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Exhibit 4
iMALL, INC.
SUBSCRIPTION AGREEMENT made as of this ____ day of ________, 1997 between
iMall, Inc., a Nevada corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company") and the undersigned
(the "Subscriber").
WHEREAS, the Company desires to issue a minimum of 50 and a maximum of 150
units ("Units") in a private placement, each Unit consisting of 25,000 shares
(the "Shares") of Series A Convertible Preferred Stock, par value $.001 per
share (the "Convertible Preferred Stock")(which Shares are each convertible into
10 shares of the Company's Common Stock, $.001 par value (the "Common Stock"))
as described in the Certificate of the Designations, Powers, Preferences and
Rights (the "Designation") of the Series A Convertible Preferred Stock included
as Exhibit A to the Memorandum (defined below)) and 62,500 common stock purchase
warrants (the "Warrants") in the form as set forth in the Warrant Agreement
attached hereto as Exhibit B on the terms and conditions hereinafter set forth
and the Subscriber desires to acquire the number of Units set forth on the
signature page hereof;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase from the Company such
number of Units as is set forth upon the signature page hereof at a price equal
to $100,000 per Unit, and the Company agrees to sell such Units to the
Subscriber for said purchase price subject to the Company's right to sell to the
Subscriber such lesser number of Units as the Company may, in its sole
discretion, deem necessary or desirable. The purchase price is payable by
certified or bank check made payable to United States Trust Company of New York,
as Escrow Agent for iMall, Inc., or by wire transfer of funds, contemporaneously
with the execution and delivery of this Subscription Agreement. Certificates
representing the Shares and Warrants will be delivered by the Company within ten
(10) days following the consummation of this offering as set forth in Article
III hereof. The Subscriber understands however, that this purchase of Units is
contingent upon the Company making sales of a minimum of 50 Units prior to the
Termination Date as defined in Article III hereof.
1.2 The Subscriber recognizes that the purchase of Units involves a high
degree of risk in that (i) an investment in the Company is highly speculative
and only investors who can afford the loss of their entire investment should
consider investing in the Company and the Units; (ii) he may not be able to
liquidate his investment; (iii) transferability of the securities
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comprising the Units is extremely limited; and (iv) in the event of a
disposition, an investor could suffer the loss of his entire investment, as well
as other risk factors as more fully set forth herein and in the Private
Placement Memorandum dated November 7, 1997 (including all exhibits and other
attachments thereto, the "Memorandum").
1.3 The Subscriber represents and warrants that he is an "accredited
investor" as such term in defined in Rule 501 of Regulation D promulgated under
the United States Securities Act of 1933, as amended (the "Act"), as indicated
by his responses to the Investor Questionnaire, and that he is able to bear the
economic risk of an investment in the Units. The Subscriber further represents
and warrants that the information furnished in the Investor Questionnaire is
accurate and complete in all material respects.
1.4 The Subscriber acknowledges that he has prior investment experience,
including investment in non-listed and non-registered securities, or he has
employed the services of an investment advisor, attorney or accountant to read
all of the documents furnished or made available by the Company both to him and
to all other prospective investors in the Units and to evaluate the merits and
risks of such an investment on his behalf, and that he recognizes the highly
speculative nature of this investment.
1.5 The Subscriber acknowledges receipt and careful review of the
Memorandum and all other documents furnished in connection with this transaction
(collectively, the "Offering Documents") and hereby represents that he has been
furnished by the Company during the course of this transaction with all
information regarding the Company which he has requested or desires to know; and
that such information and documents have, in his opinion, afforded the
Subscriber with all of the same information that would be provided him in a
registration statement filed under the Act; that he has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning the terms and
conditions of the offering, and any additional information which he had
requested.
1.6 The Subscriber acknowledges that this offering of Units may involve tax
consequences and that the contents of the Offering Documents do not contain tax
advice or information. The Subscriber acknowledges that he must retain his own
professional advisors to evaluate the tax and other consequences of an
investment in the Units.
