Document:

ex4-1.htm

Exhibit 4.1

 

Minimum Offering: 2,000,000 Securities ($100,000)

Maximum Offering: 20,000,000 Securities ($1,000,000)

of

Common Stock for $0.05 per Share

Plus Warrants

IMEDICOR, INC.

(A NEVADA CORPORATION FORMERLY KNOWN AS VEMICS, INC.)

SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (the “Agreement”) dated as of _____________, is between the undersigned Subscriber (the “Subscriber”), and iMedicor, Inc., a Nevada corporation formerly known as Vemics, Inc. (the “Company”).

WHEREAS, the Subscriber desires to subscribe for and purchase from the Company (i) that number of shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) set forth on Subscriber’s signature page hereto (the “Purchased Shares”), and (ii) associated warrants (the “Associated Warrants”) to purchase that number of shares calculated by multiplying the aggregate number of Purchased Shares by 100%  and at an exercise price for the shares issuable upon the exercise of the Associated Warrants of $0.03 per share. A form of an Associated Warrant is attached hereto as Appendix A (the Purchased Shares and the Associated Warrants are referred to collectively as, the “Securities”), on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

1.           Offering; Subscription; Payment.

(a)           This Agreement relates to the offering of Securities and is part of a package of documents related to the Company’s confidential private offering of Securities.  This offering of Securities is being made to a limited group of investors who are “accredited investors,” as that term is defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”).  The Company is offering a minimum of 2,000,000 shares of Common Stock ($100,000) and a maximum of 20,000,000 shares of Common Stock ($1,000,000), plus the Associated Warrants to purchase Common Stock. The company reserves the right, at its sole discretion to increase the maximum number of shares being offered at any time. If subscriptions for at least 2,000,000 shares of Common Stock ($100,000) have not been received and accepted by the Company by June 4, 2010, unless otherwise extended by the Company in its sole discretion to a later date not exceeding 180 days from June 3, 2010 (“Termination Date”), this offering will be terminated and all monies paid by the Subscriber for Securities related to this offering will be returned to the Subscriber, without interest.  The Company may elect at any time to close this offering, at or prior to the Termination Date, provided that subscriptions for at least 2,000,000 shares of Common Stock have been received (the “Closing Date”).  The Subscriber is subject to a minimum purchase requirement of 2,000,000 purchased shares and Associated Warrants ($100,000.00) unless the Company waives, in its sole discretion, such requirement with respect to Subscriber. The Company will limit the purchase to any single individual to 10,000,000 purchased shares and Associated Warrants ($500,000) unless such limitation is waived by the Company in writing as an attachment to this subscription agreement.

 

  

  

  

 

(b)           Subscriber represents and warrants to the Company that Subscriber has read in its entirety this Agreement and each of the following documents in the offering package that this Agreement is a part of: (i) the Registration Statement on Form 10-K filed in October of 2009, including the risk factors contained therein, and (ii) the financial statements of the Company as of and for the fiscal year ended June 30, 2009 and the Form10-Q and 8-K filings from September2009 through present (together, including this Agreement and all attachments hereto, the “Company Materials”).

(c)           Subject to the terms and conditions herein set forth, the Subscriber hereby irrevocably subscribes for that number of Securities set forth on Subscriber’s signature page hereto.  The Subscriber acknowledges that this subscription shall not be effective unless and until accepted by the Company.

(d)           The purchase price to be paid by the Subscriber to the Company for the Securities shall be that amount equal to $0.05 multiplied by the number of Purchased Shares.

(e)           The Securities subscribed for hereby shall not be deemed owned by the Subscriber, nor shall the Subscriber be deemed a holder of securities of the Company, until this subscription has been accepted by the Company, the aggregate purchase price for the Securities subscribed for has been received by the Company, and a closing has occurred.  The Subscriber understands and agrees that the Company reserves the right to reject this subscription for the Securities in whole or in part, in its sole discretion, at any time prior to the issuance of the Securities.

(f)           In the event of rejection of this subscription in its entirety, or in the event the sale of the Securities (or any portion thereof) is not consummated for any reason, this Agreement shall have no force or effect, except for Section 9(s) hereof, which shall remain in force and effect.

(g)           Immediately following notice of acceptance of this Subscription by the Company, the Subscriber agrees to deliver to the Company by wire transfer or immediately available funds to an account designated by the Company, the aggregate purchase price for the Securities in the dollar amount set forth on Subscriber’s signature page hereto (or the portion thereof for which the Company accepted a subscription).

 

  

  

  

 

(h)           The Company will issue the Securities in the name of the Subscriber upon the Company’s acceptance of this Agreement and receipt of full payment of the aggregate purchase price at the closing of the offering.

(i)           Fractional shares shall not be issued but shall be rounded up or down to the nearest whole share.

2.           Representations and Warranties of the Company.  The Company hereby represents and warrants to the Subscriber as follows:

(a)           Organization.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  The Company has full corporate power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.

(b)           Authority.  The execution and delivery of this Agreement by the Company, and the performance by the Company of its obligations hereunder, have been duly authorized by all necessary corporate action by the Company.  This Agreement has been duly and validly 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.

