SUBSCRIPTION AGREEMENT
Exhibit
4.1
THIS SUBSCRIPTION AGREEMENT
made as of this _____ day of _______ 2009 between GMV Wireless, Inc., a
corporation organized under the laws of the State of Nevada with offices at 000
00xx
Xxxxxx, Xxxxxxxxx Xxxxx, XX 00000 x/x Xxx Xxxxxxxx (the “Company”),
and the undersigned (the “Subscriber”
and together with each of the other subscribers in the Offering (defined below),
the “Subscribers”).
WHEREAS, the Company desires
to issue up to $50,000 (100 Units aggregate amount of units (a “Unit”
and collectively, the “Units”)
in a private placement (the “Offering”),
at a purchase price of $500 per Unit;
WHEREAS, each Unit shall
consist of five thousand (5,000) shares of Common Stock, par value $.001 per
share (the “Shares”); and
WHEREAS, the Subscriber is
delivering simultaneously herewith a completed confidential investor
questionnaire (the “Questionnaire”),
NOW, THEREFORE, for and in
consideration of the promises and the mutual covenants hereinafter set forth,
the parties hereto do hereby agree as follows:
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I.
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SUBSCRIPTION
FOR UNITS AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
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1.1. Subscription for Units.
Subject to the terms and conditions hereinafter set forth, the Subscriber
hereby subscribes for and agrees to purchase from the Company such aggregate
amount of Units as is set forth upon the signature page hereof; and the Company
agrees to sell such Units to the Subscriber for said purchase price subject to
the Company’s right to sell to the Subscriber such lesser number of Units as the
Company may, in its sole discretion, deem necessary or desirable. The purchase price is payable by a
check made payable to “GMV Wireless, Inc.” and delivered contemporaneously with
the execution and delivery of this Subscription Agreement to the Company’s
address set forth above.
1.2. Reliance on Exemptions. The
Subscriber acknowledges that this Offering has not been reviewed by the United
States Securities and Exchange Commission (“SEC”)
or any state agency because of the Company’s representations that this is
intended to be a nonpublic offering exempt from the registration requirements of
the Securities Act of 1933, as amended (the “1933
Act”) and state securities laws. The Subscriber understands that the
Company is relying in part upon the truth and accuracy of, and the Subscriber’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Subscriber set forth herein in order to determine the
availability of such exemptions and the eligibility of the Subscriber to acquire
the Units.
1.3. Investment Purpose. The
Subscriber represents that the Shares comprising the Units (the “Securities”)
are being purchased for his or her own account, for investment purposes only and
not for distribution or resale to others in contravention of the registration
requirements of the 1933 Act. The Subscriber agrees that it will not sell or
otherwise transfer the Securities unless they are registered under the 1933 Act
or unless an exemption from such registration is available.
1.4. Accredited Investor. The
Subscriber represents and warrants that he or she is an “accredited investor” as
such term is defined in Rule 501 of Regulation D promulgated under the 1933 Act,
as indicated by its responses to the Questionnaire, and that it is able to bear
the economic risk of any investment in the Units. The Subscriber further
represents and warrants that the information furnished in the Questionnaire is
accurate and complete in all material respects.
1.5. RISK OF INVESTMENT. THE SUBSCRIBER
RECOGNIZES THAT THE PURCHASE OF THE UNITS INVOLVES A HIGH DEGREE OF RISK
INCLUDING, WITHOUT LIMITATION, ANY AND ALL RISKS DISCUSSED IN THIS SUBSCRIPTION
AGREEMENT. AN INVESTMENT IN THE COMPANY AND THE UNITS MAY RESULT IN
THE LOSS OF A SUBSCRIBER’S ENTIRE INVESTMENT.
(a) Risk of Loss of
Investment. An investment in the Company and the Units offered
hereby involve a high degree of risk. An investment in the Units is
suitable only for investors who can bear a loss of their entire
investment.
(b) Value of Shares is
Speculative. The terms of this offering have been determined
arbitrarily by the Company. There is no relationship between such
terms and the Company’s assets, earnings, book value and/or any other objective
criteria of value.
