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EXHIBIT 10.9
SUBSCRIPTION AGREEMENT
Subscription Agreement, dated as of June __, 1996, between Mike's Original,
Inc., a Delaware corporation (the "Company") and _____________________________
(the "Purchaser").
WHEREAS, the Purchaser desires to subscribe for, and the Company desires to
issue to the Purchaser, Bridge Units (the "Units") consisting of $______
principal amount of promissory notes (the "Notes"), substantially in the form
attached hereto as Exhibit A, and ______ shares (the "Shares") of common stock,
par value $.001 per share (the "Common Stock") of the Company, all upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
premises, covenants, representations and warranties herein contained, it is
hereby agreed as follows:
1. Subscription Price; Issuance.
In reliance on the representations and warranties contained herein and
subject to the terms and conditions hereof, the Purchaser hereby subscribes for
___ Units and concurrently with delivery hereof has paid to the Company an
amount equal to $25,000 per Unit or $__________ in the aggregate, in immediately
available funds upon the execution and delivery of this Agreement, and the
Company will issue upon the closing as contemplated by the Memorandum (as
hereinafter defined) to the Purchaser a Note in the principal amount of $2,500
with respect to each such Unit and 11,250 Shares of Common Stock with respect to
each such Unit.
2. Representations and Warranties of the Company.
The Company represents and warrants to the Purchaser as follows:
2.1. Corporate Status.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with full corporate power
and authority to carry on its business as now conducted.
2.2. Authority of Agreement.
The Company has the power and authority to execute and deliver this
Agreement and to carry out its obligations hereunder. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and this Agreement constitutes the
valid and legally binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights generally now or hereafter in effect and subject to the
application of equitable principles and the availability of equitable remedies.
The Company has reserved from its authorized but unissued shares of Common Stock
such number of shares as shall be deliverable to the Purchaser upon the Closing
of the Units subscribed for hereby.
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2.3. No Conflicts.
The execution, delivery and performance of this Agreement and the
other instruments and agreements to be executed, delivered and performed by the
Company pursuant hereto and the consummation of the transactions contemplated
hereby and thereby by the Company do not and will not with or without the giving
of notice or the passage of time or both, violate or conflict with or result in
a breach or termination of any provision of, or constitute a default under, the
Certificate of Incorporation or the By-Laws of the Company or any order,
judgment, decree, statute, regulation, contract, agreement or any other
restriction of any kind or description to which the Company or its assets may be
bound or subject.
2.4 Fully Paid and Non-Assessable
Upon issuance of the Shares and payment therefor pursuant to the terms
hereof, each share of Common Stock shall be validly issued, fully paid and
non-assessable.
3. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Company as follows:
3.1. Status.
If the Purchaser is a corporation or other entity, the Purchaser is a
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization with full power
and authority to execute, deliver and perform its obligations under this
Agreement. If the Purchaser is an individual, the Purchaser has legal capacity
to execute, deliver and perform his or her obligations under this Agreement.
3.2 Authority for Agreements.
The Purchaser has the power and authority to execute and deliver this
Agreement and to carry out its obligations hereunder. The execution, delivery
and performance by the Purchaser of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Purchaser and this Agreement constitutes the valid and
legally binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of creditors'
rights generally now or hereafter in effect and subject to the application of
equitable principles and the availability of equitable remedies.
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3.3. No Conflicts.
The execution, delivery and performance of this Agreement and the
other instruments and agreements to be executed, delivered and performed by the
Purchaser pursuant hereto and the consummation of the transactions contemplated
hereby and thereby by the Purchaser do not and will not with or without the
giving of notice or the passage of time or both, violate or conflict with or
result in a breach or termination of any provision of, or constitute a default
under, the Certificate of Incorporation or the By-Laws of the Purchaser (if the
Purchaser is a corporation), any other organizational instrument (if the
Purchaser is a legal entity other than a corporation) or any order, judgment,
decree, statute, regulation, contract, agreement or any other restriction of any
kind or description to which the Purchaser is a party or by which the Purchaser
may be bound.
3.4. Investor Representations and Acknowledgements.
(a) The Purchaser is acquiring the Bridge Units for the Purchaser's
own account for investment only and not as nominee or agent and not with a view
to, or for sale in connection with, a distribution of the Bridge Units or its
components and with no present intention of selling, transferring, granting a
participation in or otherwise distributing, the Bridge Units or such components,
all within the meaning of the Securities Act of 1933, as amended, and the rules
and regulations thereunder (the "Securities Act") and any applicable state,
securities or blue sky laws.