(c)           The Securities.  The Securities when issued and delivered to the Subscriber pursuant to this Agreement will be duly and validly issued, fully paid and non-assessable.

3.           Representations and Warranties of the Subscriber.  The Subscriber hereby represents and warrants to the Company as follows:

(a)           Authority.

(i)           Natural Person.  If the Subscriber is a natural person, the Subscriber represents that he or she has the requisite capacity to execute and deliver this Agreement, to perform his or her obligations hereunder and to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by the Subscriber and constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.

(ii)           Entity.  If the Subscriber is not a natural person, the Subscriber hereby represents and warrants that (A) the Subscriber is duly organized and validly existing, and has the power, authority and capacity to enter into this Subscription Agreement and to consummate the transactions contemplated hereby; (B) all necessary actions have been taken, and all necessary approvals and consents have been given, to authorize the execution, delivery and performance of this Agreement by the Subscriber; (C) this Agreement has been duly executed and delivered by the Subscriber and constitutes the valid and legally binding obligation of the Subscriber, fully enforceable against the Subscriber in accordance with its terms; and (D) the execution and delivery of this Agreement by the Subscriber, and the Subscriber’s performance of its obligations hereunder, will not conflict with the charter, bylaws, trust agreement or other organizational document(s) of the Subscriber.

 

  

  

  

 

(b)           No Violation.  The execution and delivery by the Subscriber of this Agreement does not, and the performance by the Subscriber of his obligations under this Agreement and the consummation of the transactions contemplated hereby will not, conflict with, result in any violation of or default under, result in any person or entity having the right to terminate or modify, or require consent under (i) any note, bond, mortgage, license, lease, contract, commitment, agreement or arrangement to which the Subscriber is a party or by which any of his properties or assets are bound or (ii) any judgment, decree or order, or statute, law, ordinance, regulation or rule, applicable to the Subscriber or to any of the property or assets of the Subscriber.  No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, is required to be obtained or made by the Subscriber in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

4.           Investment Representation of the Subscriber.

(a)           The Subscriber has received and carefully read the Company Materials. The Subscriber has based the decision to invest on the information contained in the Company Materials, and has not otherwise relied upon any other offering literature or prospectus. The Subscriber acknowledges that the Subscriber has read, understood and is familiar with the Risk Factors made part of the Company Materials, is familiar with the nature of risks attending investments of this type, and has determined that a purchase of  the Securities is consistent with Subscriber’s investment objectives.

(b)           The Subscriber acknowledges that the Subscriber has been given the opportunity to ask questions of, and receive answers from, representatives of the Company regarding the business and current plans of the Company and the offering of the Securities and has been given the opportunity to inspect such documents and obtain all additional information that the Subscriber has requested so as more fully to understand the nature of the investment and to verify the accuracy of the information supplied to the Subscriber.  The Subscriber acknowledges that, except as set forth herein, no representations or warranties have been made to Subscriber, or to Subscriber’s advisors or representatives, by the Company or others with respect to the business of the Company and its financial condition.

 

  

  

  

 

(c)           The Subscriber, if an individual, is at least 21 years of age.  The Subscriber maintains his or her domicile (if an individual) or its principal offices (if not an individual) at the address shown on the signature page of this Agreement.

(d)           The Subscriber can bear the economic risks of this investment and can afford the loss of Subscriber’s entire investment in the Securities. The Subscriber has sufficient liquid assets to pay the purchase price for the Securities subscribed for hereby, has adequate means of providing for the Subscriber’s current needs and possible personal contingencies, and has no present or anticipated need for liquidity of this investment in the Company.  The investment of the Subscriber in the Company is reasonable in relation to the Subscriber’s net worth and financial needs.

(e)           The Subscriber understands that the price per share of Common Stock has been arbitrarily determined by the Company and that no assurances have been given about an increase in value, if any, of the Securities.

(f)           The Subscriber has the requisite knowledge and experience in business and financial matters to be capable of evaluating the merits and risks of an investment in the Company and has determined that such an investment is a suitable investment.

(g)           The Subscriber understands that the offer and sale of the Securities have not been passed upon, nor have the merits of this investment been endorsed or approved by, any state or federal authorities.

(h)           The Subscriber is investing in the Securities for Subscriber’s own account and not with a view toward the resale, transfer or distribution of all or any part therof.  The Subscriber understands that Subscriber must bear the economic risk of an investment in the Securities for an indefinite period. The Subscriber has been advised and is aware that: (i) there is a limited public market for the Securities purchased hereby; (ii) the Securities offered hereby have not been registered under the Securities Act or the securities laws of any state or other jurisdiction, and, therefore, cannot be sold -- and Subscriber agrees not to sell or otherwise dispose of all or any part of the Securities acquired by Subscriber -- unless the securities, or part therof, as the case may be, are subsequently registered under the Securities Act and such state securities laws as are applicable or unless there are available exemptions from such registration that are supported by an opinion of counsel for Subscriber, which opinion is satisfactory to the Company.

