REGULATION D SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE OR OTHER SECURITIES AUTHORITIES. THEY MAY NOT
BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
AN EXEMPTION TO THE REGISTRATION REQUIREMENTS OF THOSE SECURITIES LAWS.
THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO PURCHASE, ANY OF THE SECURITIES DESCRIBED HEREIN BY
OR TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD
BE UNLAWFUL. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL, STATE
OR FOREIGN SECURITIES AUTHORITIES, NOR HAVE ANY SUCH AUTHORITIES REVIEWED OR
DETERMINED THE ACCURACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK, INCLUDING BUT NOT
LIMITED TO THOSE RISK FACTORS IDENTIFIED IN THE COMPANY'S FORM S-3S FILED DURING
1997. INVESTORS MUST RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT TERMS AND
CONDITIONS OF THE PROPOSED INVESTMENT AND THEIR OWN ASSESSMENT OF THE RISKS
INVOLVED.
This Regulation D Securities Subscription Agreement (the "Agreement") is
executed by the undersigned (the "Subscriber") in connection with the offer to
the Subscriber of, and the subscription by the Subscriber for, shares of Common
Stock, $.001 par value per share (the "Common Stock"), of SI DIAMOND TECHNOLOGY,
INC., a Texas corporation (the "Company"). The Company is offering to qualified
investors (the "Offering"). The Subscriber agrees to fund $500,000 to the
Company upon the execution of this Agreement by the Subscriber, its acceptance
by the Company and the delivery of a stock certificate to the entity designated
by the Subscriber representing the number of shares of Common Stock identified
in the next sentence. The Subscriber shall receive that number of shares of
Common Stock resulting from the division of the $500,000 by a value which shall
be equal to 65% of the average closing bid price of the Company's Common Stock
for the five trading days immediately preceding the date of this Agreement. In
addition, the Subscriber shall also receive one warrant ("Warrant") for each
share of Common Stock as calculated pursuant to the sentence above. The
purchase price of each Warrant received by the Subscriber shall be the
equivalent of 115% of the average closing bid price of the Company's Common
Stock for the five trading days immediately preceding the date of this
Agreement. On November 5, 1997 and on the first business day of December 1997
and on the first business day for each month thereafter up to and including
April 1998, the Subscriber shall purchase an additional $500,000 of the
Company's Common Stock at a price which shall be equal to 65% of the average
closing bid price of the Company's Common Stock for the five trading days
immediately preceding the issuance date in each such successive month. In
addition,
the Subscriber shall also receive one Warrant for each share of Common Stock as
calculated in the above sentence. The purchase price for each of these Warrants
shall be 115% of the average closing bid price of the Company's Common Stock for
the five trading days immediately preceding the first business day of each month
pursuant to the terms of this Agreement. A form of Warrant is attached to this
Agreement as Exhibit "E."
The terms of the Common Stock are set forth in the Company's Amended and
Restated Articles of Incorporation attached hereto as Exhibit A. The
solicitation of this Subscription by the Company, and, if accepted by the
Company, the sale of the shares of Common Stock subscribed for, are being made
in reliance upon the provisions of Regulation D ("Regulation D") promulgated
under the Securities Act of 1933, as amended (the "Securities Act").
The undersigned Subscriber and the Company, upon acceptance of this
Agreement, hereby agree as follows:
1. Offering
1.1 Offer to Subscribe; Purchase Price and Closing; and Placement Fees.
Subject to satisfaction of the conditions to the closing of a purchase and
sale of Common Stock as to each purchaser of Common Stock (the "Closing") set
forth in Section 1.2 below, the Subscriber hereby offers to subscribe for and
purchase shares of Common Stock pursuant to the terms and conditions of this
Agreement.
1.2 Conditions to Subscriber's Obligations. The Subscriber's obligations
hereunder are conditioned upon the occurrence of all of the following:
(a) other than as described on Schedule 1.2 attached hereto, there have
been no material adverse changes in the Company's business prospects or
financial condition since the date of the last balance sheet included in the
Disclosure Documents (as defined below in Section 4.2);
(b) the representations and warranties of the Company shall be true and
correct in all material respects on the date of Closing, as if made on such
date; and
(c) the Subscription Agreement has been accepted by the Company.
