EXHIBIT (99a)
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SUBSCRIPTION AGREEMENT
in connection with
GOLF-TECHNOLOGY HOLDING, INC.
Offering of
up to 2,000,000 Units
Offering Price - $2.10 per Unit
Placement Agent:
X. XXXXXXX SECURITIES, L.L.C.
0000 XXXXXX XX XXX XXXXXXXX
00XX XXXXX
XXX XXXX, XXX XXXX 00000
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August 20, 1997
Page 5 of 58 Pages
SUBSCRIPTION AGREEMENT
NAME OF SUBSCRIBER:___________________________________________
NUMBER OF UNITS OFFERED: Up to Two Million (2,000,000) Units at an offering
rice of $2.10 per Unit, with a minimum purchase of Ten Thousand (10,000) Units.
To: GOLF-TECHNOLOGY HOLDING, INC.
00000 Xxxxxxxx Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
IMPORTANT INSTRUCTIONS FOR COMPLETION:
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1. COMPLETE YOUR NAME ABOVE, CHECK THE APPROPRIATE BOX ON PAGE 3; and
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2. PROVIDE THE NUMBER OF UNITS TO BE PURCHASED AND ALL INFORMATION
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REQUESTED ON PAGES 10 AND 11; and
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3. SIGN THE AGREEMENT IN THE APPROPRIATE PLACE ON PAGE 11; and
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4. MAKE YOUR CHECK PAYABLE TO "GOLF-TECH ESCROW ACCOUNT" OR REQUEST WIRING
INSTRUCTIONS PURSUANT TO SECTION 1.3 BELOW; and
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5. COMPLETE ALL INFORMATION ON PAGES 1-3 OF THE SUBSCRIBER SUITABILITY
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QUESTIONNAIRE ATTACHED HERETO AS EXHIBIT A; and
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6. DELIVER THE ORIGINAL SUBSCRIPTION AGREEMENT AND SUBSCRIBER SUITABILITY
QUESTIONNAIRE ATTACHED HERETO AS EXHIBIT A AND CHECK OR WIRE
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INSTRUCTIONS TO YOUR ACCOUNT REPRESENTATIVE FOR FORWARDING TO THE
PLACEMENT AGENT'S MAIN OFFICE.
Page 6 of 58 Pages
SUBSCRIPTION AGREEMENT
This Subscription Agreement (the "Agreement"), is executed by the
undersigned (the "Subscriber") in connection with the offering (the "Offering")
by Golf-Technology Holding, Inc., an Idaho Corporation (the "Company") of up to
a maximum of two million (2,000,000) units (the "Units") of securities of the
Company. Each Unit shall consist of one (1) share of common stock, par value
$.001 per share (the "Common Stock"), of the Company and one (1) warrant (the
"Warrant"), in the form attached hereto as Exhibit B, to purchase one (1) share
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of Common Stock. The Warrant shall be exercisable for a period of five (5) years
after its issuance at an exercise price of $2.00 per share. The minimum
aggregate number of Units which must be purchased in connection with the
Offering is two hundred fifty thousand (250,000) Units, however, the Company and
X. Xxxxxxx Securities, L.L.C., a New York limited liability company (the
"Placement Agent"), will jointly determine when and if closings are to be held
(such date is referred to as a "Closing Date").
SECTION 1.
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1.1 Subscription. The Subscriber, intending to be legally bound, hereby
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irrevocably subscribes for and agrees to purchase the number of Units, indicated
on Page 10 hereof, on the terms and conditions described herein.
1.2 Purchase. The Subscriber understands and acknowledges that the purchase
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price to be remitted to the Company in exchange for the Units shall be Two
Dollars and 10/100 Cents ($2.10) per Unit, and the minimum number of Units which
may be purchased by an investor is Ten Thousand (10,000) Units. The Company may
accept subscriptions for less than the minimum number of Units, so long as such
subscriptions do not result in fractional Units.
1.3 Payment for Purchase. PAYMENT FOR THE UNITS SHALL BE BY WIRE TRANSFER OR
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CHECK PAYABLE TO: "Golf-Tech Escrow Account" and delivered to the Placement
Agent for forwarding to the bank escrow agent, The Chase Manhattan Bank,
together with an original executed copy of this agreement. Wire transfer
instructions are available upon request from the Placement Agent.
SECTION 2.
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2. Acceptance or Rejection.
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(a) The Subscriber understands and agrees that the Company reserves the
right to reject this subscription for the Units in whole or in part in any
order, if, in its reasonable judgment, it deems such action in the best interest
of the Company, at any time prior to the Closing Date, notwithstanding prior
receipt by the Subscriber of notice of acceptance of the Subscriber's
subscription.
Page 7 of 58 Pages
(b) In the event of rejection of this subscription, or in the event
the sale of the Units is not consummated by the Company for any reason (in which
event this Agreement shall be deemed to be rejected), this Agreement and any
other agreement entered into between the Subscriber, the Placement Agent or the
Company relating to this subscription shall thereafter have no force or effect
and the Placement Agent shall promptly return or cause to be returned to the
Subscriber the purchase price remitted to the Placement Agent by the Subscriber
in exchange for the Units.
SECTION 3.
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3. Subscriber Representations and Warranties. The Subscriber hereby
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acknowledges, represents and warrants to, and agrees with, the Company and its
affiliates as follows:
(a) The Subscriber is acquiring the Units for the Subscriber's own
account as principal, not as a nominee or agent, for investment purposes only,
and not with a view to, or for, resale, distribution or fractionalization
thereof in whole or in part and no other person has a direct or indirect
beneficial interest in such Units. Further, the Subscriber does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Units or underlying securities.
(b) The Subscriber acknowledges the Subscriber's understanding that
the offering and sale of the Units is intended to be exempt from registration
under the Securities Act by virtue of Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act") and the provisions of Regulation D
promulgated thereunder ("Regulation D"). In furtherance thereof, the Subscriber
represents and warrants to and agrees with the Company and its affiliates as
follows:
(i) The Subscriber realizes that the basis for the Regulation D
exemption may not be present, if, notwithstanding such representations,
the Subscriber has in mind merely acquiring Units for a fixed or
determinable period in the future, or for a market rise, or for sale if
the market does not rise. The Subscriber does not have any such
intentions;
(ii) The Subscriber has the financial ability to bear the economic
risk of the Subscriber's investment, has adequate means for providing
for the Subscriber's current needs and personal contingencies and has
no need for liquidity with respect to the Subscriber's investment in
the Company;
(iii) The Subscriber has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
the prospective investment. If other than an individual, the Subscriber
also represents it has not been organized for the purpose of acquiring
the Units.
Page 8 of 58 Pages
(c) The Subscriber represents that the information in the Subscriber
Suitability Questionnaire, attached hereto as Exhibit A, is accurate and true in
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all aspects and furthermore represents that (CHECK WHICHEVER IS APPLICABLE):
[ ] (i) The Subscriber is a natural person (a) whose net worth,
individually or jointly with his or her spouse, exceeds $1,000,000 (inclusive of
the value of home, home furnishings and automobiles); or (b) whose personal
income (inclusive of that of his or her spouse) exceeded $200,000 in 1995 and
1996 and who reasonably anticipates that his or her personal income will exceed
$200,000 in 1997; or (c) whose joint net income with his or her spouse, exceeded
$300,000 in 1995 and 1996 and who reasonably anticipates that his or her joint
income will exceed $300,000 in 1997; or (d) who is a director or executive
officer of the Company.
[ ] (ii) The Subscriber is (a) a bank as defined in Section 3(a)(2) of the
Securities Act or a savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity; (b) a broker-dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); (c) an
insurance company as defined in Section 2(13) of the Securities Act; (d) an
investment company registered under the Investment Company Act of 1940, as
amended (the "Investment Act") or a business development company as defined in
Section 2(a)(48) of the Investment Act; (e) a 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; (f) 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, where such plan has total assets in excess of $5,000,000; (g) any
employee benefit plan within the meaning of Title 1 of the Employee Retirement
Income Security Act of 1974., as amended ("ERISA"), where the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA,
which is either a bank, savings and loan association, insurance company, or
registered investment adviser, or employee benefit plan that has total assets in
excess of $5,000,000, or if a self-directed plan, the investment decisions are
made solely by persons that are accredited investors; (h) a private business
development company, as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940; (i) any organization described in Section 501 (c)(3) of the
Internal Revenue Code, a corporation, a Massachusetts or similar business trust
or a partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000; (j) a trust, with
total assets in excess of $5,000,000, not formed for the specific purpose of
acquiring the securities offered, whose purchase is directed by a sophisticated
person, as described in Rule 506(b)(2)(ii) promulgated under the Securities Act;
or (k) an entity in which each of the equity owners is an accredited investor as
defined in Rule 501(a) promulgated under the Securities Act.
