HYBRID DYNAMICS CORPORATION
SUBSCRIPTION AGREEMENT
The
undersigned (hereinafter “ Subscriber ”) hereby
confirms his/her/its subscription for the purchase of units (the
“Units”) consisting of 2,000 Shares of Series A 8%
Convertible $5.00 Preferred Stock, 20,000 Class A Warrants and
5,000 Shares of Common Stock of Hybrid Dynamics Corporation (the
“ Securities ”), a Nevada corporation (the
“ Company ”), on the terms described below, at
purchase price of $10,000.00 per unit (the “ Purchase
Price ”);
Capitalized
terms used and not otherwise defined herein shall have the meanings
set forth for such terms in the Company’s Confidential
Private Placement Memorandum, dated November 20, 2007 (as amended
or supplemented, and together with all documents and filings
attached thereto, the “ Memorandum ”).
In
connection with this subscription, Subscriber and the Company agree
as follows:
1. Purchase and Sale
of the Securities .
(a) Under
this Subscription Agreement (“the Subscription
Agreement ”), the Company hereby agrees to issue a
maximum of fifty (50) Units (the “Units”) each Unit
composed of (i) 2,000 shares its Series A Convertible 8% Preferred
Stock, $5.00 stated value per share (the “Preferred
Stock”), (ii) Class A Warrants for the purchase of 20,000
shares of its $0.00015 par value common stock at a strike price of
$1.00, and (iii) 5,000 shares of common stock $0.00015 par value
(“Unit Common Stock”), at a purchase price of
$10,000.00 per Unit. The Preferred Stock is convertible into the
Company’s Common Stock, $0.00015 par value (the “Common
Stock”) at the rate of ten (10) shares of Common Stock per
each one (1) Preferred Share. Subscriber hereby agrees to purchase
from the Company, a number of Units at a price equal to Purchase
Price and for the aggregate subscription amount set forth on the
signature page hereto. The minimum investment is $10,000.00
per subscriber. The Subscriber understands that this
subscription is not binding upon the Company until the Company and
Joseph Stevens & Company, Inc. (the “ Selling
Agent ”) accept it. The Subscriber acknowledges and
understands that acceptance of this subscription will be made only
by a duly authorized representative of the Company executing and
mailing or otherwise delivering to the Subscriber, at the
Subscriber’s address set forth herein, a counterpart copy of
the signature page to this Subscription Agreement indicating the
Company’s acceptance of this Subscription. The Company
and the Selling Agent reserve the right, in their sole discretion
for any reason whatsoever to accept or reject this subscription in
whole or in part. Following the acceptance of this
Subscription Agreement by the Company and the receipt and
acceptance by the Company of subscriptions in an amount equal to
the Minimum Offering (as defined below), the Company shall instruct
its transfer agent to issue and deliver to Subscriber certificates
evidencing the appropriate number of Securities subscribed for
against payment in U.S. Dollars of the Purchase Price. If
this subscription is rejected, the Company and Subscriber shall
thereafter have no further rights or obligations to each other
under or in connection with this Subscription Agreement. If
this subscription is not accepted
by the Company on or before the last day of the Offering Period,
this subscription shall be deemed rejected.
(b) Subscriber
has hereby delivered and paid concurrently herewith the aggregate
Purchase Price set forth on the signature page hereto required to
purchase the Shares subscribed for hereunder, which amount has been
paid in U.S. Dollars by cash, wire transfer or check, subject to
collection, to the order of “American Stock Transfer &
Trust Company – Hybrid Dynamics Corporation Escrow
Account.”
(c) Subscriber
understands and acknowledges that this subscription is part of a
private placement by the Company of up to $500,000.00 of gross
proceeds (subject to an increase of an additional $100,000 of gross
proceeds), which offering is being made on a “best efforts
all or none” basis as to the first thirty (30) Units (for a
minimum of $300,000 of gross proceeds) (the “ Minimum
Offering ”) and on a “best efforts” basis as
to the remaining twenty (20) Units (up to the maximum of $500,000
of gross proceeds the “ Maximum Offering
”). Subscriber understands that payments hereunder as
to the Minimum Offering will be held in a non-interest bearing
escrow account established by the Company and the Selling Agent
with American Stock Transfer & Trust Company as escrow agent,
and will be released to the Company if subscriptions for the
Minimum Offering are received and accepted by the Company within
the Offering Period, as extended (as described in the
Memorandum). If subscriptions for the Minimum Offering are
not received and accepted within the Offering Period, as extended,
the funds held in the escrow account will be returned promptly to
the Subscriber in full without interest thereon or deduction
therefrom. All subscriptions received after subscriptions for the
Minimum Offering have been received and accepted from the Company
and the Selling Agent will be deposited into such escrow account
until accepted by the Company and the Selling Agent, whereupon such
subscriptions will be released by the escrow agent to the
Company.