2. Representations and Warranties of the Subscriber. The Subscriber
hereby represents and warrants to the Company as follows (which representations
and warranties shall be true as of the date of Closing):
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2.1 Accredited Investor. The Subscriber hereby represents and warrants to
the Company that it is an "accredited investor," as defined in Rule 501 of
Regulation D, and has marked the applicable box set forth in Section 9 of this
Agreement signifying such status.
2.2 Investment Experience; Access to Information; Independent
Investigation.
2.2.1 Access to Information. The Subscriber or its professional advisor
has been granted the opportunity to ask questions of and receive answers from
representatives of the Company, and its officers, directors, employees and
agents concerning the terms and conditions of the Offering, and the Company and
its business and prospects, and to obtain any additional information which the
Subscriber or its professional advisor deems necessary to verify the accuracy of
the information received. The foregoing, however, does not limit or modify the
Subscriber's right to rely upon representations and warranties of the Company in
Section 4 of this Agreement.
2.2.2 Ability to Evaluate. The Subscriber has such knowledge and
experience in financial and business matters that it is fully capable of
evaluating the merits and risks of an investment in the Company, including
without limitation those set forth in the Disclosure Documents (as defined below
in Section 4.2).
2.2.3 Disclosure Documents. The Subscriber has received and reviewed the
Disclosure Documents (as defined below in Section 4.2). The foregoing, however,
does not limit or modify the Subscriber's right to rely upon the representations
and warranties of the Company in Section 4 of this Agreement.
2.2.4 Investment Experience; Fend for Self. The Subscriber has
substantial experience in investing in securities and has made investments in
securities other than those of the Company. The Subscriber acknowledges that it
is able to fend for itself in the transaction contemplated by this Agreement and
that it has the ability to bear the economic risk of its investment in the
Company. The Subscriber has not been organized for the purpose of investing in
securities of the Company.
2.2.5 Not an Affiliate. The Subscriber is not an officer, director or
"affiliate" (as that term is defined in Rule 415 of the Securities Act) of the
Company.
2.3 Exempt Offering Under Regulation D
2.3.1 Investment; No Distribution. The Subscriber is acquiring the shares
of Common Stock subscribed for (the "Common Stock") solely for investment
purposes for the Subscriber's own account (or for beneficiaries' accounts over
which the Subscriber has investment discretion but no discretionary authority as
to voting or disposition) and not with a view to a distribution of all or any
part thereof. The Subscriber is aware that there are legal and practical limits
on its ability to sell or dispose of the Common Stock and the shares of Common
Stock
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underlying the Warrants (collectively, the "Securities"), and therefore, that
the Subscriber must bear the economic risk of its investment for an indefinite
period of time. The Subscriber has adequate means of providing for its current
needs and anticipated contingencies and has no need for liquidity of this
investment. The Subscriber's commitment to illiquid investments is reasonable
in relation to its net worth.
2.3.2 No General Solicitation. The shares of Common Stock were not
offered to the Subscriber through, and the Subscriber is not aware of, any form
of general solicitation or general advertising, including, without limitation,
(i) any advertisement, articles, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, and
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
2.3.3 No Registration of Common Stock. The Subscriber understands that
the shares of Common Stock are not registered and therefore are "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering, and
that, under such laws and applicable regulations, such securities may not be
transferred or resold without registration under the Securities Act or pursuant
to an exemption therefrom. In this connection, the Subscriber represents that
it is familiar with Rule 144 under the Securities Act, as presently in effect,
and understands the resale limitations imposed thereby and by the Securities
Act.
2.3.4 Disposition. Without in any way limiting the representations set
forth above, the Subscriber further agrees not to make any disposition of all or
any portion of the Securities unless and until:
(a) There is then in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) The Subscriber shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, the Subscriber shall have furnished the Company with
an opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of the Securities under the Securities
Act.
2.4 Due Authorization.
2.4.1 Authority. The Subscriber, if executing this Subscription Agreement
in a representative or fiduciary capacity, has full power and authority to
execute and deliver this Subscription Agreement and each other document referred
to herein for which a signature is required in such capacity and on behalf of
the subscribing individual, partnership, trust, estate,
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corporation or other entity for whom or which the Subscriber is executing this
Subscription Agreement.
