EXHIBIT 4.4
SUBSCRIPTION AGREEMENT
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Dear Subscriber:
You (the "Subscriber") hereby agree to purchase, and Advanced Aerodynamics
& Structures, Inc., a Delaware corporation (the "Company") hereby agrees to
issue and to sell to the Subscriber, the number of shares of Series A 5%
Cumulative Convertible Preferred Stock, $.0001 par value (the "Preferred Stock")
convertible in accordance with the terms thereof into shares of the Company's
$.0001 par value Class A common stock (the "Company Shares") and Common Stock
Purchase Warrants ("Warrants") as set forth on the signature page hereof for the
aggregate consideration as set forth on the signature page hereof ("Purchase
Price"). The Certificate to Set Forth Designations, Voting Powers, Preferences,
Limitations, Restrictions, and Relative Rights of Series A 5% Cumulative
Convertible Preferred Stock, $.0001 Par Value Per Share is annexed hereto as
Exhibit A ("Certificate of Designation"). (The Company Shares are sometimes
referred to herein as the "Shares" or "Common Stock"). (The Preferred Stock,
the Company Shares, Warrants, and Common Stock Purchase Warrants issuable to the
Placement Agents ("Placement Warrants"), identified on Schedule B hereto, and
the Common Stock issuable upon exercise of the Warrants and Placement Warrants
are collectively referred to herein as, the "Securities"). Upon acceptance of
this Agreement by the Subscriber, the Company shall issue and deliver to the
Subscriber the Preferred Stock and Warrants against payment, by federal funds
(U.S.) wire transfer of the Purchase Price. This Subscription Agreement and
other similar Subscription Agreements and the Subscription Agreements relating
to Series A Preferred Stock to be issued in connection with the Put described in
Section 11 hereof relate to the offering of a maximum of 100,000shares of
Preferred Stock for the aggregate Purchase Price of $10,000,000.
The following terms and conditions shall apply to this subscription.
1. Subscriber's Representations and Warranties. The Subscriber
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hereby represents and warrants to and agrees with the Company that:
(a) Information on Company. The Subscriber has been furnished
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with and has read the Company's Form 10KSB for the year ended December 31, 1998
and subsequently filed Forms 10-QSB, each as filed with the U.S. Securities and
Exchange Commission (the "Commission") (collectively, with exhibits thereto,
hereinafter referred to as the "Reports"). In addition, the Subscriber has
received from the Company such other information concerning its operations,
financial condition and other matters as the Subscriber has requested, and
considered all factors the Subscriber deems material in deciding on the
advisability of investing in the Securities (such information in writing is
collectively, the "Other Written Information").
(b) Information on Subscriber. The Subscriber is an "accredited
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investor", as such term is defined in Regulation D promulgated by the Commission
under the Securities Act of 1933, as amended, 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.
(c) Purchase of Company Shares. On the Closing Date, the Subscriber
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will purchase the Preferred Stock and Warrants for its own account and not with
a view to any distribution thereof.
(d) Compliance with Securities Act. The Subscriber understands and
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agrees that the Securities have not been registered under the Securities Act of
1933, as amended (the "1933 Act") by reason of their issuance in a transaction
that does not require registration under the 1933 Act, and that such Securities
must be held unless a subsequent disposition is registered under the 1933 Act or
is exempt from such registration.
(e) Preferred Stock and Company Shares Legend. The Preferred Stock,
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Company Shares, and the shares of Common Stock issuable upon the exercise of the
Warrants and Placement Warrants shall bear the following 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 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO ADVANCED
AERODYNAMICS & STRUCTURES, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED."
(f) Warrants Legend. The Warrants and Placement Warrants shall
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bear the following 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, OR APPLICABLE STATE SECURITIES LAWS. 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 AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO ADVANCED
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AERODYNAMICS & STRUCTURES, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED."
(g) Communication of Offer. The offer to sell the Securities was
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directly communicated to the Subscriber. 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) Correctness of Representations. The Subscriber represents that
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the foregoing representations and warranties are true and correct as of the date
hereof and, unless the Subscriber otherwise notifies the Company prior to the
Closing Date (as hereinafter defined), shall be true and correct as of the
Closing Date. The foregoing representations and warranties shall survive the
Closing Date.
2. Company Representations and Warranties. Except as disclosed in
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the Disclosure Schedule annexed hereto, the Company represents and warrants to
and agrees with the Subscriber that:
(a) Due Incorporation. Each of the Company and each of its
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subsidiaries is a corporation duly organized, and validly existing under the
laws of the state of its incorporation and has the requisite corporate power to
own its properties and to carry on its 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 on the business, operations or
prospects or condition (financial or otherwise) of the Company.
(b) Outstanding Stock. All issued and outstanding shares of capital
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stock of the Company and each of its subsidiaries has been duly authorized and
validly issued and are fully paid and non-assessable.
(c) Authority; Enforceability. This Agreement has been duly
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authorized, executed and delivered by the Company and is a valid and binding
agreement enforceable in accordance with its 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 the Company has full corporate power and
authority necessary to enter into this Agreement and to perform its obligations
hereunder and all other agreements entered into by the Company relating hereto.
(d) Additional Issuances. There are no outstanding agreements or
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preemptive or similar rights affecting the Company's common stock 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
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the Company or other equity interest in any of the subsidiaries of the Company,
except as described in the Reports or Other Written Information.
(e) Consents. No consent, approval, authorization or order of any
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court, governmental agency or body or arbitrator having jurisdiction over the
Company, or any of its affiliates or NASDAQ or the Company's Shareholders is
required for execution of this Agreement, and all other agreements entered into
by the Company relating hereto, including, without limitation issuance and sale
of the Securities, and the performance of the Company's obligations hereunder.
(f) No Violation or Conflict. Assuming the representations and
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warranties of the Subscriber in Paragraph 1 are true and correct and the
Subscriber complies with its obligations under this Agreement, neither the
issuance and sale of the Securities nor the performance of its obligations under
this Agreement and all other agreements entered into by the Company relating
thereto 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
of incorporation, charter or bylaws of the Company, or any of its affiliates,
(B) to the Company's knowledge, any decree, judgment, order, law, treaty, rule,
regulation or determination applicable to the Company, or any of its affiliates
of any court, governmental agency or body, or arbitrator having jurisdiction
over the Company, or any of its affiliates 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 is a party, by which
the Company, or any of its affiliates is bound, or to which any of the
properties of the Company, or any of its affiliates 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 is a party; 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, or any of
its affiliates.
