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EXHIBIT 10.15
ARISTA MARKETING ASSOCIATES, INC.
(TO BE RENAMED XXXXXX COMMUNICATIONS INC.
UPON THE CONSUMMATION OF THE OFFERING DESCRIBED HEREIN)
SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, (THE "ACT") OR ANY STATE SECURITIES LAWS. THE SECURITIES
CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE RESTRICTIONS ON TRANSFERABILITY CONTAINED IN APPLICABLE
FEDERAL AND STATE SECURITIES LAWS AND PURSUANT TO CONTRACTUAL RESTRICTIONS WHICH
WILL BE PLACED ON THE SECURITIES AND WILL NOT BE TRANSFERRED OF RECORD EXCEPT IN
COMPLIANCE WITH SUCH LAWS AND SUCH CONTRACTUAL RESTRICTIONS.
* * * * * * *
PLEASE REVIEW THIS SUBSCRIPTION AGREEMENT CAREFULLY. PLEASE NOTE THAT IN
ADDITION TO SIGNING AND COMPLETING PAGE 8 OF THIS SUBSCRIPTION AGREEMENT, YOU
ARE REQUIRED TO INITIAL THE APPLICABLE PARAGRAPHS OF SECTION 4 AND RETURN IT TO
THE XXXXXX GROUP PRIOR TO JUNE 18, 1998, ALONG WITH CERTIFICATES REPRESENTING
YOUR OLD SHARES DULY EXECUTED FOR TRANSFER (UNLESS SUCH CERTIFICATES ARE HELD IN
ESCROW). SUBJECT TO THE CONDITIONS DESCRIBED IN THE PRIVATE PLACEMENT
MEMORANDUM, THE OFFERING DESCRIBED HEREIN IS SCHEDULED TO CLOSE ON JUNE 18,
1998, AT WHICH TIME THE COMPANY INTENDS TO ACCEPT YOUR SUBSCRIPTION (THE
"CLOSING"). AS MORE FULLY DESCRIBED IN THE MEMORANDUM, IF ALL CONDITIONS TO THE
CONSOLIDATION ARE NOT SATISFIED BY JUNE 18, 1998, THE COMPANY WILL HAVE THE
OPTION TO POSTPONE THE CLOSING UNTIL A LATER DATE WHEN IT REASONABLY BELIEVES
THE CONDITIONS MAY BE SATISFIED.
* * * * * * *
SUBSCRIPTION AGREEMENT (this "Agreement") made as of the date
set forth on the signature page hereof between Arista Marketing Associates,
Inc., a Delaware corporation (the "Company") and the undersigned (the
"Subscriber").
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W I T N E S S E T H:
WHEREAS, the Company desires to issue common stock (the
"Common Stock"), in a private placement offering (the "Offering") in accordance
with the terms of the Preliminary Private Placement Memorandum, dated May 7,
1998, as finally supplemented by the Private Placement Memorandum, dated June 4,
1998 (the "Memorandum"), and the Subscriber wishes to subscribe for Shares in
accordance with the terms of the Memorandum. Terms used but not defined herein
shall have the meanings as set forth in the Memorandum.
NOW, THEREFORE, in consideration of the premises and the
mutual representations and covenants hereinafter set forth, the parties hereto
do hereby agree as follows:
1 . SUBSCRIPTION FOR SHARES AND REPRESENTATIONS AND COVENANTS BY
SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for such number of shares of Common Stock (the
"Shares") as is set forth opposite its name on Exhibit A, in exchange for all
outstanding shares of capital stock held by the Subscriber in any of the Xxxxxx
Group companies or Xxxxx Transfer Corp., as applicable (the "Old Shares"). The
Subscriber shall execute and return this Agreement and the certificates
representing the Subscriber's Old Shares, duly endorsed for transfer or
accompanied by executed stock powers signed in blank, in accordance with the
terms of the Memorandum. If the Company, or any of the Xxxxxx Group, or any
agent of the foregoing, is already in possession of the Subscriber's
certificates for the Old Shares, the Subscriber's execution of this Agreement
shall serve as authorization that the Old Shares be delivered to the Company on
behalf of the Subscriber for purposes of the Offering and this Agreement. The
Company agrees to issue the Shares to the Subscriber in exchange for the Old
Shares promptly following the acceptance of this Agreement by the Company.
