EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER
(THE "ACT"), AND NO INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO REGISTRATION UNDER
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
AMERICAN UNITED GLOBAL, INC.
7% Series B-2 Convertible Preferred Stock and Warrants
THIS SECURITIES SUBSCRIPTION AGREEMENT dated January 3,
1997 (this "Agreement"), is executed in reliance upon the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended
(the "Act"). Capitalized terms used herein and not defined shall have the
meaning given to them in said Section 4(2) or the rules and regulations
promulgated pursuant thereto.
THIS AGREEMENT has been executed by the undersigned
("Buyer") in connection with the private placement of 7% Series B-2
Convertible Preferred Stock of American United Global, Inc., a corporation
organized under the laws of the State of Delaware ("Seller") and certain
related warrants. Buyer and Seller hereby agree with each other as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
(a) SUBSCRIPTION. The undersigned Buyer hereby subscribes for and
agrees to purchase that number of shares of the Seller's Series B-2 Convertible
Preferred Stock (the Series B-2 Convertible Preferred Stock being hereinafter
referred to as the "Preferred Shares"), par value $0.01 per share (which shares
are convertible on the terms and conditions set forth in the instruments
governing the Preferred Shares into a certain number of shares (the "AUGI
Conversion Shares") of the common stock of the Seller, $0.01 par value per share
(the "AUGI Common Stock")). The undersigned Buyer also hereby subscribes for
and agrees to purchase a certain number of warrants (the "AUGI Warrants") to
purchase a certain number of shares (the "AUGI Warrant Shares") of the AUGI
Common Stock. Pursuant to SECTION 3(O)(B) of this Subscription Agreement, the
Buyer also shall have the right, on the terms and conditions set forth in said
SECTION 3(O)(B), to acquire a certain number of warrants (the "eXodus Warrants")
to purchase a certain number of shares (the "eXodus Warrant Shares") of the
common stock (the "eXodus Common
Stock") of eXodus Technologies, Inc. ("eXodus"), a corporation which is a
subsidiary of the Seller. The Preferred Shares, the AUGI Conversion Shares,
the AUGI Warrants, and the AUGI Warrant Shares and, if they become issuable
in the future in accordance with the terms of SECTION 3(O)(B) of this
Subscription Agreement, the eXodus Warrants and the eXodus Warrant Shares,
are sometimes hereinafter referred to as the "Securities". The number of
shares of Preferred Shares and the number of AUGI Warrants the Buyer hereby
subscribes for and agrees to purchase are set forth below Buyer's name on the
signature page hereof, and the aggregate purchase price (the "Purchase
Price") for such number of Preferred Shares and AUGI Warrants (NOT including
the additional price to be paid in order to exercise the AUGI Warrants or to
acquire and exercise the eXodus Warrants, should the same become issuable) is
also set forth below Buyer's name on the signature page hereof.
(b) PAYMENT. The Purchase Price for the Preferred Shares shall be
payable at closing by delivering to the Seller's account immediately available
funds in United States Dollars by wire transfer for closing against delivery of
securities.
(c) CLOSING. Subject to the satisfaction of the conditions set forth
in SECTIONS 7 and 8 hereof, the closing of the transactions contemplated by this
Agreement shall occur on January 6, 1997, or such earlier or later date as is
mutually agreed to in writing by the Buyer and the Seller (the "Closing Date").
2. BUYER REPRESENTATIONS; ACCESS TO INFORMATION.
(a) PRIVATE TRANSACTION. In connection with the purchase and sale of
the Securities, Buyer represents and warrants to, and covenants and agrees with,
Seller as follows:
(i) Buyer is one of the following:
A. an investment company as defined in Section 3(a)
of the Investment Company Act of 1940 which is exempt from
registration pursuant to Section 3(c)(1) of such Act, and each
of the equity owners therein is an individual whose net worth
as of the date hereof exceeds $1,000,000; or
B. a partnership, corporation, or a Massachusetts or
similar business trust (i) which has a net worth as of the date
hereof in excess of $1,000,000, (ii) which is neither an
investment company as defined in Section 3(a) of the Investment
Company Act of 1940 which is required to be registered under
such Act nor an investment company as so defined which is
exempt from registration pursuant to Section 3(c)(1) of such
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Act and was not formed for the specific purpose of acquiring the
Securities and has total assets as of the date hereof in excess
of $5,000,000.
