EX-10
EXHIBIT 10(a)(12)
INTER*ACT SYSTEMS, INCORPORATED
SUBSCRIPTION AGREEMENT
AGREEMENT by and between Inter*Act Systems, Incorporated, a North Carolina
corporation (the "Corporation") and the undersigned subscriber (the
"Subscriber") for shares ("Preferred Shares") of Series A Mandatorily
Convertible Preferred Stock ("Preferred Stock") being offered to existing
shareholders of the Corporation pursuant to the terms described in a Private
Placement Memorandum dated July 27, 1998 (the "Memorandum").
WHEREAS, the Corporation has offered the Subscriber an opportunity to
purchase shares of Preferred Stock in the Corporation pursuant to a rights
offering (the "Offering") of up to 300,000 shares of Preferred Stock pursuant to
the terms of the Memorandum that has been delivered to the Subscriber by the
Corporation,
WHEREAS, the Subscriber desires to purchase certain of the Preferred Shares
being offered and to become a holder of Preferred Stock of the Corporation.
NOW, THEREFORE, the parties hereby agree as follows:
1. The Subscriber hereby subscribes and agrees to purchase, subject to the
terms and conditions of this Subscription Agreement (the "Agreement") the number
of Preferred Shares set forth at the end of this Agreement. This subscription
and Agreement represent an irrevocable offer by the Subscriber to subscribe for
such number of Preferred Shares, except as expressly provided herein. This
Agreement, subject to the terms hereof, shall become a contract for the sale of
said Preferred Shares upon the acceptance thereof by the Corporation on or
before October 31, 1998. THE MINIMUM SUBSCRIPTION AMOUNT IS 50 PREFERRED SHARES
(OR $5,000).
2. If the Subscriber wishes to purchase a percentage of the 300,000
Preferred Shares offered pursuant to the rights offering greater than its
percentage of the Company's Common Stock (the "Allocated Amount"), the
additional number of shares Subscriber wishes to purchase is included in the
number of Preferred Shares subscribed for at the end of this Agreement.
Subscriber understands that any Preferred Shares for which subscriptions have
not been received by August 31, 1998 ("Excess Shares") will be allocated on a
pro rata basis among subscribers who have subscribed for additional shares and
that the Corporation is not obligated to make any further solicitation to
shareholders of the Corporation for the sale of any Excess Shares.
3. The Corporation reserves the unrestricted right to accept or reject this
subscription, in whole or in part, and to allocate to any subscriber less than
the number of
Preferred Shares subscribed, and to withdraw this offer at any
time, as provided in the Memorandum. The subscription will not become effective
unless and until accepted.
4. Please check the method of payment.
[ ] This subscription is accompanied by a check in an amount representing
$100.00 for each Preferred Share to which the Subscriber has subscribed.
The check is payable to "NationsBank, N.A., as Escrow Agent for Inter*Act
Systems, Incorporated" (the "Escrow Agent") as Escrow Agent for both the
Subscriber and the Corporation.
[ ] The Subscriber has wired funds in an amount representing $100.00 for each
Preferred Share to which the Subscriber has subscribed to the following
account:
NationsBank, N.A.
ABA # 000000000
Credit to FTA 018-00-1981-0
Attention: Settlements
Reference: Inter*Act Systems Escrow Account
Account No:10-02-002-0000000
5. If this subscription is not accepted by the Corporation or if there are
not subscriptions accepted for 150,000 Preferred Shares by October 31, 1998,
none of the Preferred Shares will be sold and the Escrow Agent shall promptly
return the full amount of the Subscriber's deposit with interest to the
Subscriber. If this subscription is accepted by the Corporation and if the
Offering is subscribed to the extent of 150,000 Preferred Shares by the end of
the Offering Period, then upon receipt of confirmation of the sale, the Escrow
Agent shall pay the full amount of the Subscriber's deposit, plus interest
earned thereon, into an account established by the Corporation. In the event
there is not a sufficient number of Excess Shares to honor all or any portion of
the subscription in excess of Subscriber's Allocated Amount, the Escrow Agent
shall promptly return the payment for such portion, with interest, to
Subscriber.
