Exhibit 10.3

 

 

It is the responsibility of any investor purchasing these securities to satisfy
itself as to full observance of the laws of any relevant territory outside the
United States in connection with any such purchase, including obtaining any
required governmental or other consents or observing any other applicable
requirements. We are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.

 

Determine, Inc.

Common Stock

 

SUBSCRIPTION AND INVESTMENT REPRESENTATION AGREEMENT

 

THIS AGREEMENT is dated as of the date set forth on the signature page of this
Agreement by and between Determine, Inc., a Delaware corporation (the
“Company”), and the undersigned subscribers (the “Subscribers”). In
consideration of the mutual promises contained herein, and other good and
valuable consideration, the parties hereto agree as follows:

 

1.           Agreement of Sale. The Company agrees to sell to Subscribers, and
Subscribers agree to acquire from the Company, that number of shares the
Company’s common stock set forth in Schedule I next to each Subscriber’s name
(the “Securities”). The purchase price will be paid by the Subscribers by the
Subscribers acceptance of the Company’s request to convert a portion of the
notes issued to Subscribers in March 2015 (the “Notes”) into the Company’s
common stock pursuant to the terms of the Notes as set forth in Schedule I and
for other good an valuable consideration, the receipt and sufficiency of which
is hereby acknowledged. Execution of this agreement shall constitute each
Subscriber’s request to convert the portion of the Notes set forth in Schedule
I. pursuant to the terms of the Notes. Securities issued pursuant to the
Agreement shall be subject to the same registration rights as Securities
issuable upon conversion of the Notes.

 

2.           Representations and Warranties of Each Subscriber. In consideration
of the Company’s offer to sell the Securities, each Subscriber hereby represents
and warrants to the Company as follows:

 

a.           Information About the Company.

 

i.     Subscriber has reviewed the Company’s public filings with the U.S.
Securities and Exchange Commission, including the risk factors described
therein.

 

ii.     Subscriber has had an opportunity to ask questions of, and receive
answers from, the Company concerning the business, management and financial
affairs of the Company and the terms and conditions of the purchase of the
Securities contemplated hereby. Subscriber has had an opportunity to obtain, and
has received, any additional information deemed necessary by the Subscriber to
verify such information in order to form a decision concerning an investment in
the Company.

 

iii.     Subscriber has been advised to seek legal counsel and financial advice
concerning Subscriber’s investment in the Company.

 

b.           Restrictions on Transfer. Subscriber represents and warrants that
the Securities are being purchased for Subscriber’s own account and for
Subscriber’s investment and without the intention of reselling or redistributing
the same, that Subscriber has made no agreement with others regarding any of
such Securities and that Subscriber’s financial condition is such that it is not
likely that it will be necessary to dispose of any of the Securities in the
foreseeable future. Subscriber is aware that, in the view of the Securities and
Exchange Commission, a purchase of the Securities with an intent to resell by
reason of any foreseeable specific contingency or anticipated change in market
values, or any change in the condition of the Company, or in connection with a
contemplated liquidation or settlement of any loan obtained for the acquisition
of the Securities and for which the Securities were pledged as security, would
represent an intent inconsistent with the representations set forth above.
Subscriber understands that the Securities have not been registered under the
Securities Act of 1933, as amended, or any state or foreign securities laws in
reliance on exemptions from registration under both such acts, and that,
accordingly, the Securities may not be resold by the undersigned unless they are
registered under both the Securities Act of 1933, as amended, and applicable
state or foreign securities laws or are sold in transactions which are exempt
from such registration. Subscriber therefore agrees not to sell, assign,
transfer or otherwise dispose of the Securities unless a registration statement
relating thereto has been duly filed and become effective under the Securities
Act of 1933, as amended, and applicable state or foreign securities laws, or
unless in the opinion of counsel satisfactory to the Company no such
registration is required under the circumstances.

 

 

Subscription Agreement

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c.           High Degree of Risk. Subscriber realizes that an investment in the
Securities involves a high degree of risk, including the risks of receiving no
return on the investment and of losing Subscriber’s entire investment in the
Company. Subscriber is able to bear the economic risk of investment in the
Securities, including the total loss of such investment. The Company can make no
assurance regarding its future financial performance or as to the future
profitability of the Company.