(b) Buyer (or its Purchaser Representative, if any, who has been
designated by it and whose name and address, if one has been so designated,
appears below Buyer's signature on the signature page hereof) is entering
into this Agreement relying solely on the facts and terms set forth in this
Agreement and the "SEC Documents" (as defined below), given to it by Seller,
and Buyer has received copies of all such documents and Seller has not made
any representations of any kind or nature to induce Buyer to enter into this
Agreement except as specifically set forth in such documents;
(c) Buyer (or such Purchaser Representative) has made an
investigation of the pertinent facts relating to the operation of Seller;
(d) Buyer (or such Purchaser Representative) has such knowledge and
experience in financial and business matters generally and of this nature in
particular that Buyer is capable of evaluating the merits and risks of an
investment in Seller. Buyer has adequate means of providing for Buyer's
current needs and contingencies, and has no need for liquidity of the
investment being made hereby, and Buyer is able to bear the economic burden
of holding the investment contemplated hereby indefinitely, and to bear the
economic risk of a complete loss of Buyer's investment in the Seller;
(e) Buyer understands that the Securities have not been registered
under the Act nor pursuant to the provisions of the securities or other laws
of any applicable jurisdiction, and that the Securities must be held by the
Buyer indefinitely, and neither the Securities or any interest therein may be
sold, transferred, or disposed of (i) unless a registration statement with
respect to such Securities has become effective under the Act, or (ii) an
exemption from such registration is available under the circumstances of the
applicable transaction and the Company has been furnished with an opinion of
counsel, satisfactory in form and substance to it, that such registration is
not required, and that the certificates evidencing the Securities will bear a
legend to such effect;
(f) No person is acting or authorized to act as Buyer's Purchaser
Representative in connection with Buyer's purchase of the Securities, except
the person, if any, set forth on the signature page of this Agreement as
Buyer's Purchaser Representative;
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(g) This Agreement has been duly authorized, validly executed and
delivered on behalf of Buyer and is a valid and binding agreement enforceable
against Buyer in accordance with its terms;
(h) The execution and delivery of this Agreement and the
consummation of the purchase of the Securities, and the transactions
contemplated by this Agreement do not and will not conflict with or result in
a breach by Buyer of any of the terms or provisions of, or constitute a
default under, the articles of incorporation or by-laws (or similar
constructive documents) of Buyer or any indenture, mortgage, deed of trust,
or other material agreement or instrument to which Buyer is a party or by
which Buyer or any of Buyer's properties or assets are bound, or any existing
applicable law, rule or regulation of the United States or any State thereof
or any applicable decree, judgment or order of any Federal or State court, or
State regulatory body, administrative agency or other United States
governmental body having jurisdiction over Buyer or any of Buyer's properties
or assets;
(i) All invitations, offers and sales of or in respect of, any of
the Securities, by Buyer and any distribution by Buyer of any documents
relating to any offer by Buyer of any of the Securities will be in compliance
with applicable laws and regulations and will be made in such a manner that
no prospectus need be filed and no other filing need be made by Seller with
any regulatory authority or stock exchange in any country or any political
sub-division of any country;
(j) Buyer is acquiring the Securities for its own account and not
as nominee for any person or entity, and is acquiring the Preferred Shares
and the AUGI Warrants and, if Buyer should acquire any of the same, the other
Securities, for investment and not with a view toward the resale, transfer,
or other distribution, or subdivision or other fractionalization of the same.
However, if Buyer should ever seek to sell, transfer, or otherwise dispose of
any of the Securities in the future, Buyer will not make any offer or sale of
any of the Securities by any means which would not comply with the laws and
regulations of the territory in which such offer or sale takes place or to
which such offer or sale is subject or which would in connection with any
such offer or sale impose upon Seller any obligation to satisfy any public
filing or registration requirement or to provide or publish any information
of any kind whatsoever or otherwise undertake or become obliged to do any act;
(k) Buyer understands that no Federal or State or foreign
government agency has passed on or made any recommendation or endorsement of
the Securities;
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(l) Buyer acknowledges that it and its advisors, if any, have been
had full and sufficient opportunity to ask questions of the Seller concerning
the terms and conditions of the offering of the Securities and regarding the
business of the Seller and its subsidiaries and their respective businesses,
and have been furnished with all materials relating to the business, finances
and operations of Seller and its subsidiaries and all materials relating to
the offer and sale of the Securities which have been requested by Buyer.
Buyer further acknowledges that it and its advisors, if any, have received
complete and satisfactory answers to such inquiries, but that Buyer has not
received from or on behalf of the Seller any projections on which Buyer has
relied by or concerning the Seller or its business, assets, properties, and
securities other than reports, if any, included in the SEC Documents;
(m) Buyer acknowledges that the purchase of the Securities
involves a high degree of risk, including the total loss of Buyer's
investment. Buyer has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
purchasing the Securities.