6. The Subscriber hereby makes the representations and warranties set forth
below with the express intention that they be relied upon by the Corporation in
determining the suitability of the Subscriber to purchase Preferred Shares:
a. The Subscriber is fully aware that the Preferred Shares have not
been registered under the Securities Act of 1933, as amended (the "Act"),
or under any applicable state securities law. The Subscriber further
understands that the Preferred Shares are being sold in reliance on the
exemptions from the registration requirements of the Act provided by
Section 4(2) thereof and by Regulation D promulgated thereunder, and in
reliance on exemptions from the registration requirements of the applicable
state law, on the ground that the Offering involved has been limited to
accredited investors described in the Accredited Investor Questionnaire and
a limited number of other
qualifying investors described in the Qualified Investor Questionnaire, as
the case may be, of even date herewith;
b. The Subscriber is acquiring the Preferred Shares for his, her or
its own account as principal for the Subscriber's investment and not with a
view to resale or distribution;
c. The Subscriber has been furnished and has carefully read the
Memorandum and has been given the opportunity to ask questions of, and
receive answers from, the Corporation concerning the terms and conditions
of the Offering and to obtain such additional information which the
Corporation possesses or can acquire without unreasonable effort or expense
that is necessary to verify the accuracy of the information contained
therein or information that has been otherwise provided by the Corporation;
d. The Subscriber fully understands and agrees that the Subscriber
must bear the economic risk of investment in the Preferred Shares for an
indefinite period of time because, among other reasons, the Preferred
Shares have not been registered under the Act, or under any applicable
state securities laws, and, therefore, cannot be sold, pledged, assigned or
otherwise disposed of unless they are subsequently registered under any
applicable securities laws or an exemption from such registration is
available. The Subscriber further understands and agrees that the
Corporation will not honor any attempt by the Subscriber to sell, pledge,
transfer or otherwise dispose of any Preferred Shares in the absence of an
effective registration statement for such Preferred Shares or an opinion of
counsel satisfactory to the Corporation that an exemption from any
applicable registration requirements is available. The Subscriber further
understands that the Corporation is under no obligation to register the
Preferred Shares or make an exemption from registration available and that
the Corporation has not represented that it will make any attempt to so
register the Preferred Shares or to make such an exemption thereto
available;
e. The Subscriber understands that the certificate(s) representing the
Preferred Shares will bear restrictive legends substantially in the
following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE. THE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH REGISTRATION OR
QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES LAWS OF ANY
STATE, OR AN
3
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
THE SHARES OF COMMON STOCK INTO WHICH THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE CONVERTIBLE, AND THE TRANSFER THEREOF, ARE
SUBJECT TO THE PROVISIONS OF THAT CERTAIN SHAREHOLDERS' AGREEMENT
DATED AS OF APRIL 16, 1993, AS AMENDED AND AS MAY BE SUBSEQUENTLY
AMENDED. COPIES OF THE SHAREHOLDERS' AGREEMENT AND AMENDMENTS THERETO
ARE ON FILE IN, AND MAY BE EXAMINED AT, THE PRINCIPAL OFFICE OF THE
CORPORATION.
f. The Subscriber has sought such accounting, legal and tax advice as
the Subscriber has considered necessary to make an informed investment
decision;
g. The Subscriber is aware that no federal or state agency has made
any finding or determination as to the fairness of an investment in the
Preferred Shares, nor any recommendation or endorsement of any such
investment; and
h. The Subscriber has delivered herewith a Representation of
Accredited Investor (attached as Exhibit 1 hereto) or a Representation of
Qualified Investor (attached as Exhibit 2 hereto), as the case may be, and
the Subscriber represents that the information contained in such
Representation is true and accurate as of the date hereof. The Subscriber
agrees to advise the Corporation if any of the information contained in the
Representation materially changes prior to acceptance of this subscription.
i. The Subscriber has delivered herewith a Form W-9 - Request for
Taxpayer Identification Number and Certification (attached as Exhibit 3
hereto), and the Subscriber represents that the information contained in
such Form W-9 is true and accurate as of the date hereof. The Subscriber
agrees to supplement the information in such Form W-9 as may be necessary
to ensure that the information contained in such Form W-9 remains correct
in all material respects.
7. The Subscriber acknowledges that subscribers who upon conversion of
their Preferred Shares would own more than 1% of the total number of shares of
outstanding Common Stock ("Eligible Holders") will be entitled to the
registration rights set forth on Exhibit A hereto. The Subscriber agrees to be
bound by the terms set forth on Exhibit 4 hereto to the extent that it attempts
to exercise registration rights in respect of Common Stock issued upon
conversion of its Preferred Shares.
8. The Subscriber acknowledges that the Common Stock of the Corporation
into which the Preferred Shares are convertible will be issued subject to a
Shareholders' Agreement
4
dated as of April 16, 1993 among the Corporation and all of its shareholders, as
amended by Amendment No. 1 to Shareholders' Agreement dated as of June 17, 1994
(the "Shareholders' Agreement"). Subscriber hereby agrees that upon any
conversion of the Preferred Shares, Subscriber will execute a Joinder Agreement
and will agree to be bound by the terms of the Shareholders' Agreement, as it
may be amended from time to time, unless the Shareholders' Agreement is
terminated prior to the issuance of Common Stock to Subscriber. Notwithstanding
the foregoing, however, in the event the Shareholders' Agreement is terminated
prior to the issuance of Common Stock to the Subscriber, the Subscriber
nevertheless agrees to be bound by the lock-up agreement contained in Section 23
of the Shareholders' Agreement or any similar lock-up agreement then in effect
with respect to the Company's shareholders. A copy of the Shareholders's
Agreement is available upon request.
