EXHIBIT
4.1
SUBSCRIPTION
AGREEMENT
THIS SUBSCRIPTION
AGREEMENT made as of this _____ day of _______
2008 between SILVERHILL MANAGEMENT SERVICES, INC. ., a
corporation organized under the laws of the State of Delaware with
offices c/o Emily Lussier, 21 Merrimac Way, Unit B, Tyngsboro,
Massachusetts 01879 (the “ Company ”),
and the undersigned (the “ Subscriber ”
and together with each of the other subscribers in the Offering
(defined below), the “ Subscribers
”).
WHEREAS
, the Company desires
to issue up to $100,000 (100 Units) aggregate amount of units (a
“ Unit ” and collectively, the “
Units ”) in a private placement (the “
Offering ”), at a purchase price of $1,000 per
Unit;
WHEREAS
, each Unit shall
consist of four thousand (4,000) shares of Common Stock, par value
$.0001 per share (the “ Shares ”
); and
WHEREAS
, the Subscriber is
delivering simultaneously herewith a completed confidential
investor questionnaire (the “ Questionnaire
”),
NOW,
THEREFORE ,
for and in consideration of the promises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
I.
SUBSCRIPTION FOR
UNITS AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
1.1
Subscription for
Units. Subject to the terms and conditions
hereinafter set forth, the Subscriber hereby subscribes for and
agrees to purchase from the Company such aggregate amount of Units
as is set forth upon the signature page hereof; and the Company
agrees to sell such Units to the Subscriber for said purchase price
subject to the Company’s right to sell to the Subscriber such
lesser number of Units as the Company may, in its sole discretion,
deem necessary or desirable. The purchase price is payable by
certified or bank check made payable to “Silverhill
Management Services, Inc.” and delivered contemporaneously
with the execution and delivery of this Subscription Agreement to
the Company’s address set forth above.
1.2
Reliance on
Exemptions. The Subscriber acknowledges that
this Offering has not been reviewed by the United States Securities
and Exchange Commission (“ SEC ”) or any
state agency because of the Company’s representations that
this is intended to be a nonpublic offering exempt from the
registration requirements of the Securities Act of 1933, as amended
(the “ 1933 Act ”) and state securities
laws. The Subscriber understands that the Company is relying in
part upon the truth and accuracy of, and the Subscriber’s
compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Subscriber set forth
herein in order to determine the availability of such exemptions
and the eligibility of the Subscriber to acquire the
Units.
1.3
Investment
Purpose. The
Subscriber represents that the Shares comprising the Units (the
“ Securities ”) are being purchased for
his or her own account, for investment purposes only and not for
distribution or resale to others in contravention of the
registration requirements of the 1933 Act. The Subscriber agrees
that it will not sell or otherwise transfer the Securities unless
they are registered under the 1933 Act or unless an exemption from
such registration is available.
1.4
Accredited
Investor. The
Subscriber represents and warrants that he or she is an
“accredited investor” as such term is defined in Rule
501 of Regulation D promulgated under the 1933 Act, as indicated by
its responses to the Questionnaire, and that it is able to bear the
economic risk of any investment in the Units. The Subscriber
further represents and warrants that the information furnished in
the Questionnaire is accurate and complete in all material
respects.
1.5
RISK OF INVESTMENT.
THE SUBSCRIBER RECOGNIZES THAT THE PURCHASE OF THE UNITS INVOLVES A
HIGH DEGREE OF RISK INCLUDING, WITHOUT LIMITATION, ANY AND ALL
RISKS DISCUSSED IN THIS SUBSCRIPTION AGREEMENT. AN INVESTMENT IN
THE COMPANY AND THE UNITS MAY RESULT IN THE LOSS OF A
SUBSCRIBER’S ENTIRE INVESTMENT.
(a)
Risk of Loss of
Investment .
An investment in the Company and the Units offered hereby involve a
high degree of risk. An investment in the Units is suitable only
for investors who can bear a loss of their entire
investment.
