EXHIBIT 99.5
BIGMAR, INC.
FORM OF SUBSCRIPTION AGREEMENT
("AGREEMENT")
[FOR PURCHASE OF COMMON STOCK]
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE OR
OTHER GOVERNMENTAL AUTHORITIES SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. SUBSCRIBERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE SECURITIES SUBSCRIBED FOR BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY OTHER
COUNTRY OR STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES
SUBSCRIBED FOR BY THIS AGREEMENT HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THE SECURITIES OFFERED BY THE COMPANY. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS
(OTHER THAN DISTRIBUTORS) UNLESS THE SECURITIES ARE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, IS AVAILABLE.
ADDITIONALLY, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED.
Bigmar, Inc.
9711 Sportsman Club Road
Johnstown, OH 43031-9141
Ladies and Gentlemen:
The undersigned (the "Subscriber") commits to purchase shares of common
stock, $.001 par value per share (the "Common Stock"), of Bigmar, Inc., a
corporation organized under the laws of the State of Delaware (the "Company").
Whereas the Subscriber and the Company reached an understanding related to the
terms contemplated herein on Monday, November 19, 2001 (the "Effective Date");
and whereas the Agreement herein is to formalize such understanding, now,
therefore, the Subscriber and the Company hereby agree as follows:
1. SUBSCRIPTION.
1.1 The Subscriber hereby irrevocably subscribes for and agrees to
accept from the Company Two Million (2,000,000) shares of Common Stock of the
Company, as set forth on the Signature Page attached to this Subscription
Agreement (the "Agreement"), in exchange for an aggregate consideration of One
Million Dollars ($1,000,000).
2. PURCHASE PROCEDURE. The Subscriber acknowledges that, in order to
subscribe for the Common Stock, it must, and does hereby, deliver to the
Company:
2.1 An executed counterpart of the Signature Page attached to this
Agreement together with appropriate notarization; and
2.2 In the case of the Subscriber purchasing the Common Stock in
consideration of cash payment, or a check, subject to collection, or wire
transfer in immediately available funds, in the amount set forth in Section 1
representing payment in full for the Common Stock desired to be purchased
hereunder, made payable to the order of "Bigmar, Inc." or shall cause a wire
transfer of immediately available funds in favor of "Bigmar, Inc.", for such
amount.
3. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER. By executing this
Agreement, the Subscriber represents, warrants, acknowledges and agrees as
follows:
3.1 Such Subscriber acknowledges that he has received, carefully read
and understands in their entirety (i) this Agreement; (ii) the information set
forth in the Company's public reports; (iii) all information necessary to verify
the accuracy and completeness of the Company's representations, warranties and
covenants made herein, all of which are incorporated by reference; and (iv)
written (or verbal) answers to all questions the Subscriber submitted to the
Company regarding an investment in the Company (items described in (i)-(iv)
hereof collectively referred to as the "Disclosure Documents"); and the
Subscriber has relied on the information contained therein and has not been
furnished with any other documents, offering literature, memorandum or
prospectus.
3.2 Such Subscriber understands that (i) the Securities being purchased
hereunder have not been registered under the United States Securities Act of
1933, as amended (the "Securities Act") or any applicable state securities laws,
or the laws of any foreign jurisdiction; (ii) Subscriber cannot sell such
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
certificates evidencing the Securities, stating that such securities have not
been registered under the Securities Act and setting forth or referring to the
restrictions on transferability and sales of the securities; (iv) the Company
will place stop transfer instructions against the Securities and the
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certificates for the Securities to restrict the transfer thereof; and (v) the
Company has no obligations to register the Securities or assist the Subscriber
in obtaining an exemption from the various registration requirements except as
set forth herein. 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
investment purposes only and not with a view toward resale or distribution,
either in whole or in part; (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; and (iii) agrees not to
sell or otherwise transfer the Subscriber's Securities unless and until they are
subsequently registered under the Securities Act and any applicable state
securities laws or unless an exemption from any such registration is available.
3.4 Such Subscriber understands that an investment in the Securities
involves substantial risks and Subscriber recognizes and understands the risks
relating to the purchase of the Securities, including the fact that the
Subscriber could lose the entire amount of the Subscriber's investment in the
Securities.
