EXHIBIT 4.1
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "AGREEMENT"), dated as of October
___, 2004, by and among Accupoll Holdings, Corp., a Nevada corporation (the
"COMPANY"), and the subscribers identified on the signature page hereto (each a
"SUBSCRIBER" and collectively "SUBSCRIBERS").
WHEREAS, the Company and the Subscribers are executing and delivering
this Agreement in reliance upon an exemption from securities registration
afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D
("REGULATION D") as promulgated by the United States Securities and Exchange
Commission (the "COMMISSION") under the Securities Act of 1933, as amended (the
"1933 Act").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the
Subscribers, as provided herein, and the Subscribers shall purchase, in the
aggregate, up to $600,000 (the "PURCHASE Price") of the Company's common stock,
$.001 par value (the "COMMON STOCK" or "SHARES"), and share purchase warrants in
the forms attached hereto as EXHIBIT A, EXHIBIT B AND EXHIBIT C (collectively,
the "WARRANTS"), to purchase shares of Common Stock (the "WARRANT SHARES"). The
per Share Purchase Price shall be $0.10, subject to adjustment as described in
this Agreement. The Purchase Price shall be payable to the Company on the
Closing Date. The Common Stock, the Warrants and the Warrant Shares are
collectively referred to herein as the "SECURITIES"; and
WHEREAS, the aggregate proceeds of the sale of the Common Stock and the
Warrants contemplated hereby may be held in escrow pursuant to the terms of a
Funds Escrow Agreement which may be executed by the parties substantially in the
form attached hereto as EXHIBIT D (the "ESCROW AGREEMENT").
NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement, the Company and the Subscribers hereby
agree as follows:
1. PURCHASE AND SALE OF SHARES AND WARRANTS. Subject to the
satisfaction (or waiver) of the conditions to Closing set forth in this
Agreement and the Escrow Agreement, each Subscriber shall purchase the Shares
and Warrants for the portion of the Purchase Price indicated on the signature
page hereto, and the Company shall sell such Shares and Warrants to the
Subscriber. The Purchase Price for the Shares and Warrants shall be paid in
cash. The entire Purchase Price shall be allocated to the Shares.
2. ESCROW ARRANGEMENTS; FORM OF PAYMENT. Upon execution hereof by
the parties and pursuant to the terms of the Escrow Agreement, each Subscriber
agrees to make the deliveries required of such Subscriber as set forth in the
Escrow Agreement and the Company agrees to make the deliveries required of the
Company as set forth in the Escrow Agreement.
3. WARRANTS.
(a) A WARRANTS. On the Closing Date the Company will issue A
Warrants to the Subscribers. One (1) A Warrant will be issued for each two (2)
Shares issued on the Closing Date. The per Warrant Share exercise price to
acquire a Warrant Share upon exercise of an A Warrant shall be $0.12. The A
Warrants shall be exercisable until the Registration Statement (as defined in
Section 10.1) has been effective for one hundred and fifty (150) days.
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(b) B WARRANTS. On the Closing Date the Company will issue B
Warrants to the Subscribers. One (1) B Warrant will be issued for each two (2)
Shares issued on the Closing Date. The per Warrant Share exercise price to
acquire a Warrant Share upon exercise of a B Warrant shall be $.15. The B
Warrants shall be exercisable until the Registration Statement described in
Section 10.1 has been effective for four (4) years.
(c) C WARRANTS. On the Closing Date the Company will issue C
Warrants to the Subscribers. One (1) C Warrant will be issued for each two (2)
Shares issued on the Closing Date. The per Warrant Share exercise price to
acquire a Warrant Share upon exercise of a C Warrant shall be $0.50. The B
Warrants shall be exercisable until the Registration Statement described in
Section 10.1 has been effective for three (3) years.
4. SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES. Each Subscriber
hereby represents and warrants to and agrees with the Company only as to such
Subscriber that:
(a) INFORMATION ON COMPANY. The Subscriber has been furnished
with or has had access at the XXXXX Website of the Commission to the Company's
Form 10-KSB for the year ended June 30, 2003 as filed with the Commission,
together with all subsequently filed Forms 10-QSB, 8-K, and filings made with
the Commission available at the XXXXX website (hereinafter referred to
collectively as the "REPORTS"). In addition, the Subscriber has received in
writing from the Company such other information concerning its operations,
financial condition and other matters as the Subscriber has requested in writing
(such other information is collectively, the "OTHER WRITTEN INFORMATION"), and
considered all factors the Subscriber deems material in deciding on the
advisability of investing in the Securities.
(b) INFORMATION ON SUBSCRIBER. The Subscriber is, and will be at
the time of the issuance of the Common Stock and exercise of any of the
Warrants, an "accredited investor", as such term is defined in Regulation D
promulgated by the Commission under the 1933 Act, is experienced in investments
and business matters, has made investments of a speculative nature and has
purchased securities of United States publicly-owned companies in private
placements in the past and, with its representatives, has such knowledge and
experience in financial, tax and other business matters as to enable the
Subscriber to utilize the information made available by the Company to evaluate
the merits and risks of and to make an informed investment decision with respect
to the proposed purchase, which represents a speculative investment. The
Subscriber has the authority and is duly and legally qualified to purchase and
own the Securities. The Subscriber is able to bear the risk of such investment
for an indefinite period and to afford a complete loss thereof. The information
set forth on the signature page hereto regarding the Subscriber is accurate.
(c) PURCHASE OF COMMON STOCK AND WARRANTS. On the closing date,
the Subscriber will purchase the Common Stock and Warrants as principal for its
own account and not with a view to any distribution thereof.
(d) COMPLIANCE WITH SECURITIES ACT. The Subscriber understands
and agrees that the Securities have not been registered under the 1933 Act or
any applicable state securities laws, by reason of their issuance in a
transaction that does not require registration under the 1933 Act (based in part
on the accuracy of the representations and warranties of Subscriber contained
herein), and that such Securities must be held indefinitely unless a subsequent
disposition is registered under the 1933 Act or any applicable state securities
laws or is exempt from such registration. In any event, and subject to
compliance with applicable securities laws, the Subscriber may enter into
hedging transactions with third parties, which may in turn engage in short sales
of the Securities in the course of hedging the position they
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assume and the Subscriber may also enter into short positions or other
derivative transactions relating to the Securities, or interests in the
Securities, and deliver the Securities, or interests in the Securities, to close
out their short or other positions or otherwise settle short sales or other
transactions, or loan or pledge the Securities, or interests in the Securities,
to third parties that in turn may dispose of these Securities.
(e) SHARES LEGEND. The Shares and the Warrant Shares shall bear
the following or similar legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO ACCUPOLL HOLDINGS,
CORP. THAT SUCH REGISTRATION IS NOT REQUIRED."
(f) WARRANTS LEGEND. The Warrants shall bear the following or
similar legend:
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO ACCUPOLL HOLDINGS, CORP. THAT SUCH
REGISTRATION IS NOT REQUIRED."
(g) COMMUNICATION OF OFFER. The offer to sell the Securities was
directly communicated to the Subscriber by the Company. At no time was the
Subscriber presented with or solicited by any leaflet, newspaper or magazine
article, radio or television advertisement, or any other form of general
advertising or solicited or invited to attend a promotional meeting otherwise
than in connection and concurrently with such communicated offer.
(h) AUTHORITY; ENFORCEABILITY. This Agreement and other
agreements delivered together with this Agreement or in connection herewith have
been duly authorized, executed and delivered by the Subscriber and are valid and
binding agreements enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity; and Subscriber has full corporate
power and authority necessary to enter into this Agreement and such other
agreements and to perform its obligations hereunder and under all other
agreements entered into by the Subscriber relating hereto.