(b) The Purchaser is not a party or subject to or bound by any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or pledge the Bridge Units or any part thereof to any person, and has
no present intention to enter into such a contract, undertaking, agreement or
arrangement.
(c) The Purchaser acknowledges to the Company that:
(i) The Company has advised the Purchaser that the Bridge Units and
their components have not been registered under the Securities Act or
under the laws of any state on the basis that the issuance thereof
contemplated by this Agreement is exempt from such registration;
(ii) The Company's reliance on the availability of such exemption
is, in part, based upon the accuracy and truthfulness of the
Purchaser's representations contained herein;
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(iii) The Bridge Units and their components cannot be resold without
registration or an exemption under the Securities Act and such state
securities laws, and that certificates representing the Shares will
bear a restrictive legend to such effect;
(iv) The Purchaser has evaluated the merits and risks of purchasing
the Bridge Units, and has such knowledge and experience in financial
and business matters that the Purchaser is capable of evaluating the
merits and risks of such purchase, is aware of and has considered the
financial risks and financial hazards of purchasing the Bridge Units,
and is able to bear the economic risk of purchasing the Bridge Units,
including the possibility of a complete loss with respect thereto;
(v) The Purchaser has had access to such information regarding the
business and finances of the Company, including without limitation,
the Company's audited and unaudited financial statements (including
certain drafts thereof) included in the disclosure documents delivered
by the Company to the Purchaser, and has been provided the opportunity
to discuss with the Company's management the business, affairs and
financial condition of the Company and such other matters with respect
to the Company as would concern a reasonable person considering the
transactions contemplated by this Agreement and/or concerned with the
operation of the Company.
(vi) The Purchaser hereby covenants and agrees that Purchaser shall
not directly or indirectly, offer, offer to sell, contract to sell,
pledge, hypothecate, grant any option to purchase or otherwise dispose
or transfer (or announce any offer, offer of sale, sale, contract of
sale, grant of any option to purchase or other disposition or
transfer), or agree to do any of the foregoing, with respect to the
Bridge Units and/or Shares, without the prior written consent of
Millenium Securities Corp., for a period of up to 18 months after an
initial public offering of Common Stock of the Company, even if such
Units or Shares of Common Stock are registered in such initial public
offering. The certificates representing the Bridge Units and such
Shares of Common Stock will bear a restrictive legend to such effect;
(vii) All the information which is set forth with respect to the
Purchaser in the Purchaser Questionnaire executed by the Purchaser,
all of which are incorporated herein by this reference, and all of the
Purchaser's representations and warranties set forth herein are
correct and complete as of the date of this Agreement, shall be true
and correct as of the closing of the transaction contemplated by this
Agreement, shall survive such closing and if there should by any
material change in such information prior to the sale to the Purchaser
of the Bridge Units the Purchaser will immediately furnish such
revised or corrected information to the Company; and
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(viii) Additional Representations and Warranties of Accredited
Investors. The Purchaser, by initialing the applicable paragraph below
(a) through (g) hereby represents and warrants that the Purchaser is
an "Accredited Investor", because the Purchaser comes within one or
more of the enumerated categories. The Purchaser has reviewed the
Investor Suitability Standards attached as Annex A hereto and confirms
it is an "Accredited Investor" as indicated below. Place your initials
in the space provided in the beginning of each applicable paragraph,
thereby representing and warranting as to the applicability to the
Purchaser of the initialed paragraph or paragraphs:
[ ] (a) any individual Purchaser whose net worth, or joint net
worth with that person's spouse at the time of his purchase,
exceeds $1,000,000 (including any individual participant of a
Xxxxx Plan, XXX or XXX Rollover Purchaser);
[ ] (b) any individual Purchaser who had an income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of those
years and who reasonably expects an income in excess of the same
income level in the current year (including any individual
participant of a Xxxxx Plan, XXX or XXX Rollover Purchaser);
[ ] (c) any corporation or partnership not formed for the
specific purpose of making an investment in the Bridge Units,
with total assets in excess of $5,000,000;
[ ] (d) any trust, which is not formed for the specific purpose
of investing in the Bridge Units, with total assets in excess of
$5,000,000, whose purchase is directed by a sophisticated person,
as such term is defined in Rule 506(b) of Regulation D under the
Securities Act;
[ ] (e) any ERISA Plan if the investment decision is made by a
plan fiduciary, as defined in section 3(21) of ERISA, which is
either a bank, insurance company, or registered investment
adviser, or the Plan has total assets in excess of $5,000,000;
[ ] (f) any entity in which all of the equity owners are
Accredited Investors under paragraphs (a), (b) or (c) above or
any other entity meeting required "Accredited Investor" standards
under Rule 501 of Regulation D under the Securities Act and
applicable State securities law criteria;
[ ] (g) other (please explain)
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4. Registration Rights.