 

d.           Suitability. Subscriber has such knowledge and experience in
financial and business matters that Subscriber is capable of evaluating the
merits and risks of an investment in the Securities. Subscriber has obtained, to
the extent deemed necessary, Subscriber’s own personal professional advice with
respect to the risks inherent in, and the suitability of, an investment in the
Securities in light of Subscriber’s financial condition and investment needs.
Subscriber believes that the investment in the Securities is suitable for
Subscriber based upon Subscriber’s investment objectives and financial needs,
and Subscriber has adequate means for providing for Subscriber’s current
financial needs and personal contingencies and has no need for liquidity of
investment with respect to the Securities. Subscriber understands that no
federal or state agency has made any finding or determination as to the fairness
for investment, nor any recommendation or endorsement, of the Securities.

 

e.           Tax Liability. Subscriber has reviewed with Subscriber’s own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement, and has and will
rely 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
Agreement. Under penalties of perjury, Subscriber certifies that (a) the number
shown on the signature page below is Subscriber’s correct social security or
taxpayer identification number and (b) Subscriber is not subject to back-up
withholding either because Subscriber has not been notified that Subscriber is
subject to back-up withholding as a result of a failure to report all interest
and dividends, or because the Internal Revenue Service has notified Subscriber
that Subscriber is no longer subject to back-up withholding.

 

e.           Residence. Subscriber’s principal residence or business address,
and the location where the securities are being purchased, is Subscriber’s
address listed below.

 

f.           Limitation Regarding Representations. Except as set forth in this
Agreement, no representations or warranties have been made to Subscriber by the
Company or any agent, employee or affiliate of the Company and in entering into
this transaction, Subscriber is not relying on any information, other than that
contained herein and the results of independent investigation by Subscriber.
Subscriber agrees it is not relying on any oral or written information not
expressly included in this Agreement, meaning Subscriber is not relying on
information that has been provided by the Company, its directors, its officers
or any affiliate of any of the foregoing.

 

g.           Authority.

 

i.           Entity. If the undersigned is not an individual but an entity, the
individual signing on behalf of such entity and the entity jointly and severally
agree and certify that (a) the undersigned was not organized for the specific
purpose of acquiring the Securities and (b) this Agreement has been duly
authorized by all necessary action on the part of the undersigned, has been duly
executed by an authorized officer or representative of the undersigned, and is a
legal, valid and binding obligation of the undersigned enforceable in accordance
with its terms.

 

ii.          Individual. If the undersigned is an individual, the undersigned is
of legal age.

 

3.            Legend. Each Subscriber consents to the inscription on the
certificate or certificates representing the Securities of the following legend
reciting the above restrictions on the transferability of the Securities:

 

The Securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), and have not been
registered under any state securities laws. These Securities may not be sold,
offered for sale or transferred without first obtaining (i) an opinion of
counsel satisfactory to the Company that such sale or transfer lawfully is
exempt from registration under the Securities Act and under the applicable state
securities laws or (ii) such registration.

 

PARAGRAPH 4 IS REQUIRED IN CONNECTION WITH THE EXEMPTIONS FROM THE SECURITIES
ACT AND STATE LAWS BEING RELIED ON BY THE COMPANY WITH RESPECT TO THE OFFER AND
SALE OF THE SECURITIES. ALL OF SUCH INFORMATION WILL BE KEPT CONFIDENTIAL AND
WILL BE REVIEWED ONLY BY THE COMPANY AND ITS COUNSEL. THE UNDERSIGNED AGREES TO
FURNISH ANY ADDITIONAL INFORMATION THAT THE Company AND ITS COUNSEL DEEM
NECESSARY TO VERIFY THE RESPONSES SET FORTH BELOW.

 

 

Subscription Agreement

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4.     Accredited Status. Each Subscriber represents that it does qualify as an
“accredited investor” as that term is defined in Regulation D under the
Securities Act because the undersigned satisfies the criteria indicated on the
signature page hereto. Each Subscriber further represents and warrants that the
information provided under the heading “Accredited Investor Status” on the
signature page to this Agreement is true and correct. The information provided
under this section is required in connection with the exemptions from the
Securities Act and state securities laws being relied on by the Company with
respect to the offer and sale of the Securities. The undersigned agrees to
furnish any additional information which the Company or its legal counsel deem
necessary in order to verify the responses set forth above.