1.2 The Subscriber represents and warrants that he or she has full
power and authority to exchange, sell, assign and transfer the Old Shares and
that, when the same are accepted for exchange, the Company will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances, and that the Old Shares are not subject
to any adverse claims or proxies. In this connection, the Subscriber hereby
waives any rights that it may have had pursuant to any agreements entered into
between the Subscriber and any of the Xxxxxx Group in connection with the
purchase of the Old Shares (such agreements, the "Purchase Agreements").
1.3 The Subscriber represents and warrants that, to its best knowledge,
the Subscriber has not taken or agreed to take any action that would prevent the
Company from accounting for the transaction to be consummated upon the
completion of the Offering (the "Consolidation") as a "pooling of interests"
transaction. The Subscriber agrees that it will not sell, transfer or otherwise
dispose of any of the Shares received by it in exchange for the Old Shares until
after such time as results covering at least 30 days of post-Merger combined
operations of the Company and the Xxxxxx Group have been published by the
Company in the form of a quarterly earnings report, an effective registration
statement filed with the United States Securities and Exchange Commission ("the
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Commission"), a report to the Commission on Form 10-K, 10-Q or 8-K or any other
public filing or announcement which includes such combined results of
operations. The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further actions as may be
necessary or appropriate to carry out the purposes and intent of this Agreement,
including, without limitation, agreements which may provide restrictions on the
transfer of the Shares that the Company deems necessary to permit the
Consolidation to qualify as a "pooling of interests" transaction.
1.4 The Subscriber hereby acknowledges receipt of the Memorandum and
that the Subscriber has carefully reviewed the Memorandum and all exhibits
thereto. The Subscriber recognizes that the investment in the Shares involves a
high degree of risk in that (i) an investment in the Company is highly
speculative, and only investors who can afford the loss of their entire
investment should consider investing in the Shares; (ii) the Subscriber may not
be able to liquidate its investment; (iii) transferability of the Shares is
extremely limited; and (v) in the event of a disposition, the Subscriber could
sustain the loss of its entire investment.
1.5 The Subscriber represents that it is able to bear the economic risk
of an investment in the Shares and that the Subscriber has truthfully responded
to the questions contained in Section 4 hereof.
1.6 The Subscriber hereby represents that (i) the Subscriber has been
furnished by the Company during the course of this transaction with all
information regarding the Company and the Xxxxxx Group which it has requested or
desired to know; (ii) the Subscriber has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company and the Xxxxxx Group concerning the terms and
conditions of the Offering; (iii) the Subscriber has received any additional
information which it has requested; (iv) the Subscriber alone, or with its
respective purchaser representative, has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of this transaction, and (v) the Subscriber has been informed that a
purchaser representative has been retained to answer any questions that the
Subscriber may have in regard to the Offering and has been afforded the
opportunity to consult with the purchaser representative.
1.7 The Subscriber hereby acknowledges that the offering of Shares has
not been reviewed by the Commission or any state regulatory authority, since the
Offering is intended to be exempt from the registration requirements of Section
5 of the Act pursuant to Regulation D promulgated under the Act, Section 4(2) of
the Act and any other available exemption. The Subscriber agrees that it will
not sell or otherwise transfer the Shares unless they are registered under the
Act or unless an exemption from such registration is available and until the
Subscriber complies with the transfer restrictions set forth in Section 1.10
hereof.
1.8 The Subscriber hereby represents that it is investing in the Shares
for the Subscriber's own account for investment and not with a view toward
resale or distribution of the Shares.
1.9 The Subscriber consents that the Company may, if it desires, permit
the transfer of the Subscriber's Shares, subject to the provisions of applicable
law, out of the Subscriber's name only
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when the Subscriber's request for transfer is accompanied by an opinion of
counsel reasonably satisfactory to the Company that neither the sale nor the
proposed transfer results in a violation of the Act or any applicable state
securities or "blue sky" laws. The Subscriber agrees to hold the Company and its
respective directors, officers, agents and controlling persons and their
respective heirs, representatives, successors, and assigns harmless and to
indemnify them against all liabilities, costs and expenses incurred by them as a
result of any misrepresentation made by the Subscriber contained herein or in
the Confidential Purchaser Questionnaire contained in Section 4 hereof or any
sale or distribution by the Subscriber in violation of the Act or any applicable
state securities or "blue sky" laws.
1.10 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Shares, stating that such
Securities have not been registered under the Act or any state securities or
"blue sky" laws and setting forth or referring to the restrictions on
transferability and sale thereof contained in this Agreement. The Subscriber is
aware that the Company will make a notation in its appropriate records with
respect to the restrictions on the transferability of such securities both in
regard to securities laws and in order to permit the Consolidation to qualify as
a "pooling of interests" transaction.
