Exhibit 10.1
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
SUBSCRIPTION AGREEMENT
("Agreement")
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. SUBSCRIBER
SHOULD BE AWARE THAT SUBSCRIBER MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND
SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF SAID ACT AND SUCH LAWS. THE SECURITIES SUBSCRIBED FOR BY
THIS AGREEMENT HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE
SECURITIES OFFERED BY THE COMPANY. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
Guardian
Technologies International, Inc.
516 Herndon
Parkway
Suite A
Herndon,
Virginia 20170
[For purchase of units of securities]
Ladies and
Gentlemen:
The undersigned (the "Subscriber") desires to
subscribe for and purchase units of securities
(“Units”), each unit consisting of 142,857 shares of
common stock, $.001 par value per share (the “Common
Stock”) and a Class H Common Stock Purchase Warrant to
purchase 214,285 shares of Common Stock (the “Class H
Warrant”) to be issued by Guardian Technologies
International, Inc., a Delaware corporation (the "Company”)
upon the terms set forth in the Confidential Investor Term Sheet
attached hereto as Exhibit A (the “Confidential Investor Term
Sheet”). Accordingly, the Subscriber hereby agrees as
follows:
1.
Subscription . The Subscriber hereby
subscribes for and agrees to purchase from the Company the number
of Units to be issued by the Company, as set forth on the Signature
Page attached to this Agreement, in consideration of the
subscription amount set forth on the Signature Page.
2.
Purchase Procedure . The Subscriber
acknowledges that, in order to subscribe for the Units, Subscriber
must, and Subscriber does hereby, deliver to the Company:
2.1
One (1) executed counterpart of the Signature Page
attached to this Agreement together with appropriate notarization;
and
2.2
A check, subject to collection, in the amount set
forth on the Signature Page representing payment in full for the
Units desired to be purchased hereunder, made payable to the order
of “Guardian Technologies International, Inc.,” or
shall cause a wire transfer of immediately available United
States’
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funds in favor of “Guardian Technologies
International, Inc.” for such amount in accordance with
wire transfer instructions to be furnished by the Company.
2.3
An executed copy of a Confidential Purchaser
Questionnaire.
3.
Representations of Subscriber . By
executing this Agreement, the Subscriber makes the following
representations, declarations and warranties to the Company, with
the intent and understanding that the Company will rely
thereon:
3.1
The Subscriber has all requisite power and
authority to enter into this Agreement, and to carry out the
provisions hereof.
3.2
The Subscriber represents that the Subscriber
satisfies the definition of “accredited investor” as
set forth in Rule 501(a) of Regulation D (“Regulation
D”) under the Securities Act of 1933, as amended (the
“Securities Act”) (a copy of such definition is set
forth in Appendix A attached hereto). As specifically disclosed by
the undersigned Subscriber in the Confidential Purchaser
Questionnaire executed and delivered to the Company herewith and
incorporated herein by this reference.
3.3
The Subscriber understands that (i) the Common
Stock, the Warrants, and the shares of Common Stock of the Company
underlying the Warrants (collectively, the
“Securities”) have not been registered under the
Securities Act or any applicable state securities law, (ii)
Subscriber cannot sell any Securities unless they are registered
under the Securities Act and any applicable state or foreign
securities laws or unless exemptions from such registration
requirements are available, (iii) a legend will be placed on the
certificates evidencing the Securities, stating that the Securities
have not been registered under the Securities Act and setting forth
or referring to the restrictions on transferability and sales
thereof, (iv) the Company will place stop transfer instructions
against the Securities, and (v) the Company has no obligation to
register the Securities or assist the Subscriber in obtaining an
exemption from the various registration requirements.