(i)           The Subscriber acknowledges that the Company has the unconditional right to accept or reject this Agreement in whole or in part.

(j)           The Subscriber understands the meaning and legal consequences of the foregoing representations and warranties.  The Subscriber certifies that each of the representations and warranties set forth in this Section 4 is true and correct as of the date hereof and shall survive such date.

 

  

  

  

 

(k)           The Subscriber hereby agrees that the certificates and other instruments representing the Securities issued to the Subscriber pursuant hereto, and any securities issued upon the exercise of the Associated Warrants may bear the following legend in addition to any other legends as may be agreed to by him or as may be required by law:

          THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES STATUTES AND REGULATIONS.  SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY) OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.  THE HOLDER ALSO ACKNOWLEDGES THAT THE HOLDERS OF PREFERRED STOCK HAVE SPECIAL RIGHTS, AS DESCRIBED IN THE COMPANY’S RESTATED ARTICLES OF INCORPORATION.

(l)           The Subscriber recognizes that the Company is an early stage company with limited revenues. The Subscriber is familiar with the business and financial condition, properties, operations and prospects of the Company. The Subscriber acknowledges that the Subscriber has read, understood and is familiar with the Risk Factors contained in the Form 10-K filed with the SEC in October 2009, is familiar with the nature of risks attending investments of this type, and has determined that a purchase of Securities is consistent with Subscriber’s investment objectives. The Subscriber is aware that an investment in the Securities is a speculative investment involving a high degree of risk, and that there is no guarantee that the Subsciber will realize any gain from an investment in the Securities and that the Subscriber could lose the total value of its investment.

(m)           The Subscriber acknowledges that the Subscriber has never been promised, guaranteed, or warranted by the Company or any of its agents or employees or any other person, expressly or by implication, any of the following: (i) the approximate or exact length of time that the Subscriber will be required to remain as owner of any of the Company’s securities; (ii) any expected percentage of profit and/or amount of or type of consideration, profit or loss to be realized, if any, as a result of the investment; and (iii)  any expected amount of percentage of tax deduction or other tax benefit as a result of the investment.

(n)           The Subscriber acknowledges that the Subscriber’s investment in the Company was not effected by any means of general advertising or general solicitation of an investment in the Company and that such investment is considered a private transaction.

 

5.           Accredited Investor and Suitability Information.  The Subscriber is an “accredited investor” as defined in Rule 501(a) of Regulation D, under the Securities Act. The Subscriber represents and warrants that he, she or it has completed the Investor Questionnaire contained in Appendix B attached hereto, that the information contained therein is complete and accurate as of the date hereof and that all of the the Subscriber’s responses to the information requested therein are incorporated into this Subscription Agreement as representations and warranties as if fully set forth herein.  The Subscriber agrees to furnish any additional information requested to assure compliance with applicable federal and state securities laws in connection with the purchase and sale of the Securities.

 

  

  

  

 

6.           Conditions to the Subscriber’s Obligations.  The obligation of the Subscriber to purchase the Securities is subject to the representations and warranties of the Company contained in Section 2 hereof being true and correct in all material respects as of the Closing Date as though made as of the Closing Date.

7.           Conditions to the Company's Obligations. The obligation of the Company to issue and sell the Securities is subject to the representations and warranties of the Subscriber contained in Sections 3 and 4 hereof being true and correct in all material respects as of the Closing Date as though made as of the Closing Date.

8.           Registration Rights.  If at any time after the Company has a class of securities registered under the Securities Exchange Act of 1934, as amended, the Company proposes to register, under the Securities Act of 1933, as amended, shares of any class of stock, it will notify the Subscriber, and if so requested by the Subscriber, will register as part of such registration the Purchased shares and the shares of Common Stock underlying the Associated Warrant, as requested.  The Subscriber may request and participate in a piggyback registration of its shares of its Common Stock no more than two times. The Subscriber’s piggyback registration rights hereunder will rank second to any other piggyback registration rights of the Company existing on the date hereof, or created after the date hereof. The Company shall immediately notify the Subscriber of the effective date of any registration under the Securities Act of 1933, as amended, of Subscriber’s shares of Common Stock acquired hereunder. If, in the written opinion of any managing underwriter, registration of all or any of the shares requested would unreasonably adversely affect the market for the Company’s shares, the Company and the Subscriber shall negotiate a resolution in good faith. These rights are not assignable.

9.           Miscellaneous.

(a)           Further Documents.  The parties agree to execute any and all such further documents and instruments and to take any and all such further actions reasonably required to effectuate this Agreement and the intent and purposes hereof.

(b)           Independent Legal Advice.  Neither the Company Materials nor this Subscription Agreement is to be construed as personal legal, financial or tax advice.  The Subscriber is encouraged to obtain independent legal, financial and tax counsel to advise the undersigned as to the legal and other consequences of investing in the Securities.

 

  

  

  

 

(c)           Binding Effect.  This Agreement shall be binding upon, and any action for a breach, thereof may be brought against, the parties to this Agreement and their respective successors and assigns.