(c) Dependence on Net Proceeds;
No Minimum Offering. The Company is wholly dependent upon the
net proceeds of this Offering to fund its operations, as more specifically
described elsewhere in this Subscription Agreement. There is no commitment by
any person to purchase Units and there is no assurance that any number of Units
will be sold. Additionally, there is no minimum amount of funds that
are required to be raised in order for the Company to accept subscriptions
received from investors and the Company’s may terminate this Offering prior to
the expiration of the Offering Period. There is no assurance that the Company
will sell a sufficient number of Units in this Offering on a timely basis or
that the net proceeds after payment of debts and other obligations will be
adequate for the Company’s needs.
(d) Need for Additional Capital;
Additional Private Placement. The net proceeds raised by the
Company from this Offering will be used immediately to fund the Company’s
current operations. The Company will therefore require significant additional
financing shortly after this Offering, regardless of the net proceeds received,
in order to satisfy its cash requirements. Upon completion of this offering, the
Company intends to affect a registration on Form S-1, become a publicly traded
entity and seek to raise additional funds in private placement transactions.
However, there is no assurance that it will be able to do so in a timely manner
or on terms that will enable it to enter its proposed business on a reasonable
basis.
(e) Restrictions on
Resale. The Units and the Shares, are “restricted” securities
and may not be resold or otherwise transferred except pursuant to an effective
registration statement or an exemption under the 1933 Act and applicable state
or “blue sky” laws.
(f) No Operating History;
History of Losses or Nominal Income; Development Stage
Entity. The Company not commenced operations. To
date and since inception, the Company has not generated any
revenues. The Company expects to incur substantial losses for the
foreseeable future and has no operating history on which the Company can
evaluate its potential for future success. The Company is a
developmental stage entity. To evaluate the Company, investors should
evaluate the Company in light of the expenses, delays, uncertainties, and
complications typically encountered by early-stage development businesses, many
of which are beyond the Company’s control. Early-stage development
businesses commonly face risks such as the following:
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lack
of sufficient capital;
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unanticipated
problems, delays, and expenses relating to product development and
implementation;
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lack
of intellectual property;
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licensing
and marketing difficulties;
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competition;
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technological
changes; and
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uncertain
market acceptance of products and
services.
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(g) Dependence upon the
Company’s Sole Officer and Director. The
Company is wholly dependent upon Xxx Xxxxxxxx, currently the sole officer and
director of the Company, for the operations and success of the
Company. The loss of his services would have a material adverse
effect on the Company’s business, financial condition and results of
operations. The Company does not have an employment agreement with
Xxx Xxxxxxxx who is expected to devote only a portion of his working time to the
affairs of the Company.
(h) Capital Structure of the
Company. The following sets forth the capital structure of the
Company prior to the sale of any Securities in this Offering.
(i) The
Company has Seventy Five Million (75,000,000) authorized shares of common stock
and no other class of securities authorized.
(ii) The
Company has 1,350,000 shares of Common Stock issued and outstanding as
follows:
(A) Xxx
Xxxxxxxx – 210,000;
(B) Xxxx
Xxxxxxx – 105,000;
(C) Xxxxxxx
Xxxxxxx-37,500;
(D) C2
Capital, LLC-675,000;
(E) Xxxxxx
Xxxxxxxx, Xx.-300,000; and
(F) Xxxxx
X. Xxxxxxx –22,500 Shares.
The
parties above may reallocate a portion of their shares in the
future.
(iii) The
Company has no other securities currently issued and outstanding and there are
no warrants, options or other securities outstanding that are convertible into
or exercisable for any securities of the Company.
1.6 Summary of Proposed
Business. The Company intends raise
funds to assist in GMV Holdings, Inc., a company controlled by Xx. Xxxxxxxx
(“GMVH”), further its business of providing wireless services to resorts and
other hospitality venues to enhance the value of the product they offer their
customers. Installation of high quality wireless systems that will
provide service and reliability that meet customer’s expectations is capital
intensive. After this offering is concluded, the Company will seek to
register the shares bought in this offering as well as other outstanding shares
in an S-1 Registration Statement under the 1933 Act; become listed on the Over
the Counter Bulletin Board (“OTCBB”); and raise additional funds through further
sales of its stock. There is no assurance that the Company will be successful in
these endeavors or that if accomplishes all of these steps it will be able to
operate profitably or that investors will be able to sell their shares at a
profit. The Company has an agreement with GMVH to share the profits
derived from wireless installations it has financed for GMVH. While
management believes that this agreement affords the Company an opportunity to
operate profitably, this may not prove to be the case.
