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VACATION EMPORIUM CORPORATION
SUBSCRIPTION AND RIGHTS AGREEMENT
Vacation Emporium Corporation
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
1. Subscription.
Subject to the terms and conditions of this Agreement, the undersigned
individual, residing at the address listed opposite his/her name below (the
"Subscriber") hereby subscribes for and agrees to purchase simultaneously with
the execution hereof, the number of shares of common stock, par value $.001 per
share (the "Common Stock"), of Vacation Emporium Corporation, a Nevada
corporation (the "Company"), set forth below his/her name on the signature page
hereto, for the aggregate purchase price set forth below his/her name on the
signature page hereto, payable by check delivered to the Company simultaneously
herewith (the shares of Common Stock acquired by the Subscriber hereunder are
referred to herein as the "Shares"). Simultaneously with or as soon as
practicable after the execution hereof, the Company shall deliver to Xxxxx Xxxx
LLP as escrow agent (the "Escrow Agent") one or more certificates representing
the Shares purchased hereunder, registered in the name of the Subscriber on the
books and records of the Company, to be held in escrow in accordance with the
terms of the Escrow Agreement (as defined below).
2. Acceptance of Subscription. By its signature below, the Company may,
in its sole and absolute discretion, accept this subscription, and such
subscription shall not be binding unless and until accepted by the Company.
3. Escrow Agreement. Simultaneously with the execution hereof, the
Company and the Subscriber will enter into an Escrow Agreement (the "Escrow
Agreement") with the Escrow Agent in substantially the form annexed hereto as
Exhibit A.
4. Restrictions on Transfer of Shares. The Subscriber covenants to the
Company and agrees that, except as contemplated hereby and by the Escrow
Agreement, he/she will not sell, transfer, assign, gift, devise, pledge,
hypothecate, grant a security interest in, mortgage, option, donate, or
otherwise encumber (except as contemplated hereby and by the Escrow Agreement)
or dispose of, voluntarily or involuntarily, directly or indirectly, with or
without consideration (collectively, "Transfer") any of the Shares for so long
as such Shares are held in escrow pursuant to the Escrow Agreement. Any Transfer
of Shares in violation of this Section 5, whether voluntary or involuntary,
shall be void and of no force and effect and shall transfer no right, title or
interest in or to those Shares to the purported transferee, buyer, assignee,
pledgee or encumbrance holder of such Shares.
5. Right to Repurchase Shares. The parties acknowledge that, pursuant
to and in accordance with the terms of the Escrow Agreement, the Shares will be
held in escrow by the Escrow Agent and will be released from escrow from time to
time during the period (the "Escrow Period") commencing on the date hereof and
ending two years from the date, if any, on which the Company completes its
acquisition (the "WSS Acquisition") of all the issued and outstanding shares of
Wall Street Strategies, Inc., a Delaware corporation, ("WSS") from WSS's sole
shareholder, Xxxxxxx X. Xxxxx ("Xxxxx").
(a) (i) If the Subscriber's employment by the Company is terminated by
the Company other than by reason of the Subscriber's death or Disability (as
defined in Section 4(a)(ii)), the Subscriber agrees to sell to the Company, and
the Company
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agrees to purchase from the Subscriber, all of the Shares held in escrow
pursuant to the Escrow Agreement as of the date of such termination for an
aggregate purchase price equal to the aggregate purchase price paid by the
Subscriber for such Shares pursuant hereto, such purchase and sale to be
completed within three (3) business days after the date of termination.
(ii) As used herein, "Disability" shall mean the inability of
Subscriber, due to physical or mental illness, injury or disease, to perform
his/her normal duties as an employee of the Company, for a period of at least
three (3) consecutive months or four (4) months in the aggregate in any twelve
(12) month period.
(b) If the Subscriber's employment by the Company is terminated during
the Escrow Period by reason of the Subscriber's death or Disability, all of the
Shares held in escrow pursuant to the Escrow Agreement as of the date of such
termination will be released by the Escrow Agent to the Subscriber (or his/her
estate or legal representative, as the case may be) in accordance with the terms
of the Escrow Agreement.
(c) If the WSS Acquisition is not completed within 90 days after the
date hereof (the "Interim Period"), the Company agrees to purchase from the
Subscriber, and the Subscriber agrees to sell to the Company, all of the Shares
for an aggregate purchase price equal to the aggregate purchase price paid by
the Subscriber for the Shares pursuant hereto, such purchase and sale to be
completed within three (3) business days after the end of the Interim Period.
6. Representations and Warranties of the Company. The Company hereby
represents and warrants to the undersigned as follows:
(a) Organization and Qualification; Subsidiaries. The Company is a
corporation, duly incorporated, validly existing and in good standing under the
laws of the state
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of Nevada, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which a failure to so qualify would have a
material adverse effect in its business.
