Document:

Exhibit 10.1

 

 

Statement of Work

 

 

November 12, 2019

 

Patrick
Walsh,
Chairman
and CEO

Town
Sports International
Holdings,
Inc.

1001 U.S. North
Highway
1, Suite
201

Jupiter,
FL 33477

 

 

Dear Patrick:

 

This letter confirms and sets forth the terms and conditions of the
engagement between Alvarez & Marsal Corporate Performance Improvement, LLC (“A&M”) and Town
Sports International
Holdings,
Inc. (the “Company”), including the scope of the services to be performed
and the basis of compensation for those services. Upon execution of this letter by each of the parties below, this letter will
constitute an agreement between the Company and A&M (the “Agreement”).

 

This Agreement constitutes the entire understanding
and agreement between Client and A&M with respect to the Services described herein and supersedes all prior oral and written
communications and may be amended, modified or changed (including changes in scope, nature of the Services or fees as described
under Change Order Process herein) only in writing when signed by both parties.

 

I. Description of Services

 

A&M Personnel

 

In connection with this engagement, A&M shall make available
to the Company, Helen Van Ness, to serve as the interim Chief Financial Officer (the “interim CFO”). The interim CFO
shall be designated as an executive officer of the Company. Upon the mutual agreement of A&M and the Company, A&M will
provide additional employees of A&M and/or its affiliates and wholly-owned subsidiaries (“Additional Personnel”)
as required (collectively, with the interim CFO, the “Engagement Personnel”), to assist the interim CFO in the execution
of the duties set forth more fully herein.

 

The interim CFO will be supported by an A&M Director, full time
(40-45 hours/week) and A&M Manager, full time (40-45 hours/week). Helen Van Ness, Managing Director, will be the overall engagement
leader.

 

    	 

     

    

A&M Responsibilities

 

The Engagement Personnel in cooperation with the
Chief Executive Officer (the “CEO”) and/or other applicable officers of the Company, shall perform the following (“Duties”):

 

		1.	The interim CFO shall provide leadership to the Finance and Accounting staff employed by the Company and manage all aspects
of the day-to-day corporate Finance operations and support activities of the Company as well as help identify issues and efficiency
opportunities within the corporate Finance and Accounting departments;

		2.	The interim CFO will be responsible for the review and signing of required regulatory filings, quarterly and annually;

		3.	The interim CFO shall serve as an active, contributing member of the Company’s leadership team;

		4.	The Engagement Personnel shall review all in-flight Finance and Accounting related projects and initiatives including without
limitation, the renegotiation of the Company’s 2013 Senior Credit Facility, and assist in the identification and implementation
of cost reduction and operations improvement opportunities;

		5.	The Engagement Personnel shall assist the CEO and other Company engaged professionals in developing for the Board’s review
strategic alternatives and recommendations for maximizing the enterprise value of the Company’s Finance and Accounting organizations;
and

		6.	The Engagement Personnel shall perform such other services as requested or directed by the board of the directors of the Company
(the “Board”) or other Company personnel as authorized by the Board, and agreed to by A&M, that is not duplicative
of work others are performing for the Company.

 

The Engagement Personnel shall report to the CEO
or other applicable officers, as directed by the Board and, at the request of the Board, will make recommendations to and consult
with the Board. The Engagement Personnel will continue to be employed, by A&M and, while rendering services to the Company,
will continue to work with other personnel at A&M in connection with unrelated matters that will not unduly interfere with
the services rendered by the Engagement Personnel pursuant to this Agreement. With respect to the Company, however, the Engagement
Personnel shall operate under the direction of the Board and A&M shall have no liability to the Company for any acts or omissions
of the Engagement Personnel related to the performance or non-performance of services at the direction of the Board and consistent
with the requirements of the Engagement and this Agreement.

 

In connection with the services to be provided
hereunder, from time to time A&M may utilize the services of employees of its affiliates, and subsidiaries and independent
contractors as Engagement Personnel. Such affiliates and subsidiaries are wholly owned by A&M’s parent company and employees.

 

    	2

     

    

II. Information Provided
by Company and Forward Looking Statements

 

The Company shall use all reasonable efforts to:
(i) provide the Engagement Personnel with access to management and other representatives of the Company; and (ii) to furnish all
data, material, and other information concerning the business, assets, liabilities, operations, cash flows, properties, financial
condition and prospects of the Company that Engagement Personnel reasonably request in connection with the services to be provided
to the Company. The Engagement Personnel shall rely, without further independent verification, on the accuracy and completeness
of all publicly available information and information that is furnished by or on behalf of the Company and otherwise reviewed by
Engagement Personnel in connection with the services performed for the Company. The Company acknowledges and agrees that the Engagement
Personnel are not responsible for the accuracy or completeness of such information and shall not be responsible for any inaccuracies
or omissions therein. A&M and Engagement Personnel are under no obligation to update data submitted to them or to review any
other areas unless specifically requested by the Board to do so.

 

You understand that the services to be rendered
by the Engagement Personnel may include the preparation of projections and other forward-looking statements, and numerous factors
can affect the actual results of the Company’s operations, which may materially and adversely differ from those projections.
In addition, Engagement Personnel will be relying on information provided by the Company in the preparation of those projections
and other forward-looking statements.

 

III. Limitation of Duties

 

Neither A&M, nor the Engagement Personnel make
any representations or guarantees that, inter alia, (i) an appropriate business strategy, performance improvement plan,
and/or set of recommendations can be satisfactorily formulated for the Company, (ii) any business strategy, performance improvement
plan, and/or recommendations presented to the Company’s management or the Board will be more successful than all other possible
business strategies, performance improvement plans, and/or recommendations that could have been conceived, or (iii) if formulated,
that any proposed business strategy, performance improvement plan, and/or recommendations will achieve the desired results or outcomes
anticipated by Company’s management or the Board. Further, neither A&M, nor the Engagement Personnel, assume any responsibility
for the Company’s decision to pursue, or not pursue any appropriate business strategy, performance improvement plan, and/or
set of recommendations, or to effect, or not to effect any potential transaction contemplated by the Company. The Engagement Personnel
shall be responsible for implementation only of the elements of the appropriate business strategy, performance improvement plan,
and/or set of recommendations, approved by the Board and only to the extent and in the manner authorized and directed by the Board.

 

    	3

     

    

IV. Compensation

 

A&M will receive fees for the services of the
Engagement Personnel of $165,000 per month. The Engagement will commence on a mutually agreed upon date no later than November
18, 2019 and will continue until the earlier of (i) the termination of this Agreement by either party in accordance with Section
V or (ii) April 30, 2020.

In addition, A&M will be reimbursed for its
reasonable out-of-pocket expenses incurred in connection with this assignment, such as air and ground transportation, lodging and
meals. A&M also charges a flat rate of 3% of hourly professional fees to cover costs associated with market research, benchmarking,
collaboration tools, technology and software license fees and other internal services that A&M makes available. All fees and
expenses will be billed and payable on a monthly basis.