1.7 The Subscriber acknowledges that this offering of Units has not been
reviewed by the United States Securities and Exchange Commission ("SEC") because
of the Company's representations that this is intended to be a nonpublic
offering pursuant to Sections 4(2) or 3(b) of the Act. The Subscriber represents
that the Shares and Warrants comprising his Units are being purchased for his
own account, for investment and not for distribution or resale to others. The
Subscriber agrees that he will not sell or otherwise transfer such securities
unless they are registered under the Act or unless an exemption from such
registration is available.
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1.8 The Subscriber understands that the Shares and Warrants comprising the
Units have not been registered under Act by reason of a claimed exemption under
the provisions of the Act which depends, in part, upon his investment intention.
In this connection, the Subscriber understands that it is the position of the
SEC that the statutory basis for such exemption would not be present if his
representation merely meant that his present intention was to hold such
securities for a short period, such as the capital gains period of tax statutes,
for a deferred sale, for a market rise, assuming that a market develops, or for
any other fixed period. The Subscriber realizes that, in the view of the SEC, a
purchase now with an intent to resell would represent a purchase with an intent
inconsistent with his representation to the Company, and the SEC might regard
such a sale or disposition as a deferred sale to which such exemptions are not
available.
1.9 The Subscriber understands that there is no public market for the
Shares and Warrants comprising the Units and that only a limited public market
exists for the Common Stock issuable upon conversion of the Shares, upon
conversion of any Convertible Preferred Stock issued as dividends in respect of
the Shares and upon exercise of the Warrants (the "Reserved Shares"). Rule 144
(the "Rule") promulgated under the Act requires, among other conditions, a one
year holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the registration
requirements under the Act. The Subscriber understands that the Company makes no
representation or warranty regarding its fulfillment in the future of any
reporting requirements under the Securities Exchange Act of 1934, as amended, or
its dissemination to the public of any current financial or other information
concerning the Company, as is required by the Rule as one of the conditions of
its availability. The Subscriber understands and hereby acknowledges that the
Company is under no obligation to register the securities comprising the Units
under the Act, with the exception of certain registration rights relating to the
Warrants and the Reserved Shares set forth in Article IV herein. The Subscriber
consents that the Company may, if it desires, permit the transfer of the
securities comprising the Units or issuable upon conversion or exercise thereof
out of his name only when his request for transfer is accompanied by an opinion
of counsel reasonably satisfactory to the Company that neither the sale nor the
proposed transfer results in a violation of the Act or any applicable state
"blue sky" laws (collectively "Securities Laws") and subject to the provisions
of Section 1.10 hereof. The Subscriber agrees to hold the Company and its
directors, officers and controlling persons and their respective heirs,
representatives, successors and assigns harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Investor Questionnaire
or any sale or distribution by the undersigned Subscriber in violation of any
Securities Laws.
1.10 Notwithstanding any registration statement covering the resale of the
Warrants and the Reserved Shares, the Subscriber agrees not to sell, transfer,
assign, hypothecate or otherwise dispose of the Shares, the Warrants or the
Reserved Shares for a period of one year from the final Closing; provided,
however, that nothing contained in this Section 1.10 shall prevent holders of
the Shares from exercising their right of conversion pursuant to Section 6(A) of
the
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Designation. The Placement Agent may consent to the release of the foregoing
transfer restrictions at any time after seven months from the final Closing for
all, but not less than all, of the Subscribers.
1.11 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Shares and Warrants comprising his
Units and the Reserved Shares stating that they have not been registered under
the Act and setting forth or referring to the restrictions on transferability
and sale thereof.
1.12 The Subscriber understands that the Company will review this
Subscription Agreement and the Investor Questionnaire and otherwise review the
financial standing of the Subscriber; and it is agreed that the Company reserves
the unrestricted right to reject or limit any subscription.
1.13 The Subscriber hereby represents that the address of Subscriber
furnished by him at the end of this Subscription Agreement is the undersigned's
principal residence if he is an individual or its principal business address if
it is a corporation or other entity.
1.14 The Subscriber acknowledges that if he is a Registered Representative
\of an NASD member firm, he must give such firm the notice required by the
NASD's Rules of Fair Practice, receipt of which must be acknowledged by such
firm on the signature page hereof.