(d) The Subscriber and represents and warrants to the Company that
the Subscriber:
(i) Appreciates that the Company is a public company and accordingly
no private placement memorandum or similar document has been made available
Page 9 of 58 Pages
to potential investors. However, as a public company the following
documents containing information concerning the Company have been publicly
filed, pursuant to the Exchange Act, by the Company with the Securities and
Exchange Commission (the "Commission"): (i) Form 10-KSB of the Company for
the year ended December 31, 1996, (ii) Form 10-QSB of the Company for the
fiscal quarter ended March 31, 1997, (iii) Form 10-QSB of the Company for
the fiscal quarter ended June 30, 1997, and (iv) Form 8-K filed February
11, 1997 (collectively, the "Public Documents"). The Subscriber has
reviewed the Public Documents and has reviewed the Risk Factors and
description of the Use of Proceeds set forth below in Exhibit C attached
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hereto; and
(ii) Has been given the opportunity for a reasonable time prior to the
date hereof to ask questions of, and receive answers from the Company or
its representatives concerning the terms and conditions of the Offering,
and other matters pertaining to this investment, and has been given the
opportunity for a reasonable time prior to the date hereof to obtain such
additional information in connection with the Public Documents in order for
the Subscriber to evaluate the merits and risks of purchase of the Units,
to the extent the Company possesses such information or can acquire it
without unreasonable effort or expense; and
(iii) Has not been furnished with any oral representation or oral
information in connection with the offering of the Units which is not
contained in the Public Documents; and
(iv) Has determined that the Units are a suitable investment for the
Subscriber and that at this time the Subscriber could bear a complete loss
of the Subscriber's investment; and
(v) The Subscriber is not relying on the Company, or its affiliates
with respect to economic considerations involved in this investment; and
(vi) The Subscriber will not sell or otherwise transfer the Units or
underlying securities without registration under the Securities Act or an
exemption therefrom and fully understands and agrees that he must bear the
economic risk of the Subscriber's purchase because, among other reasons,
the Units and underlying securities have not been registered under the
Securities Act or under the Securities laws of any state, pledged, assigned
or otherwise disposed of unless they are subsequently registered under the
Securities Act and under the applicable securities laws of such states or
an exemption from such registration is available. The Subscriber also
understands that, except as otherwise specified in the Registration Rights
set forth on Exhibit D attached to this Agreement, and in the Warrant, the
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Company is under no obligation to register the Units and the underlying
securities on the Subscriber's behalf or to assist the Subscriber in
complying with any exemption from registration under the Securities Act.
The Subscriber further understands that sales or transfers of the Units and
the
Page 10 of 58 Pages
underlying securities are further restricted by state securities laws and
the provisions of this Agreement which must be executed by the Subscriber
as a condition precedent to receiving securities of the Company; and
(vii) No representations or warranties have been made to the
Subscriber by the Company, or any officer, employee, agent, affiliate or
subsidiary of any of it, other than the representations of the Company in
this Agreement; and
(viii) Any information which the Subscriber has heretofore furnished to
the Company with respect to the Subscriber's financial position and
business experience is correct and complete as of the date of this
Agreement and if there should be any material change in such information
the Subscriber will immediately furnish such revised or corrected
information to the Company; and
(ix) The Subscriber understands and agrees that each Common Stock
certificate and Warrant for the securities underlying the Units shall bear
the following legend until (i) such securities shall have been registered
under the Securities Act and effectively been disposed of in accordance
with a registration statement; or (ii) in the opinion of counsel for the
Company such securities may be sold without registration under the
Securities Act:
"THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i) PURSUANT TO A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME
EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (ii)
PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN
OPINION OF COUNSEL TO THE CORPORATION, OR OTHER COUNSEL ACCEPTABLE TO
THE CORPORATION, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL
APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE
"BLUE SKY" OR SIMILAR SECURITIES LAW."
(x) The Subscriber understands that the Units and underlying
securities are restricted securities and may not be sold, transferred, or
otherwise disposed of without registration under the Securities Act or an
exemption therefrom, and that in the absence of an effective registration
statement covering the Units and underlying securities or an available
exemption from registration under the Securities Act, the Common Stock and
Page 11 of 58 Pages
Warrants underlying the Units must be held indefinitely. In particular, the
Subscriber is aware that the Common Stock and Warrants underlying the Units
and the underlying securities may not be sold pursuant to Rule 144
promulgated under the Securities Act unless all of the conditions of that
Rule are met; and
(xi) The foregoing representations, warranties and agreements shall
survive the Closing Date and acceptance by the Company of the Subscriber's
subscription.
SECTION 4.
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The Company represents and warrants to the Subscriber as follows:
4.1 Organization. Good Standing and Qualification. The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Idaho and has all requisite corporate power and authority to
carry on its business as now conducted and as 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 to its knowledge is not the subject of any pending or
threatened investigation or administrative or legal proceeding by the Internal
Revenue Service, the taxing authorities of any state or local jurisdiction, or
the Commission which have not been disclosed in the Public Documents.
4.2 Corporate Condition. There have been no material adverse changes
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in the Company's financial condition or business since the date of the Public
Documents which have not been disclosed to Subscriber in writing.
4.3 Authorization. All corporate action on the part of the Company,
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its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations of
the Company hereunder and the authorization, issuance (or reservation for
issuance) and delivery of the Common Stock and Warrants being sold hereunder and
the Common Stock issuable upon conversion of the Warrants have been taken, and
this Agreement constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms.
4.4 Valid Issuance of Securities and Securities. The Common Stock and
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Warrants, 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 U.S. federal
and state securities laws. The Common Stock issuable upon conversion of the
Securities when issued in accordance with the terms of the Certificate of
Incorporation of the Company or Warrant shall be duly and validly issued and
outstanding, fully paid and nonassessable, and based in part on the
representations and warranties of Subscriber and any transferee of the
Securities or Common Stock issuable upon conversion of the Securities, will be
issued in compliance with all applicable U.S federal and state securities laws.
Page 12 of 58 Pages
4.5 Current Public Information. The Company represents and warrants to the
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Subscriber that the Company has a class of securities registered under Section
12(g) of the Exchange Act and has filed all the materials required to be filed
as reports pursuant to the Exchange Act for a period of at least twelve months
preceding the date hereof (or for such shorter period as the Company was
required by law to file such material).
4.6 Selling Efforts in Regard to this Transaction. The Company represents
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and warrants that the Offering is not part of a plan or scheme to evade the
registration provisions of the Act.
4.7 No Conflicts. The execution and delivery of this Agreement and the
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consummation of the issuance of the Securities and the transactions contemplated
by this Agreement do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under, the
Certificate of Incorporation or bylaws of the Company, or any indenture,
mortgage, deed of trust or other material payment or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
or any existing applicable decree, judgment or order of any court, Federal or
State regulatory body, administrative agency or other governmental body having
jurisdiction over the Company or any of its properties or assets.
4.8 Compliance with Laws. As of the date hereof, the conduct of the
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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, judgment, order or decree
from any governmental authority. The Company shall comply with all applicable
securities laws with respect to the sale of the Units, including but not limited
to the filing of all reports required to be filed in connection therewith with
the Commission or any stock exchange or the NASDAQ Stock Market or any other
regulatory authority.
4.9 Litigation. Except as disclosed in the Company's Annual Report on
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Form 10-KSB, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Company, threatened, against or affecting the Company, or any
of its properties, which could reasonably be expected to result in any material
adverse change in 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.
4.10 Disclosures. There is no fact known to the Company (other than
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general economic conditions known to the public generally) that has not been
disclosed in writing to the Subscriber that 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 could reasonably
be expected to materially and adversely affect the ability of the Company to
perform
Page 13 of 58 Pages
its obligations pursuant to this Subscription Agreement and the issuance of the
Securities hereunder.
SECTION 5.
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5.1 Registration Rights. The Company hereby grants to the Subscriber the
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registration rights set forth on Exhibit D attached hereto.