4.1 IPO Registration. In connection with the purchase of the Bridge Units
and as an inducement to the Purchaser with respect thereto, the Company hereby
covenants and agrees that it shall cause all Shares purchased by the Purchaser
pursuant hereto to be registered under the registration statement relating to
the Company's initial public offering, as contemplated by the Letter of Intent
dated May 30, 1996 between the Company and Millenium Securities Corp. In
addition, the Company does hereby grant certain other registration rights, which
rights are set forth in more detail in Section 4.2 hereof and Section 5.
4.2 Piggyback Registration Rights. The Company further covenants and agrees
that if, at any time following the date hereof, the Company proposes to file a
registration statement with respect to the public offering of any class of
security (other than in connection with a merger or acquisition on Form S-4 or
successor form or in connection with an employee benefit plan on Form S-8 or
successor form) under the Securities Act in a primary registration on behalf of
the Company and/or in a secondary registration on behalf of holders of such
securities (other than the Shares) and the registration form to be used may be
used for registration of the Shares, the Company will give prompt written notice
(which shall be at least thirty (30) days prior to the proposed date of such
filing) to the holders of the Shares (the "Holders") at the addresses appearing
on the records of the Company of its intention to file a registration statement
and will offer to include in such registration to the maximum extent possible,
subject to paragraph (a) and (b) below of this Section 4.2, such number of
Shares with respect to which the Company has received written requests for
inclusion therein within ten (10) days after the giving of the Company's
aforementioned notice. The registration requested pursuant to this Section 4.2
is referred to herein as a "Piggyback Registration." The Company shall continue
to provide these Piggyback Registration rights and shall continue to give notice
of any such registrations to the Holders until such time as all of the Shares
shall have been registered under the Act.
(a) Priority on Primary Registrations. If the Piggyback Registration
applies to an underwritten primary registration on behalf of the
Company and the underwriter(s) of the offering being registered by the
Company shall determine in good faith and advise the Company in
writing that, in its/their opinion, the number of Shares requested to
be included in such registration exceeds the number than can be
registered on such registration statement without materially adversely
affecting the distribution of such securities by the Company, the
Company will include in such registration (i) first, the securities
that the Company proposes to sell, (ii) second, the securities
purchased by the Purchaser pursuant to this Subscription Agreement and
all other purchasers in this same non-public offering of Bridge Units
by the Company through Millenium Securities Corp., as placement agent
(the "Bridge Offering"), (iii) third, the securities issued to
Millenium Securities Corp. in connection with that certain Unit
Purchase Option more fully described in that certain Letter of Intent
dated May 30, 1996 between the Company and Millenium Securities Corp.
and (iv) fourth, any other securities requested to be included in such
registration, apportioned pro rata among the holders of such
securities.
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(b) Priority on Secondary Registrations. If the Piggyback Registration
applies only to an underwritten secondary registration on behalf of
holders of securities of the Company, and the underwriter(s) for such
offering being registered by the Company advise(s) the Company in
writing that, in its/their opinion, the number of Shares requested to
be included in such registration exceeds the number which can be
registered on such registration statement without materially adversely
affecting the distribution of such securities, the Company will
include in such registration (i) first, the securities requested to be
included therein by the initial holders requesting such registration,
(ii) second, the securities purchased by the Purchaser pursuant to
this Subscription Agreement and all other purchasers in the Bridge
Offering, and (iii) third, any other securities requested to be
included in such registration, apportioned pro rata among the holders
of such securities.
