Exhibit 4.1 Form of Subscription Agreement
INTERNATIONAL IMAGING SYSYTEMS, INC.
SUBSCRIPTION AGREEMENT
("Agreement")
Ladies and Gentlemen:
The undersigned (the "Subscriber") understands that International
Imaging Systems, Inc., a Delaware corporation (the "Company"), desires to issue
__________ shares (the "Shares" or the "Securities") of its common stock, par
value $0.001 per share (the "Common Stock"), on the terms and conditions set
forth below and Subscriber desires to purchase the Shares.
Accordingly, Subscriber and the Company hereby agree as follows:
1. Subscription. Subscriber hereby subscribes for and
agrees to purchase the Securities from the Company. The purchase price (the
"Purchase Price") for the Securities to be purchased hereunder by the
Subscribers is $.10 per share.
2. Purchase Procedure.
2.1 Each Subscriber acknowledges that, in order to
subscribe for Securities, such Subscriber must, and does hereby, deliver to the
Company:
2.1.1 An executed counterpart of the Signature Page
attached to this Agreement together with appropriate notarization, if required;
and
2.1.2 A check, subject to collection, in the amount equal
to the Purchase Price multiplied by the number of Securities, made payable to
the order of International Imaging Systems, Inc.
2.2. Subject to the Company's unconditional right to
accept or reject the subscriptions contained herein, upon receipt of the
foregoing, if the Company accepts the subscriptions, the Company shall promptly
deliver to each Subscriber an executed counterpart of the Signature Page
attached to this Agreement and a certificate registered in the name of
Subscriber representing the Securities as provided herein. If the Company
rejects the subscriptions, payment will be returned to Subscribers in full
without deduction or interest.
3. Representations of Each Subscriber. By executing this
Agreement, each Subscriber, severally (and not jointly), represents, warrants,
acknowledges and agrees as follows:
3.1 Such Subscriber acknowledges that he, she or it has
received, carefully read and understands in their entirety (i) this Agreement;
(ii) the Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 2004, as filed with the Securities and Exchange Commission (the
"SEC"); (iii) the Company's quarterly report on Form 10-QSB for the three month
period ended March 31, 2005 as filed with the SEC; and (iii) all information
that such Subscriber (together with such Subscriber's advisers, and any
purchaser representative) has deemed necessary or appropriate for deciding
whether to subscribe for the Securities. Such Subscriber acknowledges that he,
she or it has relied on the information contained therein and has not been
furnished with any other documents, offering literature, memorandum or
prospectus. Such Subscriber further acknowledges that such Subscriber and his,
her or its advisors (if any) have had a reasonable opportunity to ask questions
of and receive answers from the Company concerning the Securities and the
business, properties, prospects and financial condition of the Company.
3.2 Such Subscriber understands that (i) the Securities
being purchased hereunder have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or any applicable state securities
laws, or the laws of any foreign jurisdiction; (ii) such Subscriber cannot sell
or transfer the Securities unless they are registered under the Securities Act
and any applicable state securities laws or unless exemptions from such
registration requirements are available; (iii) a legend will be placed on any
certificate or other document evidencing the Securities, stating that they have
not been registered under the Securities Act and setting forth or referring to
the restrictions on transferability and sales thereof; (iv) the Company will
place stop transfer instructions against the Securities to restrict the transfer
thereof; and (v) the Company has no obligations to register the Securities or
assist such Subscriber in obtaining an exemption from the various registration
requirements. Such Subscriber agrees not to resell the Securities without
compliance with the terms of this Agreement, the Securities Act and any
applicable state or foreign securities laws.
3.3 Such Subscriber (i) is acquiring the Securities
solely for his, her or its own account for investment purposes only and not with
a view toward resale or distribution, either in whole or in part; and (ii) has
no contract, undertaking, agreement or other arrangement, in existence or
contemplated, to sell, pledge, assign or otherwise transfer the Securities to
any other person.
3.4 Such Subscriber understands that an investment in the
Securities involves substantial risks and such Subscriber recognizes and
understands the risks relating to the purchase of the Securities, including that
such Subscriber could lose the entire amount of his, her or its investment in
the Securities.
3.5 Such Subscriber is an "accredited investor" (as that
term is defined in Regulation D under the Securities Act), and has such
knowledge and experience in financial and business matters generally that such
Subscriber is capable of evaluating the merits and risks of an investment in the
Company.
3.6 Such Subscriber's investment in the Company is
reasonable in relation to Subscriber's net worth and financial needs and such
Subscriber is able to bear the economic risk of losing such Subscriber's entire
investment in the Securities.
3.7 Such Subscriber understands that (i) the offering
contemplated hereby has not been reviewed by any federal, state or other
governmental body or agency; (ii) if required by the laws or regulations of said
state(s) the offering contemplated hereby will be submitted to the appropriate
authorities of such state(s) for registration or exemption therefrom; and (iii)
documents used in connection with this offering have not been reviewed or
approved by any regulatory agency or government department, nor has any such
agency or government department made any finding or determination as to the
fairness of the Shares for investment.
