EXHIBIT 4.20
SUBSCRIPTION AGREEMENT
Applied Voice Recognition, Inc.
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1. Subscription. The undersigned hereby tenders this subscription and
applies for the purchase of the number of shares of Common Stock, $0.001 par
value per share, of Applied Voice Recognition, Inc., a Delaware corporation
doing business as ▇-▇▇▇▇.▇▇▇ (the "Company") set forth on the signature page of
this agreement (the "Subject Stock"). The minimum purchase is $150,000 and the
per share purchase price is $0.15. Together with this Subscription Agreement,
the undersigned is delivering to the Company its check payable to "Applied Voice
Recognition, Inc." in the full amount of the purchase price for the Subject
Stock which the undersigned is subscribing for pursuant hereto.
2. Representations and Warranties. In order to induce the Company to
accept this subscription, the undersigned hereby represents and warrants to, and
covenants with, the Company as follows:
(a) Authorization. The undersigned has full power and authority to
enter into this Agreement and that this Subscription Agreement
constitutes a value and legally binding obligation of the undersigned.
(b) Purchase Entirely for Own Account. This Subscription Agreement
is made with the undersigned in reliance upon the undersigned's
representation to the Company, that the Subject Stock to be purchased by
the undersigned will be acquired for investment for the undersigned's
own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the undersigned has
no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Subscription
Agreement, the undersigned further represents that the undersigned does
not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to
any third person, with respect to any of the Subject Stock.
(c) Reliance Upon the Undersigned's Representations. The undersigned
understands that the Subject Stock is not, registered under the
Securities Act of 1933 (the "Securities Act") on the ground that the
sale provided for in this Subscription Agreement and the issuance of
securities hereunder is exempt from registration under the Securities
Act pursuant to Section 4(2) thereof, and that the Company's reliance on
such exemption is predicated on the undersigned's representations set
forth herein. The undersigned realizes that the basis for the exemption
may not be present if, notwithstanding such representations, the
undersigned has in mind merely acquiring
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shares of the Subject Stock with a present intention to sell those
securities in the near future.
(d) Receipt of Information. The undersigned has received all of the
information it considers necessary or appropriate for deciding whether
to purchase the Subject Stock. Specifically, and not by way of
limitation, the undersigned confirms that it has received and had an
opportunity to read the Company's Annual Report on Form 10-K for the
year ending December 31, 1999 and the Company's Quarterly Report on Form
10-Q for the quarter ending June 30, 2000, both as filed with the
Securities and Exchange Commission. The undersigned further represents
that it has had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of the offering of the
Subject Stock and the business, properties, prospects and financial
condition of the Company and to obtain additional information (to the
extent the Company possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify the accuracy
of any information furnished to it or to which it had access.
(e) Risk of Loss; Investment Experience. The undersigned is able to
bear the economic risk of the investment in the Subject Stock, has an
adequate income independent of any income that might be produced from an
investment in the Subject Stock and has sufficient net worth to sustain
a loss of all of the undersigned's investment in the Subject Stock
without economic hardship if such a loss should occur. The undersigned
acknowledges that an investment in the Subject Stock is an extremely
risky investment. The undersigned represents that the undersigned is
experienced in evaluating and investing in securities of companies in
the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment, and has such
knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the
Subject Stock. The undersigned also represents the undersigned has not
been organized for the sole purpose of acquiring the Subject Stock.
(f) Accredited Investor.
(i) The term "Accredited Investor" as used herein refers to a
person or entity who:
(A) Is a director or executive officer of the Company;
(B) Any bank as defined in Section 3(a)(2) of the
Securities Act, or any savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities
Act whether acting in its individual or fiduciary capacity;
any broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; insurance company as defined
in Section 2(13) of the Securities Act; investment company
registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of
that Securities Act; Small Business Investment Company
licensed by the U.S. Small Business
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Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; Employee Benefit Retirement
Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such
act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000
or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors;
(C) Any private business development company as defined
in Section 202(a)(22) of the Investment Advisers Act of 1940;
(D) Any organization described in Section 501(c)(3) of
the Internal Revenue Code, corporation, Massachusetts or
similar business trust, or partnership, not formed for the
specific purpose of acquiring the securities offered, with
total assets in excess of $5,000,000;
(E) Any natural person whose individual net worth, or
joint net worth with that person's spouse, at the time of such
person's purchase exceeds $1,000,000;
(F) Any natural person who had an individual income in
excess of $200,000 in each of the two most recent years or
joint income with that person's spouse in excess of $300,000
in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(G) Any trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring
the securities offered, whose purchase is directed by a person
who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the
merits and risks of the prospective investment; or
(H) Any entity in which all of the equity owners are
Accredited Investors. As used in this Section 3.61(i), the
term "net worth" means the excess of total assets over total
liabilities. For the purpose of determining a person's net
worth, the principal residence owned by an individual should
be valued at fair market value, including the cost of
improvements, net of current encumbrances. As used in this
Section 3.6(i), "income" means actual economic income, which
may differ from adjusted gross income for income tax purposes.
