EXHIBIT 10.20
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PURCHASER'S SUBSCRIPTION AND ACKNOWLEDGMENT
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Xxxxxx.xxx Corporation
(A Delaware Corporation)
Xxxxxx.xxx Corporation
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 X.X.X.
Ladies and Gentlemen:
1. Placement. Pursuant to the private offer made by Xxxxxx.xxx
Corporation (the "Company") to sell to the undersigned (the "undersigned") up to
1,100,000 shares of Common Stock of the Company, $.01 par value (the "Common
Stock" or "Securities"), at an aggregate price of up to U.S.$7,425,000, the
undersigned hereby tenders this Subscription and Acknowledgment together with a
check, or funds by wire transfer as instructed by the Company, in the amount of
U.S.$ for
shares of the Securities. The undersigned shall further so tender an
executed counterpart hereof together with payment for each additional number of
shares of the Securities purchased in increments of no less than U.S.$1,000,000
(other than the last purchase) until the aggregate price of U.S.$7,425,000 has
been paid.
2. Representations and Warranties of Undersigned. The undersigned
hereby represents and warrants to, and covenants with, the Company as follows:
(i) The undersigned has had access to the Company's documents,
including its draft Form SB-2 Registration Statement intended to be filed
shortly with the U.S. Securities and Exchange Commission ("SEC"), and has
reviewed it, including but not limited to the various risks described therein,
and those other documents the undersigned has deemed relevant. The undersigned
has also been furnished with such other materials or literature concerning the
Company as the undersigned has reasonably requested;
(ii) The undersigned has had a reasonable opportunity to ask questions
of and receive answers from the Company and its officers, directors and key
personnel concerning
the Company and the offering by it of the Securities, and all such questions, if
any, have been answered to the full satisfaction of the undersigned;
(iii) The undersigned has such knowledge and expertise in financial and
business matters that the undersigned is capable of evaluating the merits and
risks involved in an investment in the Securities which are a highly speculative
investment involving a high degree of risk and, the undersigned understands and
acknowledges that the undersigned could lose its entire investment;
(iv) The undersigned understands that the Company has determined that
exemption from the registration provisions of the Securities Act of 1933, as
amended (the "Act"), and applicable state securities laws which are based upon
non-public offerings and offerings to non-U.S. citizens or residents are
applicable to the offer and sale of the Securities to the undersigned, is based,
in part, upon the representations, warranties and agreements made by the
undersigned herein; including, but not limited to, that the undersigned is not a
U.S. person (as defined in Regulation S) and is not acquiring the Securities for
the account or benefit of any U.S. person or is a U.S. person who purchased
Securities in a transaction that did not require registration under the Act;
(v) No representations or warranties have been made to the undersigned
by the Company or any agent, employee or affiliate of the Company and in
entering into this transaction the undersigned is not relying upon any
information, other than that contained in the Company's documents, including but
not limited to its draft Registration Statement and the draft, non-final
financial statements contained therein, and the results of independent
investigation by the undersigned;
(vi) The undersigned understands that (a) the Securities have not been
registered under the Act or the securities laws of any state, based upon
exemptions from such registration requirements for non-public offerings pursuant
to Sections 4(2), 4(6), 3(b), Regulation D and Regulation S under the Act and
applicable state laws; (b) the Securities are and will be "restricted
securities," as said term is defined in Rule 144 of the Rules and Regulations
promulgated under the Act; (c) the Securities may not be re-sold or otherwise
transferred unless they have been first registered under the Act and all
applicable state securities laws, or unless exemptions from such registration
provisions are available with respect to said resale or transfer; (d) the
Company is under no obligation to register the Securities under the Act or any
state securities laws, or to take any action to make any exemption from any such
registration provisions available; (e) the certificates for the Securities will
bear legends to the effect that the transfer of the Securities represented
thereby are subject to the provisions hereof; and (f) stop transfer instructions
will be placed on the records of the Company or with the transfer agent for the
Securities;
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(vii) Either (a) the undersigned is acquiring the Securities solely for
the account of the undersigned, for investment purposes only, and not with a