1.7 Information. The
Subscriber acknowledges receipt and full and careful review and understanding of
this Subscription Agreement with any exhibits thereto (the “Offering Document”) and hereby
represents that: (i) it has been furnished by the Company during the course of
this transaction with all information regarding the Company which it has
requested; and (ii) that it has been afforded the opportunity to ask questions
of and receive answers from duly authorized officers of the Company concerning
the terms and conditions of the Offering, and any additional information which
it has requested.
1.8 No Representations or
Warranties. The Subscriber hereby represents that, except as
expressly set forth in the Offering Document, 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 on any information other than that contained in the Offering
Documents and the results of independent investigation by the
Subscriber.
1.9 Tax Consequences. The
Subscriber acknowledges that this Offering of the Units may involve tax
consequences and that the contents of the Offering Documents do 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 Units.
1.10 Transfer or Resale. The
Subscriber understands that: (a) none of the Securities have been and are not
being registered under the 1933 Act or any state securities laws; (b) the
Securities may not be offered for sale, sold, assigned, pledged, transferred or
otherwise disposed of (each a “Disposition”)
unless, prior to effecting any such Disposition (other than any transfer not
involving a change in beneficial ownership) (i) there is in effect a
registration statement under the 1933 Act covering the Disposition and the
Disposition is made in accordance with such registration statement, or (ii) the
Subscriber gives written notice to the Company of such Subscriber’s intention to
effect a Disposition and such notice shall describe the manner and circumstances
of the proposed Disposition, and shall be accompanied by either (A) a written
opinion of a legal counsel that a Disposition of the Securities may be made
pursuant to an exemption from such registration, or (B) any other evidence
reasonably satisfactory to counsel to the Company; and (C) the Company is under
no obligation to register the Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any registration
exemption thereunder.
1.11 Legends. The Subscriber
understands that the certificates or other instruments representing the
Securities, until such time as they have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such certificates or other instruments):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR (B)
AN OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
The
legend set forth above shall be removed and the Company shall issue a
certificate or other instrument without such legend to the holder of the
Securities upon which it is stamped, if (a) there is in effect a registration
statement under the 1933 Act covering the Disposition and the Disposition is
made in accordance with such registration statement or (b) if the Disposition of
the Securities is completed in satisfaction of the requirements of Rule 144 of
the 1933 Act.
1.12 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 Units; 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 undersigned.
1.13 Residency. The Subscriber
represents that its principal address is furnished at the end of this
Subscription Agreement.
1.14
NOTICE TO
PROSPECTIVE PURCHASERS IN FLORIDA
These
securities have not been registered under the Florida Securities Act in reliance
upon an exemption therefrom. Any sale made pursuant to such exemption
is voidable by a Florida Purchaser within three (3) days after the first tender
of consideration is made by such purchaser to the issuer, an agent of the issuer
or an escrow agent in payment for such securities. However, this
right is not available to any purchaser who is a bank, trust company, savings
institution, insurance company, securities dealer, investment company as defined
in the investment company act of 1940, pension or profit-sharing trust or
qualified institutional buyer as defined in Rule 144A under the Securities Act
of 1933.
1.15 Foreign Subscriber. If the
Subscriber is not a United States person, such Subscriber hereby represents that
it has satisfied itself as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the Units or any
use of this Subscription Agreement, including: (a) the legal requirements within
its jurisdiction for the purchase of the Units; (b) any foreign exchange
restrictions applicable to such purchase; (c) any governmental or other consents
that may need to be obtained; and (d) the income tax and other tax consequences,
if any, that may be relevant to the purchase, holding, redemption, sale or
transfer of the securities comprising the Units. Such Subscriber’s subscription
and payment for, and his or her continued beneficial ownership of the Units,
will not violate any applicable securities or other laws of the Subscriber’s
jurisdiction.
1.16 FINRA Member. The Subscriber
acknowledges that if it is a Registered Representative of an FINRA member firm,
the Subscriber must give such firm notice required by the FINRA’s Rules of Fair
Practice, receipt of which must be acknowledged by such firm on the signature
page hereof.