3. SELLER REPRESENTATIONS.
Seller represents and warrants to Buyer as follows:
(a) Seller has furnished Buyer with copies of the SEC Documents (as
defined below);
(b) Upon execution of this Agreement, Seller has and shall have
authorized and reserved for issuance at all times that number of shares of
Common Shares which would be issuable to the Buyer at any time upon tender of
notice of conversion of the Preferred Shares and/or the exercise of the AUGI
Warrants. Seller agrees that violation of this representation and warranty
shall cause irreparable harm to Buyer, and shall entitle Buyer to seek an
order of specific performance;
(c) The Securities, when issued and delivered in accordance with
their respective terms, will be duly and validly authorized and issued,
fully-paid (assuming, with respect to AUGI Warrant Shares and eXodus Warrant
Shares, payment of the exercise price therefor pursuant to the related AUGI
Warrants and eXodus Warrants) and non-assessable and will not subject the
holders thereof to personal liability by reason of being such holders. There
are no preemptive rights of any shareholder of Seller with respect to the
Securities;
(d) This Agreement has been duly authorized, validly executed and
delivered on behalf of Seller and is a valid and
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binding agreement enforceable against Seller in accordance with its terms;
(e) The execution and delivery of this Agreement and the
consummation of the issuance of the Securities and the transactions
contemplated by this Agreement do not and will not conflict with or result in
a breach by Seller of any of the terms or provisions of, or constitute a
default under, the articles of incorporation or by-laws (or similar
constructive documents) of Seller, or any indenture, mortgage, deed of trust
or other material agreement or instrument to which Seller is a party or by
which it or any of its properties or assets are bound, or any existing
applicable decree, judgment or order of any court, Federal or State
regulatory body, administrative agency or other governmental body having
jurisdiction over Seller or any of its properties or assets;
(f) Seller is not aware of any authorization, approval or consent
of any governmental body which is legally required for the issuance and sale
of the Securities as contemplated by this Agreement except for the filing of
the registration statement pursuant to the Act which is a condition
precedent, set forth in the AUGI Warrant, to the offer of the eXodus Warrants
to the Buyer in the future;
(g) Upon conversion of the Preferred Shares and/or exercise of the
AUGI Warrants, Seller will instruct its transfer agent to issue one or more
certificates representing the applicable number of AUGI Conversion Shares or
AUGI Warrant Shares, as the case may be, in the name of Buyer, with
restrictive legends pertaining to the issuance of the same without
registration under the Act, in such denominations as may be specified by
Buyer prior to conversion. (In the event that the conditions precedent to the
issuance of the eXodus Warrants are satisfied and Buyer acquires any of the
same, Seller will cause eXodus to do the same upon exercise of any eXodus
Warrants, which eXodus Warrants and the corresponding eXodus Warrant Shares
shall bear a corresponding restrictive legend.) Seller further warrants that
no such instructions other than these instructions, and instructions for a
"stop transfer" until the end of the applicable restricted period have been
given to the transfer agent and also warrants that, upon issuance, the AUGI
Conversion Shares and the AUGI Warrant Shares shall otherwise be freely
transferable on the books and records of Seller subject to compliance with
Federal and State securities laws. Seller will notify the transfer agent of
the Closing Date. Nothing in this Section shall affect in any way Buyer's
obligations and agreement to comply with all applicable securities laws upon
resale of the Securities;
(h) Subject to the immediately preceding SUB-PARAGRAPH (G), Seller
has taken no action that will affect in any way
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the running of the applicable restricted period with regard to the Buyer or
the ability of Buyer to freely resell the Securities in accordance with
applicable securities laws and this Agreement;
(i) Seller will comply with all applicable securities laws with
respect to the sale of the Securities, including but not limited to the
filing of all reports required to be filed in connection therewith the
Securities and Exchange Commission (the "SEC") or any stock exchange or
NASDAQ or any other regulatory authority;
(j) During the period from July 31, 1996 to the date hereof,
Seller has filed its annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and definitive proxy statements with
respect to Seller's annual meetings of shareholders with the SEC (the "SEC
Documents"), which are all the documents (other than preliminary material)
that Seller was required to file with the SEC since such date. As of their
respective dates, none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and no material
event has occurred since the filing on November 13, 1996 of Seller's 1996
Report on Form 10-K, and the related amendment on Form 10-KA filed on
December 12, 1996 which could make any of the disclosures contained therein
misleading. The financial statements of Seller included in the SEC Documents
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto or, in the case of unaudited
financial statements, as may be permitted by Form 10-Q of the SEC) and such
statements together with the notes thereto fairly present (subject in the
case of unaudited financial statements, only to normal recurring year-end
audit adjustments) the consolidated financial position of Seller and its
consolidated subsidiaries as at the dates thereof and the consolidated
results of their operations and changes in financial position for the periods
then ended;
(k) Neither Seller nor agents of the Seller have purchased any
securities of the Seller in open market transactions on the NASDAQ for the 30
days immediately preceding the date of this Agreement;
(l) This Agreement and the SEC Documents supplied by Seller to
Buyer in connection herewith do not contain an untrue statement of a material
fact nor omit to state a material fact necessary to make the statement
therein not misleading;
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(m) As set forth in the Certificate of Designations for the
Preferred Shares, a copy of which is annexed as Exhibit "A" hereto, the
material terms of the Preferred Shares are as follows:
i. $0.01 per share par value;
ii. liquidation preference $25.00 per share;
iii. dividend 7.00% per annum, payable quarterly, in cash or in
kind with additional shares of Preferred Shares, at the
Seller's option;
iv. Preferred Shares not previously converted into AUGI
Conversion Shares shall be automatically converted into
Conversion Shares at the end of three years from the Closing
Date (December 31, 1999) at the conversion price described
below;
v. voting rights - none except in limited circumstances
involving the authorization of additional shares of AUGI
Common Stock or mergers or consolidations;
vi. convertible at option of holder:
(A) 34% 60 days after issuance;
(B) 67% in the aggregate 90 days after issuance; and
(C) 100% in the aggregate 120 days after issuance,
with share certificates tendered promptly after proper
conversion by the holder.
