Contract
Exhibit
10.6
THIS
AGREEMENT RELATES TO AN OFFERING OF SHARES PURSUANT TO REGULATIONS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). NONE OF THE SHARES TO WHICH THIS
AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE ACT, AND, UNLESS SO REGISTERED,
MAY ONLY BE OFFERED OR SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN EACH CASE ONLY IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS.
EASTERN
RESOURCES, INC.
SUBSCRIPTION AGREEMENT (the "Agreement") made as of this
____ day of _____, 2007 between Eastern Resources, Inc., a Delaware corporation,
(the "Company"), and the
undersigned (the "Subscriber").
WHEREAS, the Company is offering
pursuant to Rule 506 promulgated pursuant to the Securities Act of 1933, as
amended (the “Securities
Act”), to investors in a private placement transaction (the “Offering”) of shares of the
Company’s common stock, par value $0.001 per share (the “Shares” or the “Common Stock”);
WHEREAS, the Subscriber desires to
subscribe for, purchase and acquire from the Company and the Company desires to
sell and issue to the Subscriber, the number of Shares set forth on the
signature page of this Agreement upon the terms and conditions and subject to
the provisions hereinafter set forth;
WHEREAS, Xxxxxx Xxxxx and Xxxxx
Xxxxxxx, (collectively, the “Producers”) are expected to subscribe for Common
Stock in exchange for causing Xxxxx Xxxxxxxx and Xxxx Xxxxxxx to sell and assign
(“Assignment”) the literary property currently entitled “Buzz Kill” to the
Company;
WHEREAS, the Company and Gottbetter
& Partners, LLP (the
“Escrow Agent”) will
enter into an Escrow Agreement (the “Escrow Agreement”) to provide
for the safekeeping of funds received and documents executed in connection with
the Offering; and
WHEREAS, the Escrow Agent shall
continue to hold the proceeds of the Offering in escrow pending the closing of a
subscription agreement with Producers and the Assignment, such proceeds to be
returned to Subscriber, without interest on or deduction therefrom, if a
subscription agreement with Producers and Assignment are not accepted on or
before July 31, 2007.
NOW, THEREFORE, for and in
consideration of the mutual premises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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I.
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SUBSCRIPTION
FOR SHARES; REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
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1.1 Purchase
and Sale of the Shares. Subject to the terms and conditions of
this Agreement, the Subscriber subscribes for and agrees to purchase and acquire
from the Company and the Company agrees to sell and issue to the Subscriber such
number of Shares which is set forth on the signature page hereof at the purchase
price of $0.10 per Share (the “Purchase Price”)
1.2 Completion
and Closing of the Offering. The Offering will
be completed upon the subscriptions of Subscriber and Producers, and the
Assignment. Except as otherwise provided herein, the Offering will
close (the “Closing”)
upon the later of the Assignment, and the Subscriber and Producers execution of
subscription agreements.
1.3 Subscription
Procedure. To complete a subscription for Shares, the
Subscriber must fully comply with the subscription procedures provided in this
Section 1.3.
(a) Transaction
Documents. The Subscriber shall review, complete and execute
this Agreement and deliver such Transaction Documents to the Escrow Agent at the
address provided below. Executed agreements may be delivered to the Escrow Agent
by facsimile using the facsimile number provided below if the Investor
immediately thereafter confirms receipt of such transmission with the Escrow
Agent and delivers the original copies of the agreements and questionnaire to
the Escrow Agent as soon as practicable thereafter.
Escrow Agent – Mailing
Address and Facsimile Number:
Gottbetter & Partners,
LLP
000 Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000)
000-0000
Attention: Xxxx X.
Xxxxxxxxxx
Telephone Number: (000)
000-0000
(b) Payment
of Purchase Price. Simultaneously with the delivery of the
Transaction Documents to the Escrow Agent as provided herein, the Subscriber
shall deliver to the Escrow Agent the full Purchase Price for the Subscriber’s
Shares by check payable to “Gottbetter & Partners, LLP as Escrow Agent for
Eastern Resources, Inc.” or by wire transfer of immediately available funds
pursuant to wire transfer instructions provided below:
ACCOUNT:
Gottbetter & Partners, LLP as escrow agent for Eastern Resources,
Inc.
BANK: CITIBANK,
N.A., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
ABA:
021000089
BENEFICIARY: Gottbetter
& Partners, LLP ACCOUNT: 00000000
REFERENCE: "Eastern
Resources, Inc.– [insert buyer’s name]"
Gottbetter & Partners, LLP
Accounting Contact: Xxxxxxx XxXxxxx; telephone: (000) 000-0000; email:
xxx@xxxxxxxxxx.xxx.
1.4 Access to Information; Reliance on
Exemptions.
(a) The
Subscriber has received and carefully reviewed such information and
documentation relating to the Company that the Subscriber has
requested.
