Exhibit 10.2

 

 

 
 

Name of Subscriber:

 

SUBSCRIPTION AGREEMENT

 

usell.com, Inc.

33 East 33rd Street, Suite 1101

New York, New York 10016

Attention: Mr. Daniel Brauser

 

Dear Sirs:

 

1.1 Subscription. I, the undersigned investor (the “Investor”), hereby subscribe
for and agree to purchase on the terms and conditions contained herein a
$_______ convertible note (the “Note”) of usell.com, Inc., a Delaware
corporation (the “Company”). There is a $50,000 minimum subscription amount;
however the Company may accept lesser amounts. The Investor acknowledges receipt
of the Term Sheet dated May 30, 2013 (the “Term Sheet”) which details the terms
of the offering under which the Note is being sold to the Investor.

 

1.2 Subscription Payment. As payment for this subscription, simultaneously with
the execution hereof, I am (i) wire transferring to Nason, Yeager, Gerson, White
& Lioce, P.A. as escrow agent (the “Escrow Agent”), or (ii) delivering herewith
to the Company a check made payable to the Escrow Agent equal to the principal
amount of the Note.

 

1.3 Terms of the Note. The Note is convertible at $0.20 per share into shares of
the Company’s Common Stock at the discretion of the Investor. The Note also
automatically converts upon certain trigger events which are described in the
Note. The Note is due two years from the date of investment and pays 5% per
annum interest. A copy of the Note is attached as Exhibit A to the Term Sheet.

 

2.1 Investor Representations and Warranties. I acknowledge, represent and
warrant to, and agree with, the Company as follows:

 

(a) I am aware that my investment involves a high degree of risk;

 

(b) I acknowledge and am aware that there is no assurance as to the future
performance of the Company;

 

(c) I am purchasing the Note for my own account for investment and not with a
view to or for sale in connection with the distribution of the Note nor with any
present intention of selling or otherwise disposing of all or any part of the
Note. I agree that I must bear the economic risk of my investment for an
indefinite period of time because, among other reasons, the Note has not been
registered under the Securities Act of 1933 (the “Securities Act”) or under the
securities laws of any states and, therefore, cannot be resold, pledged,
assigned or otherwise disposed of unless it has subsequently been registered
under the Securities Act and under applicable securities laws of such states or
an exemption from such registration is available. I hereby authorize the Company
to place a legend denoting the restriction on the Note.

 

C -2

 

 

(d) I further acknowledge my understanding that the Company’s reliance on such
exemptions referred to in subsection (c) above are, in part, based upon the
foregoing representations, warranties, and agreements by me and that the
statutory basis for such exemptions would not be present, if, notwithstanding
such representations, warranties and agreements, I were acquiring the Note for
resale on the occurrence or non-occurrence of some pre-determined event. In
order to induce the Company to issue and sell the Note subscribed for hereby to
me, it is agreed that the Company will have no obligation to recognize the
ownership, beneficial or otherwise, of such Note or any part thereof by anyone,
except as set forth herein;

 

(e) I have the financial ability to bear the economic risk of my investment in
the Company (including its possible total loss), have adequate means for
providing for my current needs and personal contingencies and have no need for
liquidity with respect to my investment in the Company;

 

(f) I have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the Note and
have obtained, in my judgment, sufficient information from the Company to
evaluate the merits and risks of an investment in the Company;

 

(g) I:

 

(1) have carefully read this Subscription Agreement, the Term Sheet, the Note
and the Company’s Form 10-K for the Company’s year ended December 31, 2012, the
Form10-Q for the quarter ended March 31, 2013, and all subsequent filings filed
with the Securities and Exchange Commission and press releases contained on the
Company’s website and understand and have evaluated the risks of a purchase of
the Note and have relied solely (except as indicated in subsection (2) and (3))
on the information contained in this Subscription Agreement;

 

(2) have been provided an opportunity to obtain any additional information
concerning the Company and all other information to the extent the Company
possesses such information or can acquire it without unreasonable effort or
expense; and

 

(3) have been given the opportunity to ask questions of, and receive answers
from, the Company concerning the terms and conditions and other matters
pertaining to this investment. In addition, as required by
Section 517.061(11)(a)(3), Florida Statutes and by Rule 3E-500.05(a) thereunder,
I may have, at the offices of the Company, at any reasonable hour, after
reasonable prior notice, access to the materials set forth in the Rule which the
Company can obtain without unreasonable effort or expense.

