EXHIBIT 10.20
xxxxxxxxx.xxx, inc.
0000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
SUBSCRIPTION AGREEMENT
March 1, 2000
Xxxxxx Xxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Dear Xx. Xxxxx:
This letter will constitute the agreement between xxxxxxxxx.xxx, inc.
("Netcruise" or the "Company"), a New Jersey corporation, and yourself ("you" or
the "Investor") regarding your acquisition of shares of the $.0001 par value
common stock of Netcruise.
1. Subscription. The Investor agrees to purchase from Netcruise and Netcruise
agrees to sell to the Investor 12,362,500 shares of the unissued common stock
(the "Shares") of Netcruise as described below:
(a) for a cash purchase price of $1,897,500, the Investor is purchasing a total
of 9,487,500 Shares;
(b) for a purchase price consisting of your separate agreement
to convert into Shares the Netcruise debt owed to you by reason of your advance
of $50,000 to Netcruise on February 4, 2000 (the "Investor Advance"), the
Investor is purchasing a total of 250,000 Shares; and
(c) for a purchase price consisting of your separate agreement
to convert into Shares $325,000 of outstanding Netcruise debt held by you
reflected in four (4) Netcruise 8% secured convertible promissory notes; two (2)
in the face amount of $100,000 each dated November 4, 1999 and December 6, 1999,
one (1) in the face amount of $50,000 dated January 7, 2000 and one (1) in the
face amount of $75,000 dated January 21, 2000 (collectively the "Investor
Debt"), the Investor is purchasing a total of 2,625,000 Shares.
The Investor agrees to immediately instruct his bank to make an
electronic transfer, as instructed by the Company, of $1,897,500 into the XXXX
escrow account of Scheichet & Xxxxx, P.C., as attorneys for the Company, and
hereby tenders to the Company debt conversion agreements dated this date for the
$50,000 Investor Advance and the $325,000 of Investor Debt in full payment for
the 12,362,500 Shares being acquired hereby.
2. Representations, Warranties and Covenants of Subscriber. The Investor hereby
acknowledges, represents, warrants, covenants and agrees as follows:
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(a) the Investor has been furnished with full access to the
books, records and reports of the Company, including but not limited to all of
the Company's SEC Form 10-KSB, 10- QSB and 8-K reports and all documents filed
by the Company or any insider with the SEC, and any documents which may have
been made available upon request (collectively referred to as "additional
materials");
(b) the Investor has been given the opportunity to ask
questions of and receive answers from the Company's officers, directors and
independent accountants concerning matters pertaining to an investment in the
Company and has been given the opportunity to obtain such information necessary
to verify the accuracy of information that was otherwise provided in order for
him to evaluate the merits and risks of a purchase of Shares to the extent the
Company possesses such information or can acquire it without unreasonable effort
or expense and has not been furnished any offering literature except as
mentioned herein;
(c) the Investor has not been furnished with any oral representation in
connection with the Shares;
(d) the Investor has determined that the Shares are a suitable
investment in view of its presently anticipated financial needs and that he
could bear a loss of his investment at this time and for the foreseeable future;
(e) with the exception of his reliance on any information
provided to him by the Company as part of a due diligence examination of the
Company for purposes of reaching his decision as to whether or not to invest in
the Company, the Investor is not relying on the Company, its officers,
directors, employees, agents, investment bankers or attorneys, with respect to
individual tax and other legal or economic considerations involved in this
investment. The Investor has relied on his knowledge and experience and that of
his legal and economic advisors with regard to the tax and other legal or
economic considerations involved in this transaction. The Investor is capable of
evaluating the merits and risks of this investment;
(f) the Investor will not sell or otherwise transfer the
Shares without registration under the Securities Act of 1933 (the "Securities
Act") and appropriate state securities ("Blue Sky") laws or the availability of
appropriate exemptions therefrom and fully understands and agrees that he must
bear the economic risks of his purchase for an indefinite period of time
because, among other reasons, the Shares have not been registered under the
Securities Act or under the Blue Sky laws of any state and, therefore, cannot be
resold, pledged, assigned, hypothecated or otherwise disposed of unless they are
subsequently registered under the Securities Act and under the applicable Blue
Sky laws or pursuant to available exemptions from such registration. The
Investor also understands that neither the Company nor any other person is under
any obligation to register the Shares on his behalf or to assist him in
complying with any exemption from registration under the Securities Act or Blue
Sky laws;
(g) the Investor is a citizen and a resident of the United States and New York
State;
(h) the Investor is an "accredited investor" as defined in
Section 2(15) of the Securities Act of 1933, as amended, and Regulation D
promulgated by the United States Securities and Exchange Commission thereunder;
(i) the Shares the Investor is subscribing for will be acquired solely for the
account of the Investor for investment purposes only and are not being purchased
for any distribution,
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subdivision or fractionalization thereof; the Investor has no contract,
undertaking agreement or arrangement with any person to sell, transfer or pledge
any Shares to such person or anyone else and has no present plan to enter into
any such contract, undertaking, agreement or arrangement;
(j) the Investor has furnished the Company with information
about the Investor and such information is correct and complete as of this date.