3.5 Such Subscriber is knowledgeable about the risks associated with
the business in which the Company is engaged, and has, either alone or together
with the Subscriber's Purchaser Representative (as that term is defined in
Regulation D under the Securities Act), such knowledge and experience in
financial and business matters that the 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 his net worth and financial needs and he is able to bear the
economic risk of losing his entire investment in the Securities.
3.7 Such Subscriber represents and warrants that it satisfies the
definition of "accredited investor" as set forth in Rule 501(a) of Regulation D
under the Act ("Regulation D") because the Subscriber is one of the types of
persons listed below as indicated by Subscriber's check of the appropriate
category. (Please check the appropriate paragraph(s)).
___(1) Any bank as defined in section 3(a)(2) of the Act, or any savings and
loan association or other institution as defined in section 3(a)(5)(A)
of the Act whether acting in its individual or fiduciary capacity; any
broker or dealer registered pursuant to section 15 of the Securities
Exchange Act of 1934; any insurance company as defined in section 2(13)
of the Act; any 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; any Small Business Investment Company
licensed by the U.S. Small Business Administration under section 301(c)
or (d) of the 4 Small Business Investment Act of 1958; any plan
established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; any 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 adviser, 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 Subscribers;
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____(2) Any private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
____(3) Any organization described in section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or
partnership, or association, business or other trust or unincorporated
organization, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000 and its
net worth in excess of $1,000,000;
____(4) Any director, executive officer, or general partner of the issuer of
the securities being offered or sold, or any director, executive
officer, or general partner of a general partner of that issuer;
____(5) Any natural person whose individual net worth, or joint net worth with
that person's spouse, (exclusive of personal residence and automobiles)
at the time of his purchase exceeds $1,000,000;
____(6) Any 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;
____(7) Any 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
230.506(b)(2)(ii); and
____(8) Any entity in which all of the equity owners are accredited
Subscribers.
3.8 The Subscriber understands that no approval, authorization,
consent, order or other action of, or filing with, any person, firm or
corporation or any court, administrative agency or other governmental authority
is required in connection with the execution and delivery of this Agreement by
the Subscriber or the consummation of the transactions described herein, except
as disclosed herein and, except to the extent that the Subscriber or the Company
is required to file reports in accordance with relevant regulations under
federal securities laws.
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3.9 Such Subscriber understands that (i) the offering contemplated
hereby has not been reviewed by any United States federal, state or other
governmental body or agency, or any agency or instrumentality of any foreign
government; (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 Securities for investment.
3.10 Such Subscriber is aware that the Securities have not been
registered under the Securities Act and that no market currently exists, and
that there is no expectation that a market will ever develop. The Subscriber has
adequate means of providing for the Subscriber's current needs and personal and
family contingencies, has no need for liquidity in the investment contemplated
hereby, and is able to bear the risk of loss of his entire investment.
3.11 All information which the Subscriber has provided the Company
concerning the Subscriber, the Subscriber's financial position and the
Subscriber's 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, the Subscriber will immediately provide the Company with such new
information. The Subscriber agrees that financial and other information
concerning the 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 shall not sell, assign, encumber or transfer all
or any part of the Common Stock being acquired or any of the securities included
therein or issuable in connection therewith (except a transfer upon his death,
incapacity or bankruptcy or a transfer without consideration to his spouse
and/or children and/or a trust for the benefit of such family members), unless
the Company has determined, upon the advice of counsel for the Company, that no
applicable United States federal or state securities laws will be violated as a
result of such transfer. The Company may require an opinion of counsel
acceptable to the Company to the effect that such transfer or assignment (i) may
be effected without registration of the Common Stock or any securities included
therein or issuable in connection therewith under the Securities Act, and (ii)
does not violate any applicable federal, state or other securities laws, or the
rules regulations or statutes of any foreign government or any agency or
instrumentality of any foreign government.