1.17 Confidential
Information. The subscriber acknowledges that the information
contained in this Subscription Agreement and the related schedules and Exhibits,
as well as any other information relating to the Company that has been provided
to the Subscriber in connection with this Offering is the confidential and
proprietary information of the Company. The Subscriber agrees that he
shall not disclose any of said information to any other person, except for his
financial and legal advisors, who require such information to advise the
Subscriber with respect to his contemplated investment, and in the event that
the Subscriber does not invest in this Offering, he shall return all materials
provided to him by the Company, including any copies thereof, to the
Company.
II. REPRESENTATIONS
BY THE COMPANY
The
Company represents and warrants to the Subscriber, except as set forth in the
disclosure schedules attached hereto:
2.1 Organization and Qualification.
The Company is duly organized and validly existing in good standing under
the laws of Nevada and has the requisite power and authorization to own its
properties and to carry on its business as now being conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect. As used in this Subscription Agreement, “Material
Adverse Effect” means any material adverse effect on the business,
properties, assets, operations, results of operations or financial condition of
the Company, if any, taken as a whole, or on the transactions contemplated
hereby, or by the other Offering Documents or the agreements and instruments to
be entered into in connection herewith or therewith, or on the authority or
ability of the Company to perform its obligations under the Offering
Documents.
2.2 Authorization; Enforcement;
Validity. The Company has the requisite corporate power and authority to
enter into and perform its obligations under this Subscription Agreement and to
perform its obligations hereunder, and to issue the Securities in accordance
with the terms hereof. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby, including without limitation the issuance of the Securities, have been
duly authorized by the Company’s board of directors and no further consent or
authorization is required by the Company, its board of directors or its
stockholders. This Agreement has been duly executed and delivered by the
Company, and constitute valid and binding obligations of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally, the enforcement of creditors’ rights and
remedies.
2.3 Capitalization. Prior to the
Initial Closing, the authorized, issued and outstanding securities of the
Company (including, but not limited to, all and/or other securities convertible
into equity securities of the Company and all options and warrants, all of which
are listed in Section
1.1(i) of this Subscription Agreement. All of the issued and
outstanding securities of the Company have been and are, or upon issuance will
be duly authorized, validly issued, fully paid and non-assessable. Except as
disclosed in Offering Document, (i) no shares of the Company's capital stock are
subject to preemptive rights under Nevada law or any other similar rights or any
liens or encumbrances suffered or permitted by the Company; (ii) there are no
outstanding debt securities issued by the Company; (iii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of capital stock of the Company
or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of capital stock of the Company
or any of its Subsidiaries; (iv) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale
of any of their securities under the 1933 Act; (v) there are no outstanding
securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in the Offering Documents; and (vii) the Company
does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement. All prior sales of securities of
the Company were either registered under the 1933 Act and applicable state
securities laws or exempt from such registration, and no security holder has any
rescission rights with respect thereto.
2.4 Issuance of Securities;
Reservation. The issuance, sale and delivery of the Securities have been
duly authorized by all requisite corporate action by the Company and, upon
issuance in accordance with the Offering Documents, shall be (a) duly
authorized, validly issued, fully paid and non-assessable, (b) free from all
taxes, liens and charges with respect to the issue thereof except that may be
created by the Subscriber, and (c) entitled to the rights and preferences set
forth in the Securities. Assuming (i) the accuracy of the information provided
by the respective Subscribers in the Subscription Agreement and Questionnaire,
and (ii) that all of the offerees and Subscribers are “accredited investors” as
such term is defined in Rule 501 of Regulation D, the offer and sale of the
Units pursuant to the terms of this Subscription Agreement are and will be
exempt from the registration requirements of the 1933 Act and the rules and
regulations promulgated thereunder. The Company is not disqualified from the
exemption under Regulation D by virtue of the disqualification contained in Rule
507 thereof or otherwise.
2.5 No Conflicts. Except as set
forth in the Offering Documents, the execution, delivery and performance of the
Offering Documents by the Company, the consummation by the Company of the
transactions contemplated by the Offering Documents, and the issuance of the
Securities and performance by the Company of its obligations under the Offering
Documents, will not (a) result in a violation of the Company’s Certificate of
Incorporation, any other certificate of designations, preferences and rights of
any outstanding series of preferred stock of the Company, or the Company’s
By-Laws, (b) conflict with, or constitute a default or an event which 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 of, any
material agreement, note and/or other indebtedness, lease, license or
instrument, or (c) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations
and the rules and regulations of the NASD) applicable to the Company or any of
its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected.