We will present invoices monthly from the project
start date with amounts billed in advance to reflect the estimated fees and expenses for the upcoming period.  Invoices are
due within 30 days of receipt. Differences between estimated and actual amounts will be reconciled and adjusted on the subsequent
period’s bill.  Should any invoice remain unpaid for more than 30 days after the date thereof, interest shall be paid
at the lesser of 1.5% per month or the maximum amount permissible under law per month. 

 

V. Termination

 

This Agreement will apply from the commencement
of the services referred to in Section I and may be terminated by either party without cause by written notice to the other party.
Any termination by the Company shall be effective immediately upon delivery of written notice to A&M, while any termination
by A&M, other than for Good Reason (as defined below), shall not be effective until 30 days following the date on which A&M
delivers written notice to the Company (in each case, such date shall be referred to as the “Termination Date”). “Good
Reason” shall mean the Company’s misrepresentation of or failure to disclose material facts, failure to pay fees or
expenses when due (or circumstances indicating to A&M that fees or expenses will not be paid when due), circumstances such
that it is unethical or unreasonably difficult for A&M to continue performance of the engagement, or other just cause. A&M
normally does not withdraw from an engagement unless the Company misrepresents or fails to disclose material facts, fails to pay
fees or expenses, or makes it unethical or unreasonably difficult for A&M to continue performance of the engagement, or other
just cause exists. On termination of the Agreement, any fees and expenses due to A&M shall be remitted promptly (including
fees and expenses that accrued prior to but are invoiced subsequent to the Termination Date). Upon termination of this Agreement
pursuant to this Section V, A&M shall be entitled only to the prorated portion of any fees or expenses for the billing period
in which the Agreement is terminated, calculated from the first day of the billing period through the Termination Date.

 

The provisions of this Agreement that give the
parties rights or obligations beyond its termination shall survive and continue to bind the parties.

 

    	4

     

    

VI. Change Order Process

 

During the Project either party may request additions, deletions,
or modifications to the scope, nature or timing of the Services described in this Statement of Work (“Changes”). A&M
shall have no obligation to commence work in connection with any requested Change involving an increase or decrease in the scope
of work until the fee and/or schedule impact of the Change is agreed upon in a written change order signed by both A&M and
the Company Upon a request for a Change, A&M shall submit a proposal to the Company describing the Changes, including, as applicable,
the impact of such Changes on schedule, fees and expenses. The Company shall either indicate its acceptance of the proposed Changes
by signing the change order or advise A&M not to perform the Changes, in which event A&M shall proceed with the original
Services.

The occurrence of (1) any change in any law, rule
or regulation that materially affects the scope, nature or quantity of the Services, (2) any event or transaction that significantly
increases or decreases the size and/or nature of the operations of the Company in a manner that affects the scope, nature or quantity
of the Services, or (3) any other event or condition that significantly increases or decreases costs associated with providing
the Services shall be considered a Change, and A&M and the Company shall promptly meet to negotiate and document in writing
a reasonable, customary, and equitable adjustment in the schedule and/or fees payable to A&M.

 

VII. Other Provisions

 

No Audit

 

Company acknowledges and agrees that A&M and
Engagement Personnel are not being requested to perform an audit, review or compilation, or any other type of financial statement
reporting engagement that is subject to the rules of the AICPA, SEC or other state or national professional or regulatory body.

 

Third Party Beneficiary

 

The Company acknowledges that all advice (written
or oral) provided by A&M and the Engagement Personnel to the Company in connection with this engagement is intended solely
for the benefit and use of the Company (limited to its Board and management) in considering the matters to which this engagement
relates. The Company agrees that no such advice shall be used for any other purpose or reproduced, disseminated, quoted or referred
to at any time in any manner or for any purpose other than accomplishing the tasks referred to herein without A&M’s prior
approval (which shall not be unreasonably withheld), except as required by law.

 

    	5

     

    

Conflicts

 

A&M is not currently aware of any relationship
that would create a conflict of interest with the Company or those parties-in-interest of which you have made us aware. Because
A&M and its affiliates and subsidiaries comprise a consulting firm (the “Firm”) that serves clients on an international
basis in numerous cases, both in and out of court, it is possible that the Firm may have rendered or will render services to, or
have business associations with, other entities or people which had or have or may have relationships with the Company, including
creditors of the Company. The Firm will not be prevented or restricted by virtue of providing the services under this Agreement
from providing services to other entities or individuals, including entities or individuals whose interests may be in competition
or conflict with the Company’s, provided the Firm makes appropriate arrangements to ensure that the confidentiality of information
is maintained.

 

Confidentiality

 

A&M and Engagement Personnel shall keep as
confidential all non-public information received from the Company in conjunction with this engagement, except: (i) as requested
by the Company or its legal counsel; (ii) as required by legal proceedings; or (iii) as reasonably required in the performance
of this engagement. All obligations as to non-disclosure shall cease as to any part of such information to the extent that such
information is, or becomes, public other than as a result of a breach of this provision.

 

Non-Solicitation

The Company, on behalf of itself and its subsidiaries
and affiliates and any person which may acquire all or substantially all of its assets agrees that, until two (2) years subsequent
to the termination of this engagement, it will not solicit, recruit, hire or otherwise engage any employee of A&M or any of
its affiliates who worked on this engagement while employed by A&M or its affiliates (“Solicited Person”). Should
the Company or any of its subsidiaries or affiliates or any person who acquires all or substantially all of its assets extend an
offer of employment to or otherwise engage any Solicited Person and should such offer be accepted, A&M shall be entitled to
a fee from the Company equal to the Solicited Person’s hourly client billing rate at the time of the offer multiplied by
4,000 hours for a Managing Director, 3,000 hours for a Senior Director and 2,000 hours for any other A&M employee. The Company
acknowledges and agrees that this fee fairly represents the loss that A&M will suffer if the Company breaches this provision.
The fee shall be payable at the time of the Solicited Person’s acceptance of employment or engagement

 

    	6

     

    

Indemnification / Limitations on Liability.

 

The Company shall indemnify the Engagement Personnel
acting as officers (the “Indemnified Professionals”) to the same extent as the most favorable indemnification it extends
to its officers or directors, whether under the Company’s bylaws, its certificate of incorporation, by contract or otherwise,
and no reduction or termination in any of the benefits provided under any such indemnities shall affect the benefits provided to
the Indemnified Professionals. The Indemnified Professionals shall be covered as officers under the Company’s existing director
and officer liability insurance policy. As a condition of A&M accepting this engagement, a Certificate of Insurance evidencing
such coverage shall be furnished to A&M prior to the effective date of this Agreement. The Company shall give thirty (30) days’
prior written notice to A&M of cancellation, non-renewal, or material change in coverage, scope, or amount of such director
and officer liability policy. The Company shall also maintain such insurance coverage for the Indemnified Professionals for a period
of not less than six years following the date of the termination of the Indemnified Professionals’ services hereunder. The
provisions of this section are in the nature of contractual obligations and no change in applicable law or the Company’s
charter, bylaws or other organizational documents or policies shall affect the Indemnified Professionals’ rights hereunder.
The attached indemnity and limitation on liability provisions are incorporated herein and the termination of this agreement or
the engagement shall not affect those provisions, which shall remain in full force and effect.

