Contract
Exhibit
10.7
THIS
AGREEMENT RELATES TO AN OFFERING OF NOTES PURSUANT TO REGULATIONS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). NONE OF THE NOTES TO WHICH THIS
AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE ACT, AND, UNLESS SO REGISTERED,
MAY ONLY BE OFFERED OR SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN EACH CASE ONLY IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS.
BUZZ
KILL, INC.
SUBSCRIPTION AGREEMENT (the "Agreement") made as of July
___, 2007 between Buzz Kill, Inc., a New York corporation, (the "Company"), and the undersigned
(the "Subscriber").
WHEREAS, the Company is offering
pursuant to Rule 506 promulgated pursuant to the Securities Act of 1933, as
amended (the “Securities
Act”), to investors in a private placement transaction (the “Offering”) of up to $300,000
of the Company’s notes (the “Notes”);
WHEREAS, the Subscriber desires to
subscribe for, purchase and acquire from the Company and the Company desires to
sell and issue to the Subscriber, the Notes in the principal amount set forth on
the signature page of this Agreement upon the terms and conditions and subject
to the provisions hereinafter set forth;
WHEREAS, the Company and Gottbetter
& Partners, LLP (the
“Escrow Agent”) will
enter into an Escrow Agreement (the “Escrow Agreement”) to provide
for the safekeeping of funds received and documents executed in connection with
the Offering; and
WHEREAS, the Escrow Agent shall
continue to hold the proceeds of the Offering in escrow pending the closing
(“Closing”);
NOW, THEREFORE, for and in
consideration of the mutual premises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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I.
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SUBSCRIPTION
FOR NOTES; REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
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1.1 Purchase
and Sale of the Notes. Subject to the terms and conditions of
this Agreement, the Subscriber subscribes for and agrees to purchase and acquire
from the Company and the Company agrees to sell and issue to the Subscriber, at
par, such amount of Notes which is set forth on the signature page hereof (“Purchase
Price”).
1.2 Completion
and Closing of the Offering. The Offering will
be completed at the Closing at a time and place to be mutually agreed among the
parties.
1.3 Subscription
Procedure. To complete a subscription for Notes, the
Subscriber must fully comply with the subscription procedures provided in this
Section 1.3.
(a) Transaction
Documents. The Subscriber shall review, complete and execute
this Agreement and deliver such transaction documents (“Transaction Documents”) to
the Escrow Agent at the address provided below. Executed agreements
may be delivered to the Escrow Agent by facsimile using the facsimile number
provided below if the Investor immediately thereafter confirms receipt of such
transmission with the Escrow Agent and delivers the original copies of the
agreements and questionnaire to the Escrow Agent as soon as practicable
thereafter.
Escrow Agent – Mailing
Address and Facsimile Number:
Xxxxxxx Xxxxx, Esq.
0000 Xxxxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
Facsimile Number: (000)
000-0000
Telephone Number: (000)
000-0000
(b) Payment
of Purchase Price. Simultaneously with the delivery of the
Transaction Documents to the Escrow Agent as provided herein, the Subscriber
shall deliver to the Escrow Agent the full Purchase Price for the Subscriber’s
Notes by check payable to “Gottbetter & Partners, LLP as Escrow Agent for
Buzz Kill, Inc.” or by wire transfer of immediately available funds pursuant to
wire transfer instructions provided below:
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Bank:
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The
Chase Manhattan Bank
000
X. 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
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Routing
#:
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000000000
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Account
#:
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987100303565
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Name
on Account:
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Xxxxxxx
X. Xxxxx, PLLC
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Sub-Account
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Buzz
Kill, Inc.
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Telephone
contact is (000) 000-0000.
1.4 Access to Information; Reliance on
Exemptions.
(a) The
Subscriber has received and carefully reviewed such information and
documentation relating to the Company that the Subscriber has
requested.
(b) The
Subscriber has had a reasonable opportunity to ask questions of and receive
answers from the Company concerning the Company and the Offering, and all such
questions, if any, have been answered to the full satisfaction of the
Subscriber;
(c) The
Subscriber has such knowledge and expertise in financial and business matters
that the Subscriber is capable of evaluating the merits and risks involved in an
investment in the Notes;
(d) The
Subscriber understands that the Company has determined that the exemption from
the registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), provided by Rule 506 of Regulation D is applicable to the
offer and sale of the Notes, based, in part, upon the representations,
warranties and agreements made by the Subscriber herein;
(e) Except
as set forth herein, no representations or warranties have been made to the
Subscriber by the Company or any agent, employee or affiliate of the Company and
in entering into this transaction the Subscriber is not relying upon any
information, other than the results of independent investigation by the
Subscriber;
(f) The
Subscriber has full power and authority to execute and deliver this Subscription
Agreement and to perform the obligations of the Subscriber hereunder and this
Subscription Agreement is a legally binding obligation of the Subscriber in
accordance with its terms;
(g) Regulation
D.