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5.2 Indemnity. The Subscriber agrees to indemnify and hold harmless the
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Company, its officers and directors, employees and its affiliates and each other
person, if any, who controls any thereof, against any loss, liability, claim,
damage and expense whatsoever (including, but not limited to, any and all
expenses whatsoever reasonably incurred in investigating, preparing or defending
against any litigation commenced or threatened or any claim whatsoever) arising
out of or based upon any false representation or warranty or breach or failure
by the Subscriber to comply with any covenant or agreement made by the
Subscriber herein or in any other document furnished by the Subscriber to any of
the foregoing in connection with this transaction.
5.3 Modification. Neither this Agreement nor any provisions hereof shall be
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waived, amended, modified, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, amendment, modification,
discharge or termination is sought.
5.4 Notices. Any notice, demand or other communication which any party
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hereto may be required, or may elect, to give to anyone interested hereunder
shall be in writing and shall be deemed given when (a) deposited, postage
prepaid, in a United States mail letter box, registered or certified mail,
return receipt requested, addressed to such address as may be given herein, or
(b) delivered personally, to the other party hereto at their address set forth
in this Agreement or such other address as a party hereto may request by
notifying the other party hereto.
5.5 Counterparts. This Agreement may be executed through the use of
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separate signature pages or in any number of counterparts, and each of such
counterparts shall, for all purposes, constitute one agreement binding on all
parties, notwithstanding that all parties are not signatories to the same
counterpart.
5.6 Binding Effect. Except as otherwise provided herein, this Agreement
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shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and assigns. If the
Subscriber is more than one person, the obligation of the Subscriber shall be
joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his heirs, executors, administrators and successors.
5.7 Entire Agreement. The Exhibits attached hereto are hereby incorporated
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herein by reference. This Agreement together with the Exhibits contains the
entire agreement of the
Page 14 of 58 Pages
parties and there are no representations, covenants or other agreements except
as stated or referred to herein.
5.8 Assignability. This Agreement is not transferable or assignable by the
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Subscriber except as may be provided herein.
5.9 Applicable Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York.
5.10 Amendments. The provisions of this Agreement may be amended at any
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time and from time to time, and particular provisions of this Agreement may be
waived, with and only with an agreement or consent in writing signed by the
Company and by the Subscribers currently holding fifty percent (50%) of the
Registrable Shares (as defined in Exhibit D hereto) as of the date of such
amendment or waiver.
5.11 Neutral Gender. The use in this Agreement of words in the male, female
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or neutral gender are for convenience only and shall affect or control any
provisions of this Agreement.
5.12 Captions. The Section headings contained in this Agreement are for
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reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
[remainder of page intentionally blank]
Page 15 of 58 Pages
A. SUBSCRIPTION:
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No. Units X $2.10 per Unit = $
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B. MANNER IN WHICH TITLE IS TO BE HELD (Please check One):
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1. [_] Individual 7. [_] Trust/Estate/Pension or
Profit Sharing Plan, and
Date Opened: ______________
2. [_] Joint Tenants with Rights of 8. [_] As a Custodian for ________
Survivorship ___________________________
UGMA ____________ (State)
3. [_] Community Property
4. [_] Tenants in Common 9. [_] Married with Separate
Property
5. [_] Corporation/Partnership
10. [_] Xxxxx
6. [_] IRA
11. [_] Tenants by the Entirety
12. Other____________________________________________________________________
Page 16 of 58 Pages
C. TITLE:
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PLEASE GIVE THE EXACT AND COMPLETE NAME IN WHICH TITLE TO THE UNITS ARE TO
BE HELD:
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IN WITNESS WHEREOF, the Subscriber has executed this Agreement on
the _______ day of _________________________, 1997.
Signature: Signature:
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Name: Name:
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Title (if applicable)
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Street Address:
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City: State: Zip:
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Telephone: ( )
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Social Security or Federal Tax ID No.:
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***DO NOT WRITE BELOW DOTTED LINE***
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ACCEPTED ON BEHALF OF THE COMPANY:
GOLF-TECHNOLOGY HOLDING, INC.
By: No. of Units:
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Name: Xxxxxx X. Xxxxxxxx $ Per Unit: 2.10
Title: President --------------------
Total $:
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Page 17 of 58 Pages
EXHIBIT A
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SUBSCRIBER SUITABILITY QUESTIONNAIRE
(PLEASE ANSWER ALL QUESTIONS COMPLETELY AND ACCURATELY)
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Name:
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Street Address:
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City: State:
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State of Domicile (or registration, if a business):
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Telephone:
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Social Security or Federal Tax ID No.:
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Age: Occupation:
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Name of Employer:
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Employer's Business:
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Job Title and Duties:
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Annual Salary:
1995 1996 1997 (projected)
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Total Annual Income (all sources including salary):
1995 1996 1997 (projected)
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Other Prior Employment or Business Activities Within Last Five Years:
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Page 18 of 58 Pages
Education and Professional Background:
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Previous Investment Experience in Other Private Placements during last Five
Years:
Name of Company Year Type of Business Amount Invested
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How Have you Evaluated This Investment? (please initial next to which one
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applies)
____ I have evaluated this investment myself, and I have sufficient knowledge
and experience in financial and business matters to be capable of evaluating the
merits and risks of this investment.
____ I have had ________________________, who is an accountant, investment
adviser, attorney or other consultant with the firm of _______________________,
which has an address at _________________________, telephone ( ) ___________
review this investment.
Required Additional Information for Subscribers that are Corporations,
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Partnership, Trusts or other Business Entities:
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Date of Organization:
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Business Purposes:
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Form of Business Organization (check which applied):
Page 19 of 58 Pages
Corporation______ General Partnership______ Limited Partnership______
Limited Liability Company______ Limited Liability Partnership______
Trust______ Joint Venture______ Other (describe)__________________
Is Business Organization Actively Engaged
in Conduct of Trade or Business? Yes____ No____
List Below (as applied to your business entity) all officers, General
Partnership, Trustees, Managing Members, Managing Partners, Managing Joint
Ventureres, etc.:
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Please Prove the Following Documents concerning Your Business Ventureres, etc.:
Corporation: Copy of Articles of Incorporation.
General Partnership: Partnership Agreement.
Limited Partnership: Partnership Agreement.
Limited Liability Company: Articles of Organization.
Limited Liability Partnership: Resignation of Limited Liability Partnership.
Trust: Trust Indenture.
Joint Venture: Joint Venture Agreement.
Other: Written Agreement concerning ownership, organization and operation.
Page 20 of 58 Pages
EXHIBIT B
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FORM OF WARRANT
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE LAWS AND NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS WARRANT MAY BE TRANSFERRED EXCEPT AS PROVIDED IN SECTION 2 OF THIS
WARRANT.
WARRANT
to Purchase Common Stock of
GOLF-TECHNOLOGY HOLDING, INC.
This Warrant certifies that ______________________, or registered and
permitted assigns (the "Holder"), is entitled to, subject to the terms set forth
below, subscribe for and purchase from GOLF-TECHNOLOGY HOLDING, INC., an Idaho
corporation (the "Company"),___ (_) duly authorized, validly issued, fully paid
and nonassessable shares of the Company's common stock, $.001 par value per
share (the common stock, including any stock into which it may be changed,
reclassified, or converted, and as it may be adjusted pursuant to Section 4(A)
below, is herein referred to as the "Common Stock"). This Warrant is one of a
class of Warrants (the "Unit Warrants") issued pursuant to that certain
Subscription Agreement (the "Agreement"), dated August 20, 1997, by and among
the Company and the Subscriber (as defined therein) entitling the holders
thereof to purchase a maximum of 2,000,000 shares of Common Stock.
This Warrant is subject to the following provisions, terms and
conditions:
Section 1. Exercise of Warrant.