9. The subscription herein shall survive the death or disability of any
individual Subscriber and the dissolution or termination of any subscribing
entity, and this Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of any such Subscriber. All pronouns and
any variations thereof used herein shall be deemed neuter, singular or plural as
the identity of the Subscriber may require.
[Remainder of Page Intentionally Left Blank]
5
The number of Preferred Shares subscribed by the Subscriber and their
registration of ownership are set forth as follows:
PLEASE TYPE OR PRINT
Owner: _____________________________ _________________________
Social Security or Federal
Employer's ID Number
Residence
Address: _____________________________
Mailing Address
(if other than _____________________________
Residence): _____________________________
Telephones: Res._________________________
Bus._________________________
Joint Owner:
(if any): ______________________________
______________________________
Social Security or Federal
Employer's ID Number
Residence Address: _____________________________
Mailing
(if other _____________________________
Residence): _____________________________
Telephone: Res: _____________________________
Bus. _____________________________
PREFERRED SHARES TO BE REGISTERED AS INDICATED BELOW:
[ ] Sole ownership
[ ] Joint tenants with right of survivorship
[ ] Tenants in common
Number of Preferred Shares subscribed for*:_______________
Total Purchase Price ($100.00 per Preferred Share)*: _______________
Dated:________________________________________, 1998
* NOTE THAT THE MINIMUM SUBSCRIPTION AMOUNT IS 50 PREFERRED SHARES (OR $5,000).
6
Signature form for individuals
_______________________________________(SEAL)
Signature
Name: _________________________________
_______________________________________(SEAL)
(Signature of Joint Owner, if any)
Name: ________________________________
Signature form for corporations:
_______________________________________
(Name of corporation)
By:
_____________________________________
(Signature of Officer)
_______________________________________
(Name and Title)
7
Signature form for Partnerships:
_______________________________________
(Name of Partnership)
By its Partners:
_______________________________________
Name
_______________________________________
Name
_______________________________________
Name
_______________________________________
Name
Each Partner Individually:
_______________________________________
Name
_______________________________________
Name
_______________________________________
Name
_______________________________________
Name
8
ACCEPTANCE OF SUBSCRIPTION
The foregoing Subscription Agreement is ACCEPTED by the Corporation on
behalf of the Corporation on this ____ day of __________________ , 1998, to the
extent of __________________ Preferred Shares.
Inter*Act Systems, Incorporated
By: ___________________________________
Name:
Title:
EXHIBIT 1
REPRESENTATION OF ACCREDITED INVESTOR
In connection with the proposed offering by Inter*Act Systems,
Incorporated, a North Carolina corporation (the "Corporation"), of shares of the
Series A Mandatorily Convertible Preferred Stock of the Corporation (the
"Preferred Shares") at a purchase price of $100.00 per share in a transaction
intended to qualify as a private placement of securities exempt from
registration under the Securities Act of 1933, as amended (the "Act"), pursuant
to Section 4(2) thereof and Regulation D promulgated thereunder, I, the
undersigned, furnish the following representations and information:
REPRESENTATIONS
1. I am not relying upon the advice of an attorney, accountant or other advisor
in making a final investment decision to purchase shares since I believe I have
such knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks of an investment in the shares. I am offering as
evidence of my knowledge and experience in these matters the information
indicated below.
2. I am an Accredited Investor (as that term is defined in Attachment A hereto),
as evidenced by my satisfying at least one of the following standards (initial
the one that applies):
[ ]a. I am an individual and had Income in excess of $200,000 in 1996 and
1997 or joint Income with my spouse in excess of $300,000 in 1996 and
1997 and reasonably expect to have Income in excess of this level in
1998. For purposes of this Representation, "Income" shall mean salary
and bonus income, taxable income (gross receipts less cost of goods or
services and expenses) in the case of sale of proprietorships,
distributable income from trusts and partnerships, interest and
dividend income (excluding unrealized gains) and vested contributions
made on behalf of an individual; or
[ ]b. I am an individual and my net worth (i.e., excess of total assets over
total liabilities), either individually or together with my spouse, is
at least $1,000,000; or
[ ]c. I am a corporation or partnership, not formed for the purpose of
acquiring the shares, with total assets in excess of $5,000,000; or
[ ]d. I am an entity in which all of the equity owners meet the standards
set forth in any of the immediately preceding subparagraphs. (If this
standard is initialed, then each such equity owner must complete and
return a copy of this Representation); or
[ ]e. Other (specify by reference to Attachment A):
_________________________
_________________________
_________________________
_________________________
3. I am acquiring the Preferred Shares for my own account as principal for my
investment and not with a view toward resale or distribution.
4. My present financial position, including my other security holdings, and my
financial needs are such that:
a. my investment in the Preferred Shares is suitable for me, and I am
able to bear the economic risk of losing all funds invested; and
b. I am able to bear the economic burden of having all such funds tied up
in an essentially illiquid investment for an extended period of time.