 

Miscellaneous

 

This Agreement (together with the attached indemnity
provisions), including, without limitation, the construction and interpretation of thereof and all claims, controversies and disputes
arising under or relating thereto, shall be governed and construed in accordance with the laws of the State of New York, without
regard to principles of conflict of law that would defer to the laws of another jurisdiction. The Company and A&M agree to
waive trial by jury in any action, proceeding or counterclaim brought by or on behalf of the parties hereto with respect to any
matter relating to or arising out of the engagement or the performance or non-performance of A&M hereunder. The Company and
A&M agree, to the extent permitted by applicable law, that any Federal Court sitting within the Southern District of New York
shall have exclusive jurisdiction over any litigation arising out of this Agreement; to submit to the personal jurisdiction of
the Courts of the United States District Court for the Southern District of New York; and to waive any and all personal rights
under the law of any jurisdiction to object on any basis (including, without limitation, inconvenience of forum) to jurisdiction
or venue within the State of New York for any litigation arising in connection with this Agreement.

 

This Agreement shall be binding upon A&M and
the Company, their respective heirs, successors, and assignees, and any heir, successor, or assignee of a substantial portion of
A&M’s or the Company’s respective businesses and/or assets, including any Chapter 11 Trustee. This Agreement incorporates
the entire understanding of the parties with respect to the subject matter hereof and may not be amended or modified except in
writing executed by the Company and A&M. Notwithstanding anything herein to the contrary, A&M may reference or list the
Company’s name and/or logo and/or a general description of the services in A&M’s marketing materials, including,
without limitation, on A&M’s website.

 

_______________________________________

 

 

    	7

     

    

 

 If the foregoing is acceptable to you,
kindly sign and return the enclosed copy of this letter to acknowledge your agreement with its terms.

 

	 	Very truly yours,
	 	 
	 	Alvarez & Marsal Corporate Performance Improvement, LLC
	 	 
	 	By:	
        /s/ Helen Van Ness

	 	 	Name:	Helen Van Ness
	 	 	Title:	Managing Director
	 	 	 	 
	 	 	 	600 Madison Ave., 10th floor,
	 	 	 	New York, NY 10022
	 	 	 	+1 908-313-2370
	 	 	 	hvanness@alvarezandmarsal.com

 

 

Accepted and agreed:

 

Town Sports International Holdings, Inc.

 

	
         

         

        By:
	/s/ Stuart M. Steinberg
	
         

         

        Name:
	Stuart M. Steinberg
	
         

         

        Title:
	General Counsel
	
         

         

        Date:
	November 14, 2019

 

 

Attachment: Indemnification and Limitation on Liability Agreement

 

    	8

     

    

Indemnification and Limitation on
Liability Agreement

 

This indemnification and limitation on liability
agreement is made part of an agreement, dated November 7, 2019 (which together with any renewals, modifications or extensions thereof,
is herein referred to as the “Agreement” by and between Alvarez & Marsal Corporate Performance Improvement, LLC
(“A&M”) and Town Sports International Holdings, Inc. (the “Company”), for services to be rendered to
the Company by A&M.

 

A.       The
Company agrees to indemnify and hold harmless each of A&M, its affiliates and their respective shareholders, members, managers,
employees, agents, representatives and subcontractors (each, an “Indemnified Party” and collectively, the “Indemnified
Parties”) against any and all losses, claims, damages, liabilities, penalties, obligations and reasonable documented expenses,
including the costs for counsel or others (including employees of A&M, based on their then current hourly billing rates) in
investigating, preparing or defending any action or claim, whether or not in connection with litigation in which any Indemnified
Party is a party, or enforcing the Agreement (including these indemnity provisions), as and when incurred, caused by, relating
to, based upon or arising out of (directly or indirectly) the Indemnified Parties’ acceptance of or the performance or nonperformance
of their obligations under the Agreement; provided, however, such indemnity shall not apply to any such loss, claim, damage, liability
or expense to the extent it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to
have resulted primarily and directly from such Indemnified Party’s gross negligence or willful misconduct. The Company also
agrees that (a) no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to
the Company for or in connection with the engagement of A&M, except to the extent that any such liability for losses, claims,
damages, liabilities or expenses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal)
to have resulted primarily and directly from such Indemnified Party’s gross negligence or willful misconduct and (b) in no
event will any Indemnified Party have any liability to the Company for special, consequential, incidental or exemplary damages
or loss (nor any lost profits, savings or business opportunity). The Company further agrees that it will not, without the prior
consent of an Indemnified Party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which such Indemnified Party seeks indemnification hereunder (whether or not such Indemnified
Party is an actual party to such claim, action, suit or proceedings) unless such settlement, compromise or consent includes an
unconditional release of such Indemnified Party from all liabilities arising out of such claim, action, suit or proceeding. Notwithstanding
anything to the contrary herein in no event shall the Company be required to indemnify an Indemnified Party with respect to any
claim brought by such Indemnified Party against the Company (other than a claim seeking to enforce the terms of this Agreement
including these indemnity provisions).

 

    	9

     

    

B.       These
indemnification provisions shall be in addition to any liability which the Company may otherwise have to the Indemnified Parties.
In the event that, at any time whether before or after termination of the engagement or the Agreement, as a result of or in connection
with the Agreement or A&M’s and its personnel’s role under the Agreement, A&M or any Indemnified Party is required
to produce any of its personnel (including former employees) for examination, deposition or other written, recorded or oral presentation,
or A&M or any of its personnel (including former employees) or any other Indemnified Party is required to produce or otherwise
review, compile, submit, duplicate, search for, organize or report on any material within such Indemnified Party’s possession
or control pursuant to a subpoena or other legal (including administrative) process, the Company will reimburse the Indemnified
Party for its documented out of pocket expenses, including the reasonable fees and expenses of its counsel, and will compensate
the Indemnified Party for the time expended by its personnel based on such personnel’s then current hourly rate.

 

C.       If
any action, proceeding or investigation is commenced to which any Indemnified Party proposes to demand indemnification hereunder,
such Indemnified Party will notify the Company with reasonable promptness; provided, however, that any failure by such Indemnified
Party to notify the Company will not relieve the Company from its obligations hereunder, except to the extent that such failure
shall have actually prejudiced the defense of such action. The Company shall promptly pay documented expenses reasonably incurred
by any Indemnified Party in defending, participating in, or settling any action, proceeding or investigation in which such Indemnified
Party is a party or is threatened to be made a party or otherwise is participating in by reason of the engagement under the Agreement,
upon submission of invoices therefor, whether in advance of the final disposition of such action, proceeding, or investigation
or otherwise. Each Indemnified Party hereby undertakes, and the Company hereby accepts its undertaking, to repay any and all such
amounts so advanced if it shall ultimately be determined that such Indemnified Party is not entitled to be indemnified therefor.
If any such action, proceeding or investigation in which an Indemnified Party is a party is also against the Company, the Company
may, in lieu of advancing the expenses of separate counsel for such Indemnified Party, provide such Indemnified Party with legal
representation by the same counsel who represents the Company, provided such counsel is reasonably satisfactory to such Indemnified
Party, at no cost to such Indemnified Party; provided, however, that if such counsel or counsel to the Indemnified Party shall
determine that due to the existence of actual or potential conflicts of interest between such Indemnified Party and the Company
such counsel is unable to represent both the Indemnified Party and the Company, then the Indemnified Party shall be entitled to
use separate counsel of its own choice, and the Company shall promptly advance its reasonable documented expenses of such separate
counsel upon submission of invoices therefor. Nothing herein shall prevent an Indemnified Party from using separate counsel of
its own choice at its own expense. The Company will be liable for any settlement of any claim against an Indemnified Party made
with the Company’s written consent, which consent shall not be unreasonably withheld.