-------------------
To exercise this Warrant in whole or in part, the Holder shall
deliver to the Company at its principal office in Ponte Vedra Beach, Florida (a)
a written notice, in substantially the form of the Exercise Notice appearing at
the end of this Warrant, of the Holder's election to exercise this Warrant,
which notice shall specify the number of shares of Common Stock to be purchased,
(b) cash or a certified check payable to the Company, or such other
consideration as determined in accordance with Section 2(C) below, in an amount
equal to the aggregate purchase price of the number of shares of Common Stock
being purchased, and (c) this Warrant. The Company shall as promptly as
practicable, and in any event within 15 days thereafter, execute and deliver or
cause to be executed and delivered, in accordance with such notice, a stock
certificate or certificates representing the aggregate number of shares of
Common Stock specified in such notice. The stock certificate or certificates so
delivered shall be in such denominations as may be specified in such notice and
shall be issued in the name of the Holder or such other name as shall be
designated in such notice. Such stock certificate or certificates shall be
deemed to have been issued and the Holder or any other person so designated to
be named therein shall be deemed for all purposes to have become a holder of
record of such shares immediately prior to the close of business on the date
such notice is received by the Company as aforesaid. If this Warrant shall
Page 21 of 58 Pages
have been exercised only in part, the Company shall, at the time of delivery of
said stock certificate or certificates, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the remaining shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical to this Warrant, or, at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder. The
Company shall pay all expenses, taxes and other charges payable in connection
with the preparation, issue and delivery of such stock certificates and new
Warrants, except that, in case such stock certificates or new Warrants shall be
registered in a name or names other than the name of the Holder, funds
sufficient to pay all stock transfer taxes that are payable upon the issuance of
such stock certificates or new Warrants shall be paid by the Holder at the time
of delivering the notice of exercise mentioned above.
All shares of Common Stock issued upon the exercise of this Warrant
shall be validly issued, fully paid and nonassessable and, if the Common Stock
is then listed on a national securities exchange or quoted on an automated
quotation system, shall be duly listed or quoted thereon.
The Company shall not be required upon any exercise of this Warrant
to issue a certificate representing any fraction of a share of Common Stock,
but, in lieu thereof, shall pay to the Holder cash in an amount equal to a
corresponding fraction (calculated to the nearest 1/100 of a share) of the
purchase price of one share of Common Stock as of the date of receipt by the
Company of notice of exercise of this Warrant.
Section 2. Terms and Conditions of Warrants.
--------------------------------
(A) Exercise Period. Each Warrant shall be exercisable at any time on
or after the date hereof, and shall expire at 5:00 p.m., New York City time, on
the fifth anniversary of the date hereof (the "Expiration Date").
(B) Purchase Price. The purchase price per share of Common Stock
shall be $2.00.
(C) Payment of Purchase Price upon Exercise. The purchase price of
the Common Stock as to which a Warrant is exercised shall be paid to the Company
at the time of exercise either in currently available funds.
(D) Transferability and Exercise of Warrants. This Warrant shall be
exercisable or convertible (a) only under circumstances such that the issue of
Common Stock issuable upon such exercise or conversion is exempt from the
requirements of registration under the Securities Act of 1933, as amended (the
"1933 Act"), and any applicable state securities law or (b) upon registration of
such Common Stock in compliance therewith. This Warrant shall only be
transferable (i) in accordance with or as otherwise specifically permitted by
the provisions of the Agreement and (ii) under circumstances such that the
transfer is exempt from the requirements of registration under the 1933 Act and
any applicable state securities law. By acceptance hereof, the Holder agrees to
comply with such laws.
Page 22 of 58 Pages
(E) Investment Representation. The Holder, by acceptance hereof, (i)
hereby represents that he or she is an "Accredited Investor" under Rule 501(a)
of Regulation D promulgated under Section 4(2) of the 1933 Act, and (ii)
acknowledges that this Warrant and, to the extent not registered under the 1933
Act, any Common Stock purchased or acquired pursuant hereto is being or will be
acquired solely for the Holder's own account and not as a nominee for any other
party, and with a current investment intent and not with a view to distribution
thereof. The Holder (or any person acting under Sections 2(D) above) shall
deliver to the Company, at the time of any exercise of this Warrant or portion
thereof, a written representation that the shares to be acquired upon such
exercise are to be acquired for investment and not for resale or with a view to
the distribution thereof, and, if applicable, that he or she is the original
Holder of this Warrant. Delivery of such representation prior to the delivery of
any Common Stock issued upon exercise of a Warrant and prior to the expiration
of the Warrant period shall be a condition precedent to the right of the Holder
or such other person to purchase any Common Stock. In the event certificates for
Common Stock are delivered upon the exercise of this Warrant with respect to
which such an investment representation has been obtained, the Company may cause
a legend or legends to be placed on such certificates to make appropriate
reference to such representations and to restrict transfer in the absence of
compliance with applicable federal or state securities laws.
Section 3. Transfer, Division and Combination.
----------------------------------
The Company agrees to maintain at its principal office in Ponte Vedra
Beach, Florida, books for the registration and transfer of this Warrant, and,
subject to the provisions of Section 2(D) hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, on such books at such office,
upon surrender of this Warrant at such office, together with a written
assignment of this Warrant duly executed by the Holder or his agent or attorney
and funds sufficient to pay any stock transfer taxes payable upon the making of
such transfer. Upon such surrender and payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denominations specified in such instrument of assignment, and this
Warrant shall promptly be canceled. A Warrant may be exercised by a new holder
for the purchase of shares of Common Stock without having a new Warrant issued.
All of the provisions of this Section 3 are subject to the provisions of
Sections 2(D) above.
Section 4. General Provisions
------------------
(A) Certain Adjustments. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to this
Warrant and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Company may deem equitable to
prevent substantial dilution or enlargement of the rights granted to, or
available for, the Holder hereunder. Any adjustment of this Warrant pursuant to
this Section 4(A) shall be made only to the extent not constituting a
"modification" within the meaning of Section 424(h)(3) of the Internal Revenue
Code of 1986, as amended from time to time, unless the Holder shall agree
otherwise. The Company shall give notice to the Holder of any adjustment
Page 23 of 58 Pages
made pursuant to this Section 4(A) and, upon notice, such adjustment shall be
effective and binding for all purposes under this Warrant.
(B) Successor Company. The obligations of the Company under this
Warrant shall be binding upon any successor Company or organization resulting
from the merger, consolidation or other reorganization of the Company, or upon
any successor Company or organization succeeding to substantially all of the
assets and business of the Company. The Company agrees that it will make
appropriate provision for the preservation of Holder's rights under this Warrant
in any agreement or plan which it may enter into or adopt to effect any such
merger, consolidation, reorganization or transfer of assets.
(C) Taxes. The Company may make such provisions and take such steps
as it may deem necessary or appropriate for the withholding of all federal,
state and local taxes required by law to be withheld with respect to this
Warrant, including, but not limited to (i) deducting the amount required to be
withheld from any other amount then or thereafter payable to the Holder, and
(ii) requiring the Holder to pay to the Company the amount required to be
withheld as a condition of releasing Common Stock. In addition, subject to such
rules and regulations as the Company shall from time to time establish, the
Holder shall be permitted to satisfy federal, state and local taxes, if any,
imposed upon the issuance of Common Stock at a rate up to the Holder's maximum
marginal tax rate with respect to each such tax by (i) irrevocably electing to
have the Company deduct from the number of shares Common Stock otherwise
deliverable upon exercise of a Warrant such number of shares of Common Stock as
shall have a value equal to the amount of tax to be withheld, (ii) delivering to
the Company such portion of the Common Stock delivered upon exercise of the
Warrant as shall have a value equal to the amount of tax to be withheld, or
(iii) delivering to the Company such Common Stock or combination of Common Stock
and cash as shall have a value equal to the amount of tax to be withheld.
(D) General Creditor Status. The Holder shall have no right, title,
or interest whatsoever in or to any investments which the Company may make to
aid it in meeting its obligations hereunder. Nothing contained herein, and no
action taken pursuant hereto, shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Company and the Holder or any
other person. To the extent that any person or entity acquires a right to
receive payments from the Company hereunder, such right shall be no greater than
the right of an unsecured general creditor of the Company. All payments to be
made hereunder shall be paid from the general funds of the Company and no
special or separate fund shall be established and no segregation of assets shall
be made to assure payment of such amounts except as expressly set forth herein.
Section 5. Covenant to Reserve Shares of Common Stock.
------------------------------------------
The Company covenants and agrees that it will at all times reserve
and set apart and have, free from preemptive rights, a number of shares of
authorized but unissued Common Stock, or other stock or securities deliverable
pursuant to this Warrant, sufficient to enable it at any time to fulfill all its
obligations hereunder.
Page 24 of 58 Pages
Section 6. Notices.