view towards the resale or distribution thereof, or (b) the undersigned is
acting as a Distributor (as that term is defined in Rule 902 of Regulation S
promulgated by the SEC under the Act, with respect to the Securities;
(viii) Either (x) the undersigned will not sell or otherwise transfer
any of the Securities being purchased, or any interest therein, unless and until
(a) said Securities shall have first been registered under the Act and all
applicable state securities laws; or (b) the undersigned 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 Act and all applicable state securities laws, or (y) the
undersigned, acting as a Distributor, will make offers or sales of the
Securities in full compliance with all applicable requirements of SEC Regulation
S as currently in effect, including, but not limited to, that no directed
selling efforts will be made in the United States, that offerings of the
Securities would not be made to any U.S. persons or for the account or benefit
of a U.S. person, that such offers and sales are made only to "accredited
investors" as that term is defined in SEC Rule 501 (described below), and that
the undersigned provides the Company at the time of purchase with a written
certification of the purchaser of the Securities (other than the Distributor)
that it is not a U.S. person and is not acquiring the Securities for the account
or benefit of any U.S. person, or is a U.S. person who purchased Securities in
the transaction that did not require registration under the Act, and that such
purchaser agrees to resell such Securities only in accordance with the
provisions of Regulation S, pursuant to registration under the Act, or pursuant
to an available exemption from registration (and agrees not to engage in hedging
transactions with regard to such Securities unless in compliance with the Act);
(ix) The undersigned has full power and authority to execute and
deliver this Subscription and Acknowledgment and to perform the obligations of
the undersigned hereunder; and this Subscription and Acknowledgment is a legally
binding obligation of the undersigned in accordance with its terms;
(x) The undersigned is under no legal disability to contract as herein
contemplated and this Subscription Agreement has been duly authorized and
executed by appropriate action of the undersigned as required under law and is
fully binding on the undersigned.
(xi) The undersigned is an "accredited investor" as that term is
defined in paragraph (a) of Rule 501 under the Securities Act of 1933, as
amended, as follows:
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"Accredited Investor" shall mean any person who comes within any of the
following categories, or who the issuer reasonably believes comes
within any of the following categories, at the time of the sale of the
securities to that person:
1. Any bank as defined in Section 3(a)(2) of the Act, or any
savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Act, whether acting in its
individual or fiduciary capacity; any broker or dealer
registered pursuant to Section 15 of the Securities Exchange
Act of 1934; any insurance company as defined in Section 2(13)
of the Act; any investment company registered under the
Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of that Act; any 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; any plan established
and maintained by a state, it political subdivisions, or any
agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan
has total assets in excess of U.S.$5,000,000; any employee
benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974 if the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of
U.S.$5,000,000 or, if a self-directed plan, with investment
decisions made solely by persons that are accredited
investors;
2. Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
3. Any 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 securities offered, with total assets
in excess of U.S.$5,000,000;
4. Any director, executive officer, or general partner of the
issuer of the securities being offered or sold, or any
director, executive officer, or general partner of a general
partner of that issuer;
5. Any natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his purchase
exceeds U.S.$1,000,000;
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6. Any natural person who had an individual income in excess of
U.S.$200,000 in each of the two most recent years of joint
income with that person's spouse in excess of U.S.$300,000 in
each of those years and has a reasonable expectation of
reaching the same income level in the current year;
7. Any trust, with total assets in excess of U.S.$5,000,000, not
formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person
as described in Rule 506(b)(2)(ii); and
8. Any entity in which all of the equity owners are accredited
investors."
(xii) The undersigned further represents that the information presented
herein is complete and accurate as of the date indicated and agrees to notify
the Company immediately of any change in any such information that occurs prior
to any sale of Securities to the undersigned.