 

(h) If the undersigned is a corporation, trust, partnership, employee benefit
plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it
is authorized and qualified to become an investor in the Company and the person
signing this Subscription Agreement on behalf of such entity has been duly
authorized by such entity to do so;

 

(i) No representations or warranties have been made to the undersigned by the
Company, or any of their respective officers, employees, agents, affiliates or
attorneys;

 

C -3

 

 

(j) The information contained in Section 2.2 of this Subscription Agreement is
true and correct including any information which I have furnished and furnish to
the Company with respect to my financial position and business experience, is
correct and complete as of the date of this Subscription Agreement and if there
should be any material change in such information prior to acceptance of my
subscription, I will furnish such revised or corrected information to the
Company;

 

(k) I hereby acknowledge and am aware that except for any rescission rights that
may be provided under applicable state laws including the three day rights under
Florida or other state law, I am not entitled to cancel, terminate or revoke
this subscription, and any agreements made in connection herewith shall survive
my death or disability;

 

(l) I have not received any general solicitation or advertising regarding the
purchase of the Note and became aware of this investment through a substantive,
pre-existing relationship with the Company; and

 

(m) Where applicable, I agree to be bound by any restrictions on resale of the
Note required by applicable state laws.

 

2.2 Investor Representations and Warranties Concerning Suitability, Accredited
Investor and Eligible Client Status. I represent and warrant the following
information:

 

(a) The following information should be provided by the person making the
investment decision whether on his own behalf or on behalf of an entity:

 

 

 

(1) Name of Investor:   Age:               Email Address:     (2) Name of person
making investment decision       Age:   (Print)              

(3) Principal residence address and telephone number:

 

     

 

(4) Secondary residence address and telephone number:

 

       

 

I have no present intention of becoming a resident of any other state or
jurisdiction.

 

C -4

 

 

(5)   Name, address, telephone number and facsimile number of employer or
business:

         

 

(i) Nature of business  

 

(ii) Position and nature of responsibilities      

 

(6) Length of employment or in current position  

 

(7) Prior employment, positions or occupations during the past five years (and
the inclusive dates of each) are as follows:

     

Nature of Employment,

or Occupation

 

Position/ Duties

 

From/To

               

 

(8) Business or professional education and the degree(s) received are as
follows:

 

      School Degree Year Received            

 

 

Attach additional pages to answer any questions in greater detail, if necessary.

 

(b) Investor Representations. Must Initial One. Initial all appropriate spaces
on the following pages (please initial only where appropriate).

 

For Individual Investors Only:

 

(1) I certify that I am an accredited investor because I have an individual net
worth, or my spouse and I have combined net worth, in excess of $1,000,000. For
purposes of calculating net worth under this paragraph (1), (i) the primary
residence shall not be included as an asset, (ii) to the extent that the
indebtedness that is secured by the primary residence is in excess of the fair
market value of the primary residence, the excess amount shall be included as a
liability, and (iii) if the amount of outstanding indebtedness that is secured
by the primary residence exceeds the amount outstanding 60 days prior to the
execution of this Subscription Agreement, other than as a result of the
acquisition of the primary residence, the amount of such excess shall be
included as a liability.

 

C -5

 

 

(2a) _____ I certify that I am an accredited investor because I had individual
income (exclusive of any income attributable to my spouse) of more than $200,000
in the last two completed years and I reasonably expect to have an individual
income in excess of $200,000 this year.

 

(2b) Alternatively, my spouse and I have joint income in excess of $300,000 in
each applicable year.

 

(3) I am a director or executive officer of the Company.

 

Other Investors:

 

(4) The undersigned certifies that it is one of the following: any bank as
defined in Section 3(a)(2) of the Securities Act whether acting in its
individual or fiduciary capacity; any broker or dealer registered pursuant to
section 15 of the Securities Exchange Act of 1934; insurance company as defined
in Section 2(13) of the Securities Act; investment company registered under the
Investment Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act; 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; any plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of
such Act, which is either a bank, savings and loan association, insurance
company, or registered investment advisor, or if the employee benefit plan has
total assets in excess of $5,000,000, or if a self-directed plan, with
investment decisions made solely by persons that are accredited investors.

 

(5) The undersigned certifies that it is a private business development company
as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

 

(6) The undersigned certifies that it is a organization described in Section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar
business trust or partnership, not formed for the specific purpose of acquiring
the securities offered, with total assets in excess of $5,000,000.

 

(7) The undersigned certifies that it is a trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) of the Securities Act.

 

(8) The undersigned certifies that it is an entity in which all of the equity
owners are accredited investors.

 

(9) _____ I am none of the above.

 

3. Indemnification. I hereby agree to indemnify and hold harmless the Company,
its officers, directors, shareholders, employees, agents and attorneys against
any and all losses, claims, demands, liabilities and expenses (including
reasonable legal or other expenses) incurred by each such person in connection
with defending or investigating any such claims or liabilities, whether or not
resulting in any liability to such person) to which any such indemnified party
may become subject under the Securities Act, under any other statute, at common
law or otherwise, insofar as such losses, claims, demands, liabilities and
expenses (a) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact made by me and contained in this
Subscription Agreement, or (b) arise out of or are based upon any breach of any
representation, warranty or agreement contained herein.