-------
In the event that:
(a) the Company proposes to pay any dividend payable in stock (of
any class or classes) or any obligations or stock convertible into or
exchangeable for shares of Common Stock upon its Common Stock or make
any distribution (other than ordinary cash dividends) to the holders of
its Common Stock;
(b) the Company proposes to grant to the holders of its Common
Stock generally any rights or warrants (excluding any warrants granted
to any employee, director, officer, contractor or consultant of the
Company pursuant to any plan approved by the Board of Directors of the
Company);
(c) the Company proposes to effect any capital reorganization or
reclassification of capital stock of the Company;
(d) the Company proposes to consolidate with, or merge into, any
other Company or to transfer its property as an entirety or
substantially as an entirety; or
(e) the Company proposes to effect the liquidation, dissolution or
winding up of the Company,
then the Company shall cause notice of any such intended action to be given to
the holder of this Warrant not less than 30 days before the date on which the
transfer books of the Company shall close or a record shall be taken for such
stock dividend, distribution or granting of rights or Warrants, or the date when
such capital reorganization, reclassification, consolidation, merger, transfer,
liquidation, dissolution or winding up shall be effective, as the case may be.
Any notice or other document required or permitted to be given or
delivered to the holder of this Warrant shall be delivered by facsimile
transmission, reliable courier or first-class mail postage prepaid to the holder
of this Warrant at the last address shown on the books of the Company maintained
for the registry and transfer of this Warrant. Any notice or other document
required or permitted to be given or delivered to holders of record of Common
Stock issued pursuant to this Warrant shall be delivered by facsimile, reliable
courier or first-class mail postage prepaid to such holder at such holder's
address as the same appears on the stock records of the Company. Any notice or
other document required or permitted to be given or delivered to the Company
shall be delivered by facsimile transmission, reliable courier or first-class
mail postage prepaid to the principal office of the Company in Ponte Vedra
Beach, Florida, or delivered to the office of one of the Company's executive
officers at such address, or such other address as shall have been furnished by
the Company to the holders of record of this Warrant and the holders of record
of such Common Stock.
Page 25 of 58 Pages
Section 7. Limitation of Liability; Not Shareholders.
-----------------------------------------
No provision of this Warrant shall be construed as conferring upon the
Holder the right to vote or to consent or to receive dividends or to receive
notice as a shareholder in respect of meetings of shareholders for the election
of directors of the Company or any other matter whatsoever as shareholders of
the Company. No provision hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of Holder
for the purchase price or as a shareholder of the Company, whether such
liability is asserted by the Company, creditors of the Company or others.
Section 8. Loss, Destruction, etc., of Warrant.
-----------------------------------
Upon receipt of evidence satisfactory to the Company of the loss,
theft, mutilation or destruction of this Warrant, and in the case of any such
loss, theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of this Warrant, the Company
will make and deliver a new Warrant, of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Warrant. Any Warrant issued under the provisions
of this Section 8 in lieu of any Warrant alleged to be lost, destroyed or
stolen, or of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.
Section 9. Registration Rights.
-------------------
As used in this Section 9, the term "Registrable Stock" shall mean
(i) all shares of Common Stock that may be issued upon exercise of this Warrant
(and all shares of Common Stock that may thereafter be issued in respect of such
Warrant) that is from time to time outstanding.
References in this Warrant to rules, regulations and forms
promulgated by the Securities and Exchange Commission shall include rules,
regulations and forms succeeding to the functions thereof, whether or not
bearing the same designation.
The rights and obligations of the Company and the Holder with
respect to the Registrable Stock are set forth in Exhibit D to the Agreement,
dated the date hereof, between the Company and the Holder, and incorporated
herein by reference.
Section 10. Amendments.
----------
Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally or in writing, provided that any term of this
Warrant may be amended or the observance of such term may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Company and the holders of the
Unit Warrants that are exercisable for a number of shares of Common Stock that
represent in the aggregate at least a majority of the total number of shares of
Common Stock for
Page 26 of 58 Pages
which all of the Unit Warrants are then exercisable (whether or not the holder
of this Warrant consents).
Section 11. Governing Law and Consent to Jurisdiction.
-----------------------------------------
This Warrant shall be governed by the laws of the State of New York
without regard to its conflict of laws principles or rules. This Warrant shall
be deemed to have been executed and delivered at and shall be deemed to have
been made in New York, New York.
Any legal action, suit or proceeding arising out of or relating to this
Warrant may only be instituted in any federal court of the Southern District of
New York or any state court located in New York County, State of New York, and
the Company agrees not to assert, by way of motion, as a defense or otherwise,
in any action, suit or proceeding, any claim that it is not subject personally
to the jurisdiction of such courts, that the action, suit or proceeding if
brought in such courts, would be an inconvenient forum, that the venue of the
action, suit or proceeding, if brought in any of such courts, is improper or
that this Agreement or the subject matter may not be enforced in or by such
courts on jurisdictional grounds.
Section 12. Captions.
--------
The Section headings contained in this Warrant are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Warrant.
[remainder of page intentionally blank]
Page 27 of 58 Pages
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its duly authorized officer.
Dated: August ___, 1997
GOLF-TECHNOLOGY HOLDING, INC.
By:
----------------------------
Name:
Title:
Page 28 of 58 Pages
EXERCISE NOTICE
The undersigned, the Holder, hereby elects to exercise purchase rights
represented by such Warrant for, and to purchase thereunder, ____________ shares
of the Common Stock covered by such Warrant and herewith makes payment in full
therefor of $_________ cash and/or by cancellation of $__________ of
indebtedness of the Company to the Holder hereof and requests that, subject to
the terms and conditions of the Warrant, certificates for such shares (and any
securities or property deliverable upon such exercise) be issued in the name of
and delivered to ______________________ whose address is
_______________________________________, and whose social security or employer
identification number is ____________.
The undersigned agrees that, in the absence of an effective registration
statement with respect to Common Stock issued upon this exercise, the
undersigned is acquiring such Common Stock for the Holder's own account and not
as a nominee for any other party, for investment and not with a view to
distribution thereof and that the certificate or certificates representing such
Common Stock may bear a legend substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. UNLESS THEY
ARE SOLD PURSUANT TO RULE 144 PROMULGATED BY THE SECURITIES AND EXCHANGE
COMMISSION UNDER SAID ACT, THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION AND QUALIFICATION WITHOUT AN OPINION
OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
In addition, the undersigned agrees that, in the absence of an effective
registration statement with respect to Common Stock issued upon this exercise,
stop transfer instructions will be entered on the Company's stock transfer
records with respect to Common Stock issued upon this exercise.
Dated: --------------------------
Signature guaranteed:
Page 29 of 58 Pages
EXHIBIT C
---------
RISK FACTORS
The securities offered hereby are speculative, involve a high degree of
risk, and should not be purchased by investors who cannot afford the loss of
their entire investment. Each prospective investor should carefully consider the
following significant risk factors inherent in and affecting the business of the
Company and this Offering, as well as the other information set forth in the
Agreement and in the Public Documents. Capitalized terms used and not defined
herein shall have the meanings ascribed to them in the Subscription Agreement
(the "Agreement").
Limited Operating History and Results: History of Losses
The Company's current operations began in August 1993, and therefore the
Company has a limited operating history. For the year ended December 31, 1996
the Company had a net loss equal to approximately $5,584,000. For the six months
period ended June 30, 1997, the Company had a net loss equal to approximately
$796,000. There can be no assurance that the Company will be able to achieve
profitable operations in the future.
New Product Introduction
The Company's success will depend, in part, upon its ability to
introduce innovative golf clubs, and there can be no assurance of the Company's
ability to do so. Innovative designs are often not successful, and successful
product designs are often rendered obsolete by new product introductions. In
addition, outside consultants and representatives of components and material
suppliers who often collaborate on new products are not restricted from
providing consulting or other services to competing golf club manufacturers who
can then design products which have already received market acceptance. The
design of new golf clubs is also greatly influenced by rules and interpretations
of the USGA ("USGA"). Although the golf equipment standards established by the
USGA generally apply only to competitive events sanctioned by that organization,
it has become critical for designers of new clubs to assure compliance with USGA
standards. Although the Company believes that all its clubs comply with USGA
standards, no assurance can be given that any new products will receive USGA
approval or that existing USGA standards will not be altered in ways that
adversely affect the sales of the Company's products.
Dependence Upon Key Personnel
The Company is dependent upon the skills of its President, Chairman of
the Board of Directors, Chief Executive Officer and Treasurer, Xxxxxx X.