(c) Notwithstanding the foregoing, if any such underwriter shall
determine in good faith and advise the Company in writing that any
distribution of the Shares requested to be included in the
registration concurrently with the securities being registered by the
Company would materially adversely affect the distribution of such
securities by the Company, then the Holders of such Shares shall delay
their offering and sale for such period ending on the earliest of (1)
120 days following the effective date of the Company's registration
statement, (2) the day upon which the underwriting syndicate, if any,
for such offering shall have been disbanded or, (3) such date as the
Company, the managing underwriter of such offering and the Holders
shall otherwise agree. In the event of such delay, the Company shall
file such supplements, post-effective amendments and take any such
other steps as may be necessary to permit such Holders to make his
proposed offering and sale for a period of 120 days immediately
following the end of such period or delay. If the Purchaser
disapproves of the terms of any such underwriting, the Purchaser may
elect to withdraw therefrom by written notice to the Company.
5. Company's Obligations for Registrations.
5.1 Costs and Expenses. The Company shall pay all costs (excluding
expenses of counsel to the Holders and underwriting, dealers or selling
commissions, which shall be borne by the Holders), fees and expenses in
connection with any registration statement filed pursuant to Section 4 hereof
including, without limitation, the Company's legal and accounting fees, printing
expenses, blue sky fees and expenses. If the Company shall fail to comply with
the provisions of Section 4 hereof, the Company shall, in addition to any other
equitable or other non-monetary relief available to the Holders, be liable for
any or all incidental, special and consequential damages due to loss of profit
sustained by the Holders as a result of such failure.
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5.2 Blue Sky Laws. The Company will take all necessary action which
may be required in qualifying or registering the Shares included in a
registration statement for offer and sale under the securities or blue sky laws
of such states as reasonably are requested by the Holder(s); provided, that the
Company shall not be obligated to execute or file any general consent to service
of process or to qualify as a foreign corporation to do business under the laws
of any such jurisdiction; provided, further, that the Company shall not be
obligated to qualify or register the Shares in any state where the Company's
shares are not already qualified or registered for offer and sale as of the
effective date of the Company's initial public offering contemplated by that
certain Letter of Intent dated May 30, 1996 between the Company and Millenium
Securities Corp.
5.3 Indemnification of Holders. The Company shall indemnify the
Holder(s) of the Shares to be sold pursuant to any registration statement and
each person, if any, who controls such Holders within the meaning of Section 15
of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), against all loss, claim, damage, expense or
liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, arising
from such registration statement; provided, however, that the Company shall not
be required to indemnify the Holders for any loss, claim, damage, expense or
liability arising from any misstatement or omission of a material fact which is
based on information furnished in writing by or on behalf of such Holders, or
their successors or assigns, for inclusion in the registration statement. In
addition, the Company shall not be obligated to indemnify the Holders for any
loss, claims, damage, expense or liability arising from any misstatement or
omission of a material fact where the Company shall have timely delivered to the
Holders amendments or supplements of a registration statement or prospectus
which correct such misstatement or omission of a material fact and the Holders
fail to utilize such amendment or supplement in the offer and sale of the
Shares.
5.4 Indemnification of the Company. The Holders(s) of the Shares to be
sold pursuant to a registration statement, and their successors and assigns,
shall severally, and not jointly, indemnify the Company, its officers and
directors and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act,
against all loss, claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Securities Act, the
Exchange Act or otherwise, arising from information furnished in writing by or
on behalf of such Holders, or their successors or assigns, for inclusion in such
registration statement.
5.5 Deliveries. The Company shall furnish to each Holder participating
in the offering and to each underwriter thereof, if any, a signed counterpart,
addressed to such Holder or underwriter, of a "cold comfort" letter dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, a letter dated the date of the closing
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under the underwriting agreement) signed by the independent public accountants
who have issued a report on the Company's financial statements included in such
registration statement, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and, with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to underwriters in
underwritten public offerings of securities. In addition, in the event that the
subject registration is underwritten, the Company shall furnish to each Holder
participating in such offering and to each such underwriter thereof, an opinion
of counsel to the Company, dated as of the closing date of the public offering
covered by such registration statement, covering substantially the same matters
with respect to such registration statement (and the Prospectus included
therein) as are customarily covered in opinions of issuer's counsel delivered to
underwriters in underwritten public offerings of securities.
5.6 Financial Statements. The Company as soon as practicable, but in
any event not later than 45 days after the end of the 12-month period beginning
on the day after the end of the fiscal quarter of the Company during which the
effective date of the registration statement occurs (90 days in the event that
the end of such fiscal quarter is the end of the Company's fiscal year), shall
make generally available to its securities holders, in the manner specified in
Rule 158(b) under the Securities Act, and to the underwriter, an earnings
statement which will be in the detail required by, and will otherwise comply
with, the provisions of section 11(a) of the Securities Act and Rule 158(a),
which statement need not be audited unless required by the Securities Act,
covering a period of at least 12 consecutive months after the effective date of
the registration statement.