If there should be any material change in such information, the Investor will
immediately furnish such revised or corrected information to the Company; and
(k) he has made the foregoing representations, warranties,
covenants and agreements knowing that they shall survive his purchase of Shares.
3. Representations, Warranties and Covenants of the Company. The Company hereby
acknowledges, represents, warrants, covenants and agrees as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey and has
all requisite power and authority to own, lease and operate its properties,
carry on its business as now being conducted, enter into this Subscription
Agreement and consummate the transactions contemplated hereby. The execution and
delivery by the Company of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Company and this Agreement is a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms. Neither the execution and delivery by the
Company of this Agreement nor the consummation of the transactions contemplated
hereby will conflict with or result in a breach of any provision of its
Certificate of Incorporation or By-Laws or result in a material default under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, agreement, judgment, court order, restraint, lien or other
instrument or obligation to which the Company is a party or by which the Company
or its assets or properties may be bound.
(b) The Company has furnished the Investor with information
about the Company and such information is correct and complete as of the date of
this Subscription Agreement. If there should be any material change in such
information, the Company will immediately furnish such revised or corrected
information to the Investor.
(c) The Company has made the foregoing representations,
warranties, covenants and agreements knowing that they shall survive the
Investor's purchase of the Shares.
4. Investor Awareness. The Investor acknowledges his complete understanding of
the following facts:
(a) No federal or state agency has passed upon the investment
quality of the Shares or made any finding or determination as to the fairness,
merits or risks of any investment in them.
(b) There are substantial risks of loss of the investment incident to the
purchase of Shares.
(c) The Shares have not been registered under the Securities
Act or any Blue Sky laws and must be held indefinitely unless they are
subsequently so registered or exemptions from such registration are available.
The Investor has no right to require that the Shares be registered under the
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Securities Act or any Blue Sky laws and the Shares cannot be sold without
registration or other compliance with the Securities Act and applicable Blue Sky
laws. In summary, the Investor understands that the Shares have not been
registered under the securities laws of any jurisdiction, that no one has any
obligation to register them and that all Shares purchased by him may not be
transferred unless they are registered, or an exemption from such registration
is otherwise available.
5. Modification. Neither this Agreement nor any provision hereof shall be
waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or
termination is sought.
6. Notices. Any notice, demand or other communication which any party
hereto may be required, or may elect, to give anyone interested hereunder shall
be sufficiently given if (a) deposited, postage prepaid, in a United States mail
letter box, registered or certified mail, return receipt requested, addressed to
such address as may be given herein, or (b) delivered personally at such
address, or (c) delivered by fax transmission to a fax number provided by such
person (who confirms receipt thereof). The addresses and fax numbers for the
delivery of notices are as follows:
If to the Company: xxxxxxxxx.xxx, inc.
0000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to: Xxxxxxx X. Xxxxx, Esq.
Scheichet & Xxxxx, P.C.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel. (000) 000-0000
Fax: (000) 000-0000
If to the Investor: Xxxxxx Xxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
with a copy to: Xxxxxxx Xxxxxxx, Esq.
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
7. Counterparts. This Subscription Agreement may be executed in any number of
counterparts and each of such counterparts shall, for all purposes, constitute
one agreement binding on all the parties.
8. Binding Effect. Except as otherwise provided herein, this
Subscription Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, executors, administrators, successors, legal
representatives and assigns. If the undersigned is more than one person, the
obligation of the undersigned shall be joint and several and the covenants,
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person.
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9. Entire Agreement. This instrument, the Anti-Dilution Agreement and
the UIT Contingency Agreement between the Investor and Netcruise dated this date
contain the entire agreement of the parties and there are no representations,
warranties, covenants or other agreements, except as stated or referred to
herein and therein.
10. Benefit and Transfer or Assignment. Except as provided otherwise
herein, this Subscription Agreement is not transferable or assignable by the
undersigned without the written consent of the Company, which consent shall not
be unreasonably withheld. No such written consent shall be required for a
transfer or assignment by the Investor of his rights or interests under this
Subscription Agreement to a corporation or limited liability company in which
the Investor owns, directly or indirectly, more than 50% of the capital stock
and in which all other shareholders are accredited investors.
11. Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to that state's conflicts of laws provisions.
Investor: Company: xxxxxxxxx.xxx, inc
/s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxx, President
------------ ------------------------
Attest:
/s/ Xxxx X. Xxxxx, Secretary
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