Xxxxxxxx. There is strong competition for qualified personnel in the golf club
industry, and the loss of Xx. Xxxxxxxx'x services or an inability to attract,
retain and motivate other key personnel could adversely affect the Company's
business. There can be no assurance that the Company will be able to retain its
Page 30 of 58 Pages
other existing key personnel or to attract additional qualified personnel. The
Company has entered into an employment agreement with Xx. Xxxxxxxx through May
1999.
Possible Need for Additional Financing
The Company has limited resources and is dependent on the proceeds of
its equity securities offerings or other financing to implement its plan of
operation, which plan of operation assumes, among other things, a significant
increase in revenues from new and existing products over the next 24 months.
There can be no assurance, however, that such increase in revenues will in fact
be achieved. The Company believes that it has sufficient working capital to meet
its needs for the next 3 to 12 months (depending on the number of Units sold).
However, additional working capital may be required if sales are lower than
anticipated, the Company experiences delays in bringing products to market or
experiences other unanticipated delays. Additional financing may be necessary to
expand the business in the future. No assurance can be given that such funds
will be available or, if available, will be on commercially reasonable terms
satisfactory to the Company. In the event such funds are not available, the
Company may be forced to curtail operations, or, in an extreme situation, cease
operations.
Limited Market for Products; Competition
The Company's products are marketed to the premium-priced segment of the
golf equipment market, and consequently, the market for such products may be
limited. In addition, the market for premium-priced golf clubs is highly
competitive and a number of established companies compete in this market, many
of which have greater financial and other resources than the Company. Many
purchasers of premium-priced golf clubs desire golf clubs that feature the
latest technological innovations and cosmetic designs, and their purchases are
often the result of highly subjective preferences which can be influenced by
many factors, including, among others, advertising, media and product
endorsement. The Company could therefore face substantial competition from new
or existing competitors that introduce and successfully promote golf clubs which
are perceived by purchasers to offer advantages over the Company's products.
Uncertainty of Widespread Market Acceptance of New Products
The Company has completed the development of a full set of ten irons.
Distribution of the irons is expected to begin in late 1997. As is typical with
new products, demand and market acceptance for the Company's new products is
subject to a high level of uncertainty. Achieving widespread acceptance of the
new products will require substantial marketing efforts and the expenditure of
significant funds to create brand recognition and customer demand for such
products. There can be no assurance that adequate marketing arrangements will be
made for such products. Moreover, there can be no assurance that these products
will ever achieve widespread market acceptance or increased sales or that the
sale of such products will be profitable.
Page 31 of 58 Pages
Seasonality and Quarterly Fluctuations
Golf is primarily a warm weather sport. The Company anticipates that
sales of its products and therefore its quarterly results will fluctuate due to
seasonality of market demand.
Discretionary Consumer Spending
Sales of golf equipment have historically been dependent on
discretionary consumer spending, which may be affected by general economic
conditions. A decrease in consumer spending on golf equipment would have
material adverse effect on the Company's business and operating results.
Sources of Supply
The Company relies on a limited number of suppliers for materials.
While management believes that alternatives sources of supplies either exist or
could be developed, in the event that it should lose its present sources of
supply for these materials and components, or experience delays in receiving
delivery from such sources, the Company would sustain at least temporary
shortages of materials and components, which could have a material adverse
effect on the Company's results of operations.
Outstanding Warrants, Options and Convertible Preferred Stock; Potential Adverse
Effect on Market price of Common Stock
Prior to this Offering, outstanding securities of the Company are set
forth in the Public Documents. Additionally, the Company has reserved an
adequate number of shares of Common Stock for issuance upon exercise of the
outstanding warrants and options previously outstanding, the Warrants being
issued pursuant to this Offering, the conversion of the Company's Series A
Preferred Stock, the conversion of the Company's Series B Preferred Stock, the
conversion of the Company's Series C Preferred Stock and the exchange of shares
of Golf-Tec Holding, Inc., a predecessor to the Company, for shares of Common
Stock. To the extent that outstanding options and warrants are exercised or
shares of Preferred Stock are converted, dilution of the percentage ownership of
the Company's stockholders will occur, and any sales in the public market of the
Common Stock underlying such options, warrants and Preferred Stock may adversely
affect prevailing market prices for the Common Stock. Moreover, the terms upon
which the Company will be able to obtain additional equity capital may be
adversely affected since the holders of outstanding options and warrants can be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain any needed capital on terms more favorable to the Company than
those provided in the outstanding options and warrants.
Dividend Payments
The Company has not paid any dividends on its Common Stock since its
inception and does not contemplate or anticipate paying any dividends on its
Common Stock in the foreseeable future.
Page 32 of 58 Pages
Decree of Permanent Injunction
In February 1968, a Decree of Permanent Injunction was filed against the
Company prohibiting the Company from offering or selling shares of its Common
Stock or any other securities unless such securities were first registered with
the SEC or exempt from such registration. This injunction stemmed from the
disposition of shares, between 1963 and 1968, by two of the Company's
incorporators without registration under the Securities Act or exemption
therefrom. The Company believes that this injunction will not have an effect on
this Offering as this Offering is being made in compliance with the terms of the
Securities Act.
Litigation
The Company is involved from time to time in litigation incidental to
its business. Such litigation can be expensive and time consuming to prosecute
or defend and could have the effect of causing the Company's customers to delay
or cancel purchase orders until such lawsuits are resolved. Although the Company
believes that none of its pending litigation matters, individually or in the
aggregate, will have a material adverse effect on the Company's operating
results or financial condition, there can be no assurance of this.
Authorization and Discretionary Issuance of Preferred Stock
The Company's Certificate of Incorporation authorizes the issuance of
"blank check" Preferred Stock with such designations, rights and preferences as
may be determined from time to time by the Board of Directors. Accordingly, the
Board of Directors is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
the Company's Common Stock. In the event of issuance, the Preferred Stock could
be utilized, under certain circumstances, as a method of discouraging, delaying
or preventing a change in control of the Company. Although the Company has no
present intention to issue any additional shares of its Preferred Stock, there
can be no assurance that the Company will not do so in the future.
Broad Discretion in Application of Proceeds
The Company intends to use all of the net proceeds for working capital
and other general corporate purposes. Accordingly, the Company will have broad
discretion as to the application of such proceeds. See "Use of Proceeds."
Limited Transferability of Units; Lack of Trading Market
Purchasers of the Units offered hereby must be aware of the long-term
nature of their investment and be able to bear the economic risks of their
investment for an indefinite period of time. No trading market exists for the
Units being offered hereby and such Units have not been registered under the
Securities Act or the securities laws of any state in reliance upon exemptions
for private offerings and are considered "restricted securities" under the
Securities Act and
Page 33 of 58 Pages
applicable state securities laws or are exempt from such registration
requirements and will bear legends to that effect. The right of any purchaser to
sell, transfer, pledge or otherwise dispose of the Shares will be limited by the
Securities Act and state securities laws and the regulations promulgated
thereunder. Consequently, a holder of Units may be not be able to liquidate
their investment. Moreover, there can be no assurance that any registration
statement covering such securities will become effective.
Arbitrary Offering Price of Units
The offering price of the Units has been determined by the Company
and does not bear any relationship to the Company's assets, book value,
potential earnings or any other recognized criteria of value. There can be no
assurance that investors in this Offering will ever realize a profit.
USE OF PROCEEDS
The Company estimates that the net proceeds of this Offering, after
deducting expenses, will be approximately $450,000 if the minimum number of
Units are sold and $3,500,000 if the maximum number of Units are sold. The
Company intends to use the net proceeds of this Offering for working capital and
general corporate purposes.
The Company anticipates, based on currently proposed plans and
assumptions relating to its operations, that the proceeds of this Offering
together with projected cash flow from operations, will provide sufficient
working capital to meet the Company's needs for the next 3 to 12 months
(depending on the number of Units sold). In the event that the Company's plans
change or its assumptions change or prove to be inaccurate or cash flow proves
to be insufficient to fund the Company's operations (due to unanticipated
expenses, delays, problems, difficulties or otherwise), the Company would be
required to seek additional financing sooner than anticipated. The Company has
no current arrangements with respect to, or sources of, additional financing,
and it is not anticipated that existing stockholders will provide any portion of
the Company's future financing requirements. There can be no assurance that the
Company will achieve cash flow from operations sufficient to satisfy its working
capital requirements, or at all, or that additional financing will be available
to the Company on commercially reasonable terms, or at all.
