SHINER INTERNATIONAL, INC. FORM OF SUBSCRIPTION AGREEMENT
Exhibit
10.2
FORM
OF SUBSCRIPTION
AGREEMENT
This
Subscription Agreement pertains to the offering by Shiner International,
Inc.
(the “Company”)
of up
to Three Million Five Hundred Thousand (3,500,000) units (the “Units”),
with
each Unit consisting of one (1) share of the Company’s common stock (the
“Shares”)
and
warrants to purchase fifteen percent (15%) of one (1) share of the Company’s
common stock at an exercise price of Six Dollars ($6.00) per share (the
“Warrants”),
at a
purchase price of Three Dollars ($3.00) per Unit for an aggregate offering
of a
minimum of Three Million Dollars ($3,000,000) and up to a maximum of Ten
Million
Five Hundred Thousand Dollars ($10,500,000) (the “Offering”).
The
minimum subscription that the Company will accept from any investor is Ten
Thousand (10,000) Units for a purchase price of Thirty Thousand Dollars
($30,000). The Company is making this offering solely to accredited investors
(as defined under Rule 501(a) of Regulation D promulgated under the
Securities Act of 1933, as amended (the “Securities
Act”)).
The
undersigned, intending to be legally bound, hereby offers to pur-chase from
the
Company ________________ Units
for
an aggregate purchase price of $_______________.
The
Company will be deemed to have accepted this offer upon execution by it of
the
Receipt and Acceptance attached to this Subscription Agreement. This
subscription is submitted to the Company subject to its acceptance and in
accordance with, and subject to, the terms and conditions described in, this
Subscription Agreement.
1. Definitions.
In
addition to the terms defined elsewhere in this Subscription Agreement, for
all
purposes of this Subscription Agreement, the following terms shall have the
meanings indicated in this Section 1:
“Affiliate”
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as
such
terms are used in and construed under Rule 144.
“Commission”
means
the Securities and Exchange Commission.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“GAAP”
means
U.S. generally accepted accounting principles.
“Person”
means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Transaction
Documents”
means
this Subscription Agreement, the Warrants, the Registration Rights Agreement
and
any other documents or agreements executed in connection with the transactions
contemplated hereunder.
“Warrant
Shares” means
the
shares of Common Stock issuable upon exercise of the Warrants.
2. Verification
of Investor Suitability under Regulation D. The
undersigned understands that in order to subscribe for the Units in this
Offering, the undersigned must be an “accredited investor” as defined in Section
501 of Regulation D under the Securities Act and the undersigned hereby
represents and warrants that it is an “accredited investor” as such item is
defined in Rule 501(a) promulgated under the Securities Act. Furthermore,
the
Company understands that, as a condition to the Company’s acceptance of this
subscription, the undersigned must complete a Purchaser Questionnaire in
the
form of Exhibit “A” hereto.
3. Amount
and Method of Payment.
The
purchase price for the Units is __________ Dollars ($_______) and shall be
paid
by tender of a check made payable to Shiner International, Inc. or wire transfer
of immediately available funds to the special segregated account set forth
on
the last page hereof (the “Segregated
Account”)
in the
amount of _________________ Dollars ($________) (the “Purchase
Price”).
All
proceeds of this Offering will be deposited in the Segregated Account and
will
not be released to the Company until gross proceeds of at least Three Million
Dollars ($3,000,000) have been deposited into the Segregated Account. If
this
amount is not received before December 31, 2007, then the Purchase Price
shall
be returned to the undersigned in full without interest unless the Company
determines, in its sole discretion, to extend the offering period. Affiliates
of
the Placement Agents and the Company may purchase Units for their own account.
Such purchases will be included in determining whether the minimum amount
of
this Offering has been sold.
4. Acceptance
of Subscription.
(a) The
undersigned understands and agrees that the Company, in its sole discretion,
reserves the right to accept or reject this or any other subscription for
Units
in whole or in part at any time prior to the Closing (as defined
below).
(b) In
the
event that this subscription is rejected in whole or in part, the Company
shall
promptly return all or the applicable portion of the Purchase Price without
interest to the undersigned, as the case may be, and this Subscription
Agree-ment shall thereafter have no force or effect except with respect to
the
portion, if any, of this subscription that is accepted by the
Company.
5. Registration
Rights.
