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EXHIBIT 10.13
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT is made by and between Raptor
Networks
Technology, Inc., a Colorado
corporation (the "Company") and
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(the "Investor") (the
Company and the Investor may
be referred to collectively as the "Parties").
In connection with the offering by the Company of up to $600,000 of
8%
Convertible Notes of the
Company (the "Notes"), issuable at $50,000 per Note,
the Parties hereto agree as
follows:
ARTICLE 1
THE SECURITIES
SECTION 1.01. THE SECURITIES.
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The securities subscribed for hereby consist of ten of the
Company's
Notes. The Note shall be in
substantially the form attached hereto, the terms of
which are hereby incorporated
herein as if such Note were fully set forth
herein.
SECTION 1.02. LEGENDS; REGISTRATION UNDER THE
SECURITIES ACT OF 1933.
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As of the date of this Agreement, neither the Notes nor the shares
of
common stock of the Company
into which the Notes may be converted (the "Note
Shares") have been registered
under the Securities Act of 1933, as amended (the
"Act"). Each of the Notes and
the Note Shares shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT
BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii)
TO
THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY
SIMILAR
RULE UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES),
OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT
AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE
STATE
LAW IS AVAILABLE.
This offering is not a public offering and is intended to be
made
pursuant to Section 4(2) of
the Act and Regulation D as promulgated by the
Securities and Exchange
Commission ("SEC") under the Act. This offering is also
intended to be exempt from
the registration requirements of various state
securities laws as may be
applicable.
SECTION 1.03. CLOSING DATE.
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The purchase and
sale of the Notes will take place at one or more
closings
(each referred
to herein as the "Closing") at the offices of the Company
at
a time and date
as soon as practicable after all the conditions set
forth
in Articles III
and IV hereof have been satisfied (each, a "Closing
Date"),
or at such other
location as the Investor and the Company shall agree.
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SECTION 1.04. DELIVERY.
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At the Closing, the Company shall deliver to the Investor the
Notes
that each Investor is
purchasing against payment of the purchase price
therefor
by check, wire transfer, or
such other form of payment as shall be mutually
agreed upon by such Investor
and the Company. At the Closing, the Company shall
also deliver to the Investor
a fully executed copy of the Subscription Agreement
and any related closing
documents.
SECTION 1.05. EXPENSES.
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Irrespective of whether the Closing is effected, the Company shall
pay
all costs and expenses that
it incurs with respect to the negotiation,
execution, delivery, and
performance of this Agreement and the transactions
contemplated hereby,
including without limitation, the cost of any required
filings under the Act or any
applicable state "blue sky" laws, rules and
regulations.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. INVESTOR REPRESENTATIONS AND
WARRANTIES.
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The Investor makes each and every one of the representations
and
warranties set forth in the
document entitled Investor Representations and
Warranties Agreement attached
hereto and incorporated herein by this reference
as if such document were set
forth herein in its entirety.
SECTION 2.02. COMPANY REPRESENTATIONS AND
WARRANTIES.
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The Company hereby represents, warrants and covenants to the
Investor
as follows:
(a) The Company has been duly organized and
is validly existing as a corporation in good standing
under
the laws of its state of incorporation. The Company has
one
wholly-owned operating subsidiary, Raptor Networks
Technology,
Inc., a California corporation. The Company is duly
qualified
or licensed and in good standing as a foreign corporation
in
each jurisdiction in which its ownership or leasing of
any
properties or the character of its operations requires
such
qualification or licensing and where failure to so
qualify
would have a material effect on the Company. The Company
has
all requisite corporate power and authority, and all
material
and necessary authorizations, approvals, orders,
licenses,
certificates and permits of and from all governmental
regulatory officials and bodies to own or lease its
properties
and conduct its businesses as described in the
Disclosure
Documents (as hereinafter defined) and the Company is
doing
business in compliance with all such authorizations,
approvals, orders, licenses, certificates and permits and
all
federal, state and local laws, rules and regulations
concerning the business in which it is engaged except
where
the
failure so to do business in compliance would not have a
material adverse effect on the business of the Company.
The
disclosures herein and in the Disclosure Documents
concerning
the effects of federal, state and local regulation on
the
Company's business as currently conducted and as
contemplated
are correct in all material respects and do not omit to
state
a material fact. The Company has all corporate power and
authority to enter into this Agreement and the Notes and
to
carry out the provisions and conditions hereof and
thereof,
and all consents, authorizations, approvals and orders
required in connection herewith and therewith have been
obtained or will have been obtained prior to the Closing
Date.
No consent, authorization or order of, and no filing with,
any
court, government agency or other body is required for
the
issuance of the Notes or any securities issuable in respect
of
the Notes pursuant to this Agreement except with respect
to
applicable federal and state securities laws.
(b) The authorized capital and the issued
and outstanding securities of the Company are as set forth
in
the Company's latest annual report on Form 10-KSB for
the
fiscal year ended December 31, 2003 and all of the reports
and
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documents filed pursuant to Sections 13(a), 13(c), 14
and
15(d) of the Securities Exchange Act of 1934 (the
"Exchange
Act") since the end of the Company's fiscal year ended
December 31, 2003 (collectively, the "Disclosure
Documents"),
all of which are incorporated herein by this reference as
if
such documents were set forth herein in their entirety.