(i) RESTRICTED SECURITIES. Subscriber understands that the
Securities have not been registered under the 1933 Act and such Subscriber will
not sell, offer to sell, assign, pledge,
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hypothecate or otherwise transfer any of the Securities unless (i) pursuant to
an effective registration statement under the 1933 Act, (ii) such Subscriber
provides the Company with an opinion of counsel, in a form reasonably acceptable
to the Company, to the effect that a sale, assignment or transfer of the
Securities may be made without registration under the 1933 Act, or (iii)
Subscriber provides the Company with reasonable assurances (in the form of
seller and broker representation letters) that the Shares or the Warrant Shares,
as the case may be, can be sold pursuant to (A) Rule 144 promulgated under the
1933 Act, or (B) Rule 144(k) promulgated under the 1933 Act, in each case
following the applicable holding period set forth therein. Notwithstanding
anything to the contrary contained in this Agreement, such Subscriber may
transfer (without restriction and without the need for an opinion of counsel)
the Securities to its Affiliates (as defined below) provided that each such
Affiliate is an "ACCREDITED INVESTOR" under Regulation D and such Affiliate
agrees to be bound by the terms and conditions of this Agreement.
For the purposes of this Agreement, an "AFFILIATE" of any
specified Subscriber means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with such
specified Subscriber. For purposes of this definition, "control" means the power
to direct the management and policies of such person or firm, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
(j) NO GOVERNMENTAL REVIEW. Each Subscriber understands that no
United States federal or state agency or any other governmental or state agency
has passed on or made recommendations or endorsement of the Securities or the
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.
(k) CORRECTNESS OF REPRESENTATIONS. Each Subscriber represents as
to such Subscriber that the foregoing representations and warranties are true
and correct as of the date hereof and, unless a Subscriber otherwise notifies
the Company prior to the Closing Date (as hereinafter defined), shall be true
and correct as of the Closing Date.
(l) SURVIVAL. The foregoing representations and warranties shall
survive the Closing Date for a period of two years.
5. COMPANY REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to and agrees with each Subscriber that:
(a) DUE INCORPORATION. The Company and each of its subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of the respective jurisdictions of their incorporation and have the
requisite corporate power to own their properties and to carry on their business
as now being conducted. The Company and each of its subsidiaries is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a material adverse effect. For
purposes of this Agreement, a "material adverse effect" shall mean a material
adverse effect on the financial condition, results of operations, properties or
business of the Company taken as a whole.
(b) OUTSTANDING STOCK. All issued and outstanding shares of
capital stock of the Company and each of its subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable.
(c) AUTHORITY; ENFORCEABILITY. This Agreement, the Common Stock,
the Warrants, the Escrow Agreement and any other agreements delivered together
with this Agreement or in
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connection herewith (collectively "TRANSACTION DOCUMENTS") have been duly
authorized, executed and delivered by the Company and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights generally and
to general principles of equity. The Company has full corporate power and
authority necessary to enter into and deliver the Transaction Documents and to
perform its obligations thereunder.
(d) ADDITIONAL ISSUANCES. There are no outstanding agreements or
preemptive or similar rights affecting the Company's common stock or equity and
no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, or agreements or understandings with
respect to the sale or issuance of any shares of common stock or equity of the
Company or other equity interest in any of the subsidiaries of the Company
except as described on SCHEDULE 5(D).
(e) CONSENTS. No consent, approval, authorization or order of any
court, governmental agency or body or arbitrator having jurisdiction over the
Company, or any of its affiliates, the American Stock Exchange, the National
Association of Securities Dealers, Inc., Nasdaq, SmallCap Market, the OTC
Bulletin Board ("BULLETIN BOARD") nor the Company's shareholders is required for
the execution by the Company of the Transaction Documents and compliance and
performance by the Company of its obligations under the Transaction Documents,
including, without limitation, the issuance and sale of the Securities.
(f) NO VIOLATION OR CONFLICT. Assuming the representations and
warranties of the Subscribers in Section 4 are true and correct, neither the
issuance and sale of the Securities nor the performance of the Company's
obligations under the Transaction Documents by the Company will:
(i) violate, conflict with, result in a breach of, or
constitute a default (or an event which with the giving of notice or the lapse
of time or both would be reasonably likely to constitute a default) under (A)
the articles or certificate of incorporation, charter or bylaws of the Company,
(B) to the Company's knowledge, any decree, judgment, order, law, treaty, rule,
regulation or determination applicable to the Company of any court, governmental
agency or body, or arbitrator having jurisdiction over the Company or any of its
subsidiaries or over the properties or assets of the Company or any of its
affiliates, (C) the terms of any bond, debenture, note or any other evidence of
indebtedness, or any agreement, stock option or other similar plan, indenture,
lease, mortgage, deed of trust or other instrument to which the Company or any
of its affiliates or subsidiaries is a party, by which the Company or any of its
affiliates or subsidiaries is bound, or to which any of the properties of the
Company or any of its affiliates or subsidiaries is subject, or (D) the terms of
any "lock-up" or similar provision of any underwriting or similar agreement to
which the Company, or any of its affiliates or subsidiaries is a party except
the violation, conflict, breach, or default of which would not have a material
adverse effect on the Company; or
(ii) result in the creation or imposition of any lien, charge
or encumbrance upon the Securities or any of the assets of the Company, its
subsidiaries or any of its affiliates; or
(iii) result in the activation of any anti-dilution rights or
a reset or repricing of any debt or security instrument of any other creditor or
equity holder of the Company, nor result in the acceleration of the due date of
any obligation of the Company; or
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(iv) result in the activation of any piggy-back registration
rights of any person or entity holding securities of the Company or having the
right to receive securities of the Company; or
(v) result in a violation of Section 5 under the 0000 Xxx.
(g) THE SECURITIES. The Securities upon issuance:
(i) are, or will be, free and clear of any security interests,
liens, claims or other encumbrances, subject to restrictions upon transfer under
the 1933 Act and any applicable state securities laws;
(ii) have been, or will be, duly and validly authorized and on
the date of issuance of the Shares and upon exercise of the Warrants, the Shares
and Warrant Shares will be duly and validly issued, fully paid and nonassessable
(and if registered pursuant to the 1933 Act, and resold pursuant to an effective
registration statement will be free trading and unrestricted, provided that each
Subscriber complies with the prospectus delivery requirements of the 1933 Act);
(iii) will not have been issued or sold in violation of any
preemptive or other similar rights of the holders of any securities of the
Company; and
(iv) will not subject the holders thereof to personal
liability by reason of being such holders.
(h) LITIGATION. There is no pending or, to the best knowledge of
the Company, threatened action, suit, proceeding or investigation before any
court, governmental agency or body, or arbitrator having jurisdiction over the
Company, or any of its affiliates that would affect the execution by the Company
or the performance by the Company of its obligations under the Transaction
Documents. Except as disclosed on SCHEDULE 5(H), there is no pending or, to the
best knowledge of the Company, basis for or threatened action, suit, proceeding
or investigation before any court, governmental agency or body, or arbitrator
having jurisdiction over the Company, or any of its affiliates which litigation
if adversely determined would have a material adverse effect on the Company.
(i) REPORTING COMPANY. The Company is a publicly-held company
subject to reporting obligations pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "1934 ACT") and has a class of common
shares registered pursuant to Section 12(g) of the 1934 Act. Pursuant to the
provisions of the 1934 Act, the Company has filed all reports and other
materials required to be filed thereunder with the Commission during the
preceding twelve months.
(j) NO MARKET MANIPULATION. The Company has not taken, and will
not take, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or manipulation of
the price of the common stock of the Company to facilitate the sale or resale of
the Securities or affect the price at which the Securities may be issued or
resold.
(k) INFORMATION CONCERNING COMPANY. The Reports contain all
material information relating to the Company and its operations and financial
condition as of their respective dates which information is required to be
disclosed therein. Since the date of the financial statements included in the
Reports, and except as modified in the Other Written Information or in the
Schedules hereto, there has been no material adverse change in the Company's
business, financial condition or affairs not disclosed in the Reports. The
Reports do not contain any untrue statement of a
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material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances when made.
(l) STOP TRANSFER. The Securities, when issued, will be
restricted securities. The Company will not issue any stop transfer order or
other order impeding the sale, resale or delivery of any of the Securities,
except as may be required by any applicable federal or state securities laws and
unless contemporaneous notice of such instruction is given to the Subscriber.