2. Representations and
Warranties of Subscriber . Subscriber represents and
warrants to the Company and Selling Agent as follows:
(a) Subscriber
is an “accredited investor” as defined by Rule 501 of
Regulation D (“ Regulation D ”) promulgated
under the Securities Act of 1933, as amended (the “
Act ”), and Subscriber is capable of evaluating the
merits and risks of Subscriber’s investment in the Company
and has the ability and capacity to protect Subscriber’s own
interests.
(b) Subscriber
understands that the Shares and the underlying shares of common
stock, par value $.00015 per share (the “ Common Stock
” and, with the Shares, the “ Securities
”) will not be registered under the Act on the grounds that
the issuance thereof is exempt from the registration requirements
of the Act by Section 4(2) of the Act and/or Regulation D
promulgated thereunder as a transaction by an issuer not involving
any public offering and that, in the view of the United States
Securities and Exchange Commission (the “Commission
”), the statutory basis for the exception claimed would not
be present if the representations and warranties of Subscriber
contained in this Subscription Agreement or the Confidential
Purchase Questionnaire are untrue or, notwithstanding
Subscriber’s representations and warranties, Subscriber
currently has in mind acquiring the Shares for resale or
distribution upon the occurrence or non-occurrence of some
predetermined event.
(c) Subscriber
is purchasing the Shares subscribed for hereby for investment
purposes for their own account and not with a view to distribution
or resale, nor with the intention of selling, transferring or
otherwise disposing of all or any part thereof for any particular
price, or at any particular time, or upon the happening of any
particular event or circumstances, except selling, transferring, or
disposing the Securities in full compliance with all applicable
provisions of the Act, the rules and regulations promulgated by the
Commission thereunder, and applicable state securities laws; and
that an investment in the Shares is not a liquid investment.
Subscriber understands that the Company is privately held,
there is no trading market for its securities and that the company
does not file any reports with the Commission.
(d) Subscriber
acknowledges that the Securities must be held indefinitely unless
subsequently registered under the Act or unless an exemption from
such registration is available. Subscriber is aware of the
provisions of Rule 144 promulgated under the Act, which permits
limited resale of securities purchased in a private placement
subject to certain limitations and to the satisfaction of certain
conditions.
(e) Subscriber
acknowledges that Subscriber has had the opportunity to ask
questions of, and receive answers from, the Company or any
authorized person acting on its behalf concerning the Company and
its business and to obtain any additional information, to the
extent possessed by the Company (or to the extent it could have
been acquired by the Company without unreasonable effort or
expense) necessary to verify the accuracy of the information
received by Subscriber. In connection therewith, Subscriber
acknowledges that Subscriber has had the opportunity to discuss the
Company’s business, management and financial affairs with the
Company’s management or any authorized person acting on its
behalf. Subscriber has received and reviewed the Memorandum,
and all the information that Subscriber desires. Without
limiting the generality of the foregoing, Subscriber has been
furnished with or has had the opportunity to acquire, and to review
all information that Subscriber desires with respect to the
Company’s business, management, financial affairs and
prospects. In determining whether to make this investment,
Subscriber has relied solely on Subscriber’s own knowledge
and understanding of the Company and its business based upon
Subscriber’s own due diligence investigations and the
information furnished pursuant to this paragraph. Subscriber
understands that no person has been authorized to give any
information or to make any representations which were not contained
in the Memorandum and Subscriber has not relied on any other
representations or information.
(f) Subscriber
has all requisite legal and other power, authority and capacity to
execute and deliver this Subscription Agreement and to carry out
and perform Subscriber’s obligations under the terms of this
Subscription Agreement. This Subscription Agreement
constitutes a valid and legally binding obligation of Subscriber,
enforceable in accordance with its terms, and subject to laws of
general application relating to bankruptcy, insolvency and the
relief of debtors and other general principals of equity, whether
such enforcement is considered in a proceeding in equity or
law.