(g) The Securities. The Securities upon issuance:
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(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 State laws;
(ii) have been, or will be, duly and validly authorized and on the
date of issuance and on the Closing Date, as hereinafter defined, and the date
the Preferred Stock is converted, and the Warrants and Placement Warrants are
exercised, the Securities 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 the Subscriber complies with the Prospectus delivery requirements);
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(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;
(iv) will not subject the holders thereof to personal
liability by reason of being such holders; and
(h) Litigation. There is no pending or, to the best knowledge of the
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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 this Agreement, and all
other agreements entered into by the Company relating hereto.
(i) Reporting Company. The Company is a publicly-held company whose
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common stock is (and has been for the past 90 days) registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Company's Common Stock is listed for trading on the NASDAQ National
Market. Pursuant to the provisions of the Exchange Act, the Company has timely
filed all reports and other materials required to be filed thereunder with the
Securities and Exchange Commission during the preceding twelve months.
(j) No Market Manipulation. The Company has not taken, and will not
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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.
(k) Information Concerning Company. The Reports and Other Written
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Information 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 most
recent financial statements included in the Reports, and except as modified in
the Other Written Information, there has been no material adverse change in the
Company's business, financial condition or affairs not disclosed in the Reports.
The Reports and Other Written Information do not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
(l) Dilution. The number of Shares issuable upon Conversion of the
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Preferred Stock (as defined in the Certificate of Designation) may increase
substantially in certain circumstances, including, but not necessarily limited
to, the circumstance wherein the trading price of the Common Stock declines
prior to conversion of the Preferred Stock. The Company's executive officers
and directors have studied and fully understand the nature of the Securities
being sold hereby and recognize that they have a potential dilutive effect. The
board of directors of the Company has concluded, in its good faith business
judgment, that such issuance is in the best interests of the Company. The
Company specifically acknowledges that its obligation to issue the Shares upon
conversion of the Preferred Stock and exercise of the Warrants and Placement
Warrants is binding upon the Company and enforceable, except as otherwise
described in this Subscription Agreement, regardless of the dilution such
issuance may have on the ownership interests of other shareholders of the
Company.
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(m) Stop Transfer. The Securities are restricted securities as of the
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date of this Agreement. The Company will not issue any stop transfer order or
other order impeding the sale and delivery of the Securities at such time as the
Securities are registered for public sale or an exemption from registration is
available.
(n) Defaults. Neither the Company nor any of its subsidiaries is in
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violation of its Articles of Incorporation or Bylaws. Neither the Company nor
any of its subsidiaries is (i) 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) 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) to its
knowledge in violation of any statute, rule or regulation of any governmental
authority material to its business.
(o) No Integrated Offering. Neither the Company, nor any of its
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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 offering 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 NASDAQ National Market ("NASDAQ National Market"), as applicable, nor will
the Company or any of its affiliates or subsidiaries take any action or steps
that would cause the offering of the Securities to be integrated with other
offerings. The Company has not conducted and will not conduct any offering
other than the transactions contemplated hereby that will be integrated with the
issuance of the Securities for purposes of Rule 4460(i) of the NASDAQ Stock
Market, Inc.'s Marketplace Rules.
(p) No General Solicitation. Neither the Company, nor any of its
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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 Act) in connection with the offer or sale of
the Securities.
(q) Listing. The Company's common stock is quoted on, and listed for
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trading on NASDAQ National Market. The Company has not received any oral or
written notice from NASDAQ that its Common Stock will be delisted from NASDAQ or
that the Common Stock does not meet all requirements for the continuation of
such listing.
(r) Correctness of Representations. The Company represents that the
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foregoing representations and warranties are true and correct as of the date
hereof in all material respects and, unless the Company otherwise notifies the
Subscriber prior to the Closing Date, shall be true and correct in all material
respects as of the Closing Date. The foregoing representations and warranties
shall survive the Closing Date.
3. Regulation D Offering. This Offering is being made pursuant to the
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exemption from the registration provisions of the Securities Act of 1933, as
amended, afforded by
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Rule 506 of Regulation D promulgated thereunder. On the Closing Date, the
Company will provide an opinion acceptable to Subscriber from the Company's
legal counsel opining on the availability of the Regulation D exemption as it
relates to the offer and issuance of the Securities. A form of the legal opinion
is annexed hereto as Exhibit C. The Company will provide, at the Company's
expense, such other legal opinions in the future as are reasonably necessary for
the conversion of the Preferred Stock, Warrants and Placement Warrants.
4. Reissuance of Securities. The Company agrees to reissue
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certificates representing the Securities without the legends set forth in
Sections 1(e) and 1(f) above at such time as (a) the holder thereof is permitted
to dispose of such Securities pursuant to Rule 144(k) under the Act, or (b) upon
resale subject to an effective registration statement after the Securities are
registered under the Act. The Company agrees to cooperate with the Subscriber
in connection with all resales pursuant to Rule 144(d) and Rule 144(k) and
provide legal opinions necessary to allow such resales provided the Company and
its counsel receive reasonably requested representations from the Subscriber and
selling broker, if any.
5. Redemption. The Company may not redeem the Securities without
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the consent of the holder of the Securities, except as described in the
Certificate of Designation.
6. Commissions/Fees. The Company will pay a cash commission of
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nine percent (9%) of the Purchase Price designated on the signature page hereto
to certain Placement Agents identified on Schedule B hereto. The cash
commissions will be payable out of funds held pursuant to a Funds Escrow
Agreement to be entered into by the Company, Subscriber and an Escrow Agent. The
Company will also issue and deliver to the Placement Agents as additional
compensation Placement Warrants designated on Schedule B hereto. The Commissions
and Placement Warrants will be issued to the Placement Agents only when, as, and
if the corresponding subscription amount is released from escrow to the Company.
All the representations, covenants, warranties and undertakings, including but
not limited to registration rights made or granted to or for the benefit of the
Subscriber and the terms described in Sections 9.2, 9.3, 9.4 and 9.5 hereof are
hereby also made and granted to the Placement Agents in respect of the Placement
Warrants and Company Shares issuable upon exercise of the Placement Warrants.
The Company will pay a fee to the Escrow Agent of $10,000 in connection with
aggregate $10,000,000 of subscriber funds to which this Subscription Agreement
relates.
7.1. Covenants of the Company. The Company covenants and agrees with
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the Subscriber as follows:
(a) The Company will advise the Subscriber, promptly after it
receives notice of issuance by the Securities and Exchange 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.
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(b) The Company shall promptly secure the listing of the Company
Shares, and Common Stock issuable upon the exercise of the Warrants and
Placement Warrants upon each national securities exchange, or automated
quotation system, if any, upon which shares of common stock are then listed
(subject to official notice of issuance) and shall maintain such listing so long
as any other shares of common stock of the Company shall be so listed. The
Company will use its best efforts to maintain the listing and trading of its
Common Stock on NASDAQ National Market, and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the National Association of Securities Dealers ("NASD") and such exchanges, as
applicable. The Company will provide the Subscriber copies of all notices it
receives notifying the Company of the actual delisting of the Common Stock on
any exchange or quotation system on which the Common Stock is listed.