Concurrently
with the execution of this Subscription Agreement, the Company and the
undersigned have entered into a Registration Rights Agreement regarding the
Shares and the Warrant Shares.
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6. Restrictions
on Resale or Transfer.
(a) The
Units, Shares, Warrants and Warrant Shares have not been registered under
the
Securities Act or any state securities laws, and may not be sold or transferred
unless (i) such sale or transfer is subsequently registered thereunder;
(ii) the undersigned shall have delivered to the Company an opinion of
counsel (which opinion and counsel shall be reasonably acceptable to the
Company) to the effect that the securities to be sold or transferred may
be sold
or transferred pursuant to an exemption from such registration; or
(iii) the securities are sold pursuant to Rule 144 promulgated under
the Securities Act (or a successor rule).
(b)
The
certificate(s) representing the Shares and the Warrant Shares and the Warrants
shall each bear restrictive legends in substantially the following form (and
a
stop-transfer order may be placed against transfer of the certificates for
such
securities):
“The
securities represented by this certificate have not been registered under
the
Securities Act of 1933, as amended (the “Securities
Act”),
or
applicable state securities laws, and may not be offered for sale, sold,
transferred or assigned in the absence of an effective registration statement
for the securities under the Securities Act, or an opinion of counsel, in
form,
substance and scope reasonably acceptable to the Company, that registration
is
not required under the Securities Act or unless sold pursuant to Rule 144
under
the Securities Act.”
7. Delivery
of the Stock Certificate and Warrants.
The
Company will execute and deliver certificate(s) representing the Shares and
Warrants to the subscriber within five (5) business days after the occurrence
of
each of the following items: (i) acceptance of the subscription by the Company;
(ii) receipt of the Purchase Price into the Segregated Account; (iii) a closing
of the Offering; and (iv) release to the Company of the Purchase Price from
the
Segregated Account.
8. Representations
and Warranties. The
undersigned hereby acknowledges, represents and warrants to, and agrees with,
the Company as follows:
(a) The
undersigned understands that the offering and sale of the Units by the Company
to the undersigned is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) of the Securities Act and the
provisions of Rule 506 of Regulation D promulgated thereunder and, in accordance
therewith and in furtherance thereof, the undersigned represents and warrants
to
and agrees with the Company as follows:
(i) The
undersigned has carefully reviewed this Subscription Agreement and the
Confidential Purchaser Questionnaire attached as Exhibit “A” hereto, the Form of
Stock Purchase Warrant attached as Exhibit “B” hereto, the Registration Rights
Agreement attached as Exhibit “C” hereto and the Confidential Private Offering
Memorandum attached as Exhibit “D” hereto, and understands the information
contained in each such document including, but not limited to, the Company’s
audited financial statements dated as of December 31, 2006 and for the year
then
ended included in Exhibit “D” and its unaudited financial statements dated as of
March 31, 2007 and for the quarter then ended included in Exhibit
“D.”
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(ii) All
documents, records and books pertaining to the Company and/or this investment
that the undersigned has requested have been made available for inspection
by
him and/or his attorney, accountant and other advisor(s);
(iii) The
undersigned and/or his advisor(s) have had a reasonable opportunity to ask
questions of and receive information and answers from a person or persons
acting
on behalf of the Company concerning the offering of the Units and all such
questions have been answered and all such information has been provided to
the
full satisfaction of the undersigned;
(iv) Neither
the undersigned nor the undersigned’s investment advisors, if any, have been
furnished any offering literature other than this Subscription Agreement
and the
exhibits attached hereto and the undersigned and the undersigned’s advisors, if
any, have relied only on the information contained in this Subscription
Agreement and the exhibits attached hereto and the information, as described
in
subparagraphs (ii) and (iii) above, furnished or made available to them by
the
Company;
(v) No
oral
or written representations have been made and no oral or written information
has
been furnished to the undersigned or his advisor(s) in connection herewith
that
were in any way inconsistent with the information set forth in this Subscription
Agreement and the exhibits attached hereto;
(vi) The
undersigned is not subscribing for the Units as a result of or subsequent
to any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio,
or
presented at any seminar or meeting;
(vii) The
undersigned acknowledges that he has conducted his own independent evaluation
of
the Company and has analyzed the risks associated with an investment in the
Units and has based his decision to invest in the Units on the results of