2.6 Consents. The Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Offering Documents. Except as otherwise
provided in the Offering Documents, all consents, authorizations, orders,
filings and registrations which the Company is required to obtain pursuant to
the preceding sentence have been obtained or effected on or prior to the date
hereof. The Company and its Subsidiaries are unaware of any facts or
circumstances which might prevent the Company from obtaining or effecting any of
the foregoing.
2.7 No General Solicitation. None
of the Company, its Subsidiaries, any of their affiliates, and any person acting
on their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the 0000 Xxx) in
connection with the offer or sale of the Securities.
2.8 No Integrated Offering. None
of the Company, its Subsidiaries, any of their affiliates, and any person acting
on their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would require registration of any of the Securities under the 1933 Act by
causing this Offering of the Securities to be integrated with prior offerings by
the Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including without limitation, under the rules and regulations of any
exchange or automated quotation system on which any of the securities of the
Company are listed or designated, or otherwise. None of the Company, its
Subsidiaries, their affiliates and any person acting on their behalf will take
any action or steps referred to in the preceding sentence that would require
registration of any of the Securities under the 1933 Act by causing the Offering
of the Securities to be integrated with other offerings, or
otherwise.
2.9 Foreign Corrupt Practices.
Neither the Company, nor any director, officer, agent, employee or other
person acting on behalf of the Company or any of its Subsidiaries has, in the
course of its actions for, or on behalf of, the Company, (a) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds, (b) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended, or (c) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.
2.10 Absence of Litigation. Except
as set forth in the Offering Document, there is no action, suit, proceeding,
inquiry or investigation before or by the NASD, any court, public board,
government agency, self-regulatory organization or body, or arbitrator pending
or, to the knowledge of the Company, threatened against the Company, the Common
Stock or any of the Company’s officers or directors in their capacities as
such.
2.11 Tax Status. Except as set
forth in the Offering Document, the Company and has made or filed all federal
and state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject, except when the failure to do so would
not have a Material Adverse Effect, and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations or to the
Company’s knowledge otherwise due and payable, except those being contested in
good faith and has set aside on its books reserves in accordance with GAAP
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.
2.12 Securities Law Compliance. The
offer, offer for sale, and sale of the Units has not been registered with the
SEC. The Units are to be offered, offered for sale and sold in reliance upon the
exemptions from the registration requirements of Section 5 of the 1933 Act. The
Company will conduct the Offering in compliance with the requirements of
Regulation D under the 1933 Act, and the Company will file all appropriate
notices of offering with the SEC.
2.13 Title. Except as set forth in
or contemplated by the Offering Document, the Company has good and marketable
title to all material properties and tangible assets owned by it, free and clear
of all liens, charges, encumbrances or restrictions, except as such as are not
significant or important in relation to the Company’s business; all of the
material leases and subleases under which the Company is the lessor or sublessor
of properties or assets or under which the Company holds properties or assets as
lessee or sublessee are in full force and effect, and the Company is not in
default in any material respect with respect to any of the terms or provisions
of any of such leases or subleases, and to the Company’s knowledge no material
claim has been asserted by anyone adverse to rights of the Company as lessor,
sublessor, lessee or sublessee under any of the leases or subleases mentioned
above, or affecting or questioning the right of the Company to continued
possession of the leased or subleased premises or assets under any such lease or
sublease. The Company owns, leases or licenses all such properties as are
necessary to its operations as described in the Offering Documents.