(c) The Company shall notify the SEC, NASD 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 Subscriber
and Placement Agents and promptly provide copies thereof to Subscriber.
(d) Until at least two (2) years after the effectiveness of the
Registration Statement on Form SB-2 or such other Registration Statement
described in Section 10.1(iv) hereof, the Company will (i) cause its Common
Stock to continue to be registered under Sections 12(b) or 12(g) of the Exchange
Act, (ii) comply in all respects with its reporting and filing obligations under
the Exchange Act, (iii) comply with all reporting requirements that is
applicable to an issuer with a class of Shares registered pursuant to Section
12(g) of the Exchange Act, and (iv) comply with all requirements related to any
registration statement filed pursuant to this Agreement. The Company will not
take any action or file any document (whether or not permitted by the Act or the
Exchange 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 the later of (y) two (2) years after the effective date of the
Registration Statement on Form SB-2 or such other Registration Statement
described in Section 10.1(iv) hereof, or (z) the sale by the Subscribers and
Placement Agents of all the Company Shares issuable by the Company pursuant to
this Agreement. Until at least two (2) years after the Warrants and Placement
Warrants have been exercised, the Company will use its commercial best efforts
to continue the listing or trading of its Common Stock on NASDAQ National Market
and will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the NASD and NASDAQ.
(e) The Company and Subscriber agree that until the Company either
obtains shareholder approval of the issuance of the Securities and Put
Securities (as defined herein), or an exemption from NASDAQ's corporate
governance rules as they may apply to the Securities and Put Securities, and an
opinion of counsel reasonably acceptable to Subscriber that NASDAQ's corporate
governance rules do not conflict with nor may result in a delisting of the
Company's common stock from the NASDAQ National Market upon the conversion of
the Preferred Stock and exercise of the Warrants and Placement Warrants and
Conversion of the Put Stock and exercise of the Put Warrants and Put Placement
Warrants (the "Approval"), the Subscriber may not receive upon conversion of the
Preferred Stock and exercise of the Warrants nor may the Placement Agents
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receive upon exercise of the Placement Warrants more than the number of Company
Shares designated on the signature page hereof and on Schedule B hereof
("Section 7.1(e) Shares") upon conversion of the Preferred Stock and/or exercise
of the Warrants and Placement Warrants. The Company represents that this number
together with the aggregate of such amounts designated for all investors in the
initial $5,000,000 offering to which this Subscription Agreement relates, and
Common Stock issuable upon exercise of the Warrants and Placement Warrants is
not greater than 19.9% of the shares of Company's common stock outstanding on
the Closing Date. The Company covenants to obtain the Approval required
pursuant to the NASDAQ's corporate governance to allow conversion of all the
Preferred Stock and dividends thereon and exercise of all the Warrants and
Placement Warrants. The Company further covenants to file the preliminary proxy
statement relating to the Approval with the Commission on or before forty-five
days after the Closing Date ("Proxy Filing Date"). The Company further
covenants to obtain the Approval no later than ninety days after the Closing
Date ("Approval Date"). The Company's failure to file the proxy on or before
the Proxy Filing Date or the Company's failure to obtain the Approval on or
before the Approval Date (either being an "Approval Default") shall be deemed an
Event of Default pursuant to Section 8 of the Certificate of Designation, but
only to the extent the Preferred Stock, and dividends thereon that may not be
converted due to the Company's failure to obtain such Approval.
(f) The Company undertakes to use the proceeds of the
Subscriber's funds for working capital purposes and expenses of this offering.
7.2. Covenant of the Subscriber. The Subscriber covenants that the
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Subscriber nor any of its affiliates will not engage in short sales of the
common stock of the Company at a time when the last reported bid of the common
stock as reported by NASDAQ National Market is less than $7.00 per share.
8. Covenants of the Company and Subscriber Regarding
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Idemnifications.
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(a) The Company agrees to indemnify, hold harmless, reimburse and
defend Subscriber against any claim, cost, expense, liability, obligation, loss
or damage (including reasonable legal fees) of any nature, incurred by or
imposed upon Subscriber which results, arises out of or is based upon (i) any
misrepresentation by Company or breach of any warranty by Company in this
Agreement or in any Exhibits or Schedules attached hereto, or Reports or other
Written Information; or (ii) any breach or default in performance by Company of
any covenant or undertaking to be performed by Company hereunder, or any other
agreement entered into by the Company and Subscribers relating hereto.
(b) Subscriber agrees to indemnify, hold harmless, reimburse and
defend the Company at all times against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature,
incurred by or imposed upon the Company which results, arises out of or is based
upon (a) any misrepresentation by Subscriber in this Agreement or in any
Exhibits or Schedules attached hereto; or (b) any breach or default in
performance by Subscriber of any covenant or undertaking to be performed by
Subscriber hereunder, or any other agreement entered into by the Company and
Subscribers relating hereto.
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(c) The procedures set forth in Section 10.6 shall apply to the
indemnifications set forth in Sections 8(a) and 8(b) above.
9.1. Conversion/Liquidated Damages.
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(a) The Preferred Stock and accrued dividends will be convertible
according to the procedure set forth in the Certificate of Designation.
(b) The Company understands that a delay in the delivery of the
Company Shares after Conversion, and delivery of Preferred Stock certificates
representing the unconverted balance of a Preferred Stock certificate tendered
for conversion beyond the date described for such delivery set forth in the
Certificate of Designation, or late delivery of a Mandatory Redemption Payment
(as defined herein), as the case may be, (each of the foregoing a "Delivery
Date") could result in economic loss to the Subscriber. As compensation to the
Subscriber for such loss, the Company agrees to pay late payments to the
Subscriber for late delivery of Shares upon Conversion and late delivery of a
Preferred Stock certificate for the unconverted portion of Preferred Stock or
late delivery of a Mandatory Redemption Payment, in the amount of $100 per
business day after the Delivery Date for each $10,000 of Stated Value of
Preferred Stock being converted and Preferred Stock certificate remaining
undelivered or Mandatory Redemption Payment not paid. The Company shall pay any
payments incurred under this Section in immediately available funds upon demand.
Furthermore, in addition to any other remedies which may be available to the
Subscriber, in the event that the Company fails for any reason to effect
delivery of the Shares within three business days after the Delivery Date, the
Subscriber will be entitled to revoke the relevant Notice of Conversion by
delivery of a notice of revocation to the Company whereupon the Company and the
Subscriber shall each be restored to their respective positions immediately
prior to the delivery of such notice of revocation, except that late payment
charges described above shall be payable through the date notice of revocation
is given to the Company.
