Exhibit 4.1
SUBSCRIPTION NUMBER 725S
SUMMUS, INC. (USA)
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (the "Agreement") by and between Summus, Inc. (USA),
a corporation organized and existing under the laws of the State of Florida (the
"Company"), and the undersigned subscriber, ______________, (the
"Subscriber") for shares of preferred stock, no par value per share, of the
Company (the "Preferred Stock").
W I T N E S S E T H
WHEREAS, the Company has offered the Subscriber an opportunity to
purchase shares of the Company's Series C Convertible Preferred Stock (the
"Shares") pursuant to a private offering (the "Offering"); and
WHEREAS, the Subscriber desires to purchase the Shares being offered on
the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
1. The Subscriber hereby subscribes and agrees to purchase, subject to the
terms and conditions of this Agreement, the number of Shares set forth
immediately before the signature page hereof at a purchase price of $1,000 per
Share. This Agreement represents an irrevocable offer by the Subscriber to
subscribe for such number of Shares, except as expressly provided herein. This
Agreement, subject to the terms hereof, shall become a contract for the sale of
said Shares upon the acceptance thereof by the Company.
2. The Company reserves the unrestricted right to accept or reject this
subscription, in whole or in part, and to withdraw this offer at any time. The
subscription will not become effective unless and until accepted by the Company.
3. This subscription is accompanied by the undersigned's certified or
official bank check or wire transfer of immediately available funds in the
dollar amount set forth on page 5 hereof.
4. If this subscription is not accepted by the Company, the Company shall
promptly return the undersigned's payment.
5. The Subscriber hereby makes the representations and warranties set forth
below with the express intention that they be relied upon by the Company in
determining the suitability of the Subscriber to purchase Shares. The Subscriber
hereby agrees to advise the Company if any of Subscriber's representations in
this Section 5 materially change prior to completion of this subscription.
(a) The Subscriber acknowledges that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or under any applicable state securities laws on the grounds that the issuance
of the shares to Subscriber is exempt from registration. The Subscriber further
acknowledges that reliance on such exemption is, in part, based upon the
representations, warranties and covenants of Subscriber contained herein.
(b) The Subscriber is acquiring the Shares for the Subscriber's own
account as principal for the Subscriber's investment and not with a view to or
for resale in connection with any distribution thereof.
(c) The Subscriber is a citizen of THE UNITED STATES AND A RESIDENT OF
THE STATE OF FLORIDA and will be the beneficial owner of the Shares standing in
his/her name.
(d) The Subscriber has been furnished and has carefully reviewed
information about the Company to allow him to make an informed investment
decision prior to purchasing the Shares and has been given the opportunity to
ask questions of, and receive answers from, the Company concerning the business
plans of the Company, its present financial condition and the terms and
conditions of the Offering and to obtain such additional information that the
Company possesses or can acquire without unreasonable effort or expense
necessary to verify the accuracy of the information contained therein or
information that has been otherwise provided by the Company.
(e) The Subscriber acknowledges and is aware that (i) the Shares have
not been approved or disapproved by the Securities and Exchange Commission or by
any state securities commission, (ii) the Shares are a speculative investment
which involve material risk of loss of the Subscriber's entire investment, and
(iii) there are substantial restrictions on the transferability of the Shares.
(f) The Subscriber fully understands and agrees that the Subscriber
must bear the economic risk of investment in the Shares for an indefinite period
of time because, among other reasons, the Shares have not been registered under
the Securities Act or under any applicable state securities laws and, therefore,
cannot be sold, pledged, assigned, transferred or otherwise disposed of unless
they are subsequently registered under applicable securities laws or an
exemption from such registration is available. The Subscriber further
understands and agrees that the Company will not honor any attempt by the
Subscriber to sell, pledge, assign, transfer or otherwise dispose of Shares in
the absence of an effective registration statement for such Shares or an opinion
of counsel satisfactory to the Company that an exemption from any applicable
registration requirements is available. The Subscriber further understands that,
other than the Registration Rights Agreement between the Company and Subscriber,
dated July 10, 2003, the Company is under no obligation to register the Shares
or make an exemption from registration available. The Subscriber agrees to hold
the Company, its officers and directors, and its and their respective successors
and assigns, harmless and to indemnify them against all liabilities, costs and
expenses incurred by them as a result of any sale or distribution of the Shares
by the Subscriber in violation of the Securities Act or any state securities
laws.