vii. all Preferred Shares are convertible, as aforesaid, into
shares of AUGI Common Stock at a price equal to the LESSER
of (A) or (B):
(A) 105% of the average daily closing bid price of
the AUGI Common Stock as reported on The Nasdaq
National Market or other national securities
exchange for the ten (10) trading days (the
"Average Price") immediately preceding the
Closing Date (the "Closing Date Average
Price"); PROVIDED, that if the Average Price
immediately preceding the first anniversary
of the Closing Date (the "Anniversary Average
Price")
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shall be LESS than the Closing Date Average
Price, the conversion price set forth in this
clause (A) shall be reset to equal 105% of
the Anniversary Average Price; or
(B) 82.5% of the Average Price immediately
preceding the date any shares of
Preferred Shares are converted into AUGI
Common Stock (the "Conversion Date
Average Price");
viii. In the event that the Average Price of the AUGI Common
Stock calculated at any time on or after the date six
(6) months after the effective date of the Form S-3
registration statement of the Seller referred to below
(the "Restriction Commencement Date"), and prior to the
date of conversion, shall be $3.50 or less, the Seller
shall have the right to RESTRICT the rights of the
holders to convert the Preferred Shares into AUGI
Common Stock in the manner provided below.
(A) PERCENTAGE CONVERSIONS. Not more than
20% of the total number of shares of
Preferred Shares originally purchased by
a holder may be converted into AUGI
Common Stock in any interval of
consecutive thirty (30) calendar days (a
"Conversion Window"), with each such
Conversion Window measured from the
Restriction Commencement Date.
(B) STANDSTILL. On not more than ONE
occasion in every six month period,
measured from the Restriction
Commencement Date, the Seller will have
the right to impose a 30-calendar day
"standstill" on the holders of the
Preferred Shares, pursuant to which they
may NOT convert the Preferred Shares.
Such "standstill" right will be
implemented, as follows:
(i) if any holder elects to convert,
such holder shall notify the Seller by
hand or fax as to such holder's
intention to convert and
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the number of Preferred Shares to be
converted;
(ii) the Seller must respond by notice
by hand or by fax within 48 hours as to
whether the Seller wants to impose the
"standstill" (silence means that the
Seller will permit a conversion into
AUGI Common Stock). If the Seller gives
timely notice of desiring the standstill
it is good for 30 days from the date of
notice. If the Seller approves a
conversion or does not respond and
holder does NOT convert the Preferred
Shares into AUGI Common Stock within
such 30 day period, the Seller's right
to impose a standstill shall resume for
the next 30 day period.
(n) As set forth in the form of Warrant annexed hereto as Exhibit
"B", the material terms of the AUGI Warrants are as follows:
(i) Warrants, purchased for $0.01 per each share of AUGI
Common Stock purchasable upon exercise thereof, shall be for the
purchase of 35,000 shares of Common Stock of Seller for each $1
million of Preferred Shares or part thereof purchased by Buyer
(subject to standard anti-dilution provisions);
(ii) Warrants shall expire five years from Closing Date;
and
(iii) Warrants are exercisable at any time prior to
expiration for an exercise price per share of AUGI Common Stock
equal to the Closing Date Average Price.