1.15 The Subscriber hereby represents that, except as set forth in the
Offering Documents, no representations or warranties have been made to the
Subscriber by the Company or any agent, employee or affiliate of the Company and
in entering into this transaction, the Subscriber is not relying on any
information, other than that contained in the Offering Documents and the results
of independent investigation by the Subscriber.
1.16 The Subscriber acknowledges that at such time, if ever, as any of the
Securities are registered, sales of such Securities will be subject to state
securities laws, including those of states which may require any securities sold
therein to be sold through a registered broker-dealer or in reliance upon an
exemption from registration.
1.17 The Subscriber acknowledges that the maximum number of Units to be
sold pursuant to the Memorandum may be increased, at the discretion of the
Company and the Placement Agent, by up to twenty (20) additional Units.
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to the Subscriber that prior to the
consummation of this offering and at the Closing Date:
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(a) The Company is a corporation duly organized, existing and in good
standing under the laws of the State of Nevada and has the corporate power to
conduct the business which it conducts and proposes to conduct and is qualified
to do business in California and Utah.
(b) The execution, delivery and performance of this Subscription Agreement
by the Company will have been duly approved by the Board of Directors of the
Company and all other actions required to authorize and effect the offer and
sale of the Units and the securities contained therein will have been duly taken
and approved.
(c) The Shares and Warrants comprising the Units have been duly and validly
authorized and when issued and paid for in accordance with the terms hereof,
will be duly and validly issued and fully paid and non assessable.
(d) The Company will at all times have authorized and reserved a sufficient
number of Reserved Shares to provide for conversion of the Shares and exercise
of the Warrants.
(e) The Company has obtained, or is in the process of obtaining, all
licenses, permits and other governmental authorizations necessary to the conduct
of its business; such licenses, permits and other governmental authorizations
obtained are in full force and effect; and the Company is in all material
respects complying therewith.
(f) The Company knows of no pending or threatened legal or governmental
proceedings to which the Company is a party which could materially adversely
affect the business, property, financial condition or operations of the Company.
(g) The Company is not in violation of or default under, nor will the
execution and delivery of this Subscription Agreement, the issuance of the
Shares or the Warrants, and the incurrence of the obligations herein and therein
set forth and the consummation of the transactions herein or therein
contemplated, result in a violation of, or constitute a default under, the
Company's articles of incorporation or by-laws, any material obligations,
agreement, covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness or in any material contract, indenture, mortgage, loan
agreement, lease, joint venture or other agreement or instrument to which the
Company is a party or by which it or any of its properties may be bound or any
material order, rule, regulation, writ, injunction, or decree of any government,
governmental instrumentality or court, domestic or foreign.
(h) The financial information contained in the Memorandum presents fairly
the financial condition of the Company as of the dates and for the periods
indicated.
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III. TERMS OF SUBSCRIPTION
3.1 The subscription period will begin as of November 7, 1997 and will
terminate at 11:59 PM Eastern time on January 6, 1998, unless extended by the
Company and the Placement Agent (as defined in Section 3.2 hereof) for up to an
additional 60 days (the "Termination Date"). Of the ▇▇▇▇▇, ▇▇ will be offered on
a "best efforts-all or none" basis and the remaining 100 Units will be offered
on a "best efforts" basis as more particularly set forth in the Memorandum. The
minimum subscription per subscriber shall be one Unit ($100,000), provided,
however, that smaller investments may be accepted at the discretion of the
Placement Agent and the Company.
3.2 Placement of the Units will be made by Commonwealth Associates (the
"Placement Agent"), which will receive (i) a placement fee in the amount of 7%
of the purchase price of the Units placed; (ii) a structuring fee in the amount
of 3% of the purchase price of the Units placed; (iii) an expense allowance of
$200,000; (iv) warrants to purchase up to 10,500,000 shares of Common Stock of
the Company exercisable at $.40 per share for assisting the Company in the
placement; (v) an advisory fee of $5,000 per month for 12 months; and (vi) other
compensation as summarized in the Memorandum.