The amount of the net proceeds that will be invested in particular
areas of the Company's business from working capital will depend upon future
economic conditions and business opportunities. To the extent that the Company
continues to incur losses from operations, such losses will be funded from the
Company's working capital, including the net process of this Offering. In such
event, the amount available for use in the expansion of these various aspects of
the Company's business will be reduced by amounts expended in the course of
day-to-day operations.
The Company may determine, depending upon the opportunities available
to it, to seek additional debt or equity financing to fund the cost of
continuing expansion. To the extent that
Page 34 of 58 Pages
the Company finances such expansion with a combination of cash and equity
securities, any such issuance of equity securities would result in dilution to
the interest of the company's stockholders. Additionally, to the extent that the
Company incurs indebtedness or issues debt securities in connection with such
expansion, the Company will be subject to risks associated with incurring
substantial indebtedness, including the risks that interest rates may fluctuate
and cash flow may be insufficient to pay principal and interest on any such
indebtedness.
Pending application of the proceeds from the Offering in the manner
described above, the Company may make temporary investment of such funds in
certificates of deposits, U.S. Government obligations of similar minimum risk
investment.
Page 35 of 58 Pages
EXHIBIT D
---------
REGISTRATION RIGHTS
-------------------
1. Certain Definitions. Capitalized terms used and not defined
-------------------
herein shall have the meanings ascribed to them in the Subscription Agreement
(the "Agreement"). As used in this Exhibit, the following terms shall have the
following respective meanings:
"Registrable Shares" shall mean (i) any Common Stock of the Company
issued pursuant to the Agreement or issuable in respect of the Warrants, and
(ii) or upon any stock split, stock dividend, recapitalization or similar event;
provided, however, that Registrable Shares or other securities shall no longer
be treated as Registrable Shares if (A) they have been sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction, (B) they have been sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act so that
all transfer restrictions and restrictive legends with respect thereto are
removed upon consummation of such sale or (C) all such Registrable Shares are
available for sale under the Securities Act (including Rule 144(k)), in the
opinion of counsel to the Company, without compliance with the registration and
prospectus delivery requirements of the Securities Act and without compliance
with the volume and manner of sale restrictions of Rule 144, so that all
transfer restrictions and restrictive legends with respect thereto may be
removed upon the consummation of such sale.
The terms "register", "registered" and "registration" shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expense incurred by the
Company, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, reasonable fees and disbursements (not to exceed $20,000) of
one counsel for all the selling holders of Registrable Shares for a limited "due
diligence" examination of the Company, and the reasonable expenses of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in any
event by the Company, and excluding all underwriting discounts and selling
commissions applicable to the sale of the Registrable Shares).
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Shares and all fees and
disbursements of one counsel for the selling holders of Registrable Shares
(other than the fees disbursements of such counsel included in Registration
Expenses).
2. Incidental Registration Under Securities Act of 1933.
----------------------------------------------------
(a) The Company agrees that if, at any time and, from time to time
(during the date of this Agreement and ending on the second anniversary date of
this Agreement), the Board of
Page 36 of 58 Pages
Directors of the Company shall authorize the filing of a registration statement
other than a registration statement on Form S-4 or S-8 (any such registration
statement being sometimes hereinafter called a "Company Initiated Registration
Statement") under the Act in connection with the proposed offer of any of its
securities by it or any of its shareholders, the Company will (i) promptly
notify the Subscribers and all of their permitted transferees, if any, that such
Company Initiated Registration Statement will be filed and that the Registrable
Shares which are then held, and/or which may be acquired upon the exercise of
the Warrants, by the Subscribers, or their permitted transferees, and such
Subscribers, or their permitted transferees, will be included in such Company
Initiated Registration Statement at the Subscribers', or their permitted
transferees' request, (ii) cause such Company Initiated Registration Statement
to cover all Registrable Shares which it has been so requested to include, (iii)
cause such Company Initiated Registration Statement to become effective as soon
as practicable and to remain effective and current for a minimum period of one
hundred eighty (180) days, and (iv) take all other action necessary under any
federal or state law or regulation of any governmental authority to permit all
Registrable Shares which it has been so requested to include in such Company
Initiated Registration Statement to be sold or otherwise disposed of and will
maintain such compliance with each such federal and state law and regulation of
any governmental authority for the period such registration statement remains
effective (such period being a minimum of one hundred eighty (180) days). If the
registration of which the Company gives notice is a firmly underwritten
registered public offering, the Company shall so advise the Subscribers, and
their permitted transferees, as part of the written notice given pursuant to
this Section 2(a). In such event, notwithstanding any other provision of this
Section 2(a), if the underwriter of such public offering determines in its
reasonable discretion that marketing factors require the limitation of the
number of shares to be underwritten, the underwriter may (subject to the
allocation priority set forth below) exclude some or all of the Registrable
Shares from such registration and underwriting. The Company shall so advise all
Subscribers, and their permitted transferees, shall allocate the securities to
be included in such offering in the following manner. The Company may exclude
shares of all Subscribers, and their permitted transferees, of registration
rights without any exclusion of shares offered by the Company, provided that no
securities other than securities offered by the Company are included in such
registration. In the event of any exclusion of shares held by holders of
registration rights, the securities of the Company (other than the Registrable
Shares) issued subsequent the date hereof (whether or not such securities are
entitled to registration rights) shall be excluded first to the extent required
by such limitation and, if a limitation of the number of shares is still
required, the number of shares that may be included in the registration and
underwriting shall be allocated among all Subscribers, and their permitted
transferees, and all holders of shares of Common Stock (or securities that are
convertible into or exchangeable for shares of Common Stock) that were issued
and outstanding prior to the date hereof and which shares of Common Stock
(including shares of Common Stock issuable upon conversion or exchange of such
convertible securities) the Company is contractually obligated or otherwise
desires, at the request of such holders, to include in such registration ("Prior
Shares") in proportion, as nearly as practicable, to the respective number of
Registrable Shares held or purchasable by such Subscribers, and their permitted
transferees, and the respective number of Prior Shares, each determined at the
time of the notice referred to in this Section 2(a).
(b) Whenever the Company is required pursuant to the provisions of
this Section 2 to include Registrable Shares in a registration statement, the
Company shall (i) furnish each
Page 37 of 58 Pages
Subscribers of any such Registrable Shares and each underwriter of such
Registrable Shares with such copies of the prospectus, including the preliminary
prospects, conforming to the Act (and such other documents as each such
Subscribers or each such underwriter may reasonably request) in order to
facilitate the sale or distribution of the Registrable Shares, (ii) use its best
efforts to register or qualify such Registrable Shares under the blue sky laws
(to the extent applicable) of such jurisdiction or jurisdictions as the
Subscribers, or their permitted transferees, of any such Registrable Shares and
each underwriter of Registrable Shares being sold by Subscribers, or their
permitted transferees, shall reasonably request, and (iii) take such other
actions as may be reasonably necessary or advisable to enable such Subscribers,
or their permitted transferees, and such underwriters to consummate the sale or
distribution in such jurisdiction or jurisdictions in which such Subscribers, or
their permitted transferees, shall have reasonably requested that the
Registrable Shares be sold.
(c) The parties hereto, hereby acknowledge and agree that the
registration rights granted to the Subscribers pursuant to Section 2 of this
Agreement are subordinate to the "piggyback" registration rights of Third World
Investments, Ltd. ("Third World") granted by the Company to Third World pursuant
to that certain Warrant for the Purchase of Shares of Common Stock, issued on
May 21, 1996, for 500,000 shares, by the Company to Third World.
3. Expenses of Registration. The Company shall bear all
------------------------
Registration Expenses incurred in connection with any registration,
qualification or compliance of the Registrable Shares pursuant to this
Agreement. All Selling Expenses shall be borne by the holders of the securities
so registered pro rata on the basis of the number of their shares so registered.
4. Registration Procedures. Pursuant to this Agreement, the Company
-----------------------
will keep each holder of Registrable Shares advised in writing as to the
initiation of a registration under this Agreement and as to the completion
thereof. At its expense, the Company will:
(a) Use reasonable efforts to keep such registration effective
for a period of one hundred eighty (180) days or until the holder or holders of
Registrable Shares have completed the distribution described in the registration
statement relating thereto or until the securities registered cease to be
Registrable Shares, whichever first occurs;
(b) Prepare and file with the Commission 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 the Securities Act with respect to the disposition of securities
covered by such registration statement; and
(c) Furnish such number of prospectuses and other documents
incidental thereto, including any amendment of or supplement to the prospectus,
as a holder of Registrable Shares from time to time may reasonably request.