(c) Nothing contained herein or in any document referred to
herein or delivered in connection herewith shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest or
dividends required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the Subscriber and thus refunded to the
Company.
9.2. Mandatory Redemption. In the event the Company may not issue
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Shares on a Delivery Date because such issuance and delivery would be contrary
to NASDAQ's Corporate Governance Rules, or after the occurrence and during the
pendency of an Approval Default, or for any other reason (except in relation to
the Shares not deliverable pursuant to Section 9.3 of this Subscription
Agreement), then at the Subscriber's election, the Company must pay to the
Subscriber on the Delivery Date a sum of money determined by the greater of (i)
multiplying the Stated Value of Preferred Stock not convertible by 110% together
with accrued but unpaid dividends thereon; or (ii) the closing bid price of the
common stock as reported by the NASDAQ National Market or the principal exchange
or market where traded for the Delivery Date multiplied by the amount of Shares
not deliverable, together with accrued but unpaid dividends thereon, ("Mandatory
Redemption
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Payment"). The Mandatory Redemption Payment must be received by the Subscriber
on the same date as the Company Shares otherwise deliverable. Upon receipt of
the Mandatory Redemption Payment, the corresponding Preferred Stock will be
cancelled and no longer outstanding, and if the Holder is in possession of the
corresponding Preferred Stock, same will be returned to the Company.
9.3. Maximum Conversion. The Company and Subscriber shall not be
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entitled to convert on a Conversion Date of that amount of the Preferred Stock
in connection with that number of shares of Common Stock which would be in
excess of the sum of (i) the number of shares of Common Stock beneficially owned
by the Subscriber and its affiliates on a Conversion Date, and (ii) the number
of shares of Common Stock issuable upon the conversion of the Preferred Stock
with respect to which the determination of this proviso is being made on a
Conversion Date, which would result in beneficial ownership by the Subscriber
and its affiliates of more than 9.99% of the outstanding shares of Common Stock
of the Company. For the purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder, except as otherwise provided in clause (i) of such proviso. The
Subscriber may revoke the restriction described in this paragraph upon 75 days
prior notice to the Company. The Subscriber may allocate which of the equity of
the Company deemed beneficially owned by the Subscriber shall be included in the
9.9% amount described above and which shall be allocated to the excess above
9.99%.
9.4. Injunction - Posting of Bond. In the event a Subscriber shall
----------------------------
elect to convert Preferred Stock and/or accrued dividends, the Company may not
refuse conversion 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 from a court, on notice, restraining
and or enjoining conversion of all or part of said Preferred Stock and/or
dividends shall have been sought and obtained and the Company posts a surety
bond for the benefit of such Subscriber in the amount of 150% of the amount of
the stated value of the Preferred Stock which is subject to the injunction,
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 it obtains judgment.
9.5. Buy-In. In addition to any other rights available to the
------
Subscriber, if the Company fails to deliver to the Subscriber Company Shares
issuable upon conversion of Preferred Stock and/or dividends by the Delivery
Date and if after the Delivery Date 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 Company Shares which the Subscriber anticipated
receiving upon such conversion (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 stated value of the Preferred Stock for
which such conversion was not timely honored, 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 the Subscriber purchases shares of common
stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted conversion of $10,000 of stated value of Preferred Stock and/or
dividends, the Company
11
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.
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 61 days after the
Closing Date, but not later than three years after the Closing Date, the
Company, upon a written request therefor from any record holder or holders of
more than 50% of the aggregate of the Company's Shares issued and issuable upon
Conversion of the Preferred Stock issued in the Company's offering of up to
$5,000,000 of stated value of Preferred Stock on the same terms and conditions
as in this Subscription Agreement (the Securities and securities issued or
issuable by virtue of ownership of the Securities, including the Put Securities,
are the "Registrable Securities"), shall prepare and file with the SEC a
registration statement under the Act covering the Registrable Securities which
are the subject of such request, unless such Registrable Securities are the
subject of an effective registration statement. In addition, 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 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). As
a condition precedent to the inclusion of Registrable Securities, the holder
thereof shall provide the Company with such information as the Company
reasonably requests. The obligation of the Company under this Section 10.1(i)
shall be limited to one registration statement.
(ii) If the Company at any time proposes to register any of its
securities under the 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
registering the Registrable Securities for sale to the public, provided the
Registrable Securities are not otherwise registered for resale by the Subscriber
or Holder pursuant to an effective registration statement, each such time it
will give at least 30 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 30 days after the giving of any such
notice by the Company, to register any of the Registrable Securities, 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"). 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, (i) Seller shall enter into the underwriting agreement with the
underwriter, and (ii) 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 forgoing provisions, the Company may
12
withdraw 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, 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) except that the Company or
underwriter, if any, may not withdraw such registration or limit the amount of
Registrable Securities included in such registration.
(iv) The Company shall file with the Commission within 60 days of the
Closing Date (the "Filing Date"), and use its reasonable commercial efforts to
cause to be declared effective a Form SB-2 registration statement (or such other
form that it is eligible to use) within 90 days of the Closing Date in order to
register the Registrable Securities for resale and distribution under the Act.
The registration statement described in this paragraph must be declared
effective by the Commission within 120 days of the Closing Date (as defined
herein) ("Effective Date"). The Company will register not less than a number of
shares of Common Stock in the aforedescribed registration statement that is
equal to 200% of the Company Shares issuable at the Conversion Price that would
be in effect on the Closing Date or the date of filing of such registration
statement, whichever is greater, assuming the conversion of all the Preferred
Stock and Put Stock set forth in the signature page hereto, and one share of
common stock for each common share issuable upon exercise of the Warrants,
Placement Warrants, Put Warrants and Put Commission Warrants. The Registrable
Securities shall be reserved and set aside exclusively for the benefit of the
Subscriber and Placement Agents, as the case may be, and not issued, employed or
reserved for anyone other than the Subscriber and Placement Agents. Such
registration statement will be promptly amended or additional registration
statements will be promptly filed by the Company as necessary to register
additional Company Shares to allow the public resale of all Common Stock
included in and issuable by virtue of the Registrable Securities. No securities
of the Company other than the Registrable Securities will be included in the
registration statement described in this Section 10.1(iv).
10.2. Registration Procedures. If and whenever the Company is
-----------------------
required by the provisions hereof to effect the registration of any shares of
Registrable Securities under the Act, the Company will, as expeditiously as
possible:
(a) prepare and file with the Commission a registration
statement 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 (determined as herein provided), and promptly
provide to the holders of Registrable Securities copies of all filings and
Commission letters of comment;
(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 the latest of: (i) six months after the exercise period of the Warrants
and Placement Warrants; or (ii) two years after the Closing Date, and
13
comply with the provisions of the Act with respect to the disposition of all of
the Registrable Securities covered by such registration statement in accordance
with the Seller's intended method of disposition set forth in such registration
statement for such period;
(c) furnish to the Seller, and to each underwriter if any, 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 Seller's
Registrable Securities covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the Seller and in the
case of an underwritten public offering, the managing underwriter shall
reasonably request, 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) 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 Seller and each underwriter under
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the 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;
(g) make available for inspection by the Seller, any
underwriter participating in any distribution pursuant to such registration
statement, 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,
underwriter, attorney, accountant or agent in connection with such registration
statement.