(b)
Value of Shares is
Speculative .
The terms of this offering have been determined arbitrarily by the
Company. There is no relationship between such terms and the
Company’s assets, earnings, book value and/or any other
objective criteria of value.
(c)
Dependence on Net
Proceeds; No Minimum Offering . The Company is wholly dependent
upon the net proceeds of this Offering to fund its operations, as
more specifically described elsewhere in this Subscription
Agreement. There is no commitment by any person to purchase Units
and there is no assurance that any number of Units will be sold.
Additionally, there is no minimum amount of funds that are required
to be raised in order for the Company to accept subscriptions
received from investors and the Company’s may terminate this
Offering prior to the expiration of the Offering Period. There is
no assurance that the Company will sell a sufficient number of
Units in this Offering on a timely basis or that the net proceeds
after payment of debts and other obligations will be adequate for
the Company’s needs.
(d)
Need for Additional
Capital; Additional Private Placement . The net proceeds raised by the
Company from this Offering will be used immediately to fund the
Company’s current operations. The Company will therefore
require significant additional financing shortly after this
Offering, regardless of the net proceeds received, in order to
satisfy its cash requirements. Upon completion of this offering,
the Company intends to affect a registration on Form SB-2, become a
publicly traded entity and seek to raise additional funds in
private placement transactions. However, there is no assurance that
it will be able to do so in a timely manner or on terms that will
enable it to enter its proposed business on a reasonable
basis.
(e)
Restrictions on
Resale . The
Units and the Shares, are “restricted” securities and
may not be resold or otherwise transferred except pursuant to an
effective registration statement or an exemption under the 1933 Act
and applicable state or “blue sky” laws.
(f)
No Operating History;
History of Losses or Nominal Income; Development Stage
Entity . The
Company not commenced operations. To date and since inception, the
Company has not generated any revenues. The Company expects to
incur substantial losses for the foreseeable future and has no
operating history on which the Company can evaluate its potential
for future success. The Company is a developmental stage entity. To
evaluate the Company, investors should evaluate the Company in
light of the expenses, delays, uncertainties, and complications
typically encountered by early-stage development businesses, many
of which are beyond the Company’s control. Early-stage
development businesses commonly face risks such as the
following:
·
lack of sufficient
capital;
·
unanticipated problems,
delays, and expenses relating to product development and
implementation;
·
lack of intellectual
property;
·
licensing and marketing
difficulties;
·
competition;
·
technological changes;
and
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·
uncertain market
acceptance of products and services.
(g)
Dependence upon the
Company’s Sole Officer and Director . The Company is wholly dependent upon
Emily Lussier, currently the sole officer and director of the
Company, for the operations and success of the Company. The loss of
her services would have a material adverse effect on the
Company’s business, financial condition and results of
operations. The Company does not have an employment agreement with
Ms. Lussier who is expected to devote only a portion of her working
time to the affairs of the Company.
(h)
Capital Structure of
the Company .
The following sets forth the capital structure of the Company prior
to the sale of any Securities in this Offering.
(i)
The Company has twenty
one million (21,000,000) authorized shares of capital stock
consisting of (A) twenty million (20,000,000) shares of Common
Stock and one million (1,000,000) shares of blank check preferred
stock.
(ii)
The Company has
3,985,000 shares of Common Stock issued and outstanding as
follows:
(A)
Emily Lussier –
3,925,000; and
(B)
Robert Steele –
20,000; and
(C)
Eric W Richardson
– 40,000.
Ms. Lussier may
reallocate a portion of her shares in the future.
(iii)
The Company has no other
securities currently issued and outstanding and there are no
warrants, options or other securities outstanding that are
convertible into or exercisable for any securities of the
Company.
