Exhibit 10.1
THE ISSUANCE OF SECURITIES REPRESENTED BY THIS SUBSCRIPTION AGREEMENT HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), OR THE GEORGIA
SECURITIES ACT OF 1973 (THE "GEORGIA ACT"), OR ANY OTHER APPLICABLE STATE LAW,
AND WAS MADE IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION AND QUALIFICATION
PROVIDED IN THE ACT AND THE GEORGIA ACT, INCLUDING WITHOUT LIMITATION, SECTION
10-5-9(13) OF THE GEORGIA ACT. THESE SECURITIES CANNOT BE OFFERED, SOLD, OR
OTHERWISE TRANSFERRED UNLESS SUCH TRANSFER IS REGISTERED UNDER SUCH ACTS, OR
EXCEPT AS OTHERWISE PERMITTED PURSUANT TO RULE 144 UNDER THE ACT OR ANOTHER
EXEMPTION FROM REGISTRATION UNDER THE ACT, AND AN OPINION OF LEGAL COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACTS.
EBANK FINANCIAL SERVICES, INC.
SUBSCRIPTION AGREEMENT
TO: ebank Financial Services Inc.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Box, Chief Executive Officer
Dear Sir:
The undersigned (the "Subscriber") hereby tenders his subscription to
ebank Financial Services Inc., a Georgia corporation (the "Company"), on the
terms and conditions hereinafter set forth:
1. SUBSCRIPTION FOR COMMON STOCK
Subscriber hereby irrevocably subscribes for and agrees to purchase the number
of shares of the Company's common stock (the "Common Stock") as indicated below:
Number of shares of Common Stock subscribed for: 462,962 X $1.08 per share =
Total Purchase Price: $499,998.96.
Simultaneously with the execution and delivery by Subscriber of this
Subscription Agreement, Subscriber is delivering to the Company the Total
Purchase Price for the Common Stock in the form of a check payable to "ebank
Financial Services, Inc."
Subscriber acknowledges that the issuance of the Common Stock is not and will
not be registered under the Securities Act of 1933 (the "Act"), or the
securities laws of any state in reliance upon exemptions from registration
contained in those respective laws, and that the Company's reliance
upon such exemptions is based in part upon Subscriber's representations,
warranties and agreements contained in this Subscription Agreement. Subscriber
acknowledges that this Subscription Agreement constitutes a valid and binding
agreement on the Subscriber but not on the Company until accepted, and that
certificates for the Common Stock will be delivered to Subscriber as soon as
practicable after the Company accepts the Subscription Agreement.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SUBSCRIBER
In order to induce the Company to accept this subscription, Subscriber hereby
represents, warrants and agrees as follows:
2.1 Subscriber represents that he is purchasing the Common Stock for
his own account, with the intention of holding the Common Stock for investment,
with no present intention of either (i) dividing, or allowing others to
participate in, this investment or (ii) reselling or otherwise participating
directly or indirectly in a distribution of, the Common Stock or any part
thereof. Subscriber understands that the Common Stock has not been registered
under the Act or under any state securities law in reliance on representations
contained herein.
2.2 Subscriber represents that his financial condition is such that he
is not under any present necessity or constraint to dispose of the Common Stock
to satisfy any existing or contemplated debt or undertaking. Subscriber further
understands that he must bear the economic risk of investment in the Company for
an indefinite period (i.e., at the time of the investment, Subscriber has the
ability to afford a complete loss).
2.3 Subscriber understands that the shares of Common Stock subject
hereto are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Common Stock may be resold without registration under the Act only in
certain limited circumstances. Subscriber acknowledges and agrees that he will
not sell, transfer, or otherwise dispose of the Common Stock unless any such
transfer is registered under the Act, or unless such sale, transfer, or other
disposition would be in compliance with all applicable federal and state
securities laws and regulations and Subscriber provides the Company with a legal
opinion acceptable in form and substance to the Company and the Company's legal
counsel stating that such sale, transfer or other disposition may be made
without registration under the Act and under any other applicable laws and
regulations.
2.4 Subscriber represents that he either personally or together with
his offeree representative(s), possesses the requisite knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Common Stock.
2.5 Subscriber represents and acknowledges that Subscriber has been
granted access to, and had the opportunity to review, financial and other
information relating to the Company and all documents, records, and books
pertaining to the Company and the terms and conditions of investment in the
Common Stock, as well as such other information as Subscriber deems necessary or
appropriate as a prudent and knowledgeable investor in evaluating the merits and
risks of investment in the Common Stock, and that Subscriber understands that
the books and records of the Company will continue to be made available to
Subscriber for inspection upon reasonable notice, during reasonable business
hours, at the principal place of business of the Company, prior to acceptance of
this Subscription Agreement by the Company.
2.6 Subscriber has a pre-existing business or personal relationship
with the Company or with one or more of the Company's officers, directors, or
controlling persons. Subscriber and his advisers have had a reasonable
opportunity to ask questions of and receive answers from the officers of the
Company, or a person or persons acting on their behalf, concerning the terms and
conditions of this offering, and to obtain additional information, to the extent
possessed or obtainable without unreasonable effort or expense by the officers
of the Company. All such questions have been answered to the full satisfaction
of Subscriber.