(o) eXodus is a subsidiary of the Seller. Seller hereby
covenants and agrees, in its capacity as the controlling shareholder
of eXodus, to cause eXodus to perform such that, in the event of an
initial public offering by eXodus of eXodus Common Stock, the Buyer
shall have the right to purchase, for $0.01 per warrant to acquire one
share of eXodus Common Stock, a number of eXodus Warrants on the
following terms and conditions:
(A) the "eXodus IPO" shall be defined as the time at
which eXodus shall consummate an initial public offering of
eXodus Common Stock, alone or in combination with other
eXodus securities, pur-
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suant to a registration statement filed by eXodus pursuant to the
Act and declared effective by the SEC;
(B) In the event that eXodus determines to engage in an
eXodus IPO, eXodus shall cause to be mailed to the Buyer, at the
Buyer's address for notices pursuant to this Subscription
Agreement, not less than 30 days before filing any such
registration statement written notice of its intention to do so
and offer to the Buyer the right to purchase, effective upon the
eXodus IPO, the number of eXodus Warrants calculated pursuant to
PARAGRAPH 3(O)(C) of this Subscription Agreement. Failure by the
Buyer to accept such offer in writing and make payment for the
aforesaid eXodus Warrants within 25 days after the giving of such
notice by eXodus shall cause the Buyer's right to acquire the
eXodus Warrants to be terminated. Notwithstanding any notice by
eXodus of its intention to engage in an eXodus IPO, or any
acceptance by Buyer pursuant hereto, eXodus shall be under no
obligation to continue its efforts to effect any such
registration statement and may terminate or abandon the same at
any time prior to the effective date of any such registration
statement. If eXodus so terminates or abandons its effort to
engage in an eXodus IPO, the right of Buyer to purchase eXodus
Warrants pursuant to this PARAGRAPH 3(O)(B) upon the
effectiveness of any eXodus IPO shall be revived, notwithstanding
the Buyer's determination not to accept any such prior offer;
(C) the Buyer shall have the right to purchase, as
aforesaid, the number of eXodus Warrants which would entitle the
Buyer to purchase, in the aggregate, the number of shares of
eXodus Common Stock equal to the number of shares of AUGI Warrant
Common Stock which may be acquired upon exercise by the Buyer of
the AUGI Warrants acquired by the Buyer pursuant to this
Subscription Agreement (that is, eXodus Warrants for 35,000
shares of eXodus Common Stock for each $1,000,000 of Preferred
Shares acquired by the Buyer pursuant to this Subscription
Agreement), at an exercise price per share of eXodus Common
Stock equal to the price per share at which the eXodus Common
Stock is offered to the public in an eXodus IPO;
(D) each eXodus Warrant will be a five (5) year warrant (as
calculated from the date of issuance thereof);
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(E) The eXodus Warrants shall otherwise be on terms
substantially identical to the AUGI Warrants;
(F) On the date hereof, the Seller and the Buyer are
entering into a certain Registration Rights Agreement covering,
among other things, certain registration rights and obligations
of the Buyer in the event that the Buyer acquires eXodus
Warrants, pursuant to which the shares of eXodus Common Stock
issuable upon exercise of the eXodus Warrants shall be subject to
customary piggyback registration rights and one demand
registration right FOLLOWING completion of the eXodus IPO, but
shall be subject to restrictions on sale pursuant to customary
"lock-up agreements" (but in no event for more than 180 days)
with the representative of the underwriters of the eXodus IPO on
terms which shall be no less favorable to the holders of eXodus
Warrants than similar agreements with the Seller and other eXodus
stockholders at the time of the eXodus IPO.
(p) Seller will as promptly as practicable (but, in any event, within
thirty (30) days after the Closing Date) file at Seller's sole expense, a
registration statement on Form S-3 under the Act (or in the event that Seller is
ineligible to use Form S-3 such other form as Seller is eligible to use under
the Act) (the "Registration Statement") covering the resale of the AUGI
Conversion Common Shares issuable on conversion of the Preferred Shares and the
AUGI Warrant Shares issuable upon exercise of the AUGI Warrants, and shall take
all action reasonably necessary to qualify the AUGI Conversion Shares and the
AUGI Warrant Shares under all applicable State "blue sky" laws PROVIDED, that in
no event shall the Seller be required to take any action which would cause the
Seller to be qualified to do business or acceptable to service of process for
general purposes in any State. Any such registration statement shall remain
effective for the period ending twenty four (24) months after the initial
issuance of the Preferred Shares or until all of the AUGI Conversion Shares and
the AUGI Warrant Shares are sold pursuant to the Registration Statement,
whichever is earlier. The Seller shall provide the Buyer with such numbers of
copies of the prospectus as shall be reasonably requested to facilitate the sale
of the AUGI Conversion Shares pursuant to the Registration Statement;
(q) Seller shall use its best efforts to cause the Registration
Statement to be declared effective by the SEC within one hundred twenty (120)
days after the Closing Date. In the event the Registration Statement is not
declared effective by the SEC within such one hundred twenty (120) day
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period, the Seller shall pay liquidated damages in cash per day to the holders
of the Preferred Shares, in the aggregate, equal to $5,000 per day until the
Registration Statement is declared effective; PROVIDED, that if the Registration
Statement has not been declared effective within one hundred fifty (150) days of
the Closing Date, the Seller shall, following such one hundred fifty (150) day
period, pay liquidated damages in cash per day, in the aggregate, equal to
$10,000 per day or (a maximum of $300,000 per month) until the Registration
Statement is declared effective. Notwithstanding the foregoing, if the Seller
shall timely file such Registration Statement with the SEC, the one hundred
twenty (120) and one hundred fifty (150) day time periods referred to above each
shall be increased by one day for each day more than forty-five (45) days that
the SEC does not furnish its complete comments on the initial filing of the
Registration Statement by the Seller;
(r) The execution and delivery of this Agreement and the
consummation of the issuance of the Securities, and the transactions
contemplated by this Agreement do not and will not conflict with or result in
a breach by Seller of any of the terms or provisions of, or constitute a
default under, the articles of incorporation or by-laws of Seller, or any
indenture, mortgage, deed of trust, or other material agreement or instrument
to which Seller is a party or by which Seller or any of its properties or
assets are bound, or any existing applicable law, rule, or regulation of the
United States or any State thereof or any applicable decree, judgment, or
order of any Federal or State court, Federal or State regulatory body,
administrative agency or other United States governmental body having
jurisdiction over Seller or any of its properties or assets; and
(s) Seller is not legally required to obtain any authorization,
approval or consent of any governmental body for the issuance and sale of the
Securities to Buyer pursuant to this Agreement, other than compliance with
applicable securities laws as contemplated under this Subscription Agreement.