(m) DEFAULTS. The Company is not in violation of its articles of
incorporation or bylaws. The Company is (i) not in default under or in violation
of any other material agreement or instrument to which it is a party or by which
it or any of its properties are bound or affected, which default or violation
would have a material adverse effect on the Company, (ii) not in default with
respect to any order of any court, arbitrator or governmental body or subject to
or party to any order of any court or governmental authority arising out of any
action, suit or proceeding under any statute or other law respecting antitrust,
monopoly, restraint of trade, unfair competition or similar matters, or (iii)
except as disclosed in the Reports, to its knowledge not in violation of any
statute, rule or regulation of any governmental authority which violation would
have a material adverse effect on the Company.
(n) NO INTEGRATED OFFERING. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the offer of the
Securities pursuant to this Agreement to be integrated with prior offerings by
the Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
the Bulletin Board. Nor will the Company or any of its affiliates or
subsidiaries take any action or steps that would cause the offer of the
Securities to be integrated with other offerings. The Company will not conduct
any offering other than the transactions contemplated hereby that will be
integrated with the offer or issuance of the Securities.
(o) NO GENERAL SOLICITATION. Neither the Company, nor any of its
affiliates, nor to its knowledge, any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the 0000 Xxx) in connection with the offer or sale
of the Securities.
(p) LISTING. The Company's common stock is quoted on the Bulletin
Board. The Company has not received any oral or written notice that its common
stock is not eligible nor will become ineligible for quotation on the Bulletin
Board nor that its common stock does not meet all requirements for the
continuation of such quotation and the Company satisfies and as of the Closing
Date, the Company will satisfy all the requirements for the continued quotation
of its common stock on the Bulletin Board.
(q) NO UNDISCLOSED LIABILITIES. The Company has no liabilities or
obligations which are material, individually or in the aggregate, which are not
disclosed in the Reports and Other Written Information, other than those
incurred in the ordinary course of the Company's businesses since June 30, 2003
and which, individually or in the aggregate, would reasonably be expected to
have a material adverse effect on the Company's financial condition, other than
as set forth in SCHEDULE 5(Q).
(r) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since June 30, 2003,
no event or circumstance has occurred or exists with respect to the Company or
its businesses, properties, operations or financial condition, that, under
applicable law, rule or regulation, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed in the Reports.
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(s) CAPITALIZATION. The authorized and outstanding capital stock
of the Company as of the date of this Agreement and the Closing Date are set
forth on SCHEDULE 5(S). Except as set forth in the Reports and Other Written
Information and SCHEDULE 5(D), there are no options, warrants, or rights to
subscribe to, securities, rights or obligations convertible into or exchangeable
for or giving any right to subscribe for any shares of capital stock of the
Company. All of the outstanding shares of Common Stock of the Company have been
duly and validly authorized and issued and are fully paid and nonassessable.
(t) DILUTION. The Company's executive officers and directors
understand the nature of the Securities being sold hereby and recognize that the
issuance of the Securities will have a potential dilutive effect on the equity
holdings of other holders of the Company's equity or rights to receive equity of
the Company. The board of directors of the Company has concluded, in its good
faith business judgment, that the issuance of the Securities is in the best
interests of the Company. The Company specifically acknowledges that its
obligation to issue the Securities is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests of
other shareholders of the Company or parties entitled to receive equity of the
Company.
(u) NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS. There are no
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company, including but not limited to disputes or
conflicts over payment owed to such accountants and lawyers.
(v) INVESTMENT COMPANY. The Company is not, and is not an
Affiliate (as defined in Rule 405 under the 0000 Xxx) of, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(w) CORRECTNESS OF REPRESENTATIONS. The Company represents that
the foregoing representations and warranties are true and correct as of the date
hereof in all material respects, and, unless the Company otherwise notifies the
Subscribers prior to the Closing Date, shall be true and correct in all material
respects as of the Closing Date.
(x) SURVIVAL. The foregoing representations and warranties shall
survive the Closing Date for a period of two years.
6. REGULATION D OFFERING. The offer and issuance of the Securities
to the Subscribers is being made pursuant to the exemption from the registration
provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933
Act and/or Rule 506 of Regulation D promulgated thereunder. On the Closing Date,
the Company will provide an opinion reasonably acceptable to Subscriber from the
Company's legal counsel opining on the availability of an exemption from
registration under the 1933 Act as it relates to the offer and issuance of the
Securities and other matters reasonably requested by Subscribers. A form of the
legal opinion is annexed hereto as EXHIBIT E. The Company will provide, at the
Company's expense, such other legal opinions in the future as are reasonably
necessary for the resale of the Common Stock and exercise of the Warrants and
resale of the Warrant Shares.
7. LEGAL FEES/PLACEMENT AGENT.
(a) LEGAL FEES. The Company shall pay to Grushko & Xxxxxxx, P.C.,
a fee of $10,000 ("LEGAL FEES") as reimbursement for services rendered to the
Subscribers in connection with this Agreement and the purchase and sale of the
Shares and Warrants (the "OFFERING") and acting as Escrow
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Agent for the Offering. The Legal Fees will be payable on the Closing Date out
of funds held pursuant to the Escrow Agreement.
(b) PLACEMENT AGENT'S FEE. The Company on the one hand, and each
Subscriber (for himself only) on the other hand, agree to indemnify the other
against and hold the other harmless from any and all liabilities to any persons
claiming brokerage commissions or finder's fees other than X.X. Xxxxxx &
Company, L.L.C. ("PLACEMENT AGENT") on account of services purported to have
been rendered on behalf of the indemnifying party in connection with this
Agreement or the transactions contemplated hereby and arising out of such
party's actions. Anything to the contrary in this Agreement notwithstanding,
each Subscriber is providing indemnification only for such Subscriber's own
actions and not for any action of any other Subscriber. Each Subscriber's
liability hereunder is several and not joint. The Company agrees that it will
pay the Placement Agent a cash finder's fee of ten percent (10%) of the Purchase
Price ("PLACEMENT AGENT'S FEE") directly out of the funds held pursuant to the
Escrow Agreement. The Company represents that there are no other parties
entitled to receive fees, commissions, or similar payments in connection with
the Offering except the Placement Agent. The Placement Agent will also be paid
by the Company eight percent (8%) of the cash proceeds received by the Company
from Warrant exercise ("WARRANT EXERCISE COMPENSATION"). The Warrant Exercise
Compensation must be paid by the Company to the Placement Agent within five (5)
days after each receipt by the Company of Warrant Exercise cash proceeds.
(c) PLACEMENT AGENT'S WARRANTS. On the Closing Date, the Company
will issue to the Placement Agent Warrants similar to and carrying the same
rights as the Warrants issuable to the Subscribers except that the exercise
price to purchase one Warrant Share shall be $0.12and the Warrants shall be
exercisable until five years after the Closing Date ("PLACEMENT AGENT'S CLOSING
WARRANTS"). The Placement Agent will receive one Placement Agent Closing Warrant
for each eight (8) Shares issued to the Subscribers on the Closing Date. The
Placement Agent will also receive Warrants from the Company in connection with
exercise of A Warrants and B Warrants by Subscribers or their assigns. The
Placement Agent will receive one "PLACEMENT AGENT'S A WARRANTS" for each eight
(8) A Warrants exercised by a Subscriber on a cash basis. The Placement Agent's
A Warrants will be exercisable at $0.14 per Warrant Share. The Placement Agent
will receive one "PLACEMENT AGENT'S B WARRANTS" for each eight (8) B Warrants
exercised by a Subscriber on a cash basis. The Placement Agent's B Warrants will
be exercisable at $0.18 per Warrant Share. The Placement Agent will receive one
"PLACEMENT AGENT'S C WARRANTS" for each eight (8) C Warrants exercised by a
Subscriber on a cash basis. The Placement Agent's C Warrants will be exercisable
at $.60 per Warrant Share. All Placement Agent's Warrants will be exercisable
for five years after the respective issue dates, will not be subject to Call and
may be exercised on a cashless basis. A form of Placement Agent's Warrant is
annexed hereto as EXHIBIT F. Warrant Exercise Compensation will not be payable
in connection with Placement Agent's Warrants. The Placement Agent's A Warrants
and Placement Agent's B Warrants must be delivered to the Placement Agent
simultaneously with the Warrant Exercise Compensation payable in connection with
the exercise of the A Warrants and B Warrants giving rise to the obligation to
issue Placement Agent's A Warrants and Placement Agent's B Warrants. All the
Warrants issuable to the Placement Agent are referred to as "PLACEMENT AGENT'S
WARRANTS". All the representations, covenants, warranties, undertakings,
remedies, liquidated damages, indemnification, and other rights including but
not limited to reservation requirements and registration rights made or granted
to or for the benefit of the Subscribers are hereby also made and granted to the
Placement Agent in respect of the Placement Agent's Warrants.
8. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the Subscribers as follows:
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(a) STOP ORDERS. The Company will advise the Subscribers,
promptly after it receives notice of issuance by the Commission, any state
securities commission or any other regulatory authority of any stop order or of
any order preventing or suspending any offering of any securities of the
Company, or of the suspension of the qualification of the Common Stock of the
Company for offering or sale in any jurisdiction, or the initiation of any
proceeding for any such purpose.
(b) LISTING. The Company shall promptly secure the listing of the
shares of Common Stock and the Warrant Shares upon each national securities
exchange, or automated quotation system upon which they are or become eligible
for listing (subject to official notice of issuance) and shall maintain such
listing so long as any Warrants are outstanding. The Company will maintain the
listing of its Common Stock on the American Stock Exchange, Nasdaq SmallCap
Market, Nasdaq National Market System, Bulletin Board, or New York Stock
Exchange (whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock (the "PRINCIPAL MARKET")), and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the Principal Market, as applicable.
The Company will provide the Subscribers copies of all notices it receives
notifying the Company of the threatened and actual delisting of the Common Stock
from any Principal Market. As of the date of this Agreement and the Closing
Date, the Bulletin Board is and will be the Principal Market.
(c) MARKET REGULATIONS. The Company shall notify the Commission,
the Principal Market and applicable state authorities, in accordance with their
requirements, of the transactions contemplated by this Agreement, and shall take
all other necessary action and proceedings as may be required and permitted by
applicable law, rule and regulation, for the legal and valid issuance of the
Securities to the Subscribers and promptly provide copies thereof to Subscriber.
(d) REPORTING REQUIREMENTS. From the date of this Agreement and
until the sooner of (i) two (2) years after the Closing Date, or (ii) until all
the Shares and Warrant Shares have been resold or transferred by all the
Subscribers pursuant to the Registration Statement or pursuant to Rule 144,
without regard to volume limitation, the Company will (v) cause its Common Stock
to continue to be registered under Section 12(b) or 12(g) of the 1934 Act, (x)
comply in all respects with its reporting and filing obligations under the 1934
Act, (y) comply with all reporting requirements that are applicable to an issuer
with a class of shares registered pursuant to Section 12(b) or 12(g) of the 1934
Act, as applicable, and (z) comply with all requirements related to any
registration statement filed pursuant to this Agreement. The Company will use
its best efforts not to take any action or file any document (whether or not
permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing
obligations under said acts until two (2) years after the Closing Date. Until
the earlier of the resale of the Common Stock and the Warrant Shares by each
Subscriber or at least two (2) years after the Warrants have been exercised, the
Company will use its best efforts to continue the listing or quotation of the
Common Stock on the Principal Market or other market with the reasonable consent
of Subscribers holding a majority of the Shares and Warrant Shares, and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the Principal Market. The Company
agrees to timely file a Form D with respect to the Securities if required under
Regulation D and to provide a copy thereof to each Subscriber promptly after
such filing.
(e) USE OF PROCEEDS. The Company undertakes to use the proceeds
of the Subscribers' funds for the purposes set forth on SCHEDULE 8(E) hereto. A
deviation from the use of proceeds set forth on SCHEDULE 8(E) of more than 10%
per item or more than 20% in the aggregate shall be deemed a material breach of
the Company's obligations hereunder. Except as set forth on SCHEDULE 8(E), the
Purchase Price may not and will not be used for accrued and unpaid officer and
director salaries,
10
payment of financing related debt, redemption of outstanding redeemable notes or
equity instruments of the Company nor non-trade obligations outstanding on the
Closing Date.
(f) RESERVATION. Prior to the Closing Date, the Company
undertakes to reserve, PRO RATA, on behalf of each Subscriber and holder of a
Warrant, from its authorized but unissued common stock, a number of common
shares equal to the amount of Warrant Shares issuable upon exercise of the A
Warrants. Failure to have sufficient shares reserved pursuant to this Section
8(f) for three (3) consecutive business days or ten (10) days in the aggregate
shall be a material default of the Company's obligations under this Agreement.
(g) TAXES. From the date of this Agreement and until the sooner
of (i) two (2) years after the Closing Date, or (ii) until all the Shares and
Warrant Shares have been resold or transferred by all the Subscribers pursuant
to the Registration Statement or pursuant to Rule 144, without regard to volume
limitations, the Company will promptly pay and discharge, or cause to be paid
and discharged, when due and payable, all lawful taxes, assessments and
governmental charges or levies imposed upon the income, profits, property or
business of the Company; provided, however, that any such tax, assessment,
charge or levy need not be paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall have
set aside on its books adequate reserves with respect thereto, and provided,
further, that the Company will pay all such taxes, assessments, charges or
levies forthwith upon the commencement of proceedings to foreclose any lien
which may have attached as security therefore.
(h) INSURANCE. From the date of this Agreement and until the
sooner of (i) two (2) years after the Closing Date, or (ii) until all the Shares
and Warrant Shares have been resold or transferred by all the Subscribers
pursuant to the Registration Statement or pursuant to Rule 144, without regard
to volume limitations, the Company will keep its assets which are of an
insurable character insured by financially sound and reputable insurers against
loss or damage by fire, explosion and other risks customarily insured against by
companies in the Company's line of business, in amounts sufficient to prevent
the Company from becoming a co-insurer and not in any event less than one
hundred percent (100%) of the insurable value of the property insured; and the
Company will maintain, with financially sound and reputable insurers, insurance
against other hazards and risks and liability to persons and property to the
extent and in the manner customary for companies in similar businesses similarly
situated and to the extent available on commercially reasonable terms.
(i) BOOKS AND RECORDS. From the date of this Agreement and until
the sooner of (i) two (2) years after the Closing Date, or (ii) until all the
Shares and Warrant Shares have been resold or transferred by all the Subscribers
pursuant to the Registration Statement or pursuant to Rule 144, without regard
to volume limitations, the Company will keep true records and books of account
in which full, true and correct entries will be made of all dealings or
transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.
(j) GOVERNMENTAL AUTHORITIES. From the date of this Agreement and
until the sooner of (i) two (2) years after the Closing Date, or (ii) until all
the Shares and Warrant Shares have been resold or transferred by all the
Subscribers pursuant to the Registration Statement or pursuant to Rule 144,
without regard to volume limitations, the Company shall duly observe and conform
in all material respects to all valid requirements of governmental authorities
relating to the conduct of its business or to its properties or assets.
(k) INTELLECTUAL PROPERTY. From the date of this Agreement and
until the sooner of (i) two (2) years after the Closing Date, or (ii) until all
the Shares and Warrant Shares have been resold or transferred by all the
Subscribers pursuant to the Registration Statement or pursuant to Rule 144,
11
without regard to volume limitations, the Company shall maintain in full force
and effect its corporate existence, rights and franchises and all licenses and
other rights to use intellectual property owned or possessed by it and
reasonably deemed to be necessary to the conduct of its business.
(l) PROPERTIES. From the date of this Agreement and until the
sooner of (i) two (2) years after the Closing Date, or (ii) until all the Shares
and Warrant Shares have been resold or transferred by all the Subscribers
pursuant to the Registration Statement or pursuant to Rule 144, without regard
to volume limitation, the Company will keep its properties in good repair,
working order and condition, reasonable wear and tear excepted, and from time to
time make all necessary and proper repairs, renewals, replacements, additions
and improvements thereto; and the Company will at all times comply with each
provision of all leases to which it is a party or under which it occupies
property if the breach of such provision could reasonably be expected to have a
material adverse effect.