(g) Subscriber
has carefully considered and has discussed with the
Subscriber’s legal, tax, accounting and financial advisors,
to the extent the Subscriber has deemed necessary, the suitability
of this investment and the transactions contemplated by this
Subscription Agreement for the Subscriber’s particular
federal, state, local and foreign tax and financial situation and
has independently determined that this investment and the
transactions contemplated by this Subscription Agreement are a
suitable investment for the Subscriber. Subscriber has relied
solely on such advisors and not on any statements or
representations of the Company or any of its agents.
Subscriber understands that Subscriber (and not the Company) shall
be responsible for Subscriber’s own tax liability that may
arise as a result of this investment or the transactions
contemplated by this Subscription Agreement.
(h) This
Subscription Agreement and the Confidential Purchase Questionnaire
accompanying this Subscription Agreement do not contain any untrue
statement of a material fact or omit any material fact concerning
Subscriber. Subscriber has a net worth and annual gross income as
stated in the Purchaser Questionnaire, and all of the answers and
statements in the Purchaser Questionnaire are true and correct.
(i) There
are no actions, suits, proceedings or investigations pending
against Subscriber or Subscriber’s assets before any court or
governmental agency (nor, to Subscriber’s knowledge, is there
any threat thereof) which would impair in any way
Subscriber’s ability to enter into and fully perform
Subscriber’s commitments and obligations under this
Subscription Agreement or the transactions contemplated hereby.
(j) The
execution, delivery and performance of and compliance with this
Subscription Agreement will not result in any material violation
of, or conflict with, or constitute a material default under, any
of Subscriber’s articles of incorporation or bylaws, if
applicable, or any agreement to which Subscriber is a party or by
which Subscriber is bound, nor result in the creation of any
mortgage, pledge, lien, encumbrance or charge against any of the
assets or properties of Subscriber or the Securities.
(k) Subscriber
acknowledges that an investment in the Securities is speculative
and involves a high degree of risk and that Subscriber can bear the
economic risk of the purchase of the Securities, including a total
loss of Subscriber’s investment. Subscriber has adequate
means of providing for current needs and personal contingencies and
has no need for liquidity in an investment in the Securities.
Subscriber’s overall financial commitment to investments that
are not readily marketable is not disproportionate to
Subscriber’s net worth, and Subscriber’s investment in
the Securities will not cause an overall commitment to become
excessive. Subscriber has no reason to anticipate any change in
Subscriber’s personal circumstances, financial or otherwise,
which may cause Subscriber to attempt to resell or transfer the
Securities.
(l) Subscriber
acknowledges that he/she/it has carefully reviewed and considered
the risk factors discussed in the “Risk Factors”
section of the Memorandum prior to making an investment
decision.
(m) Subscriber
recognizes that no federal, state or foreign agency has recommended
or endorsed the purchase of the Securities.
(n) Subscriber
is aware that the Securities are and will be, when issued,
“restricted securities” as that term is defined in Rule
144 promulgated under the Act.
(o) Subscriber
understands that any and all certificates representing the
Securities and any and all securities issued in replacement thereof
or in exchange therefore shall bear the following legend or one
substantially similar thereto, which Subscriber has read and
understands:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THIS
CORPORATION, IS AVAILABLE.”
(p) In
addition, the certificates representing the Securities, and any and
all securities issued in replacement thereof or in exchange
therefore, shall bear such legend as may be required by the
securities laws of the jurisdiction in which Subscriber
resides.
(q) Because
of the restrictions imposed on resale, Subscriber understands that
the Company shall have the right to note stop-transfer instructions
in its stock transfer records, and Subscriber has been informed of
the Company’s intention to do so. Any sales, transfers,
or any other dispositions of the Securities by Subscriber, if any,
will be in compliance with the Act and all applicable rules and
regulations promulgated thereunder.
(r) Subscriber
acknowledges that Subscriber has such knowledge and experience in
financial and business matters that he is capable of evaluating the
merits and risks of an investment in the Securities and of making
an informed investment decision. Subscriber has read the Memorandum
(including the business and risk factors sections and financial
statements provided herein) and understands and has evaluated
the risks and the terms of the offering made hereby.
