EXHIBIT 4.1
SUBSCRIPTION SUPPLEMENT, LOCKUP AND
REGISTRATION RIGHTS AGREEMENT
This Subscription Supplement and Registration Rights Agreements (the
"Subscription Supplement"), containing additional terms to the Subscription
Agreement between Algiers Resources, Inc., Balstron Corporation, Daliprint,
Inc., Hartscup Corporation, Mayall Partners, Inc., PSLRA, Incorporated, Regal
Acquisitions, Inc., Spacial Corporation, Voyer One, Inc., Voyer Two, Inc. (the
"Companies") and investors subscribing for shares of Common Stock of the
Companies being offered pursuant to the Companies' Confidential Offering
Memorandum (as hereinafter defined), has been incorporated by reference into the
Subscription Agreement attached hereto (the "Subscription Agreement"). Each
investor should therefore carefully review this Subscription Supplement before
signing the Subscription Agreement. Terms used herein and not otherwise defined
shall have the meaning ascribed to them in the Memorandum.
1. Subscription for Shares. I subscribe for the number of Shares of Common
Stock, par value $0.001 (the "Shares"), of each Company set forth in the
Subscription Agreement, priced at $0.25 per share.
2. Review of Memorandum. I have carefully reviewed the Confidential
Offering Memorandum in connection with the offering of Shares and any
Supplement(s) thereto provided by the Companies (collectively, the
"Memorandum"). I have been furnished with and have carefully read the
Memorandum, and very specifically the sections entitled "Risk Factors" and
"Available Information," and the documents referenced therein, including any
documents listed in "Available Information" which I wished to review, and I am a
suitable investor as described in the Memorandum.
3. Irrevocability of Subscription. I agree that this subscription is and
shall be irrevocable, but my obligations hereunder will terminate if this
subscription is not accepted by the Companies. I agree to pay for the Shares in
the manner set forth in the Subscription Agreement.
4. Illiquid Investment. I understand that investment in the Shares is an
illiquid investment. In particular, I recognize that:
(a) I must bear the economic risk of investment in the Shares for an
indefinite period of time, because the Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act") and
therefore cannot be sold unless either they are subsequently registered
under the Securities Act or an exemption from such registration is
available and a favorable opinion of counsel for the Companies to that
effect is obtained (if requested by the Companies); and
(b) No established market will exist and it is possible that no public
market for the Shares will develop.
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5. Consent to Legends. I consent to the affixing by the Companies of such
legends on certificates representing the Shares as any applicable federal or
state securities law may require from time to time.
6. Subscriber's Representation and Warranties. I represent and warrant to
the Companies that:
(a) The financial information provided in the Subscription Agreement
is complete, true and correct;
(b) I and my investment advisors, if any, have carefully reviewed and
understand the risks of, and other considerations relating to, a purchase
of Shares, including, but not limited to, the risks set forth under "Risk
Factors" in the Memorandum;
(c) I and my investment advisors, if any, have been afforded the
opportunity to obtain any information necessary to verify the accuracy of
any representations or information set forth in the Memorandum and have had
all inquiries to the Companies answered, and have been furnished all
requested materials, relating to the Companies and the offering and sale of
the Shares and anything else set forth in the Memorandum;
(d) Neither I nor my investment advisors, if any, have been furnished
any offering literature by the Companies or any of its affiliates,
associates or agents other than the Memorandum, and the documents
referenced therein;
(e) I am acquiring the Shares for which I am subscribing for my own
account, as principal, for investment and not with a view to the resale or
distribution of all or any part of the Shares;
(f) The undersigned, if a corporation, partnership, trust or other
form of business entity, (i) is authorized and otherwise duly qualified to
purchase and hold the Shares, (ii) has obtained such additional tax and
other advice that it has deemed necessary, (iii) has its principal place of
business at its residence address set forth in the Subscription Agreement,
and (iv) has not been formed for the specific purpose of acquiring the
Shares (although this may not necessarily disqualify the subscriber as a
purchaser). The persons executing the Subscription Agreement, as well as
all other documents related to the Offering, represent that they are duly
authorized to execute all such documents on behalf of the entity. (If the
undersigned is one of the aforementioned entities, it agrees to supply any
additional written information that may be required.);
(g) All of the information which I have furnished to the Companies or
which is set forth in the Subscription Agreement (including this
Subscription Supplement) is correct and complete as of the date of the
Subscription Agreement. If any material change in this information should
occur prior to my subscription being accepted, I will immediately furnish
the revised or corrected information;
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(h) I further agree to be bound by all of the terms and conditions of
the Offering described in the Memorandum; and
(i) I am the only person with a direct or indirect interest in the
Shares subscribed for by the Subscription Agreement.
