Exhibit 4.7
NX NETWORKS, INC.
13595 Dulles Technology Drive
Herndon, Virginia 20171
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SUBSCRIPTION AGREEMENT
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Re: PRIVATE SALE OF COMMON STOCK
Dear Purchaser:
Nx Networks, Inc., a Delaware corporation (the "Company"), is
offering to sell up to $4.0 million of Common Stock of the Company (the "Common
Stock") to certain "accredited investors" (as defined under the Securities Act
of 1933 (the "Securities Act")). The terms of this offering (the "Offering") are
set forth in this Subscription Agreement and a Registration Rights Agreement
(the "Offering Documents"). The purchase price per share of Common Stock is
$____ per share. The Common Stock is being offered by the Company pursuant to
Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated
thereunder. The Offering will be made by the Company on a best efforts basis.
The Common Stock is subject to the benefits of the Registration
Rights Agreement (the "Registration Rights Agreement") providing for
registration of the Common Stock
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THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, NOR HAVE THEY BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE AND NO SUCH COMMISSION HAS PASSED UPON THE
ADEQUACY OR ACCURACY OF THE DOCUMENTS RELATED TO THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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March 16, 2001
Subscriptions shall be paid by check or wire transfer and deposited in an
escrow account maintained by the Company until accepted by the Company. This
subscription may be accepted by the Company at any time prior to the end of the
Offering Period (as defined in Section 1(c)). If your subscription is not
accepted, your subscription payment will be immediately returned to you. At the
time the Company accepts subscriptions, certificates representing the Common
Stock will be issued by the Company to the investors.
1. SUBSCRIPTION; THE OFFERING.
(a) By your execution of this Subscription Agreement and delivery of
the subscription amount to the Company, you hereby irrevocably subscribe to
purchase the amount of Common Stock set forth on the signature page of this
Agreement.
(b) Subscription payments by check should be made payable to "Nx
Networks, Inc." and should be delivered, together with two fully executed and
completed copies of this Subscription Agreement to:
Peter J. Kendrick
Chief Financial Officer
Nx Networks, Inc.
13595 Dulles Technology Drive
Herndon, Virginia 20171
Telephone: (703) 793-2021
If you prefer to pay by wire transfer, please contact Mr. Kendrick who will
provide the necessary information.
(c) The Offering will expire on March 31, 2001 subject to earlier
termination or extension by the Company at its discretion (the "Offering
Period"). Any subscriptions received after the end of the Offering Period or
received but not accepted prior to the end of the Offering Period will be
returned in full.
(d) This subscription is subject to the terms and conditions of the
Offering, which are described herein and in the other Offering Documents. Upon
acceptance by the Company of this subscription, and following clearance of
funds, the Company will deliver to you a Common Stock certificate in the amount
subscribed for, and signed copies of this Subscription Agreement and the
Registration Rights Agreement.
2. ACCEPTANCE OR REJECTION OF SUBSCRIPTIONS. You agree that all
subscriptions for Common Stock (including this subscription) are made subject to
the following terms and conditions:
(a) All subscriptions payments will be held by the Company in a
segregated account until accepted or rejected by the Company.
(b) The Company may accept subscriptions received by it in such order
and at such time, prior to termination of the Offering, as the Company may, in
its sole discretion, determine.
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(c) The Company shall have the right, in its sole discretion, to reject
any subscription in whole or in part for any reason.
(d) Any subscription received but not accepted by the Company prior to
the end of the Offering Period or received by the Company after the end of the
Offering Period will be rejected by the Company.
(e) If your subscription is rejected by the Company for any reason, the
Company shall promptly return (subject to delay as necessary to permit funds
deposited to clear) to you your executed Subscription Agreements together with
all funds paid by you, without deduction and without interest.
(f) If your subscription is accepted only in part, then the Company
shall promptly return (subject to delay as necessary to permit funds deposited
to clear) to you that part of all funds paid by you relating to that part of
your subscription which is not accepted, without deduction and without interest.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. You hereby
represent and warrant to, and agree with, the Company as follows:
(a) You are an "Accredited Investor" as that term is defined in Section
501(a) of Regulation D promulgated under the Securities Act. Specifically you
are (EACH INVESTOR MUST CHECK APPROPRIATE ITEM(S)):
|_| (i) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or
fiduciary capacity; a broker or dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment
Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act; a small business investment company
licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; a plan established
and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
$5,000,000; an employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association, insurance
company, or registered investment advisor, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by persons that are
accredited investors;
|_| (ii) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
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|_|(iii) An organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000;
|_| (iv) A director or executive officer of the Company;
|_|(v) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his or her purchase exceeds
$1,000,000;
|_|(vi) A natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year;
|_|(vii) A trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule
506(b) (2) (ii); or
|_|(viii) An entity in which all of the equity owners are accredited
investors. (If this alternative is checked, you must identify each
equity owner and provide statements signed by each demonstrating how
each qualifies as an accredited investor.)