2.7 Subscriber represents that his commitment to all speculative
investments is reasonable in relation to his net worth.
2.8 Subscriber understands that no federal or state agency or
securities exchange has recommended or endorsed the purchase of the Common
Stock.
2.9 Subscriber acknowledges that neither the Company, nor any person
acting on its behalf, offered to sell the Common Stock by means of any form of
advertising.
2.10 Subscriber understands that the Over-the-Counter Bulletin Board on
which the Company's common stock is quoted is not an established market.
Subscriber understands that the transferability of the Common Stock is subject
to the restrictions set forth herein and Subscriber cannot expect to be able to
liquidate his investment in case of an emergency.
2.11 Subscriber understands that adverse market, economic, or
regulatory events may occur that could lead to a partial or total failure of the
Company, resulting in a partial or total loss of his investment in the Company.
2.12 Subscriber understands that there will be placed on the
certificates for the Common Stock a legend substantially in conformance with the
following language:
THE ISSUANCE OF SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), OR THE GEORGIA
SECURITIES ACT OF 1973 (THE "GEORGIA ACT"), OR ANY OTHER APPLICABLE
STATE LAW, AND WAS MADE IN RELIANCE UPON THE EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION PROVIDED IN THE ACT AND THE GEORGIA ACT,
INCLUDING WITHOUT LIMITATION, SECTION 10-5-9(13) OF THE GEORGIA ACT.
THESE SECURITIES CANNOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
UNLESS SUCH TRANSFER IS REGISTERED UNDER SUCH ACTS, OR EXCEPT AS
OTHERWISE PERMITTED PURSUANT TO RULE 144 UNDER THE ACT OR ANOTHER
EXEMPTION FROM REGISTRATION UNDER THE ACT, AND AN OPINION OF LEGAL
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY IS
OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
SUCH ACTS.
2.13 The information provided in the Investor Questionnaire to the
Company by the Subscriber about the Subscriber is true and correct as of the
date hereof, and Subscriber agrees to advise the Company prior to its acceptance
of this subscription of any material change in any such information. Subscriber
agrees that the representations and warranties of Subscriber set forth in this
Section 2 shall survive the acceptance of this subscription, in the event that
such subscription is accepted.
2.14 Subscriber is an individual, is a citizen of the United States and
a resident of the State of Georgia. If Subscriber's residence changes to a state
other than the state indicated by Subscriber before Subscriber purchases the
Common Stock and before the Common Stock certificates are delivered to
Subscriber, Subscriber covenants and agrees to properly notify the Company.
2.15 When executed by Subscriber, this Subscription Agreement
(including these representations and warranties) will constitute a valid and
binding obligation of Subscriber, enforceable in accordance with its terms.
2.16 Subscriber understands and agrees that there is no minimum number
of shares that must be sold in this offering. Proceeds from this offering will
be immediately available to us regardless of the number of shares we sell.
2.17 Subscriber understands and agrees that the subscription set forth
herein will not be binding upon the Company until it is accepted by the Company,
that acceptance of any or all subscriptions is within the sole discretion of the
Company, and that the Company may choose to accept or reject any or all
subscriptions, including this subscription, for any reason or no reason, in its
sole discretion.
2.18 Subscriber represents and warrants to the Company that Subscriber
currently "beneficially owns" (as such term is defined below) securities of the
Company as follows: 42,583 shares of Common Stock; 80,000 shares of Series A
Preferred Stock; and warrants to purchase an aggregate of 40,000 shares of
Common Stock.
Subscriber represents and warrants to the Company that no member of Subscriber's
"immediate family" (as such term is defined below) beneficially owns securities
of the Company except as follows: Subscriber's brother owns 7,742 shares of
Common Stock, 34,000 shares of Series A Preferred Stock and warrants to purchase
an aggregate of 17,000 shares of Common Stock.
If Subscriber's beneficial ownership of the Company's securities changes before
Subscriber purchases the Common Stock, Subscriber covenants and agrees to
promptly notify the Company.
The terms "beneficially owns" and "beneficial ownership" as used in this
Subscription Agreement shall have the meaning set forth in Regulation 13d-3
under the Securities Exchange Act of 1934, as amended.
The term "immediate family" means a person's spouse, father, mother, children,
brothers, sisters and grandchildren; the father, mother, brothers and sisters of
a person's spouse; and the spouse of the person's child, brother or sister.
3. INDEMNIFICATION
Subscriber hereby agrees to indemnify and hold harmless the Company and the
directors, managers, members, officers, employees and agents of the Company from
any and all loss, damage, liability or costs (including attorneys' fees) due to,
or arising out of, any breach of any representation or warranty of Subscriber
contained in this Subscription Agreement.
