Purchaser:___________________
SUBSCRIPTION AGREEMENT
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TRINITY MEDICAL GROUP USA, INC.
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Trinity Medical Group USA, Inc.
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxx, Xxxxxxxxxx 00000
Gentlemen:
1. Subscription. The undersigned hereby applies to purchase from
Trinity Medical Group USA, Inc., a Florida corporation (the "Company"), a
convertible promissory note issued by the Company to the order of the
undersigned for the principal amount of $500,000, substantially in the form
attached hereto as Attachment A (the "Convertible Note"). THIS SUBSCRIPTION IS
IRREVOCABLE, BUT MAY BE REJECTED BY THE COMPANY IN ITS SOLE discretion. In the
event that the undersigned's subscription documents are returned to it, the
undersigned understands that all of its obligations hereunder shall terminate.
2. Representations and Warranties. The undersigned acknowledges,
represents, warrants and agrees as follows:
(a) Authorization. The decision to invest and the execution and
delivery of this agreement by the undersigned, the performance by the
undersigned of its obligations hereunder and the consummation by the undersigned
of the transactions contemplated hereby have been duly authorized and no other
proceedings on the part of the undersigned is necessary. The person executing
this agreement on behalf of the undersigned has all right, power and authority
to execute and deliver this agreement on behalf of the undersigned. This
agreement has been duly executed and delivered by the undersigned and, assuming
the due authorization, execution and delivery hereof by the Company, will
constitute the legal, valid and binding obligations of the undersigned,
enforceable against the undersigned in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors generally and
the availability of equitable remedies.
(b) Accredited Investor. The undersigned is aware of what
constitutes an Accredited Investor as that term is defined under Regulation D
promulgated under the Securities Act of 1933, as amended (the "Act"), and under
the laws, if any, of each state governing the undersigned, and the undersigned
is an Accredited Investor for purposes of Regulation D and the laws, if any, of
the state governing the undersigned. The undersigned is able to bear the
economic risks of this investment and, consequently, without limiting the
generality of the
foregoing, is able to hold the Convertible Note and the shares of Common Stock
issuable upon conversion of the Convertible Note and the shares of Common Stock
issuable upon exercise of the Warrant to be issued on the conversion of the
Convertible Note (the "Shares") for an indefinite period of time and has a
sufficient net worth to sustain a loss of its entire investment in the Company
in the event such loss should occur.
In addition, the undersigned meets at least one of the following
criteria (please check where applicable):
(A) A natural person and has, or with his or her spouse jointly
has, and the undersigned and his or her spouse will have at
the time of purchase of the Shares, a net worth (i.e., total
assets in excess of total liabilities) in excess of
$1,000,000;
(B) A natural person and has had an individual annual income
(exclusive of his or her spouse's income, regardless of
whether this is a joint investment with such spouse) in excess
of $200,000 in each of the two most recent years or joint
income with his or her spouse in excess of $300,000 in each of
those years, and the undersigned has a reasonable expectation
of reaching the same income level in the current year. For
this purpose, a person's income is the amount of his
individual adjusted gross income (as reported on a federal
income tax return), increased by the following amounts: (a)
any deduction for depletion (Section 611 et seq. of the
Internal Revenue -- --- Code of 1986, as amended (the
"Code")), (b) any deduction for a portion of long-term capital
gains (Section 1202 of the Code), (c) any exclusion for
interest on tax exempt municipal obligations (Section 103 of
the Code); and (c) any losses of a partnership or limited
liability company allocated to the individual (as reported on
Schedule E of Form 1040);
(C) A bank as defined in Section 3(a)(2) of the Act or any savings
and loan association or other institution as defined in
Section 3(a)(5)(A) of the Act, whether acting in an individual
or fiduciary capacity;
(D) A broker or dealer registered pursuant to the Securities
Exchange Act of 1934;
(E) An insurance company as defined in Section 2(13) of the Act;
(F) An investment company registered under the Investment Company
Act of 1940 (the "1940 Act");
(G) A business development company as defined in Section 2(a)(48)
of the 1940 Act;
(H) A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958;
(I) An employee benefit plan within the meaning of Title I of the
Employment Retirement Income Security Act of 1974 ("ERISA"),
and either (i) the investment
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decision with respect to this subscription is to be made by a
plan fiduciary, as defined in Section 3(21) of ERISA, which is
either a bank, savings and loan association, an insurance
company, or a registered investment adviser, or (ii) the
employee benefit plan has total assets in excess of $5,000,000
or (iii) if a self-directed plan, investment decisions are
made solely by Accredited Investors;
(J) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(K) A corporation, Massachusetts or similar business trust, a
partnership or an organization described in Section 501(c)(3)
of the Internal Revenue Code, not formed for the specific
purpose of acquiring the Shares, with total assets in excess
of $5,000,000;
(L) A trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Convertible Note and
the Shares, which acquisition is directed by a sophisticated
person as described in Rule 506(b)(2)(ii) of Regulation D
promulgated under the Act; or
(M) An entity in which all of the equity owners qualify as
"Accredited Investors."