 

    	10

     

    

D.       In
order to provide for just and equitable contribution if a claim for indemnification pursuant to these indemnification provisions
is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification
may not be enforced in such case, even though the express provisions hereof provide for indemnification, then the relative fault
of the Company, on the one hand, and the Indemnified Parties, on the other hand, in connection with the statements, acts or omissions
which resulted in the losses, claims, damages, liabilities and costs giving rise to the indemnification claim and other relevant
equitable considerations shall be considered; and further provided that in no event will the Indemnified Parties’ aggregate
contribution for all losses, claims, damages, liabilities and expenses with respect to which contribution is available hereunder
exceed the amount of fees actually received by the Indemnified Parties pursuant to the Agreement. No person found liable for a
fraudulent misrepresentation shall be entitled to contribution hereunder from any person who is not also found liable for such
fraudulent misrepresentation.

 

E.       In
the event the Company and A&M seek judicial approval for the assumption of the Agreement or authorization to enter into a new
engagement agreement pursuant to either of which A&M would continue to be engaged by Company, the Company shall promptly pay
expenses reasonably incurred by the Indemnified Parties, including attorneys’ fees and expenses, in connection with any motion,
action or claim made either in support of or in opposition to any such retention or authorization, whether in advance of or following
any judicial disposition of such motion, action or claim, promptly upon submission of invoices therefor and regardless of whether
such retention or authorization is approved by any court. The Company will also promptly pay the Indemnified Parties for any expenses
reasonably incurred by them, including attorneys’ fees and expenses, in seeking payment of all amounts owed it under the
Agreement (or any new engagement agreement) whether through submission of a fee application or in any other manner, without offset,
recoupment or counterclaim, whether as a secured claim, an administrative expense claim, an unsecured claim, a prepetition claim
or a post petition claim.

 

F.       Neither
termination of the Agreement nor termination of A&M’s engagement nor the filing of a petition under Chapter 7 or 11 of
the United States Bankruptcy Code (nor the conversion of an existing case to one under a different chapter) shall affect these
indemnification provisions, which shall hereafter remain operative and in full force and effect.

 

G.       The
rights provided herein shall not be deemed exclusive of any other rights to which the Indemnified Parties may be entitled under
the certificate of incorporation or bylaws of the Company, any other agreements, any vote of stockholders or disinterested directors
of the Company, any applicable law or otherwise.

 

    	11

     

    

Accepted and agreed:

 

	Town Sports International Holdings, Inc.	 	Alvarez & Marsal Corporate Performance Improvement, LLC
	
         

         

        By:
	/s/ Stuart M. Steinberg	 	
         

         

        By:
	/s/ Helen Van Ness
	
         

         

        Name:
	Stuart M. Steinberg	 	
         

         

        Name:
	Helen Van Ness
	
         

         

        Title:
	General Counsel	 	
         

         

        Title:
	Managing Director

 

    	12EXHIBIT 10.1 SUBSCRIPTION AGREEMENT

   

 

                                                                                                                                                              EXHIBIT 10.1
 

 ACCREDITED INVESTOR PRIVATE PLACEMENT
 

 SUBSCRIPTION AGREEMENT
 

 

 

 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE LAWS OF ANY STATE, AND ARE BEING ISSUED IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE ACT. 
 

 

 

 REQUIREMENTS TO SUBSCRIBE - Subscribers please note that to fulfill this subscription properly you must (a) read this document carefully and acquire independent legal and investment advice as this document constitutes a binding legal document, (b) fill in the amount of securities subscribed for in the section “Amount Subscribed and Method of Payment” at page 2 below,  (c) check off the appropriate exemption in Appendix I and sign Appendix I, (d) complete the signature and information page at page 3, and (e) deliver this subscription agreement and payment, in accordance with the section “Amount Subscribed and Method of Payment” on page 2.
 

 

 

 

  To:

 Weyland Tech Inc. (referred to as the “Company”), with an address for notice and delivery for the purposes of this agreement located at 85 Broad Street, 16-079, New York, NY 10004.
 

 

 

 The Company is offering to eligible investors, including the subscriber (hereinafter referred to as     the “Subscriber”) entering into this Subscription Agreement (the “Agreement”) with the       Company, on an exempt private placement basis and on the terms of this Agreement, shares (the     “Shares”) at a subscription price of US$0.15 per Share
 

 

 

 The Shares are also herein referred to as the “Securities”.
 

 

 

 This offering is not subject to the receipt of a minimum subscription amount and any received subscription monies may be placed into the Company’s accounts and employed by the Company immediately upon receipt and prior to acceptance and issuance of any Shares.  The Company offers, and the Subscriber accepts, the Shares on the terms and conditions as set forth in this Agreement.  This Agreement is made specifically subject to the terms of the attached Schedule “A” and Appendices, which are incorporated herein as terms.
 

 

 

  
 
 

 

 

 AMOUNT SUBSCRIBED AND METHOD OF PAYMENT
 

  1.1

 Subscription for Shares.  Based upon the terms and representations of this Agreement given by each party to the other, the Subscriber hereby irrevocably subscribes for and agrees to purchase ___________
 Shares, at a subscription price of US$0.15 per Share for aggregate consideration of 
___________________ (the “Subscription Price”).
 

  1.2

 Method of Subscription.  Subscriptions for Shares shall be made by:  
 

 (a) delivering to the Company an originally executed copy of this Agreement (Note – please fill in the above section 1.1, complete and execute the Appendix I, and fully complete the signature and information page at page 3), and 
 

 (b) payment of the Subscription Price in the following manner:
 

  (i)

 by wire transfer to the Company by wiring instructions below:
 

 Regions Bank
 Head Office
  1900 Fifth Avenue North
Birmingham, Alabama 35203
 

 International Wiring: SWIFT Code: UPNBUS44
 USA Wiring: ABA/Routing Number 062005690
 Account Number: 0227182681
 Weyland Tech, Inc.
 

 

 

 

 

 

 

 

  
 
 

 

 

 IN WITNESS WHEREOF the Parties hereto have hereunto set their respective hands and seals in the presence of their duly authorized signatories effective as at the date first above written.
 