3.13 Such Subscriber represents that the Company has made available all
information which Subscriber deemed material to making an informed investment
decision in connection with his purchase of securities of the Company; that the
Subscriber is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables Subscriber
to obtain information from the Company in order to evaluate the merits and risks
of this investment; and that Subscriber has been represented by counsel and been
advised concerning the risks and merits of this investment. Further, Subscriber
acknowledges that the Company has made available to Subscriber the opportunity
to ask questions of, and receive answers from the Company, its officers,
directors and other persons acting on its behalf, including John Tramontana,
concerning the terms and conditions of his purchase and to obtain any additional
information, to the extent the Company possesses such information or can acquire
it without unreasonable effort or expense, necessary to verify the accuracy of
the information disclosed to Subscriber. Further, Subscriber represents that no
statement, printed material or inducement was given or made by the Company or
anyone on its behalf that is contrary to the information disclosed to
Subscriber.
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3.14 Such Subscriber is familiar with the nature and extent of the
risks inherent in investments in unregistered securities and in the business in
which the Company is engaged and intends to engage and has determined, either
personally or in consultation with the Subscriber's Purchaser Representative or
attorney, that an investment in the Company is consistent with the Subscriber's
investment objectives and income prospects.
3.15 The Subscriber, upon review of the Disclosure Documents and
careful consideration of the risks involved in the purchase of the Common Stock,
understands and acknowledges that this investment is of a speculative nature
involving a risk of loss of all or a portion of the undersigned's investment,
and that:
i) The Common Stock are being sold in reliance on the
exemption from the registration provisions of the Securities
Act, pursuant to Section 4(2) of the Securities Act,
Regulation S and Regulation D promulgated by the Securities
and Exchange Commission thereunder and the Common Stock, will
be Restricted Common Stock as defined in Rule 144 under the
Securities Act and will be saleable only pursuant to
Regulation S, a Registration Statement or an exemption from
the registration requirements under the Securities Act. Except
as provided herein, the Company has no obligation to register
the Common Stock pursuant to the Securities Act. Consequently,
transfer may be limited.
ii) The Common Stock are only being offered to the Subscriber
because the Subscriber has represented that the Subscriber is
an accredited investor (as defined in Regulation D under the
Securities Act), and the information being supplied to the
Subscriber would not be adequate to comply with the disclosure
provided in connection with a registration statement or with
information required to be provided under the Securities Act
to an unaccredited investor under Regulation D.
iii) The Subscriber has determined that the Common Stock is a
suitable investment for the Subscriber.
iv) Each certificate for the Common Stock shall be imprinted
with a legend substantially in the following form:
THE SECURITIES WHICH ARE REPRESENTED HEREBY HAVE NOT BEEN THE
SUBJECT OF REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION
STATEMENT WITH RESPECT THERETO IS DECLARED AND REMAINS
EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES AN OPINION
OF COUNSEL FOR THE COMPANY THAT AN EXEMPTION FROM REGISTRATION
REQUIREMENTS OF SUCH ACT IS AVAILABLE.
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THE SECURITIES WHICH ARE REPRESENTED HEREBY HAVE NOT BEEN THE
SUBJECT OF REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, OFFERED, DISPOSED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED TO A UNITED
STATES PERSON EXCEPT (A) (1) IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, OR (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
AVAILABLE), AND (B) IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
3.16 If the Subscriber is a corporation, trust, partnership or other
entity that is not a natural person, it has been formed and validly exists and
has not been organized for the specific purpose of purchasing the Common Stock
and is not prohibited from doing so.
3.17 If the Subscriber is purchasing the Common Stock in a fiduciary
capacity for another person or entity, including without limitation a
corporation, partnership, trust or any other entity, the Subscriber has been
duly authorized and empowered to execute this Agreement and all other
subscription documents, and such other person fulfills all the requirements for
purchase of the Common Stock as such requirements are set forth herein, concurs
in the purchase of the Common Stock and agrees to be bound by the obligations,
representations, warranties and covenants contained herein. Upon request of the
Company, the Subscriber will provide true, complete and current copies of all
relevant documents creating the Subscriber, authorizing his investment in the
Company and/or evidencing the satisfaction of the foregoing.
3.18 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, the 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 securities offered hereby should not rely on the counsel retained by the
Company with respect to any matters herein described.
3.19 The Company has a history of operating losses and there can be no
assurance that the Company will be able to operate profitably in the future.