(c) Evaluation of Risks. The undersigned has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of, and bearing the economic risks entailed by, an investment
in the Company and of protecting its interests in connection with this
transaction. The undersigned recognizes that its investment in the Company
involves a high degree of risk and that the Company is dependent upon this
private placement to continue its operations.
(d) High Degree of Risk. The undersigned acknowledges that an
investment in the Convertible Note and the Shares is a speculative investment
and involves a high degree of risk, and that the Company makes no assurances
whatever concerning the present or prospective value of the Convertible Note or
the Shares. The undersigned understands that the price of the Convertible Note
has been arbitrarily determined by the Company and bears no relationship to its
assets, earnings, book value or other accepted criteria of value.
(e) Due Diligence. The undersigned has received a copy of such
documents relating to the Company as requested by the undersigned (collectively,
the "Documents"), has carefully reviewed such Documents, has had the opportunity
to obtain any additional information necessary to verify the accuracy of the
information contained in such Documents and has been given the opportunity to
meet with representatives of the Company and to have them answer any questions
and provide any additional information regarding the terms and conditions of
this particular investment deemed relevant by the undersigned, and all such
questions have been answered and requested information provided to the
undersigned's full satisfaction. In making its decision to purchase the
Convertible Note and the Shares, the undersigned has relied solely upon its
review of the Documents referred to above, this agreement and independent
investigations made by it or its representatives.
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(f) Independent Counsel. The undersigned acknowledges that it has
been advised to consult with its own attorney regarding legal matters concerning
the Company and to consult with its tax advisor regarding the tax consequences
of acquiring the Convertible Note and the Shares. Xxxxxx Xxxxxx LLP is counsel
to the Company in the transactions contemplated hereby and herein.
(g) No Distribution. The undersigned is acquiring the Convertible
Note and the Shares for its own account for investment and not with a view to or
for resale in connection with any distribution of the Shares. It has not offered
or sold any portion of the Convertible Note or the Shares and has no present
intention of dividing the Convertible Note or the Shares with others or of
selling, distributing or otherwise disposing of any portion of the Convertible
Note or the Shares either currently or after the passage of a fixed or
determinable period of time or upon the occurrence or non-occurrence of any
predetermined event or circumstance.
(h) No Registration. The undersigned understands that the sale of
the Shares has not been registered under the Act in reliance upon an exemption
therefrom for non-public or limited offerings. The undersigned understands that
the Shares must be held indefinitely unless the sale or other transfer thereof
is subsequently registered under the Act or an exemption from such registration
is available at that time.
(i) Registration Rights. The undersigned shall have piggy-back
registration rights with respect to the Shares then held by the undersigned. The
Company agrees to file a registration statement to register the Shares within
thirty (30) days after the date the Company accepts this subscription (the
"Closing Date"). The Company shall respond to comments of the Securities and
Exchange Commission ("SEC") within five (5) business days of receipt of said
comments and will use its reasonable best efforts to cause the registration
statement to be declared effective by the SEC within ninety (90) days from the
Closing Date. The Company shall keep the registration statement continuously
effective through November 19, 2001, and shall cause the related prospectus to
be amended or supplemented by a required prospectus supplement pursuant to Rule
424 under the Securities Act of 1933, as amended. If the registration statement
is not filed within 30 days of the issuance of the Convertible Note or if the
registration statement is not declared effective with respect to the Shares
within 120 days of the issuance of the Convertible Note (each such failure being
referred to as an "Event"), the Maker shall pay as liquidated damages and not as
a penalty to the Holder an amount equal to 2% of the purchase price of the
Convertible Note for each 30-day period until the applicable Event has been
cured. The amount of the liquidated damages shall be prorated on a daily basis
for periods less than 30 days. The liquidated damages shall be paid within five
(5) business days of the end of each month during which the Event has occurred
and is continuing.