 SUBSCRIPTION BY SUBSCRIBER:
 

 SUBSCRIBER STATEMENT – I, the Subscriber, have sought such independent counsel as I consider necessary and I have read this Agreement carefully and accept, agree and acknowledge the representations and terms thereof in full and without exception and agree that this Agreement constitutes the entire agreement between us and there are no collateral representations or agreements.
 

 

  Dated at ______________________

  , on this ___________

   day of ____________

 , 2019.
 

 REMEMBER:  The Subscriber must also carefully read Schedule “A” additional terms of this Agreement and complete and sign Appendix I to declare his exemption qualifying the subscriber as an eligible purchaser.
 

 ______________________________________                       _________________________________
Name of Subscriber - please print
 

 By: ______________________________                  _____________________________
  Signature of Subscriber

 Subscriber’s Address
 

                                                                                                                 _________________________________

  Telephone Number
 ______________________________________
Please print name of signing officer whose
 signature appears above if different than
 the name of the Subscriber printed above                                                                                 
 e-mail address
 

 

 

 ACCEPTANCE BY THE COMPANY:
 

 

 Weyland Tech, Inc. hereby accepts the above subscription by the Subscriber on this ____day of__________, 2019.
 

 

 

 

 ___________________________________________

 By: Authorized Signatory
 

 

 

 

 

  
 
 

 

 

 APPENDIX I
 

 ACCREDITED INVESTOR REPRESENTATIONS
 

 IN THE MATTER OF WEYLAND TECH, INC. 
 
(the “Company”)
 

 In addition to the covenants, representations and warranties contained in the Private Placement Subscription Agreement, to which this Appendix is attached, the undersigned Subscriber covenants, represents and warrants to the Company as follows:
 

 The Subscriber warrants the Subscriber is an 'Accredited Investor' under the definition(s) below.   The Subscriber therefore has no restriction in law to his right to subscribe for the Shares and acknowledges that the Company is relying upon this in issuing the Securities.  The Subscriber advises the Company that the Subscriber is exempt from investment restriction in the Subscriber’s country of domicile by one or more of the following (check appropriate category):
 

  (   )

 earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
 

  (   )

 has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence and any loans secured by the residence (up to the value of the residence)).
 

 

 

 The statements made in this Certificate are true.
 

  DATED_______________________

 , 2019.
                                                                                        __________________________________________________
 Name of Subscriber [Please Print]
  
 _____________________________________________
 Signature of Subscriber or Authorized Signatory of Subscriber
 

                                                                                        __________________________________________________

 Name and Office of Authorized Signatory [Please Print]
  
 _____________________________________________
 Address of Subscriber
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  
 
 

 

 SCHEDULE “A” 
 

 TO THE PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
 OF
 WEYLAND TECH, INC. 
 

 

 Article 1
 

 SUBSCRIPTION FOR SECURITIES AND CONDITIONS OF SUBSCRIPTION
 1.1 Acceptance of subscription or return of Subscription Price by the Company.  The Company, upon acceptance by its board of directors of all or part of this Subscription Agreement, hereby agrees to issue the Shares as fully paid and non-assessable shares and to refund to the Subscriber any excess subscription monies of the Subscription Price of any non-accepted portion of this Subscription Agreement.  The Subscriber agrees and directs that where the Subscriber has omitted to complete certain sections of this Agreement the Company or its agents may complete such sections from the Company’s knowledge or logic (such as, by way of example only and without limitation, inserting the number of Shares subscribed based upon the funds tendered) or by direction by the Subscriber by phone or otherwise.  
 1.2 Use of Funds before and after acceptance.  The subscription monies shall be advanced immediately to the Company’s general fund to reserve the Subscriber’s subscription, shall not be held in trust, may be employed by the Company for its business purposes immediately and prior to acceptance and shall constitute solely a reservation of subscription and advance of funds therefore.  The Subscriber shall not demand return of its subscription unless the Shares have not been issued for a period in excess of six months from the date of this subscription and such demand may be fulfilled by acceptance and delivery of subscribed Shares or return of funds, at the sole discretion of the Company.  The Subscriber acknowledges that the funds to be raised from the Shares are to be employed for the business of the Company in accordance with management’s determination as to the best use of the same for the Company’s business plan.  Notwithstanding any disclosure document or offering memorandum or prospectus provided concurrent with this subscription, the Company reserves the right at any time to alter its business plan in accordance with management’s appreciation of the market for the goods and services of the Company and the best use of the Company’s funds to advance its business, whether present or future. 
 1.3 Subscriber’s eligibility for subscription.  The Subscriber acknowledges and warrants (and has made diligent inquiries to so determine or has the sophistication and knowledge to know his status without concern of error), on which the Company relies, that the Subscriber is purchasing the Shares on a private basis and without infraction of or impedance by his domicile laws, and, the Subscriber has completed Appendix I to this Agreement, and the completion of the same, whether signed or not, constitutes a true and accurate statement by the Subscriber.
 1.4 Securities issued at different prices and characteristics.  The Subscriber acknowledges that the Company may issue shares at different prices which may occur sequentially, from time to time, or at the same time and prices in the future may be lower than now.  The Company may also issue offerings which have warrants, or other benefits, attached and some offerings which do not.  Not all subscribers will receive common shares, or other share classes, of the Company at the same price and such may be issued at vastly different prices to that of the Subscriber.  For example, the Company will or may issue common shares at nominal prices as “founder’s shares” (which may or will constitute millions of common shares, as determined solely by the Company’s board) or for developmental assets (which cannot be valued and so may be assigned a nominal value on the Company’s books) or for services or to attract expertise or management talent or other circumstances considered advisable by the board of directors of the Company.  Such issuances at different prices are made by the board in its judgment as to typical structuring for a company such as the Company, to provide incentive, reward, and to provide a measure of developmental control, to acquire assets or services which the board considers necessary or advisable for the Company’s development and success, and other such considerations in the board’s judgment.  
 

 

 

  
 
 

 