(d)           Severability.  The invalidity, illegality or unenforceability of one or more of the provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of this Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

(e)           Entire Agreement.  This Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.

(f)           Amendment.  This Agreement may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto.

(g)           No Third Party Beneficiaries.  The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person.

(h)           No Transfer.  The Subscriber may not transfer this Agreement, or any of the Subscriber’s rights or obligations under this Agreement, without the written consent of the Company.

(i)           Survival.  This Subscription Agreement shall survive the death, disability, legal incapacity, bankruptcy, insolvency, dissolution or cessation of business of the Subscriber.

(j)           Headings.  The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

(k)           Governing Law.  This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Nevada.

(l)           Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

  

  

  

 

(m)           Recapitalization or Fundamental Change.  If any recapitalization or other transaction affecting the stock of the Company is effected, then any new, substituted or additional securities or other property which is distributed with respect to the Securities shall be immediately subject to this Agreement, to the same extent that the Securities, immediately prior thereto, shall have been subject to  this Agreement.

(n)           Specific Performance.  The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with the terms hereof and that the parties, and any third party beneficiaries hereof, shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

(o)           Waiver.  No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(p)           Notices.  All notices, requests, claims, demands and other communications given or made pursuant to this Agreement shall be in writing and shall be given or made by delivery in person, by courier service, by telecopy or by email to the respective parties at the following addresses and facsimile numbers (or at such other address or facsimile number for a party as shall be specified in a notice given in accordance with this Section):

(i)           if to the Company:

Vemics, Inc.

523 Avalon Gardens Drive

Nanuet, New York 10954

Office Phone:  (845) 371-7380

Fax: (845) 215-0110

Attention:  Fred Zola, CEO

E-mail:  fzolla@imedicor.com

With a copy to:

Samuel B. Fortenbaugh III

630 Fifth Avenue, Suite 1401

New York, NY 10111

Office Phone: (212) 596-3379

Fax:     (212) 596-3391

E-mail:  sam@sfortenbaugh.com

 

  

  

  

 

(ii)           if to the Subscriber:

______________________

 

Name

 

_____________________

 

Address

 

______________________

 

City

 

______________________

 

State                      Zip

 

______________________

 

Fax/Telephone

 

______________________

 

E-mail

 

 

All such notices shall be deemed to have been duly given when delivered by hand, if personally delivered; when receipt is acknowledged, if telecopied or e-mailed; and on the next Business Day (as hereinafter defined), if timely delivered to an air courier guaranteeing overnight delivery.  A “Business Day” shall mean any day that is not a Saturday, a Sunday, or any other day on which banks are required or authorized by law to be closed in the State of Nevada.

(q)           Waiver of Jury Trial.   EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF EITHER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.  EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH PARTY.  EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

  

  

  

 

(r)           Confidentiality.  The Subscriber agrees to maintain the secrecy and confidentiality of any Trade Secrets and any Confidential Information which is provided to the Subscriber for purposes of evaluating his, her or its purchase of the Securities.  As used herein, “Trade Secrets” shall include, without limitation, all formulae, patterns, compilations, programs, devices, methods, techniques, processes and all other information used in the conduct of the Company’s business that would be deemed “trade secrets” within the meaning of the Uniform Trade Secrets Act.  The Subscriber acknowledges that the Trade Secrets are of independent economic value to the Company because they are not generally known and are the subject of efforts by the Company to maintain their secrecy.  As used herein, “Confidential Information” shall mean any and all technical or business information of the Company furnished or disclosed, in whatever form or medium, by the Company to the Subscriber or discovered by the Subscriber, including but not limited to computer programs, source code, object code, reports, documentation, product/service specifications, marketing plans, financial data and personnel statistics. The Subscriber acknowledges that all Trade Secrets, all Confidential Information and all books, documents, lists and records pertaining to the Company's business (collectively, the “Records”), whether the Records are written, typed, printed, contained on microfilm, contained on computer disc, contained on tape or set forth in some other medium of expression, are the sole and exclusive property of the Company.  The Subscriber agrees not to (i) divulge, furnish or make accessible to anyone or in any way use, for the Subscriber’s benefit or for the benefit of any other person, firm or entity, any Trade Secret or any Confidential Information; (ii) take or permit any action to be taken which would reduce the value of the Trade Secrets or the Confidential Information to the Company; or (iii) otherwise misappropriate or suffer the misappropriation of the Trade Secrets or the Confidential Information.  Notwithstanding anything herein to the contrary, the obligations of secrecy and confidentiality set forth herein shall not apply to any information which is now generally publicly known or which subsequently becomes generally publicly known other than as a direct or indirect result of the breach of this Agreement by Subscriber.

(s)           Indemnification.   The Subscriber hereby agrees to indemnify the Company and its directors, officers, agents, attorneys and shareholders and hold them harmless from and against any and all loss, damage, liability or expense (including costs and reasonable attorney’s fees) to which they may be subject or which they may incur by reason of or in connection with any misrepresentation made by the undersigned, any breach of any of the Subscriber’s representations or warranties, or the undersigned’s failure to fulfill any of the Subscriber’s covenants or agreements, under this Subscription Agreement, or any other document furnished by the Subscriber. This Subscription Agreement and the representations and warranties and indemnification contained herein shall be binding upon the Subscriber, the Subscriber’s heirs, executors, administrators, successors and assigns, and shall survive the acceptance of this Subscription and the sale of the Securities.