(j) Additional Transfer Restrictions. The undersigned understands
and agrees that, in addition to the restrictions set forth in this agreement,
the following restrictions and limitations are applicable to its purchase of the
Convertible Note and any resales, pledges, hypothecations or other transfers of
the Shares:
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(i) The following legend reflecting all applicable restrictions will
be placed on any certificate(s) or other document(s) evidencing the Warrants or
the Shares and the undersigned must comply with the terms and conditions set
forth in such legends prior to any resales, pledges, hypothecations or other
transfers of the Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED AND MAY NOT BE TRANSFERRED UNLESS (A) THE SHAREHOLDER
WISHING TO TRANSFER SUCH SECURITIES PROVIDES AN OPINION OF COUNSEL
REASONABLY CONCURRED IN BY COUNSEL FOR TRINITY MEDICAL GROUP USA, INC.
(THE "COMPANY") STATING THAT THE PROPOSED TRANSFER OF THE COMPANY'S
SECURITIES IS EXEMPT FROM THE REGISTRATION PROVISIONS OF ALL APPLICABLE
FEDERAL AND STATE LAWS; OR (B) SAID SECURITIES HAVE BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED."
(ii) Stop transfer instructions have been or will be placed on
any certificates or other documents evidencing the Warrants or the
Shares so as to restrict the resale, pledge, hypothecation or other
transfer thereof in accordance with the provisions hereof.
(k) No Advertisements. The undersigned is not subscribing for the
Convertible Note or the Shares as a result of or subsequent to any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
presented at any seminar or meeting.
(l) Capacity. The undersigned, if an individual, has reached the age of
majority in the state in which the undersigned resides, has adequate means of
providing for the undersigned's current financial needs and contingencies, is
able to bear the substantial economic risks of an investment in the Convertible
Note and the Shares for an indefinite period of time, has no need for liquidity
in such investment, and, at the present time, could afford a complete loss of
such investment.
(m) Indemnity. The undersigned shall indemnify and hold harmless the
Company and each officer, director or control person of the Company, who is or
may be a party or is or may be threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of or arising from any actual or
alleged misrepresentation or misstatement of facts or omission to represent or
state facts made or alleged to have been made by the undersigned to the Company,
or omitted or alleged to have been omitted by the undersigned, concerning the
undersigned, or its authority to invest or financial position in connection with
the offering or sale of the Convertible Note or the Shares, including, without
limitation, any such misrepresentation, misstatement or omission contained
herein or any other document submitted by the undersigned, against losses,
liabilities and expenses for which the Company, or any officer, director or
control person of the Company has not otherwise been reimbursed (including
attorneys' fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by the Company or such officer, director or control person
in connection with such action, suit or proceeding. In connection with this
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indemnity, the undersigned represents that all of the information provided
herein by the undersigned is true, complete and correct in all respects.
(n) Legends. The undersigned acknowledges that it has reviewed the
following legends:
PURCHASE OF THE SECURITIES INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE
CONSIDERED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN A TOTAL LOSS OF THEIR
INVESTMENT.
THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED FOR SALE TO THE
PUBLIC UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY OTHER
SECURITIES LAWS, AND WILL BE OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF SUCH LAWS. CONSEQUENTLY, THE SECURITIES MAY NOT BE
OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR DELIVERED BY ANY INVESTOR EXCEPT, IN
THE OPINION OF COUNSEL FOR OR SATISFACTORY TO THE COMPANY, PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH
APPLICABLE STATE OR OTHER SECURITIES LAWS. THE SECURITIES WILL BEAR A
RESTRICTIVE LEGEND TO THE FOREGOING EFFECT, AND EACH INVESTOR MUST SIGN AN
INVESTMENT REPRESENTATION CONSISTENT WITH THE FOREGOING.