3.4
The Subscriber (i) is acquiring the Securities
solely for the Subscriber's own account for investment purposes
only and not with a view toward resale or distribution, either in
whole or in part; (ii) has no contract, undertaking, agreement or
other arrangement, in existence or contemplated, to sell, pledge,
assign or otherwise transfer the Securities, to any other person;
and (iii) agrees not to sell, assign, encumber or transfer all or
any part of the Securities (except a transfer upon his death,
incapacity or bankruptcy or a transfer without consideration to his
spouse and/or children and/or a trust for the benefit of such
family members) until such securities are subsequently registered
under the Securities Act and any applicable state securities laws
or unless an exemption from any such registration is available as
evidenced by an opinion of counsel acceptable to the Company to the
effect that such transfer or assignment (i) may be effected without
registration of the Securities under the Securities Act; and (ii)
does not violate any applicable Federal or state securities
laws.
3.5
The Subscriber represents that the Company has made
available to Subscriber all information which Subscriber deemed
material to making an informed investment decision in connection
with his purchase of the Securities. The Subscriber acknowledges
that the Subscriber has received and carefully read in their
entirety (i) this Subscription Agreement, and all information
necessary to verify the accuracy and completeness of the Company's
representations, warranties and covenants made herein; (ii) the
Confidential Investor Term Sheet; (iii) the form of Class H Common
Stock Purchase Warrant Agreement attached hereto as Exhibit B; (iv)
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2006, the Company’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2007, and the
Company’s Current Reports on Form 8-K filed with the
Securities and Exchange Commission (“SEC”) on July 12,
2007, July 24, 2007, August 7, 2007, August 17, 2007,
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September 12, 2007, September 18, 2007, October
10, 2007, and October 19, 2007, as amended; and (vi) written (or
verbal) answers to all questions the Subscriber submitted to the
Company regarding an investment in the Company; and the
Subscriber has relied on the information contained therein and
has not been furnished with any other documents, offering
literature, memorandum or prospectus. The Subscriber
acknowledges that the Company has made available to the
Subscriber the opportunity to ask questions of, and receive
answers from the Company, its officers, directors and other
persons acting on its behalf, including Mr. William J. Donovan,
President and Chief Operating Officer of the Company, 516
Herndon Parkway, Herndon, Virginia 20170, concerning the terms
and conditions of the Subscriber’s purchase and to obtain
any additional information, to the extent the Company possesses
such information or can acquire it without unreasonable effort
or expense, necessary to verify the accuracy of the information
disclosed to the Subscriber. The Subscriber represents
that no statement, printed material or inducement was given or
made by the Company or anyone on its behalf which is contrary to
the information disclosed to the Subscriber.
3.6
The Subscriber is in a position regarding the
Company, which, based upon employment, family relationship or
economic bargaining power, enabled and enables the Subscriber to
obtain information from the Company in order to evaluate the merits
and risks of this investment.
3.7
The Subscriber understands that an investment in
the Securities involves substantial risks and Subscriber recognizes
and understands the risks relating to the purchase of the
Securities, including those risks disclosed by the Company under
Part I, Item 1A of the Company’s Form 10-K for the year ended
December 31, 2006, and under Part II, Item 1A of the
Company’s Form 10-Q for the quarter ended September 30,
2007.
3.8
The Subscriber has such knowledge and experience in
financial and business matters that the Subscriber is capable of
evaluating the merits and risks of an investment in the
Company.
3.9
The Subscriber understands that (i) the offering
contemplated hereby has not been reviewed by any Federal, state or
other governmental body or agency; (ii) if required by the laws or
regulations of said state(s) or other jurisdiction the offering
contemplated hereby will be submitted to the appropriate
authorities of such state(s) or other jurisdiction for registration
or exemption therefrom; and (iii) subscription documents used in
connection with this offering have not been reviewed or approved by
any regulatory agency or government department, nor has any such
agency or government department made any finding or determination
as to the fairness of the Securities for investment.
3.10
The Subscriber is aware that the Securities have
not been registered under the Act. While the Company’s Common
Stock is quoted on the OTC Bulletin Board, the market for its
shares of Common Stock is limited and/or illiquid. Subscriber
understands that there is no market for the Company’s Class H
Warrants and none is expected to develop. The Subscriber has
adequate means of providing for the Subscriber's current needs and
personal and family contingencies, has no need for liquidity in the
investment contemplated hereby, and is able to bear the risk of
loss of his entire investment.