(s) Subscriber
represents that: (i) Subscriber is able to bear the economic
risks of an investment in the Securities and to afford the complete
loss of the investment, and (ii) (A) Subscriber could be reasonably
assumed to have the capacity to protect his/her/its own interests
in connection with this subscription; or (B) Subscriber has a
pre-existing personal or business relationship with either the
Company, the Selling Agent or any affiliate thereof or of such
duration and nature as would enable a reasonably prudent purchaser
to be aware of the character, business acumen and general business
and financial circumstances of the Company or such affiliate and is
otherwise personally qualified to evaluate and assess the risks,
nature and other aspects of this subscription.
(t) Subscriber
further represents that the address set forth below is
Subscriber’s principal residence (or, if Subscriber is a
company, partnership or other entity, the address of its principal
place of business); that Subscriber is purchasing the Securities
for Subscriber’s own account and not, in whole or in part,
for the account of any other person; Subscriber is purchasing the
Securities for investment and not with a view to resale or
distribution; and that Subscriber has not formed any entity for the
purpose of purchasing the Securities.
(u) Subscriber
understands that the Company and the Selling Agent shall have the
unconditional right to accept or reject this subscription, in whole
or in part, for any reason or without a specific reason, in the
sole and absolute discretion of the Company and Selling Agent (even
after receipt and clearance of Subscriber’s funds).
This Subscription Agreement is not binding upon the Company until
accepted in writing by an authorized officer of the Company.
In the event that the subscription is rejected, then
Subscriber’s subscription funds (to the extent of such
rejection) will be returned promptly in full without interest
thereon or deduction therefrom.
(v) Reserved.
(w) Subscriber
represents that Subscriber is not subscribing for Securities 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 the Internet, television or radio or
presented at any seminar or meeting or any public announcement by
the Company.
(x) Subscriber
has carefully read this Subscription Agreement and the Memorandum,
and Subscriber has accurately completed the Confidential Purchaser
Questionnaire which accompanies this Subscription Agreement.
(y) No
representations or warranties have been made to Subscriber by the
Company, or any officer, employee, agent, affiliate or subsidiary
of the Company, other than the representations of the Company
contained herein, and in subscribing for the Securities the
Subscriber is not relying upon any representations other than those
contained in the Memorandum or in this Subscription Agreement.
(z) To
the best of Subscriber’s knowledge, that other than the
Selling Agent, no finder, broker, agent, financial advisor or other
intermediary, nor any purchaser representative or any broker-dealer
acting as a broker, is entitled to any compensation in connection
with the transactions contemplated by this Subscription
Agreement.
(aa) Subscriber
has: (i) not distributed or reproduced the Memorandum, in whole or
in part, at any time, without the prior written consent of the
Company and the Selling Agent, (ii) kept confidential the existence
of the Memorandum and the information contained therein or
otherwise made available in connection with any further
investigation of the Company and (iii) refrained and shall refrain
from trading in any publicly-traded securities of the Company or
any other relevant company for so long as such recipient has been
in possession of the material non-public information contained in
the Memorandum.
(bb) If
Subscriber is a corporation, partnership, limited liability
company, trust or other entity, the person executing this
Subscription Agreement hereby represents and warrants that the
above representations and warranties shall be deemed to have been
made on behalf of such entity and the Subscriber has made such
representations and warranties after due inquiry to determine the
truthfulness of such representations and warranties.
(cc) If
the Subscriber is a corporation, partnership, limited liability
company, trust or other entity: (i) it is duly organized, validly
existing and in good standing in its jurisdiction of incorporation
or organization and has all requisite power and authority to
execute and deliver this Subscription Agreement and purchase the
Securities, as provided herein; (ii) the purchase of the Securities
will not result in any violation of, or conflict with, any term or
provision of the charter, bylaws or other organizational documents
of Subscriber or any other instrument or agreement to which the
Subscriber is a party or is subject; (iii) the execution and
delivery of this Subscription Agreement and Subscriber’s
purchase of the Securities has been duly authorized by all
necessary action on behalf of the Subscriber and constitute a
legal, valid and binding agreement of Subscriber.