10.3. Provision of Documents.
----------------------
(a) At the request of the Seller, provided a demand for
registration has been made pursuant to Section 10.1(i) or a request for
registration has been made pursuant to Section 10.1(ii), the Registrable
Securities will be included in a registration statement filed pursuant to this
Section 10.
(b) In connection with each registration hereunder, the
Seller 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. In connection with each registration
pursuant to Section
14
10.1(i) or 10.1(ii) covering an underwritten public offering, the Company and
the Seller agree to enter into a written agreement with the managing underwriter
in such form and containing such provisions as are customary in the securities
business for such an arrangement between such underwriter and companies of the
Company's size and investment stature.
10.4. Non-Registration Events. The Company and the Subscriber agree
-----------------------
that the Seller will suffer damages if any registration statement required under
Section 10.1(i) or 10.1(ii) above is not filed within 60 days after request by
the Holder and not declared effective by the Commission within 120 days after
such request [or the Filing Date and Effective Date, respectively, in reference
to the Registration Statement on Form SB-2 or such other form described in
Section 10.1(iv)], 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. Accordingly, if (i) the Registration
Statement described in Sections 10.1(i) or 10.1(ii) is not filed within 60 days
of such request, or is not declared effective by the Commission on or prior to
the date that is 120 days after such request, or (ii) the registration statement
on Form SB-2 or such other form described in Section 10.1(iv) is not filed on or
before the Filing Date or not declared effective on or before the sooner of the
Effective Date, or within five days of receipt by the Company of a communication
from the Commission that the registration statement described in Section
10.1(iv) will not be reviewed, or (iii) 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 immediately by an
additional registration statement filed and declared effective) for a period of
time which shall exceed 30 days in the aggregate per year but not more than 20
consecutive calendar days (defined as a period of 365 days commencing on the
date the Registration Statement is declared effective) (each such event referred
to in clauses (i), (ii) and (iii) of this Section 10.4 is referred to herein as
a "Non-Registration Event"), then, for so long as such Non-Registration Event
shall continue, the Company shall pay in cash as Liquidated Damages to each
holder of any Registrable Securities an amount equal to two (2%) percent per
month or part thereof after the first thirty days, of the pendency of such Non-
Registration Event, of the stated value of the Preferred Stock, whether or not
converted, and of the aggregate amount of the exercise prices of the Warrants
and Placement Warrants, whether or not exercised, then owned of record by such
holder as of the occurrence of such Non-Registration Event. Payments to be made
pursuant to this Section 10.4 shall be due and payable immediately upon demand
in immediately available funds. In the event a Mandatory Redemption payment is
demanded from the Company by the Holder of Preferred Stock, pursuant to Section
9.2 of this Subscription Agreement, then the Liquidated Damages described in
this Section 10.4 shall no longer accrue on the portion of the Purchase Price
underlying the Mandatory Redemption Payment, from and after the date the Holder
receives the Mandatory Redemption Payment. It shall be deemed a Non-
Registration Event to the extent that any Shares into which Preferred Stock and
Put Stock (if issued) are convertible, assuming complete conversion of all
Preferred Stock, and Put Stock (if issued) and dividends thereon, are not
included in an effective registration statement as of and after the Effective
Date at the Conversion Price in effect from and after the Effective Date.
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
15
(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 special
counsel to the Seller, are called "Selling Expenses". The Seller shall pay the
fees of its own additional counsel, if any.
The Company will pay all Registration Expenses in connection
with the registration statement under Section 10. All 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.
10.6. Indemnification and Contribution.
--------------------------------
(a) In the event of a registration of any Registrable
Securities under the Act pursuant to Section 10, the Company will 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 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 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 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 will not be liable in any such case if and 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, the underwriter 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 Act pursuant to Section 10, the Seller will indemnify and
hold harmless the Company, and each person, if any, who controls the Company
within the meaning of the 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 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 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
16
under which such Registrable Securities were registered under the 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, or
the Seller's failure to comply with prospectus delivery requirements, 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 proportion of any such loss, claim,
damage, liability or expense which is equal to the proportion that the public
offering price of the Registrable Securities sold by the Seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the gross proceeds
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) 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 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
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.
The indemnifying party shall not be liable for amounts paid in settlement by the
indemnified party unless the indemnifying party has consented to the settlement,
which consent shall not be unreasonably withheld.
17
(d) In order to provide for just and equitable contribution
in the event of joint liability under the Act in any case in which either (i)
the Seller, or any controlling person of the 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 Act may be required on the part of the Seller or
controlling person of the Seller in circumstances for which indemnification is
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, (A) 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 (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
11.1. Obligation To Purchase.
----------------------
(a) The Subscriber agrees to purchase from the Company
Preferred Stock ("Put Stock") and common stock purchase warrants ("Put
Warrants") in the amounts set forth on the signature page hereof for up to the
aggregate amount of Put Purchase Price designated on the signature page hereof
(the "Put"). Collectively the Put Stock, Put Warrants and Put Placement Warrants
and Common Stock issuable upon conversion of the Put Stock, Put Warrants and Put
Placement Warrants are referred to as the "Put Securities".) The Holders of the
Put Securities are granted all the rights, undertakings, remedies, liquidated
damages and indemnification granted to the Subscriber and Placement Agents in
connection with the Securities, including but not limited to, the rights and
procedures set forth in Sections 9.1, 9.2, 9.3, 9.4, 9.5, and the registration
rights described in Section 10 hereof.
(b) The agreement to purchase the Put Securities is
contingent on the following, as of the Put Date and Put Closing Date, any, some
or all of which may be waived by the Subscriber:
(i) The failure to obtain the Approval as described in
Section 7.1(e) above.
(ii) The non-occurrence of a Non-Registration Event.
18
(iii) The non-occurrence (whether or not continuing) of an Event
of Default as described in the Certificate of Designation.
(iv) As of a Put Date and Put Closing Date, the Company will be
a full reporting company with the class of Shares registered pursuant to Section
12(g) of the Exchange Act of 1934, and the Company will be in compliance with
all such reporting obligations applicable to an issuer with a class of Shares
registered pursuant to Section 12(g) of the Exchange Act.