3.11
The Subscriber (a) is a citizen or resident of the
state of residence shown on the Agreement’s Subscriber
Signature Page; (ii) if a natural person, is at least 21 years of
age; (iii) has adequate means of providing for his or its current
needs and personal contingencies; (iv) has no need for liquidity in
his or its investment in the Securities; and (v) maintains his or
its domicile (and is not a transient or temporary resident) at the
address shown below.
3.12
All information that the Subscriber has provided
the Company concerning the Subscriber, the Subscriber's financial
position and the Subscriber's knowledge of financial and business
matters is
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correct and complete as of the date hereof.
The Subscriber agrees that financial and other information
concerning the Subscriber may be disclosed by the Company to any
persons or entities that may enter into a transaction with the
Company. The Subscriber further agrees, if requested by
the Company or its authorized representative, to provide bank
references or other confirming information concerning the
Subscriber's financial information as may be reasonably
requested by the Company.
3.13
The Subscriber is familiar with the nature and
extent of the risks inherent in investments in unregistered
securities and in the business in which the Company is engaged and
intends to engage and recognizes and understands all of the risks
relating to the purchase of the securities and has determined that
an investment in the Company is consistent with the Subscriber's
investment objectives and income prospects.
3.14
The Subscriber understands that the total amount of
funds tendered to purchase the Securities are unsecured and are
placed at the risk of the business and may be completely lost.
Subscriber has read the Company’s filings with the SEC
under the Securities Exchange Act of 1934, as amended, including,
but not limited to, the description of the risk factors applicable
to the Company and its businesses set forth therein.
3.15
The Subscriber’s overall commitment to
investments including the Subscriber’s investment in the
Company that are not readily marketable is not disproportionate to
the Subscriber’s net worth, and the Subscriber’s
investment in the securities described herein will not cause such
overall commitment to become excessive. The Subscriber understands
that the statutory basis on which such Securities are being
offered, sold and/or issued to the Subscriber would not be
available if the Subscriber’s present intention were to hold
such securities for a fixed period of time or until the occurrence
of a certain event. The Subscriber realizes that, in the view of
the SEC, a purchase of such securities now, with a present
intention to resell by reason of a foreseeable specific contingency
or any anticipated change in the market value of such securities,
or in the condition of the Company or that of the industry in which
the business of the Company is engaged or in connection with a
contemplated liquidation, or settlement of any loan obtained by the
Subscriber for the acquisition of such securities, and for which
such securities may be pledged as a security or as donations to
religious or charitable institutions for the purpose of securing a
deduction on an income tax return, would, in fact, constitute a
purchase with an intention inconsistent with the Subscriber’s
representations to the Company and the SEC would then regard such
purchase as a purchase for which the exemption from registration
under the Securities Act relied upon by the Company in connection
herewith is not available.
3.16
The Subscriber acknowledges that the Company has
the unconditional right to accept or reject this subscription, in
whole or in part. The Company will notify the Subscriber
whether this subscription is accepted or rejected. If such
subscription is rejected, payment will be returned to the
Subscriber.
3.17
If the Subscriber is a corporation, trust,
partnership or other entity that is not an individual person, it
has been formed and validly exists and has not been organized for
the specific purpose of purchasing the Securities and is not
prohibited from doing so.
3.18
If the Subscriber is purchasing the Securities in a
fiduciary capacity for another person or entity, including without
limitation a corporation, partnership, trust or any other entity,
the Subscriber has been duly authorized and empowered to execute
this Subscription Agreement and all other subscription documents,
and such other person or entity fulfills all the requirements for
purchase of the Securities as such requirements are set forth
herein, concurs in the purchase of the Securities and agrees to be
bound by the obligations, representations, warranties and covenants
contained herein. Upon request of the Company, the Subscriber will
provide true, complete and current copies of all relevant
documents
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creating the Subscriber, authorizing its
investment in the Company and/or evidencing the satisfaction of
the foregoing.
3.19
The Subscriber recognizes that the Company may seek
to raise additional financing and working capital through a variety
of sources, and that although the Company may undertake one or more
public or private offerings of its shares of Common Stock, debt or
equity securities, there can be no assurance that any such offering
will be made or, if made, that it will be successful.