3. Representations and
Warranties of the Company . The Company represents and
warrants to Subscriber as follows:
(a) The
Company is duly organized and validly exists as a corporation in
good standing under the laws of the State of Delaware.
(b) The
Company has all such corporate power and authority to enter into,
deliver and perform this Subscription Agreement.
(c) All
necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of
this Subscription Agreement by the Company, and the issuance and
sale of the Securities to be sold by the Company pursuant to this
Subscription Agreement. This Subscription Agreement has been
duly and validly authorized, executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally
and by general equitable principles, whether such enforcement is
considered in a proceeding in equity or in law.
(d) The
authorized capital stock of the Company consists of 99,000,000
shares of the Common Stock, of which 5,187,285 shares is issued and
outstanding as of November 20, 2007, and 1,000,000 shares of
preferred stock, $0.00015 par value, of which 660,000 shares have
been designated Series A Convertible 8% Preferred Stock, and no
shares of which are issued
and outstanding as of the date hereof, and the designations,
powers, preferences, rights, qualifications, limitations, and
restrictions in respect of each class and series of authorized
capital stock of the Company, as set forth in the Company’s
articles of incorporation, as amended (the “Articles of
Incorporation”) and the Certificate, will be valid, binding
and enforceable, and in accordance with all applicable laws. Except
as disclosed in the Memorandum, (i) there is no commitment by or
obligation of the Company to issue any shares of capital stock,
subscriptions, warrants, options, convertible securities, or other
similar rights to purchase or receive Company securities or to
distribute to the holders of any of its equity securities any
evidence of indebtedness, cash, or other assets, (ii) the Company
is under no obligation (contingent or otherwise) to purchase,
redeem, or otherwise acquire any of its equity or debt securities
or any interest therein or to pay any dividend or make any other
distribution in respect thereof, and (iii) there are no voting
trusts or similar agreements, stockholders’ agreements,
pledge agreements, transfer restrictions, buy-sell agreements,
rights of first refusal, preemptive rights, or proxies relating to
any securities of the Company. Except as set forth in the
Memorandum, no person holds of record or, to the best of the
Company’s knowledge, beneficially, 5% or more of the
outstanding shares of the capital stock of the Company. All
outstanding securities of the Company were issued in compliance
with applicable Federal and state securities laws. The capital
stock of the Company conforms in all material respects to the
description thereof contained in the Memorandum. Except as
disclosed in the Memorandum, the Offering or sale of the Shares as
contemplated in the Transaction Documents will not give rise to any
rights for or relating to the registration of any shares of Common
Stock other than the registration rights of the holders of the
Shares and pursuant to the Warrants.
(e) Neither
the Memorandum nor the Subscription Documents contain any untrue
statement of a material fact, and will not omit to state any
material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not
misleading.
(f) Neither
the Company nor any Subsidiary is in: (i) violation of its
certificate or articles of incorporation, by-laws or other
organizational documents, (ii) default under, and no event has
occurred which, with notice or lapse of time or both, would
constitute a default under or result in the creation or imposition
of any Lien upon any of its property or assets pursuant to, any
material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it
is bound or to which any of its property or assets is subject or
(iii) violation in any respect of any law, rule, regulation,
ordinance, directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, foreign
or domestic, except (in the case of clause (ii) above) for any Lien
disclosed in the Memorandum and the exhibits thereto and except, in
the cases of (ii) and (iii), where such defaults or violations do
not, individually or in the aggregate, have a Material Adverse
Effect.
(g) The
Company has never declared, paid or made any dividends or other
distributions of any kind on or in respect of its capital stock
other than as set forth in the Memorandum.
(h) Except
as disclosed in the Memorandum, since December 31, 2006, there has
been no material adverse change (or any development involving a
prospective material adverse change), whether or not arising from
transactions in the ordinary course of business, in or affecting:
(i) the business, condition (financial or otherwise), results of
operations, shareholders’ equity, properties or prospects of
the Company and each Subsidiary, taken as a whole; (ii) the
long-term debt or capital stock of the Company or any of its
Subsidiaries; or (iii) the Placement or consummation of any of the
other transactions contemplated by the Memorandum and hereby.