 

5.     Holding Status. Each Subscriber desires that the Securities be held as
set forth on the signature page hereto.

 

6.     Confidentiality. Each Subscriber will make no written or other public
disclosures regarding the Company and its business, the terms or existence of
the proposed sale of Securities or regarding the parties to the proposed sale of
Securities to any individual or organization without the prior written consent
of the Company, except as may be required by law.

 

7.     Notice. Correspondence regarding the Securities should be directed to the
Subscribers at the address printed below. Each Subscriber is a bona fide
resident of the state listed below.

 

8.     No Assignment or Revocation; Binding Effect. Neither this Agreement, nor
any interest herein, shall be assignable by any Subscriber without prior written
consent of the Company. Each Subscriber hereby acknowledges and agrees that it
is not entitled to cancel, terminate or revoke this Agreement and that it shall
survive the death, incapacity or bankruptcy of Subscriber. The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, legal representatives, successors and
assigns.

 

9.     Remedies. Each Subscriber acknowledges that the Company may not have an
adequate remedy at law in the event of any breach of this Agreement by the
Subscribers and, therefore, the Company will be entitled, in addition to any
other available remedies, to injunctive and/or other equitable relief to prevent
or remedy a breach of this Agreement and to attorneys’ fees and other costs
incurred by the Company in commencing suit or taking other action to enforce the
terms and conditions of this Agreement.

 

10.     Modifications. This Agreement may not be changed, modified, released,
discharged, abandoned or otherwise amended, in whole or in part, except by an
instrument in writing, signed by the Subscribers and the Company. No delay or
failure of the Company in exercising any right under this Agreement will be
deemed to constitute a waiver of such right or of any other rights.

 

11.     Entire Agreement. This Agreement and the exhibits hereto are the entire
agreement between the parties with respect to the subject matter hereto and
thereto. This Agreement, including the exhibits, supersede any previous oral or
written communications, representations, understandings or agreements with the
Company or with any officers or representatives of the Company.

 

12.     Severability. In the event that any paragraph or provision of this
Agreement shall be held to be illegal or unenforceable in any jurisdiction, such
paragraph or provision shall, as to that jurisdiction, be adjusted and reformed,
if possible, in order to achieve the intent of the parties, and if such
paragraph or provision cannot be adjusted and reformed, such paragraph or
provision shall, for the purposes of that jurisdiction be voided and severed
from this Agreement, and the entire Agreement shall not fail on account thereof
but shall otherwise remain in full force and effect.

 

13.     Governing Law. This Agreement shall be governed by, subject to, and
construed in accordance with the laws of the State of Delaware without regard to
conflict of law principles.

 

14.     Employment Status/Subsequent Employment. NOTHING IN THIS AGREEMENT WILL
GIVE ANY SUBSCRIBER ANY RIGHT TO EITHER EMPLOYMENT OR CONTINUED EMPLOYMENT WITH
THE COMPANY OR IN ANY WAY CHANGE ANY EMPLOYMENT STATUS OF SUBSCRIBER.

 

 

Subscription Agreement

(Confidential) Page 3

 
 

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15.     Survival of Representations and Warranties; Indemnification. Each
Subscriber understands the meaning and legal consequences of the agreements,
representations and warranties contained herein, agrees that such agreements,
representations and warranties shall survive and remain in full force and effect
after the execution hereof and payment for the Securities, and further agrees to
indemnify and hold harmless the Company and each current and future officer,
director, employee, agent and shareholder of the Company from and against any
and all loss, damage or liability due to, or arising out of, a breach of any
agreement, representation or warranty of the undersigned contained herein.

 

 

 

[Remainder of page left blank intentionally – signature page follows]

 

 

Subscription Agreement

(Confidential) Page 4

 
 

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Schedule I

 

Subscriber

Conversion Amount

Securities

Lloyd I. Miller Trust A-4

$324,395.00

72,847

Lloyd I. Miller, III – Individual

324,395.00

72,847

MILFAM II, L.P.

324,392.50

72,846

Total

973,182.50

218,540

 

 

Subscription Agreement

(Confidential) Page 5

 
 

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For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, each Subscriber hereby agrees that by signing this
Subscription and Investment Representation Agreement, and upon acceptance hereof
by the Company, that the terms, provisions, obligations and agreements of this
Agreement shall be binding upon Subscriber.