Moreover, the Company reserves the right to make future
offers, either public or private, of securities including shares of
Common Stock or securities convertible into Common Stock at prices
that may be more than or less than the price per share Subscriber
is paying for the shares of Common Stock included in the Units or
upon exercise of the Warrants.
3.20
The Subscriber agrees to maintain in confidence all
information furnished to Subscriber by the Company regarding the
Company.
4.
Indemnification . The Subscriber
hereby agrees to indemnify and hold harmless the Company and the
Company's officers, directors, employees, attorneys, agents and
affiliates from and against any and all damages, losses, costs,
liabilities and expenses (including, without limitation, reasonable
attorneys' fees) which they, or any of them, may incur by reason of
the Subscriber's failure to fulfill any of the terms and conditions
of this Agreement or by reason of the Subscriber's breach of any of
his representations and warranties contained herein. This
Agreement and the representations and warranties contained herein
shall be binding upon the Subscriber's heirs, executors,
administrators, representatives, successors and assigns.
THE COMPANY AND THE SUBSCRIBER HAVE BEEN ADVISED THAT THE
INDEMNIFICATION OF THE COMPANY, ITS OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS, AGENTS AND AFFILIATES IS DEEMED TO BE VOID AS AGAINST
PUBLIC POLICY AND THEREBY UNENFORCEABLE IN SOME STATES.
5.
Arbitration Agreement .
5.1
The Subscriber represents, warrants and covenants
that any controversy or claim brought directly, derivatively or in
a representative capacity by him in his capacity as a present or
former security holder, whether against the Company, in the name of
the Company or otherwise, arising out of or relating to any acts or
omissions of the Company, or any security holder or any of their
officers, directors, employees, attorneys, agents or affiliates,
including without limitation any controversy or claim relating to a
purchase or sale of the Securities, shall be settled by arbitration
under the Federal Arbitration Act in accordance with the commercial
arbitration rules of the American Arbitration Association ("AAA")
and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. Any
controversy or claim brought by the Company against the Subscriber,
whether in his capacity as present or former security holder of the
Company or against any of the Subscriber's officers, directors,
agents, affiliates, associates, employees or controlling persons,
shall also be settled by arbitration under the Federal Arbitration
Act in accordance with the commercial arbitration rules of the AAA
and judgment rendered by the arbitrators may be entered in any
court having jurisdiction thereof. In arbitration proceedings
under this Section 5, the parties shall be entitled to any and
all remedies that would be available in the absence of this
Section 5 and the arbitrators, in rendering their decision,
shall follow the substantive laws that would otherwise be
applicable. This Section 5 shall apply, without limitation,
to actions arising in connection with the offer and sale of the
Securities contemplated by this Agreement under any Federal or
state securities laws.
5.2
The arbitration of any dispute pursuant to this
Section 5 shall be held in Washington, D.C.
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5.3
Notwithstanding the foregoing, in order to preserve
the status quo pending the resolution by arbitration of a claim
seeking relief of an injunctive or equitable nature, any party,
upon submitting a matter to arbitration as required by this
Section 5, may simultaneously or thereafter seek a temporary
restraining order or preliminary injunction from a court of
competent jurisdiction pending the outcome of the arbitration.
5.4
This Section 5 is intended to benefit the
security holders, officers, directors, employees, attorneys, agents
and affiliates of the Company, each of whom shall be deemed to be a
third party beneficiary of this Section 5, and each of whom
may enforce this Section 5 to the full extent that the Company
could do so if a controversy or claim were brought against it.
5.5
The Subscriber acknowledges that this
Section 5 limits a number of the Subscriber's rights,
including without limitation (i) the right to have claims resolved
in a court of law and before a jury; (ii) certain discovery rights;
and (iii) the right to appeal any decision.