1.11 The Subscriber understands that if certain conditions to the
Offering are not satisfied by June 18, 1998, including without limitation, the
Company's determination that the Consolidation will qualify as a "pooling of
interests" transaction, then the Company may elect to defer its acceptance of
this Subscription until such conditions are satisfied. Additionally, the
Subscriber understands that the Company reserves the unrestricted right to
reject or limit any subscription and to close the Offering to the Subscriber at
any time or to otherwise amend the terms of the Offering or to abandon the
Offering.
1.12 The Subscriber hereby represents that the address furnished on the
signature page hereof is the Subscriber's principal residence if the Subscriber
is an individual, or its principal business if it is a corporation or other
entity.
2. APPOINTMENT OF ATTORNEYS-IN-FACT AND PROXIES
2.1 The Subscriber hereby irrevocably appoints Xxxxx X. Xxxxxx and
Xxxxxx X. Xxxxx and each of them, the attorneys-in-fact and proxies of the
Subscriber, each with full power of substitution, (i) to execute a stock power
for the Old Shares in the name of the Subscriber and to take all further actions
necessary to effectuate the transfer and exchange of the Old Shares as
contemplated by the Offering, (ii) to execute any documents and to take all
necessary actions to terminate the Purchase Agreements, and (iii) to vote in
such manner as each such attorney and proxy or his substitute shall, in his sole
discretion, deem proper, and otherwise act (including pursuant to written
consent) with respect to all of the Old Shares accepted by the Company prior to
the time of such vote or action and which the Subscriber would otherwise be
entitled to vote (whether at an annual or special meeting and whether or not an
adjourned meeting, or by written consent in lieu of such meeting, or otherwise).
This power of attorney and proxy is coupled with an interest in the Old Shares
and is irrevocable and is granted in consideration of, and is effective upon,
the acceptance of such Old Shares and this Subscription Agreement by the Company
in accordance with the terms of
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the Offering. Such acceptance shall revoke, without further action, any other
power of attorney or proxy granted by the Subscriber at any time with respect to
such Old Shares and no subsequent powers of attorney or proxies will be given
(and if given will be deemed not to be effective) with respect thereto by the
Subscriber. In particular, but without limitation, the Subscriber consents to
the taking of all actions by such attorney to fully effect the Consolidation as
contemplated by the Memorandum including, without limitation, the execution,
delivery and performance of the Consolidation Agreement.
3. MISCELLANEOUS
3.1 Any notice or other communication given hereunder to the Company
shall be deemed sufficient if in writing and sent by registered or certified
mail, return receipt requested, or delivered by hand against written receipt
therefor, addressed to XXXXXX COMMUNICATIONS INC., 00 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx, President, and to the Subscriber at
his or her address indicated on the signature page of this Agreement. Notices
shall be deemed to have been given or delivered on the date of mailing, except
notices of change of address, which shall be deemed to have been given or
delivered when received.
3.2 This Agreement shall not be changed, modified or amended except by
a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
3.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and to their respective heirs, legal representatives,
successors and assignees. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understanding of any and every
nature among them.
3.4 Upon the execution and delivery of this Agreement by the Subscriber
to the Xxxxxx Group, this Agreement shall become a binding obligation of the
Subscriber with respect to the exchange of the Shares for the Old Shares as
herein provided.
3.5 NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY
ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
3.6 The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provisions of this Agreement, which shall remain in full force and effect. If
any provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
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enforceable, and no provisions shall be deemed dependent upon any other covenant
or provisions unless so expressed herein.
3.7 It is agreed that a waiver by either party of a breach of any
provision of this Agreement shall not operate, or be construed, as a waiver of
any subsequent breach by that same party.
3.8 This Agreement may be executed in two or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
4. CONFIDENTIAL INVESTOR QUESTIONNAIRE
The Subscriber represents and warrants that it comes within one
category initialed below, and that for any category initialed, the Subscriber
has truthfully set forth, where applicable, the factual basis or reason the
Subscriber comes within that category.
ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
CONFIDENTIAL. The Subscriber agrees to furnish additional information which the
Company deems necessary in order to verify the answers set forth below:
Category A _______ The Subscriber is an individual (not a
partnership, corporation, etc.) whose
individual net worth or joint net worth,
with his or her spouse, presently exceeds
$1,000,000.
Explanation. In calculating net worth you
may include equity in personal property and
real estate, including your principal
residence, cash, short-term investments,
stocks and securities. Equity in personal
property and real estate should be based on
the fair market value of such property less
debt secured by such property.