 

INDIVIDUAL(S):

ENTITIES:

                                                                           

                                                                       

Print Name:                                                   

Entity Name

    Address:                                                        
                                                              
By:                                                                 
                                                              
Name:                                                            
                                                              
Its:                                                                  Social
Security Number:                             

                         

 

Date: June 21, 2017

 

Number of Shares Purchased:               

      The Subscriber desires that the Securities be held as follows (check one):
  ☐     Individual Ownership ☐     Corporation* ☐     Community Property
☐     Trust* ☐     Jt. Tenant with Right of Survivorship ☐     Limited Liability
Company*  (both parties must sign) ☐     Partnership* ☐     Tenants in Common
☐     Other (please describe):                      * If Securities are being
subscribed for by an entity, Exhibit B to this agreement must also be completed.
   

 

The Company hereby accepts the subscription evidenced by this Subscription and
Investment Representation Agreement:

 

 

 

Date:  June 21, 2017          

(which date shall be the effective

date of this Agreement)

Determine, Inc.

   

 

 

 

By:                                                       

Name:                                                  

Title:                                                    

 

 

Subscription Agreement

(Confidential) Page 6

 
 

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ACCREDITED INVESTOR CRITERIA
[Mark as applicable]

 

______

The undersigned is an individual with a net worth, or a joint net worth together
with his or her spouse, in excess of $1,000,000. In calculating net worth, you
may include equity in personal property and real estate (excluding your
principal residence), cash, short term investments, stock and securities.
Indebtedness that is secured by your primary residence up to the estimated fair
market value of the residence shall not be included as a liability unless it
exceeds the amount outstanding 60 days before the date of this agreement other
than as a result of acquisition of your primary residence. Indebtedness secured
by your primary residence in excess of the fair market value of the residence
shall be included as a liability.

   

______

The undersigned is an individual that had an individual income in excess of
$200,000 in each of the prior two years and reasonably expects an income in
excess of $200,000 in the current year.

   

______

The undersigned is an individual that had with his or her spouse joint income in
excess of $300,000 in each of the prior two years and reasonably expects joint
income in excess of $300,000 in the current year.

    ______ The undersigned is a director or executive officer of the Company.  
  ______ The undersigned is an entity, and is an “accredited investor” as
defined in Rule 501(a) of Regulation D under the Securities Act. This
representation is based on the following (check one or more, as applicable):

 

  _____ The undersigned is an entity in which all equity owners are accredited
investors. (If relying on this category alone, each equity owner must complete a
separate copy of this Agreement.)        

_____

The undersigned (or, in the case of a trust, the undersigned trustee) is a bank
or savings and loan association as defined in Sections 3(a)(2) and 3(a)(5)(A),
respectively, of the Securities Act acting either in its individual or fiduciary
capacity.

 

 

_____

The undersigned is an insurance company as defined in Section 2(13) of the
Securities Act.

 

 

_____

The undersigned is an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
the Securities Act.

 

 

_____

The undersigned is a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.

 

 

_____

The undersigned is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 and either (check one or more,
as applicable):

 

   

_____     the investment decision is made by a plan fiduciary, as defined in
Section 3(21) of the Securities Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser; or

 

 

 

_____     the employee benefit plan has total assets in excess of $5,000,000; or

 

   

_____     the plan is a self-directed plan with investment decisions made solely
by persons who are “Accredited Investors” as defined under the Securities Act.

 

 

_____

The undersigned is a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.

 

 

_____

The undersigned has total assets in excess of $5,000,000, was not formed for the
specific purpose of acquiring Securities and is one or more of the following
(check one or more, as applicable):

 

 

_____

an organization described in Section 501(c)(3) of the Internal Revenue Code; or

 

 

_____

a corporation; or

 

 

_____

a Massachusetts or similar business trust; or

 

 

_____

a partnership.

 

 

_____

The undersigned is a trust with total assets exceeding $5,000,000, which was not
formed for the specific purpose of acquiring Securities and whose purchase is
directed by a person who has such knowledge and experience in financial and
business matters that Subscriber is capable of evaluating the merits and risks
of the investment in the Securities.

 

 

Subscription Agreement

(Confidential) Page 7