 

C -6

 

 

4. Arbitration. Any controversy, dispute or claim against the Company, its
officers, directors or employees arising out of my investment or relating to
this Subscription Agreement, or its interpretation, application, implementation,
breach or enforcement which the parties are unable to resolve by mutual
agreement, shall be settled by submission by either party of the controversy,
claim or dispute to binding arbitration in New York, New York (unless the
parties agree in writing to a different location) before one arbitrator in
accordance with the rules of the American Arbitration Association then in
effect. In any such arbitration proceeding, the parties agree to provide all
discovery deemed necessary by the arbitrator. The decision and award made by the
arbitrator shall be final, binding and conclusive on all parties to any
arbitration proceeding for all purposes, and judgment may be entered thereon in
any court having jurisdiction thereof.

 

5. Counterparts. This Subscription Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Subscription Agreement may be by actual or facsimile signature.

 

6. Benefit. This Subscription Agreement shall be binding upon and inure to the
benefit of the parties hereto and their legal representatives, successors and
assigns.

 

7. Notices and Addresses. All notices, offers, acceptance and any other acts
under this Agreement (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person (or to such other
address as any of them, by notice to the other may designate from time to time)
by FedEx or similar overnight next business day delivery, or by email followed
by overnight next business day delivery, as follows:

 

Investor: At the address designated in Section 2.2
of this Subscription Agreement           The Company: usell.com, Inc.   At the
address on the first page   of this Subscription Agreement   Attention: Mr.
Daniel Brauser   Email: dan@usell.com

 

8. Governing Law. This Subscription Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided therein or performance
whether sounding in contract, tort or otherwise, shall be governed or
interpreted according to the laws of the State of Delaware.

 

9. Oral Evidence. This Subscription Agreement constitutes the entire
Subscription Agreement between the parties and supersedes all prior oral and
written agreements between the parties hereto with respect to the subject matter
hereof. Neither this Subscription Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, except by a statement in
writing signed by the party or parties against which enforcement or the change,
waiver discharge or termination is sought.

 

C -7

 

 

10. Section Headings. Section headings herein have been inserted for reference
only and shall not be deemed to limit or otherwise affect, in any matter, or be
deemed to interpret in whole or in part any of the terms or provisions of this
Subscription Agreement.

 

11. Survival of Representations, Warranties and Agreements. The representations,
warranties and agreements contained herein shall survive the delivery of, and
payment for, the securities.

 

12. Acceptance of Subscription. The Company may accept this Subscription
Agreement at any time for all or any portion of the securities subscribed for by
executing a copy hereof as provided and notifying me within a reasonable time
thereafter.

 

FLORIDA SALES

 

FLORIDA LAW PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN
FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN THREE DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
COMPANY, AN AGENT OF THE COMPANY OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER
THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER
OCCURS LATER. PAYMENTS FOR TERMINATED SUBSCRIPTIONS VOIDED BY PURCHASERS AS
PROVIDED FOR IN THIS PARAGRAPH WILL BE PROMPTLY REFUNDED WITHOUT INTEREST.
NOTICE SHOULD BE GIVEN TO THE COMPANY TO THE ATTENTION OF DANIEL BRAUSER AT THE
ADDRESS SET FORTH ON THE COVER PAGE OF THIS SUBSCRIPTION AGREEMENT.

 

 

[Remainder of Page Intentionally Left Blank]

[Signature Page Follows]

 

C -8

 

 

INVESTOR SIGNATURE PAGE

 

Individual Investors

 

      Social Security Number Print Name of Investor                 Signature of
Investor        

Dated: _______________, 2013

 

Corporate or Other Entity

 

      Federal ID Number   Print Name of Entity         By:       Signature,
Title

Dated: _______________, 2013

 

 

All Investors:

 

Manner in which the securities are to be held:

 

  Individual Ownership   Partnership           Tenants-in-Common   Trust        
  Joint Tenant With Right of Survivorship   Corporation           Tenants by the
Entirety   Employee Benefit Plan           Community Property   Other (please
indicate)           Separate Property    

 

C -9

 

 

ACCEPTANCE OF SUBSCRIPTION

 

By signing below, the undersigned accepts the foregoing subscription and agrees
to be bound by the terms of the Subscription Agreement.

 

usell.com, Inc.

 

 

By:     Dated: __________ ___, 2013    

Daniel Brauser

President

     

 

C -10