5.7 Copies. The Company shall furnish to each Holder of Shares such
number of copies of the registration statement, each amendment thereto, the
prospectus included in such registration (including each preliminary prospectus)
and such other documents as such Holder any reasonably request in order to
facilitate the disposition of the Shares owned by such Holder.
5.8 Underwritten Piggyback Offering. Subject to the Company's other
contractual obligations, the Company shall enter into an underwriting agreement
with the managing underwriters reasonably selected for such underwriting by
Holders holding a majority of the Shares requested to be included in such
underwriting and upon consent of the Company, which consent shall not be
unreasonably withheld. Such agreement shall be satisfactory in form and
substance to the Company, each Holder and such managing underwriters, and shall
contain such representations, warranties and covenants by the Company and such
other terms as are customarily contained in agreements of that type used by the
managing underwriter. The Company shall deliver promptly to each managing
underwriter, if any, of an offering to which Piggyback Registration applies,
copies of all correspondence between the Securities and Exchange Commission (the
"Commission") and the Company, its counsel or auditors and all memoranda
relating to discussions with the Commission or its staff with respect to the
registration statement and permit each underwriter to do such investigation,
upon reasonable advance notice, with respect to information contained in or
omitted from the registration statement as it deems reasonably necessary to
comply with applicable securities laws or rules of the National Association of
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Securities Dealers, Inc. ("NASD"). Such investigation shall include access to
books, records and properties and opportunities to discuss the business of the
Company with its officers and independent auditors, all to such reasonable
extent and at such reasonable times and as often as any such Underwriter shall
reasonably request. The Holders shall be parties to any underwriting agreement
relating to an underwritten sale of their Shares and may, at their option,
require that any or all the representations, warranties and covenants of the
Company to or for the benefit of such underwriters shall also be made to and for
the benefit of such Holders. Such Holders shall be required to make such
representations or warranties as to such Holders to or agreements with the
Company or the underwriters as are customary under the circumstances.
6. Further Assurances.
At any time and from time to time after the date hereof, each party shall,
without further consideration, execute and deliver to the other such other
instruments or documents and shall take such other actions as the other may
reasonably request to carry out the transactions contemplated by this Agreement.
7. Miscellaneous.
Any party may waive compliance by the other with any of the provisions of
this Agreement. No waiver of any provision shall be construed as a waiver of any
other provision. Any waiver must be in writing. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. This Agreement may not be modified
or amended except in writing signed by both parties hereto. This Agreement may
be executed in several counterparts, each of which shall be deemed an original,
and all of which shall constitute one and the same instrument. This Agreement
shall be governed in all respects, including validity, interpretation and
effect, by the laws of the State of Delaware, applicable to contracts made and
to be performed in Delaware. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the successors and assigns of the parties
hereto. This Agreement shall not be assignable by either party without the prior
written consent of the other, such consent not to be unreasonably withheld. The
rights and obligations contained in this Agreement are solely for the benefit of
the parties hereto and are not intended to benefit or be enforceable by any
other party, under the third party beneficiary doctrine or otherwise.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
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EXECUTION PAGE FOR SUBSCRIPTION BY INDIVIDUALS
(not applicable to subscriptions by entities, Individual
Retirement Accounts, Xxxxx Plans or ERISA Plans)
TOTAL SUBSCRIPTION AMOUNT $___________________________
INDIVIDUAL OWNER CUSTODIAN UNDER
(One signature required below) Uniform Gifts to Minors Act
JOINT TENANTS WITH RIGHT _______________________________
OF SURVIVORSHIP (Insert applicable state)
(All tenants must sign below) (Custodian must sign below)
TENANTS IN COMMON COMMUNITY PROPERTY
(All tenants must sign below) (Both spouses in community property
states must sign below)
Print information as it is to appear on the Company records.
___________________________ ___________________________________
(Name of Subscriber) (Social Security or Taxpayer ID No.)
___________________________
___________________________ ___________________________________
(Home Address) (Home Telephone)
___________________________
___________________________ ___________________________________
Address) (Business Telephone)
___________________________ ___________________________________
(Name of Co-Subscriber) (Social Security or Taxpayer ID No.)
