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EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT, dated as of ______ __, 1996, between GO2NET, INC.,
a Delaware corporation (the "Company"), and _________________________ (the
"Subscriber").
A. Subscription. Subject to the terms and conditions of this subscription
agreement (the "Subscription Agreement"), the Subscriber hereby agrees to
purchase, and the Company agrees to sell, ________ shares (the "Shares") of the
Company's 9% Cumulative Redeemable Convertible Preferred Stock, par value $1.00
per share (the "Preferred Stock"), at a subscription price of $___ per share
(the "Purchase Price"). Payment for the Shares shall be made by delivery to the
Company of a check in the amount of the aggregate Purchase Price for the Shares
made payable to the Company.
B. Acceptance of Subscription. The Subscriber acknowledges that the Company
has the right to accept or reject this subscription, in whole or in part, for
any reason, and that this subscription shall be deemed to be accepted by the
Company only when it is signed on its behalf. The Subscription Agreement either
will be accepted or rejected, in whole or in part, as promptly as practical
after receipt. Upon rejection of this Subscription Agreement for any reason, all
items received with this Subscription Agreement shall be returned to the
Subscriber without deduction for any fee, commission or expense, and without
accrued interest with respect to any money received, and this Subscription
Agreement shall be deemed to be null and void and of no further force or effect.
C. Representations, Warranties and Covenants of the Subscriber. The
Subscriber hereby represents and warrants to, and covenants with, the Company as
follows:
1. The Subscriber is either (i) an "accredited investor", as such term
is defined in Rule 501 of Regulation D promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), or (ii) a "qualified investor",
defined as an investor who has a net worth, exclusive of homes, furnishings
and automobiles, of more than five (5) times the amount of the aggregate
Purchase Price described in paragraph A above. The Subscriber agrees to
provide the Company with any information which the Company may request in
order to confirm the Subscriber's status as either an "accredited investor"
or "qualified investor";
2. The Subscriber has relied solely upon investigations made by or on
behalf of the Subscriber or his representative in evaluating the
suitability of an investment in the Company and recognizes that an
investment in the Company involves a high degree of risk;
3. The Subscriber has been advised that (i) it is unlikely that there
will be a market for the Shares; and (ii) it may not be possible to readily
liquidate this investment;
4. The Subscriber's overall commitment to investments which are not
readily marketable is not disproportionate to his net worth; his investment
in the Company will not cause such overall commitment to become excessive;
and he can afford to bear the loss of his entire investment in the Company;
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5. The Subscriber has adequate means of providing for his current
needs and personal contingencies and has no need for liquidity in his
investment in the Company;
6. The Subscriber satisfies any special suitability or other
applicable requirements of his state of residence and/or the state in which
the transaction by which the Shares are purchased occurs;
7. The Subscriber has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of
an investment in the Company, or the Subscriber has employed the services
of an independent investment advisor, attorney or accountant to assist in
the evaluation of the merits of an investment in the Company. The
Subscriber acknowledges that the Company has neither developed nor prepared
a business plan and that the Company has not determined what products or
services to develop and offer for sale;
8. The Subscriber has received, read, understood and is familiar with
the "Risk Factors" (set forth on Exhibit A hereto) which set forth certain
risks to be considered in evaluating an investment in the Company and the
Company's Certificate of Incorporation (set forth on Exhibit B hereto)
which sets forth, among other things, the preferences, designations and
limitations of the Shares. The Subscriber recognizes that the Company is a
newly formed corporation and does not have, nor has it ever had,
operational income or assets;
9. The Subscriber confirms that the Company has made available to
Subscriber the opportunity to ask questions of, and receive answers from,
the Company concerning the Company and the activities of the Company, and
otherwise to obtain any additional information, to the extent that the
Company possesses such information;
10. The Subscriber hereby acknowledges that the Subscriber has been
advised that this offering of the Shares has not been registered with, or
reviewed by, the Securities and Exchange Commission (the "SEC") or any
state securities agency because this offering of the Shares is intended to
be a non-public offering pursuant to Section 4(2) of the Securities Act and
the relevant state securities laws. The Subscriber represents that the
Shares are being purchased for the Subscriber's own account, for investment
purposes only and not with a view towards distribution or resale to others.