3.3 Pending the sale of the Units, all funds paid hereunder shall be
deposited by the Company in escrow with United States Trust Company of New York.
If the Company shall not have obtained subscriptions (including this
subscription) for purchases of 50 Units for an aggregate purchase price of
$5,000,000 on or before the Termination Date, then this subscription shall be
void and all funds paid hereunder by the Subscriber, with interest, shall be
promptly returned to the Subscriber, subject to paragraph 3.5 hereof. If 50
Units are sold at or prior to the Termination Date, then all subscription
proceeds shall be paid over to the Company within ten days thereafter. In such
event, placements of additional Units may continue until the Termination Date,
with subsequent releases of funds to be at the mutual consent of the Company and
the Placement Agent.
3.4 The Subscriber hereby authorizes and directs the Company to deliver
certificates representing the securities to be issued to such Subscriber
pursuant to this Subscription Agreement either (a) to the residential or
business address indicated in the Confidential Purchaser Questionnaire or (b)
directly to the Subscriber's account maintained with the Placement Agent, if
any. (If the Subscriber does not desire the securities to be delivered to such
account, the Subscriber should delete Subsection (b) of this Section 3.4.)
3.5 The Subscriber hereby authorizes and directs the Company to return any
funds, plus interest, for unaccepted subscriptions to the same account from
which the funds were drawn, including any customer account maintained with the
Placement Agent.
3.6 If the Subscriber is not a United States person, such Subscriber hereby
represents that it has satisfied itself as to the full observance of the laws of
its jurisdiction in
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connection with any invitation to subscribe for the Securities or any use of
this Agreement, including (i) the legal requirements within its jurisdiction for
the purchase of the Securities, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that may
need to be obtained, and (iv) the income tax and other tax consequences, if any,
that may be relevant to the purchase, holding, redemption, sale or transfer of
the Securities. Such Subscriber's subscription and payment for, and his or her
continued beneficial ownership of the Securities, will not violate any
applicable securities or other laws of the Subscriber's jurisdiction.
IV. REGISTRATION RIGHTS
4.1 The Company hereby agrees with the holders of the Reserved Shares or
their transferees (collectively, the "Holders") to use its best efforts to
ensure that the Warrants and the Reserved Shares (collectively, the "Registrable
Securities") shall be registered for resale under the Act, subject to the
lock-up provisions of Section 1.10 hereof, within seven months after the initial
Closing.
The obligation of the Company under this Section 4.1 shall be limited to
one registration statement and shall not apply to any Registrable Securities
which at the time are eligible for resale pursuant to Rule 144 without regard to
the volume limitations of such rule. The Company shall pay the expenses
described in Section 4.3 for the registration statement filed pursuant to this
Section 4.1, except for underwriting discounts and commissions and legal fees of
the Holders, which shall be borne by the Holders.
The foregoing notwithstanding, the Company may defer any such \registration
pursuant to this Section 4.1 for a period of not more than ninety (90) days if
the Company's Board of Directors determines in good faith that it would be in
the best interest of shareholders to do so.
4.2 Registration Procedures. If and whenever the Company is required by the
provisions of Section 4.1 to effect the registration of Registrable Securities
under the Act, the Company will, until such time as the Registrable Securities
may be sold under Rule 144 without volume limitation:
(a) prepare and file with the SEC a registration statement with
respect to such securities, and use its best efforts to cause such registration
statement to become and remain effective;
(b) prepare and file with the SEC such amendments to such registration
statement and supplements to the prospectus contained therein as may be
necessary to keep such registration statement effective;
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(c) furnish to the security holders participating in such registration
and to the underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably request
in order to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities covered
by such registration statement under such state securities or blue sky laws of
such jurisdictions as such participating holders may reasonably request in
writing within twenty (20) days following the original filing of such
registration statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified;
(e) notify the security holders participating in such registration,
promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed;
(f) notify such holders promptly of any request by the SEC for the
amending or supplementing of such registration statement or prospectus or for
additional information;
(g) prepare and file with the SEC, promptly upon the request of any
such holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such holders (and concurred in
by counsel for the Company), is required under the Act or the rules and
regulations thereunder in connection with the distribution of Common Stock by
such holder;
(h) prepare and promptly file with the SEC and promptly notify such
holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Act, any event shall have occurred as the
result of which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(i) advise such holders, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued.