this
evaluation and analysis;
(viii) The
undersigned’s overall commitment to investments that are not readily market-able
is not disproportionate to the undersigned’s net worth and the undersigned’s
investment in the Company will not cause such overall commitment to become
disproportionate to the undersigned’s net worth;
(ix) If
the
undersigned is a natural person, the undersigned has reached the age of
ma-jority in the jurisdiction in which the undersigned resides, has adequate
net
worth and means of providing for the undersigned’s current financial needs and
personal contingencies, is able to bear the substantial economic risks of
an
investment in the Units for an indefinite period of time, has no need for
liquidity in such investment and, at the present time, could afford a complete
loss of such investment;
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(x) The
address set forth below is the undersigned’s true and correct residence (or, if
not an individual, domiciliary) address;
(xi) The
undersigned (A) has such knowledge of, and experience in, business and financial
matters so as to enable him to utilize the information made available to
him in
connection with the offering of the Units in order to evaluate the merits
and
risks of an investment in the Units and to make an informed investment decision
with respect thereto, (B) the undersigned has carefully evaluated the risks
of
investing and (C) has the capacity, either alone, or with a professional
advisor, to protect his own interests in connection with a purchase of the
Units;
(xii) The
undersigned is not relying on the Company with respect to the economic
considerations of the undersigned relating to this investment. In regard
to such
considerations, the investor has relied on the advice of, or has consulted
with,
only his own advisor(s). The undersigned recognizes that the information
furnished by the Company does not constitute investment, accounting, legal
or
tax advice. The undersigned is relying on professional advisors for such
advice;
(xiii) The
undersigned is acquiring the Units solely for his own account as principal,
for
investment purposes only and not with a view to the resale or distribution
thereof, in whole or in part, and no other person has a direct or indirect
beneficial interest in such Units;
(xiv) The
undersigned understands that the certificate(s) evidencing ownership of the
Shares and the Warrant Shares and the Warrants will each bear a restrictive
legend and have not been registered under the Securities Act or any state
securities laws, and may not be sold or transferred unless (i) such sale or
transfer is subsequently registered thereunder; (ii) the undersigned shall
have delivered to the Company an opinion of counsel (which opinion and counsel
shall be reasonably acceptable to the Company) to the effect that the securities
to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration; or (iii) the securities are sold pursuant to
Rule 144 promulgated under the Securities Act (or a successor
rule);
(xv) The
undersigned understands that the price of the Units has been determined
arbitrarily by the Company and may not be indicative of the true value of
the
Units. The undersigned understands that no assurances can be given that the
Shares, the Warrants or the Warrant Shares could be resold by the Subscriber
for
the subscription price or any price and he/she/it has made an independent
determination of the fairness of the subscription price; and
(xvi) The
undersigned has completed and returned to the Company a Purchaser Questionnaire,
in the form attached as Exhibit “A” hereto. The information provided by the
undersigned in the Purchaser Questionnaire is true and correct and the
undersigned understands that the Company is relying upon such information
in
connection with the purchase of the Units by the undersigned.
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(b) The
undersigned recognizes that an investment in the Units involves a number
of
signifi-cant risks including, but not limited to, those risks described in
Exhibit “D” hereto.
(c) The
undersigned understands that no federal or state agency has passed upon the
Units or made any finding or determination as to the fairness of this investment
in the Units.
(d) All
information that the undersigned has heretofore furnished and furnishes herewith
to the Company are true, correct and complete as of the date of execution
of
this Subscription Agreement and if there should be any material change in
such
information prior to the closing of the sale of the Units (the “Closing”),
the
undersigned will immediately furnish such revised or corrected informa-tion
to
the Company.
(e) The
undersigned acknowledges and agrees that the Company intends to pay commissions
to any registered broker/dealer or finder designated a selected dealer on
all
sales to qualified accredited investors that it refers to the Company. These
commissions will consist of (i) cash equal to eight percent (8%) of the gross
proceeds received by the Company from such sales, plus (ii) a warrant to
purchase that number of shares of common stock equal to fifteen percent (15%)
of
the aggregate Units sold in the Offering by such registered broker/dealer
or
finder in the form attached as Exhibit “B” hereto.