Category B _______ The Subscriber is an individual (not a
partnership, corporation, etc.) who had an
income in excess of $200,000 in each of 1996
and 1997, or joint income with his or her
spouse in excess of $300,000 in each of
those years (in each case including foreign
income, tax exempt income and full amount of
capital gains and losses but excluding any
income of other family members and any
unrealized capital appreciation) and has a
reasonable expectation of reaching the same
income level in 1998.
Category C _______ The Subscriber is a partnership, corporation
or other organization which is an
"accredited investor" as defined in
Registration D of the Act. If relying upon
this Category, initial the specific basis
for the accredited investor status:
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(i) ______ The Subscriber is a
corporation, partnership,
Massachusetts business
trust, or non-profit
organization within the
meaning of Subsection
5.501(c)(3) of the Internal
Revenue Code, in each case
not formed for the specific
purpose of acquiring the
Securities and with total
assets in excess of
$5,000,000.
(ii) ______ The Subscriber is a
trust with total assets in
excess of $5,000,000, not
formed for the specific
purpose of acquiring the
Securities, where the
purchase is directed by a
"sophisticated person" as
defined in Regulation
506(b)(2)(ii).
(iii) ______ The Subscriber is an
entity all the equity
owners of which are
"accredited investors"
within one or more of the
above categories.
Category D __________ The Subscriber is not within any of the
categories above and is therefore not an
accredited investor.
The Subscriber is informed of the significance of the foregoing representations,
and the fact that they are made with the intention that the Company will rely
upon them.
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this ____ day of _____________, 1998.
Name in which Shares should
be issued: ____________________________________
Signature
____________________________________
Name (Typed or Printed)
____________________________________
Residence Address
____________________________________
City, State and Zip Code
____________________________________
Tax Identification or Social Security
Number
Telephone Number:
Business ( ) ___________________
Residence ( ) ___________________
Please initial one of the following:
____________________ The Subscriber has previously deposited
certificates representing its Old Shares
with the Xxxxxx Group or its agents and
authorizes that they be delivered
transferred and exchanged in accordance with
this Offering; or
_______ The Subscriber is delivering herewith
certificates representing its Old Shares,
duly endorsed for transfer or accompanied by
an executed stock power signed in blank.
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ACCEPTANCE
On behalf of Arista Marketing Associates, Inc., the undersigned hereby
accepts the foregoing subscription on this 16th day of July, 1998.
ARISTA MARKETING ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President
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EXHIBIT TO AGREEMENT
Pursuant to Item 601(b)(2) of Regulation S-K, Xxxxxx Communications Inc. agrees
to furnish supplementally a copy of the omitted Exhibit A to this Subscription
Agreement, which consists of a stock ownership chart, to the Commission upon
request.
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SCHEDULE TO EXHIBIT 10.15
This Schedule to Exhibit 10.15 is filed pursuant to Instruction 2 to Item 601 of
Regulation S-K, which permits in any case where two or more contracts are
substantially identical in all material respects except as to parties thereto,
the dates of execution, or other details, the filing of a schedule identifying
the other documents omitted and setting forth the material details in which such
documents differ from the document a copy of which is filed.
The following parties executed a Subscription Agreement in the form filed as
Exhibit 10.15 hereto:
Party Shares
----- ------
Xxxxx X. Xxxxxx 4,278,510
Xxxxxxxxx X. Xxxxxx 328,596
The Xxxxxx Family Limited
Partnership 2,474,021
Xxxxxx Inc. 5,087,275
The Xxxxx X. Xxxxxx 1998 Grantor
Retained Annuity Trust 3,642,192
Xxxxxx X. Xxxxx 3,097,362
The Xxxxxx and Xxxxx Xxxxx Family
Limited Partnership 437,566
The Xxxxxx X. Xxxxx 1998 Grantor
Retained Annuity Trust 358,735
Xxxxx X. Xxxxxxxx 425,520
The Scarperi Family Limited
Partnership 103,439
Xxxxxx X. Xxxxxx 420,416
The Xxxxxx X. Xxxxxx 1998 Grantor
Retained Annuity Trust 195,339
Xxxx X. Xxxxxxx 347,576
Xxxxxx Xxxx Xxxxx, Xx. 10,655
Additionally, the remaining shareholders of the Xxxxxx Group executed
agreements identical to the Subscription Agreement in the form filed as Exhibit
10.15 hereto, for an aggregate of 2,054,495 shares of Arista Marketing
Associates, Inc.