5.6
Please note that: (i) arbitration is final and
binding on the parties; (ii) the parties are waiving their
rights to seek remedies in court, including the right to jury
trial; (iii) pre-arbitration discovery is generally more limited
than and different from court proceedings; (iv) the
arbitrators’ award is not required to include factual
findings or legal reasoning and any party’s right to
appeal or seek modification of rulings by the arbitrators is
strictly limited; (v) the panel of arbitrators will
typically include a minority of arbitrators who were or are
affiliated with the securities industry; (vi) no person shall
bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action,
or who is a member of a putative class who has not opted out of
the class with respect to any claims encompassed by the putative
class action until: (a) the class certification is denied; or
(b) the class is decertified; or (c) the person is excluded from
the class by the court. Such forbearance to enforce an
agreement to arbitrate shall not constitute a waiver of any
rights under this Agreement except to the extent stated
herein.
6.
Governing Law . The validity and
construction of this Agreement and all matters pertaining hereto
are to be determined in accordance with the laws of the
Commonwealth of Virginia without reference to the conflicts of laws
of that state.
7.
Execution in Counterparts . This
Agreement may be executed in one or more counterparts.
8.
Persons Bound . This Agreement shall,
except as otherwise provided herein, inure to the benefit of and be
binding on the Company and its successors and assigns and on the
Subscriber and his respective heirs, executors, administrators,
successors and assigns.
9.
Notices . Any notices 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 (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile, provided a copy is mailed by U.S.
certified mail, postage prepaid and return receipt requested; (iii)
three (3) days after being sent by U.S. certified mail, postage
prepaid and return receipt requested; or (iv) one (1) day after
deposit with a nationally recognized overnight delivery service,
postage prepaid, 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, to the address
and facsimile number set forth on the Signature Page hereof; if to
the Company, 516 Herndon Parkway, Suite A, Herndon, Virginia 20170,
attention: Chief Executive Officer, facsimile number (703)
464-8530.
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10.
Entire Agreement . This Agreement,
when accepted by the Company, and the Securities issued pursuant
hereto will constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede all prior
and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein
contained. This Agreement may not be modified, changed,
waived or terminated other than by a writing executed by all the
parties hereto. No course of conduct or dealing shall be
construed to modify, amend or otherwise affect any of the
provisions hereof.
11.
Headings . The headings of this
Agreement are for convenience of reference only and are not part of
this Agreement.
12.
Assignability . The Subscriber
acknowledges that Subscriber may not assign any of
Subscriber’s rights to or interest in or under this Agreement
without the prior written consent of the Company, and any attempted
assignment without such consent shall be void and without
effect.
13.
Interpretation . When the context in
which words are used in this Agreement indicates that such is the
intent, singular words shall include the plural, and vice versa,
and masculine words shall include the feminine and neuter genders,
and vice versa.
14.
CERTIFICATION . THE SUBSCRIBER
CERTIFIES THAT THE SUBSCRIBER HAS READ THIS ENTIRE SUBSCRIPTION
AGREEMENT AND THAT EVERY STATEMENT MADE BY THE SUBSCRIBER HEREIN IS
TRUE AND COMPLETE.
[THE REMAINDER OF THIS PAGE IS LEFT BLANK
INTENTIONALLY.]
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SUBSCRIBER SIGNATURE PAGE
The undersigned, desiring to subscribe for the
Units of Guardian Technologies International, Inc. (the "Company"),
as set forth below, acknowledges that the undersigned has received
and understands the terms and conditions of the Subscription
Agreement attached hereto and that the undersigned does hereby
agree to all the terms and conditions contained therein.
IN WITNESS WHEREOF, the undersigned has hereby
executed this Subscription Agreement as of the date set forth
below.
(PLEASE
PRINT OR TYPE)
Number of Units:
______
Total Amount Subscription/Conversion:
$100,000
Exact name(s) of Subscriber(s):
____________________________________________________
Signature of Subscriber(s)*:
____________________________________________________
State of Residence:
____________________________________________________
*If Subscriber is an association, corporation,
partnership or trust enter the name and title of the person
authorized to bind the Subscriber:
____________________________________________________
PLEASE
ATTACH CERTIFIED COPY OF AUTHORIZING DOCUMENTS.
In
addition