(v) No material adverse change in the Company's business or
business prospects shall have occurred after the date of the most recent
financial statements included in the Reports. Material adverse change is defined
as any effect on the business, operations, properties, prospects, or financial
condition of the Company that is material and adverse to the Company and its
subsidiaries and affiliates, taken as a whole, and/or any condition,
circumstance, or situation that would prohibit or otherwise interfere with the
ability of the Company to enter into and perform any of its obligations under
this Agreement, or any other agreement entered into or to be entered into in
connection herewith, in any material respect.
(vi) The execution and delivery to the Subscriber of a
certificate signed by the Company's chief executive officer representing the
truth and accuracy of all the Company's representations and warranties contained
in this Subscription Agreement as of the Put Date, and Put Closing Date and
confirming the covenants and undertakings contained herein, and representing the
satisfaction of all contingencies and conditions required for the exercise of
the Put.
(vii) The Company's continued listing on and compliance at all
times after the date hereof with the listing requirements of the NASDAQ National
Market.
(viii) The Company's not having received notice from the NASDAQ
National Market (or any principal market on which the Company's common stock is
listed for trading) that the Company is not in compliance with the requirements
for continued listing.
(ix) The execution by the Company and delivery to the
Subscriber of all documents reasonably necessary to memorialize the rights and
obligations of each of the parties in relation to the Put.
(x) The Company's model "500" aircraft successfully passing
the fuselage structure pressurization test and receipt of a Form 8110-3 from the
Federal Aviation Administration certifying such tests results.
(xi) The average closing bid price of the Common Stock as
reported by NASDAQ National Market for the three trading days preceding a Put
Date is not less than 150% of the average closing bid price of the Common Stock
as reported by the NASDAQ National Market
19
for the three trading days preceding the Closing Date, provided that this
condition shall apply only to the portion of the Put Purchase Price payable up
to 90 days after the Actual Effective Date.
11.2. Exercise of Put.
---------------
(a) The Company's right to exercise the Put commences on the
actual effective date of the registration statement described Section 10.1(iv)
hereof in relation to all the Securities and Put Securities ("Actual Effective
Date") and expires fifteen (15) business days thereafter ("Put Exercise
Period").
(b) The Put may be exercised by the Company by the giving to
the Subscriber of a written notice of exercise ("Put Notice") during the Put
Exercise Period in relation to the subject Put Securities. The date a Put Notice
is given is a Put Date. Each Put Notice must be accompanied by the (i) officer's
certificate described in Section 11.1(b)(vi) above; (ii) the original legal
opinion described in Section 7.1(e); (iii) a legal opinion relating to the Put
Securities in form reasonably acceptable to Subscriber; and (iv) proof of
effectiveness of the registration statement in which the Securities and Put
Securities are registered together with five copies of the prospectus relating
to the Securities and Put Securities.
(c) Unless otherwise agreed to by the Subscribers, Put Notices
must be given to all Subscribers in proportion to the amounts agreed to be
purchased by all Subscribers undertaking to purchase Put Shares in the initial
$5,000,000 installment of the aggregate $10,000,000 offering to which this and
other Subscription Agreements relate. The aggregate amount of all Put Notices
may not exceed $5,000,000. In the event the Company does not exercise the Put
during the Put Exercise Period for the entire Put amount, then the Subscriber
may exercise the Put on behalf of the Company in relation only to such
Subscriber, by giving notice to the Company of such exercise during the seven
(7) business days following the Put Exercise Period.
(d) After receipt by Subscriber of a Put Notice and the items
set forth in Section 11.2(b) above the Subscriber must pay an amount equal to
40% of the Purchase Price set forth on the signature page hereto within thirty
days after the Actual Effective Date, and an amount equal to 60% of the Purchase
Price within ninety (90) days after the Actual Effective Date. Payment will be
made against delivery to the Subscriber or an escrow agent to be agreed upon by
the Company and Subscriber, of the Put Securities, and delivery to the Placement
Agents of the Put Placement Warrants and Put Commissions set forth on Schedule B
hereto.
(e) Maximum Put Exercise. The Company may not give the
--------------------
Subscriber a Put Notice in connection with that amount of Put Securities which
could be converted as of the Put Date into a number of shares of Common Stock
which would be in excess of the sum of (i) the number of shares of Common Stock
beneficially owned by the Subscriber and its affiliates on such Put Date, and
(ii) the number of shares of Common Stock issuable upon the conversion of the
Put Stock and exercise of the Put Warrants with respect to which the
determination of this proviso is
20
being made on a Put Date, which would result in beneficial ownership by the
Subscriber and its affiliates of more than 9.99% of the outstanding shares of
Common Stock of the Company on such Put Date. For the purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder.
11.3. Put Commission. The Placement Agents identified on Schedule B
--------------
hereto shall receive aggregate finder's fees in connection with the closing of
the Put of cash equal to nine (9%) percent of the Put Purchase Price and Put
Commission Warrants as set forth on Schedule B hereto. Collectively, the
foregoing are referred to as Put Commissions. Put Commissions shall be payable
only in connection with the Put Purchase Price actually paid by a Subscriber.
12. Reset. In the event the average closing bid price of the
-----
Company Shares as reported by the NASDAQ National Market or such other principal
exchange where the Company Shares are listed for trading ("Closing Bid Price")
for the three trading days preceding the first anniversary of the Closing Date
("Initial Price") is less than 200% of the Closing Bid Price for the three
trading days prior to the issue date of Preferred Stock who receive Preferred
Stock in the Company's initial offering of Preferred Stock, then the Company
will issue to the Subscriber within ten business days after the first
anniversary of the Closing Date the number of Company Shares determined by
subtracting (the Purchase Price divided by the Initial Price) from (the Purchase
Price divided by 90% of the Initial Price) ("Additional Shares"). The Subscriber
is granted the demand and piggy-back registration rights described in Section
10.1(i) and 10.1(ii) hereof in relation to the Additional Shares. The holding
period of the Additional Shares for purposes of Rule 144 of the Securities Act
of 1933 shall be deemed to have begun on the Closing Date. Failure to timely
deliver the Additional Shares shall be deemed an Event of Default pursuant to
Section 8 of the Certificate of Designation.
13. Offering Restrictions. Until 120 days after the Actual
---------------------
Effective Date, the Company agrees not to issue any equity, convertible debt or
other securities at a per common share equivalent price less than the Closing
Ask price of the Company's common stock in effect as of the date of such
issuance as reported by NASDAQ National Market or such other principal market or
exchange where the Company's common stock is listed for trading. The restriction
described in this Section 13 shall not apply if the Subscriber fails to timely
pay to the Company funds payable in connection with a Put exercise.