(b) The
Subscriber has had a reasonable opportunity to ask questions of and receive
answers from the Company concerning the Company and the Offering, and all such
questions, if any, have been answered to the full satisfaction of the
Subscriber;
(c) The
Subscriber has such knowledge and expertise in financial and business matters
that the Subscriber is capable of evaluating the merits and risks involved in an
investment in the Shares;
(d) The
Subscriber understands that the Company has determined that the exemption from
the registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), provided by Rule 506 of Regulation D is applicable to the
offer and sale of the Shares, based, in part, upon the representations,
warranties and agreements made by the Subscriber herein;
(e) Except
as set forth herein, 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 upon any
information, other than the results of independent investigation by the
Subscriber;
(f) The
Subscriber has full power and authority to execute and deliver this Subscription
Agreement and to perform the obligations of the Subscriber hereunder and this
Subscription Agreement is a legally binding obligation of the Subscriber in
accordance with its terms;
(g) Regulation
D.
(i) The
Subscriber understands and acknowledges that the Shares have not been registered
under the Securities Act or the securities laws of any state, based upon an
exemption from such registration requirements for non-public offerings pursuant
to Rule 506 of Regulation D under the Securities Act; (B) the Shares are and
will be "restricted securities", as said term is defined in Rule 144 of the
Rules and Regulations promulgated under the Securities Act; (C) the Shares may
not be sold or otherwise transferred unless they have been first registered
under the Securities Act and all applicable state securities laws, or unless
exemptions from such registration provisions are available with respect to said
resale or transfer; and (D) except as otherwise provided in this Agreement, the
Company is under no obligation to register the Shares under the Securities Act
or any state securities law, or to take any action to make any exemption from
any such registration provisions available.
(ii) The
Subscriber will not sell or otherwise transfer any of the Shares, or any
interest therein, unless and until (A) said Shares shall have first been
registered under the Securities Act and all applicable state securities laws; or
(B) the Subscriber shall have first delivered to the Company a written opinion
of counsel (which counsel and opinion (in form and substance) shall be
reasonably satisfactory to the Company), to the effect that the proposed sale or
transfer is exempt from the registration provisions of the Securities Act and
all applicable state securities laws.
(iii) The
Subscriber is acquiring the Shares for its own account for investment purposes
only and not with a view to or for distributing or reselling such Shares or any
part thereof or interest therein, without prejudice, however, to the Subscriber
's right, subject to the provisions of this Subscription Agreement, at all times
to sell or otherwise dispose of all or any part of such Shares pursuant to an
effective registration statement under the Securities Act and in compliance with
applicable federal and state securities laws or under an exemption from such
registration.
(iv) At
the time the Subscriber was offered the Shares, it was, and at the date hereof
it is, and it will be, an "accredited investor" as defined in Rule 501(a) under
the Securities Act.
(v) The
Subscriber has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Shares, and has so evaluated the merits and risks
of such investment.
(vi) The
Subscriber is able to bear the economic risk of an investment in the Shares and,
at the present time, is able to afford a complete loss of such
investment.
(vii) The
Subscriber understands that no federal or state agency has approved or
disapproved the Shares, passed upon or endorsed the merits of the offering
thereof, or made any finding or determination as to the appropriateness of the
Shares for investment.
(viii) The
Subscriber understands that the certificates representing the Shares will bear a
legend in substantially the following form:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN ABSENCE OF (I) AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SHARES UNDER SAID ACT OR (II) AN OPINION OF
COMPANY COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
1.5 Rejection of Subscriptions.
This Offering is made subject to withdrawal, cancellation or modification by the
Company. The Company reserves the right to reject any subscription in whole or
in part or to allot to any prospective Subscriber fewer than the number of
Shares subscribed for by such Subscriber. Shares will be sold only to a limited
number of Subscribers meeting certain standards.
1.6 Tax Consequences. The
Subscriber acknowledges that the offering may involve tax consequences and that
this Agreement does not contain tax advice or information. The Subscriber
acknowledges that it must retain its own professional advisors to evaluate the
tax and other consequences of an investment in the Shares.
1.7 Validity; Enforcement. If the
Subscriber is a corporation, partnership, trust or other entity, the Subscriber
represents and warrants that: (a) it is authorized and otherwise duly qualified
to purchase and hold the Shares; and (b) that this Subscription Agreement has
been duly and validly authorized, executed and delivered and constitutes the
legal, binding and enforceable obligation of the Subscriber. If the Subscriber
is an individual, the Subscriber represents and warrants that this Subscription
Agreement has been duly and validly executed and delivered and constitutes the
legal, binding and enforceable obligation of the Subscriber.
1.8 Address. The Subscriber hereby
represents that the address of the Subscriber furnished by the Subscriber at the
end of this Subscription Agreement is the Subscriber's principal residence if
the Subscriber is an individual or its principal business address if it is a
corporation or other entity.
II. REPRESENTATIONS
OF THE COMPANY
2.1 Organization, Good Standing and
Qualification. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full corporate power and authority to conduct its business.