 

(t)           Brokers.  Subscriber has not entered into any agreement to pay any broker’s or finder’s fee to any person with respect to this Agreement or the transactions contemplated hereby.

[SIGNATURES ON FOLLOWING PAGE]

 

  

  

  

 

VEMICS, INC.

COUNTERPART SIGNATURE PAGE TO

SUBSCRIPTION AGREEMENT

 

       IN WITNESS WHEREOF, the undersigned Subscriber, desiring to purchase the Securities, by executing this signature page, intending to be legally bound, hereby executes, adopts and agrees to all terms, conditions and representations of the Subscription Agreement to which this Counterpart Signature page is attached.

 

Total number of shares of Common Stock (the “Purchased Shares”) to be purchased:  ______________

 

	
Aggregate Purchase Price 

	
$______________ ($0.05 x the number of Purchased Shares)

The Subscriber must also complete the Investor Questionnaire attached hereto as Appendix A.

If Securities are to be purchased by an individual, the Subscriber should sign below:

Date:___________________                                                       _____________________________

                                     Signature of Subscriber

 

_______________________                                                                                                                            

Social Security No.                                                                            Print Name

 

If Securities are to be purchased by an entity, an authorized individual of the Subscriber should sign below:

Date:___________________                                                        _____________________________

                                      Print Name of Entity

________________________                                                      _____________________________

Tax Identification No.                                                                       Signature of Authorized Signatory

                                      Name: ____________________

                                                                                                             Title: _____________________

 

  

  

  

 

If the Securities are to be purchased jointly, each Subscriber should sign below:

Date:____________________                                                     ____________________________

                                                                                                              Signature of Shareholder

________________________                                                     ____________________________

Social Security No.                                                                             Print Name

Date:____________________                                                     ____________________________

                                                                                                              Signature of Shareholder

________________________                                                     ____________________________

Social Security No.                                                                              Print Name

All Subscribers should provide the information below:

Principal Residence Address:                                                            Mailing Address, if different from Residence Address:

_____________________

_____________________

_____________________

_____________________

 

The Subscription is accepted on ______,__, 2010.

 

VEMICS, INC.

By:

_______________________

Name: Fred Zolla

Title:   CEOex4-2.htm

Exhibit 4.2

FORM OF WARRANT

 

NEITHER THIS SECURITY NOR ANY SECURITIES WHICH MAY BE ISSUED UPON EXERCISE OF THIS SECURITY HAVE BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY U.S. STATE OR OTHER JURISDICTION OR ANY EXCHANGE OR SELF-REGULATORY ORGANIZATION, IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND SUCH OTHER LAWS AND REQUIREMENTS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR LISTING OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION AND/OR LISTING REQUIREMENTS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH WILL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

VEMICS, INC.

 

COMMON STOCK WARRANT

 

No.________                                                                                                                                                                                                                              Date:

 

Vemics, Inc., a Nevada corporation (the “Company”), hereby certifies that Edward Newman, their permissible transferees, designees, successors and assigns (collectively, the “Holder”), for value received, is entitled to purchase from the Company at any time commencing on the effective date (the “Effective Date”), which shall be the date listed at the top of this Warrant, and terminating on the 5th anniversary of such date (the “Termination Date”) up to __________ (_________) shares (each, a “Share” and collectively the “Shares”) of the Company’s common stock, par value $0.001 per Share (the “Common Stock”), at an exercise price per Share equal to $_.__ (the “Exercise Price”).  The number of Shares purchasable hereunder and the Exercise Price are subject to adjustment as provided in Section 4 hereof.

 

          1.           Method of Exercise; Payment.

 

                (a)           Cash Exercise.  The purchase rights represented by this Warrant may be exercised, for cash only, by the Holder, in whole or in part, at any time, or from time to time, by the surrender of this Warrant (with the notice of exercise form (the "Notice of Exercise") attached hereto as Exhibit A duly executed) at the principal office of the Company, and by payment to the Company of an amount equal to the Exer­cise Price multiplied by the number of the Shares being purchased, which amount may be paid, at the election of the Holder, by  wire transfer or certified check payable to the order of the Company. The person or persons in whose name(s) any certificate(s) repre­senting Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised.

 

  

  

  

 

(b)           Cashless Exercise.  Any time after the date of issuance of this Warrant, other than with respect to the Basket Shares, this Warrant may be exercised at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = the Fair Market Value on the trading day immediately preceding the date of such election;

 

(B) = the Exercise Price of this Warrant, as adjusted; and

 

(X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

(c)           Forced Exercise.  In the event the Company’s Common Stock shall trade at least 50,000 shares per day at an average price of at least $.75 per share for a period of 20 consecutive trading days, then the Company shall have the right to require the Holder to exercise this Warrant in its entirety.  Notwithstanding the foregoing, the Company shall only have a right to require the Holder to exercise this Warrant to the extent that the shares of Common Stock issuable upon exercise hereof are either registered for resale under the Securities Act or may be sold without restriction based upon exemption from the Federal securities laws.  The Company shall have a period of five days from the Trigger Event to give notice to the holder electing to force the exercise of this Warrant.  The Holder will then have a period of 30 calendar days in which to exercise this Warrant and pay the exercise price to the Company.

