Exhibit 10.3
SUBSCRIPTION AGREEMENT
Date: February 21, 2005
TO: NEW CENTURY ENERGY CORP.
PLEASE INSERT TODAY'S DATE ABOVE IN THE SPACE INDICATED. ALSO, YOU MUST SIGN
THIS SUBSCRIPTION AGREEMENT AT THE END WHERE INDICATED AND COMPLETE ALL
INFORMATION ASKED FOR FOLLOWING THE SIGNATURE LINE. NO SUBSCRIPTION WILL BE
ACCEPTED WITHOUT THIS INFORMATION.
RE: Subscription for Shares Pursuant to Regulation S under the Securities Act
of 1933
Gentlemen:
1. ACKNOWLEDGEMENT AND SUBSCRIPTION. The undersigned (herein the "Subscriber")
hereby acknowledges that he subscribes for the purchase of shares of the common
stock (the "Shares") of New Century Energy Corp. (the "Company") in the amount
up to One Million Dollars($1,000,000) and with an option to purchase an
additional One Million Dollars at the price of 40% of the daily closing offer
price as reported by NASDAQ or OTCBB (with a minimum purchase price of .35 per
share unless otherwise agreed upon in advance by the Company). Subscriber also
confirms that he has received pertinent information about the Company which
includes, among other things, pertinent financial and business information
regarding its products, operations and future plans, together with such other
information as has been requested by Subscriber from the Company so that
Subscriber may properly make an informed investment decision concerning the
subscription for the Company's Shares. Subscriber also acknowledges that,
except as set forth herein, no representations or warranties have been made to
the undersigned, or to his advisers by the Company or by any officer, director,
employee or by any person acting in the Company's behalf, and THE UNDERSIGNED
HAS NOT RELIED UPON ANY INFORMATION CONCE-RNING THE SHARES BEING PURCHASED,
WRITTEN OR ORAL, OTHER THAN THAT PROVIDED BY THE COMPANY.
2. PAYMENT. Subscriber agrees to pay for the Shares in weekly closings until
the subscription is fully completed pursuant to the instructions of the Company
in good funds, denominated in US Dollars, transmitted in the form of wire
transfer or bank/cashier's check to the account of the Escrow Agent designated
by the Company for this purpose.
3. ESCROW PROVISIONS, REGULATION S RESTRICTIONS AND ISSUANCE OF SHARE
CERTIFICATES.
A. ESCROW OF SUBSCRIPTION PROCEEDS. All funds of Subscriber will be
forwarded to Xxxx Xxxxx Xxxxxxxxx, Escrow Agent, as escrow agent for the
Company ("Escrow Agent"), and deposited in an Escrow Account maintained for
such purpose under the terms of a separate Escrow Agreement that shall
govern the release of funds and share certificates. The Escrow Agent shall,
upon receipt of this subscription with good, available funds, wire transfer
the net proceeds to Company. Upon receipt of the proceeds, the Company
shall promptly issue all necessary instructions to the Company's Transfer
Agent, with instructions to issue the Share Certificate in the name set
forth in this Subscription Agreement.
Subscription Agreement
Page 2
B. REGULATION S OFFERING. The Shares being sold by the Company are
offered pursuant to Regulation S promulgated under the Securities Act of
1933, as amended (the "Act"), and will be subject to the restrictions on
transfer provided by Regulation S, the terms and conditions of which are
incorporated herein by reference. Share Certificates shall bear a customary
Regulation S legend and special "stop transfer" instructions restricting
the transfer of such Shares to any US Person, as such term is defined in
Regulation S promulgated under the Act, for a period of one (1) year from
the date of purchase of the Shares (the "Restricted Period"). Except as so
noted, the Shares will be freely transferable on the Company's books and
records.
C. REMOVAL OF RESTRICTIVE LEGEND. At the end of the Restricted Period
the Company will provide to its Transfer Agent a legal opinion prepared by
Company Counsel to the effect that the restrictive legend may be
appropriately removed from the Share Certificates, should such a legal
opinion be required by the Transfer Agent in order to so remove the
restrictive legend. All fees relating to the removal of the legend, except
for selling or brokerage commissions, shall be borne by the Company.
However, nothing contained herein shall affect in any way the Subscriber's
obligation and agreement to comply with all applicable securities laws upon
the sale of the Shares.
D. NO REGULATORY REVIEW OF OFFERING. No federal or state agency in the
United States has made any finding or determination as to the fairness of
this purchase in the Company, nor has any such body made any endorsement of
this investment.
E. DELIVERY OF CERTIFICATES. Upon receipt of Share Certificates Escrow
Agent will promptly forward the Share Certificates to the Subscriber.