2.14 Intellectual Property Rights.
The Company owns or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted, the lack of which could reasonably be expected to
have a Material Adverse Effect. Except as set forth in the Offering Documents,
to the Company’s knowledge, none of the Company's trademarks, trade names,
service marks, service xxxx registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights have expired or terminated,
or are expected to expire or terminate within two (2) years from the date of
this Subscription Agreement, except where such expiration or termination would
not have either individually or in the aggregate a Material Adverse Effect. The
Company does not have any knowledge of any infringement by the Company of
trademarks, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service xxxx registrations, trade
secrets or other similar rights of others, or of any such development of similar
or identical trade secrets or technical information by others and, except as set
forth in the Offering Document, no claim, action or proceeding has been made or
brought against, or to the Company's knowledge, has been threatened against, the
Company regarding trademarks, trade name rights, patents, patent rights,
inventions, copyrights, licenses, service names, service marks, service xxxx
registrations, trade secrets or other infringement, except where such
infringement, claim, action or proceeding would not reasonably be expected to
have either individually or in the aggregate a Material Adverse Effect. Except
as set forth in the Offering Document, the Company is unaware of any facts or
circumstances which might give rise to any of the foregoing. The Company has
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their intellectual properties except where the failure to do so
would not have either individually or in the aggregate a Material Adverse
Effect.
2.15 Registration Rights. Except as
set forth in the Offering Document, no person has any right to cause the Company
to effect the registration under the 1933 Act of any securities of the
Company.
2.16 Brokers. Neither the Company
nor any of its officers, directors, employees or stockholders has employed any
broker or finder in connection with the transactions contemplated
herein.
2.17 Disclosure. None of the
representations and warranties of the Company appearing in this Subscription
Agreement or any information appearing in any Exhibit or Schedule hereto other
than material which says it is a “belief” or “expectation” of the Company or
similarly qualified, which statements the Company believes to the best of its
knowledge as of the date hereof and at each Closing Date to be true and accurate
in all material respects and not misleading), when considered together as a
whole, contains, or on any Closing Date will contain, any untrue statement of a
material fact or omits, or on any Closing Date will omit, to state any material
fact required to be stated herein or therein in order for the statements herein
or therein, in light of the circumstances under which they were made, not to be
misleading. [DOES THIS READ WELL?]
III. TERMS
OF SUBSCRIPTION
3.1 Closing and Termination of
Offering. Provided that the required conditions to closing set
forth in Article
V and Article
VI hereof have been satisfied or waived, a closing (the “Initial
Closing”) shall take place at the offices of the Company as set forth
herein or at such place as may otherwise be agreed to by the Company within 30
days of the receipt of the first cleared subscriber’s funds. The
Company may consummate subsequent closings of the Offering, upon mutual
agreement only, each of which shall be subject to satisfaction or waiver of the
conditions to closing set forth in Article
V and Article
VI hereof, and each of which shall be deemed a “Closing”
hereunder. The date of the last closing of the Offering is hereinafter referred
to as the “Final
Closing” and the date of any Closing hereunder is hereinafter referred to
as a “Closing
Date.” The offering period for the Offering shall commence on the day the
Offering Document is first delivered to prospective Subscribers by the Company
for delivery in connection with the offering for sale of the Units and shall
continue until the earlier to occur of: (i) the sale of the all of the Units
being offered pursuant to this Offering; and (ii) 5:00 p.m. (New York Time),
January 31, 2009; provided, however, that (A) if
all of the Units have not been sold on or prior to January 31, 2009, this
Offering may be extended for an additional ninety (90) days by the Company and
for additional 90 day periods thereafter in its sole discretion and (B) this
Offering may be terminated prior to January 31, 2009, upon the sole action of
the Company. The day that the Offering Period terminates is hereinafter referred
to as the “Termination
Date.”
3.2 Certificates. The Subscriber
hereby authorizes and directs the Company, upon each closing of the Offering, to
(i) deliver the certificates representing the Shares (the “Stock
Certificates”) to be issued to such Subscriber pursuant to this
Subscription Agreement to the Subscriber’s address indicated in the
Questionnaire, by thirty (30) days after the applicable Closing
Date.
IV. COVENANTS
4.1 Form D and Blue Sky. The
Company shall file a Form D with respect to the Units as required under
Regulation D under the 1933 Act and, upon written request, provide a copy
thereof to the Subscriber promptly after such filing. The Company shall use its
reasonable best efforts, on or before the Closing, to take such action as the
Company shall reasonably determine is necessary in order to obtain an exemption
for or to qualify the Units for sale to the Subscriber pursuant to this
Subscription Agreement under applicable securities or “Blue Sky” laws of the
states of the United States. The Company shall use its reasonable
best efforts to make all filings and reports relating to the offer and sale of
the Securities required under applicable securities or “Blue Sky” laws of the
states of the United States following the Closing.