4. EXEMPTION; RELIANCE ON REPRESENTATIONS.
Buyer understands that Seller is offering and selling the Securities
pursuant to this Subscription Agreement without registering the same under
the 1933 Act in reliance upon the representations and warranties of the Buyer
hereunder as the basis for the availability of an exemption from registration
under Section 4(2) of the Act.
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5. TRANSFER AGENT INSTRUCTIONS.
Upon the conversion of the Preferred Shares or the exercise of any
AUGI Warrant, the holder thereof shall submit such Preferred Shares or
Warrant, as the case may be, to Seller, and Seller shall, within three (3)
business days of receipt of such Preferred Shares or AUGI Warrant, as the
case may be, together with applicable properly completed documentation and
payment (in the case of AUGI Warrants), instruct Seller's transfer agent to
issue one or more certificates representing the number of shares of AUGI
Common Stock into which the Preferred Shares are convertible in accordance
with the provisions regarding conversion set forth in the Certificate of
Designations or the AUGI Warrants, as the case may be. Seller shall cause
eXodus to covenant to take similar actions with regard to the eXodus Warrants
and the eXodus Warrant Shares if the same shall be issued. Nothing in this
SECTION 5, however, shall affect or limit in any way any holder's obligations
and agreement to comply with all applicable securities laws upon resale of
the Securities.
6. CONDITIONS TO SELLER'S OBLIGATION TO SELL.
Seller's obligation to sell the Securities is conditioned upon:
(a) The receipt and acceptance by Buyer of this Agreement and all
related agreements as evidenced by execution of this Agreement and such
agreements by Buyer and delivery of the same to the Seller.
(b) Delivery to the Seller's account by wire transfer of the
aggregate Purchase Price for the number Preferred Shares and AUGI Warrants
set forth beneath the Buyer's name on the signature pages of this
Subscription Agreement in immediately available funds in United States
Dollars PROVIDED, that notwithstanding the foregoing the Buyer shall not be
entitled to acquire the AUGI Warrant Shares, the eXodus Warrants, or the
eXodus Warrant Shares without paying the additional consideration therefor
set forth in this Subscription Agreement and otherwise complying with the
terms and conditions of the instruments evidencing the same.
(c) Compliance by the Buyer with all applicable securities laws
pertaining to the offer and sale of the Preferred Shares and the AUGI
Warrants (and, when the same are issued, the AUGI Conversion Shares, the
eXodus Warrants and the eXodus Warrrant Shares).
(d) Buyer's representations and warranties being true and accurate
as of the Closing Date.
- Page 14 -Subscription Agt.
(e) The absence of any action or threat of action, at law or in
equity, arising out of or in connection with or relating to this Subscription
Agreement or the transactions contemplated hereby, seeking to prohibit the
consummation of, or materially alter the terms of, the same, or damages or
other relief in respect of the same materially adverse to the Seller or
eXodus.
7. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE.
Buyer's obligation to purchase the Preferred Shares and the Warrants
is conditioned on:
(a) The receipt and acceptance by Seller of this Agreement and all
related agreements as evidenced by execution of this Agreement and such
agreements by the duly authorized officer of Seller.
(b) Seller's representations and warranties being true and accurate
as of the Closing Date.
(c) Delivery (against payment to the Seller therefor in accordance
with the terms and conditions of this Subscription Agreement) of the
certificates evidencing the number of Preferred Shares and AUGI Warrants set
forth beneath the Buyer's name on the signature pages of this Agreement to
the Buyer at the Buyer's address set forth beneath the Buyer's name on the
signature pages of this Agreement.
