby, the Investor shall
promptly execute and deliver to the Company any agreements or instruments as it
many reasonably request in order to effect the purchase and issuance of the
Units.
6. The Company shall have the right, in its sole discretion, to imprint
upon the Shares and Warrants issued hereunder and legends relating to the 1933
Act or state securities law or other applicable law as it deems necessary or
advisable; provided, however, that they Company agrees to remove such legend and
bear all costs and expenses or removal upon the registration of the Shares of
the Company's common stock underlying the Warrants (the "Underlying Shares")
upon the applicability of an exemption from registration with respect to such
Shares and/or Underlying Shares.
7. The representations, warranties and agreements herein contained are
made and given for the benefit of the Company and to induce the Company to sell
and issue the Units to the Investor and each constitutes a material portion of
the consideration therefore. The undersigned shall not be entitled to cancel,
terminate or revoke this subscription except as permitted by applicable law.
8. Each party hereto will pay its own expenses relating to this
Subscription Agreement and the purchase of the Units by the Investor hereunder.
9. This Subscription Agreement or any term hereof may be not changed,
waived, discharged or terminated except with the prior written consent of the
Investor and the Company.
10. The Subscription Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of law applicable thereto.
11. The Subscription Agreement (i) shall be binding upon the Investor and
the legal representatives, successors and assigns of the Investor, (ii) shall
survive the closing of the transactions contemplated hereby and (iii) shall, if
the Investor consists or more than one person, be the joint in several
obligation of all such persons. This Subscription Agreement may be executed in
one or more duplicate originals that shall, either singly or together, serve to
represent one agreement between the parties.
12. This Subscription Agreement shall not bind the Company until accepted
by it.
IN WITNESS WHEREOF, the Investor has executed this Subscription
Agreement on the day and year first above written.
Lombard Odier Xxxxxx Xxxxxxx & Cie
by proxy:
--------------------------
(Name of Entity)
/s/ X. Xxxx /s/ Xxxxx Xxxxxxx
-------------- -----------------
X. XXXX Xxxxx Xxxxxxx
Vice President Assistant Manager
By:__________________________
(Signature of Officer)
or
----------------------------
(Name)
The Investor hereby agrees to purchase five million (5,000,000) Units for an
aggregate purchase price of US$ five hundred thousand and 00/1000 (500'000.00)
THE FOREGOING SUBSCRIPTION AGREEMENT IS HEREBY AGREED TO BY THE COMPANY:
NEW GENERATION HOLDINGS, INC.
By: /s/ Jacques Mot Dated: 8/25/05
-------------------
Name: Jacques Mot
Title: Chairman
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