 The Company may or will acquire debt and/or undertake equity financings in the future required or advisable, as determined by the Company’s board, in the course of the Company’s business development.  The Subscriber acknowledges these matters, understands that the Subscriber’s investment is not necessarily the most advantageous investment in the Company and authorizes the board of the Company now and hereafter to use its judgment to make such issuances whether such issuances are at a lesser, equal or greater price than that of the Subscriber and whether such is prior to, concurrent with, or subsequent to the Subscriber’s investment. 
 Article 2
 INVESTMENT SUBSCRIPTION TERMS, CORPORATE DISCLOSURE AND GENERAL SUBSCRIBER ACKNOWLEDGEMENTS AND WARRANTIES
 2.1 Release of liability and indemnity.  The Subscriber agrees that in consideration, in part, of the Company’s within acceptance of this subscription, the Subscriber does hereby release, remise and forever discharge the Company and its subsidiaries, directors, officers, employees, attorneys, agents, executors, administrators, successors and assigns, of and from all manner of action and causes of action, suits, debts, dues, accounts, bonds, covenants, trusts, contracts, claims, damages and demands, whether known or unknown, suspected or unsuspected and whether at law or in equity, which against the Company and/or any of its subsidiaries, directors, officers, employees, attorneys, agents, executors, administrators, successors and assigns, the Subscriber ever had, now has, or which the Subscriber or any of them hereafter can, shall or may have by reason of any matter arising from the within subscription or the use of funds or the operation of the Company (collectively, the “Release”) except only for gross negligence or fraud (and such shall constitute only objective willful act of objective material wrongdoing, and such exception shall only apply against the Company committing such gross negligence or fraud).  The Subscriber shall hold harmless and indemnify the Company from and against, and shall compensate and reimburse the same for, any loss, damage, claim, liability, fee (including reasonable attorneys’ fees), demand, cost or expense (regardless of whether or not such loss, damage, claim, liability, fee, demand, cost or expense relates to a third-party claim) that is directly or indirectly suffered or incurred by the Company, or to which the Company becomes subject, and that arises directly or indirectly from, or relates directly or indirectly to, any inaccuracy in or breach of any representation, warranty, covenant or obligation of the Subscriber contained in this Agreement.  This Release is irrevocable and will not terminate in any circumstances. 
 2.2 The Subscriber’s representations, warranties and understandings.  The Subscriber acknowledges, represents and warrants to the Company and understands that: 
  (a)

 Experience and counsel.  The Subscriber has the requisite knowledge and experience in financial and business matters for properly evaluating the risks of an investment in the Company and has sought all such counsel as the Subscriber has considered advisable. 
  (b)

 Adequacy of information.  The Subscriber has been given the opportunity to ask questions of, and to receive answers from, the Company concerning the terms and conditions of the offering and the Subscriber has received all information regarding the Company reasonably requested by the Subscriber in order to evaluate an investment in the Company. 
  (c)

 Independent investigation.  In making a decision to invest in the Company the Subscriber has relied solely upon independent investigations made by the Subscriber, and the particular tax consequences arising from an investment in the Company will depend upon the Subscriber’s individual circumstances and is at his sole risk. 
  (d)

 Principal.  The Subscriber is purchasing the Shares as principal for the Subscriber’s own account and not for the benefit of any other person, except as otherwise stated herein, and not with a view to the resale or distribution of all or any of the Securities. 
  (e)

 Decision to purchase.  The decision of the Subscriber to enter into this Agreement and to purchase Shares pursuant hereto has been based only on the representations of this Agreement and any accompanying offering memorandum, if any.  It is not made on other information relating to the Company and not upon any 
 

 

 

  
 
 

 

 oral representation as to fact or otherwise made by or on behalf of the Company or by any person which contradicts this Agreement or any offering memorandum.  The Subscriber agrees that the Company assumes no responsibility or liability of any nature whatsoever for the accuracy, adequacy or completeness of any business plan information which has been created based upon the Company’s management experience.  In particular, and without limiting the generality of the foregoing, the decision to subscribe for Shares has not been influenced by: 
  (i)

 newspaper, magazine or other media articles or reports related to the Company or their businesses; 
  (ii)

 promotional literature or other materials used by the Company for sales or marketing purposes; or 
  (iii)

 any representations, oral or otherwise, that the Company will become a listed company, that any of the Securities will be repurchased or have any guaranteed future realizable value or that there is any certainty as to the success of the Company or the liquidity or value of any of the securities of the Company. 
  (f)

 Advertisements.  The Subscriber acknowledges that the Subscriber has not purchased Shares as a result of any general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising. 
  (g)

 Information not received.  The Subscriber has not received, nor has the Subscriber requested, nor does the Subscriber have any need to receive, any offering memorandum or any other document (other than documents the content of which is prescribed by statute or regulation) describing the business and affairs of the Company which has been prepared for delivery to, and review by, prospective purchasers in order to assist them in making an investment decision in respect of the Shares, and the Subscriber has not become aware of any advertisement in printed media of general and regular paid circulation, radio or television with respect to the distribution of the Shares. 
  (h)

 Economic risk.  The Subscriber has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of the Subscriber’s investment in and to any of the Securities, and the Subscriber is able to bear the economic risk of a total loss of the Subscriber’s investment in and to any of the Securities.  The Subscriber understands that an investment in any of the Securities is a speculative investment and that there is no guarantee of success of the plans of the Company’s management.  Such plans are an effort to apply present knowledge and experience to project a future course of action which is hoped will result in financial success employing the Company’s assets and with the present level of management’s skills and of those whom the Company will need to attract (which cannot be assured).  Additionally, all plans are capable of being frustrated by new or unrecognized or unappreciated present or future circumstances which can typically not be predicted, accurately or at all. 
  (i)

 No Representations as to resale.  No person has made to the Subscriber any written or oral representations: 
  (i)

 that any person will resell or repurchase any of the Securities; 
  (ii)

 that any person will refund the purchase of any of the Securities; 
  (iii)

 as to the future price or value of any of the Securities; or 
  (iv)

 that any of the Securities will be listed and posted for trading on any stock exchange, over-the-counter or bulletin board market, or that application has been made to list and post any of the Securities for trading on any stock exchange, over-the-counter or bulletin board market. 
  (j)

 Resale restrictions.  The Subscriber has been independently advised as to the applicable hold period imposed in respect of the Securities by securities legislation in the jurisdiction in which the Subscriber resides and confirms that no representation has been made respecting the applicable hold periods for the Securities (including their component parts) and is aware of the risks and other characteristics of the Securities and of the fact that the Subscriber may not be able to resell the Securities except in accordance with the applicable 
 

 

 

  
 
 

 

 securities legislation and regulatory policy.  In this regard the Subscriber agrees that if the Subscriber decides to offer, sell or otherwise transfer any of the Securities, the Subscriber will not offer, sell or otherwise transfer any of such Securities, directly or indirectly, in the U.S. or to U.S. residents unless: 
  (i)

 the sale is to the Company; 
  (ii)

 the sale is made outside the United States in compliance with the requirements of Rule 904 of Regulation S under the United States Securities Act of 1933 (the “1933 Act”) and in compliance with applicable state securities laws;
  (iii)

 the sale is made pursuant to an exemption from registration under the 1933 Act provided by Rule 144 thereunder and in compliance with applicable state securities laws; or 
  (iv)

 with the prior written consent of the Company, the sale is made pursuant to another applicable exemption from registration under the 1933 Act and in compliance with applicable state securities laws. 
  (k)

 Reports and undertakings.  If required by applicable securities legislation, policy or order or by any securities commission, stock exchange or other regulatory authority, the Subscriber will execute and otherwise assist the Company in filing such reports, undertakings and other documents as may be reasonably required with respect to the issue of the Securities. 
  (l)