(d)           Stock Certificates.  In the event of any exercise of the rights represented by this Warrant, as promptly as practicable after this Warrant is surrendered and delivered to the Company along with all other appropriate documentation on or after the date of exercise and in any event within ten (10) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of Shares issuable upon such exercise.  In the event this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the number of Shares for which this Warrant may then be exercised.

(e)           Taxes.  The issuance of the Shares upon the exercise of this Warrant, and the delivery of certificates or other instruments representing such Shares, shall be made without charge to the Holder for any tax or other charge in respect of such issuance.

 

  

  

  

 

          2.           Warrant.

 

                                (a)           Exchange, Transfer and Replacement.  At any time prior to the exercise hereof, this Warrant may be exchanged upon presentation and surrender to the Company, alone or with other warrants of like tenor of different denominations registered in the name of the same Holder, for another warrant or warrants of like tenor in the name of such Holder exercisable for the aggregate number of Shares as the warrant or warrants surrendered.

 

                                (b)           Replacement of Warrant.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver in lieu thereof, a new Warrant of like tenor.

 

                                (c)           Cancellation; Payment of Expenses.  Upon the surrender of this Warrant in connection with any transfer, exchange or replacement as provided in this Section 2, this Warrant shall be promptly canceled by the Company.  The Holder shall pay all taxes and all other expenses (including legal expenses, if any, incurred by the Holder or transferees) and charges payable in connection with the preparation, execution and delivery of Warrants pursuant to this Section 2.

 

 (d)           Warrant Register.  The Company shall maintain, at its principal executive offices (or at the offices of the transfer agent for the Warrant or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant (the “Warrant Register”), in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.

 

          3.           Rights and Obligations of Holders of this Warrant.  The Holder of this Warrant shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or in equity; provided, however, that in the event any certificate representing shares of Common Stock or other securities is issued to the holder hereof upon exercise of this Warrant, such holder shall, for all purposes, be deemed to have become the holder of record of such Common Stock on the date on which this Warrant, together with a duly executed Election to Purchase, was surrendered and payment of the aggregate Exercise Price was made, irrespective of the date of delivery of such Common Stock certificate.

 

          4.           Adjustments.

 

  

  

  

 

(a)           Stock Dividends, Reclassifications, Recapitalizations, Etc.  While this Warrant is outstanding, in the event the Company:  (i) pays a dividend in Common Stock or makes a distribution in Common Stock, (ii) subdivides its outstanding Common Stock into a greater number of shares, (iii) combines its outstanding Common Stock into a smaller number of shares or (iv) increases or decreases the number of shares of Common Stock outstanding by reclassification of its Common Stock (including a recapitalization in connection with a consolidation or merger in which the Company is the continuing corporation), then (1) the Exercise Price on the record date of such division or distribution or the effective date of such action shall be adjusted by multiplying such Exercise Price by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately before such event and the denominator of which is the number of shares of Common Stock outstanding immediately after such event, and (2) the number of shares of Common Stock for which this Warrant may be exercised immediately before such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the Exercise Price immediately before such event and the denominator of which is the Exercise Price immediately after such event.

 

(b)           Combination: Liquidation.  While this Warrant is outstanding, (i) In the event of a Combination (as defined below), each Holder shall have the right to receive upon exercise of the Warrant the kind and amount of shares of capital stock or other securities or property which such Holder would have been entitled to receive upon or as a result of such Combination had such Warrant been exercised immediately prior to such event (subject to further adjustment in accordance with the terms hereof).  Unless paragraph (ii) is applicable to a Combination, the Company shall provide that the surviving or acquiring Person (the “Successor Company”) in such Combination will assume by written instrument the obligations under this Section 4 and the obligations to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to acquire. “Combination” means an event in which the Company consolidates with, mergers with or into, or sells all or substantially all of its assets to another Person, where “Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity; (ii)  In the event of (x) a Combination where consideration to the holders of Common Stock in exchange for their shares is payable solely in cash or (y) the dissolution, liquidation or winding-up of the Company, the Holders shall be entitled to receive, upon surrender of their Warrant, distributions on an equal basis with the holders of Common Stock or other securities issuable upon exercise of the Warrant, as if the Warrant had been exercised immediately prior to such event, less the Exercise Price.  In case of any Combination described in this Section 4, the surviving or acquiring Person and, in the event of any dissolution, liquidation or winding-up of the Company, the Company, shall deposit promptly with an agent or trustee for the benefit of the Holders of the funds, if any, necessary to pay to the Holders the amounts to which they are entitled as described above.  After such funds and the surrendered Warrant are received, the Company is required to deliver a check in such amount as is appropriate (or, in the case or consideration other than cash, such other consideration as is appropriate) to such Person or Persons as it may be directed in writing by the Holders surrendering such Warrant.