(m) CONFIDENTIALITY/PUBLIC ANNOUNCEMENT. From the date of this
Agreement and until the sooner of (i) two (2) years after the Closing Date, or
(ii) until all the Shares and Warrant Shares have been resold or transferred by
all the Subscribers pursuant to the Registration Statement or pursuant to Rule
144, without regard to volume limitations, the Company agrees that except in
connection with a Form 8-K or the Registration Statement, it will not disclose
publicly or privately the identity of the Subscribers unless expressly agreed to
in writing by a Subscriber or only to the extent required by law and then only
upon ten days prior notice to Subscriber. In any event and subject to the
foregoing, the Company undertakes to file a Form 8-K or make a public
announcement describing the Offering not later than the first trading day
following the Closing Date. In the Form 8-K or public announcement, the Company
will specifically disclose the amount of common stock outstanding immediately
after the Closing. A form of the public announcement or Form 8-K is annexed
hereto as EXHIBIT F.
(n) FURTHER REGISTRATION STATEMENTS. Except for a registration
statement filed on behalf of the Subscribers pursuant to Section 10 of this
Agreement, the Company will not file any registration statements, including but
not limited to Form S-8, with the Commission or with state regulatory
authorities without the consent of the Subscriber until sixty (60) days after
the actual effective date of the registration statement described in Section
10.1(iv) of this Agreement ("ACTUAL EFFECTIVE DATE") during which such
Registration Statement shall be current and available for use in connection with
the public resale of the Shares and Warrant Shares ("EXCLUSION PERIOD").
(o) BLACKOUT. The Company undertakes and covenants that until the
first to occur (i) until the Registration Statement has been effective for 150
days, or (ii) until all the Shares and Warrant Shares have been resold pursuant
to such registration statement, the Company will not enter into any acquisition,
merger, exchange or sale or other transaction that could have the effect of
delaying the effectiveness of any pending registration statement or causing an
already effective registration statement to no longer be effective or current.
(p) NON-PUBLIC INFORMATION. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Subscriber
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such
Subscriber shall have agreed in writing to receive such information. The Company
understands and confirms that each Subscriber shall be relying on the foregoing
representations in effecting transactions in securities of the Company.
9. COVENANTS OF THE COMPANY AND SUBSCRIBER REGARDING
INDEMNIFICATION.
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(a) The Company agrees to indemnify, hold harmless, reimburse and
defend the Subscribers, the Subscribers' officers, directors, agents,
affiliates, control persons, and principal shareholders, against any claim,
cost, expense, liability, obligation, loss or damage (including reasonable legal
fees) of any nature, incurred by or imposed upon the Subscriber or any such
person which results, arises out of or is based upon (i) any material
misrepresentation by Company or breach of any warranty by Company in any of the
Transaction Documents; or (ii) after any applicable notice and/or cure periods,
any breach or default in performance by the Company of any covenant or
undertaking to be performed by the Company under any Transaction Documents. This
indemnification is in addition to the indemnifications contained in Section 11
of this Agreement.
(b) Each Subscriber agrees to indemnify, hold harmless, reimburse
and defend the Company and each of the Company's officers, directors, agents,
affiliates, control persons against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature,
incurred by or imposed upon the Company or any such person which results, arises
out of or is based upon (i) any material misrepresentation by such Subscriber in
this Agreement or in any Exhibits or Schedules attached hereto, or other
agreement delivered pursuant hereto; or (ii) after any applicable notice and/or
cure periods, any breach or default in performance by such Subscriber of any
covenant or undertaking to be performed by such Subscriber hereunder, or any
other agreement entered into by the Company and Subscribers, relating hereto.
(c) In no event shall the liability of any Subscriber or
permitted successor hereunder or under any other agreement delivered in
connection herewith be greater in amount than the dollar amount of the net
proceeds actually received by such Subscriber upon the sale of Registrable
Securities (as defined herein).
(d) The procedures set forth in Section 10.6 shall apply to the
indemnifications set forth in Sections 9(a) and 9(b) above.
10.1. REGISTRATION RIGHTS. The Company hereby grants the following
registration rights to holders of the Securities.
(i) On one occasion, for a period commencing ninety-one (91) days
after the Closing Date, but not later than two (2) years after the Closing Date
("REQUEST DATE"), upon a written request therefor from any record holder or
holders of more than 50% of the Shares and Warrant Shares actually issued upon
exercise of the Warrants, the Company shall prepare and file with the Commission
a registration statement under the 1933 Act registering the Shares and Warrant
Shares including Warrant Shares issuable upon exercise of the Finder's Warrants
(collectively "REGISTRABLE SECURITIES") which are the subject of such request
for unrestricted public resale by the holder thereof. For purposes of Sections
10.1(i) and 10.1(ii), Registrable Securities shall not include Securities which
are registered for resale in an effective registration statement or included for
registration in a pending registration statement, or which have been issued
without further transfer restrictions after a sale or transfer pursuant to Rule
144 under the 1933 Act. Upon the receipt of such request, the Company shall
promptly give written notice to all other record holders of the Registrable
Securities that such registration statement is to be filed and shall include in
such registration statement Registrable Securities for which it has received
written requests within ten (10) days after the Company gives such written
notice. Such other requesting record holders shall be deemed to have exercised
their demand registration right under this Section 10.1(i).
(ii) If the Company at any time proposes to register any of its
securities under the 1933 Act for sale to the public, whether for its own
account or for the account of other security holders or both, except with
respect to registration statements on Forms X-0, X-0 or another form not
available for
13
registering the Registrable Securities for sale to the public, provided the
Registrable Securities are not otherwise registered for resale by the
Subscribers or Holder pursuant to an effective registration statement, each such
time it will give at least fifteen (15) days' prior written notice to the record
holder of the Registrable Securities of its intention so to do. Upon the written
request of the holder, received by the Company within ten (10) days after the
giving of any such notice by the Company, to register any of the Registrable
Securities not previously registered, the Company will cause such Registrable
Securities as to which registration shall have been so requested to be included
with the securities to be covered by the registration statement proposed to be
filed by the Company, all to the extent required to permit the sale or other
disposition of the Registrable Securities so registered by the holder of such
Registrable Securities (the "SELLER" or "SELLERS"). In the event that any
registration pursuant to this Section 10.1(ii) shall be, in whole or in part, an
underwritten public offering of common stock of the Company, the number of
shares of Registrable Securities to be included in such an underwriting may be
reduced by the managing underwriter if and to the extent that the Company and
the underwriter shall reasonably be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company
therein; provided, however, that the Company shall notify the Seller in writing
of any such reduction. Notwithstanding the foregoing provisions, or Section 10.4
hereof, the Company may withdraw or delay or suffer a delay of any registration
statement referred to in this Section 10.1(ii) without thereby incurring any
liability to the Seller.
(iii) If, at the time any written request for registration is
received by the Company pursuant to Section 10.1(i), the Company has determined
to proceed with the actual preparation and filing of a registration statement
under the 1933 Act in connection with the proposed offer and sale for cash of
any of its securities for the Company's own account and the Company actually
does file such other registration statement, such written request shall be
deemed to have been given pursuant to Section 10.1(ii) rather than Section
10.1(i), and the rights of the holders of Registrable Securities covered by such
written request shall be governed by Section 10.1(ii).
(iv) The Company shall file with the Commission not later than
thirty (30) days after the Closing Date (the "FILING DATE"), and cause to be
declared effective within ninety (90) days after the Filing Date (the "EFFECTIVE
DATE"), a Form SB-2 registration statement (the "REGISTRATION STATEMENT") (or
such other form that it is eligible to use) in order to register the Registrable
Securities for resale and distribution under the 1933 Act. The Company will
register not less than a number of shares of common stock in the aforedescribed
registration statement that is equal to all of the Shares and Warrant Shares
issuable pursuant to this Agreement. The Registrable Securities shall be
reserved and set aside exclusively for the benefit of each Subscriber and
Warrant holder, PRO RATA, and not issued, employed or reserved for anyone other
than each such Subscriber and Warrant holder. The Registration Statement will
immediately be amended or additional registration statements will be immediately
filed by the Company as necessary to register additional shares of Common Stock
to allow the public resale of all Common Stock included in and issuable by
virtue of the Registrable Securities. Without the written consent of the
Subscriber, no securities of the Company other than the Registrable Securities
will be included in the Registration Statement.