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4.3 Expenses.
(a) With respect to the registration required pursuant to Section 4.1
hereof, all fees, costs and expenses of and incidental to such registration,
inclusion and public offering (as specified in paragraph (b) below) in
connection therewith shall be borne by the Company, provided, however, that any
securityholders participating in such registration shall bear their pro rata
share of the underwriting discount and commissions and transfer taxes.
(b) The fees, costs and expenses of registration to be borne by the
Company as provided in paragraph (a) above shall include, without limitation,
all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in 4.3(a) above). Fees and
disbursements of counsel and accountants for the selling securityholders and any
other expenses incurred by the selling securityholders not expressly included
above shall be borne by the selling securityholders.
4.4 Indemnification.
(a) The Company will indemnify and hold harmless each holder of
Registrable Securities which are included in a registration statement pursuant
to the provisions of Section 4.1 hereof, its directors and officers, and any
underwriter (as defined in the Act) for such holder and each person, if any, who
controls such holder or such underwriter within the meaning of the Act, from and
against, and will reimburse such holder and each such underwriter and
controlling person with respect to, any and all loss, damage, liability, cost
and expense to which such holder or any such underwriter or controlling person
may become subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein or any amendment or supplement thereto, 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, in light of the circumstances in which they were made, not
misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, damage, liability, cost or expenses
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 such holder, such underwriter or such controlling person in writing
specifically for use in the preparation thereof.
(b) Each holder of Registrable Securities included in a registration
pursuant to the provisions of Section 4.1 hereof will indemnify and hold
harmless the Company, its directors and officers, any controlling person and any
underwriter from and against, and will reimburse the Company, its directors and
officers, any controlling person and any underwriter with respect to, any and
all loss, damage, liability, cost or expense to which the Company or any
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controlling person and/or any underwriter may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, 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, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by or on behalf of such
holder specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this Section 4.4 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party,
provided, however, if counsel for the indemnifying party concludes that a single
counsel cannot under applicable legal and ethical considerations, represent both
the indemnifying party and the indemnified party, the indemnified party or
parties have the right to select separate counsel to participate in the defense
of such action on behalf of such indemnified party or parties. After notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of said paragraph (a) or (b) for
any legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnified party shall have employed counsel in
accordance with the provisions of the preceding sentence, (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after the notice of the
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party.
V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the Company, at its registered office, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Executive Officer and to the Subscriber at his address indicated
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on the last page of this Subscription Agreement. Notices shall be deemed to have
been given on the date of mailing, except notices of change of address, which
shall be deemed to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended
except by a writing signed by the parties to be charged, and this Subscription
Agreement may not be discharged except by performance in accordance with its
terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
5.4 Notwithstanding the place where this Subscription Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of the State of New York. The parties hereby agree that any dispute
which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in New York
City and they hereby submit to the exclusive jurisdiction of the courts of the
State of New York located in New York, New York and of the federal courts in the
Southern District of New York with respect to any action or legal proceeding
commenced by any party, and irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action or proceeding brought
in such a court or respecting the fact that such court is an inconvenient forum,
relating to or arising out of this Subscription Agreement or any acts or
omissions relating to the sale of the securities hereunder, and consent to the
service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
below or such other address as the undersigned shall furnish in writing to the
other.
5.5 This Subscription Agreement may be executed in counterparts. Upon the
execution and delivery of this Subscription Agreement by the Subscriber, this
Subscription Agreement shall become a binding obligation of the Subscriber with
respect to the purchase of Units as herein provided; subject, however, to the
right hereby reserved to the Company to enter into the same agreements with
other subscribers and to add and/or to delete other persons as subscribers.
5.6 The holding of any provision of this Subscription Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Subscription Agreement, which shall remain in full
force and effect.