(b) If you are a natural person, you are: a bona fide resident of the
state contained in your address set forth on the signature page of this
Agreement as your home address; at least 21 years of age; and legally competent
to execute this Agreement. If you are an entity, you are duly authorized to
execute this Agreement and this Agreement, when executed and delivered by you,
will constitute your legal, valid and binding obligation enforceable against you
in accordance with its terms.
(c) You have received, read carefully and are familiar with this
Agreement, the and the Registration Rights Agreement. Respecting the Company,
its business, plans and financial condition, the terms of the Offering and any
other matters relating to the Offering: you have received and reviewed all
materials which have been requested by you; and the Company has answered all
inquiries that you or your representatives have put to it. You have had access
to all additional information necessary to verify the accuracy of the
information set forth in this Agreement and any other materials furnished
herewith, and you have taken all the steps necessary to evaluate the merits and
risks of an investment as proposed hereunder.
(d) You or your purchaser representative have such knowledge and
experience in finance, securities, investments and other business matters so as
to be able to protect your interests in connection with this transaction, and
your investment in the Company hereunder is not material when compared to your
total financial capacity.
(e) You understand the various risks of an investment in the Company as
proposed herein and can afford to bear such risks, including, but not limited
to, the risks of losing your entire investment.
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(f) You will acquire the Common Stock for your own account (or for the
joint account of you and your spouse either in joint tenancy, tenancy by the
entirety or tenancy in common) for investment and not with a view to the sale or
distribution thereof or the granting of any participation therein, and that you
have no present intention of distribution or selling to others any of such
interest or granting any participation therein.
(g) Without limiting any of your other representations and warranties
hereunder, you acknowledge that you have reviewed and are aware of the Risk
Factors set forth in our public filings with the Securities and Exchange
Commission.
4. TRANSFER RESTRICTIONS.
(a) You agree not to sell any Common Stock prior to June 30, 2001,
unless (and to the extent) such shares have been released from this obligation
in accordance with the following provisions of this Section 4(a).
(i) If the average closing bid price for the Common Stock on the Nasdaq
National Market over a period of 10 consecutive trading days is at
least 125% of the initial purchase price of the Common Stock, then
25% of your Common Stock will be released from the sales restriction
effective at that time.
(ii) If the average closing bid price for the Common Stock on the Nasdaq
National Market over a period of 10 consecutive trading days is at
least 156% of the initial purchase price of the Common, then an
additional 25% of your Common Stock (50% total) will be released
from the sales restriction effective at that time.
(iii)If the average closing bid price for the Common Stock on the Nasdaq
National Market over a period of 10 consecutive trading days is at
least 195% of the initial purchase price of the Common Stock, then
an additional 25% of your Common Stock (75% total) will be released
from the sales restriction effective at that time.
(iv) If the average closing bid price for the Common Stock on the Nasdaq
National Market over a period of 10 consecutive trading days is at
least 244% of the initial purchase price of the Common Stock, then
all remaining Common Stock will be released from the sales
restriction effective at that time.
(b) You have been advised by the Company that the Common Stock has not
been registered under the Securities Act, that the Common Stock will be issued
on the basis of the exemption provided by Section 4(2) of the Securities Act
and/or Rule 506 of Regulation D promulgated thereunder relating to transactions
by an issuer not involving any public offering and under similar exemptions
under certain state securities laws; that this transaction has not been reviewed
by, passed on or submitted to any Federal or state agency or self-regulatory
organization where an exemption is being relied upon, and that the Company's
reliance thereon is based in part upon the representations made by you in this
Agreement. You acknowledge that you have been informed by the Company of, or are
otherwise familiar with, the nature of the limitations imposed by the Securities
Act and the rules and regulations thereunder on the transfer of securities. In
particular, you agree that no sale, assignment or transfer of the Common Stock
shall be valid or effective, and the Company shall not be required to give any
effect to any such sale, assignment or transfer, unless (i) the sale, assignment
or transfer of the Common stock is registered under the Securities Act, it being
understood that the Common Stock is not currently registered for sale and that
the Company has no obligation or intention to so register the Common Stock
except as contemplated by the Registration Rights Agreement, or (ii) the Common
Stock is sold, assigned or transferred in accordance with all the requirements
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and limitations of Rule 144 under the Securities Act, it being understood that
Rule 144 is not available at the present time for the sale of the Common Stock,
or (iii) such sale, assignment, or transfer is otherwise exempt from
registration under the Securities Act. You acknowledge that the Common Stock
shall be subject to a stop transfer order and the certificate or certificates
evidencing any Common Stock shall bear the following or a substantially similar
legend and such other legends as may be required by state blue sky laws:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED FOR
INVESTMENT ONLY AND NOT FOR RESALE. THEY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS FIRST
REGISTERED UNDER SUCH LAWS, OR UNLESS THE COMPANY HAS RECEIVED
EVIDENCE REASONABLY SATISFACTORY TO IT THAT REGISTRATION UNDER
SUCH LAWS IS NOT REQUIRED."
5. INDEMNIFICATION. You acknowledge that you understand the meaning and
legal consequences of the representations and warranties contained in Section 3
hereof and the agreement contained in Section 4 hereof, and you hereby agree to
indemnify and hold harmless the Company and each officer, director, employee,
agent and controlling person thereof from and against any and all loss, damage
or disability due to or arising out of a breach of any such representation or
warranty.
6. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company and you, and our respective successors and assigns.
Nothing in this Agreement is intended or shall be construed to confer upon any
other person any right, remedy or claim, in equity or at law, or to impose upon
any other person any duty, liability or obligation.
7. MISCELLANEOUS.
(a) All notices and other communications provided for hereunder shall
be in writing, and, if to you, shall be delivered or mailed by registered mail
addressed to you at your address as set forth below, or to such other address as
you may designate to the Company in writing, and if to the Company, shall be
delivered or mailed by registered mail to the Company at 13595 Dulles Technology
Drive, Herndon, Virginia 20171, Attention: General Counsel, or to such other
address as the Company may designate to you in writing, with a copy to Kelley
Drye & Warren LLP, Two Stamford Plaza, 281 Tresser Boulevard, Stamford,
Connecticut 06901, Attention: John T. Capetta. All such notices shall be
effective one day after delivery or three days after mailing.
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(b) This Agreement shall be construed in accordance with and governed
by the internal laws of the State of Delaware without reference to that State's
conflicts of laws provisions.
(c) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended only by a
writing executed by all parties hereto.
(d) This Agreement may be executed in one or more counterparts
representing, however, one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year this subscription has been accepted by the Company as set
forth below.
Very truly yours,
NX NETWORKS, INC.
By: _________________________________
Name:
Title:
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SIGNATURE PAGE FOR SUBSCRIPTION BY INDIVIDUALS
(NOT APPLICABLE TO SUBSCRIPTIONS BY ENTITIES, INDIVIDUALS
RETIREMENT ACCOUNT, KEOGH PLANS OR ERISA PLAN)
TOTAL SUBSCRIPTION AMOUNT $ ____________________. [THIS MUST BE COMPLETED.]
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Check One:
|_| INDIVIDUAL OWNER |_| CUSTODIAN UNDER
(One signature required below) UNIFORM GIFTS TO MINORS ACT
|_| JOINT TENANTS WITH RIGHT
OF SURVIVORSHIP _____________________________________
(All tenants must sign below) (Insert applicable state)
(Custodian must sign below)
|_| TENANTS IN COMMON |_| COMMUNITY PROPERTY
(All tenants must sign below) (Both spouses in community
property states must sign below)
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PRINT INFORMATION AS IT IS TO APPEAR ON THE COMPANY RECORDS.
- ---------------------------------------- --------------------------------------
(Name of or Subscriber) (Social Security or Taxpayer ID No.)
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(Home Address) (Home Telephone)
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(Business Address) (Business Telephone)
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(Name of Co-Subscriber) (Social Security or Taxpayer ID No.)
- ------------------------------------ --------------------------------------
- ------------------------------------ --------------------------------------
(Home Address) (Home Telephone)
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(Business Address) (Business Telephone)
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SIGNATURE(S)
Dated:---------------------------------
(1) By:-------------------------------- (2) By:-------------------------------
Signature of Authorized Signatory Signature or Authorized Co-Signatory
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Print Name of Signatory and Title, Print Name of Co-Signatory and Title,
if applicable if applicable
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ACCEPTED AND AGREED:
NX NETWORKS, INC.
By:--------------------------------- Dated:--------------------------------
SIGNATURE PAGE FOR SUBSCRIPTION BY ENTITIES
TOTAL SUBSCRIPTION AMOUNT $___________________. [THIS MUST BE COMPLETED.]
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Check one:
|_| EMPLOYEE BENEFIT PLAN OR TRUST (including pension plan, profit sharing
plan, other defined contribution plan and SEP)
|_| IRA, IRA ROLLOVER OR KEOGH PLAN
|_| TRUST (other than employee benefit trust)
|_| CORPORATION (Please include certified corporate resolution
authorizing signature)
|_| PARTNERSHIP
|_| OTHER
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PRINT INFORMATION AS IT IS TO APPEAR ON THE COMPANY RECORDS.
- --------------------------------------- -----------------------------------
(Name of Subscriber) (Taxpayer ID No.)
- --------------------------------------- -----------------------------------
(Plan number, if applicable)
- --------------------------------------- -----------------------------------
(Address) (Telephone Number)
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Name and Taxpayer ID number of sponsor, if applicable
The undersigned trustee, partner, corporate officer or fiduciary
certificates that he or she has full power and authority from all beneficiaries,
partners or shareholders of the entity named above to execute this Subscription
Agreement on behalf of the entity and to make the representations, warranties
and agreements made herein on their behalf and that investment in the Securities
has been affirmatively authorized by the governing board or body of such entity
and is not prohibited by law or the governing documents of the entity.
SIGNATURES
Dated:---------------------------------
By: By:
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Signature of Authorized Signatory Signature of Authorized Co-Signatory
--------------------------------- ------------------------------------
Print Name of Signatory Print Name of Required Co-Signatory
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Print Title of Signatory Print Title of Required Co-Signatory
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ACCEPTED AND AGREED:
NX NETWORKS, INC.
By: Dated:
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