2.4.2 Due Authorization. The Subscriber is duly and validly organized,
validly existing and in good standing as such entity under the laws of the
jurisdiction of its organization, with full power and authority to purchase the
Common Stock subscribed for and to execute and deliver this Agreement.
3. Acknowledgements. The Subscriber is aware of the following:
3.1 Risks of Investment. The Subscriber recognizes that investment in the
Company involves certain risks, including the potential loss of the Subscriber's
investment herein. The Subscriber recognizes that this Agreement and the
exhibits hereto do not purport to contain all the information which would be
contained in a registration statement under the Securities Act;
3.2 No Government Approval. The Subscriber acknowledges that no federal,
state or foreign agency has passed upon or reviewed the terms and conditions of
the Offering or made any finding or determination as to the fairness of the
Offering;
3.3 Restrictions on Transfer. The Subscriber may not sell, transfer,
assign, pledge or otherwise dispose of all or any portion of the Securities in
the absence of either an effective registration statement or an exemption from
the registration requirements of the Securities Act and applicable state
securities law;
3.4 Exempt Transaction. The Common Stock is being offered and sold in
reliance on specific exemptions from the registration requirements of federal
and state law and the Subscriber's representations, warranties, agreements,
acknowledgements and applicability of such exemptions and the suitability of the
Subscriber to acquire such Common Stock.
3.5 Legends. It is understood that any certificates evidencing the Common
Stock shall bear the following legend:
"The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, or applicable state securities laws,
nor the securities laws of any other jurisdiction. They may not be sold or
transferred in the absence of an effective registration statement under
those securities laws or an opinion of counsel, reasonable satisfactory to
the Company, that the sale or transfer is pursuant to an exemption to the
registration requirements of those securities laws."
4. Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Subscriber, except as
disclosed in the Disclosure Documents or otherwise disclosed to Subscriber,
which representations and warranties shall be true as of the date of acceptance
of this Agreement by the Company and as of Closing:
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4.1 Organization, Good Standing, and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas, and has all requisite corporate power and authority to
carry on its business as now conducted and as currently proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the business or properties of the Company and its
subsidiaries taken as a whole. The Company is not the subject of any pending
or, to its knowledge, threatened or contemplated investigation or administrative
or legal proceeding by the Internal Revenue Service, the taxing authorities of
any state or local jurisdiction, or the Securities and Exchange Commission, or
any state securities commission, or any other governmental entity, which are
required to be disclosed in the Disclosure Documents and have not been
disclosed.
4.2 Corporate Condition. The Company has timely filed all forms, and
reports and documents with the Securities and Exchange Commission required to be
filed by it under the Securities Xxxxxxxx Xxx 0000, as amended (the "Exchange
Act") through the date hereof (collectively,the "SEC Reports"). Each of the SEC
Reports, at the time filed, complied in all material respects with the
requirements of the Exchange Act. The Company has made available to the
Subscriber a copy of the Company's Form 10-KSB/A for the fiscal year ended
December 31, 1996, and a copy of the Company's Forms 10-QSB, 8-K and S-3 filed
by the Company since January 1, 1997 (the "Most Recent Filings Report"). Other
than as set forth in Schedule 4.2 attached hereto and made a part hereof, there
have been no material adverse changes in the Company's business, prospects,
operations or financial condition since the date of the Most Recent Filings
Report. The SEC Reports, together with Schedule 4.2 and any other documents
listed on Schedule 4.2(a) attached hereto and made a part hereof and furnished
herewith by the Company to the Subscriber are referred to collectively as the
"Disclosure Documents." The financial statements contained in the Disclosure
Documents have been prepared in accordance with generally accepted accounting
principles, consistently applied, and fairly present in all material respects
the consolidated financial condition of the Company as of the dates of the
balance sheets included therein and the consolidated results of its operations
and cash flows for the periods then ended. Without limiting the foregoing,
there are no material liabilities, contingent or actual that are not disclosed
in the Disclosure Documents (other than liabilities incurred by the Company in
the ordinary course of its business, consistent with its past practice, after
the periods covered by the Disclosure Documents). The Company has paid all
material taxes which are due, except for taxes which it reasonably disputes.