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3.20 The Company's ability to implement its business plan may be
materially dependent upon the Company's ability to raise additional capital
through the successful completion of a subsequent offering or through some other
source. There can be no assurance that any such offering will be completed, or
of the final terms thereof. Any such offering will most likely be highly
dilutive to the shareholders of the Company. There can be no assurance that the
Company's business activities will result in sufficient ongoing revenues to
provide profits to the Company, or that additional financing, if needed, will be
available to the Company or, if available, on satisfactory terms.
3.21 The Subscriber expressly represents, warrants and agrees that, in
connection with the offer and sale of the securities described herein to the
Subscriber, the Company is relying upon the Subscriber's representations and
warranties as contained in this Agreement.
3.22 The Subscriber expressly acknowledges that the foregoing
representations and warranties are true as of the date of this Agreement and
shall be true as of the date the Company issues and sells the Common Stock to
the Subscriber. If such representations or warranties shall not be true in any
respect prior to such date, the Subscriber will give prompt written notice of
such fact to the Company.
3.23 The Subscriber certifies that, if the Subscriber is a party other
than a distributor, it is not a U.S. person (as defined under Regulation S of
the Securities Act) or a U.S. person who purchased securities in a transaction
that did not require registration under the Securities Act, and that it is not
acquiring the securities for the benefit of any U.S. person.
3.24 The Subscriber agrees it will resell such Common Stock only in
accordance with the provisions of Regulation S (Sections 230.901 through 230.905
and the Preliminary Notes), pursuant to registration under the Securities Act,
or pursuant to an available exemption from registration; and agrees not to
engage in hedging transactions with regard to such Common Stock unless in
compliance with the Securities Act.
3.25 The Subscriber will not offer, sell, resell or otherwise transfer
the Common Stock except pursuant to offers and sales that occur outside the
United States which fall within the meaning of Regulation S of the Securities
Act in a transaction meeting the requirements of Section 230.904 thereunder and
will not direct, or cause any affiliate or other person acting on its behalf to
direct, selling efforts in the United States.
3.26 The Subscriber acknowledges that any restricted securities (as
defined in Section 230.144 of Regulation S of the Securities Act) that are
equity securities of a domestic issuer will continue to be deemed restricted
securities notwithstanding that they were acquired in a resale transaction made
pursuant to Section 203.901 or 203.904 of Regulation S of the Securities Act.
3.27 The Subscriber represents that if it is a "dealer" or a person
"receiving a selling concession fee or other remuneration" within the meaning of
Regulation S of the Securities Act, the Subscriber, or any person acting on
behalf of the Subscriber, until the expiration of the one-year distribution
compliance period (as further defined under Section 203.903 thereunder) will not
offer or sell to a U.S. person (as further defined under Section 203.902(k)
thereunder) or for the account of or benefit of a U.S. person .
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3.28 The Subscriber further represents that, in the case of an offer or
sale of securities by a dealer (as defined in Section 2(a)(12) of the Securities
Act), or a person receiving a selling concession, fee or other remuneration in
respect of securities offered or sold, prior to the expiration of the
distribution company compliance period by a dealer (i) neither the seller nor
any person acting on its behalf knows that the offeree or buyer is a U.S. person
and (ii) if the seller or any person acting on the seller's behalf knows that
the purchaser is a dealer (as defined in Section 2(a)(12) of the Securities
Act), or is a person receiving a selling concession, fee or other remuneration
in respect of the securities sold send to the purchase a confirmation or other
notice stating that the securities may be offered and sold during the
distribution compliance period only (a) in accordance with the provisions of
Regulation S; (b) pursuant to registration of the securities under the
Securities Act; or (c) pursuant to an available exemption from the registration
requirements of the Securities Act.
Subscriber understands that the Company will be relying on the accuracy
and completeness of Subscriber's responses to the foregoing representations and
warranties. The Subscriber further represents and warrants to the Company that:
(i) The foregoing representations and warranties are answers
are true, complete and correct and may be relied upon by the
Company for all purposes, including the purpose of determining
whether the offering in which Subscriber proposes to
participate is exempt from registration under federal and
state securities laws;
(ii) Subscriber will notify the Company immediately of any
material change in any representatitions and warranties made
herein occurring prior to the closing of any purchase by
Subscriber of the Common Stock; and
(iii) Subscriber is able to bear the economic risk of the
investment and, at the present time, can afford a complete
loss of such investment.