 

  

  

  

 

(c)           Notice of Adjustment.  Whenever the Exercise Price or the number of shares of Common Stock and other property, if any, issuable upon exercise of the Warrant is adjusted, as herein provided, the Company shall deliver to the holders of the Warrant in accordance with Section 10 a certificate of the Company’s Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment was calculated (including a description of the basis on which (i) the Board of Directors determined the fair value of any evidences of indebtedness, other securities or property or warrants, options or other subscription or purchase rights and (ii) the Current Market Value of the Common Stock was determined, if either of such determinations were required), and specifying the Exercise Price and number of shares of Common Stock issuable upon exercise of  Warrant after giving effect to such adjustment.

 

(d)           Current Market Value.  “Current Market Value” per share of Common Stock or any other security at any date means (i) if the security is not registered under the Securities Exchange Act of 1934 and/or traded on a national securities exchange, quotation system or bulletin board, as amended (the “Exchange Act”), (a) the value of the security, determined in good faith by the Board of Directors of the Company and certified in a board resolution, based on the most recently completed arm’s-length transaction between the Company and a Person other than an affiliate of the Company or between any two such Persons and the closing of which occurs on such date or shall have occurred within the six-month period preceding such date, or (b) if no such transaction shall have occurred within the six-month period, the value of the security as determined by an independent financial expert or an agreed upon financial valuation model or (ii) if the security is registered under the Exchange Act and/or traded on a national securities exchange, quotation system or bulletin board, the average of the daily closing bid prices (or  the equivalent in an over-the-counter market) for each day on which the Common Stock is traded for any period on the principal securities exchange or other securities market on which the common Stock is being traded (each, a “Trading Day”) during the period commencing thirty (30) days before such date and ending on the date one day prior to such date.

 

          5.           Registration Rights.  The Holder is entitled to the benefit of such registration rights in respect of the Shares as are set forth in the Subscription Agreement dated as of ____, _______ by and between the Company and the Holder.

 

          6.           Fractional Shares.  In lieu of issuance of a fractional share upon any exercise hereunder, the Company will issue an additional whole share in lieu of that fractional share, calculated on the basis of the Exercise Price.

 

          7.           Legends.  Prior to issuance of the shares of Common Stock underlying this Warrant, all such certificates representing such shares shall bear a restrictive legend to the effect that the Shares represented by such certificate have not been registered under the 1933 Act, and that the Shares may not be sold or transferred in the absence of such registration or an exemption therefrom, such legend to be substantially in the form of the bold-face language appearing at the top of Page 1 of this Warrant.

 

  

  

  

 

          8.           Disposition of Warrants or Shares.  The Holder of this Warrant, each transferee hereof and any holder and transferee of any Shares, by his or its acceptance thereof, agrees that no public distribution of Warrants or Shares will be made in violation of the provisions of the 1933 Act.  Furthermore, it shall be a condition to the transfer of this Warrant that any transferee thereof deliver to the Company his or its written agreement to accept and be bound by all of the terms and conditions contained in this Warrant.

 

          9.           Merger or Consolidation.  The Company will not merge or consolidate with or into any other corporation, or sell or otherwise transfer its property, assets and business substantially as an entirety to another corporation, unless the corporation resulting from such merger or consolidation (if not the Company), or such transferee corporation, as the case may be, shall expressly assume, by supplemental agreement reasonably satisfactory in form and substance to the Holder, the due and punctual performance and observance of each and every covenant and condition of this Warrant to be performed and observed by the Company.

 

        10.           Notices.  Except as otherwise specified herein to the contrary, all notices, requests, demands and other communications required or desired to be given hereunder shall only be effective if given in writing by certified or registered U.S. mail with return receipt requested and postage prepaid; by private overnight delivery service (e.g. Federal Express); by facsimile transmission (if no original documents or instruments must accompany the notice); or by personal delivery.  Any such notice shall be deemed to have been given (a) on the business day immediately following the mailing thereof, if mailed by certified or registered U.S. mail as specified above; (b) on the business day immediately following deposit with a private overnight delivery service if sent by said service; (c) upon receipt of confirmation of transmission if sent by facsimile transmission; or (d) upon personal delivery of the notice.  All such notices shall be sent to the following addresses (or to such other address or addresses as a party may have advised the other in the manner provided in this Section 10):

 

	
if to the Company:

	
Vemics, Inc

523 Avalon Gardens Drive

Nanuet, NY 10954

Attn:  Fred Zolla, CEO

Tel: 845.371.7380

Fax: 845.215.0132

 

If to the Holder to the Holder’s address on the books and records of the Company.

 

  

  

  

 

Notwithstanding the time of effectiveness of notices set forth in this Section, an Election to Purchase shall not be deemed effectively given until it has been duly completed and submitted to the Company together with this original Warrant and payment of the Exercise Price in a manner set forth in this Section.