Except
as described in the Disclosure Documents and except for
the
transactions contemplated by this Agreement and the Notes
and
except for the Company's proposed private offering from
which
the Notes shall be repaid, there are (A) no outstanding
warrants, options or rights to subscribe for or purchase
any
capital stock or other securities from the Company, (B)
no
voting trusts or voting agreements among, or irrevocable
proxies executed by, stockholders of the Company, (C) no
existing rights of stockholders to require the Company
to
register any securities of the Company or to participate
with
the Company in any registration by the Company of its
securities, and (D) no agreements among stockholders
providing
for the purchase or sale of the Company's capital stock.
(c) This Agreement and the attachments
hereto have been duly and validly authorized, executed
and
delivered by the Company and are valid and binding
agreements
of the Company, enforceable in accordance with their
respective terms, except to the extent that the
enforceability
hereof or thereof may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or similar laws
from
time to time in effect and affecting the rights of
creditors
generally, (B) limitations upon the power of a court to
grant
specific performance or any other equitable remedy, or (C)
a
finding by a court of competent jurisdiction that the
indemnification provisions herein are in violation of
public
policy. The shares of common stock issuable upon conversion
of
the Notes (the "Note Shares") have been duly authorized
and,
when issued in accordance with the conversion of the
Notes,
will be validly issued, fully paid and non-assessable;
the
holders thereof are not and will not be subject to
personal
liability solely by reason of being such holders; other
than
as described herein, the Notes and the Note Shares are not
and
will not be subject to the preemptive rights of any
stockholder of the Company; and all corporate action
required
to be taken for the authorization, issuance and sale of
the
Notes and the Note Shares has been duly and validly taken
by
the Company.
(d) With the exception of two pieces of
testing equipment which are being leased towards purchase
and
upon
which the lessor maintains a security interest, the
Company has good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and
personal property owned or leased by it, free and clear of
all
liens, claims, encumbrances, security interests and defects
of
any material nature whatsoever.
(e) There is no litigation or governmental
proceeding pending or threatened against, or involving
the
properties or business of, the Company which might
materially
adversely affect the value or the operation of the
properties
or the business of the Company, except as set forth in
the
Disclosure Documents.
(f) The financial statements of the Company
contained in the Disclosure Documents fairly present the
financial position and the results of operations of the
Company at the dates and for the periods to which they
apply;
and such financial statements have been prepared in
conformity
with generally accepted accounting principles,
consistently
applied throughout the periods involved.
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(g) There has been no material adverse
change in the condition or prospects for commercialization
of
the Company, financial or otherwise, as of the latest dates
as
of which such condition or prospects, respectively, are
set
forth in this Agreement and the Disclosure Documents; and
the
outstanding debt, the property and the business of the
Company
each conforms in all material respects to the
descriptions
thereof contained herein and therein.
(h) The Notes and the Note Shares conform in
all respects to all statements in relation thereto
contained
herein or in the Notes or the Disclosure Documents.
(i) The
Company is not in violation of its
Articles of Incorporation or Bylaws. Neither the execution
and
delivery of this Agreement or the Notes, nor the issuance
of
the Notes or the Note Shares upon conversion of the Notes,
nor
the consummation of any of the transactions contemplated
herein or in the Notes, nor the compliance by the Company
with
the terms and provisions contained herein, or in the
Notes,
has conflicted with or will conflict with, or has resulted
in
or will result in a breach of, any of the terms and
provisions
of, or has constituted or will constitute a default under,
or
has resulted in or will result in the creation or
imposition
of any lien, charge or encumbrance upon any property or
assets
of the Company pursuant to the terms of any indenture,
mortgage, deed of trust, note, loan or credit agreement or
any
other agreement or instrument evidencing an obligation
for
borrowed money, or any other agreement or instrument to
which
the Company is subject; nor will such action result in
any
violation of the provisions of the Articles of
Incorporation
or the Bylaws of the Company, or any statute or any
order,
rule or regulation applicable to the Company of any court
or
of any federal, state or other regulatory authority or
other
government body having jurisdiction over the Company;
except
for any conflict, breach, default, lien, charge or
encumbrance
which does not have a material and adverse effect on the
Company, any of its business, property or assets, or any
transactions contemplated hereby or by the Notes.
(j) All taxes which are due and payable from
the Company have been paid in full, and the Company does
not
have any material tax deficiency or claim outstanding,
assessed or proposed against it.
(k) Subsequent to the dates as of which
information is given in this Agreement or the Disclosure
Documents, and except as may otherwise be indicated or
contemplated herein or therein, the Company has not (A)
issued
any securities or incurred any liability or obligation,
direct
or contingent, for borrowed money, in excess of $20,000 in
the
aggregate, or (B) entered into any transaction other than
in
the ordinary course of business, or (C) declared or paid
any
dividend or made any other distribution on or in respect
of
its capital stock. The Investor acknowledges that the
Company
is planning on conducting financing activities in the
near
future which will result in the issuance of securities of
the
Company to third parties.
(l) The Company owns or possesses, free and
clear of all liens or encumbrances and rights thereto or
therein by third parties, the requisite licenses or
other
rights to use all trademarks, service marks, copyrights,
service names, trade names, patents, patents applications
and
licenses necessary to conduct and material to its
business
(including, without limitation any such licenses or
rights
described herein as being owned or possessed by the
Company),
and there is no material claim or action by any person
pertaining to, or proceeding, pending or threatened,
which
challenges the exclusive rights of the Company with respect
to
any trademarks, service marks, copyrights, service
names,
trade names,