5. All questions that I have had concerning the investment have been answered to
my complete satisfaction.
6. All documents, books and records of the Corporation relative to this
investment have been made available for my inspection.
7. I further acknowledge that the representations and information contained
herein support the reasonable belief of Inter*Act Systems, Incorporated that I
qualify within one of the above categories of Accredited Investors.
PERSONAL AND FINANCIAL INFORMATION
8. Name: _________________________________ Birth Date: _______________________
9. Permanent Residence Address (other than Post Office Box), including County,
and Telephone Number: ______________________________________________________
_________________________________________________________________________
10. Name of Current Business, Business Address and Telephone Number: ___________
____________________________________________________________________________
_________________________________________________________________________
Type of Current Business: __________________________________________________
Position Held in Current Business, Responsibilities Involved in Position and
Number of Years Employed in Position: ______________________________________
_________________________________________________________________________
_________________________________________________________________________
11. Name and Type of Business of Employer(s) or Business Association(s) during
Past Five Years and Dates of Employment: ___________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Position(s) Held during Past Five Years and Above-named Employers:
_________________________________________________________________________
_________________________________________________________________________
Responsibilities Involved in Above-named Positions:
_________________________________________________________________________
_________________________________________________________________________
12. Send correspondence to:
Home: ______________________________________________________________________
Office: ____________________________________________________________________
Other: _____________________________________________________________________
13. Business or Professional Education and Degrees Received are as follows:
Year
School Degree Received
------ ------ --------
------------------------- ----------- ------------
Year
School Degree Received
------ ------ --------
--------------------------- ------------ -------
--------------------------- ------------ --------
14. The approximate percentage of my current income by source is as follows:
Salary ______%
-----------------------------------------
Bonus and Commissions ______%
-----------------------------------------
Dividends and Interest ______%
-----------------------------------------
Real Estate Income ______%
-----------------------------------------
Other Income ______%
-----------------------------------------
100%
------
------
15. The following approximate percentages of my net worth are invested in
a. "tax shelter" partnerships: ______%
---------------------------------------------
b. marketable securities: ______%
---------------------------------------------
c. cash: ______%
---------------------------------------------
d. real estate: ______%
---------------------------------------------
e. venture capital (equity of companies
characterized by rapid growth and high
risk/return investment potential): ______%
---------------------------------------------
100%
-------
-------
16. The source(s) of the funds that I intend to use to invest is (are): (If
funds are to be borrowed, so state).
___________________________________________________________________________
___________________________________________________________________________
17. Any contingent liabilities for which I may be obligated are as follows:
(State dollar amount and describe contingent liability).
___________________________________________________________________________
___________________________________________________________________________
INFORMATION CONCERNING MY INVESTMENT EXPERIENCE:
18. Prior Investment:
a. The frequency of my investment in marketable securities is:
[ ] often [ ] occasionally
[ ] seldom [ ] never
b. I have participated in the following types of investments:
[ ] Limited Partnerships
[ ] Tax shelters
[ ] Private placements of securities
[ ] Real estate
[ ] Oil and gas investment
[ ] Equipment leasing shelters
c. I was not required to use a purchaser representative for any private
placements.
IN WITNESS WHEREOF, I have executed this Representation of Accredited
Investor this ____ day of ________ , 1998 and declare that it is truthful and
correct.
--------------------------------------------------------------------------------
__________________________________ _____________________________________
Signature of Prospective Purchaser Signature of Prospective Co-Purchaser
--------------------------------------------------------------------------------
__________________________________ _____________________________________
PRINT Purchaser Name PRINT Co-Purchaser Name
--------------------------------------------------------------------------------
__________________________________ _____________________________________
Title, if applicable Title, if applicable
--------------------------------------------------------------------------------
(Check one)
___ Individually
___ Joint tenants with right of survivorship
___ Tenants in common
___ In Partnership
___ As custodian, Trustee or agent for ________________________
___ Corporation
ATTACHMENT A
[Definition of Accredited Investor]
Reg. 'SS'230.501. As used in Regulation D ('SS''SS'230.501-230.508), the
following terms shall have the meaning indicated:
(a) Accredited investor. "Accredited investor" shall mean 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; 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; 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 investors;
[Amended in Release No. 33-6758 ([p] 84,211), effective April 11, 1988, 53
F.R. 7866; and Release No. 33-6825 ([p] 84,404), effective April 19, 1989,
54 F.R. 11369.]
(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 of acquiring the securities
offered, with total assets in excess of $5,000,000; [Amended in Release No.
33-6758 ([p] 84,211), effective April 11, 1988, 53 F.R. 7866.]
(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, 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; [Amended in Release No. 33-6738 ([p] 84,221), effective
April 11, 1988, 53 F.R. 7866.]
(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
'SS' 230.506(b)(2)(ii); and [Added in Release No. 33-6758 ([p] 84,221),
effective April 11, 1988, 53 F.R. 7866.]