(g) The Subscriber understands that the certificate(s) representing the
Shares will bear restrictive legends substantially in the following form:
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THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933, AS AMENDED, AND SUCH OTHER SECURITIES LAWS. THE SHARES MAY NOT BE
RE-OFFERED, SOLD, PLEDGED, ASSIGNED, TRANSFERRED, HYPOTHECATED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH
REGISTRATION OR QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES
LAWS OF ANY STATE, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
(h) The Subscriber has sought such accounting, legal and tax advice as
the Subscriber has considered necessary to make an informed investment decision.
(i) The Subscriber is aware that no federal or state agency has made
any finding or determination as to the fairness of an investment in the Shares,
nor any recommendation or endorsement of any such investment.
(j) The Subscriber recognizes that it is important under the Securities
Act and state securities laws that the Company determine if the Subscriber is an
"Accredited Investor," as defined in APPENDIX A attached hereto. Subscriber
represents that Subscriber is an Accredited Investor and has checked all
categories of Accredited Investor on APPENDIX A that apply.
The representations, warranties, covenants and agreements contained in this
Section 5 shall survive the delivery of, and the payment for, the Shares.
6. The Company hereby makes the representations and agreements set forth
below in this Section 6 in connection with the subscription of the Shares in
this Offering:
(a) The Board of Directors of the Company shall appoint Xxxxxx X.
Xxxxxxx to the Board of Directors of the Company and shall nominate Xx. Xxxxxxx
as a Director of the Company to be included in the Company's proxy statement for
its 2003 annual meeting and submit him for election by the shareholders of the
Company at such shareholders' meeting. This appointment to the Board and the
inclusion of Xx. Xxxxxxx in the proxy statement for election as a Director by
the shareholders of the Company at the 2003 annual meeting is contingent upon
(i) a satisfactory result of the standard investigation of Xx. Xxxxxxx by the
Company's investigative group, which is standard for all potential directors and
executive officers of the Company, and (ii) the receipt by the Company,
cumulatively, of $2.5 million from all Subscribers purchasing shares of the
Company's Series C Convertible Preferred Stock in the Offering.
(b) The Company represents and warrants that (i) it owns all technology
for which it has submitted patent applications (the "Technology") to the U.S.
Patent Office, and (ii) that all assignments by the appropriate employees and
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officers of the Company relating to the Technology have been executed and filed
in the U.S. Patent Office, and (iii) if the Company makes any application for
any international patents relating to the Technology, the Company shall own such
international applications and any resulting international patents.
(c) The Company represents and warrants that (i) all payments for the
Company's Directors and Officers Insurance for the fiscal year ending December
31, 2003 has been made, and (ii) that such insurance is in effect for a total
coverage of $5,000,000.
(d) For a period of twelve (12) months from the receipt of the $2.5
million investment from the Subscribers in the Company's Series C Convertible
Preferred Stock (the "Series C Receipt Date"), the Company shall not spend more
than $50,000 per month for the payment to vendors of past payable amounts owed
to such vendors or subject to settlements with such vendors for such past
payable amounts as of the Series C Receipt Date.
The representations, warranties, covenants and agreements contained in
this Section 6 shall survive the delivery of, and the payment for, the Shares.
7. This Agreement and subscription herein shall survive the death or
disability of any individual Subscriber and the dissolution or termination of
any subscribing entity, and this Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of any such Subscriber. All
pronouns and any variations thereof used herein shall be deemed neuter, singular
or plural as the identity of the Subscriber may require.
8. This Agreement shall be enforced, governed and construed in all respects
in accordance with the laws of the State of North Carolina, as such laws are
applied by North Carolina courts to agreements entered into and to be performed
in North Carolina without regard to conflicts of law.