10.2. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Section 10.1(i), 10.1(ii), or (iv) to effect the
registration of any Registrable Securities under the 1933 Act, the Company will,
as expeditiously as possible:
(a) subject to the timelines provided in this Agreement, prepare
and file with the Commission a registration statement required by Section 10,
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby (as herein provided), and promptly provide to
the holders of the
14
Registrable Securities copies of all filings and Commission letters of comment
and notify Subscribers and Grushko & Xxxxxxx, P.C. (by telecopier and by email
to XXXXXXXXX@XXX.XXX) within two (2) hours of (i) notice that the Commission has
no comments or no further comments on the Registration Statement, (ii) request
by the Company of acceleration of effectiveness of any registration statement
which includes Registrable Securities, and (iii) the declaration of
effectiveness of the registration statement;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
until such registration statement has been effective for a period of two (2)
years, and comply with the provisions of the 1933 Act with respect to the
disposition of all of the Registrable Securities covered by such registration
statement in accordance with the Sellers' intended method of disposition set
forth in such registration statement for such period;
(c) furnish to the Sellers, at the Company's expense, such number
of copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons reasonably may request
in order to facilitate the public sale or their disposition of the securities
covered by such registration statement;
(d) use its best efforts to register or qualify the Sellers'
Registrable Securities covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the Sellers shall request
in writing, provided, however, that the Company shall not for any such purpose
be required to qualify generally to transact business as a foreign corporation
in any jurisdiction where it is not so qualified or to consent to general
service of process in any such jurisdiction;
(e) if applicable, list the Registrable Securities covered by
such registration statement with any securities exchange on which the Common
Stock of the Company is then listed;
(f) immediately notify the Sellers when a prospectus relating
thereto is required to be delivered under the 1933 Act, of the happening of any
event of which the Company has knowledge as a result of which the prospectus
contained in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and
(g) provided same would not be in violation of the provision of
Regulation FD under the 1934 Act, make available for inspection by the Sellers,
and any attorney, accountant or other agent retained by the Seller or
underwriter, all publicly available, non-confidential financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all publicly
available, non-confidential information reasonably requested by the seller,
attorney, accountant or agent in connection with such registration statement.
10.3. PROVISION OF DOCUMENTS. In connection with each registration
described in this Section 10, each Subscriber will furnish to the Company in
writing such information and representation letters with respect to itself and
the proposed distribution by it as reasonably shall be necessary in order to
assure compliance with federal and applicable state securities laws.
10.4. NON-REGISTRATION EVENTS. The Company and the Subscribers agree
that the Sellers will suffer damages if the Registration Statement is not filed
by the Filing Date and not declared effective by the Commission by the Effective
Date, and any registration statement required under Section 10.1(i) or 10.1(ii)
is not filed within 60 days after written request and declared effective by the
Commission within 120 days after such request, and maintained in the manner and
within the time periods contemplated by Section 10 hereof, and it would not be
feasible to ascertain the extent of such damages with precision.
15
Accordingly, if (i) the Registration Statement is not filed on or before the
Filing Date, (ii) if the Registration Statement is not declared effective on or
before the Effective Date, (iii) if the Registration Statement is not declared
effective within three (3) business days of receipt by the Company of a written
or oral communication from the Commission that the Registration Statement will
not be reviewed or that the Commission has no further comments, (iv) if the
registration statement described in Sections 10.1(i) or 10.1(ii) is not filed
within 60 days after such written request, or is not declared effective within
120 days after such written request, or (v) any registration statement described
in Sections 10.1(i), 10.1(ii) or 10.1(iv) is filed and declared effective but
shall thereafter cease to be effective (without being succeeded within ten (10)
business days by an effective replacement or amended registration statement) for
a period of time which shall exceed 30 days in the aggregate per year (defined
as a period of 365 days commencing on the date the Registration Statement is
declared effective) or more than 20 consecutive days (each such event referred
to in clauses (i), (ii), (iii) and (iv) of this Section 10.4 is referred to
herein as a "NON-REGISTRATION EVENT"), then for the first sixty (60) days of the
pendency of such Non-Registration Event, the Company shall deliver to the holder
of Registrable Securities, as Liquidated Damages, an amount equal to one and
one-half percent (1.5%) for each thirty (30) days or part thereof and
thereafter, two percent (2%) for each thirty (30) days of part thereof of the
Purchase Price of the Shares and Warrant Shares owned of record by such holder
as of and during the pendency of such Non-Registration Event which are subject
to such Non-Registration Event. Liquidated Damages otherwise payable in
connection with an Effective Date related Non-Registration Event as described in
Section 10.4(ii) are deemed waived if the Actual Effective Date occurs within
thirty (30) days from the Effective Date. The Company must pay the Liquidated
Damages in cash within ten (10) days after the end of each thirty (30) day
period or shorter part thereof for which Liquidated Damages are payable. In the
event a Registration Statement is filed by the Filing Date but is withdrawn
prior to being declared effective by the Commission, then such Registration
Statement will be deemed to have not been filed.
10.5. EXPENSES. All expenses incurred by the Company in complying
with Section 10, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including reasonable
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars and costs of insurance)
are called "REGISTRATION EXPENSES." All underwriting discounts and selling
commissions applicable to the sale of Registrable Securities, including any fees
and disbursements of any additional counsel to the Seller, are called "SELLING
Expenses." The Company will pay all Registration Expenses in connection with the
registration statement under Section 10. Selling Expenses in connection with
each registration statement under Section 10 shall be borne by the Seller and
may be apportioned among the Sellers in proportion to the number of shares sold
by the Seller relative to the number of shares sold under such registration
statement or as all Sellers thereunder may agree. Additionally, the parties
agree that each will be responsible for their respective legal fees in
connection with this transaction.
10.6. INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of a registration of any Registrable Securities
under the 1933 Act pursuant to Section 10, the Company will, to the extent
permitted by law, indemnify and hold harmless the Seller, each officer of the
Seller, each director of the Seller, each underwriter of such Registrable
Securities thereunder and each other person, if any, who controls such Seller or
underwriter within the meaning of the 1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which the Seller, or such
underwriter or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Securities was registered under the 1933 Act
pursuant
16
to Section 10, any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances when made, and will subject to the provisions of
Section 10.6(c) reimburse the Seller, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable to
the Seller to the extent that any such damages arise out of or are based upon an
untrue statement or omission made in any preliminary prospectus if (i) the
Seller failed to send or deliver a copy of the final prospectus delivered by the
Company to the Seller with or prior to the delivery of written confirmation of
the sale by the Seller to the person asserting the claim from which such damages
arise, (ii) the final prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission, or (iii) to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such Seller, or
any such controlling person in writing specifically for use in such registration
statement or prospectus.
(b) In the event of a registration of any of the Registrable
Securities under the 1933 Act pursuant to Section 10, each Seller severally but
not jointly will, to the extent permitted by law, indemnify and hold harmless
the Company, and each person, if any, who controls the Company within the
meaning of the 1933 Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the 1933 Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
officer, director, underwriter or controlling person may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Registrable Securities were
registered under the 1933 Act pursuant to Section 10, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and each such
officer, director, underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided, however,
that the Seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
such Seller, as such, furnished in writing to the Company by such Seller
specifically for use in such registration statement or prospectus, and provided,
further, however, that the liability of the Seller hereunder shall be limited to
the net proceeds actually received by the Seller from the sale of Registrable
Securities covered by such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 10.6(c) and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 10.6(c), except and only if and to the extent the indemnifying
party is prejudiced by such omission. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel satisfactory to such indemnified party, and, after notice from
17
the indemnifying party to such indemnified party of its election so to assume
and undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 10.6(c) for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected, provided, however, that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified parties, as a group, shall have the right to select one
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the reasonable expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution in
the event of joint liability under the 1933 Act in any case in which either (i)
a Seller, or any controlling person of a Seller, makes a claim for
indemnification pursuant to this Section 10.6 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding the
fact that this Section 10.6 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of the Seller or
controlling person of the Seller in circumstances for which indemnification is
not provided under this Section 10.6; then, and in each such case, the Company
and the Seller will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that the Seller is responsible only for the portion
represented by the percentage that the public offering price of its securities
offered by the registration statement bears to the public offering price of all
securities offered by such registration statement, provided, however, that, in
any such case, (y) the Seller will not be required to contribute any amount in
excess of the public offering price of all such securities offered by it
pursuant to such registration statement; and (z) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the 0000
Xxx) will be entitled to contribution from any person or entity who was not
guilty of such fraudulent misrepresentation.