1.6
Summary of Proposed
Business. The
Company intends to offer business support services to proprietors,
entrepreneurs, and small business owners. By offering a full suite
of outsourced business processes including project management,
database and information storage, and document management services,
the Company will market it’s “Virtual Admin”
brand to businesses to help optimize their managements’ time
and allow them to focus on their core business activities. The
Company will secure office space, hire necessary personnel,
purchase equipment, further develop the service offering, and
commence its marketing efforts. There is no assurance that the
Company will be successful in these endeavors or that if
accomplishes all of these steps it will be able to operate
profitably. Based on management’s personal experience, the
Company believes that its product is a legitimate business
opportunity for the Company and its shareholders.
1.7
Information. The Subscriber acknowledges receipt
and full and careful review and understanding of this Subscription
Agreement with any exhibits thereto (the “ Offering
Document ”) and hereby represents that: (i) it has been
furnished by the Company during the course of this transaction with
all information regarding the Company which it has requested; and
(ii) that it has been afforded the opportunity to ask questions of
and receive answers from duly authorized officers of the Company
concerning the terms and conditions of the Offering, and any
additional information which it has requested.
1.8
No Representations or
Warranties. The Subscriber hereby represents
that, except as expressly set forth in the Offering Document, no
representations or warranties have been made to the Subscriber by
the Company or any agent, employee or affiliate of the Company and
in entering into this transaction the Subscriber is not relying on
any information other than that contained in the Offering Documents
and the results of independent investigation by the
Subscriber.
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1.9
Tax
Consequences. The Subscriber acknowledges that
this Offering of the Units may involve tax consequences and that
the contents of the Offering Documents do not contain tax advice or
information. The Subscriber acknowledges that it must retain its
own professional advisors to evaluate the tax and other
consequences of an investment in the Units.
1.10
Transfer or
Resale. The
Subscriber understands that: (a) none of the Securities have been
and are not being registered under the 1933 Act or any state
securities laws; (b) the Securities may not be offered for sale,
sold, assigned, pledged, transferred or otherwise disposed of (each
a “ Disposition ”) unless, prior to
effecting any such Disposition (other than any transfer not
involving a change in beneficial ownership) (i) there is in effect
a registration statement under the 1933 Act covering the
Disposition and the Disposition is made in accordance with such
registration statement, or (ii) the Subscriber gives written notice
to the Company of such Subscriber’s intention to effect a
Disposition and such notice shall describe the manner and
circumstances of the proposed Disposition, and shall be accompanied
by either (A) a written opinion of a legal counsel that a
Disposition of the Securities may be made pursuant to an exemption
from such registration, or (B) any other evidence reasonably
satisfactory to counsel to the Company; and (C) the Company is
under no obligation to register the Securities under the 1933 Act
or any state securities laws or to comply with the terms and
conditions of any registration exemption thereunder.
1.11
Legends.
The Subscriber
understands that the certificates or other instruments representing
the Securities, until such time as they have been registered under
the 1933 Act as contemplated by the Registration Rights Agreement,
shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such
certificates or other instruments):
THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF
COUNSEL, IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS.
The legend set forth
above shall be removed and the Company shall issue a certificate or
other instrument without such legend to the holder of the
Securities upon which it is stamped, if (a) there is in effect a
registration statement under the 1933 Act covering the Disposition
and the Disposition is made in accordance with such registration
statement or (b) if the Disposition of the Securities is completed
in satisfaction of the requirements of Rule 144 of the 1933
Act.
1.12
Validity;
Enforcement. If the Subscriber is a corporation,
partnership, trust or other entity, the Subscriber represents and
warrants that: (a) it is authorized and otherwise duly qualified to
purchase and hold the Units; and (b) that this Subscription
Agreement has been duly and validly authorized, executed and
delivered and constitutes the legal, binding and enforceable
obligation of the undersigned.
1.13
Residency.
The Subscriber
represents that its principal address is furnished at the end of
this Subscription Agreement.