4. SUBSCRIPTION ACCEPTANCE.
4.1 This subscription may be accepted or rejected in whole or in part
by the Company, in its sole discretion.
4.2 Except as otherwise required by law, this subscription is and shall
be irrevocable except that (i) the Subscriber's execution and delivery of this
Agreement shall not constitute an agreement between the Company and the
Subscriber until this Agreement is accepted on behalf of the Company and, of not
so accepted, the Subscriber's subscription and obligations hereunder shall
terminate, and (ii) the Subscriber may, at any time prior to acceptance of this
Agreement, request in writing that the Subscriber be released from the
obligations hereunder (and the Company may, but need not, in its discretion,
elect to release the Subscriber from the subscription and from such
obligations).
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5. REPRESENTATIONS OF COMPANY.
Upon the Company's receipt and acceptance of payment by the Subscriber
hereunder and issuance of certificates representing the Common Stock being
purchased hereby, the Common Stock will be duly authorized, fully paid and
non-assessable. The Company represents that neither the Company nor any
authorized agent acting on its behalf will register in its stockholder records
any transfer of the Common Stock not made in compliance with Regulation S and
Rule 144 promulgated under the Securities Act or pursuant to registration or
another available exemption. The Subscriber acknowledges that the Company is it
required, either by contract or a provision in its by-laws or articles, to
refuse to register any transfer of the Common Stock not made in accordance with
the provisions of Regulation S and Rule 144 under the Securities Act, pursuant
to registration under the Securities Act, or pursuant to an available exemption
from registration; provided, however, that if the securities are in bearer form
or foreign law prevents the Company from refusing to register the securities
transfers, other reasonable procedures shall be implemented to prevent any
transfer of the securities not made in accordance with the provisions of
Regulation S of the Securities Act. The Company further acknowledges that in the
event of an offer or sale of securities of the Company by an officer or director
or by a distributor who is affiliate of the Company or the distributor solely by
virtue of holding such position, no selling concession, fee or other
remuneration has been or will be paid in connection with such offer or sale
other than the usual and customary broker's commission that would be received by
a person executing such transaction as agent.
6. INDEMNIFICATION. 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 the Subscriber's
failure to fulfill any of the terms and conditions of this Agreement or by
reason of the Subscriber's breach of any of his representations and warranties
contained herein. This Agreement and the representations and warranties
contained herein shall be binding upon the 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.
7. ARBITRATION AGREEMENT.
7.1 Subscriber represents, warrants and covenants that any controversy
or claim brought directly, derivatively or in a representative capacity by him
in his capacity as a present or former securityholder, whether against the
Company, in the name of the Company or otherwise, arising out of or relating to
any acts or omissions of the Company, or any securityholder or any of their
officers, directors, agents, affiliates, associates, employees, counsel or
controlling persons (including without limitation any controversy or claim
relating to a purchase or sale of the Common Stock) shall be settled by binding
arbitration under the United States Federal Arbitration Act in accordance with
the commercial arbitration rules of the American Arbitration Association ("AAA")
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. Any controversy or claim brought by the
Company against the Subscriber, whether in his capacity as present or former
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securityholder of the Company in or against any of the Subscriber's officers,
directors, agents, affiliates, associates, employees, counsel or controlling
persons shall also be settled by arbitration under the Federal Arbitration Act
in accordance with the commercial arbitration rules of the AAA and judgment
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. In arbitration proceedings under this Paragraph 7, the parties shall be
entitled to any and all remedies that would be available in the absence of this
Paragraph 7 and the arbitrators, in rendering their decision, shall follow the
substantive laws that would otherwise be applicable. This Paragraph 7 shall
apply, without limitation, to actions arising in connection with the offer and
sale of the Common Stock contemplated by this Agreement under any Federal,
state, foreign securities or other laws.
7.2 The arbitration of any dispute pursuant to this Paragraph 7 shall
be held in New York, New York.