9. The number of Shares subscribed for by the Subscriber and their
registration of ownership are as set forth on page 5 of this Agreement:
10. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors, assigns, executors and
administrators, but this Agreement and the respective rights and obligations of
the parties hereunder shall not be assignable by any party hereto without the
prior written consent of the other.
11. This Agreement represents the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof and cannot be
amended, supplemented or modified except by an instrument in writing signed by
the party against whom enforcement of any such amendment, supplement or
modification is sought.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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PLEASE TYPE OR PRINT
Owner: _______________
Social Security or Federal:
Employer's ID Number:
Residence
Address:
Mailing Address (if other than Residence):
Telephones: Res. __________ Bus. __________ Fax.__________
Email._________
Joint Owner (if any):___________________________
Social Security or Federal:_____________________
Employer's ID Number:___________________________
Residence Address:______________________________
Mailing Address
(if other than
Residence):
Telephones: Res. ____________________________ Bus. _________________________
SHARES TO BE REGISTERED AS INDICATED BELOW:
[ ] Sole ownership
[ ] Joint tenants with right of survivorship
[ ] Tenants in common
Number of Shares subscribed for: 250
Total Purchase Price ($1,000 PER SHARE): $250,000.00
PAYMENT IN FULL DELIVERED IN AMOUNT OF: $250,000.00
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IN WITNESS WHEREOF, the undersigned has executed or cause to be executed under
seal this Agreement, as of July 10, 2003.
SIGNATURE FORM FOR INDIVIDUALS
(SEAL)
Signature________________________________
Name:____________________________________
______________________________(SEAL)
(Signature of Joint Owner, if any)
Name:____________________________________
SIGNATURE FORM FOR CORPORATIONS:
(Name of corporation)
By:_____________________________________
(Signature of Officer
_________________________________________
(Name and Title)
SIGNATURE FORM FOR PARTNERSHIPS OR LIMITED
LIABILITY COMPANIES:
_________________________________________
(Name of Partnership or LLC)
BY ITS GENERAL PARTNERS OR MANAGERS:
Name:____________________________________
Name:____________________________________
Name:____________________________________
SIGNATURE FORM FOR TRUSTS:
_________________________________________
(Full Name of Trust)
BY ITS TRUSTEE(S):
Name:____________________________________
Name:____________________________________
Name:____________________________________
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ACCEPTANCE OF SUBSCRIPTION
The, foregoing Subscription Agreement is ACCEPTED by the Company, on July __,
2003, for ___ shares of its Series C Preferred Stock.
SUMMUS, INC. (USA)
BY:_______________________________
XXXXX XXXXXXX
CHIEF EXECUTIVE OFFICER
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APPENDIX A
AN ACCREDITED INVESTOR IS DEFINED AS FOLLOWS. PLEASE CHECK ALL DEFINITIONS THAT
APPLY.
/ / a natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of purchase exceeds U.S. $1,000,000;
/ / a natural person who had an individual income in excess of U.S. $200,000
in each of the two most recent years or 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 (i.e., the year in which the purchase is made);
/ / any trust, with total assets in excess of U.S. $5,000,000, not formed
for the specific purpose of acquiring shares of PreferredStock and/or
warrants, whose purchase is directed by a sophisticated person having
such knowledge and experience in financial and business matters that
she is capable of evaluating the merits and risks of investing in the
Company;
/ / a director or executive officer of the Company;
/ / 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
shares of PreferredStock and/or warrants, with total assets in excess
of U.S. $5,000,000;
/ / a bank as defined in Section 3(a)(2) of the Securities Act of 1933 (the
"Securities Act"), or a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities Act
whether acting in its individual or fiduciary capacity; a broker dealer
registered under the Securities Exchange Act of 1934; an insurance
company as defined in Section 2(13) of the Act; an 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; a Small
Business Investment Company licensed under the Small Business
Investment Act of 1958; an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, which is either a
bank, savings and loan association, an 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;
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/ / a private business development company as defined in the Investment
Advisers Act of 1940; or
/ / an entity in which all of the equity owners are Accredited Investors.
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