(f) The
foregoing representations, warranties and agreements, together with all other
representations and warranties made or given by the undersigned to the Company
in any other written statement or document delivered in connection with the
transactions contemplated hereby, shall be true and correct in all respects
on
and as of the date of the Closing as if made on and as of such date and shall
survive such date. If more than one person is signing this Subscription
Agreement, each representation, warranty and undertaking herein shall be
the
joint and several representation, warranty and undertaking of each such
person.
9. Representations
and Warranties of the Company.
The
Company hereby acknowledges, represents and warrants to, and agrees with,
the
undersigned as follows:
(a) Organization
and Qualification.
The
Company is duly incorporated or otherwise organized, validly existing and
in
good standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
The
Company is not in violation of any of the provisions of its certificate or
articles of incorporation, bylaws or other organizational or charter documents.
The Company is duly qualified to conduct its business and is in good standing
as
a foreign corporation or other entity in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary.
(b) Authorization;
Enforcement.
The
Company has the requisite corporate power and authority to enter into and
to
consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company in connection therewith. Each Transaction
Document has been (or upon delivery will have been) duly executed by the
Company
and, when delivered in accordance with the terms hereof, will constitute
the
valid and binding obligation of the Company enforceable against the Company
in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.
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(c) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby
do
not and will not (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational
or
charter documents, or (ii) conflict with, or constitute a default (or an
event
that with notice or lapse of time or both would become a default) under,
or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company debt or otherwise)
or
other understanding to which the Company is a party or by which any property
or
asset of the Company is bound or affected, or (iii) result in a violation
of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by which
any
property or asset of the Company is bound or affected.
(d) Filings,
Consents and Approvals.
The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or
other federal, state, local, foreign or other governmental authority or other
Person in connection with the execution, delivery and performance by the
Company
of the Transaction Documents, other than (i) the filing with the Commission
of
one or more Registration Statements in accordance with the requirements of
the
Registration Rights Agreement, (ii) filings required by state securities
laws,
(iii) the filing of a Notice of Sale of Securities on Form D with the Commission
under Regulation D of the Securities Act, and (iv) those that have been made
or
obtained prior to the date of this Subscription Agreement.
(e) Issuance
of the Units.
The
Units have been duly authorized and, when issued and paid for in accordance
with
the Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all liens and encumbrances. The Company
has
reserved from its duly authorized capital stock the shares of Common Stock
issuable pursuant to this Agreement and the Warrants in order to issue the
Shares and the Warrant Shares.
10. Indemnification.
The
undersigned agrees to indemnify and hold harmless the Company and the officers
and directors thereof and each other person, if any, who controls the Company,
within the meaning of Section 15 of the Securities Act, against any and all
loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all expenses reasonably incurred in investigating, preparing
or defending against any litigation commenced or threatened or any claim
whatsoever) arising out of or based upon any false representations or warranty
or breach or failure by the undersigned to comply with any covenant or agreement
made by the undersigned herein or in any other document furnished by the
undersigned to the Company in connection with this transaction.
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11. Additional
Information. The
undersigned hereby acknowledges and agrees that the Company may make or cause
to
be made such further inquiry and obtain such addi-tional information as it
may
deem appropriate with regard to the suitability of the undersigned as an
investor in the Units.
12. Binding
Effect.
The
undersigned hereby acknowledges and agrees that, except as provided under
applicable state securities laws, the subscription hereunder is irrevocable,
that the undersigned is not entitled to cancel, terminate or revoke this
Subscription Agreement or any agreements of the undersigned hereunder and
that
this Subscription Agreement and such other agreements shall survive the death
or
disability of the undersigned and shall be binding upon and inure to the
benefit
of the parties and their heirs, executors, administrators, successors, legal
representatives and assigns. If the undersigned is more than one person,
the
obligations of the undersigned hereunder shall be joint and several and the
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person and
his/her/its heirs, executors, admin-istrators, successors, legal representatives
and assigns.
13. Modification.
Neither
this Subscription Agreement nor any provisions hereof shall be waived, modified,
discharged or terminated except by an instrument in writing signed by the
party
against whom any such waiver, modification, discharge or termination is
sought.
14. Notices.
Any
notice, demand or other communication that any party hereto may be required,
or
may elect, to give to any other party hereunder shall be sufficiently given
if
(a) deposited, postage prepaid, in a United States mail box, stamped, registered
or certified mail, return receipt requested, addressed to such address as
may be
listed on the books of the Company, or (b) delivered personally at such
address.