(8) Any entity in which all of the equity owners are accredited
investors. [Amended in Release No. 33-6758 ([p] 84,221), effective April 11,
1988, F.R. 7866.]
EXHIBIT 2
REPRESENTATION OF QUALIFIED INVESTOR
In connection with the proposed offering by Inter*Act Systems, Incorporated,
a North Carolina corporation (the "Corporation"), of shares of the Series A
Mandatorily Convertible Preferred Stock of the Corporation (the "Preferred
Shares") at a purchase price of $100.00 per share in a transaction intended to
qualify as a private placement of securities exempt from registration under the
Securities Act of 1933, as amended (the "Act"), pursuant to Section 4(2) thereof
and Regulation D promulgated thereunder, I, the undersigned, furnish the
following representations and information:
REPRESENTATIONS
1. I have received and carefully reviewed the Memorandum and Exhibits thereto,
and have obtained such additional information as I have requested through
discussions with representatives of the Corporation and otherwise.
2. I am sufficiently experienced in financial and business matters to be capable
of utilizing such information to evaluate the merits and risks of my investment
and to make an informed decision relating thereto, or I have utilized the
services of a purchaser representative as that term is defined in Rule 501(h)
promulgated under the Securities Act of 1933, as amended, and together we are
sufficiently experienced in financial and business matters that we are capable
of utilizing such information to evaluate the merits and risks of my investment,
and to make an informed decision relating thereto. The name, address, certain
representations and signature of any purchaser representative on whose advice I
have relied in making a decision concerning the purchase of Preferred Shares is
included with these representations in the form of Attachment A hereto.
3. I am acquiring the Preferred Shares for my own account as principal for my
investment and not with a view toward resale or distribution.
4. My present financial position, including my other security holdings, and my
financial needs are such that:
a. my investment in the Preferred Shares is suitable for me, and
I am able to bear the economic risk of losing all funds invested; and
b. I am able to bear the economic burden of having all such funds tied up
in an essentially illiquid investment for an extended period of time.
5. All questions that I have had concerning the investment have been answered to
my complete satisfaction.
6. All documents, books and records of the Corporation relative to this
investment have been made available for my inspection.
7. I further acknowledge that the representations and information contained
herein support the reasonable belief of Inter*Act Systems, Incorporated that I
qualify as a sophisticated investor for purposes of Rule 506.
PERSONAL AND FINANCIAL INFORMATION
8. Name:____________________________ Birth Date: ___________________________
9. Permanent Residence Address (other than Post Office Box), including County,
and Telephone Number: ______________________________________________________
____________________________________________________________________________
10. Name of Current Business, Business Address and Telephone Number: ___________
____________________________________________________________________________
____________________________________________________________________________
Type of Current Business: __________________________________________________
Position Held in Current Business, Responsibilities Involved in Position and
Number of Years Employed in Position: ______________________________________
____________________________________________________________________________
____________________________________________________________________________
11. Name and Type of Business of Employer(s) or Business Association(s) during
Past Five Years and Dates of Employment: ___________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Position(s) Held during Past Five Years and Above-named Employers: _________
____________________________________________________________________________
____________________________________________________________________________
Responsibilities Involved in Above-named Positions:
____________________________________________________________________________
____________________________________________________________________________
12. Send correspondence to:
Home: ______________________________________________________________________
Office: ____________________________________________________________________
Other: _____________________________________________________________________
13. Business or Professional Education and Degrees Received are as follows:
--------------------------------------------------------------------
School Degree Year Received
------ ------ -------------
_________________________ _______________ __________________
--------------------------------------------------------------------
_________________________ _______________ __________________
--------------------------------------------------------------------
_________________________ _______________ __________________
--------------------------------------------------------------------
14. The approximate percentage of my current income by source is as follows:
-----------------------------------------
Salary ______%
-----------------------------------------
Bonus and Commissions ______%
-----------------------------------------
Dividends and Interest ______%
-----------------------------------------
Real Estate Income ______%
-----------------------------------------
Other Income ______%
-----------------------------------------
100%
______
-----------------------------------------
15. The following approximate percentages of my net worth are invested in
-------------------------------------------------
a. "tax shelter" partnerships: ______%
-------------------------------------------------
b. marketable securities: ______%
-------------------------------------------------
c. cash: ______%
-------------------------------------------------
d. real estate: ______%
-------------------------------------------------
e. venture capital (equity of
companies characterized by rapid
growth and high risk/return ______%
investment potential):
-------------------------------------------------
100%
_______
-------------------------------------------------
16. The source(s) of the funds that I intend to use to invest is (are): (If
funds are to be borrowed, so state).
___________________________________________________________________________
___________________________________________________________________________
17. Any contingent liabilities for which I may be obligated are as follows:
(State dollar amount and describe contingent liability).
___________________________________________________________________________
___________________________________________________________________________
INFORMATION CONCERNING MY INVESTMENT EXPERIENCE:
18. Prior Investment:
a. The frequency of my investment in marketable securities
is:
[ ] often [ ] occasionally
[ ] seldom [ ] never
b. I have participated in the following types of investments:
[ ] Limited Partnerships
[ ] Tax shelters
[ ] Private placements of securities
[ ] Real estate
[ ] Oil and gas investment
[ ] Equipment leasing shelters
c. I [ ] was [ ] was not required to use a purchaser representative for
any private placements.
IN WITNESS WHEREOF, I have executed this Representation of Qualified Investor
this ____ day of ____________, 1998 and declare that it is truthful and correct.
--------------------------------------------------------------------------------
__________________________________ _____________________________________
Signature of Prospective Purchaser Signature of Prospective Co-Purchaser
--------------------------------------------------------------------------------
__________________________________ _____________________________________
PRINT Purchaser Name PRINT Co-Purchaser Name
--------------------------------------------------------------------------------
__________________________________ _____________________________________
Title, if applicable Title, if applicable
--------------------------------------------------------------------------------
(Check one)
___ Individually
___ Joint tenants with right of survivorship
___ Tenants in common
___ In Partnership
___ As custodian, Trustee or agent for ________________________
___ Corporation
Attachment A
Statement of Purchaser Representative
I, ________________________________, have been appointed as the purchaser
representative for [ name of shareholder ] (the "Purchaser") in connection with
the private placement by Inter*Act Systems, Incorporated (the "Issuer") of its
Series A Mandatorily Convertible Preferred Stock.
I hereby certify as follows:
1. I am not an affiliate, director or officer or other employee of the
Issuer, or beneficial owner of 10% or more of any class of the equity
securities or 10% or more of an equity interest in the Issuer.
2. I have sufficient knowledge and experience in financial and business
matters to be capable of evaluating, alone, or together with other purchaser
representatives of the Purchaser, or together with the Purchaser, the merits
and risks of the prospective investment.
3. I have fully and truthfully disclosed to Purchaser any material
relationship between me or any of my affiliates and the Issuer or its
affiliates that exist now, or have existed at any time during two years, as
well as any compensation received, or to be received, as a result of such
relationship.
IN WITNESS WHEREOF, this Statement of Purchaser Representative is delivered
to the Corporation on this __ day of ___________, 1998.
______________________________________
Signature of Purchaser Representative
______________________________________
Address
______________________________________
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EXHIBIT 4
REGISTRATION RIGHTS
SECTION 1. Definitions. The following terms shall have the following
meanings for the purpose of this Exhibit A:
(a) "Blackout Period" has the meaning assigned to such term in Section
2(a) hereof.
(b) "Closing" and "Closing Date" are defined as the sale and issuance
of the Preferred Stock and the date of sale and issuance of the Preferred
Stock, respectively, pursuant to the Subscription Agreement.
(c) "Common Stock" means the common stock, no par value, of the
Company.
(d) "Decline Notice" has the meaning assigned to that term in Section
2(b) hereof.
(e) "Demand Registration" has the meaning assigned to that term in
Section 2(a) hereof.
(f) "Eligible Holder" means a holder of shares of Preferred Stock or
Registrable Securities who holds (or would hold upon the conversion of any
outstanding shares of Preferred Stock) in excess of one percent (1%) of the
total outstanding shares of Common Stock.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "Expiration Date" has the meaning assigned to that form in Section
12.
(i) "Person" means any individual, corporation, limited liability
company, partnership, association, trust or other entity or organization.
(j) "Piggyback Registration" has the meaning assigned to that term in
Section 3 hereof.
(k) "Preferred Stock" means the Series A Mandatorily Convertible
Preferred Stock of the Company.
(l) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in
compliance with the Securities Act, or the securities laws of any
jurisdiction other than the United States, and the declaration or ordering
of effectiveness of such registration statement or document, or similar
action in such other jurisdiction.
(m) "Registrable Securities" means the shares of Common Stock issued or
issuable in connection with the conversion of Preferred Stock or issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of such Common Stock (whether through stock dividends, stock
splits, reclassifications, mergers, consolidations, recapitalizations or
otherwise).
(n) "Registration Expenses" has the meaning assigned to that term in
Section 6(a) hereof.
(o) "Registration Rights" means the rights to Demand Registration and
Piggyback Registration of Eligible Holders pursuant to this Agreement and
any other similar rights of any other Person that are in existence as of the
date hereof.
(p) "SEC" means the Securities and Exchange Commission.
(q) "Secondary Securities" has the meaning assigned to that term in
Section 7 hereof.
(r) "Securities Act" means the Securities Act of 1933, as amended.
(s) "Violation" has the meaning assigned to that term in Section 9(a)
hereof.