Accordingly, the undersigned should consider whether it should
add any or all of the following items to its adjusted gross
income for income tax purposes in order to reflect more
accurately its actual economic income: any amounts
attributable to tax-exempt income received, losses claimed as
a limited partner in any limited partnership, deductions
claimed for depletion, contributions to an ▇▇▇ or ▇▇▇▇▇
retirement plan, and alimony payments.
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(ii) The undersigned as to itself represents to the Company that
the undersigned is an Accredited Investor.
(g) Restricted Securities. The undersigned understands that the Subject
Stock may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act or an exemption therefrom, and that in
the absence of an effective registration statement covering the Subject
Stock or an available exemption from registration under the Securities Act,
the Subject Stock must be held indefinitely. In particular, the undersigned
is aware that the Subject Stock may not be sold pursuant to Rule 144
promulgated under the Securities Act unless all of the conditions of that
Rule are met. Among the conditions for use of Rule 144 is the availability
of current information to the public about the Company.
(h) Legends. To the extent applicable, each certificate or other
document evidencing any of the Subject Stock, shall be endorsed with the
legends set forth below, and each of the undersigned covenants that, except
to the extent such restrictions are waived by the Company, the undersigned
shall not transfer the shares represented by any such certificate without
complying with the restrictions on transfer described in the legends
endorsed on such certificate:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
(i) Foreign Investor. To the extent that the undersigned is not a U.S.
person or entity, the undersigned hereby represents that it has satisfied
itself as to the full observance of the laws of its jurisdiction in
connection with an invitation to subscribe for the Subject Stock or any use
of this Subscription Agreement, including (i) the legal requirements within
the undersigned's jurisdiction for the purchase of the Subject Stock, (ii)
any foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents which may need to be obtained, and (iv) the
income tax and other tax consequences, if any, which may be relevant to the
purchase, holding, redemption, sale or transfer of the Subject Stock. The
undersigned's subscription and payment for, and its continued beneficial
ownership of the Subject Stock will not violate any applicable securities or
other laws of its jurisdiction.
3. Company's Discretion to Accept Subscription. The undersigned understands
that this subscription is not binding upon the Company until the Company accepts
it, which
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acceptance is at the sole discretion of the Company and is to be evidenced by
the Company's execution of this Subscription Agreement where indicated. This
Subscription Agreement shall be null and void if the Company does not accept it
as aforesaid.
4. Subscriber's Indemnity. The undersigned agrees to indemnify the
Company and hold it harmless from and against any and all losses, damages,
liabilities, costs and expenses which it may sustain or incur in connection with
the breach by the undersigned of any representation, warranty or covenant made
by it herein.
5. Registration of Subject Stock. Upon acceptance of this Agreement by
the Company, the Company and the undersigned will enter into a Registration
Rights Agreement in the form attached hereto as Exhibit "A".
6. No Assignment. Neither this Subscription Agreement nor any of the
rights of the undersigned hereunder may be transferred or assigned by the
undersigned.
7. Modification; Entire Agreement; Successors. This Subscription
Agreement (i) may only be modified by a written instrument executed by the
undersigned and the Company; (ii) sets forth the entire agreement of the
undersigned and the Company with respect to the subject matter hereof; and (iii)
shall inure to the benefit of, and be binding upon the Company and the
undersigned and its respective, legal representatives, successors and assigns.
8. Gender. Unless the context otherwise requires, all personal
pronouns used in this Subscription Agreement, whether in the masculine, feminine
or neuter gender, shall include all other genders.
9. Notices. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
mailed by certified or registered mail, return receipt requested, postage
prepaid, as follows: if to the undersigned, to the address set forth on the
signature page hereto; and if to the Company, to Applied Voice Recognition,
Inc., ▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Facsimile No.
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: President, or to such other address as the Company or
the undersigned shall have designated to the other by like notice.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this day of August, 2000.
SUBSCRIBER:
___________ (total amount
of investment desired)
Address of Subscriber:
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Name: ▇▇▇▇▇ ▇. Neighbours
COMPANY:
APPLIED VOICE RECOGNITION, INC.,
a Delaware corporation d/b/a
▇-▇▇▇▇.▇▇▇
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Signature Page to
Subscription Agreement
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