___________________________
___________________________ ___________________________________
(Home Address) (Home Telephone)
___________________________
___________________________ ___________________________________
(Business Address) (Business Telephone)
SIGNATURE(S)
Dated:______________, 1996.
(1) By: _____________________________ (2) By: ___________________________
Signature of Authorized Signatory Signature of Authorized Co-Signatory
Print Name of Signatory and Title, Print Name of Co-Signatory and Title,
if applicable if applicable
ACCEPTED AND AGREED:
MIKE'S ORIGINAL, INC.
By: ________________________________ Dated: ________________________, 1996
Name:
Title:
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(ACKNOWLEDGEMENT FOR INDIVIDUALS)
STATE OF :
: s:
COUNTY OF :
On this _____________ day of ___________, 1996, before me, a notary public in
and for the state and county aforesaid, personally appeared
___________________________, known to me to be the person(s) whose name(s) is
(are) subscribed to the foregoing Subscription Agreement and acknowledged that
he, she or they executed the same.
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EXECUTION PAGE FOR SUBSCRIPTION BY ENTITIES
TOTAL SUBSCRIPTION AMOUNT $
[ ] EMPLOYMENT BENEFIT PLAN OR TRUST (including pension plan, profit sharing
plan, other defined contribution plan and SEP)
[ ] XXX, XXX ROLLOVER OR XXXXX PLAN
[ ] TRUST (other than employee benefit trust)
[ ] CORPORATION (Please include certified corporate resolution authorizing
signature)
[ ] PARTNERSHIP
[ ] OTHER
Print information as it is to appear on the Company records.
______________________________ _________________________________
(Name of Subscriber) (Taxpayer ID Number)
______________________________ _________________________________
(Address) (Telephone Number)
Name and Taxpayer ID number of sponsor, if applicable
The undersigned trustee, partner, corporate officer or fiduciary certifies
that he or she has full power and authority from all beneficiaries, partners or
shareholders of the entity named above to execute this Subscription Agreement on
behalf of the entity and to make the representations, warranties and agreements
made herein on their behalf and that investment in the Bridge Units has been
affirmatively authorized by the governing board or body of such entity and is
not prohibited by law or the governing documents of the entity.
SIGNATURE(S)
Dated: ___________________, 1996.
By:__________________________________ ____________________________________
Signature of Authorized Signatory Signature of Required Authorized
Co-Signatory
__________________________________ ____________________________________
Print Name of Authorized Signatory Print Name of Required Authorized
Co-Signatory
Co-Signatory
__________________________________ ____________________________________
Print Name of Authorized Signatory Print Name of Required Authorized
Co-Signatory
ACCEPTED AND AGREED:
MIKE'S ORIGINAL, INC.
By: _________________________________ Dated: _______________________, 1996
Name:
Title:
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(ACKNOWLEDGEMENT FOR ENTITIES)
STATE OF :
: ss:
COUNTY OF :
On this ___________ day of _______, 1996, before me personally came
_____________________ known to me, who, being by me duly sworn, did depose and
say that he or she is the __________ of ___________________________________, the
entity described in and which executed the foregoing Subscription Agreement;
that is was so affirmatively authorized by the governing board or body of such
entity; and that he or she signed his or her name thereto by like order.
Notary Public
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Annex A
INVESTOR SUITABILITY STANDARDS
A purchase of the Bridge Units involves a high degree of risk and is suitable
only for persons of substantial financial means who have no need for liquidity
in their investments. The offer, offer for sale, and sale of the securities are
intended to be exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Regulation D promulgated
thereunder ("Regulation D"), and are intended to be exempt from the requirements
of applicable state securities laws.
The Bridge Notes are being offered and sold to up to 35 non-accredited
investors and to "accredited investors," as that term is defined in Regulation
D. Each "accredited investor" must represent, in writing, that he or she is an
accredited investor. In addition, such investor will be required, upon the
request of the Company, to provide such information as may be deemed necessary
to substantiate the accuracy of such representation.
Regulation D defines an "accredited investor" as follows:
(1) Any bank as defined in section 3(a)(2) of the Securities Act, or any
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; 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 Securities 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,
its 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 $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
or 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 $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 or acquiring the securities offered, with total
assets in excess of $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;
16
(5) Any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his or her purchase exceeds $1,000,000;
(6) Any natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse in
excess of $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 $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) of Regulation D;
and
(8) Any entity in which all of the equity owners are accredited investors.