The information presented below is confidential and is provided to the
Company on the condition that it will not be disclosed or divulged to any person
or entity, except such parties as the Company deems appropriate to establish the
availability of an exemption from registration of the interests under the
Federal and state securities laws.
Please print or type. All items must be fully completed. Attach
additional sheets if necessary. If the answer to any item is "None" or "Not
Applicable," please so state.
a. Full Name: _______________________________________
b. Address: _______________________________________
Mailing Address: _________________________________
Business Telephone Number: _______________________
Business Fax Number: _____________________________
(xiii) The undersigned has carefully reviewed the jurisdictional
notices listed below and agrees to abide by any restrictions contained therein
applicable to the undersigned:
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JURISDICTIONAL NOTICES
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATES AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE FEDERAL SECURITIES
REPORTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES ARE BEING OFFERED ONLY TO ACCREDITED INVESTORS WHO OR WHICH
ARE NON-U.S. PERSONS, WHO DO NOT REQUIRE IMMEDIATE LIQUIDITY FOR THIS INVESTMENT
AND MAY NOT BE RE-OFFERED OR RESOLD DIRECTLY OR INDIRECTLY TO ANY UNITED STATES
PERSON EXCEPT AS SET FORTH HEREIN.
THE COMPANY HAS NOT MADE AND WILL NOT MAKE ANY ATTEMPT TO COMPLY WITH
THE LAWS OR REGULATIONS OF ANY NON-U.S. JURISDICTION AND MAKES NO REPRESENTATION
WHATSOEVER AS TO THE APPLICABILITY OR REQUIREMENTS OF ANY SUCH LAW OR
REGULATION, IF ANY, TO THE OFFER OR SALE OF THE SECURITIES HEREUNDER.
ANY CERTIFICATES EVIDENCING THE SECURITIES WHICH ARE ISSUED OR SOLD
WILL BEAR SUBSTANTIALLY THE FOLLOWING LEGEND:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), HAVE BEEN SOLD IN A TRANSACTION UNDER REGULATION S PROMULGATED
THEREUNDER, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
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TRANSFERRED IN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF
U.S. PERSONS UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT IS AVAILABLE. IT IS THE RESPONSIBILITY OF ANY INVESTOR
PURCHASING THESE SECURITIES TO SATISFY ITSELF AS TO FULL OBSERVANCE OF
THE LAWS OF ANY RELEVANT JURISDICTION OUTSIDE THE UNITED STATES IN
CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED
GOVERNMENTAL OR OTHER CONSENTS AND OBSERVING ANY OTHER APPLICABLE
REQUIREMENTS."
(xiv) The undersigned is organized under and maintains it principal
place of business in, the jurisdiction specified on the signature page hereof,
and the undersigned has no present intention of changing its place of
organization or place of business from such jurisdiction.
3. Acceptance. The undersigned understands that this Subscription and
Acknowledgment 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 execution of this Subscription and Acknowledgment where
indicated. This Subscription and Acknowledgment shall be null and void if the
Company does not accept it as aforesaid.
4. Irrevocability. The undersigned understands that this Subscription
and Acknowledgment is irrevocable by the undersigned, except as otherwise may be
provided by applicable state law, and the Company may, in its sole discretion,
reject this Subscription and Acknowledgment in whole or in part.
The undersigned further acknowledges that the Securities shall not be
deemed sold or issued to the undersigned, nor shall the undersigned be deemed a
holder of the Securities, until this Subscription and Acknowledgment is accepted
by the Company.