THERE IS CURRENTLY NO PUBLIC OR OTHER MARKET FOR THE SECURITIES AND
THERE CAN BE NO ASSURANCE THAT A PUBLIC OR OTHER MARKET WILL DEVELOP. INVESTORS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISK OF THE
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
(o) Residence. The undersigned (check below if applicable):
|_| is not a "U.S. person," as such term is defined in Regulation S
promulgated under the Act.
|_| is not acquiring the Shares for the account of any U.S. person.
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Purchaser Co-Owner
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|_| |_| (i) I am a United States citizen or resident of
the United States for federal income tax
purposes.
|_| |_| (ii) I am neither a United States citizen nor a
resident of the United States for United
States federal income tax purposes.
3. ALL INFORMATION CONTAINED IN THIS AGREEMENT WILL BE TREATED
CONFIDENTIALLY. However, the undersigned agrees that the Company may present
this agreement to such parties as the Company deems appropriate if called upon
to establish that the proposed offer and sale of the Convertible Note and the
Shares is exempt from registration under the Act or meets the requirements of
applicable state securities law.
4. The undersigned will notify the Company immediately of any material
change in any representation made or any statement made in this agreement that
occurs prior to the closing of the sale of the Convertible Note. The
representations, warranties and covenants of the undersigned shall survive the
closing of the sale of the Convertible Note. The undersigned understands and
acknowledges that the Company is relying upon such information provided in this
agreement to determine that the exemption from the registration provisions of
the Act for non-public offerings is applicable to the offer and sale of the
Convertible Note.
5. Subscription and Method of Payment. (a) The undersigned shall (i)
deliver to Xxxxxx Xxxxxx LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn: Xxxxxxxxxxx X. Xxxxxxx the executed agreement by
overnight courier or facsimile (with original to follow by overnight courier)
and (ii) deliver to the Company the amount set forth on page 11 of this
agreement as the purchase price for the Convertible Note (the "Purchase Price")
by check payable to the Company or by wire transfer of immediately available
funds to the account specified by the Company.
(b) Promptly upon receipt of the funds and documents required so to
be delivered and upon acceptance by the Company of the undersigned's offer to
subscribe for the shares, the Company shall deliver the Convertible Note to the
undersigned registered in the name of the undersigned (or, if the undersigned
shall have a nominee, registered in the name of such nominee). If the Company
does not accept the undersigned's offer to subscribe for the Convertible Note,
the Company shall return the Purchase Price to the undersigned without interest.
6. The undersigned shall not, directly or indirectly, whether
voluntarily, by operation of law, upon death or otherwise, sell, pledge,
mortgage, hypothecate, give, bequeath, transfer, create a security interest in
or lien on, place in trust (voting or otherwise), assign or in any other way
whatsoever encumber or dispose of, any of the Shares (or any interest therein),
or the stock certificate or certificates representing Shares.
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7. Miscellaneous.
(a) The undersigned agrees not to transfer or assign this agreement,
the Convertible Note or the Shares or any of the undersigned's interest herein,
and further agrees that the transfer or assignment of this agreement, the
Convertible Note or the Shares shall be made only upon approval of the Company
and in accordance with all applicable laws.
(b) This agreement constitutes the entire agreement between the
undersigned and the Company with respect to the subject matter hereof. This
agreement may be amended only by a writing executed by both of them.
(c) This agreement shall be enforced, and construed in accordance
with the laws of the State of New York, without regard to the principles of
conflicts of laws thereof. Each of the parties hereto hereby irrevocably
consents and submits to the exclusive jurisdiction of the United States District
Court for the Southern District of New York in connection with any proceeding
arising out of or relating to this agreement or the transactions contemplated
hereby, waives any objection to venue in such District (unless such court lacks
jurisdiction with respect to such proceeding, in which case, each of the parties
hereto irrevocably consents to the jurisdiction of the courts of the State of
New York in connection with such proceeding and waives any objection to venue in
New York County, State of New York), and agrees that service of any summons,
complaint, notice or other process relating to such proceeding may be effected
in the manner provided by clause (d) of this paragraph 7. All of the fees and
expenses of such proceeding, together with all reasonable attorney's and
accountant's fees and expenses of each party hereto in connection therewith,
shall be borne by the losing party or parties, or as allocated by the court.