4. GOVERNING LAW AND INTERPRETATION
This Subscription Agreement shall be construed in accordance with and governed
by the laws of the State of Georgia, without regard to the principles of
conflict of law. This Subscription Agreement constitutes the full and entire
agreement and understanding of the parties to this Subscription Agreement with
respect to the subjects hereof and supersedes all previous discussions and
agreements, if any, of the parties hereto with respect to the subject matter of
this Subscription Agreement. No party shall be liable for or be bound in any
other manner by any representations, warranties, covenants or agreements except
as specifically set forth in this Subscription Agreement.
5. NOTICES
The address of record for Subscriber maintained by the Company for all purposes
of this Subscription Agreement and the Common Stock shall be that address set
forth beneath Subscriber's signature on this Subscription Agreement. Subscriber
may change his address of record only by notifying the Company in the manner
prescribed herein. Any notice under this Agreement or with respect to the Common
Stock shall be in writing and shall be deemed to have been sufficiently given or
served and effective for all purposes when presented personally or five days
after deposit with the United States Postal Service, by registered or certified
mail, postage pre-paid, addressed to the Company at its principal place of
business and to Subscriber at the address of record maintained by the Company
with respect to Subscriber.
6. COUNTERPARTS
This Subscription Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. Facsimile transmission of signatures
shall be deemed originals.
7. MISCELLANEOUS
7.1 Subscriber agrees not to transfer or assign this Subscription
Agreement, or any of Subscriber's interest herein, to any other person, and
further agrees that the transfer or assignment
of the Common Stock shall be made only in accordance with this Subscription
Agreement, the Act and any other applicable laws and regulations.
7.2 Notwithstanding any of the representations, warranties,
acknowledgments, or agreements made herein by Subscriber, Subscriber does not
hereby or in any other manner waive any rights granted to Subscriber under
applicable federal or state securities laws.
7.3 Within five days after the receipt of a written request from an
officer of the Company, Subscriber agrees to provide such information and to
execute and deliver such documents as reasonably may be necessary to comply with
any and all laws and regulations to which the Company is subject.
7.4 The representations and warranties of Subscriber set forth herein
shall survive the sale of the Common Stock to Subscriber pursuant to this
Subscription Agreement.
7.5 Each party hereto shall execute and deliver such additional
documents as may reasonably be necessary or desirable to consummate the
transactions contemplated by this Subscription Agreement.
7.6 Whenever possible, each provision of this Subscription Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Subscription Agreement shall be
prohibited by or invalid under applicable law, such provisions shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of the
Subscription Agreement.
7.7 For a term of one (1) year following the execution by Subscriber of
this Subscription Agreement, Subscriber will not make any public disclosures
about, and agrees to hold in trust and strictest confidence, any Confidential
Information (as that term is defined herein) provided to Subscriber by the
Company and Subscriber agrees not to use, reproduce, distribute, disclose or
otherwise disseminate the Confidential Information; provided however, that
Subscriber may disclose any of the Confidential Information (i) to any of its
legal and professional advisors so long as such advisors are made aware of and
agree to comply with the provisions of this Section 7.7, (ii) to any relevant
governmental agencies but only if and to the extent necessary to implement and
consummate the terms of this Subscription Agreement; or (iii) if legally
compelled (by deposition, interrogatory, request for production of documents,
subpoena, civil investigative demand or similar process) to disclose any of the
Confidential Information, and in such case, only after prior written notice to
the Company so that Company may seek a protective order or other appropriate
remedy. Subscriber agrees not to purchase or sell securities of the Company for
as long as the Confidential Information remains material and nonpublic, other
than as may be permitted by applicable law. "Confidential Information" means
information and the compilation of information related to the operation and
business of the Company which derives economic value, actual or potential, from
not being generally known to or readily ascertainable by other persons who can
obtain economic value from its disclosure or use, including without limitation,
the existence and/or contents of this Subscription Agreement or the transactions
contemplated by this Subscription Agreement.
7.8 SUBSCRIBER AGREES THAT SUBSCRIBER MAY NOT CANCEL, TERMINATE, OR
REVOKE THIS SUBSCRIPTION AGREEMENT (EXCEPT AS OTHERWISE SPECIFICALLY PERMITTED
UNDER APPLICABLE STATE SECURITIES LAWS), AND THAT THIS SUBSCRIPTION AGREEMENT
SHALL SURVIVE THE DEATH OR DISSOLUTION OF SUBSCRIBER AND SHALL BE BINDING UPON
SUBSCRIBER'S HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS, AND ASSIGNS.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement as of December 28, 2004.
/s/ Xxxxx Xxxx Xxxxxx
----------------------------------------
(SUBSCRIBER SIGNATURE)
Name: Xxxxx Xxxx Xxxxxx
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Address: 000 Xxxxxxx Xxxx
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Xxxxxxx, Xxxxxxx 00000
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ACCEPTED AS OF:
December 28, 2004:
ebank Financial Services, Inc.
By: /s/ Xxxxx X. Box
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Name: Xxxxx X. Box
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Title: Chief Executive Officer
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