2.2 Capitalization and Voting
Rights. The authorized, issued and outstanding capital stock of the
Company is 300 million shares of Common Stock and 5 million shares of preferred
stock and all issued and outstanding shares of the Company are validly issued,
fully paid and nonassessable. There are no outstanding options,
warrants, agreements, convertible securities, preemptive rights or other rights
to subscribe for or to purchase any shares of capital stock of the Company.
Except as otherwise required by law, there are no restrictions upon the voting
or transfer of any of the shares of capital stock of the Company pursuant to the
Company's Certificate of Incorporation (the "Certificate of Incorporation"),
By-Laws or other governing documents or any agreement or other instruments to
which the Company is a party or by which the Company is bound.
2.3 Authorization; Enforceability.
The Company has all corporate right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. All corporate
action on the part of the Company, its directors and stockholders necessary for
the (i) authorization execution, delivery and performance of this Agreement by
the Company; and (ii) authorization, sale, issuance and delivery of the Shares
contemplated hereby and the performance of the Company's obligations hereunder
has been taken. This Agreement constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, and to limitations of public
policy. The Common Stock, when issued and fully paid for in accordance with the
terms of this Agreement, will be validly issued, fully paid and nonassessable.
The issuance and sale of the Common Stock contemplated hereby will not give rise
to any preemptive rights or rights of first refusal on behalf of any person
which have not been waived in connection with this offering.
2.4 No Conflict; Governmental
Consents.
(a) The
execution and delivery by the Company of this Agreement and the consummation of
the transactions contemplated hereby will not result in the violation of any
material law, statute, rule, regulation, order, writ, injunction, judgment or
decree of any court or governmental authority to or by which the Company is
bound, or of any provision of the Certificate of Incorporation or By-Laws of the
Company, and will not conflict with, or result in a material breach or violation
of, any of the terms or provisions of, or constitute (with due notice or lapse
of time or both) a default under, any lease, loan agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to which the Company
is a party or by which it is bound or to which any of its properties or assets
is subject, nor result in the creation or imposition of any lien upon any of the
properties or assets of the Company.
(b) No
consent, approval, authorization or other order of any governmental authority is
required to be obtained by the Company in connection with the authorization,
execution and delivery of this Agreement or with the authorization, issue and
sale of the Shares.
III. MISCELLANEOUS
3.1 Notice. Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Agreement must be in writing and will be deemed to have been
delivered: (a) upon receipt, when delivered personally, (b) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party), or (c) one (1)
business day after deposit with an overnight courier service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Subscriber:
With a copy to (which shall not
constitute notice):
Gottbetter & Partners,
LLP
000 Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxx, XX 00000
Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: 212.400.6901
If to the Producers, to their address
and facsimile number set forth at the end of this Agreement, or to such other
address and/or facsimile number and/or to the attention of such other person as
specified by written notice given to the Company five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (a) given by the
recipient of such notice, consent, waiver or other communication, (b)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission, or (c) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (a), (b) or (c) above,
respectively.
3.2 Entire Agreement; Amendment.
This Agreement supersedes all other prior oral or written agreements between the
Subscriber, the Company, their affiliates and persons acting on their behalf
with respect to the matters discussed herein, and this Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Subscriber
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be amended or waived other than by
an instrument in writing signed by the Company and the holders of at least a
majority of the Shares acquired (or if prior to the Closing, the Subscribers
purchasing at least a majority of the Shares to be purchased at the
Closing).
3.3 Severability. If any provision
of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.
3.4 Governing Law; Jurisdiction; Waiver
of Jury Trial. This Agreement shall be governed by, and construed in
accordance with the laws of the State of New York without regard to the choice
of law principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York for the purpose of
any suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
3.5 Headings. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.
3.6 Successors And Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least a majority of the Shares acquired, except by
merger or consolidation. The Subscriber shall not assign its rights hereunder
without the consent of the Company, which consent shall not be unreasonably
withheld.
3.7 No Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.
3.8 Survival. The representations
and warranties of the Company and the Subscriber contained in Articles I and II
and the agreements set forth this Article III shall survive closing for a period
of two years.
3.9 Further Assurances. Each party
shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
3.10 No Strict Construction. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party.
3.11 Legal Effect. The Subscriber
acknowledges that: (a) it has read this Agreement and (b) it understands the
terms and consequences of this Agreement and is fully aware of its legal and
binding effect.
3.12 Counterparts. This Agreement
may be executed in two or more identical counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.
[Signature
page follows.]
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year first written above.
No.
of Shares of Common Stock:
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Name
of Subscriber
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Signature
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_________________________________________ | ||
Name
(Please Print)
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_________________________________________ | ||
Title
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_________________________________________ | ||
Address
of Subscriber
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Taxpayer
Identification Number of Subscriber
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Subscription
Accepted:
EASTERN
RESOURCES, INC.
By: ______________________
Name: Xxxxxx
Xxxxx
Title: President