14. Miscellaneous.
-------------
(a) Notices. All notices or other communications given or made
-------
hereunder shall be in writing and shall be personally delivered or deemed
delivered the first business day after being telecopied (provided that a copy is
delivered by first class mail) to the party to receive the same at its address
set forth below or to such other address as either party shall hereafter give to
the other by notice duly made under this Section: (i) if to the Company, to
Advanced Aerodynamics & Structures, Inc., 0000 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxx
Xxxxxxx, XX 00000,
21
telecopier number: (000) 000-0000, with a copy by telecopier only to Xxxx,
Forward, Xxxxxxxx & Scripps, LLP, 000 Xxxx Xxxxxxxx, Xxxxx 0000, Xxx Xxxxx, XX
00000, Attn: Xxxx Xxxxxxxx, Esq., telecopier number: (000) 000-0000, and (ii) if
to the Subscriber, to the name, address and telecopy number set forth on the
signature page hereto, with a copy by telecopier only to Grushko & Xxxxxxx, 000
Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, telecopier number: (212) 227-
5865. Any notice that may be given pursuant to this Agreement, or any document
delivered in connection with the foregoing may be given by the Subscriber on the
first business day after the observance dates in the United States of America by
Orthodox Jewry of Rosh Hashanah, Yom Kippur, the first two days of the Feast of
Tabernacles, Shemini Atzeret Simchat Torah, the first two and final two days of
Passover and Pentecost, with such notice to be deemed given and effective, at
the election of the Subscriber on a holiday date that precedes such notice. Any
notice received by the Subscriber on any of the aforedescribed holidays may be
deemed by the Subscriber to be received and effective as if such notice had been
received on the first business day after the holiday.
(b) Closing. The consummation of the transactions contemplated herein
-------
shall take place at the offices of Grushko & Xxxxxxx, 000 Xxxxxxxx, Xxxxx 000,
Xxx Xxxx, Xxx Xxxx 00000, upon the satisfaction of all conditions to Closing set
forth in this Agreement. The closing date shall be the date that subscriber
funds representing the net amount due the Company from the Purchase Price are
transmitted by wire transfer to the Company (the "Closing Date"). The closing
date for the Put shall be the date on which Subscriber funds representing the
net amount due the Company from the Put Purchase Price is transmitted to or on
behalf of the Company ("Put Closing Date").
(c) Entire Agreement; Assignment. This Agreement represents 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. 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) Execution. This Agreement may be executed by facsimile
---------
transmission, and in counterparts, each of which will be deemed an original.
(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. Both parties and the individuals executing
this Agreement and other agreements 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
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.
22
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 injuction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof or thereof, 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 and Subscriber
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 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) Automatic Termination. This Agreement shall automatically
---------------------
terminate without any further action of either party hereto if the Closing shall
not have occurred by the tenth (10th) business day following the date this
Agreement is accepted by the Subscriber.
[THIS SPACE INTENTIONALLY LEFT BLANK]
23
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $1,000,000
----------
Preferred Shares Purchased: 10,000 (at $100 per share)
------
Common Stock Purchase Warrants:130,000
-------
Section 7.1(e) Shares: 672,620
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 10,000 Preferred Shares
------
Put Warrants: 130,000
-------
Put Purchase Price: $1,000,000
----------
AUSTINVEST ANSTALT BALZERS - Subscriber
9494 Furstentums
Balzers, Liechtenstein
Fax: 000-000-000000
By:________________________________
Name:
Title:
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $1,000,000
----------
Preferred Shares Purchased: 10,000 (at $100 per share)
------
Common Stock Purchase Warrants: 130,000
-------
Section 7.1(e) Shares: 672,620
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 10,000 Preferred Shares
------
Put Warrants: 130,000
-------
Put Purchase Price: $1,000,000
----------
ESQUIRE TRADE & FINANCE INC. - Subscriber
Trident Xxxxxxxx
X.X. Xxx 000
Xxxx Xxxx, Xxxxxxx, B.V.I.
Fax: 000-00-00-000-0000
By:________________________________
Name:
Title:
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $750,000
--------
Preferred Shares Purchased: 7,500 (at $100 per share)
-----
Common Stock Purchase Warrants: 97,500
------
Section 7.1(e) Shares: 504,465
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 7,500 Preferred Shares
-----
Put Warrants: 97,500
------
Put Purchase Price: $504,465
--------
AMRO INTERNATIONAL, S.A. - Subscriber
c/o Ultra Finanz
Grossmuenster Xxxxx 00
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx CH8011
Fax: 000-000-000-0000
By:________________________________
Name:
Title:
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $500,000
--------
Preferred Shares Purchased: 5,000 (at $100 per share)
-----
Common Stock Purchase Warrants: 65,000
------
Section 7.1(e) Shares: 336,310
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 5,000 Preferred Shares
-----
Put Warrants: 65,000
------
Put Purchase Price: $500,000
--------
THE SHAAR FUND LTD. - Subscriber
c/x Xxxxxxxx Capital Management
0 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
By:________________________________
Name:
Title:
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $200,000
--------
Preferred Shares Purchased: 2,000 (at $100 per share)
-----
Common Stock Purchase Warrants: 26,000
------
Section 7.1(e) Shares: 134,524
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 2,000 Preferred Shares
-----
Put Warrants: 26,000
------
Put Purchase Price: $200,000
--------
GROSS FOUNDATION, INC. - Subscriber
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx
Fax: 000-000-0000
By:________________________________
Name:
Title:
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $50,000
-------
Preferred Shares Purchased: 500 (at $100 per share)
---
Common Stock Purchase Warrants: 6,500
-----
Section 7.1(e) Shares: 33,631
------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 500 Preferred Shares
---
Put Warrants: 6,500
-----
Put Purchase Price: $50,000
-------
THE HEWLETT FUND, INC. - Subscriber
0000 Xxxxxx X, #000
Xxxxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
By:________________________________
Name:
Title:
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $100,000
--------
Preferred Shares Purchased: 1,000 (at $100 per share)
-----
Common Stock Purchase Warrants: 13,000
------
Section 7.1(e) Shares: 67,262
------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 1,000 Preferred Shares
-----
Put Warrants: 13,000
------
Put Purchase Price: $100,000
--------
LEVAL TRADING, INC. - Subscriber
c/o Xxxxxxx Xxxxxx
00 xxx xx Xxxxxxx-Xxxxxxx
XX-0000, Xxxxxx, Xxxxxxxxxxx
Fax: 000-00-00-000-0000
By:________________________________
Name:
Title:
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $250,000
--------
Preferred Shares Purchased: 2,500 (at $100 per share)
-----
Common Stock Purchase Warrants: 32,500
------
Section 7.1(e) Shares: 168,155
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 2,500 Preferred Shares
-----
Put Warrants: 32,500
------
Put Purchase Price: $250,000
--------
XXXXXXX XXXX FUNDING, LLC - Subscriber
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
By:________________________________
Name:
Title:
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $150,000
--------
Preferred Shares Purchased: 1,500 (at $100 per share)
-----
Common Stock Purchase Warrants: 19,500
------
Section 7.1(e) Shares: 100,893
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 1,500 Preferred Shares
-----
Put Warrants: 19,500
------
Put Purchase Price: $150,000
--------
TALBIYA B. INVESTMENTS LTD.