7.3 This Paragraph 7 is intended to benefit the securityholders,
agents, affiliates, associates, employees, counsel and controlling persons of
the Company, each of whom shall be deemed to be a third party beneficiary of
this Paragraph 7, and each of whom may enforce this Paragraph 7 to the full
extent that the Company could do so if a controversy or claim were brought
against it.
7.4 Subscriber acknowledges that this Paragraph 7 limits a number of
Subscriber's rights, including without limitation (i) the right to have claims
resolved in a court of law and before a jury; (ii) certain discovery rights; and
(iii) the right to appeal any decision.
8. APPLICABLE LAW. This Agreement shall be construed in accordance with
and governed by the laws applicable to contracts made and wholly performed in
the Delaware.
9. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more counterparts.
10. 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 assigns and on each Subscriber and his respective heirs, executors,
administrators, successors and assigns.
11. ENTIRE AGREEMENT. This Agreement, when accepted by the Company,
will constitute the entire agreement among 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.
12. ASSIGNABILITY. The Subscriber acknowledges that he may not assign
any of his rights to or interest in or under this Agreement without the prior
written consent of the Company, and any attempted assignment without such
consent shall be void and without effect.
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13. TAX CONSEQUENCES. No effort has been made by the Company to provide
any advice as to the federal income tax consequences of the investment by the
Subscriber in the Common Stock. The Subscriber has been advised to seek
independent advice as to the tax consequences of an investment in the Common
Stock.
14. 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.
15. INTERPRETATION.
15.1 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.
15.2 Captions are inserted for convenience only, are not a part of this
Agreement, and shall not be used in the interpretation of this Agreement.
16. CERTIFICATION. THE SUBSCRIBER CERTIFIES THAT HE HAS READ THIS
ENTIRE SUBSCRIPTION AGREEMENT AND THAT EVERY STATEMENT MADE BY THE SUBSCRIBER
HEREIN IS TRUE AND COMPLETE.
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SUBSCRIBER SIGNATURE PAGE
-------------------------
The undersigned, desiring to subscribe for shares of Common Stock of
Bigmar, Inc. (the "Company"), as set forth below, acknowledges that he has
received and understands the terms and conditions of the Agreement attached
hereto and that he does hereby agree to all the terms and conditions contained
therein.
IN WITNESS WHEREOF, the undersigned has hereby executed this
Subscription Agreement as of this _____ day of ____________, 2001.
Dollar Amount of Investment: US$
Number of Shares of
Common Stock Subscribed for:
Exact name(s) of Subscriber(s) (please print):
By: __________________________________
PLEASE ATTACH CERTIFIED COPY OF AUTHORIZING CORPORATE OR TRUST DOCUMENTS
In addition, if the subscriber is a corporation, the corporate seal should be
affixed:
[SEAL]
Residence or Mailing Address: ________________________________
Telephone Numbers (include Area Code): ________________________________
Social Security or Taxpayer
Identification Number(s): ________________________________
Mailing Address for Correspondence
from the Company (if different from above): ________________________________
________________________________
ACCEPTANCE OF SUBSCRIPTION
The subscription set forth herein is accepted by Bigmar, Inc. to the extent of
US$ in consideration for shares of Common Stock, as of this _ day of ____, 2001.
BIGMAR, INC.
By:
Title: President
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ACKNOWLEDGMENT FOR CORPORATIONS
STATE OF ________________________ :
: ss:
COUNTY OF _______________________ :
On this _______ day of __________ ______, before me personally came
_____________, known to me, who, being by me duly sworn, did depose and say that
he or she is the __________________ of the corporation described in and which
executed the foregoing Subscription Agreement; that he or she knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that he or she signed his/her name thereto by like order.
Notary Public
[Seal]
My Commission Expires:
ACKNOWLEDGMENT FOR PARTNERSHIPS
STATE OF ___________________________ :
: ss:
COUNTY OF __________________________ :
On this _______ day of __________ ____, before me personally came
_____________, known to me, who, being by me duly sworn, did depose and say that
he or she is a partner in the firm of _____________________, a partnership, and
that he or she executed the foregoing Subscription Agreement on behalf of said
firm.