There is no material claim, litigation, or administrative proceeding pending,
or, to the best of the Company's knowledge, threatened or contemplated against
the Company, except as disclosed in the Disclosure Documents. This Agreement
and the Disclosure Documents do not contain any untrue statement of material
fact and do not omit to state any material fact required to be stated therein or
herein necessary to make the statements contained therein or herein not
misleading in the light of the circumstances under which they were made.
4.3 Authorization. All corporate action on the part of the Company
by its officers, directors and shareholders necessary for the authorization,
execution and delivery of this
6
Agreement, the performance of all obligations of the Company hereunder and the
authorization, issuance and delivery of the Common Stock and reservation for
issuance of the Common Stock obtainable on exercise of the Warrants have been
taken, and this Agreement and the Registration Rights Agreement constitute valid
and legally binding obligations of the Company, enforceable in accordance with
their terms; provided, however that enforceability is subject to: (i)
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance, and similar federal and state laws affecting the rights and remedies
of creditors generally, and (ii) general principles of equity limiting the
availability of equitable remedies (including but not limited to the remedy of
specific performance), whether considered in a proceeding at law or in equity.
The Company has obtained all consents and approvals required for it to execute,
deliver and perform this Agreement and the Registration Rights Agreement.
4.4 Valid Issuance of Common Stock. The Common Stock, when issued,
sold and delivered in accordance with the terms hereof, for the consideration
expressed herein, will be validly issued, fully paid and nonassessable and,
based in part upon the representations of the Subscriber in this Agreement, will
be issued in compliance with all applicable federal and state securities laws.
The shares of Common Stock underlying the Warrants when issued upon exercise
shall be duly and validly issued and outstanding, fully paid and nonassessable,
and based in part on the representations and warranties of the Subscriber, will
be issued in compliance with all applicable U.S. federal and state securities
laws. The Securities will be issued free of any preemptive rights.
4.5 Compliance with Other Instruments. The Company is not in
violation or default of any provisions of its Amended and Restated Articles of
Incorporation or Bylaws as amended and in effect on and as of the date of this
Agreement or of any material provision of any material instrument or contract to
which it is a party or by which it is bound or, to its knowledge, of any
provision of any federal or state judgment, writ, decree, order, statute, rule
or governmental regulation applicable to the Company, which would have a
material adverse effect on the Company's business or prospects, except as
described in the Disclosure Documents. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
will not result in any such violation or be in conflict with or constitute, with
or without the passage of time and giving of notice, either a default under any
such provision, instrument or contract or an event which results in the creation
of any lien, charge or encumbrance upon any assets of the Company.
4.6 Reporting Company. The Company is subject to the reporting
requirements of the Exchange Act, and has a class of securities registered under
Section 12 or Section 15 of the Exchange Act. When requested by the Subscriber,
the Company shall furnish copies of reports filed by the Company with the
Securities and Exchange Commission.
4.7 Use of Proceeds. As of the date hereof, the Company expects to
use the proceeds from the Offering (less fees and expenses) for the purposes set
forth on Exhibit D hereto.
7
These purposes are estimates and are subject to change, but represent the
Company's good faith best estimate of anticipated uses.
4.8 Compliance with Laws. As of the date hereof, the conduct of the
business of the Company complies in all material respects with all material
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable thereto. The Company has not received notice of any alleged
violation of any statute, law, regulations, ordinance, rule, judgement, order or
decree from any governmental authority. The Company shall comply with all
applicable securities laws with respect to the Offering.
4.9 No Rights of Participation. No person or entity, including, but
not limited to, current or former shareholders of the Company, underwriters,
brokers, agents or other third parties, has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the Offering which has not been waived.
4.10 Disclosures. There is no fact known to the Company (other than
general economic conditions known to the public generally) that has not been
disclosed in the Disclosure Documents that (a) could reasonably be expected to
have a material adverse effect on the business, financial condition or results
of operations of the Company, or which could reasonably be expected to
materially and adversely affect the properties or assets of the Company or (b)
could reasonably be expected to materially and adversely affect the ability of
the Company to perform its obligations pursuant to this Agreement and the
issuance of the Securities.
4.11 Representations True and Correct. The foregoing representations,
warranties and agreements are true, correct and complete in all material
respects, and shall survive the Closing and the issuance of the Common Stock and
the Warrants.
4.12 Termination Date of Offering. In no event shall the Closing
occur later than October _____, 1997, with any extension based upon an agreement
between the Company and the Subscriber.
5. Covenants of the Company
5.1 Independent Auditors. The Company shall, until at least three
(3) years after the date of the Closing, maintain as its independent auditors an
accounting firm authorized to practice before the Securities and Exchange
Commission.
5.2 Corporate Existence and Taxes. The Company shall, until at least
three (3) years after the date of the Closing, maintain its corporate existence
in good standing (provided, however, that the foregoing covenant shall not
prevent the Company from entering into any merger or corporate reorganization so
long as the surviving entity in such transaction, if not the
8
Company, assumes all of the Company's obligations with respect to the
Securities) and shall pay all its taxes when due, except for taxes which the
Company disputes.
5.3 Registration of Conversion Shares. The Company will register the
shares of Common Stock and shares of Common Stock underlying the Warrants on the
terms of the Registration Rights Agreement (substantially in the form attached
as Exhibit B).
5.4 Filings with Securities and Exchange Commission. The Company
shall provide the Subscriber with copies of its annual reports on Form 10-KSB,
quarterly reports on Form 10-QSB and current reports on Form 8-K for as long as
the Common Stock remains outstanding.
5.5 Opinion of Counsel. Purchasers of the Common Stock shall, upon
purchase, receive an opinion letter from Xxxxxxx Xxxxxxxxx & Xxxxx, L.L.C.,
counsel to the Company, substantially in the form Legal Opinion attached hereto
as Exhibit C.
5.6 Removal of Legend Upon Registration. The restrictive legend
described in Section 3.5 above will be removed from the Common Stock after the
Registration Statement is effective and when the stock is to be sold.
5.7 Listing. The Company shall use its best efforts to maintain the
listing of its Common Stock on the Nasdaq SmallCap Stock Market or another
national securities exchange or national quotation system.
6. Miscellaneous
6.1 Representations and Warranties Survive the Closing; Severability.
The Subscriber's and the Company's representations and warranties shall survive
the Closing of the transaction provided for hereby notwithstanding any due
diligence investigation made by or on behalf of the party seeking to rely
thereon. In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
6.2 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither party may assign its rights hereunder without the
prior written consent of the other parties.
6.3 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Texas without respect to conflict of laws.
9
6.4 Execution in Counterparts Permitted. This Agreement may be
executed in any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts, and all of which
together shall constitute one (1) instrument.
6.5 Titles and Subtitles; Gender. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. The use in this Agreement of a
masculine, feminine or neither pronoun shall be deemed to include a reference to
the others.
6.6 Written Notices, Etc. Any notice, demand or request required or
permitted to be given by the Company or the Subscriber pursuant to the terms of
this Agreement shall be in writing and shall be deemed given when delivered
personally, or by facsimile (with a hard copy to follow by overnight or two (2)
day courier), addressed to the parties at the addresses and/or facsimile
telephone number of the parties set forth at the end of this Agreement or such
other address as a party may request by notifying the other in writing.
6.7 Expenses. Each of the Company and the Subscriber shall pay all
costs and expenses that it respectively incurs, with respect to the negotiation,
execution, delivery and performance of this Agreement.
6.8 Entire Agreement; Written Amendments Required. This Agreement,
the Common Stock certificates, the Warrants, the Registration Rights Agreement
and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and no party shall be liable or bound to any other party in
any manner by any warranties, representations or covenants except as
specifically set forth herein. Neither this Agreement nor any terms hereof may
be amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.
7. Subscription and Wiring Instructions; Irrevocability.
7.1 Subscription
(a) Wire transfer of Subscription Funds. Subscriber shall send a
signed Subscription Agreement by facsimile to the Company at (000) 000-0000, and
its subscription funds by wire transfer, to the Company as follows:
Bank: Texas Commerce Bank
P. O. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Ph. (000) 000-0000
Account Name: SI Diamond Technology, Inc.
Account No.: 081-00000000
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ABA Routing No.: 000000000
(b) Irrevocable Subscription. The Subscriber hereby acknowledges and
agrees, subject to the provisions of any applicable laws providing for the
refund of subscription amounts submitted by the Subscriber, that this Agreement
is irrevocable and that the Subscriber is not entitled to cancel, terminate or
revoke this Agreement; provided, however, that if the conditions to Closing are
not satisfied or if the Disclosure Documents are discovered prior to Closing to
contain statements which are materially inaccurate, or omit statements of
material facts, the Subscriber may revoke or cancel this Agreement.
(c) Company's Right to Reject Subscription. This Agreement shall be
accepted by the Company when the Company countersigns this Agreement. The
Subscriber hereby confirms that the Company has full right in its sole
discretion to accept or reject the subscription of the Subscriber, in whole or
in part, provided that, if the Company decides to reject such subscription, the
Company must do so promptly and in writing. In the case of rejection, the
Company will promptly return any rejected payments and (if rejected in whole)
copies of all executed subscription documents (including without limitation this
Agreement) to Subscriber.
7.2 Acceptance of Subscription. In the case of acceptance of this
subscription, ownership of the number of securities being purchased hereby will
pass to the Subscriber upon the Closing.
7.3 Subscriber to Forward Original Signed Subscription Agreement to
Company. The Subscriber agrees to courier to the Company its original inked
signed Subscription Agreement within three (3) days after faxing said signed
Agreement to the Company.
8. Number of Shares and Purchase Price. The undersigned Subscriber
hereby subscribes for and agrees to purchase $3,500,000 of the Company's Common
Stock in accordance with Section 1 and the terms of this Agreement.
9. Accredited Investor. The Subscriber is (please check applicable box):
(a) [ ] a corporation, business trust, or partnership not formed for
the specific purpose of acquiring the securities offered, with total assets in
excess of $5,000,000.
(b) [ ] 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 who has such
11
knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of the prospective investment.
(c) [ ] an individual, who
[ ] is a director, executive officer or general partner of the
issuer of the securities being offered or sold or a director, executive officer
or general partner of a general partner of that issuer.
[ ] has an individual net worth, or joint net worth with that
person's spouse, at the time of his purchase exceeding $1,000,000.
[ ] 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.
(d) [ ] an entity, each owner of which is an entity described in (a)
or (b) above or is an individual described in (c) above.
The undersigned acknowledges that this Agreement and the subscription
represented hereby shall not be effective unless accepted by the Company as
indicated below.
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IN WITNESS WHEREOF, the undersigned Subscriber does hereby execute this
Agreement this _______ day of October, 1997.
-------------------------------- --------------------------------------
Name of Company You Represent EXACT NAME IN WHICH YOU WANT
(if applicable) THE SECURITIES TO BE REGISTERED
DELIVERY INSTRUCTIONS:
-------------------------------- --------------------------------------
Your Signature Please type or print address where your
security is to be delivered
ATTN:
-------------------------------- ---------------------------------
Your Name: Please Print
--------------------------------- --------------------------------------
Title/Representative Capacity Street Address
(if applicable)
--------------------------------- --------------------------------------
Place of Execution of this City, State or Province, Country,
Agreement Offshore Postal Code
--------------------------------------
Telephone Number
--------------------------------------
Facsimile Number
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ACCEPTANCE BY COMPANY:
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY AND THE COMPANY AGREES TO BE
BOUND BY THE TERMS AND CONDITIONS THEREOF THIS _____ DAY OF
_______________________, 1997.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Attest:
---------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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EXHIBIT "A"
-----------
AMENDED AND RESTATED ARTICLES OF INCORPORATION
[NOT INCLUDED]
15
EXHIBIT "B"
-----------
FORM OF REGISTRATION RIGHTS AGREEMENT
[NOT INCLUDED]
16
EXHIBIT "C"
-----------
FORM OPINION OF COUNSEL
[NOT INCLUDED]
17
EXHIBIT "D"
-----------
USE OF PROCEEDS
[NOT INCLUDED]
18
EXHIBIT "E"
-----------
FORM OF WARRANT
[NOT INCLUDED]
19