3.8 Such Subscriber is aware that although the Company is
a reporting issuer, there is no active trading market for the Shares, there can
be no assurance that a market for the Shares will develop or be maintained, and,
therefore, such Subscriber may have to hold the Securities indefinitely. Such
Subscriber has adequate means of providing for his, her or its current needs and
personal and family contingencies, has no need for liquidity in the investment
contemplated hereby.
3.9 Such Subscriber, if an individual, is at least 21
years of age, and maintains his or her domicile (and is not a transient or
temporary resident) at the address shown on the Signature Page below.
3.10 Such Subscriber, if a corporation, partnership, trust
or other non-natural person is authorized and otherwise duly qualified to
purchase and hold the Securities and to enter into this Subscription Agreement,
and such Subscriber was not formed for the specific purpose of acquiring the
Securities.
3.11 All information which such Subscriber has provided
the Company concerning his, her or its financial position and knowledge of
financial and business matters, is correct and complete as of the date hereof,
and if there should be any change in such information, such Subscriber will
immediately provide the Company with such new information. Further, such
Subscriber agrees that financial and other information concerning the such
Subscriber may be disclosed by the Company to any persons or entities that may
enter into a transaction with the Company.
3.12 Such Subscriber is familiar with the nature and
extent of the risks inherent in investments in unregistered securities and has
determined, either personally or in consultation with such Subscriber's
Purchaser Representative or attorney, that an investment in the Company is
consistent with such Subscriber's investment objectives and income prospects.
Such Subscriber understands that the Company has no substantial assets and has
incurred losses to date; that the Company may need to obtain additional capital
through debt and/or equity financing to implement its business plan; and that
there can be no assurance that such financing will be obtained, or will be
obtained on terms that are acceptable to the Company.
3.13 Such Subscriber acknowledges that the Company has the
unconditional right to accept or reject the subscription contained herein, in
whole but not in part. The Company will notify each Subscriber whether the
subscription contained herein is accepted or rejected. If such subscription is
rejected, payment will be returned to such Subscriber in full without deduction
or interest.
3.14 The Purchase Price of each of the Shares offered
hereby was determined arbitrarily by the Company, does not bear any relationship
to the assets, book value, results of operations, net worth, or other objective
criteria of value applicable to the Company and should not be considered an
indication of the actual value of the Company.
3.15 The Company has not retained any independent
professionals to review or comment on this offering on behalf of, or to
otherwise protect the interests of, Subscribers hereunder. Although the Company
has retained its own counsel, neither such counsel nor any other counsel has
made, on behalf of the Subscribers, any independent examination of any factual
matters represented by management herein or in the documents provided herewith,
and purchasers of the Shares offered hereby should not rely on the counsel
retained by the Company with respect to any matters herein described.
3.16 The Company has not paid any dividends on its Common
Stock since its inception and, by reason of its present financial status and its
contemplated financial requirements, does not contemplate or anticipate paying
any dividends upon its Common Stock in the foreseeable future.
3.17 There can be no assurance that the Company will be
able to operate profitably in the future.
3.18 Such Subscriber expressly acknowledges and
understands that, in connection with the offer and sale of the Securities to
such Subscriber, the Company is relying upon such Subscriber's representations
and warranties as contained in this Agreement.
3.19 Such Subscriber has not employed any broker, finder
or similar agent and no person or entity with which he, she or it has had any
dealings or communications of any kind is entitled to any brokerage, finder's or
placement fee or any similar compensation in connection with the purchase and
sale of the Shares.
4. Representations of Company. The Company hereby
represent, warrant and agree with each Subscriber as follows:
4.1 The Company is a corporation duly organized, existing
and in good standing under the laws of the State of Delaware and has the
corporate power to conduct the business which it conducts and proposes to
conduct.
4.2 The execution, delivery and performance of this
Agreement by the Company has been duly approved by the Board of Directors of the
Company and all other actions required to authorize and effect the offer and
sale of the Shares has been duly taken and approved.
4.3 The Securities have been duly and validly authorized
and when issued to each Subscriber in accordance with the terms hereof, will be
duly and validly issued, fully paid and non-assessable.
5. Indemnification. Each Subscriber hereby agrees to
indemnify and hold harmless the Company and the Company's officers, directors,
employees, agents, counsel and affiliates from and against any and all damages,
losses, costs, liabilities and expenses (including, without limitation,
reasonable attorneys' fees) which they, or any of them, may incur by reason of
such Subscriber's failure to fulfill any of the terms and conditions of this
Agreement or by reason of such Subscriber's breach of any of his, her or its
representations and warranties contained herein. This Agreement and the
representations and warranties contained herein shall be binding upon each
Subscriber's heirs, executors, administrators, representatives, successors and
assigns. THE COMPANY HAS BEEN ADVISED THAT THE INDEMNIFICATION OF THE COMPANY,
ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, COUNSEL AND AFFILIATES IS DEEMED TO
BE VOID AS AGAINST PUBLIC POLICY AND UNENFORCEABLE IN SOME STATES.
6. Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws applicable to contracts made and wholly
performed in the State of Florida.
7. Execution in Counterparts. This Agreement may be
executed in one or more counterparts.
8. Persons Bound. This Agreement shall, except as
otherwise provided herein, inure to the benefit of and be binding on the Company
and its successors and permitted assigns and on each Subscriber and each
Subscriber's respective heirs, executors, administrators, successors and
permitted assigns.
9. Entire Agreement. This Agreement, when accepted by
the Company, will constitute the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. This Agreement
may not be modified, changed, waived or terminated other than by a writing
executed by all the parties hereto. No course of conduct or dealing shall be
construed to modify, amend or otherwise affect any of the provisions hereof.
10. Assignability. Each of the parties hereto agrees that
he, she or it may not assign any of his, her or its respective rights or
obligations hereunder without the prior written consent of the other party
hereto.
11. Notices. Any notice or other communication required
or permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission, sent by certified,
registered or express mail, postage prepaid, or by overnight courier to the
address of each party set forth herein. Any such notice shall be deemed given
when delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, three days after the date of deposit in the United
States mails.
12. Interpretation.
12.1 When the context in which words are used in this
Agreement indicates that such is the intent, singular words shall include the
plural, and vice versa, and masculine words shall include the feminine and
neuter genders, and vice versa.
12.2 Captions are inserted for convenience only, are not a
part of this Agreement, and shall not be used in the interpretation of this
Agreement.
ACCREDITED INVESTOR CERTIFICATION
- -> EACH SUBSCRIBER MUST COMPLETE
13. Each Subscriber hereby further represents and
warrants (as indicated below by such Subscriber's initials):
A. Accredited Investors: Please initial one or more of the
following four statements:
1. ____ I certify that I am an accredited investor because I have
had individual income (exclusive of any income earned by my
spouse) of more than $200,000 in each of the most recent two
years and I reasonably expect to have an individual income in
excess of $200,000 for the current year.
2. ____ I certify that I am an accredited investor because I have
had joint income with my spouse in excess of $300,000 in each
of the two most recent years and I reasonably expect to have
joint income with my spouse in excess of $300,000 for the
current year.
3. ____ I certify that I am an accredited investor because I have
an individual net worth, or my spouse and I have a joint net
worth, in excess of $1,000,000.
4. ____ I am a director or executive officer of the Company
5. ____ I am an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 and (i)
investment decisions for such plan are made by a plan
fiduciary, as defined in Section 3(21) of such Act, which is a
bank, savings and loan association, insurance company or
registered investment advisor or (ii) such plan has total
assets exceeding $5,000,000 or (iii) if a self directed plan,
investment decisions are made solely by accredited investors.
[signatures on next page]
SUBSCRIBER SIGNATURE PAGE
-------------------------
Manner in Which Title is to be Held. (check one)
-----------------------------------
___ Individual Ownership
___ Community Property
___ Joint Tenant with Right of Survivorship (both parties must sign)
___ Partnership
___ Tenants in common
___ Corporation
___ Trust
___ Other (please indicate)
Dated: _____________________________
INDIVIDUAL INVESTORS ENTITY INVESTORS
_____________________________ Name of entity, if any
Signature (Individual)
By:__________________________
*Signature
______________________________ Its__________________________
Signature (Joint) Title
(all record holders must sign)
______________________________ ______________________________
Name(s) Typed or Printed Name Typed or Printed
______________________________ ______________________________
Residence or Mailing Address: Principal Address
Address to Which Correspondence Address to Which Correspondence
Should be Directed Should be Directed
______________________________ ______________________________
______________________________ ______________________________
City, State and Zip Code City, State and Zip Code
______________________________ ______________________________
Tax Identification or Tax Identification or
Social Security Number Social Security Number
Number of Shares Subscribed For: _________________
Purchase Price (see Section 1): $________________
* If Shares are being subscribed for by any entity, the
Certificate of Signatory must also be completed
The foregoing subscription is accepted and the Company hereby agrees to be bound
by its terms.
INTERNATIONAL IMAGING SYSTEMS, INC.
Dated: By:
---------------------- -------------------------------------
C. Leo smith, Chief Executive Officer
CERTIFICATE OF SIGNATORY
(To be completed if Shares are being subscribed for by an entity)
I, ____________________________________, the ______________________________
(name of signatory) (title)
of______________________________ "Entity"), a ________________________
(name of entity)
_________________________________________
(type of entity)
hereby certify that I am empowered and duly authorized by the Entity to execute
the Subscription Agreement and to purchase the Securities, and certify further
that the Subscription Agreement has been duly and validly executed on behalf of
the Entity and constitutes a legal and binding obligation of the Entity.
IN WITNESS WHEREOF, I have set my hand this day of 2002.
______________________________
(Signature)