(b) Capital Structure. As of the date hereof (and assuming the issuance
of the Shares), the authorized capital stock of Company will consist of: (A)
5,000,000 shares of Preferred Stock, par value $.001 per share, none of which
are outstanding and (B) 50,000,000 shares of Common Stock, par value $.001 per
share. Upon completion of the issuances of shares of Common Stock contemplated
by this Agreement and agreements being entered into simultaneously herewith, a
maximum of 15,702,564 shares of Common Stock will be issued. All outstanding
shares of Common Stock are validly issued, fully paid, nonassessable. The Shares
being purchased hereunder, when issued, sold and delivered in accordance with
the terms of this Agreement, will (subject to the escrow described herein and in
the Escrow Agreement) be duly and validly issued, fully paid and nonassessable,
and will be free of restrictions on transfer other than restrictions under
applicable state and federal securities laws and restrictions imposed under this
Agreement and the Escrow Agreement. Other than commitments in connection with
issuances to third parties of up to 1,258,205 shares of the Company's Common
Stock being made simultaneously herewith, there are no options, warrants, calls,
rights (including conversion or preemptive rights), commitments, agreements,
contracts, understandings, restrictions, arrangements or rights of any character
to which the Company is a party or by which it may be bound obligating the
Company to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of the Company's Common Stock or obligating the Company to
grant, extend or enter into any such option, warrant, call, right, commitment,
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agreement, contract, understanding, restriction, arrangement or right to or with
any person or persons whatsoever, except for options to be granted to Xxxxx
XxXxxxxx and Xxxxx X. Xxxxxxx pursuant to their respective employment agreements
to be executed with the Company.
(c) Authority. The Company has all requisite corporate power and
authority to enter into this Agreement, and to consummate the transactions
contemplated hereby. The execution and delivery 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. This
Agreement has been duly executed and delivered by the Company and constitutes
the valid and binding obligation of the Company enforceable in accordance with
its terms.
7. Representations and Warranties of the Subscriber. The Subscriber
hereby represents and warrants to the Company as follows:
(a) Organization; Authority. He/she has the requisite power, authority
and capacity to enter into and to consummate the transactions contemplated
hereby and otherwise to carry out his/her obligations hereunder. This Agreement
has been duly executed and delivered by the Subscriber and constitutes his/her
valid and binding obligation, enforceable in accordance with its terms.
(b) Subscriber's Status. The Subscriber understands that the securities
to be purchased hereunder have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or under the securities law of any
jurisdiction, that the purchase and sale is being made in reliance upon certain
exemptions from registration and that the Company's reliance on such exemption
is predicated in part upon the accuracy of the Subscriber's
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representations in this Section 7. The Subscriber confirms that he/she is a
resident of the jurisdiction set forth at the foot of this Agreement.
(c) Lack of Liquidity. The Subscriber hereby acknowledges and confirms
that (i) the Shares are "restricted securities" under the Securities Act because
they are being acquired from the Company in a transaction not involving a public
offering, and that, under such laws and applicable regulations, such securities
may be resold without registration under the Securities Act only in certain
limited circumstances; (ii) there is presently no public market for the sale or
resale of the Company's Equity Securities and the Company has not made any
commitment, and is under no obligation, to register any shares of its capital
stock of any class for public sale in the future; (iii) if in fact the Company
undertakes to register any shares of its Equity Securities for public sale in
the future, there can be no assurance that it will be successful in causing such
registration to occur; and (iv) as a result of the foregoing, the Shares may be
required to be held by the Subscriber indefinitely.
(d) Purchase for Investment, Speculative Investment, etc. The
undersigned represents and warrants that: (i) he/she is acquiring the Shares for
his/her own account for investment only and not with a view to, or for sale in
connection with, a distribution within the meaning of the Securities Act; (ii)
he/she has no present intention of selling or otherwise disposing of any portion
of the Shares except as contemplated hereby; (iii) he/she has been afforded the
opportunity to request, and has received such information regarding the Company
and its present and prospective business, assets and liabilities and the
backgrounds of the principals of the Company as he/she has deemed material to
making the decision to acquire the Shares and has been afforded the opportunity
to ask questions of and receive answers from the Company's senior management
concerning present and prospective business prospects of the
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Company; (iv) he/she has fully considered such information as has been provided
by the Company in valuing the Company and assessing the merits of the
transactions contemplated hereby; (v) he/she recognizes that an investment in
the Shares involves special, speculative and substantial risk because, among
other things, the Company has conducted no business since March 31, 1999 other
than to enter into a non-binding letter of intent with Xxxxx to effect the WSS
Acquisition (as such terms are defined in Section 5 hereof), there can be no
assurance that the Company will complete the WSS Acquisition, or any
transaction, the Company does not presently have professional management,
customers or sales, the Company does not presently have the resources to achieve
its strategic objectives (to the extent they have been identified), the Shares
are subject to significant legal restrictions upon resale and, in any case,
there may be no future market for resale of the Shares; (vi) he/she is able to
fend for himself/herself in the transactions contemplated by this Agreement, and
is, on his/her own or through his/her professional advisors, knowledgeable in
business and financial matters and, accordingly, is capable of evaluating and
has evaluated the merits of the transactions contemplated hereby; (vii) he/she
has made the determination to enter into this Agreement based upon his/her own
independent evaluation and assessment of the value of the Company and its
present and prospective business prospects and has not relied on, or been
induced to enter into this Agreement on account of any representation or
warranty of any kind or nature, whether oral or written, express or implied,
except for such representations and warranties of the Company as are
specifically set forth in this Agreement, (viii) he/she is financially capable
of bearing a total loss of his/her investment in the Shares and (x) at no time
was he/she presented with, or solicited by any publicly issued or circulated
newspaper, magazine, mail, radio or television or any other form of general
advertising or solicitation in connection herewith.