Notary Public
[Seal]
My Commission Expires:
ACKNOWLEDGMENT FOR TRUSTS
STATE OF ______________________________ :
: ss:
COUNTY OF _____________________________ :
On this _______ day of __________ ____, before me personally came
_____________, known to me, who, being by me duly sworn, did depose and say that
he or she is a trustee of __________________ and that he or she executed the
foregoing Subscription Agreement on behalf of said trust.
Notary Public
[Seal]
My Commission Expires:
APPENDIX A
----------
SUBSCRIBER SUITABILITY STANDARDS
A PURCHASE OF THE SHARES OF COMMON STOCK PURSUANT TO THE SUBSCRIPTION
AGREEMENT INVOLVES A HIGH DEGREE OF RISK AND IS SUITABLE ONLY FOR PERSONS OF
SUBSTANTIAL FINANCIAL MEANS WHO HAVE NO NEED FOR LIQUIDITY IN THEIR INVESTMENTS.
THE OFFER, OFFER FOR SALE, AND SALE OF THE SHARES OF COMMON STOCK ARE INTENDED
TO BE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), PURSUANT TO REGULATION D PROMULGATED THEREUNDER
("REGULATION D") OR ANOTHER EXEMPTION THEREUNDER AND ARE INTENDED TO BE EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS.
RULE 501(a) OF REGULATION D DEFINES AN "ACCREDITED INVESTOR" AS ANY
PERSON WHO COMES WITHIN ANY OF THE FOLLOWING CATEGORIES, OR WHO THE ISSUER
REASONABLY BELIEVES COMES WITHIN ANY OF THE FOLLOWING CATEGORIES, AT THE TIME OF
THE SALE OF THE SECURITIES TO THAT PERSON:
(1) ANY BANK AS DEFINED IN SECTION 3(a)(2) OF THE ACT, OR ANY SAVINGS
AND LOAN ASSOCIATION OR OTHER INSTITUTION AS DEFINED IN SECTION 3(a)(5)(A) OF
THE ACT WHETHER ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY; ANY BROKER OR
DEALER REGISTERED PURSUANT TO SECTION 15 OF THE SECURITIES EXCHANGE ACT OF 1934;
ANY INSURANCE COMPANY AS DEFINED IN SECTION 2(13) OF THE ACT; ANY 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; ANY SMALL
BUSINESS INVESTMENT COMPANY LICENSED BY THE U.S. SMALL BUSINESS ADMINISTRATION
UNDER SECTION 301(c) OR (d) OF THE SMALL BUSINESS INVESTMENT ACT OF 1958; ANY
PLAN ESTABLISHED AND MAINTAINED BY A STATE, ITS POLITICAL SUBDIVISIONS, OR ANY
AGENCY OR INSTRUMENTALITY OF A STATE OR ITS POLITICAL SUBDIVISIONS, FOR THE
BENEFIT OF ITS EMPLOYEES, IF SUCH PLAN HAS TOTAL ASSETS IN EXCESS OF $5,000,000;
ANY 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 ADVISER, 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 SUBSCRIBERS;
(2) ANY PRIVATE BUSINESS DEVELOPMENT COMPANY AS DEFINED IN SECTION
202(A)(22) OF THE INVESTMENT ADVISERS ACT OF 1940;
(3) ANY 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 OR ACQUIRING THE SECURITIES
OFFERED, WITH TOTAL ASSETS IN EXCESS OF $5,000,000;
(4) ANY DIRECTOR, EXECUTIVE OFFICER OR GENERAL PARTNER OF THE ISSUER OF
THE SECURITIES BEING OFFERED OR SOLD, OR ANY DIRECTOR, EXECUTIVE OFFICER OR
GENERAL PARTNER OF A GENERAL PARTNER OF THAT ISSUER;
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(5) ANY NATURAL PERSON WHOSE INDIVIDUAL NET WORTH, OR JOINT NET WORTH
WITH THAT PERSON'S SPOUSE, AT THE TIME OF HIS PURCHASE EXCEEDS $1,000,000;
(6) ANY 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;
(7) ANY 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
(8) ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS ARE ACCREDITED
INVESTORS.
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