Ragnall House
00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
By:________________________________
Name:
Title:
32
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $100,000
--------
Preferred Shares Purchased: 1,000 (at $100 per share)
-----
Common Stock Purchase Warrants: 13,000
------
Section 7.1(e) Shares: 67,262
------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 1,000 Preferred Shares
-----
Put Warrants: 13,000
------
Put Purchase Price: $100,000
--------
NESHER LTD. - Subscriber
Ragnall House
00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
By:________________________________
Name:
Title:
33
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $225,000
--------
Preferred Shares Purchased: 2,250 (at $100 per share)
-----
Common Stock Purchase Warrants: 29,250
------
Section 7.1(e) Shares: 151,340
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 2,250 Preferred Shares
-----
Put Warrants: 29,250
------
Put Purchase Price: $225,000
--------
KESHET L.P. - Subscriber
Ragnall House
00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
By:________________________________
Name:
Title:
34
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $175,000
--------
Preferred Shares Purchased: 1,750 (at $100 per share)
-----
Common Stock Purchase Warrants: 22,750
------
Section 7.1(e) Shares: 117,708
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 1,750 Preferred Shares
-----
Put Warrants: 22,750
------
Put Purchase Price: $175,000
--------
THE KESHET FUND, L.P. - Subscriber
Ragnall House
00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
By:________________________________
Name:
Title:
35
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.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:____________________________________
Name:
Title:
Dated: March _____, 2000
Purchase Price: $500,000
--------
Preferred Shares Purchased: 5,000 (at $100 per share)
-----
Common Stock Purchase Warrants: 65,000
------
Section 7.1(e) Shares: 336,310
-------
ACCEPTED: Dated as of March _____, 2000
PUT
---
Put Stock: 5,000 Preferred Shares
-----
Put Warrants: 65,000
------
Put Purchase Price: $500,000
--------
THE ENDEAVOUR CAPITAL FUND, S.A. - Subscriber
The Maduro Building, P.O. Box 662
Wickhams Cay, Road Town
Tortola, British Virgin Islands
Fax: 0-000-000-0000
By:________________________________
Name:
Title:
36
SCHEDULE B TO SUBSCRIPTION AGREEMENT
------------------------------------
(AGGREGATE $5,000,000 OF SUBSCRIBER FUNDS)
------------------------------------------
---------------------------------------------------------------------------------------------
CASH PLACEMENT
PLACEMENT AGENT COMMISSION* WARRANTS
---------------------------------------------------------------------------------------------
XXXXX XXXXXXXXX $ 85,000.00 -0-
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
---------------------------------------------------------------------------------------------
TALBIYA B. INVESTMENTS LTD. $185,300.00 257,000
Ragnall House
00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
---------------------------------------------------------------------------------------------
LIBRA FINANCE, S.A. $ 90,760.00 205,000
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx
Fax: 000-000-000-0000
---------------------------------------------------------------------------------------------
AMRO INTERNATIONAL, S.A. $ 14,170.00 -0-
c/o Ultra Finanz
Grossmuenster Xxxxx 00
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx CH8011
Fax: 000-000-000-0000
---------------------------------------------------------------------------------------------
XXXXXXX RESOURCE LTD. $ 20,300.00 -0-
000 Xxxxx 000
Xxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
---------------------------------------------------------------------------------------------
XXXXX ENTERPRISES LTD. $ 14,170.00 -0-
00X Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxx, XX0, 0XX
Fax: 000-000-000000000
---------------------------------------------------------------------------------------------
NESHER LTD. $ 6,800.00 -0-
Xxxxxxx Xxxxx, 00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
---------------------------------------------------------------------------------------------
ENDEAVOUR MANAGEMENT INC. $ 8,500.00 -0-
The Maduro Building, P.O. Box 662
Wickhams Cay, Road Town
Tortola, British Virgin Islands
Fax: 0-000-000-0000
---------------------------------------------------------------------------------------------
TOTALS $425,000.00 462,000
---------------------------------------------------------------------------------------------
* The Escrow Agent will deduct $25,000 proportionately from the Cash Commissions
set forth above, in relation to the $5,000,000 aggregate Purchase Price and pay
said $25,000 to counsel to the Subscribers.
37
PUT
---
(AGGREGATE $5,000,000 OF SUBSCRIBER PUT FUNDS)
----------------------------------------------
------------------------------------------------------------------------------------------------------
CASH PLACEMENT
PLACEMENT AGENT COMMISSION* WARRANTS
------------------------------------------------------------------------------------------------------
XXXXX XXXXXXXXX $ 90,000.00 -0-
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
------------------------------------------------------------------------------------------------------
TALBIYA B. INVESTMENTS LTD. $196,200.00 257,000
Ragnall House
00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
------------------------------------------------------------------------------------------------------
LIBRA FINANCE, S.A. $ 96,100.00 205,000
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx
Fax: 000-000-000-0000
------------------------------------------------------------------------------------------------------
AMRO INTERNATIONAL, S.A. $ 15,000.00 -0-
c/o Ultra Finanz
Grossmuenster Xxxxx 00
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx CH8011
Fax: 000-000-000-0000
------------------------------------------------------------------------------------------------------
XXXXXXX RESOURCE LTD. $ 21,500.00 -0-
000 Xxxxx 000
Xxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
------------------------------------------------------------------------------------------------------
XXXXX ENTERPRISES LTD. $ 15,000.00 -0-
00X Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxx, XX0, 0XX
Fax: 000-000-000000000
------------------------------------------------------------------------------------------------------
NESHER LTD. $ 7,200.00 -0-
Xxxxxxx Xxxxx, 00 Xxxx Xxxx
Xxxxxxx, Xxxx xx Xxx
0X0 0X0, Xxxxxx Xxxxxxx
Fax: 000-000-00000000
------------------------------------------------------------------------------------------------------
ENDEAVOUR MANAGEMENT INC. $ 9,000.00 -0-
The Maduro Building, P.O. Box 662
Wickhams Cay, Road Town
Tortola, British Virgin Islands
Fax: 0-000-000-0000
------------------------------------------------------------------------------------------------------
TOTALS $450,000.00 462,000
------------------------------------------------------------------------------------------------------
* The Escrow Agent will deduct $15,000 proportionately from the Cash
Commissions set forth above, in relation to the $5,000,000 aggregate Purchase
Price and pay said $15,000 to counsel to the Subscribers.
38