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8. Transfer Restrictions under the Securities Laws. If (subject to the
limitations contained herein) the Subscriber should decide to dispose of any of
the Shares to be purchased hereunder, the Subscriber understands and agrees
he/she may do so only (i) pursuant to an effective registration statement under
the Securities Act (which the Company is under no obligation to file) or (ii)
pursuant to an available exemption from registration under the Securities Act.
In connection with any transfer of any Shares other than pursuant to an
effective registration statement, the Company may require that the Subscriber
provide to the Company an opinion of counsel reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
Shares under the Securities Act or any state securities laws.
Each certificate representing the Shares shall bear the
following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY APPLICABLE STATE SECURITIES LAW, AND NO
INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING
SAID SECURITIES, (ii) THIS CORPORATION RECEIVES AN OPINION OF
LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY
TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION, OR (iii) THIS CORPORATION OTHERWISE
SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS CONTAINED IN A
SUBSCRIPTION AND RIGHTS AGREEMENT DATED __________, 1999, AND
AN ESCROW AGREEMENT DATED __________, 1999. COPIES OF SAID
AGREEMENTS MAY BE EXAMINED AT THE PRINCIPAL OFFICE OF THE
CORPORATION.
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The first legend set forth above may be removed if and when the Shares
represented by such certificate may be disposed of pursuant to an effective
registration statement under the Securities Act or in the opinion of counsel to
the Company such legend is no longer required under applicable requirements of
the Securities Act. The second legend set forth above may be removed if and when
the Shares represented by such certificate are released from escrow in
accordance with the terms of the Escrow Agreement. The stock certificates
representing the Shares shall also bear any other legends required by applicable
Federal or state securities laws, which legends may be removed when, in the
opinion of counsel to the Company, such legends are no longer required under the
applicable requirements of such securities laws. The Company agrees that it will
provide the Subscriber, upon request, with a substitute stock certificate or
certificates, free from such legends at such time as such legends are no longer
applicable.
9. Restriction on Dealing in Company Stock. The Subscriber covenants
to, and agrees with the Company that unless and until the earliest of (a) the
abandonment of the WSS Acquisition or (b) the completion and public announcement
of the completion of the WSS Acquisition, he/she will not, directly or
indirectly, engage in, or cause any other person to engage in any transaction,
for his/her own account or the account of any other person, involving any of the
Company's securities, including without limitation any purchase or sale of the
Company's securities, other than the purchase and any sale of the Shares as
contemplated by this Agreement and the Escrow Agreement.
10. Stop Transfer Instruction. The Subscriber agrees that the Company
shall be entitled to make a notation on its records and give instructions to any
transfer agent of the Company in order to implement the restrictions on transfer
set forth in this Agreement.
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11. Fees and Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, each party hereto shall pay its own expenses and
the fees and expenses of its counsel and accountants and other experts.
12. Entire Agreement; Amendments. This Agreement, together with the
Exhibits and Schedules hereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters.
13. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been received
(a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct
answer back received), telecopy or facsimile (with transmission confirmation
report) at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Company:
Vacation Emporium Corporation
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
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Attn.: Xxxxxx X. Xxxxx
If to the Subscriber:
To the address listed below on the signature page.
or such other address as may be designated in writing hereafter, in the same
manner, by such person.
14. Amendments; Waivers, Jurisdiction. No provision of this Agreement
may be waived or amended except in a written instrument signed, in the case of
an amendment, by both the Company and the Subscriber, or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter. Each party
hereto irrevocably submits to the non-exclusive jurisdiction of any state or
federal court located in New York County, State of New York, in respect of any
legal action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby.
15. Successors and Assigns. 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. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
16. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
without regard to the principles of conflicts of law thereof.
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17. Counterpart. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
18. Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
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substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
PURCHASER:
--------------------------
Name:
Residence Address:
Social Security Number:
No. of Shares of Common Stock to
be Purchased:
Aggregate Purchase Price:
Date: , 1999
------------------
ACCEPTANCE OF SUBSCRIPTION
The Subscription Agreement of the Subscriber indicated herein below
with respect to Vacation Emporium Corporation is hereby accepted, and such
Subscriber is hereby allocated the Shares indicated below.
__________, 1999
VACATION EMPORIUM CORPORATION
By:
--------------------------------
Name:
Title:
Subscriber:
Subscriber's Residence Address:
No. of Shares of Common Stock Allocated:
Aggregate Purchase Price:
