EXHIBIT 10.2
SUBSCRIPTION AGENCY AGREEMENT
SUBSCRIPTION AGENCY AGREEMENT, dated as of ______________, 1996 (the
"Agreement") by and between Paragon Acquisition Company, Inc., a Delaware
corporation (the "Company") and Continental Stock Transfer & Trust Company (the
"Subscription Agent").
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the creation of an issue of
Subscription Rights to be evidenced by forms substantially in the form of
Exhibit A hereto ("Subscription Forms"), each Subscription Right entitling the
registered holder thereof to purchase, subject to the provisions of the
Subscription Forms and this Agreement, one share of the Common Stock, $.01 par
value, of the Company (the "Common Stock"); and
WHEREAS, the Company desires the Subscription Agent to act on behalf of
the Company, and the Subscription Agent is willing so to act, in connection with
the issuance of the Subscription Forms and exercise of the Subscription Rights;
and
WHEREAS, the Company and the Subscription Agent desire to set forth in
this Agreement the terms and conditions upon which the Subscription Forms shall
be issued and the Subscription Rights exercised, and to provide for the rights
of the holders of Subscription Rights;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the Company and the Subscription Agent agree as
follows:
ARTICLE I
Issuance and Exercise of Subscription Rights
Section 1.01. The Company hereby appoints the Subscription Agent to act
on behalf of the Company in accordance with the provisions hereinafter set forth
in this Agreement, and the Subscription Agent hereby accepts such appointment
and agrees to perform the same in accordance with such provisions.
Section 1.02. The Subscription Forms shall be issued in registered form
only and shall be non-transferable. The text of the Subscription Forms shall be
substantially in the form of Exhibit A hereto, which text is hereby incorporated
into this Agreement by reference as though fully set forth herein. Each
Subscription Form shall evidence the right, subject to the provisions of this
Agreement and of such Subscription Form, to purchase the number of fully paid
and non-assessable shares of Common Stock stated therein.
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Section 1.03. Upon the written order of the Company, signed by the
President or any Vice President and the Secretary, Treasurer, Assistant
Secretary of Assistant Treasurer of the Company, the Subscription Agent shall
register Subscription Rights in the names and denominations specified in said
order, and will countersign Subscription Forms evidencing the same in accordance
with said order. Each Subscription Form shall be executed on behalf of the
Company by the manual or facsimile signature of the President or any Vice
President of the Company, under its corporate seal, affixed or facsimile,
attested by the manual or facsimile signature of the Secretary or an Assistant
Secretary of the Company and shall be countersigned manually by the Subscription
Agent. The Subscription Forms shall not be valid for any purpose unless so
countersigned. In case any officer whose facsimile ceased to be such before such
Subscription Form is issued, it may be issued with the same effect as if such
officer had not ceased to be such at the date of issuance.
Section 1.04. The term "Subscription Holder" as used herein shall mean
any person in whose name at the time any Subscription Right shall be registered
upon the books to be maintained by the Subscription Agent for that purpose.
ARTICLE II
Subscription Price, Duration and Exercise of Subscription Rights
Section 2.01. The Subscription Period shall commence after the
effective date of a post- effective amendment to the Company's Prospectus dated
__________, 1996 (the "Post-Effective Amendment"). Upon written notice from the
Company that the Post-Effective Amendment is effective, the Subscription Agent
shall mail the Subscription Forms to the Subscription Holders. Each Subscription
Holder shall have no fewer than 20 and no more than 45 business days from the
effective date of the Post-Effective Amendment to exercise his or her
Subscription Rights.
Section 2.02. Subject to the provisions of Section 4.01 and paragraph
(4) of Section 4.03, Subscription Rights may be exercised at any time during the
Subscription Period.
Subscription Rights not exercised during the Subscription Period shall
become void and all rights thereunder and all rights in respect thereof under
this Agreement shall cease at the end of such period.
Section 2.03. (1) The Subscription Holder may exercise a Subscription
Right upon delivery of the Subscription Form, with the exercise form thereon
duly executed to the Subscription Agent at its corporate office, together with
the Subscription Price for each share of Common Stock to be purchased.
(2) Upon receipt of a duly executed Subscription Form
accompanied by payment of the aggregate Subscription Price for the shares of
Common Stock for which the Subscription Price is then being exercised, the
Subscription Agent shall requisition from the transfer agent certificates for
the total number of shares of Common stock for which the Subscription Price is
being exercised in such names and denominations as are required for
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delivery to the Subscription Holder, and the Subscription Agent shall thereupon
deliver such certificate and payment into an escrow account in accordance with
that certain Escrow Agreement dated ___________, 1996, by and between the
Company and Continental Stock Transfer & Trust Company, (the "Escrow Agent").
(3) The Company covenants and agrees that it will
pay, when due and payable, any and all taxes which may be payable in respect to
the issue of Subscription Rights, or the issue of any shares of Common Stock
upon the exercise of Subscription Rights.
(4) The Subscription Agent shall account promptly to
the Company with respect to the Subscription Rights exercised and currently
account to the Company for moneys received by the Subscription Agent for the
purchase of shares of Common Stock upon the exercise of the Subscription Rights.
ARTICLE III
Other Provisions Relating to Rights of Subscription Holders
Section 3.01. No Subscription Holder, as such, shall be entitled to
vote or receive dividends or be deemed the holder of shares of Common Stock for
any purpose, nor shall anything contained in any Subscription Form be construed
to confer upon any Subscription Holder, as such, any of the rights of a
shareholder of the Company or any right to vote, give or withhold consent to any
action by the Company or any right to vote, give or withhold consent to any
action by the Company (whether upon any recapitalization, issue of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings or
other action affecting shareholders or receive dividends until such Subscription
Rights shall have been exercised and the shares of Common Stock purchasable upon
the exercise thereof shall have become deliverable as provided in this
Agreement.
Section 3.02. (1) The Company covenants and agrees that at all times it
shall reserve and keep available for exercise of Subscription Rights such number
of authorized shares of Common Stock as shall be required to permit the exercise
in full of all outstanding Subscription Rights and that it will make available
to the Escrow Agent from time to time a number of duly executed certificates
representing shares of Common Stock sufficient thereof.
(2) The Company covenants that all shares of Common
Stock issued on exercise of Subscription Rights will be validly issued,
fully-paid, non-assessable and free of preemptive rights, and that if the taking
of any action would cause an adjustment in the Subscription Price so that the
exercise of a Subscription Right while such Subscription Price is in effect
would cause a share of Common Stock to be issued at a price below its then par
value, the Company will take such action as may, in the opinion of counsel, be
necessary in order that upon exercise of the Subscription Rights it may validly
and legally issue shares of Common Stock that are fully paid, non-assessable and
free of preemptive rights.
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(4) The Company will from time to time, furnish the
Subscription Agent with current Prospectuses meeting the requirements of the Act
in sufficient quantity to permit the Subscription Agent to deliver a Prospectus
to each registered holder of a Subscription Form upon delivery thereof. The
Company further agrees to pay all fees, costs and expenses in connection with
the preparation and delivery to the Subscription Agent of the Prospectus and to
immediately notify the Subscription Agent in the event that (i) the Commission
shall have issued or threatened to issue any order preventing or suspending the
use of the Prospectus or suspending or revoking the exemption upon which such
Prospectus was based; (ii) at any time the Prospectus shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(iii) for any reason it shall be necessary to amend or supplement the Prospectus
in order to comply with the Act.
Section 3.03. Anything contained herein to the contrary
notwithstanding, the Company shall not be required to issue any fraction of a
share of Common Stock in connection with the exercise of any Subscription Right.
Section 3.04. Any notice to Subscription Holders shall be deemed given
or made by the Company if sent by mail, first class or registered, postage
prepaid, addressed to the Subscription Holders at their last known addresses as
they shall appear on the register maintained by the Subscription.
ARTICLE IV
Concerning the Subscription Agent and Other Matters
Section 4.01. The Company will from time to time promptly pay, subject
to the provisions of Section 2.03, all taxes and charges that may be imposed
upon the Company or the Subscription Agent in respect of the issuance or
delivery of shares of Common Stock upon the exercise of the Subscription Rights.
Section 4.02. (1) The Subscription Agent, or any successor to it
hereafter appointed, may resign its duties and be discharged from all further
duties and liabilities hereunder after giving two weeks notice in writing to the
Company in accordance with the provisions of Section 4.03. If the office of the
Subscription Agent becomes vacant by resignation or incapacity to act or
otherwise, the Company shall appoint in writing a successor Subscription Agent
in place of the Subscription Agent. If the Company shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Subscription
Agent, then the Subscription Agent may apply to any court of competent
jurisdiction for the appointment of a successor Subscription Agent. Any
successor Subscription Agent, whether appointed by the Company or by such a
court, shall be a corporation, firm or entity having its principal office in the
United States of America, organized in good standing and doing business under
the laws of the United States of America, or any state hereof, and authorized
under such laws to exercise corporate trust or corporate agency powers and
subject to supervision or examination by Federal or State authority and having a
combined capital and surplus of not less than $35,000. The combined capital and
surplus of any such
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successor Subscription Agent shall be deemed to be the combined capital and
surplus set forth in the most recent report of its condition published at least
annually pursuant to law or to the requirements of a Federal or State
supervising or examining authority. After appointment, any successor
Subscription Agent shall be vested with all authority, powers, rights,
immunities, duties and obligations of its predecessor Subscription Agent with
like effect as if originally named as Subscription Agent hereunder, without any
further act or deed; but the former Subscription Agent shall deliver and
transfer to its successor any property at the time held by it hereunder and, if
for any reason it becomes necessary or appropriate, the predecessor Subscription
Agent shall execute and deliver, at the expense of the Company, an instrument
transferring to such successor Subscription Agent hereunder; and, upon request
of any successor Subscription Agent, the Company shall make, execute,
acknowledge and deliver any and all instruments in writing for more fully and
effectually vesting in and confirming to such successor Subscription Agent all
such authority, powers, rights, immunities, duties and obligation. Not later
than the effective date of any such appointment, the Company shall give notice
thereof to the predecessor Subscription Agent and each transfer agent for the
Common Stock, and shall forthwith give notice thereof to the Subscription
Holders in accordance with the provisions of Section 4.05. Failure to give such
notice, or any defect therein, shall not affect the validity of the appointment
of the successor Subscription Agent.
Section 4.03. The Company agrees (i) that it will pay the Subscription
Agent reasonable compensation for its services hereunder and will reimburse the
Subscription Agent upon demand for all expenditures that the Subscription Agent
may reasonably incur in the execution of its duties hereunder; and (ii) that it
will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Subscription
Agent for the carrying out or performing of the provisions of this Agreement.
Section 4.04. The Subscription Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by which the Company, by its acceptance hereof, shall be bound:
A. The statements contained herein and in the Subscription
Forms shall be taken as statements of the Company, and the Subscription Agent
assumes no responsibility for the correctness of any of the same except such as
described by the Subscription Agent or action taken or to be taken by it. The
Subscription Agent assumes no responsibility with respect to the execution,
delivery or distribution of Subscription Forms except as herein provided;
B. The Subscription Agent shall not be responsible for any
failure of the Company to comply with any of the covenants contained in this
Agreement or in the Subscription Forms, nor shall it at any time be under any
duty or responsibility to any Subscription Holder, to make or cause to be made
any adjustment of the Subscription Price or of the shares of Common Stock, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments when made, or with
respect to the method employed in making same;
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C. The Subscription Agent may consult with its counsel or
other counsel satisfactory to it (including counsel for the Company) and the
opinion of such counsel shall be full and complete authorization in respect to
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion of such counsel, provided the Subscription Agent
shall have exercised reasonable care in the selection of such counsel;
D. The Subscription Agent shall incur no liability or
responsibility to the Company or to any Subscription Holder for any action taken
in reliance on any notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
E. The Subscription Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more registered
Subscription Holders shall furnish the Subscription Agent with reasonable
security and indemnity for any costs and expenses which may be incurred. All
rights of action under this Agreement or under any of the Subscription Rights
may be enforced by the Subscription Agent without the possession of any of the
Subscription Forms or the production thereof at any trial or other proceeding
relative thereto, and any such action, suit or proceeding instituted by the
Subscription Agent may be brought in its name as Subscription Agent, and any
recovery of judgment shall be for the ratable benefit of the registered holders
of the Subscription Rights, as their respective rights or interests may appear;