5. Covenants of the Company. The Company hereby covenants with the
undersigned that:
(a) the undersigned may nominate one person to serve on the
Board of Directors of the Company and the Company will submit such
nominee for consideration to the stockholders of the Company as a
Director at each of the next five annual meetings of stockholders where
Directors are elected and qualified; and
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(b) immediately following consummation of the subscription
contemplated herein, the Company shall engage Xx. Xxxxxx Xxxxxxxx as
its Managing Director of European Operations on terms and conditions
satisfactory to it; and
(c) if, once its shares of Common Stock are publicly traded on
a recognized national securities exchange in the United States or on a
recognized market system (e.g., NASDAQ), the Company's shares of Common
Stock have a closing public price in excess of $15 per share on any ten
out of any twenty consecutive trading days, upon request of the
undersigned, provided it is in compliance with Regulation S to do so
the Company will attempt to register for public sale up to 25% of the
shares then owned by the undersigned which are not then either
registered or otherwise freely tradable. The costs for any such
registration, other than sales commissions and any attorneys fees
incurred by the undersigned in connection therewith, shall be borne by
the Company.
6. Indemnification. The undersigned agrees to indemnify the Company and
hold it, and all persons associated with it, harmless from and against any and
all losses, damages, liabilities, costs and expenses which any of them may
sustain or incur in connection with the breach by the undersigned of any
representation, warranty or covenant made by the undersigned.
7. No Assignment. Neither this Subscription and Acknowledgment nor any
of the rights of the undersigned hereunder may be transferred or assigned by the
undersigned.
8. Modification; Enforcement. This Subscription and Acknowledgment (i)
may only be modified by a written instrument executed by the undersigned and the
Company; (ii) sets forth the entire agreement of the undersigned and the Company
with respect to the subject matter hereof; (iii) shall be governed by the laws
of the State of Illinois applicable to contracts made and to be wholly performed
therein, without regard to conflicts of laws rules or principles; and (iv) shall
inure to the benefit of, and be binding upon the Company and the undersigned and
their respective heirs, legal representatives, successors and assigns. The
undersigned (a) agrees that any legal suit, action or proceeding arising out of
or relating to this Agreement shall be instituted exclusively in the Circuit
Court of Xxxx County, Illinois, or in the United States District Court for the
Northern District of Illinois, Eastern Division, each and any of which shall
apply Illinois law, without reference to its conflicts of laws rules or
principles, (b) waives any objection which the undersigned may have now or
hereafter to the venue of any such suit, action or proceeding, and (c)
irrevocably consents to the jurisdiction of the Circuit Court of Xxxx County,
Illinois, and the United States District Court for the Northern District of
Illinois, Eastern Division, in any such suit, action or proceeding. The
undersigned further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in the
Circuit Court
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of Xxxx County, Illinois, and the United States District Court for the Northern
District of Illinois, Eastern Division.
9. Gender. Unless the context otherwise requires, all personal pronouns
used in this Subscription and Acknowledgment, whether in the masculine, feminine
or neuter gender, shall include all other genders.
10. Notice. Except as otherwise required in this Subscription and
Acknowledgment, any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received
(i) when delivered, if delivered personally, (ii) three days after mailing, when
sent by registered or certified mail, return receipt requested, postage prepaid,
(iii) the next business day after delivery to a private courier service when
delivered to a private courier service providing documented overnight service,
and (iv) on the date of delivery if delivered by telecopy, receipt confirmed,
provided that a confirmation copy is sent on the next business day by registered
or certified mail, return receipt requested and postage prepaid, addressed as
follows:
To the Company: Xxxxxx.xxx Corporation
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 U.S.A.
Attention: Xxxxxx Xxxxxxxxx, President
To the Purchaser: At the address set forth beneath the
Purchaser's signature
11. Survival. The representations, warranties, covenants and agreements
contained herein shall survive the delivery of and payment for the Securities.
IN WITNESS WHEREOF, the undersigned has executed this Subscription and
Acknowledgment as of the _____ day of _________, 1999.
PURCHASER (DISTRIBUTOR):
By ________________________________
_________________,its___________
Address:_____________________________
ACCEPTANCE OF SUBSCRIPTION
AND ACKNOWLEDGMENT:
XXXXXX.XXX CORPORATION
By:____________________________________
Xxxxxx X. Xxxxxxxxx, President
Date: __________________, 1999
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