1.14
Foreign
Subscriber. If the Subscriber is not a United
States person, such Subscriber hereby represents that it has
satisfied itself as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the
Units or any use of this Subscription Agreement, including: (a) the
legal requirements within its jurisdiction for the purchase of the
Units; (b) any foreign exchange restrictions applicable to such
purchase; (c) any governmental or other consents that may need to
be obtained; and (d) the income tax and other tax consequences, if
any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the securities comprising the Units. Such
Subscriber’s subscription and payment for, and his or her
continued beneficial ownership of the Units, will not violate any
applicable securities or other laws of the Subscriber’s
jurisdiction.
1.15
NASD
Member. The
Subscriber acknowledges that if it is a Registered Representative
of an NASD member firm, the Subscriber must give such firm notice
required by the NASD’s Rules of Fair Practice, receipt of
which must be acknowledged by such firm on the signature page
hereof.
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1.16
Escrow Agent; Escrow
Agreement .
Pursuant to the terms of an escrow agreement (the “
Escrow Agreement ”) by and between the Company
and Frank J. Hariton, Esq., as escrow agent (the “
Escrow Agent ”) for the Offering, all proceeds
from the sale of the Units shall be sent directly to and held in
escrow by the Escrow Agent pending each Closing (as defined
below).
1.17
Confidential
Information . The subscriber acknowledges that
the information contained in this Subscription Agreement and the
related schedules and Exhibits, as well as any other information
relating to the Company that has been provided to the Subscriber in
connection with this Offering is the confidential and proprietary
information of the Company. The Subscriber agrees that he shall not
disclose any of said information to any other person, except for
his financial and legal advisors, who require such information to
advise the Subscriber with respect to his contemplated investment,
and in the event that the Subscriber does not invest in this
Offering, he shall return all materials provided to him by the
Company, including any copies thereof, to the Company.
II.
REPRESENTATIONS BY
THE COMPANY
The Company represents
and warrants to the Subscriber, except as set forth in the
disclosure schedules attached hereto:
2.1
Organization and
Qualification. The Company and its “
Subsidiaries ” (which for purposes of this
Subscription Agreement means any entity in which the Company,
directly or indirectly, owns capital stock and holds a majority or
similar interest) are duly organized and validly existing in good
standing under the laws of the jurisdiction in which they were
organized, and have the requisite power and authorization to own
their properties and to carry on their business as now being
conducted. Each of the Company and its Subsidiaries is duly
qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not have a Material
Adverse Effect. As used in this Subscription Agreement, “
Material Adverse Effect ” means any material
adverse effect on the business, properties, assets, operations,
results of operations or financial condition of the Company and its
Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby, or by the other Offering Documents or the
agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the
Company to perform its obligations under the Offering
Documents.
2.2
Authorization;
Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its
obligations under this Subscription Agreement and the Escrow
Agreement and to perform its obligations under the Offering
Document, and to issue the Securities in accordance with the terms
of the Offering Document. The execution and delivery of the
Offering Document by the Company and the consummation by the
Company of the transactions contemplated by the Offering Documents,
including without limitation the issuance of the Securities, have
been duly authorized by the Company’s board of directors and
no further consent or authorization is required by the Company, its
board of directors or its stockholders. The Offering Documents have
been duly executed and delivered by the Company, and constitute
valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally,
the enforcement of creditors’ rights and remedies.
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2.3
Capitalization
. Prior to the Initial
Closing, the authorized, issued and outstanding securities of the
Company (including, but not limited to, all and/or other securities
convertible into equity securities of the Company and all options
and warrants, all of which are listed in Section
1.1(i) of this Subscription Agreement. All of the issued
and outstanding securities of the Company have been and are, or
upon issuance will be duly authorized, validly issued, fully paid
and non-assessable. Except as disclosed in Offering Document, (i)
no shares of the Company's capital stock are subject to preemptive
rights under Delware law or any other similar rights or any liens
or encumbrances suffered or permitted by the Company; (ii) there
are