 

    11.           Limitation on Exercise. Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.99% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Each delivery of an Exercise Notice hereunder will constitute a representation by the Holder that it has evaluated the limitation set forth in this paragraph and determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is permitted under this paragraph. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder may receive in the event of a merger or other business combination or reclassification involving the Company. This restriction may not be waived without the consent of the Holder.

        12.           Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.

 

        13.           Successors and Assigns.  This Warrant shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 

        14.           Headings.  The headings of various sections of this Warrant have been inserted for reference only and shall not affect the meaning or construction of any of the provisions hereof.

 

        15.           Severability. If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant, and the balance hereof shall be interpreted as if such provision were so excluded.

 

        16.           Modification and Waiver.  This Warrant and any provision hereof may be amended, waived, discharged or terminated only by an instrument in writing signed by the Company and the Holder.

 

        17.           Specific Enforcement.  The Company and the Holder acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Warrant were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Warrant and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which either of them may be entitled by law or equity.

 

  

  

  

 

        18.           Assignment.  Subject  to prior written approval by the Company, this Warrant may be transferred or assigned, in whole or in part, at any time and from time to time by the then Holder by submitting this Warrant to the Company together with a duly executed Assignment in substantially the form and substance of the Form of Assignment which accompanies this Warrant, as Exhibit B hereto, and, upon the Company’s receipt hereof, and in any event, within five (5) business days thereafter, the Company shall issue a warrant to the Holder to evidence that portion of this Warrant, if any as shall not have been so transferred or assigned.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, manually or by facsimile, by one of its officers thereunto duly authorized.

 

	  	
VEMICS, INC.

 

	
Dated:

	
By:_______________________________

Name:  Fred Zolla

Title:  Chief Executive Officer

	  	  

 

  

  

  

 

EXERCISE FORM

 

VEMICS, INC.

 

The  undersigned  _______________,  pursuant  to  the  provisions  of  the  within  Warrant,  hereby  elects  to  purchase  _____  shares  of  Common  Stock  of  Vemics,  Inc.  covered  by  the  within  Warrant.

 

	
Dated:

	
Signature:

	  	  
	  	
Address:

 

 

ASSIGNMENT

 

FOR   VALUE   RECEIVED,   _________________   hereby   sells,   assigns   and   transfers   unto  __________________ the within Warrant and all rights evidenced thereby and does irrevocably  constitute and appoint _____________, attorney, to transfer the said Warrant on the books of the  within named corporation.

 

	
Dated:

	
Signature:

	  	  
	  	
Address:

 

 

PARTIAL ASSIGNMENT

 

FOR   VALUE   RECEIVED,   _________________   hereby   sells,   assigns   and   transfers   unto  __________________  the  right  to  purchase  _________  shares  of  Warrant  Stock  evidenced  by  the within Warrant together with all rights therein, and does irrevocably constitute and appoint  ___________________,  attorney,  to  transfer  that  part  of  the  said  Warrant  on  the  books  of  the  within named corporation.

 

	
Dated:

	
Signature:

	  	  
	  	
Address:

 

 

FOR USE BY THE ISSUER ONLY:

 

This  Warrant  No.  _____________  canceled  (or  transferred  or  exchanged)  this  _____  day  of  ___________, _____, shares of Common Stock issued therefor in the name

 

 

To:

Vemics, Inc.

523 Avalon Gardens Drive  

Nanuet, New York 10954

 

  

  

  

 

NOTICE OF CASHLESS EXERCISE

 

The  undersigned  hereby  irrevocably  elects  to  exchange  its  Warrant  for  ___________  shares of Warrant Stock pursuant to the cashless exercise provisions of the within Warrant, as provided for in Section 1 of such Warrant, and requests that a certificate or certificates for such shares be issued in      the name of and delivered to:

 

	
(Print Name, Address and Social Security  or Tax Identification Number)

 

and, if such number of shares of Warrant Stock shall not be all the Warrant Stock which the undersigned    is entitled to purchase in accordance with the within Warrant, that a new Warrant for the balance of the  Warrant  Stock  covered  by  the  within  Warrant  be  registered  in  the  name  of,  and  delivered  to,  the  undersigned at the address stated below.

 

	
Dated:_________________________

	
Name:_________________________

	  	
                                (Print)

	
Address:_________________________

	  
	  	  

 

	
________________________________ 

                          (Signature)

 

(Signature  must  conform  in  all  respects  to  the  name  of  the  Holder  as  specified  on  the  face  of the Warrant)

 

  

  

  

 

FORM OF ASSIGNMENT

 

(To be signed only on transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns, and transfers unto _____________ the right represented by the within Warrant to purchase ______ shares of Common Stock of Vemics, Inc., a Nevada corporation, to which the within Warrant relates, and appoints ____________________ Attorney to transfer such right on the books of Vemics, Inc., a Nevada corporation, with full power of substitution of premises.

 

	
Dated:

	
By:_______________________________

Name:

Title:

(signature must conform to name of holder as specified on the fact of the Warrant)

	  	
 

Address:

 

 

Signed in the presence of :___________________________________________

 

Dated:_________________________________

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