Since the date of the latest balance sheet presented in or attached
to the Memorandum, neither the Company nor any Subsidiary has
incurred or undertaken any liabilities or obligations, whether
direct or indirect, liquidated or contingent, matured or unmatured,
or entered into any transactions, including any acquisition or
disposition of any business or asset, which are materially adverse
to the Company and the Subsidiaries taken as a whole, except for
liabilities, obligations and transactions which are disclosed in
the Memorandum and the exhibits thereto or incurred in the ordinary
course of business.
(j) The
financial statements, including the notes thereto, and the
supporting schedules included in the Memorandum present fairly, in
all material respects and as of the dates indicated and for the
periods specified the financial position and the cash flows and
results of operations of the Company and the Subsidiaries.
The supporting schedules, if any, included in the Memorandum
present fairly the information required to be stated therein.
The other financial and statistical information included in the
Memorandum present fairly the information included therein in all
material respects.
(j) No
consent, approval, authorization or order of any court or
governmental or regulatory agency or body or any individual or
entity is required on the part of the Company or any Subsidiary for
the lawful consummation of the transactions contemplated hereby and
thereby, except for such consents and approvals with respect to the
offer and sale of the Securities.
(k) Each
of the Company and the Subsidiaries has all necessary consents,
approvals, authorizations, orders, registrations, qualifications,
licenses, filings and permits of, with and from all applicable
judicial, regulatory and other legal or governmental agencies and
bodies and all third parties, foreign and domestic (collectively,
the “ Consents ”), to own, lease and operate
their respective properties and conduct their respective businesses
as are now being conducted and as disclosed in the Memorandum,
except where the failure to have any such Consent would not have a
Material Adverse Effect. Each such Consent is valid and in
full force and effect, and neither the Company nor any Subsidiary
has received written notice of any investigation or proceedings
which results in or, if decided adversely to the Company or any
Subsidiary, could reasonably be expected to result in, the
revocation of, or imposition of a materially burdensome restriction
on, any Consent.
(l) The
Company and each Subsidiary: (i) owns or possesses all rights to
use, option and/or license, as the case may be, all patents, patent
applications, provisional patents,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses, formulae, mask
works, customer lists, internet domain names, know-how and other
intellectual property (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures, “ Intellectual Property
”) necessary for the conduct of their respective businesses
as being conducted and as described in the Memorandum and (ii) does
not believe that the conduct of their respective businesses does or
will conflict with, and have not received any notice of any claim
of conflict with, any such right of others, which conflict would
have a Material Adverse Effect. To the best of the
Company’s knowledge, all Intellectual Property developed by
and belonging to the Company or any Subsidiary (including, without
limitation, that which is developed by consultants to the Company
or any Subsidiary) which has not been patented has been kept
confidential so as, among other things, all such information may be
deemed proprietary to the Company. To the Company’s
knowledge, there is no infringement by third parties of any
Intellectual Property. There are no pending or, to the
Company’s knowledge, threatened actions, suits, proceedings
or claims by others challenging the Company’s or any
Subsidiary’s rights in or to any Intellectual Property, and
there are no facts to the knowledge of the Company which would form
a reasonable basis for any such claim. There is no pending
or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others that the Company or any Subsidiary
infringes or otherwise violates any Intellectual Property rights of
others, in each case which would be reasonably likely to have a
Material Adverse Effect, and the Company is unaware of any other
fact which would form a reasonable basis for any such claim.
4. Indemnification
. Subscriber agrees to indemnify and hold harmless the
Company, the Selling Agent, and their respective officers,
directors, employees, shareholders, agents representatives and
affiliates, and any person acting for or on behalf of the Company
or Selling Agent, from and against any and all damage, loss,
liability, cost and expense (including reasonable attorneys’
fees and disbursements) which any of them may incur by reason of
the failure by Subscriber to fulfill any of the terms and
conditions of this Subscription Agreement, or by reason of any
breach of the representations and warranties made by Subscriber
herein, or in any other document provided by Subscriber to the
Company in connection with the subject matter hereof. All
representations, warranties and covenants of each of Subscriber and
the Company contained herein shall survive the acceptance of this
subscription and the Closings.
5. Registration
Rights; Anti-Dilution Adjustments. In consideration of
the investment in the Company described in this Agreement and the
Memorandum, the Company hereby grants to the Subscriber the
registration rights set forth on Annex A and the
anti-dil
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