 No prospectus filing.  The Subscriber acknowledges that this is an offering made on a private basis without a prospectus and that no federal, state, provincial or other agency has made any finding or determination as to the merits of the investment nor made any recommendation or endorsement of the Securities, and that: 
  (i)

 the Subscriber may be or is restricted from using most of the civil remedies available under applicable securities legislation;
  (ii)

 no securities commission or similar regulatory authority has reviewed or passed on the merits of the Securities;
  (iii)

 the Subscriber may not receive information that would otherwise be required to be provided to the Subscriber under such securities legislation; and
  (iv)

 in addition to releases contained in this Agreement, the Company is relieved from certain obligations that would otherwise apply under applicable securities legislation. 
  (m)

 Withdrawal.  This Agreement is given for valuable consideration and, except as permitted by this Agreement, shall not be withdrawn or revoked by the Subscriber once tendered to the Company with the Subscription Price.
  (n)

 Disclosure of Subscriber information.  By providing personal information to the Company, the Subscriber and each person for whom it is contracting is consenting to the Company’s collection, use and disclosure of that information for the purpose of the subscription of the Shares, the offering and general corporate purposes.  The Subscriber, and each person for whom it acts, consents to disclosure of personal information by the Company to regulators or any other person or entity the Company considers advisable or necessary for their securities, corporate or other purposes. 
  (o)

 Waiver of pre-emptive rights.  The Subscriber hereby grants, conveys and vests unto the President of the Company, or unto such other nominee or nominees of the President as he may determine from time to time, in the President’s sole and absolute discretion, to the extent permitted by law, the right to act as the Subscriber’s power of attorney solely for the purpose of waiving any prior or pre-emptive rights which the Subscriber may have to further issues of equity or debt by the Company under applicable corporate and securities laws.
  (p) 

 Age of majority.  The Subscriber, if an individual, has attained the age of majority and is legally competent to execute this Agreement and to take all actions required pursuant hereto.
  (q) 

 Authorization and formation of subscriber.  The Subscriber, if a corporation, partnership, trust or other form of business entity, is authorized and otherwise duly qualified to purchase and hold the Securities, and such entity has not been formed for the specific purpose of acquiring Securities in this issue and has not acted to 
 

 

 

  
 
 

 

 acquire Securities in this issue in violation of the provisions of Regulation S or Rule 144 under the securities laws of the United States or in violation of any of the exemptions provided by the securities laws of any other jurisdiction.  If the Subscriber is one of the aforementioned entities it hereby agrees that, upon request of the Company, it will supply the Company with any additional written information that may be requested by the Company.  In addition, the entering into of this Agreement and the transactions contemplated hereby will not result in the violation of any of the terms of and provisions of any law applicable to, or the constating documents, if a corporation, of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber may be bound.
  (r) 

 Legal obligation.  This Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Subscriber.
  (s) 

 Compliance with applicable laws.  The Subscriber knows of no reason (and is sufficiently knowledgeable to determine the same or has sought legal advice) why the delivery of this Agreement, the acceptance of it by the Company and the issuance of the Securities to the Subscriber will not comply with all laws applicable to the Subscriber and the Subscriber has no reason to believe that the Subscriber’s subscription hereby will cause the Company to become subject to or required to comply with any disclosure, prospectus or reporting requirements or to be subject to any civil or regulatory review or proceeding.  In addition, the Subscriber will comply with all applicable securities laws and will assist the Company in all reasonable manners to comply with all applicable securities laws.
  (t) 

 Encumbrance or transfer of Securities.  The Subscriber will not sell, assign, gift, pledge or encumber in any manner whatsoever any of the Securities herein subscribed for except in accordance with applicable securities legislation and this Agreement.
 2.3 Truth of Subscriber’s representations and warranties.  The Subscriber understands that the Company will rely on the acknowledgments, representations and covenants of the Subscriber contained in this Agreement in determining whether a sale of the Shares to the Subscriber is in compliance with applicable securities laws and in the best interest of the Company.  All of the information set forth in this Agreement with respect to the Subscriber are correct and complete as of the date hereof and if there should be any material change in such information prior to the acceptance of this Agreement by the Company the Subscriber will immediately furnish the revised or corrected information to the Company. 
 2.4 Company confidential information.  The Subscriber acknowledges that the Company is engaged in business development including programs of research and development and the marketing of products and services.  The Subscriber also recognizes the importance of protecting the Company’s trade secrets, confidential information and other proprietary information and related rights acquired through such Company’s expenditure of time, effort and money.  Therefore, in consideration of the Company permitting the Subscriber to submit this subscription and have access to the Company’s information and/or Company’s confidential information otherwise coming to the Subscriber, the Subscriber agrees to be bound by the following terms and conditions with respect to the Company: 
 (a)  “Confidential Information” includes any of the following: 
  (i)

 any and all versions of the trade names, trade-mark, business plans, products, software, all Developments (as defined below) and all other matters owned or marketed by the Company; 
  (ii)

 information regarding the Company’s business operation, methods and practices, including marketing strategies, product pricing, margins and hourly rates for staff and information regarding the financial affairs of the Company; 
  (iii)

 the names of the Company’s clients and the names of the suppliers to the Company, and the nature of the Company’s relationships with these clients and suppliers; and
  (iv)

 any other trade secret or confidential or proprietary information in the possession or control of the Company, 
 

 

 

  
 
 

 

 but Confidential Information does not include information which is or becomes generally available to the public without the Subscriber’s fault. 
 (b)  “Developments” include all the following related to the products or business of the Company: 
  (i)

 copyright works, software, documentation, data, designs, scripts, photographs, music, reports, flowcharts, trade-marks, specifications, source codes, product designs or formula and any related works, including any enhancements, modifications, or additions to the products owned, marketed or used by the Company; and 
  (ii)

 inventions, devices, discoveries, concepts, ideas, algorithms, formulae, know-how, processes, techniques, systems and improvements, whether patentable or not, developed, created, acquired, generated or reduced to practice by the Company or any person by or for the Company, including the Subscriber.  
 (c)  At all times the Subscriber shall keep in strictest confidence and trust the Confidential Information.  The Subscriber shall take all necessary precautions against unauthorized disclosure of the Confidential Information, and the Subscriber shall not directly or indirectly disclose, allow access to, transmit or transfer the Confidential Information to a third party, nor shall the Subscriber use, copy or reproduce the Confidential Information except as may be reasonably required for the Subscriber with the permission of the Company that holds such Confidential Information. 
 (d)  Upon the request of the Company, the Subscriber shall immediately return to the Company all materials, including all copies in whatever form, containing the Confidential Information of the Company which are in the Subscriber’s possession or under the Subscriber’s control. 
 (e)  The Subscriber acknowledges and agrees that he shall not acquire any right, title or interest in or to the Confidential Information.  Should any interest in the Confidential Information come into the possession of the Subscriber by any means, other than specific written transfer by the Company, the Subscriber hereby assigns and transfers, now and in the future, to the Company, and agrees that the Company shall be the exclusive owner of, all of the Subscriber’s right, title and interest to any such throughout the world, including all trade secrets, patent rights, copyrights and all other intellectual property rights therein.  The Subscriber further agrees to cooperate fully at all times with respect to signing further documents and doing such acts and other things required by the Company to confirm such transfer of ownership of rights.  The Subscriber agrees that the obligations in this Section 2.4 shall continue beyond the issue of Securities and beyond the ownership of Securities or beyond the termination of the Subscriber’s employment, engagement or association with the Company for a period of ten (10) years. 
 Article 3
 RESTRICTED COMMON SHARES AND RESTRICTED DISPOSITION
 3.1 U.S. law application.  If or as the Company is or may become a U.S. company or otherwise a company whose securities are or may be subject to U.S. law, the Subscriber hereby agrees, represents and warrants to the Company as follows: 
 (a)  The Subscriber acknowledges that the Securities have not been registered under the 1933 Act and the Company has no obligation or present intention of filing a registration statement under the 1933 Act in respect of the Securities.  The Subscriber agrees to resell the Securities only in accordance with the provisions of applicable securities laws, pursuant to a registration under the 1933 Act, or pursuant to an available exemption from such registration (in particular the provisions of Regulation S or Rule 144, as applicable), and that hedging transactions involving the Securities may not be conducted unless in compliance with the 1933 Act.  The Subscriber understands that any certificate representing the Securities will bear a legend setting forth the foregoing restrictions.  The Subscriber understands that the Securities are restricted securities within the meaning of Rule 144 promulgated under the 1933 Act, that the exemption from registration under Rule 144 will not be available in any event for at least six months from the date of purchase and payment of the Securities by the 
 