SECTION 2. Registration Upon Demand. (a) At any time prior to the Expiration
Date and after six months from the date that the first registration statement
filed by the Company under the Securities Act with respect to the Common Stock
becomes effective, upon the written request of Eligible Holders representing not
less that 50% of the total numbers of shares of Common Stock issued or issuable
upon conversion of the Preferred Stock that are held by Eligible Holders
("Requesting Holders") requesting that the Company effect the registration under
the Securities Act of its Registrable Securities (which request shall specify
the intended method of distribution thereof), the Company shall use its best
efforts to register under the Securities Act (a "Demand Registration"), as
expeditiously as may be practicable, the Registrable Securities that the Company
has been requested to register; provided, however, that Eligible Holders shall
entitled to request (i) more than two (2) Demand Registrations or (ii) any
Demand Registration within the twelve-month period immediately following the
date of any previous request for a Demand Registration hereunder.
(b) The Company may, at any one time during the term of this Agreement,
decline a Demand Registration request of Requesting Holders by notifying such
Requesting Holders in writing within fifteen (15) days of the receipt of such
request (a "Decline Notice") if, in the Company's judgment, such Demand
Registration would not be in the Company's best interest.
The Decline Notice shall be effective for a three-month period commencing on the
date thereof (the "Blackout Period") and shall operate as a bar to any
additional Demand Registration requests of Eligible Holders for the remainder of
the Blackout Period.
SECTION 3. "Piggyback" Registrations. If, at any time during the term of
this Agreement, the Company proposes to register any securities under the
Securities Act in connection with any offering of its securities, whether or not
for its own account (other than a registration statement filed with respect to
the issuance of Common Stock, or securities convertible into or exchangeable for
Common Stock, or rights to acquire Common Stock, on Form S-4 or otherwise in
connection with an acquisition, merger or other transaction or on Form S-8 with
respect to shares issuable pursuant to options granted or to be granted to
employees of the Company), the Company shall furnish prompt written notice to
each Eligible Holder of its intention to effect such registration and the
intended method of distribution in connection therewith. On each such occasion,
upon the written request of an Eligible Holder made to the Company within 30
days after the receipt of such a notice by the Company, the Company shall
include in such registration such amount of the Registrable Securities as such
Eligible Holder shall notify to the Company in writing (a "Piggyback
Registration"), subject to Section 7 hereof.
SECTION 4. Obligations of the Company. Whenever the Company is required
under this Agreement to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as may be practicable:
(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration
statement effective for up to 60 days.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
applicable law with respect to the disposition of all securities covered by
such registration statement.
(c) Furnish to the Requesting Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of applicable law, and such other documents as it may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by it.
(d) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities laws of such
jurisdictions in which the securities are being registered as shall be
reasonably requested by the Requesting Holders; provided, however, that the
Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. The
Requesting Holders shall also enter into and perform its obligations under
such an agreement.
(f) Notify the Requesting Holders, at any time when a prospectus
relating thereto is required to be delivered under applicable law, of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of circumstances then existing.
SECTION 5. Furnish Information. It shall be a condition precedent to the
obligation of the Company to take any action pursuant to this Agreement that
each Eligible Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of such securities as shall be reasonably required to effect the
registration of the Registrable Securities.
SECTION 6. Expenses of Registration. (a) With respect to a Demand
Registration, the Company shall bear and pay all out-of-pocket expenses incurred
in connection with the registrations, filings or qualifications of Registrable
Securities, with respect to the registrations made pursuant to Sections 2 and 4,
including, without limitation, all registration, filing, and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the Company
and one (but only one) counsel representing all of the Eligible Holders (the
"Registration Expenses"), but excluding underwriting discounts and commissions
relating to Registrable Securities.
(b) With respect to a Piggyback Registration, each Eligible Holder shall pay
a portion of the Registration Expenses incurred by or on behalf of such Eligible
Holder for its benefit pro rata based on the percentage of the aggregate number
of shares registered pursuant to such registration which are represented by the
Registrable Securities of such Eligible Holder; provided, however, such Eligible
Holder may elect to be responsible for the payment of only those expenses it
would bear had it exercised its right to its Demand Registration at the
Company's expense if not previously exercised (in which case, such Eligible
Holder would be obligated to pay a portion of the Registration Expenses incurred
by or on behalf of such Eligible Holder for its benefit in connection with any
Demand Registration); and provided, further, that if the Company should agree to
bear the Registration Expenses of any other stockholder in any Piggyback
Registration for any other stockholder of Company on terms more favorable than
those applicable to the Eligible Holders, the Company will bear the expenses of
the Eligible Holders in the Piggyback Registration without requiring the payment
of such expenses in connection with a Demand Registration available to the
Investor or provide the more favorable terms to the Eligible Holders, as the
case may be.