(d) Compliance by the Seller with all applicable securities laws
pertaining to the offer and sale of the Preferred Shares and the AUGI
Warrants (and, when the same are issued, the AUGI Conversion Shares, the
eXodus Warrants and the eXodus Warrrant Shares).
(e) The absence of any action or threat of action, at law or in
equity, arising out of or in connection with or relating to this Subscription
Agreement or the transactions contemplated hereby, seeking to prohibit the
consummation of, or materially alter the terms of, the same, or damages or
other relief in respect of the same materially adverse to the Seller or
eXodus.
8. NO SHAREHOLDER APPROVAL.
Seller hereby agrees that from the Closing Date until the issuance
of shares of AUGI Common Stock upon the conversion of the Preferred Shares or
the exercise of the Warrants, Seller will not take any action which would
require Seller to seek shareholder approval of such issuance. Seller shall
at all times keep that number of shares available from its
- Page 15 -Subscription Agt.
authorized but unissued share capital for the purposes of those conversions or
exercises.
9. MISCELLANEOUS.
(a) Except as specifically referenced herein, this Agreement
constitutes the entire contract between the parties, and neither party shall
be liable or bound to the other in any manner by any warranties,
representations or covenants except as specifically set forth herein. Any
previous agreement among the parties related to the transactions described
herein is superseded hereby. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties hereto PROVIDED, that the Buyer may not assign any
of its rights and obligations under this Subscription Agreement without the
prior written consent of the Seller, which shall not be unreasonably
withheld. Nothing in this Agreement, express or implied, is intended to
confer upon any party, other than the parties hereto, and their respective
successors and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided herein.
(b) All representations and warranties contained in this Agreement
by Seller and Buyer shall survive the closing of the transactions
contemplated by this Agreement.
(c) This Agreement shall be construed in accordance with the
internal laws of the State of New York. The parties agree to submit to the
jurisdiction of the state and federal courts located in the Borough of
Manhattan, City and State of New York, for the adjudication of any disputes
arising out of or in connection herewith. This Agreement may be executed in
counterparts, and the facsimile transmission of an executed counterpart to
this Agreement shall be effective as an original.
- Page 16 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
By:_____________________________
Title:__________________________
Tax I.D. #:
Address:
Attn:
No. of Preferred Shares:
No. of AUGI Warrants:
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:__________________________
Title:__________________________
THE GALILEO FUND, L.P.
By: DDJ Galileo, LLC, its General Partner
By: /s/
-----------------------------
Title: Member
Tax I.D. #: 00-0000000
-------------------
Address: 000 Xxxxxx Xxxxxx, X-0
Xxxxxxxxx, XX 00000
Address for Delivery of Certificates:
Xxxxxxx Xxxxx & Co.
Attn.: Xxxxx Xxxxxx, 44th Fl.
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, X.X. 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Securities to Be Registered in Following
Name: Xxxxxxx Xxxxx & Company
FFC DDJ Galileo Fund, L.P.
No. of Preferred Shares:
112,800
------------------------
No. of AUGI Warrants:
98,700
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$2,820,987.00
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
CROCODILE I, LLC
By: DDJ Capital Management, Inc.
Pursuant to a Power of Attorney
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #: N/A
-------------------
Address: Crocodile I, LLC
c/o DDJ Capital Management, LLC
000 Xxxxxx Xxxxxx, X-0
Xxxxxxxxx, XX 00000
Address for Delivery of Certificates:
Xxxxxxx Sachs & Co.
Attn.: Xxxxx Xxxxxx, 44th Fl.
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, X.X. 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Securities to Be Registered in Following
Name: Xxxxxxx Sachs & Company
FFC Crocodile I, LLC
No. of Preferred Shares:
3,600
------------------------
No. of AUGI Warrants:
3,150
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$90,031.50
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
XXXXXX OVERSEAS CORP.
By: DDJ Capital Management, LLC
Pursuant to a Power of Attorney
By: /s/
-----------------------------
Title: Member
--------------------------
Tax I.D. #:
Address: Xxxxxx Overseas Corp.
c/o Goldman Xxxxx (Cayman)
Harbor Center, 2nd Fl.
Xxxxxx Town
Post Offfice Box 896
Grand Cayman Islands
Address for Delivery of Certificates:
Xxxxxxx Xxxxx & Co.
Attn.: Xxxxx Xxxxxx, 44th Fl.