4. SUBSCRIBER REPRESENTATIONS, WARRANTIES AND COVENANTS. Subscriber hereby
acknowledges, represents and warrants to, and agrees with, the Company and any
other persons acting as selling agents as follows:
(a) The Subscriber is not a resident of the United States and if a
corporation or other entity, is not organized under the laws of any
jurisdiction within the United States, and if the Subscriber is an
entity other than an individual, it was not formed for the purpose of
investing in securities sold under Regulation S under the Act.
Subscriber is not a subsidiary of a corporation organized in the
United States, and is not otherwise a "U.S. Person" as that term is
defined in Section 902 of Regulation S.
(b) At the time that this subscription for the Shares was made, Subscriber
was outside of the United States and continued to be outside of the
United States at the time this Subscription Agreement was delivered to
the Company.
(c) Subscriber is acquiring the Shares for his, her or its own ac-count,
as principal, or for the account of persons each of whom have entered
into offshore subscription agreements or documents certifying that
they are not U.S. Persons as defined under Regulation S, and the
undersigned confirms that neither he, she, it or they are purchasing
the Shares for the account or for the benefit of a U.S. Person, as
defined in Regulation S.
Subscription Agreement
Page 3
(d) Subscriber warrants and represents that he is not a resident of the
United States;
(e) The offer leading to the purchase and sale evidenced hereby was made
in an "offshore transaction" for the purposes of Regulation S under
the Act. An "offshore transaction" is defined under Regulation S as
any offer or sale of securities if (i) the offer is made to a person
outside of the United States or the Company and any person acting for
the Company reasonably believes that the Subscriber is outside of the
United States when the offer is made; or (ii) the transaction is
executed in or through the facilities of an offshore securities market
as defined by Regulation S to be the "Eurobond Market," as regulated
by the Association of the International Bond Dealers, the American
Stock Exchange of Hong Kong Limited, the International Stock Exchange
of the United Kingdom and the Republic of Ireland, Limited, the
Johannesburg Stock Exchange, the Toronto Stock Exchange, the Vancouver
Stock Exchange, the Stockholm Stock Exchange, the Tokyo Stock Exchange
or the Zurich Stock Exchange. In regard to this representation and
warranty and understanding, it is agreed that offers and sales to
persons excluded from the definition of "U.S. Person" are offshore
transactions;
(f) For purposes of this Agreement, a "U.S. person as defined under
Regulation S is (i) any natural person resident in the United States;
(ii) any partnership or corporation organized or incorporated under
the laws of the United States; (iii) any estate of which an executor
or administrator is a U.S. Person; (iv) any trust of which any trustee
is a U.S. Person; (v) any agency or branch of a foreign entity located
in the United States; (vi) any non-organized, incorporated or (if an
individual) resident in the United States and (vii) any partnership or
corporation if (A) organized or incorporated under the laws of any
foreign jurisdiction and (B) formed by a U.S. Person principally for
the purpose of investing in securities not registered under the Act
unless it is organized, incorporated or owned by accredited investors
who are not natural persons, estates or trusts;
(g) Neither the Subscriber, nor any affiliate, nor any person acting on
their behalf, has made any direct selling efforts in the United
States, as defined in Regulation S to be any activity undertaken for
the purpose of, or that could reasonably be expected to have the
effect of conditioning the market in the United States for any
securities being purchased hereby;
(h) The Subscriber further understands and agrees that the Company shall
be under no obligation whatsoever to include any of said securities
in any future registration statement filed under the Act and that,
consequent-ly, the sale or transfer thereof in the future will be
subject to significant restrictions as provided in Regulation S under
the Act and discussed herein above;
(i) The Subscriber (i) by himself or together with his advisor(s), has
such knowledge and experience in financial, business and tax matters
that the Subscriber is capable of evaluating the merits of the
prospective investment in the Company and making an investment
decision with respect to the Company; and (ii) the Subscriber is able
to bear the economic risk of this investment;
(j) Other than the information, if any, given to the Subscriber by the
Company in writing, no representations or warranties have been made
to the under-signed by the Company or any other person in connection
with this Offering, or any officer, employee, agent, affiliate or
subsidiary of any of them, other than as set forth in this
Subscription Agreement.