(i) The
Subscriber understands and acknowledges that the Notes have not been registered
under the Securities Act or the securities laws of any state, based upon an
exemption from such registration requirements for non-public offerings pursuant
to Rule 506 of Regulation D under the Securities Act; (B) the Notes are and will
be "restricted securities", as said term is defined in Rule 144 of the Rules and
Regulations promulgated under the Securities Act; (C) the Notes may not be sold
or otherwise transferred unless they have been first registered under the
Securities Act and all applicable state securities laws, or unless exemptions
from such registration provisions are available with respect to said resale or
transfer; and (D) except as otherwise provided in this Agreement, the Company is
under no obligation to register the Notes under the Securities Act or any state
securities law, or to take any action to make any exemption from any such
registration provisions available.
(ii) The
Subscriber will not sell or otherwise transfer any of the Notes, or any interest
therein, unless and until (A) said Notes shall have first been registered under
the Securities Act and all applicable state securities laws; or (B) the
Subscriber shall have first delivered to the Company a written opinion of
counsel (which counsel and opinion (in form and substance) shall be reasonably
satisfactory to the Company), to the effect that the proposed sale or transfer
is exempt from the registration provisions of the Securities Act and all
applicable state securities laws.
(iii) The
Subscriber is acquiring the Notes for its own account for investment purposes
only and not with a view to or for distributing or reselling such Notes or any
part thereof or interest therein, without prejudice, however, to the Subscriber
's right, subject to the provisions of this Subscription Agreement, at all times
to sell or otherwise dispose of all or any part of such Notes pursuant to an
effective registration statement under the Securities Act and in compliance with
applicable federal and state securities laws or under an exemption from such
registration.
(iv) At
the time the Subscriber was offered the Notes, it was, and at the date hereof it
is, and it will be, an "accredited investor" as defined in Rule 501(a) under the
Securities Act.
(v) The
Subscriber 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 Notes, and has so evaluated the merits and risks
of such investment.
(vi) The
Subscriber is able to bear the economic risk of an investment in the Notes and,
at the present time, is able to afford a complete loss of such
investment.
(vii) The
Subscriber understands that no federal or state agency has approved or
disapproved the Notes, passed upon or endorsed the merits of the offering
thereof, or made any finding or determination as to the appropriateness of the
Notes for investment.
(viii) The
Subscriber understands that the certificates representing the Notes will bear a
legend in substantially the following form:
THE NOTES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF IN ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH NOTES UNDER SAID ACT OR (II) AN OPINION OF COMPANY COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
1.5 Rejection of Subscriptions.
This Offering is made subject to withdrawal, cancellation or modification by the
Company. The Company reserves the right to reject any subscription in whole or
in part or to allot to any prospective Subscriber fewer than the number of Notes
subscribed for by such Subscriber. Notes will be sold only to a limited number
of Subscribers meeting certain standards.
1.6 Tax Consequences. The
Subscriber acknowledges that the offering may involve tax consequences and that
this Agreement does not contain tax advice or information. The Subscriber
acknowledges that it must retain its own professional advisors to evaluate the
tax and other consequences of an investment in the Notes.
1.7 Validity; Enforcement. If the
Subscriber is a corporation, partnership, trust or other entity, the Subscriber
represents and warrants that: (a) it is authorized and otherwise duly qualified
to purchase and hold the Notes; and (b) that this Subscription Agreement has
been duly and validly authorized, executed and delivered and constitutes the
legal, binding and enforceable obligation of the Subscriber. If the Subscriber
is an individual, the Subscriber represents and warrants that this Subscription
Agreement has been duly and validly executed and delivered and constitutes the
legal, binding and enforceable obligation of the Subscriber.
1.8 Address. The Subscriber hereby
represents that the address of the Subscriber furnished by the Subscriber at the
end of this Subscription Agreement is the Subscriber's principal residence if
the Subscriber is an individual or its principal business address if it is a
corporation or other entity.
II. REPRESENTATIONS
OF THE COMPANY
2.1 Organization, Good Standing and
Qualification. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York and has
full corporate power and authority to conduct its business.