4.2 Use of Proceeds. The Company
shall only use the net proceeds from the sale of the Units for the following
purposes:
(a) To
pay the expenses of the Offering, including, but not limited to legal and
accounting fees;
(b) To
fund the costs of a Securities Act Registration Statement; and
(c) Working
capital requirements.
V. CONDITIONS
TO CLOSING IN FAVOR OF THE COMPANY
The
obligation of the Company hereunder to issue and sell Units to the Subscriber at
the Closing is subject to the satisfaction, at or before the Closing, of each of
the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion
by providing the Subscriber with prior written notice thereof:
5.1 Offering Documents. The
Subscriber shall have executed a Questionnaire, a Subscription Agreement and
delivered the same to the Company.
5.2 Purchase Price. The Subscriber
shall have paid the purchase price for the Units being purchased by the
Subscriber at the Closing in the manner set forth in Section
1.1.
5.3 Representations and
Warranties. The representations and warranties of the Subscriber shall be
true and correct in all material respects as of the date when made and as of the
Closing as though made at that time, and the Subscriber shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Subscription Agreement to be performed,
satisfied or complied with by the Subscriber at or prior to the
Closing.
5.4 Other Matters. All opinions,
certificates and documents and all proceedings related to this Offering shall be
in form and content reasonably satisfactory to the Company and its legal
counsel.
VI. CONDITIONS
TO CLOSING IN FAVOR OF THE SUBSCRIBER
The
obligation of the Subscriber hereunder to purchase the Units is subject to the
satisfaction, at or before the Closing, of each of the following conditions,
provided that these conditions are for the Subscriber’s sole benefit and may be
waived by the Subscriber at any time in its sole discretion by providing the
Company with prior written notice thereof:
6.1 Offering Documents. The
Company shall have executed and delivered to the Subscriber each of the Offering
Documents to which its signature is required.
6.2 Representations and
Warranties. The representations and warranties of the Company shall be
true and correct as of the date when made and as of the Closing as though made
at that time (except for representations and warranties that reference a
specific date which shall have been true and correct in all material respects as
of such date), and the Company shall have performed, satisfied and complied in
all respects with the covenants, agreements and conditions required by the
Offering Documents to be performed, satisfied or complied with by the Company at
or prior to the Closing.
VII. RIGHTS
OF TERMINATION
7.1 Termination by Subscriber or Company.
This Subscription Agreement may be terminated at any time prior to the
Closing: (a) by mutual written consent of the parties hereto; or (b) by the
Company or the Subscriber upon written notice to the other party if any court or
governmental authority of competent jurisdiction shall have issued a final,
non-appealable order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Subscription Agreement.
Termination of this Subscription Agreement under this Section
7.1 shall
result in this Subscription Agreement becoming void and of no further force and
effect, except that a termination shall not release, or be construed as so
releasing, any party hereto from any liability or damage to the other party
hereto arising out of the breaching party’s willful and material breach of the
warranties and representations made by it, or willful and material failure in
performance of any of its covenants, agreements, duties or obligations provided
hereunder, and the obligations under Section
8.8 shall survive such termination.
VIII. MISCELLANEOUS
8.1 Notice. Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Subscription 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
Company at the address set forth in the first paragraph of this agreement,
Attn.: President.
If to the
Subscriber, to its address and facsimile number set forth at the end of this
Subscription Agreement, 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 clauses (a), (b) or (c) above, respectively.
8.2 Entire Agreement; Amendment.
This Subscription 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
Subscription 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 Subscription
Agreement may be amended or waived other than by an instrument in writing signed
by the Company and each Subscriber.
8.3 Severability. If any provision
of this Subscription 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 Subscription Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Subscription Agreement in any other jurisdiction.
8.4 Governing Law; Jurisdiction.
This Agreement shall be governed by and construed solely in accordance
with the internal laws of the State of California with respect to contracts
executed, delivered and to be fully performed therein, without regard to the
conflicts of laws principles thereof. The parties hereto hereby expressly and
irrevocably agree that any suit or proceeding arising under this Agreement or
the consummation of the transactions contemplated hereby, shall be brought
solely in a federal or state court located in the City and County of Los
Angeles, State of California. By its execution hereof, Company and Subscriber
hereby expressly and irrevocably submits to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of Los Angeles and agree that any process in any such action may be served
upon him or her personally, or by certified mail or registered mail upon such
party or such agent, return receipt requested, with the same full force and
effect as if personally served upon such party in Los Angeles, California. The
parties hereto each waive any claim that any such jurisdiction is not a
convenient forum for any such suit or proceeding and any defense or lack of
in personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of its reasonable counsel fees and
disbursements.