15. Counterparts.
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. This Subscription
Agreement may be executed and delivered via electronic facsimile transmission
with the same force and effect as if it were executed and delivered by the
parties simultaneously in the presence of one another.
16. Entire
Agreement.
This
Subscription Agreement contains the entire agreement of the parties with
respect
to the subject matter hereof and there are no representations, covenants
or
other agreements except as stated or referred to herein.
17. Severability.
Each
provision of this Subscription Agreement is intended to be severable from
every
other provision, and the invalidity or illegality of any provision shall
not
affect the validity or legality of the remaining provisions.
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18. Assignability.
This
Subscription Agreement is not transferable or assignable by the
undersigned.
19. Applicable
Law.
This
Subscription Agreement shall be governed by and construed in accordance with
the
laws of the Commonwealth of Pennsylvania as applied to residents of that
jurisdiction executing contracts wholly to be performed therein.
20. Choice
of Jurisdiction.
The
undersigned agrees that any action or proceeding directly or indirectly relating
to or arising out of this Subscription Agreement, any breach hereof, or any
transaction covered hereby shall be resolved, whether by arbitration or
otherwise, within the Commonwealth of Pennsylvania. Accordingly, the parties
consent and submit to the jurisdiction of the state courts of the Commonwealth
of Pennsylvania located within Philadelphia, Pennsylvania or the United States
federal courts located in the Eastern District of Pennsylvania. The parties
further agree that any such relief whatsoever in connection with this
Subscription Agreement shall be commenced by such party exclusively in the
state
courts of the Commonwealth of Pennsylvania located within Philadelphia,
Pennsylvania or the United States federal courts located in the Eastern District
of Pennsylvania.
21. Reimbursement.
If any
action or other proceeding is brought for the enforcement of this Subscription
Agreement or because of an alleged dispute, breach, default or misrepresentation
in connection with any of the provisions of this Subscription Agreement,
the
suc-cessful or prevailing party or parties shall be entitled to recover
reasonable attorney’s fees and other costs incurred in such action or proceeding
in addition to any other relief to which they may be entitled.
22. Further
Assurances.
Each of
the parties shall execute said documents and other instruments and take such
further actions as maybe reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.
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Subscription
Information (to be completed by individual subscriber):
Units
Purchased
____________________________________________________________________________________________________
Purchase
Price of Units (Number of Units Purchased x $3.00 per Unit)
____________________________________________________________
Name(s)
in which the Units is to be registered:
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
Home
Address
_____________________________________________________________________________________________________
Mailing
Address
____________________________________________________________________________________________________
Form
of
joint ownership (if applicable). (If one of these items is checked, subscriber
and co-subscriber must both sign all documents.):
|
Tenants-in-Common
________________________________
|
Joint
Tenants
________________________________
|
IN
WITNESS WHEREOF,
the
undersigned has caused this Subscription Agreement to be duly executed on
the
____ day of ___________, 2007.
|
Please
Print Name of Subscriber
|
Signature
of Subscriber
|
Social
Security Number
|
||
|
Please
Print Name of Co-Subscriber
|
Signature
of Co-Subscriber
|
Social
Security Number
|
[ATTACH
CHECK HERE]
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THIS
PORTION NOT TO BE COMPLETED BY SUBSCRIBER
RECEIPT
AND ACCEPTANCE
CASH
OR
CHECK AND SUBSCRIPTION AGREEMENT RECEIVED ON ______________,
2007.
By:
_________________________________
SUBSCRIPTION
ACCEPTED ON __________________,
2007.
By:_________________________________
Name:
Title:
WIRE
TRANSFER INSTRUCTIONS
If
Subscriber wishes to wire transfer the purchase price of his Units, he or
she
shall wire transfer immediately available funds in the amount of the Purchase
Price subscribed for hereunder, as follows:
Bank: Commerce
Bank, NA
Account
Name: Shiner
International Inc.
Account
No.: #372004010
Bank
Routing No.: #000000000
Swift
Code: XXXXXX00
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EXHIBIT
A
CONFIDENTIAL
PURCHASER QUESTIONNAIRE
12
EXHIBIT
B
FORM
OF STOCK PURCHASE WARRANT
13
EXHIBIT
C
FORM
OF REGISTRATION RIGHTS AGREEMENT
14
EXHIBIT
D
CONFIDENTIAL
PRIVATE OFFERING MEMORANDUM
15