7. Certification of Information. I certify, to the best of my information
and belief, that the above information that I have supplied is true and correct
in all material respects.
8. Indemnification of Companies. I agree to indemnify and hold harmless the
Companies, the Placement Agents and their respective officers, directors,
agents, attorneys, accountants and affiliates from and against all damages,
losses, costs and expenses (including reasonable attorneys' fees) that they may
incur by reason of the failure of the undersigned to fulfill any of the terms or
conditions of this Subscription Supplement or the Subscription Agreement, or by
reason of any breach of the representations and warranties made by the
undersigned herein or in the undersigned's related Subscription Agreement, or in
any document provided by the undersigned to the Companies.
9. Nontransferability of Subscription. This subscription is not
transferable or assignable by me without the written consent of the Companies.
10. Subscribers' Joint and Several Liability. If more than one person is
executing this document, the obligations of each shall be joint and several and
the representations and warranties contained in the Subscription Agreement and
this Subscription Supplement shall be deemed to be made by, and be binding upon,
each of these persons and his or her heirs, executors, administrators,
successors and assigns.
11. Successors and Assigns. This subscription, upon acceptance by each
Company, shall be binding upon my heirs, executors, administrators, successors
and assigns.
12. Governing Law. The Subscription Agreement, including this Subscription
Supplement, shall be construed in accordance with and governed in all respects
by the laws of the State of California.
13. Registration Rights. I acknowledge and agree that I will have the
following registration rights with respect to Shares purchased by me in the
Offering:
(a) In connection with the first general registration statement (other
than Form S-8) ("Registration Statement"), if any, filed by a Company
following the closing of a merger with an operating company (a "Merger"),
such Company will use its best efforts to include the Shares of Common
Stock of that Company purchased by the Holder in the Offering in the
Registration Statement. In the event, the Company proposes to register any
of its securities following a Merger, it will give written notice to each
Holder, at least thirty (30) days prior to the filing of a Registration
Statement, of its intention to do so. Upon the written request of any
Holder given
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within fifteen (15) days after receipt of any such notice of his, her or
its or their desire to include such Holder's Registerable Securities in
such Registration Statement, the Company shall afford such Holder(s) the
opportunity to have such Holder's Registerable Securities registered under
such registration. Notwithstanding anything to the contrary contained in
this paragraph, each Company shall have the right at any time after it
shall have given written notice pursuant to this paragraph (irrespective of
whether a written request for the inclusion of such Registerable Securities
shall have been made) to elect not to file any such proposed Registration
Statement, or to withdraw the same after the filing but prior to the
effective date thereof. Any and all shares registered in a Registration
Statement will still be subject to the lock-up provisions set forth in
Paragraph 14 herein.
(b) Each Company shall undertake in good faith to file a Registration
Statement covering my shares as soon as reasonably possible after such
Merger and to keep such Registration Statement effective for a period of at
least two years. However, I acknowledge that no assurance can be given that
such agreement can be obtain or such Registration Statement will be
declared effective, and the lock-up provisions will still apply to such
registered shares, unless otherwise released.