8.5 Headings. The headings of this
Subscription Agreement are for convenience of reference and shall not form part
of, or affect the interpretation of, this Subscription Agreement.
8.6 Successors And Assigns. This
Subscription Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns, including any purchasers of
the Units. The Company shall not assign this Subscription Agreement or any
rights or obligations hereunder. Subscriber may assign some or all of its rights
hereunder without the consent of the Company, provided, however, that any
such assignment shall not release the Subscriber from its obligations hereunder
unless such obligations are assumed by such assignee and the Company has
consented to such assignment and assumption, which consent shall not be
unreasonably withheld.
8.7 No Third Party Beneficiaries.
This Subscription 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.
8.8 Survival. The representations
and warranties of the Company and the Subscriber contained in Article
I and Article
II and the agreements set forth this Article
VIII shall survive the Closing for a period of twelve (12)
months.
8.9 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
Subscription Agreement and the consummation of the transactions contemplated
hereby.
8.10 No Strict Construction. The
language used in this Subscription 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.
8.11 Legal Representation. The
Subscriber acknowledges that: (a) it has read this Subscription Agreement and
the exhibits hereto; (b) it understands that the Company has been represented in
the preparation, negotiation, and execution of this Subscription Agreement by
Xxxxx Xxxxxxx, Esq., counsel to the Company; (c) it has either been represented
in the preparation, negotiation, and execution of this Subscription Agreement by
legal counsel of its own choice, or has chosen to forego such representation by
legal counsel after being advised to seek such legal representation; and (d) it
understands the terms and consequences of this Subscription Agreement and is
fully aware of its legal and binding effect.
8.12 Confidentiality. The
Subscriber agrees that it shall keep confidential and not divulge, furnish or
make accessible to anyone, the confidential information concerning or relating
to the business or financial affairs of the Company contained in the Offering
Documents to which it has become privy by reason of this Subscription
Agreement.
8.13 Counterparts. This
Subscription 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.
Remainder
of Page Intentionally Left Blank
IN WITNESS WHEREOF, the
parties have executed this Subscription Agreement as of the date first written
above.
|
SUBSCRIBER
**
|
CO-SUBSCRIBER
**
|
||
|
Signature
of Subscriber
|
Signature
of Co-Subscriber
|
||
|
Name
of Subscriber [please print]
|
Name
of Co-Subscriber [please print]
|
||
|
Address
of Subscriber
|
Address
of Co-Subscriber
|
||
|
Social
Security or Taxpayer
Identification
Number of Subscriber
|
Social
Security or Taxpayer Identification
Number
of Co-Subscriber
|
||
|
Name
of Holder(s) as it should appear on the security certificates* [please
print]
|
|||
* Please
provide the exact names that you wish to see on the certificates
(1) For
individuals, print full name of subscriber.
(2) For
joint, print full name of subscriber and all co-subscribers.
(3) For
corporations, partnerships, LLC, print full name of entity, including “&,”
“Co.,” “Inc.,” “etc,” “LLC,” “LP,”etc.
(4) For
Trusts, print trust name (please contact your trustee for the exact name that
should appear on the certificates.)
Dollar
Amount of Units Subscribed For: $_______________________
Dollar
Amount of Units
Subscription
Accepted: $__________________________
SUBSCRIPTION
ACCEPTED BY THE COMPANY
By:______________________________________________________
Xxx
Xxxxxxxx, President & CEO
**If
Subscriber is a Registered Representative with a FINRA (formerly NASD) member
firm or an affiliated person of a FINRA member firm, have the acknowledgment to
the right signed by the appropriate party:
The
undersigned FINRA Member firm acknowledges receipt of the notice required by
Rule 3040 of the FINRA Conduct Rules.
Name of
FINRA Member Firm
By:____________________________________________________
Authorized
Officer