F. The Subscription Agent shall act hereunder solely as agent
and its duties shall be determined solely by the provisions hereof. The
Subscription Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own negligence or
willful misconduct;
G. The Subscription Agent shall not be under any
responsibility with respect to the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Subscription Agent)
or in respect of the validity or execution of any Subscription Form (except its
countersignature thereof). The Subscription Agent shall act by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or other securities, property or cash
to be issued pursuant to this Agreement or any Subscription Forms or as to
whether any shares of Common Stock or other securities or property will when
issued be validly issued, fully paid and non-assessable or as to the
Subscription Price or the number of, kind or amount of shares of Common Stock or
other securities, other property or cash issuable upon exercise of any
Subscription Rights;
H. The Subscription Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the President and Vice President, the Treasurer or the Secretary of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and shall not be liable for any action taken or suffered to be taken by
it in good faith in accordance with instructions of any such officer or in good
faith reliance upon any statement signed by any one of such officers of the
Company with
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respect to any fact or matter (unless other evidence in respect thereof is
herein prescribed) which may be deemed to be conclusively proved and established
by such signed statement;
I. The Subscription Agent shall cancel any Subscription Form
delivered to it for exercise, in whole or in part, and shall deliver to the
Company from time to time, or otherwise dispose of, such canceled Subscription
Form in a manner specified in writing by the Company; and
J. The Company agrees to indemnify the Subscription Agent for,
and to hold it harmless against, any loss, liability or expense, including
judgments, costs and counsel fees, for anything done or omitted by the
Subscription Agent arising out of or in connection with this Agreement, except
as a result of the Subscription Agent's negligence or bad faith.
Section 4.05. The Subscription Agent may, without the consent or
concurrence of the Subscription Holder, by supplemental agreement or otherwise,
concur with the Company in making any changes or corrections in this Agreement
that it shall have been advised by counsel (who may be counsel for the Company)
are required to cure any ambiguity or to correct any defective or inconsistent
provision or clerical omission or mistake or manifest error herein contained, or
to confer additional rights upon the Subscription Holders.
Section 4.06. All covenants and provisions of this Agreement by or for
the benefit of the Company or the Subscription Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 4.07. Forthwith upon the appointment after the date hereof of
any transfer agent other than Continental Stock Transfer & Trust Company, or if
any subsequent transfer agent for the Common stock, the Company will file with
the Subscription Agent a statement setting forth the name and address of such
transfer agent.
Section 4.08. Any notice or demand authorized by this Agreement to be
given or made by the Subscription Agent or by the holder of any Subscription
Right to or on the Company shall be sufficiently given or made or sent by
registered mail, postage prepaid, addressed (until another address is filed in
writing by the Company with the Subscription Agent) as follows:
PARAGON ACQUISITION COMPANY, INC.
000 XXXX XXXXXX
XXX XXXX, XXX XXXX 00000
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Any notice or demand authorized by this Agreement to be given or made by the
holder of any Subscription Right or by the Company to or on the Subscription
Agent shall be sufficiently given or made or sent by registered mail, postage
prepaid, addressed (until another address is filed in writing by the
Subscription Agent with the Company), as follows:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
0 XXXXXXXX, 00XX XXXXX
XXX XXXX, XX 00000
ATTN: COMPLIANCE DEPARTMENT
Any notice or demand authorized by this Agreement to be given or made by the
Company or the Subscription Agent to or on the Subscription Holders shall be
given in accordance with the provisions of Section 3.04.
Section 4.09. The validity, interpretation and performance of this
Agreement shall be governed by the law of the State of New York.
Section 4.10. Nothing in this Agreement expressed and nothing that may
be implied from any of the provisions hereof is intended or shall be construed
to confer upon, or give to any person or corporation other than the parties
hereto and the Subscription Holders any right, remedy or claim under promise or
agreement hereof, and all covenants, conditions, stipulations, promises and
agreements in this Agreement contained shall be for the sole and exclusive
benefit of the parties hereto and their successors and of the Subscription
Holders.
Section 4.11. A copy of this Agreement shall be available at all
reasonable times at the business offices of the Subscription Agent for
inspection by any Subscription Holder.
Section 4.12. The Article headings herein are for convenience only and
are not part of this Agreement and shall not affect the interpretation
Section 4.13. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto under their respective seals as of the day and year first above
written.
ATTEST: PARAGON ACQUISITION COMPANY, INC.
_____________________________ By: _______________________________
Name:_______________________________
Title: _____________________________
ATTEST:
_____________________________ By: _______________________________
Name:_______________________________
Title: _____________________________
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