The Subscriber agrees that the Subscriber will not attempt to sell,
transfer, assign, pledge or otherwise dispose of all or any portion of the
Shares unless they are registered under the Securities Act and the relevant
state securities laws, or unless in the opinion of counsel satisfactory to
the Company an exemption from such registration is available. The
Subscriber understands that the Shares have not been registered under the
Securities Act or any state securities laws by reason of a claimed
exemption under the provisions of the Securities Act and the relevant state
securities laws which depend, in part, upon the Subscriber's investment
intention. In this respect, the Subscriber understands that it is the
position of the SEC and various state securities agencies that the
statutory basis for such exemption would not be present if the Subscriber's
representations merely meant that the Subscriber's present intention was to
hold such Shares for a short period, such as the capital gains period of
tax statutes, for a deferred
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sale or for any other fixed period. The Subscriber realizes that the SEC or
certain state securities agencies might regard a purchase with an intent
inconsistent with the Subscriber's representations to the Company, and a
sale or disposition thereof, as a deferred sale to which the exemption is
not available;
11. The Subscriber understands that no securities administrator of any
state has made any finding or determination relating to the fairness of
this investment and that no securities administrator of any state has
recommended or endorsed, or will recommend or endorse, the offering of the
Shares;
12. The execution, delivery and performance by the Subscriber of the
Subscription Agreement are within the powers of the Subscriber, have been
duly authorized and will not constitute or result in a breach or default
under, or conflict with, any order, ruling or regulation of any court or
other tribunal or of any governmental commission or agency, or any
agreement or other undertaking, to which the Subscriber is a party or by
which the Subscriber is bound; and, if the Subscriber is not an individual,
will not violate any provision of the charter documents, by-laws, indenture
of trust or partnership agreement, as applicable, of the Subscriber. The
signatures on the Subscription Agreement are genuine; and the signatory, if
the Subscriber is an individual, has legal competence and capacity to
execute the same, or, if the Subscriber is not an individual, the signatory
has been duly authorized to execute the same; and the Subscription
Agreement constitutes the legal, valid and binding obligations of the
Subscriber, enforceable in accordance with its terms except as such
enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization or other similar laws and legal and equitable principles
limiting or affecting the rights of creditors generally and/or (ii) general
principles of equity, regardless of whether considered in a proceeding in
equity or at law;
13. The Subscriber acknowledges that no general solicitation or
general advertising (including communications published in any newspaper,
magazine or other broadcast) has been received by him and that no public
solicitation or advertisement with respect to the offering of the Shares;
14. The Subscriber has relied solely upon the advice of his own tax
and legal advisors with respect to the tax and other legal aspects of this
investment;
15. The Subscriber understands that the Company will review this
Subscription Agreement and certain additional information, where
applicable, and the Company is hereby given authority by the Subscriber to
call the Subscriber's bank or place of employment or otherwise investigate
or review the financial standing of the Subscriber; and it is further
agreed that the Company reserves the unrestricted right to reject or limit
any subscription and to close or terminate the offering of the Shares for
any reason whatsoever;
16. The Subscriber is not aware that any person, and has been advised
that no person, will receive from the Company any compensation as a broker,
finder, adviser or in any other capacity in connection with the purchase of
Shares. The Company has also
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agreed to indemnify its affiliates and certain other related persons
against certain liabilities under the federal securities laws, including
its general partner and its affiliates; and
17. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY
ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY
WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
The foregoing representations and warranties are true and accurate as of
the date hereof, shall be true and accurate as of the date of delivery of this
Subscription Agreement and accompanying documents to the Company and shall
survive the delivery of the Shares. If, in any respect, those representations
and warranties shall not be true and accurate prior to delivery of the payment
pursuant to paragraph A hereof, the undersigned shall immediately give written
notice to the Company specifying which representations and warranties are not
true and accurate and the reason therefor.
D. Indemnification. The Subscriber acknowledges that he understands the
meaning and legal consequences of the representations, warranties and covenants
in paragraph C hereof and that the Company has relied upon such representations,
warranties and covenants, and he hereby agrees to indemnify and hold harmless
the Company and its officers, directors, controlling persons, agents and
employees (collectively, the "Indemnified Persons"), who are or may be parties
or are or may be threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made or alleged to have been made by the undersigned to the Company or the
Indemnified Persons (or any agent or representative of any of them), or omitted
or alleged to have been omitted by the undersigned, concerning the undersigned
or the undersigned's authority to invest or financial position in connection
with the offering or sale of the Shares, including, without limitation, any such
misrepresentation, misstatement or omission contained herein, against losses,
damages, liabilities or expenses for which the Company or any Indemnified Person
has not otherwise been reimbursed (including attorney's fees, judgments, fines
and amounts paid in settlement) actually and reasonably incurred by the Company
or any Indemnified Person in connection with such action, suit or proceeding.