 

 

  
 
 

 

 Subscriber, and other terms and conditions of Rule 144 are complied with, and that any sale of the Securities may be made by the Subscriber only in limited amounts in accordance with such terms and conditions and even then may not be available unless (i) a public trading market then exists for the common stock of the Company that issued such Securities, (ii) adequate information concerning the Company that issued such Securities is then available to the public and (iii) other terms and conditions of Rule 144 are complied with. 
 (b)  The Subscriber further acknowledges and understands that, without in any way limiting the acknowledgements and understandings as set forth hereinabove, the Subscriber agrees that the Subscriber shall in no event make any disposition of all or any portion of the Securities which the Subscriber is acquiring hereunder unless and until: 
  (i)

 there is then in effect a “Registration Statement” under the 1933 Act covering such proposed disposition and such disposition is made in accordance with said Registration Statement; or 
  (ii)

 (A) the Subscriber shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, (B) the Subscriber shall have furnished the Company with an opinion of the Subscriber’s own counsel to the effect that such disposition will not require registration of any such Securities under the 1933 Act and (C) such opinion of the Subscriber’s counsel shall have been concurred in by counsel for the Company and the Company shall have advised the Subscriber of such concurrence. 
 3.2 Legending of the Securities.  The Subscriber agrees and understands that the certificates representing the Securities will be stamped with the following legend (or substantially equivalent language) restricting transfer in the following manner: 
 “The transfer of the securities represented by this certificate is prohibited except in accordance with the provisions of Regulation S promulgated under the United States Securities Act of 1933, as amended (the “1933 Act”), pursuant to registration under the 1933 Act or pursuant to an available exemption from registration.  In addition, hedging transactions involving such securities may not be conducted unless in compliance with the 1933 Act.” 
 3.3 Company permission for transfer.  The Subscriber agrees that unless and until there is a public market for the Company’s Securities and a Registration Statement is in effect for the Subscriber’s Securities received from the Company, the Subscriber may not sell such Securities without prior notice to the Company and until the Company’s counsel is satisfied that the Subscriber may lawfully sell the Securities.  The Subscriber acknowledges that this is an effort by the Company to protect itself but that the Company nor its counsel is in control of the facts of the sale and may themselves make error in law and neither the Company nor its counsel hold out that any permission constitutes advice to the Subscriber that he may in fact sell and all risks of the sale, legal and otherwise, reside solely with the Subscriber. 
 Article 4
 GENERAL PROVISIONS
 4.1 Address for delivery.  Each notice, demand or other communication required or permitted to be given under this Agreement shall be in writing and shall be sent by delivery (electronic or otherwise) or prepaid registered mail deposited in a post office addressed to the Subscriber or the Company at the address specified in this Agreement.  The date of receipt of such notice, demand or other communication shall be the date of delivery thereof if delivered, or, if given by registered mail as aforesaid, shall be deemed conclusively to be the fifth day after the same shall have been so mailed, except in the case of interruption of postal services for any reason whatsoever, in which case the date of receipt shall be the date on which the notice, demand or other communication is actually received by the addressee.  Each party to this Agreement may, at any time, and from 
 

 

 

  
 
 

 

 time to time notify the other party in writing of a change of address and the new address to which notice shall be given to it thereafter until further change. 
 4.2 Gender and number.  This Agreement is to be read with all changes in gender or number as required by the context and the gender of the Subscriber. 
 4.3 Governing law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.  Any dispute regarding matters as between the Subscriber and the Company, whether as a subscriber or security holder and whether arising under this Agreement or pursuant to security holder rights pursuant to the constitutional documents of the Company or applicable law, shall be adjudicated exclusively in the Courts of the State of Delaware, unless the Company shall permit otherwise. 
 4.4 Survival of Agreement terms.  The covenants, representations and warranties contained herein shall survive the closing of the transactions contemplated hereby.  The terms of this Agreement shall bind the Subscriber, and any successor or assignee, from the date of tendering to the Company and both before and after issuance of the Securities, and shall continue to bind until sale or other disposition of all the Securities by the Subscriber but that certain provisions, such as the release, indemnity and confidentiality provisions of this Agreement shall continue to bind for a period of ten (10) years after the sale or other disposition of the Securities. 
 4.5 Enforceability.  The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.
 4.6 Counterparts.  This Agreement may be signed by the parties hereto in as many counterparts as may be necessary, each of which so signed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution will be deemed to bear the execution date as set forth in this Agreement.  This Agreement may also be executed and exchanged by facsimile and such facsimile copies shall be valid and enforceable agreements. 
 4.7 Entire Agreement.  This Agreement constitutes the only agreement between the parties with respect to the subject matter hereof and shall supersede any and all prior negotiations and understandings.  There are no collateral agreements or understandings hereto and this Agreement, and the documents contemplated herein, constitutes the totality of the parties’ agreement.
 4.8 Amendments.  This Agreement may be amended or modified in any respect by written instrument only.  The Company may give notice of an amendment to the terms of this Agreement by delivery to the Subscriber of the intended amendment addendum.  In the event that the Subscriber does not refuse the amendment within fifteen (15) days of delivery of the proposed amendment then this Agreement will be amended to the proposed terms without any further act required by the Subscriber. 
 4.9 Successors and assigns.  The terms and provisions of this Agreement shall be binding upon and enure to the benefit of the Subscriber, the Company and its successors and lawfully permitted assigns.  This Agreement shall not be assignable by any party without the written consent of the other parties hereto.  The benefit and obligations of this Agreement, insofar as they extend to or affect the Subscriber, shall pass with any assignment or transfer of any of the Securities in accordance with the terms of this Agreement, except as otherwise noted in this Agreement. 
 4.10 Time of the essence.  Time is of the essence in this Agreement.

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