SECTION 7. Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 3 to include any of the Registrable
Securities of any Eligible Holder in the registration of the securities to be
included in such underwriting, or in such underwriting itself, unless such
Eligible Holder accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it, and then only in such quantity as
the underwriters determine in their sole discretion will not jeopardize the
success of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by shareholders to be included in
such offering, whether upon exercise of Registration Rights or otherwise
(collectively, "Secondary Securities"), exceeds the number of Secondary
Securities that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only such number of Secondary Securities, including
Registrable Securities, as the underwriters determine in their sole discretion
will not jeopardize the success of the offering. The Secondary Securities so
included shall be apportioned among the Eligible Holders and such other selling
shareholders having exercised Registration Rights, pro rata in proportion to the
total number of Secondary Securities, including Registrable Securities, owned by
the Eligible Holders and such other selling shareholders, respectively, before
any Secondary Shares shall be included on behalf of any other shareholder, or in
such other proportion as may be agreed to by all such shareholders and the
Eligible Holders.
SECTION 8. Delay of Registration. The Eligible Holders shall not have any
right to obtain or seek an injunction restraining or otherwise delaying any
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Agreement.
SECTION 9. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless the Eligible Holder, any underwriter (as defined in the Securities
Act or other applicable law) for the Eligible Holder and each Person, if
any, who controls an Eligible Holder or underwriter within the meaning of
the Securities Act, the Exchange Act or other applicable law, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act or other applicable law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading,
or (iii) any violation or alleged violation by the Company of the Securities
Act or other applicable law, or any rule or regulation promulgated under the
Securities Act or other applicable
law; and the Company will pay to each Eligible Holder, underwriter or
controlling Person any reasonable legal or other expenses incurred by it
in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 9(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or
action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company
be liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by an
Eligible Holder or such underwriter or controlling Person.
(b) To the extent permitted by law, each Eligible Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers
who has signed the registration statement, each Person, if any, who controls
the Company within the meaning of the Securities Act or other applicable
law, any underwriter, and any controlling Person of any such underwriter,
against any losses, claims, damages, or liabilities (joint or several) to
which any of the foregoing Persons may become subject, under the Securities
Act or other applicable law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Eligible Holder expressly for use in connection with such
registration; and such Eligible Holder will pay any reasonable legal or
other expenses incurred by any Person to be indemnified pursuant to this
Section 9(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Eligible Holder, which
consent shall not be unreasonably withheld; and provided further, however,
that in no event shall any indemnity under this Section 9(b) exceed the
gross proceeds from the offering received by such Eligible Holder.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 9, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified
party and any other party represented by such counsel in such proceeding.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if prejudicial to
its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 9, but the
omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 9.
(d) The obligations of the Company and each Eligible Holder under this
Section 9 shall survive the completion of any offering of Registrable
Securities under a registration statement pursuant to this Agreement, and
otherwise.
SECTION 10. Reports. With a view to making available to the holders of
Preferred Stock and Registrable Securities the benefits of Rules 144 and 144A
under the Securities Act and any other applicable rule or regulation in each
other jurisdiction where the Company's securities are registered that may at any
time permit the Investor to sell securities of the Company to the public without
registration, the Company agrees to do the following from the date of
effectiveness of the Company's first registration statement filed under the
Securities Act until the Expiration Date:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 or other applicable law, at all times;
(b) file with the SEC and the applicable authority in each other
jurisdiction where the Company's securities are registered in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act, and the similar laws of each such other
jurisdiction; and
(c) furnish to each holder of Preferred Stock or Registrable Securities
forthwith upon request, (i) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents filed by the
Company with governmental authorities (including the SEC), and (ii) such
other information as may be reasonably requested in availing the Investor of
any rule or regulation of the SEC or similar authorities in any jurisdiction
where the Company's securities are registered, which permits the selling of
any such securities without registration.
SECTION 11. "Market Stand-Off" Agreement. Each holder of Preferred Stock or
Registrable Securities hereby agrees that, during the duration of the period
specified by the Company and an underwriter of Common Stock or other securities
of the Company following the effective date of a registration statement of the
Company under the Securities Act (but no longer than six months), it shall not,
to the extent requested by the Company and such underwriter, directly or
indirectly sell, offer to sell, contract to sell (including, without limitation,
any short sale), grant any option to purchase or otherwise transfer or dispose
of any securities of the Company held by such holder at any time during such
period except Common
Stock included in such registration and except in a private transaction in which
the transferee of such holder agrees to abide by the agreement of the holder
pursuant to this Agreement for the remaining duration of the period specified to
the holder by the Company and the underwriter. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions, consistent with the
provisions of this Section 11, with respect to the shares of Preferred Stock or
the Registrable Securities of the Investor (and the shares or securities of
every other Person subject to the foregoing restriction) until the end of such
period.
SECTION 12. Termination. Except for the right to indemnification provided
herein, no holder of Registrable Securities shall be entitled to exercise any
right provided for in this Exhibit A after the earlier of (i) five years
following the date of effectiveness of the Company's first registration
statement filed under the Securities Act or (ii) the date all of the Registrable
Securities then owned by Investor may be immediately resold pursuant to Rule 144
(such date, the "Expiration Date").