(d) Any notice, demand, request or other communication which is
required, called for or contemplated to be given or made hereunder to or upon
any party hereto shall be deemed to have been duly given or made for all
purposes if (a) in writing and sent by (i) messenger or an overnight courier
service for next day delivery with receipt therefor, or (ii) certified or
registered mail, postage paid, return receipt requested, or (b) sent by
telegram, facsimile transmission or similar electronic means, with a written
copy thereof sent on the same day by postage paid first-class mail, to such
party at the following address:
To the undersigned at:
RoyCap Inc.
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Xxxxxxx Xxxxx
Telecopier No.: (000) 000-0000
-8-
with a copy to:
Fogler Xxxxxxxx LLP
00 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx Xxxx
Telecopier No.: (000) 000-0000
To the Company at:
Trinity Medical Group USA, Inc.
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxx, Chief Executive Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
or such other address as either party hereto may at any time, or from time to
time, direct by notice given to the other party in accordance with this section.
The date of giving or making of any such notice or demand shall be, in the case
of clause (a)(i), the date of the receipt; in the case of clause (a)(ii), five
(5) business days after such notice or demand is sent; and, in the case of
clause (b), the business day next following the date such notice or demand is
sent.
(e) This agreement may be executed in counterparts. In the event
that any provision of this agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this agreement
shall continue in full force and effect without said provision.
(f) Except as otherwise provided herein, no amendment of this
agreement shall be valid or effective, unless in writing and signing by or on
behalf of the parties hereto.
(g) No course of dealing or omission or delay on the part of either
party hereto in asserting or exercising any right hereunder shall constitute or
operate as a waiver of any such right. No waiver of any provision hereof shall
be effective, unless in writing and signed by or on behalf of the party to be
charged therewith. No waiver shall be deemed a continuing waiver or waiver in
respect of any other or subsequent breach or default, unless expressly so stated
in writing.
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(h) The provisions hereof are severable and in the event that any
provision of this agreement shall be determined to be invalid or unenforceable
in any respect by a court of competent jurisdiction, the remaining provisions
hereof shall not be affected, but shall, subject to the discretion of such
court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.
(i) Each party hereto covenants and agrees promptly to execute,
deliver, file or record such agreements, instruments, certificates and other
documents and to perform such other and further acts as the other party hereto
may reasonably request or as may otherwise be necessary or proper to consummate
and perfect the transactions contemplated hereby.
(j) This agreement, and each right, interest and obligation
hereunder, may not be assigned by either party hereto without the prior written
consent of the other party hereto, and any purported assignment without such
consent shall be void and without effect.
(k) The section and other headings contained in this agreement are
for convenience of reference only and do not in any way define or interpret the
intent of the parties or modify or otherwise affect any of the provisions
hereof.
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SUBSCRIBER INFORMATION
Please print here the exact name in which the investor desires go to
have the Shares registered (must be beneficial owner).
RoyCap, Inc.
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All correspondence relating to the undersigned's investment
should be sent (check one):
|X| (i) to the address of the undersigned set forth on the
signature page hereof
|_| (ii) to the following address:
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The undersigned may be contacted by telephone at the
following telephone number(s):
(i) Home Telephone ( - )_______________________
(ii) Business Telephone (000) 000-0000
Amount of Convertible Note: $ 500,000
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SIGNATURE PAGE
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FOR CORPORATE INVESTORS
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The undersigned, by executing this signature page, hereby swears to,
adopts and agrees to all terms, conditions, representations, warranties and
covenants contained in this Subscription Agreement of which this signature page
is a part.
Note: The officer authorized to bind the corporation must sign.
RoyCap, Inc.
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Name of Corporation (please print or type)
By: /s/ Xxxxxxx Xxxxx
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(Signature of authorized agent)
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Taxpayer Identification Number
Title: President
-------------------------------------------------------------------------
Address of Principal
Corporate Offices: 0000 Xxxxx Xx.
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Suite 504
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Toronto, ONT. CANADA X0X 0X0
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Mailing Address, if different:
---------------------------------------------
---------------------------------------------
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State of Incorporation: Ontario, CANADA
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Executed at Xxxxxxx, Xxxxxxx this 19th day of October, 2000.
City State
SUBSCRIPTION ACCEPTED:
TRINITY MEDICAL GROUP USA, INC.
By:/s/ Xxxxx Xxxxxxx, CEO
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Name:
Title:
Date:October 19, 2000
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