Page 38 of 58 Pages
5. Indemnification.
---------------
(a) The Company will indemnify each holder of Registrable
Shares, each of its officers, directors and each person controlling such holder
of Registrable Shares, with respect to which registration has been effected
pursuant to this Agreement, and each underwriter, if any, and each person who
controls any underwriter, and their respective counsel against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, or other
document incident to any such registration, or based on any 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 any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company in connection with any such registration and will reimburse each
such holder of Registrable Shares, each of its officers, directors and partners,
and each person controlling such holder of Registrable Shares, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses as they are reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided, however, that the indemnity contained in this Section 5(a) shall not
apply to amounts paid in settlement of any such claim, loss, damage, liability
or action if such settlement is effected without the consent of the Company; and
provided further that the Company shall not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such holder of Registrable Shares or underwriter and
stated to be specifically for use therein. The foregoing indemnity agreement is
further subject to the condition that insofar as it relates to any untrue
statement, alleged untrue statement, omission or alleged omission made in a
preliminary prospectus, such indemnity agreement shall not inure to the benefit
of the foregoing indemnified parties if copies of a final prospectus correcting
the misstatement, or alleged misstatement, omission or alleged omission upon
which such loss, liability, claim or damage is based is timely delivered to such
indemnified party and a copy thereof was not furnished to the person asserting
the loss, liability, claim or damage.
(b) Each holder of Registrable Shares, severally and not
jointly, will, if Registrable Shares held by it are included in the securities
as to which such registration is being effected, indemnify the Company, each of
its directors and officers and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of the Securities Act and the
rules and regulations thereunder, each other such holder of Registrable Shares
and each of its officers, directors and partners, and each person controlling
such holder of Registrable Shares, and their respective counsel against all
claims, losses, damages and liabilities (or actions, proceedings or settlements
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact relating to such holder contained in any
such registration statement, prospectus, offering circular or other document, or
any omission (or alleged omission) to state therein a material fact required to
be stated therein relating to such holder or necessary to make the statements
therein relating to such holder not misleading or any violation by such holder
of any rule or regulation promulgated under the Securities Act applicable to
such holder and
Page 39 of 58 Pages
relating to action or inaction required of such holder in connection with any
such registration; and will reimburse the Company, such holders of Registrable
Shares, directors, officers, partners, persons, underwriters or control persons
for any legal or any other expense reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) relating to such
holder is made in such registration statement, prospectus, offering circular or
other document in reliance upon and in conformity with written information
furnished to the Company by such holder of Registrable Shares and stated to be
specifically for use therein; provided, however, that such indemnification
obligations shall not apply if the Company modifies or changes to a material
extent written information furnished by such holder; provided, further, that the
obligation of any holder of Registrable Shares to indemnify the Company under
the provisions of this Section 5(b) shall be limited to the product of the
number of Registrable Shares being sold by the selling holder and the market
price of the Common Stock on the date of the sale to the public of these
Registrable Shares.
(c) Each party entitled to indemnification under this Section 5
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld or delayed), and the Indemnified Party may participate
in such defense at such Indemnified Party's expense. No Indemnifying Party, in
the defense of any such claim or litigation, shall except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
6. Information By Holder of Registrable Shares. Each holder of
-------------------------------------------
Registrable Shares shall furnish to the Company such information regarding such
holder of Registrable Shares and the distribution proposed by such holder of
Registrable Shares as the Company may reasonably request in writing and as shall
be reasonably required in connection with any registration referred to in this
Agreement.
Page 40 of 58 Pages
Golf-Technology Holding , Inc.
00000 Xxxxxxxx Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
August 28, 1997
To the Recipients of the
Subscription Agreement
Relating to the Offering
of Units of Golf-Technology Holding , Inc. (the "Company")
Re: Amendment No.1 to the Subscription Agreement dated August 20, 1997 - Risk
Factors.
-------------------------------------------------------------------------
Dear Recipient:
Please be advised that on August 22, 1997, the NASDAQ Stock Market,
Inc. ("Nasdaq") announced that the Securities and Exchange Commission approved
certain changes to the rules governing The Nasdaq SmallCap Market. Certain
shares the Company's Common Stock trade on the Nasdaq SmallCap Market, as set
forth in Part II of the Company's December 31, 1996 Form 10-KSB which is one of
the "Public Documents" attached to the Subscription Agreement as Exhibit C.
---------
As part of those rule changes, various new Nasdaq corporate
governance requirements will now apply to the Company in common with all other
companies listed on the Nasdaq SmallCap Market. One of those new requirements
would mandate that this Offering be approved by the Company's shareholders.
Under the provisions of the Company's By-Laws, the Offering would need to be
approved by the holders of 50% of the Company's voting stock.. The Company is
presently preparing a proxy to be submitted to the Company's shareholders.
Although the Company anticipates that the Offering is in the best
interests of the Company and will be approved by the shareholders, there can be
no assurance that such approval will be obtained. If such approval by the
shareholders is not obtained, such failure may have an adverse affect upon the
market for the Company's shares, including the possible removal of the listing
of the Company's shares from the Nasdaq SmallCap Market.
In all other respects, the Subscription Agreement is not amended,
modified or changed in any way.
I have read and understand this amendment GOLF-TECHNOLOGY HOLDING, INC.
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------- ---------------------------------
Subscriber Xxxxxx X. Xxxxxxxx
President
Page 41 of 58 Pages
Golf-Technology Holding , Inc.
00000 Xxxxxxxx Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
September 19, 1997
To the Recipients of the
Subscription Agreement
Relating to the Offering
of Units of Golf Technology Holding, Inc. (the "Company")
Re: Amendment No. 2 to the Subscription Agreement dated August 20, 1997 -
Risk Factors and Registration Rights.
Dear Recipient:
As we had previously advised you by letter dated August 29, 1997,
Nasdaq had recently adopted certain rule changes applicable to the Company which
would require the approval of the Offering by the Company's shareholders. We
have been further advised by the Nasdaq Office of the General Counsel, however,
that the final version these rule changes will not take effect until six (6)
months after their adoption, or January 22, 1998. Therefore, assuming that the
Offering is completed prior to January 22, 1998 (which is a date after the
Termination Date of the Offering), then no approval by the Company's
shareholders would be required.
Also, due to an oversight, we regret to inform you that certain
demand registration rights for the shares of Common Stock and Warrants
comprising each Unit were unintentionally omitted from the statement of
Registration Rights that is attached to the Subscription Agreement as Exhibit
"D". Please be advised, therefore, that the statement of Registration Rights is
amended so that the following is added to end of Paragraph 2(a) thereof so as to
correct this omission and add those demand registration rights:
In addition to the filing of a Company Initiated Registration
Statement, for a period of five (5) years from the date upon which the Company
issues shares of Registrable Shares pursuant to the Agreement, on one occasion,
upon the written demand or demands of the holders representing, in the
aggregate, a majority of the Registrable Shares so issued, to promptly, and as
soon as is practicable, register the Registrable Shares at the sole cost and
expense of the Company (such registration statement being hereinafter called a
"Holder Initiated Registration Statement"). Upon receipt of such written demand
from a majority of said holders, the Company shall (i) cause such Holder
Initiated Registration Statement to be filed to cover all Registrable Shares
which are the subject of and included within the demand, and (ii) cause such
Holder Initiated Registration Statement to become effective as soon as is
practicable and to remain effective and current for a period of one hundred
eighty (180) days, and (iii) take all other action necessary under federal or
state law or regulation of any governmental body to permit all Registrable
Shares to be covered by the Holder Initiated Registration Statement to be sold
or otherwise disposed of and will maintain such compliance with each such
federal and state law
Page 42 of 58 Pages
To the Recipients of the
Subscription Agreement
Relating to the Offering
of Units of Golf Technology Holding, Inc.
September 19, 1997
Page 2
and regulation of any governmental body for the period that such
registration statement remains effective (such period being a minimum of one
hundred eighty (180) days).
In all other respects, the Subscription Agreement is not amended,
modified or changed in any way.
Very truly yours,
GOLF TECHNOLOGY HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxx
President
Page 43 of 58 Pages