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5.7 It is agreed that a waiver by either party of a breach of any provision
of this Subscription Agreement shall not operate, or be construed, as a waiver
of any subsequent breach by that same party.
5.8 The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
5.9 The Company agrees not to disclose the names, addresses or any other
information about the Subscribers, except as required by law, provided, that the
Company may use information relating to the Subscriber in any registration
statement under the Act with respect to the Warrants or the Reserved Shares.
VI. BLUE SKY LEGENDS
California
The sale of securities which are the subject of this agreement has not been
qualified with the Commissioner of Corporations of the State of California and
the issuance of such securities or the payment or receipt of any part of the
consideration for such securities prior to such qualification is unlawful,
unless the sale of securities is exempt from qualification by Section 25100,
25102 or 25105 of the California Corporations Code. The rights of all parties to
this agreement are expressly conditioned upon such qualification being obtained,
unless the sale is so exempt.
Connecticut The undersigned acknowledges that the Securities have not been
registered under the Connecticut Uniform Securities Act, as amended (the "Act")
and are subject to restrictions on transferability and sale of securities as set
forth herein. The undersigned hereby agrees that such Securities will not be
transferred or sold without registration under the Act or exemption therefrom.
Maine
These securities are being sold pursuant to an exemption from registration
with the bank superintendent of the State of Maine under Section 10502(2)(r) of
Title 32 of the Maine revised statutes. These securities may be deemed
restricted securities and as such the holder may not be able to resell the
securities unless pursuant to registration under state or federal securities
laws or unless an exemption under such laws exists.
Page 57 of 74 Pages
Missouri
The undersigned acknowledges that the Securities have not been registered
under the Missouri Uniform Securities Act, as amended (the "Act") and are
subject to restrictions on transferability and sale of securities as set forth
herein. The undersigned hereby acknowledges that such Securities may be disposed
of only through a licensed broker-dealer. It is a felony to sell securities in
violation of the Missouri Securities Act.
Pennsylvania
The undersigned hereby acknowledges that the Issuer is relying upon the
exemption from registration of securities set forth in Section 203(d) of the
Pennsylvania Securities Act of 1972, as amended (the "Pennsylvania Act") in
connection with the sale of the Securities to the undersigned.
In accordance with the requirements of Section 203(d) of the Pennsylvania
Act, the undersigned hereby agrees not to sell his Securities within twelve (12)
months from the date of purchase except pursuant to Section 204.01 of the Blue
Sky Regulations of the Pennsylvania Securities Act of 1972. Additionally, the
undersigned is aware of the right of withdrawal under Section 207(m) of the Act
described in the cover pages of the Memorandum.
Texas
The undersigned hereby acknowledges that the Securities cannot be sold
unless they are subsequently registered under the Securities Act of 1933, as
amended, and the Texas Securities Act, or an exemption from registration is
available. The undersigned further acknowledges that because the Securities are
not readily transferable, he must bear the economic risk of his investment for
an indefinite period of time.
Page 58 of 74 Pages
IN WITNESS WHEREOF, the parties have executed this Subscription Agreement
as of the day and year first written above.
______________________________ ___________________________________
Signature of Subscriber Signature of Co-Subscriber
______________________________ ___________________________________
Name of Subscriber Name of Co-Subscriber
[please print]
______________________________ ___________________________________
Address of Subscriber Address of Co-Subscriber
______________________________ ___________________________________
Social Security or Taxpayer Social Security or Taxpayer Identification
Identification Number of Subscriber Number of Co-Subscriber
______________________________
Subscriber's Account Number
at Commonwealth Associates
______________________________
Number of Units Subscribed For
*If Subscriber is a Registered Representative
with an NASD member firm, have the following
acknowledgement signed by the appropriate party:
The undersigned NASD member firm
acknowledges receipt of the notice
required by Rule 3050 of the NASD Subscription Accepted:
Conduct Rules.
iMALL, INC.
______________________________
Name of NASD Member Firm By: ______________________________
By ______________________________ Date: ____________________
Authorized Officer