Notwithstanding the foregoing, however, no representation, warranty, covenant,
acknowledgment or agreement made herein by the Subscriber shall in any manner be
deemed to constitute a waiver of any rights granted to the Subscriber under
federal or state securities laws. All representations, warranties
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and covenants contained in this Subscription Agreement and the indemnification
contained in this paragraph D shall survive the acceptance of this subscription.
E. Restrictions on Transfer. The Subscriber understands and agrees that the
following restriction and limitation is applicable to the Subscriber's
investment in the Shares pursuant to Section 4(2) of the Securities Act and
shall appear on each certificate representing the Shares:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
SATISFACTORY TO COUNSEL FOR THIS COMPANY, IS AVAILABLE."
F. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Subscriber as
follows:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power to own and/or lease its properties and to conduct its
business as currently conducted;
2. The execution, delivery and performance of this Subscription
Agreement by the Company is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization or other similar laws and legal and equitable
principles limiting or affecting the rights of creditors generally and/or
(ii) general principles of equity, regardless of whether considered in a
proceeding in equity or at law;
3. The Shares, when issued against payment therefor in accordance with
the terms and conditions hereof, will be validly issued, duly authorized,
fully paid and nonassessable shares of Preferred Stock and will be free of
any and all liens, options, encumbrances, charges, third-party rights or
claims of any nature whatsoever except for restrictions on transfers set
forth therein granted by the Subscriber or imposed by law; and
4. To the best of the Company's knowledge, no material consent,
approval, qualification, order or authorization of, or filing with, any
local, state, or federal governmental authority is required on the part of
the Company in connection with the Company's valid execution, delivery or
performance of this Subscription Agreement or the offer, sale or issuance
of the Shares, except for filings that shall be made at or prior to any
closing of the sale of Shares hereunder.
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G. Modification. Neither this Subscription Agreement nor any provision
hereof shall be waived, modified, changed, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver, modification,
change, discharge or termination is sought.
H. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
1. If to the Subscriber, to the address set forth on the signature
page of this Subscription Agreement;
2. If to the Company, to:
GO2NET, INC.
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000; or
3. At such other address as the Subscriber or the Company may
hereafter have advised the other.
I. Binding Effect. This Subscription Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and assigns.
J. Entire Agreement. This Subscription Agreement contains the entire
agreement of the parties with respect to the matters set forth herein and there
are no representations, covenants or other agreements except as stated or
referred to herein or as are embodied in the Agreement.
K. Assignability. This Subscription Agreement is not transferable or
assignable by the undersigned or any successor thereto.
L. Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to the principles thereof relating to conflicts of law.
M. Certain Disclosures. The Company may present this Subscription Agreement
to such persons as they deem advisable if compelled by law or called upon to
establish the availability under any federal or state securities laws of an
exemption from registration of the private placement or if the contents thereof
are relevant to any issue in any action, suit, or proceeding to which the
Company is a party or by which it is or may be bound.
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement as of the _____ day of ________, 1996.
GO2NET, INC.
By:
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Name: Xxxxxxx X. Xxxxxxxx
Title: President
SUBSCRIBER
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(Signature of Subscriber)
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(Name Typed or Printed)
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(Signature of Co-Subscriber)
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(Name Typed or Printed)
TYPE OF OWNERSHIP
(CHECK ONE):
NATURAL PERSONS
_____ Individual Mailing Address (if not residence):
_____ Joint tenants with
rights of survivorship
_____ Tenants in common
_____ Tenants by the entirety
ENTITIES
_____ Corporation, Company or Trust Residence Address:
_____ Pension or Profit Sharing Plan or Trust
_____ Individual Retirement Account
_____ Tax Exempt Organization Estate
_____ Other (specify) _________________________
Social Security or Federal Tax Identification
Number of Subscriber: _____________________
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