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, X.X. 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
No. of Preferred Shares:
3,600
------------------------
No. of AUGI Warrants:
3,150
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$90,031.50
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KODIAK OPPORTUNITY OFFSHORE, LP
By: /s/ Xxx X. Xxxxxx
-------------------------
Title: Chairman
-------------------------
Tax I.D. #: 00-0000000
-------------------
Address: 000 Xxxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxx Xxxxxx
Xxxxxx/Xxxxxx Management
No. of Preferred Shares:
3,840
------------------------
No. of AUGI Warrants:
3,360
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$96,033.60
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KODIAK OPPORTUNITY LP
By: /s/ Xxx X. Xxxxxx
-------------------------
Title: Chairman
-------------------------
Tax I.D. #: 00-0000000
-------------------
Address: 000 Xxxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxx Xxxxxx
Xxxxxx/Xxxxxx Management
No. of Preferred Shares:
3,840
------------------------
No. of AUGI Warrants:
3,360
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$96,033.60
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KODIAK INTERNATIONAL LTD.
By: /s/ Xxx X. Xxxxxx
-------------------------------
Title: Investment Advisor
Tax I.D. #: NONE
---------------------
Address: x/x Xxxxxx Xxxxx
0 Xxx Xxxxxxxxxx
P.O. Box 6432
1211 Xxxxxx 0, Xxxxxxxxxxx
Address for Notice:
000 Xxxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxx Xxxxxx
Xxxxxx/Xxxxxx Management
No. of Preferred Shares:
26,880
------------------------
No. of AUGI Warrants:
23,250
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$672,235.20
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
KODIAK CAPITAL, L.P.
By: /s/ Xxx X. Xxxxxx
-------------------------------
Title: Chairman
----------------------------
Tax I.D. #: 00-0000000
---------------------
Address: 000 Xxxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxx Xxxxxx
Xxxxxx/Xxxxxx Management
No. of Preferred Shares:
15,360
------------------------
No. of AUGI Warrants:
13,440
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$384,134.40
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
GOODLAND INTERNATIONAL INVESTMENT LTD.
By: /s/ Xxxxxxxxxx Xxxxxx
-----------------------------
Title: V P
--------------------------
Tax I.D. # NONE
---------------------
Address: x/x Xxxxxx Xxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX00 Xxxxxxx
Xxxxxxxxx: Xx. Xxxxx Xxxxxx
No. of Preferred Shares:
140,000
------------------------
No. of AUGI Warrants:
122,500
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$3,501,225.00
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
WEYBURN OVERSEAS LTD.
By: /s/ Xxxxxxxxxx Xxxxxx
------------------------------
Title: V P
--------------------------
Tax I.D. #: NONE
-------------------
Address: x/x Xxxxxx Xxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX00 Xxxxxxx
Xxxxxxxxx: Xx. Xxxxx Xxxxxx
No. of Preferred Shares:
60,000
------------------------
No. of AUGI Warrants:
52,500
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$1,500,525.00
------------------------
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
Official Signatory of Seller:
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
Official Signatory of Buyer:
XXXXXX PARTNERS LP
By: Xxxxxxx X. Xxxxxx/ /s/Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: General Managing Partner
----------------------------
Tax I.D. #: 00-0000000
---------------------
Address: 000 Xxxxxxxxx
Xxxxx 000X
Xxxx Xxxxxx, XX. 00000
Attn: Mr. Xxxx Xxxxxx
No. of Preferred Shares:
26,000
------------------------
No. of AUGI Warrants:
22,750
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$650,210.00
------------------------
[CONTINUED ON NEXT PAGE]
- Page 17 -Subscription Agt.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
AMERICAN UNITED GLOBAL, INC.
By:_____________________________
Name:___________________________
Title:__________________________
EDJ LIMITED
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------
Title: President
-------------------------
Tax I.D. #: NONE
-------------------
Address: x/x Xxxxxx Xxxxxxxxxx
Xxxxx Xx.
Xxxxxx House
Xxxxxx Xxx
Box N-3229
Nassau, Bahamas
Attn: Xx. Xxxxxxxx Xxxxxxx
No. of Preferred Shares:
6,000
------------------------
No. of AUGI Warrants:
5,250
------------------------
Aggregate Purchase Price
for Preferred Shares
and AUGI Warrants:
$150,052.50
------------------------
- Page 17 -Subscription Agt.
Buyer's Purchaser Representative
(if one is designated by Buyer):
Name:
-------------------------
Title:
-------------------------
Address:
-------------------------
-------------------------
-------------------------
As to PARAGRAPH 3(O) and the last
sentence of SECTION 5 only,
acknowledged and agreed:
Official Signatory of eXodus:
eXodus TECHNOLOGIES, INC.
By:_____________________________
Title:__________________________
- Page 18 -Subscription Agt.
As to PARAGRAPH 3(O) and the last
sentence of SECTION 5 only,
acknowledged and agreed:
Official Signatory of eXodus:
eXodus TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
--------------------------
Title: Chairman
-------------------------
- Page 19 -Subscription Agt.