2.2 Capitalization and Voting
Rights. The authorized, issued and outstanding capital stock of the
Company is 300 million shares of Common Stock and 10 million shares of preferred
stock and all issued and outstanding shares of the Company are validly issued,
fully paid and nonassessable. There are no outstanding options,
warrants, agreements, convertible securities, preemptive rights or other rights
to subscribe for or to purchase any shares of capital stock of the
Company. Except as otherwise required by law, there are no
restrictions upon the voting or transfer of any of the shares of capital stock
of the Company pursuant to the Company's Certificate of Incorporation (the
"Certificate of Incorporation"), By-Laws or other governing documents or any
agreement or other instruments to which the Company is a party or by which the
Company is bound.
2.3 Authorization; Enforceability.
The Company has all corporate right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. All corporate
action on the part of the Company, its directors and stockholders necessary for
the (i) authorization execution, delivery and performance of this Agreement by
the Company; and (ii) authorization, sale, issuance and delivery of the Notes
contemplated hereby and the performance of the Company's obligations hereunder
has been taken. This Agreement constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, and to limitations of public
policy.
2.4 No Conflict; Governmental
Consents.
(a) The
execution and delivery by the Company of this Agreement and the consummation of
the transactions contemplated hereby will not result in the violation of any
material law, statute, rule, regulation, order, writ, injunction, judgment or
decree of any court or governmental authority to or by which the Company is
bound, or of any provision of the Certificate of Incorporation or By-Laws of the
Company, and will not conflict with, or result in a material breach or violation
of, any of the terms or provisions of, or constitute (with due notice or lapse
of time or both) a default under, any lease, loan agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to which the Company
is a party or by which it is bound or to which any of its properties or assets
is subject, nor result in the creation or imposition of any lien upon any of the
properties or assets of the Company.
(b) No
consent, approval, authorization or other order of any governmental authority is
required to be obtained by the Company in connection with the authorization,
execution and delivery of this Agreement or with the authorization, issue and
sale of the Notes.
III. CONDITION
3.1 The
Company shall have no obligation to sell the Notes and the Subscriber shall have
no obligation to purchase a Note if shareholders representing a majority of the
voting power of Eastern Resources, Inc., a Delaware corporation, have not
authorized the issuance and sale of the Notes.
IV. MISCELLANEOUS
4.1.
Notice. Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Agreement must be in writing and will be deemed to have been
delivered: (a) upon receipt, when delivered personally, (b) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party), or (c) one (1)
business day after deposit with an overnight courier service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Subscriber:
If to the Company:
Buzz Kill, Inc.
0 Xxxx Xxxxxx Xxxxx, Xxxxx
00X
Xxx Xxxx,
XX 00000
With a copy to:
Gottbetter & Partners,
LLP
000 Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, XX 00000
Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: 212.400.6901
or to
such other address and/or facsimile number and/or to the attention of such other
person as specified by written notice given to the Company five (5) days prior
to the effectiveness of such change. Written confirmation of receipt (a) given
by the recipient of such notice, consent, waiver or other communication, (b)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission, or (c) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (a), (b) or (c) above,
respectively.
4.2 Entire Agreement; Amendment.
This Agreement supersedes all other prior oral or written agreements between the
Subscriber, the Company, their affiliates and persons acting on their behalf
with respect to the matters discussed herein, and this Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Subscriber
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be amended or waived other than by
an instrument in writing signed by the Company and the holders of at least a
majority of the Notes acquired (or if prior to the Closing, the Subscribers
purchasing at least a majority of the Notes to be purchased at the
Closing).
4.3 Severability. If any provision
of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.
4.4 Governing Law; Jurisdiction; Waiver
of Jury Trial. This Agreement shall be governed by, and construed in
accordance with the laws of the State of New York without regard to the choice
of law principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York for the purpose of
any suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
4.5 Headings. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.
4.6 Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least a majority of the Notes acquired, except by
merger or consolidation. The Subscriber shall not assign its rights hereunder
without the consent of the Company, which consent shall not be unreasonably
withheld.
4.7 No Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.
4.8 Survival. The representations
and warranties of the Company and the Subscriber contained in Articles I and II
and the agreements set forth this Article IV shall survive closing for a period
of two years.
4.9 Further Assurances. Each party
shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
4.10 No Strict Construction. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party.
4.11 Legal Effect. The Subscriber
acknowledges that: (a) it has read this Agreement and (b) it understands the
terms and consequences of this Agreement and is fully aware of its legal and
binding effect.
4.12 Counterparts. This Agreement
may be executed in two or more identical counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.
[Signature
page follows.]
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year first written above.
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Amount
of Notes Subscribed For
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Name
of Subscriber
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Signature
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Name
(Please Print)
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Title
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Address
of Subscriber
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Taxpayer
Identification Number of Subscriber
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Subscription
Accepted:
BUZZ
KILL, INC.
By:_____________________
Name: Xxxxxx
Xxxxx
Title: President