10.7. DELIVERY OF UNLEGENDED SHARES.
(a) Within three (3) business days (such third (3rd) business
day, the "UNLEGENDED SHARES DELIVERY Date") after the business day on which the
Company has received (i) a notice that Registrable Securities have been sold
either pursuant to the Registration Statement or Rule 144 under the 1933 Act,
(ii) a representation that the prospectus delivery requirements, or the
requirements of Rule 144, as applicable, have been satisfied, and (iii) the
original share certificates representing the shares of Common Stock that have
been sold, and (iv) in the case of sales under Rule 144, customary
representation letters of the Subscriber and/or Subscriber's broker regarding
compliance with the requirements of Rule 144, the Company at its expense, (y)
shall deliver, and shall cause legal counsel selected by the Company to deliver,
to its transfer agent (with copies to Subscriber) an appropriate instruction and
opinion of such counsel, directing the delivery of shares of Common Stock
without any legends including the legends set forth in Sections 4(e) and 4(f)
above, issuable pursuant to any effective and current Registration Statement
described in Section 10 of this Agreement or pursuant to Rule 144 under the 1933
Act (the "UNLEGENDED SHARES"); and (z) cause the transmission of the
certificates representing the Unlegended Shares together with a legended
certificate representing the balance of the unsold shares of Common Stock, if
any, to the Subscriber at the address specified in the notice of sale, via
express courier, by electronic transfer or otherwise on or before the Unlegended
Shares Delivery Date. Transfer fees shall be the responsibility of the Seller.
18
(b) In lieu of delivering physical certificates representing the
Unlegended Shares, if the Company's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer program,
upon request of a Subscriber, so long as the certificates therefor do not bear a
legend and the Subscriber is not obligated to return such certificate for the
placement of a legend thereon, the Company shall cause its transfer agent to
electronically transmit the Unlegended Shares by crediting the account of
Subscriber's prime Broker with DTC through its Deposit Withdrawal Agent
Commission system. Such delivery must be made on or before the Unlegended Shares
Delivery Date.
(c) The Company understands that a delay in the delivery of the
Unlegended Shares pursuant to Section 10 hereof beyond the Unlegended Shares
Delivery Date could result in economic loss to a Subscriber. As compensation to
a Subscriber for such loss, the Company agrees to pay late payment fees (as
liquidated damages and not as a penalty) to the Subscriber for late delivery of
Unlegended Shares in the amount of $100 per business day after the Delivery Date
for each $10,000 of purchase price of the Unlegended Shares subject to the
delivery default. If during any 360 day period, the Company fails to deliver
Unlegended Shares as required by this Section 10.7 for an aggregate of thirty
(30) days, then each Subscriber or assignee holding Securities subject to such
default may, at its option, require the Company to purchase all or any portion
of the Shares and Warrant Shares subject to such default at a price per share
equal to 130% of the Purchase Price of such Common Stock and Warrant Shares. The
Company shall pay any payments incurred under this Section in immediately
available funds upon demand.
(d) In addition to any other rights available to a Subscriber, if
the Company fails to deliver to a Subscriber Unlegended Shares as required
pursuant to this Agreement, within ten (10) calendar days after the Unlegended
Shares Delivery Date and the Subscriber purchases (in an open market transaction
or otherwise) shares of common stock to deliver in satisfaction of a sale by
such Subscriber of the shares of Common Stock which the Subscriber anticipated
receiving from the Company (a "Buy-In"), then the Company shall pay in cash to
the Subscriber (in addition to any remedies available to or elected by the
Subscriber) the amount by which (A) the Subscriber's total purchase price
(including brokerage commissions, if any) for the shares of common stock so
purchased exceeds (B) the aggregate purchase price of the shares of Common Stock
delivered to the Company for reissuance as Unlegended Shares, together with
interest thereon at a rate of 15% per annum, accruing until such amount and any
accrued interest thereon is paid in full (which amount shall be paid as
liquidated damages and not as a penalty). For example, if a Subscriber purchases
shares of Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to $10,000 of purchase price of shares of Common Stock
delivered to the Company for reissuance as Unlegended Shares, the Company shall
be required to pay the Subscriber $1,000, plus interest. The Subscriber shall
provide the Company written notice indicating the amounts payable to the
Subscriber in respect of the Buy-In.
(e) In the event a Subscriber shall request delivery of
Unlegended Shares as described in Section 10.7(e) and the Company is required to
deliver such Unlegended Shares pursuant to Section 10.7(e), the Company may not
refuse to deliver Unlegended Shares based on any claim that such Subscriber or
any one associated or affiliated with such Subscriber has been engaged in any
violation of law, or for any other reason, unless, an injunction or temporary
restraining order from a court, on notice, restraining and or enjoining delivery
of such Unlegended Shares or exercise of all or part of said Warrant shall have
been sought and obtained and the Company has posted a surety bond for the
benefit of such Subscriber in the amount of 130% of the amount of the aggregate
purchase price of the Common Stock and Warrant Shares which are subject to the
injunction or temporary restraining order, which bond shall remain in effect
until the completion of arbitration/litigation of the dispute and the proceeds
of which shall be payable to such Subscriber to the extent Subscriber obtains
judgment in Subscriber's favor.
19
11. (a) RIGHT OF FIRST REFUSAL. Commencing on the date of this
Agreement and until the Registration Statement has been effective for one
hundred and fifty (150) days, the Subscribers shall be given not less than ten
(10) business days prior written notice of any proposed sale by the Company of
its common stock or other securities or debt obligations, except in connection
with (i) employee stock options or compensation plans, (ii) documented legal
fees (for which a Form S-8 may be filed notwithstanding Section 8(n) hereof), or
(iii) as has been described on Schedule 5(s) (collectively "EXCEPTED
ISSUANCES"). The Subscribers who exercise their rights pursuant to this Section
11(a) shall have the right during the ten (10) business days following receipt
of the notice to purchase all of such offered common stock, debt or other
securities in accordance with the terms and conditions set forth in the notice
of sale in the same proportion to each other as their purchase of Shares in the
Offering. In the event such terms and conditions are modified during the notice
period, the Subscribers shall be given prompt notice of such modification and
shall have the right during the original notice period or for a period of ten
(10) business days following the notice of modification, whichever is longer, to
exercise such right.
(b) FAVORED NATIONS PROVISION. Other than the Excepted Issuances,
if at any time until the Registration Statement has been effective for one
hundred and fifty (150) days, if the Company shall offer, issue or agree to
issue any common stock or securities convertible into or exercisable for shares
of common stock (or modify any of the foregoing which may be outstanding at any
time prior to the Closing Date) to any person or entity at a price per share or
conversion or exercise price per share which shall be less than the Per Share
Purchase Price, without the consent of each Subscriber holding Shares, then the
Company shall issue, for each such occasion, additional shares of Common Stock
to each Subscriber so that the average Per Share Purchase Price of the shares of
Common Stock issued to the Subscriber (of only the Common Stock or Warrant
Shares still owned by the Subscriber) is equal to such other lower price per
share. The delivery to the Subscriber of the additional shares of Common Stock
shall be not later than the closing date of the transaction giving rise to the
requirement to issue additional shares of Common Stock. The Subscriber is
granted the registration rights described in Section 10 hereof in relation to
such additional shares of Common Stock except that the Filing Date and Effective
Date vis-a-vis such additional common shares shall be, respectively, the
sixtieth (60th) and one hundred and twentieth (120th) date after the closing
date giving rise to the requirement to issue the additional shares of Common
Stock. For purposes of the issuance and adjustment described in this paragraph,
the issuance of any security of the Company carrying the right to convert such
security into shares of Common Stock or of any warrant, right or option to
purchase Common Stock shall result in the issuance of the additional shares of
Common Stock upon the issuance of such convertible security, warrant, right or
option and again upon any subsequent issuances of shares of Common Stock upon
exercise of such conversion or purchase rights if such issuance is at a price
lower than the then Per Share Purchase Price. The rights of the Subscriber set
forth in this Section 11 are in addition to any other rights the Subscriber has
pursuant to this Agreement and any other agreement referred to or entered into
in connection herewith.