Subscription Agreement
Page 4
(k) If the Subscriber is a corporation, partnership, trust or other
entity, it is authorized and qualified to purchase the securities
indicated in this Subscription Agreement and authorized to make its
capital contribution to the Company and otherwise to comply with its
obligations under this Subscription Agreement, and the person signing
this Subscription Agreement on behalf of such entity has been duly
authorized by such entity to do so;
(l) If the Subscriber is an individual, he is over 21 years of age and is
a citizen and resident of the country indicated herein; or, if the
Subscriber is a partnership, trust or other entity, each equity owner
of such entity is over 21 years of age and a citizen of the country
indicated herein; or if the Subscriber is a corporation, it is duly
organized under the laws of the country set forth herein;
(m) Any information which the Subscriber has heretofore furnished to the
Company in this Subscription Agreement, including information with
respect to his financial position, investment objectives and business
experience, is correct and complete as of the date of this
Subscription Agreement and if there should be any material change in
such information prior to his purchase of the Shares herein, he will
immediately furnish such revised or corrected information to the
Company;
(n) The foregoing representations, warranties and agreements shall survive
the acceptance of this subscription and delivery of the Shares.
5. FURTHER DISTRIBUTION OF SHARES. In such event the Subscriber warrants,
represents and confirms that any such further distribution is in compliance with
the provisions of Regulation S and that each individual or entity that may
receive a portion of the Shares herein subscribed for is not a U.S. Person as
defined under Regulation S and that each of the representations in Paragraph 4
above relating to the status of Subscriber as a non-U.S. person under Regulation
S applies with the same force and effect to each party to whom Subscriber
desires to transfer Shares. Subscriber shall provide to the Escrow Agent or the
Company such additional information or warranties as may reasonably be required
in connection with the issuance of such Shares.
6. INDEMNITY. The Subscriber agrees to indemnify and hold harmless the
Company, its officers and directors or any other persons participating in the
sale of Shares against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against litigation
commenced or threatened or with respect to any claim) arising out of or based
upon any breach of or failure by the Sub-xxxxxxx, or any party to whom
Subscriber may transfer Shares under Paragraph 5 above, to comply with any
representation, warranty, covenant or agreement made by Subscriber herein or in
any other document furnished by the Subscriber in connection with this
transaction.
7. MODIFICATION. Neither this Subscription Agreement nor any provisions
hereof shall be modified, changed, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.
Subscription Agreement
Page 5
8. REVOCABILITY. Except as may be required by law in certain jurisdictions,
this Subscription Agreement is irrevocable and when signed, may not be withdrawn
or revoked by the Subscriber in whole or in part without the consent of the
Company.
9. NOTICES. All notices, consents, requests, demands, offers, reports and
other communications required or permitted to be given pursuant to this
Subscription Agreement shall be in writing and shall be considered properly
given or made when personally delivered to the party entitled thereto, or when
sent by mail in a sealed envelope, with postage prepaid, addressed, if to the
Company, to the address given above, and if to the Subscriber, to the address
set forth opposite the Subscriber's signature on the counterpart of this
Subscription Agreement that he originally executed and delivered to the Company.
The Company may change its address by giving notice to all Subscribers.
10. COUNTERPARTS. This Agreement may be executed in counter-part copies,
each of which shall be considered an original and all of which constitute one
and the same instrument binding on all the parties, notwithstanding that all
parties are not signatories to the same counterpart.
11. SUCCESSORS AND ASSIGNS. This Subscription Agreement and all of the terms
and provisions hereof shall be binding upon and inure to the benefit of the
parties and their respective heirs, executors, administrators, successors,
trustees, legal representatives and assigns. If the Subscriber is more than one
person, the obligation of the Subscriber shall be joint and several and the
agreements, representations, warranties and acknowledgements herein contained
shall be deemed to be made by and be binding upon each such person and his
heirs, executors, administrators, successors, trustees, legal representatives
and assigns.
12. ASSIGNABILITY. This Subscription Agreement is not transferable by the
Subscriber.
13. GOVERNING LAW, JURISDICTION. This Agreement shall be construed, performed,
and enforced in accordance with, and governed by, the internal laws of
Switzerland, without giving effect to the principles of conflicts of laws
thereof.
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement
this day of 21 , 2005
-----
Name of Subscriber: KITARO, INC.
Witnessed By: Signature of Subscriber:
/s/ Xxxxx Xxxxxx
--------------------- -----------------------------
Title
Subscription Agreement
Page 6
Number of Shares Subscribed For:
US Dollar Amount Subscribed For: $ 1,000,000 up to $ 2,000,000
One million up to two million US Dollars
Subscriber Address: If a Corporation:
00xx Xxxxxx 00xx Xxxxx
Xxxxxx Xxxx, Xxxxxx Country of Incorporation: Panama
Country of Residence:
If a Partnership: Country of Formation:
---------------------------------------
Countries of citizenship of members:
---------------------------------------
This Subscription Agreement is Accepted this 21,day of February, 2005
COMPANY NAME: NEW CENTURY ENERGY CORP.
By:
---------------------------------
Title:
---------------------------------