(c) Each Company shall indemnify and hold harmless the Holders of
Registerable Securities from and against any and all losses, claims,
damages and liabilities caused by any untrue statement of material fact
contained in the Registration Statement filed by such Company under the
Securities Act by reason of this Paragraph 13, any post-effective amendment
to such Registration Statement, or any prospectus included therein or
caused by any omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or omission based upon information furnished or
required to be furnished in writing to the Company by a Holder (or the
authorized representatives or agents of the Holder) expressly for use
therein, which indemnification shall include each person, if any, who
controls the Holder within the meaning of the Securities Act and each
officer, director, employee and agent of the Holder; provided, however,
that the indemnification in this Paragraph 13(b) with respect to any
prospectus shall not inure to the benefit of the Holder (or to the benefit
of any person controlling the Holder) on account of any such loss, claim,
damage or liability arising from the sale of Registerable Securities by
such Holder, if a copy of a subsequent prospectus correcting the untrue
statement or omission in such earlier prospectus was provided to such
Holder by the Company prior to the subject sale and the subsequent
prospectus was not delivered or sent by the Holder to the purchaser of such
securities prior to such sale; and provided further, that the Company shall
not be obligated to so indemnify the Holder or any other person referred to
above unless the Holder or other person, as the case may be, shall at the
same time indemnify the Company, its directors, each officer signing the
Registration Statement and each person, if any, who controls the Company
within the meaning of the Securities Act, from and against any and all
losses, claims, damages and liabilities caused by any untrue statement of a
material fact contained in any Registration Statement or any prospectus
required to be filed or furnished in connection with such Registration
Statement or caused any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
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misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission based upon information furnished
in writing to the Company by the Holder expressly for use therein.
If for any reason the indemnification provided for in the preceding
subparagraph is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, claim, damage, liability or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
(d) All expenses, filing fees and other costs incurred by each Company
in connection with any registration of securities pursuant to this
Paragraph 13 (exclusive of underwriting discounts and selling commissions
applicable to any sale of registered securities and any fees and costs of
legal counsel engaged by the Holders) shall be borne by such Company.
In the case of the registration effected by each Company pursuant to the
provisions of this Paragraph 13, the Company will (i) furnish to the Holders of
the Registerable Securities such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such Holders may reasonably request in order to
facilitate the disposition of the Registerable Securities owned by them, and
(ii) notify each Holder of Registerable Securities covered by such Registration
Statement at any time when a prospectus relating thereto is required to be
delivered under Securities Act of the happening of any event as a result of
which the prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of circumstances then existing.
(e) For purposes hereof, the term "Registerable Securities" means the
Shares of Common Stock of a Company sold in the Offering.
(f) Notwithstanding anything to the contrary contained in this Section
13, all of the registration rights described in this Section 13 shall
expire at such time as all the Registrable Securities of a Company held by
you are saleable pursuant to Rule 144(k) of the Securities Act, or such
successor provision.
14. Lock-Up Restriction on Sale. Notwithstanding anything to the contrary
contained in the Memorandum or Paragraph 13 hereof, I acknowledge and agree that
prior to registration of any Company, the consummation of a Merger by a Company,
and either the expiration of relevant holding periods under Rule 144 of the
Securities Act or registration of the Common Stock, and for a six (6) month
period after the registration of Common Stock and Merger, I will not sell,
pledge, assign or otherwise transfer or hypothecate, any Shares of Common Stock
of any
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Company, and that, subsequent to the registration of Common Stock and Merger of
a Company, I will not sell, pledge, assign or otherwise transfer or hypothecate
fifty percent (50%) of the Shares of such Company, (including any shares of
Common Stock registered in connection with the Registration Statement described
in Paragraph 13 hereof) or other equity securities of the Company (other than
those acquired in the public market in any initial public offering by such
Company or thereafter) during the twelve (12) month period following the
consummation of the Merger without the prior written consent of such surviving
Company. Notwithstanding anything contained herein, if, subsequent to a Merger,
a Company releases Xx. Xxxxx X. Xxxxxxxxx from the terms of his same lock-up
agreement restricting his Shares of Common Stock held prior to the Offering in
such Company, or releases the holder of any Placement Agent Warrant from the
lock- up, my Shares will be released in a pro rata percentage from the terms of
the lock-up agreement. This "Lock Up" Agreement may be referenced in a legend on
my shares.
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