(c) MAXIMUM EXERCISE OF RIGHTS. In the event the exercise of the
rights described in Sections 11(a) and 11(c) would result in the issuance of an
amount of common stock of the Company that would exceed the maximum amount that
may be issued to a Subscriber calculated in the manner described in Section 10
of the Warrant, then the issuance of such additional shares of common stock of
the Company to such Subscriber will be deferred in whole or in part until such
time as such Subscriber is able to beneficially own such common stock without
exceeding the maximum amount set forth calculated in the manner described in
Section 10 of the Warrant. The determination of when such common stock may be
issued shall be made by each Subscriber as to only such Subscriber.
20
12. MISCELLANEOUS.
(a) NOTICES. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, 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: (i) if to the Company, to: Accupoll Holdings,
Corp., 00000 Xxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attn:
___________________, telecopier: ______________, with a copy by telecopier only
to: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attn: Xxxxxxx Xxxxxxxxx, Esq., telecopier: (000) 000-0000, (ii)
if to the Subscribers, to: the one or more addresses and telecopier numbers
indicated on the signature pages hereto, with an additional copy by telecopier
only to: Grushko & Xxxxxxx, P.C., 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx
Xxxx 00000, telecopier number: (000) 000-0000, and (iii) if to the Placement
Agent, to: X.X. Xxxxxx & Company, L.L.C., 00 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx
Xxxxx, XX 00000, Attn: Xxxxxxx Xxxx, telecopier: (000) 000-0000.
(b) CLOSING. The consummation of the transactions contemplated
herein shall take place at the offices of Grushko & Xxxxxxx, P.C., 000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, upon the satisfaction of all
conditions to Closing set forth in this Agreement ("CLOSING DATE").
(c) ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and other
documents delivered in connection herewith represent the entire agreement
between the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by both parties. Neither the Company nor the
Subscribers have relied on any representations not contained or referred to in
this Agreement and the documents delivered herewith. No right or obligation of
either party shall be assigned by that party without prior notice to and the
written consent of the other party.
(d) COUNTERPARTS/EXECUTION. This Agreement may be executed in any
number of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. This
Agreement may be executed by facsimile signature and delivered by facsimile
transmission.
(e) LAW GOVERNING THIS AGREEMENT. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of laws. Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. THE PARTIES AND THE INDIVIDUALS
EXECUTING THIS AGREEMENT AND OTHER AGREEMENTS REFERRED TO HEREIN OR DELIVERED IN
CONNECTION HEREWITH ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION
OF SUCH COURTS AND WAIVE TRIAL BY JURY. The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and costs. In the
event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any
21
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of any agreement.
(f) SPECIFIC ENFORCEMENT, CONSENT TO JURISDICTION. The Company
and Subscriber acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which any of them may be entitled by law or equity.
Subject to Section 12(e) hereof, each of the Company, Subscriber and any
signator hereto in his personal capacity hereby waives, and agrees not to assert
in any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction in New York of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Nothing in this Section shall affect or limit
any right to serve process in any other manner permitted by law.
(g) INDEPENDENT NATURE OF SUBSCRIBERS. The Company acknowledges
that the obligations of each Subscriber under the Transaction Documents are
several and not joint with the obligations of any other Subscriber, and no
Subscriber shall be responsible in any way for the performance of the
obligations of any other Subscriber under the Transaction Documents. The Company
acknowledges that the decision of each Subscriber to purchase Securities has
been made by such Subscriber independently of any other Subscriber and
independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company which
may have been made or given by any other Subscriber or by any agent or employee
of any other Subscriber, and no Subscriber or any of its agents or employees
shall have any liability to any Subscriber (or any other person) relating to or
arising from any such information, materials, statements or opinions. The
Company acknowledges that nothing contained in any Transaction Document, and no
action taken by any Subscriber pursuant hereto or thereto (including, but not
limited to, the (i) inclusion of a Subscriber in the SB-2 Registration Statement
and (ii) review by, and consent to, such Registration Statement by a Subscriber)
shall be deemed to constitute the Subscribers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the
Subscribers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. The
Company acknowledges that each Subscriber shall be entitled to independently
protect and enforce its rights, including without limitation, the rights arising
out of the Transaction Documents, and it shall not be necessary for any other
Subscriber to be joined as an additional party in any proceeding for such
purpose. The Company acknowledges that it has elected to provide all Subscribers
with the same terms and Transaction Documents for the convenience of the Company
and not because Company was required or requested to do so by the Subscribers.
The Company acknowledges that such procedure with respect to the Transaction
Documents in no way creates a presumption that the Subscribers are in any way
acting in concert or as a group with respect to the Transaction Documents or the
transactions contemplated thereby.
(h) EQUITABLE ADJUSTMENT. The Securities and the purchase prices
of Securities shall be equitably adjusted to offset the effect of stock splits,
stock dividends, and distributions of property or equity interests of the
Company to its shareholders.
22
[THIS SPACE INTENTIONALLY LEFT BLANK]
23
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
NEW MILLENNIUM CAPITAL PARTNERS $2,500.00 25,000 12,500 12,500 12,500
II, LLC
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (B)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
AJW QUALIFIED PARTNERS, LLC $42,500.00 425,000 212,500 212,500 212,500
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (C)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
AJW OFFSHORE, LTD $38,000.00 380,000 190,000 190,000 190,000
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (D)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
AJW PARTNERS, LLC $17,000.00 170,000 85,000 85,000 85,000
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (E)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
SRG CAPITAL LLC 000 Xxxxxxxx, $125,000.00 1,250,000 625,000 625,000 000,000
00xx Xxxxx Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Tax ID: 00-0000000
/s/ SRG Capital LLC
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (F)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
ENABLE GROWTH PARTNERS LP $125,000.00 1,250,000 625,000 625,000 625,000
Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
/s/ ENABLE GROWTH PARTNERS LP
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (G)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
TRUK INTERNATIONAL FUND LP $8,750.00 87,500 43,750 43,750 43,750
C/o Atoll Asset Management LLC
00 Xxxxxxxxxxx Xxxxx,
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
/s/ TRUK INTERNATIONAL FUND LP
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (H)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
DOUBLE U MASTER FUND LP $42,000.00 420,000 210,000 210,000 210,000
X/x Xxxxxxxxx Xxxxxxxxxx Xxx.
Xxxxxx Xxxxx, Xxxxxxxxxx Drive
P.O. Box 972
Road Town, Tortola
British Virgin Islands
Attn: Xxxxxx Xxxx
Fax: (000) 000-0000
/s/ DOUBLE U MASTER FUND LP
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (I)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
PLATINUM PARTNERS VALUE ARBITRAGE
FUND LP $83,000.00 830,000 415,000 415,000 415,000
Attn: Xxxx Xxxxxxxxx, Managing
Member of the GP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
/s/ PLATINUM PARTNERS VALUE
ARBITRAGE FUND LP
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (J)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
TRUK OPPORTUNITY FUND LLC $116,250.00 1,162,500 581,250 581,250 581,250
C/o Atoll Asset Management LLC
00 Xxxxxxxxxxx Xxxxx,
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
/s/ TRUK OPPORTUNITY FUND LLC
-----------------------
(Signature)
-----------------------
Print Name and Title
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (K)
Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.
ACCUPOLL HOLDINGS, CORP.
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
Dated: October 22, 2004
---------- -------------- ------ ---------- ---------- ----------
SUBSCRIBER PURCHASE PRICE SHARES A WARRANTS B WARRANTS C WARRANTS
---------- -------------- ------ ---------- ---------- ----------
XXXXXXX X. XXXXXXXX $5,000.00 50,000 25,000 25,000 25,000
0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
/s/ XXXXXXX XXXXXXXX
-----------------------
(Signature)
-----------------------
Print Name and Title
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of A Warrant
Exhibit B Form of B Warrant
Exhibit C Form of C Warrant
Exhibit D Escrow Agreement
Exhibit E Form of Legal Opinion
Exhibit F Form of Placement Agent Warrant
Schedule 5(d) Additional Issuances
Schedule 5(h) Litigation
Schedule 5(q) Undisclosed Liabilities
Schedule 5(s) Capitalization
Schedule 8(e) Use of Proceeds
Schedule 10.1 Other Securities to be Registered
