EXHIBIT 10.3
IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING; SIGNIFICANT
--------- REPRESENTATIONS ARE CALLED FOR HEREIN
SUBSCRIPTION AND INVESTMENT REPRESENTATION AGREEMENT
Photo Control Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned Xxxxxxx X. Xxxxxxx ("Subscriber")
-----------------------------
EXACT LEGAL NAME OF INDIVIDUAL/ENTITY
hereby subscribes to purchase upon the terms and conditions set forth below that
number of whole shares of common stock, $0.01 par value ("SHARES"), of Photo
Control Corporation, a Minnesota corporation ("COMPANY") at a price per share
equal to the lower of the (a) 70% of the average closing price per share of the
company's Common Stock on the Nasdaq Small Cap Market over the 30 calendar day
period preceding the date hereof and ( b) 70% of the average closing price per
share of the Company's Common Stock on the Nasdaq Small Cap Market over the 30
calendar day period preceding the day prior to the date of the closing under
that certain Merger Agreement and Plan of Reorganization by and among Company,
Nature Vision, Inc., Xxxx Xxxxxx and certain other parties (THE "MERGER"), which
equals an aggregate purchase price of approximately $1,000,000; provided the
price per Share shall not be lower than $1.53. A check or wire transfer payable
to Photo Control Corporation for such aggregate purchase price will be delivered
at the closing of the Merger. Subscriber and Company agree that this
subscription is binding upon the parties, contingent only upon closing of the
Merger. Subscriber agrees to enter into the Irrevocable Proxy in the form
attached hereto as Exhibit A granting Xxxx Xxxxxx the right to vote the Shares
for a period of two years.
1. REPRESENTATIONS OF SUBSCRIBER - Subscriber acknowledges and represents as
follows:
(a) Subscriber has been given full access to information regarding the
Company, and the opportunity to meet with Company officers and to
review all the documents that Subscriber may have requested, and has
utilized such access to its satisfaction for the purpose of obtaining
all information Subscriber deems necessary for purposes of making an
informed investment decision;
(b) Subscriber has sufficient knowledge and experience in financial and
business matters that Subscriber is capable
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of evaluating the merits and risks of investing in the Shares;
(c) Subscriber understands that the purchase of the Shares is a highly
speculative investment, involves a high degree of risk, and that the
Company makes no assurances whatever concerning the present or
prospective value of the Shares;
(d) Subscriber believes that the investment in the Shares is suitable
based upon Subscriber's investment objectives and financial needs and
Subscriber has adequate means of providing for current financial needs
and personal contingencies, has obtained, to the extent he or she
deems necessary, personal professional advice with respect to the
risks inherent in an investment in the Shares, has no need for
liquidity of investment with respect to the Shares and can afford a
complete loss of such investment;
(f) Subscriber understands that (i) there are substantial restrictions on
the transfer of the Shares; (ii) there is not currently, and it is
unlikely that in the future there will exist, a public market for the
Shares; and (iii) accordingly, for the above and other reasons,
Subscriber may not be able to liquidate an investment in the Shares
for an indefinite period; and
2. INVESTMENT INTENT; RESTRICTIONS ON TRANSFER - Subscriber has been advised
that the Shares are not being registered under the Securities Act of 1933,
as amended, (the "Act") or state securities laws and are being sold
pursuant to exemptions from the Act and such laws, and that the Company's
reliance upon such exemptions is predicated in part on the representations
of Subscriber contained herein. Subscriber represents and warrants that the
Shares are being purchased for Subscriber's own account and for investment
without the intention of reselling or redistributing the same, that no
agreement has been made by Subscriber with others regarding beneficial
ownership of the Shares and that Subscriber's financial condition is such
that it is not likely that it will be necessary to dispose of any of such
Shares in the foreseeable future. Subscriber further understands and agrees
that the Shares may not be sold except pursuant to an effective
registration statement under the Act and applicable state securities laws,
or an opinion of counsel that such registration is not required (it being
expressly understood that the Company shall not have any obligation to
register the Shares). Additionally, the Shares will all be subject to the
Shareholder Agreement in the form attached hereto. Subscriber understands
that a legend will be placed on the certificates representing the Shares,
containing substantially the following language:
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These shares have been purchased for investment within the
meaning of the Securities Act of 1933 as amended ("Act") and
applicable state securities laws, and they may not be sold,
offered for sale, pledged, or otherwise transferred without
an effective registration statement under the Act and
applicable state securities laws or an opinion of counsel
satisfactory to the company to the effect that the proposed
transaction will be exempt from registration.
3. RESIDENCE - Subscriber represents and warrants that Subscriber is a bona
fide resident of, and is domiciled in, the state so designated on the
signature page hereto, and that the Shares are being purchased solely for
the beneficial interest of Subscriber and not as nominee for, or on behalf
of, or for the beneficial interest of, or with the intention to transfer
to, any other person, trust, or organization, except as specifically set
forth in this Agreement.
4. ACCREDITED INVESTOR STATUS - Subscriber represents and warrants that
Subscriber is an "accredited investor" as such term is defined in
Regulation D of the Securities and Exchange Commission.
5. ENTITY REPRESENTATIONS - Subscriber, if other than an individual, makes the
following additional representations:
(a) Subscriber was not organized for the specific purpose of acquiring the
Shares; and
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(b) this Agreement has been duly authorized by all necessary action on the
part of Subscriber, has been duly executed by an authorized officer or
representative of Subscriber, and is a legal, valid, and binding
obligation of Subscriber enforceable in accordance with its terms.
6. MISCELLANEOUS -
(a) Manner in Which Title is to be Held [Check one] -
__X___ Individual Ownership
______ Corporation or LLC
______ Partnership (PROVIDE COPY OF PARTNERSHIP AGREEMENT)
______ Community Property
______ Joint Tenant with Right of Survivorship (both parties must sign)
______ Tenants in Common (both parties must sign)
______ As Custodian, Trustee or Agent (PROVIDE COPY OF CUSTODY, TRUST
OR AGENCY AGREEMENT, CUSTODIAN OR AGENT AND BENEFICIARY MUST
BOTH SIGN)
______ Other (Describe) ________________________
(b) Subscriber agrees to furnish any additional information that the
Company or its counsel deem necessary in order to verify the responses
set forth above.
(c) Subscriber understands the meaning and legal consequences of the
agreements, representations and warranties contained herein.
Subscriber agrees that such agreements, representations and warranties
shall survive and remain in full force and effect after the execution
hereof and payment for the Shares. Subscriber further agrees to
indemnify and hold harmless the Company, and each current and future
officer, director, employee, agent and shareholder of the Company,
from and against any and all loss, damage or liability due to, or
arising out of, a breach of any of my agreements, representations or
warranties contained herein.
(d) This Agreement is not transferable or assignable by Subscriber. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and to the successors and assigns of the Company and to
the legal representatives, successors and permitted assignees of
Subscriber.
(e) This Agreement shall be governed by, and construed and enforced in
accordance with, Minnesota law.
(f) This instrument contains the entire agreement of the parties, and
there are no representations, covenants or other agreements except as
stated or referred to herein.
Dated Effective April 15, 2004.
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INDIVIDUAL SUBSCRIBER:
/s/ Xxxxxxx X.Xxxxxxx
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Signature of Xxxxxxx X. Xxxxxxx
The Subscription and Investment Representation Agreement is accepted
effective as of April 15, 2004.
Photo Control Corporation
By: /s/ Xxxxxx Xxxxxxx
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Its: President
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