1 (Ex. 10.5)
SUBSCRIPTION AGREEMENT
FUTURE EDUCATIONAL SYSTEMS, INC.
1801 Ave. of the Stars, 0xx Xxxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
The Offering
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FUTURE EDUCATIONAL SYSTEMS, INC., a Nevada corporation ("FESI" or
the "Company"), agrees to sell to subscriber its common stock at a
purchase price of $0.10 per share. The shares acquired pursuant to this
transaction are being acquired under the auspices of Regulation S of the
Securities Act of 1933 (the "Act"), and the certificates representing
these shares will bear a restrictive legend preventing resale without
compliance with the safe harbor regulations of the Act.
General Conditions and Restrictions
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The Securities have not been registered under the Securities Act, the
Company has no intention of registering the Securities under such Act and
Subscribers will have no "piggy back" or "demand" registration rights
with respect to the Securities. Without such registration or an
exemption therefrom, Subscriber understands that he will be unable to,
and may not, offer or sell the Securities within the US or to, or for the
account or benefit of, any US persons UNTIL ONE YEAR AFTER THE CLOSING OF
THIS OFFERING. Furthermore, Subscriber represents that he is not
currently nor has he been in the recent past, intending to resell these
Securities in the United States to persons or entities already identified
as prospective purchasers. Subscriber acknowledges that the Company has
urged Subscriber to consult with its own advisors concerning the
restrictions on his ability to sell the Securities.
3. Risk Factors
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THE UNDERSIGNED SUBSCRIBER (THE "UNDERSIGNED" OR "SUBSCRIBER") HEREBY
ACKNOWLEDGES ITS UNDERSTANDING OF THE SPECULATIVE NATURE OF THIS
INVESTMENT, THAT IT INVOLVES A HIGH DEGREE OF RISK AND THAT NO FEDERAL OR
STATE SECURITIES AGENCY HAS MADE ANY FINDING OR DETERMINATION, OR HAS
PASSED UPON, THE TERMS OR FAIRNESS OF THE OFFERING MADE HEREBY.
The Company is in the development stage, with no history of operations,
revenues or net income, and it is in need of substantial additional
capital. An investment in the Company is suitable only for investors
with substantial means who have no need for liquidity in their
investments and who can afford to suffer a total loss.
4. Company Has No Obligation under the Act to Provide Offering Material
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to Subscriber
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Page 1 of 5
2 (Ex. 10.5)
Subscriber acknowledges that under the Securities Act the Company is not
required to furnish Subscriber with any offering material in connection
with this offering and that it is Subscriber's sole and active
responsibility to evaluate the Company and an investment in the
Securities. Accordingly, to the extent Subscriber has deemed it
necessary, appropriate or advisable, Subscriber has directly, or
indirectly, through its agents and representatives, performed "due
diligence" regarding the Company, its financial condition and results of
operations, capitalization, authorized and outstanding securities and
Common Stock eligible for future sale, business plan of operation,
products, sales, marketing, competition, prospects, pending litigation,
applicable government regulations, properties, management, executive
compensation, transactions with affiliates, principal shareholders and
their respective beneficial ownership of the Company's Common Stock, the
proposed grants of stock options, information regarding the resale
restrictions on the Securities, the market for the Company's Common Stock
and "xxxxx stock" rules to which the Securities are now subject and will
remain subject unless the Common Stock is listed on NASDAQ, the immediate
and substantial dilution in the offering price of Securities compared to
the net tangible book value per share of Common Stock after the offering,
and the other risks relating to the Company and an investment in the
Securities. Other than any documentation which has been expressly
requested by Subscriber, the Company has furnished Subscriber with no
offering materials.
5. Subscription
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The Subscriber has carefully considered, and to the extent Subscriber
believes it appropriate, has discussed with Subscriber's legal, tax and
financial advisors, the suitability of making an investment in the
Company on the terms set forth herein. After due consideration, and
subject to the terms and conditions hereof, the Subscriber hereby
irrevocably subscribes for the dollar amount of Securities set forth on
the signature page and has paid the subscription price therefor. The
Subscriber acknowledges that the Company may accept or reject this
subscription in whole or in part, in its sole and absolute discretion.
6. Representations and Warranties of Subscriber
--------------------------------------------
In order to induce the Company to accept this subscription, Subscriber
hereby represents and warrants to, and covenants and agrees with the
Company as follows:
(a) The Subscriber is not a "US person" under Rule 902(o) of Regulation
S under the Securities Act, and is not acquiring the Securities for
the account or benefit of any US person; and Subscriber, if a
natural person, is over 21 years of age;
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3 (Ex. 10.5)
(b) Subscriber (i) has adequate means of providing for his current needs
and possible personal contingencies, and Subscriber has no need for
liquidity of his investment, (ii) can bear the economic risk of
losing the entire investment, (iii) has such knowledge and
experience in financial and business matters that Subscriber is
capable of evaluating the relative risks and merits of investment in
the securities, (iv) has had an opportunity to ask questions of and
receive answers from the Company's senior management concerning the
Company and its business prospects, affairs and risks, and (v) all
documents, books and records of the Company requested, if any, by
Subscriber pertaining to the investment in the Securities have been
made available for inspection or delivery to Subscriber and
Subscriber has read or reviewed, and is familiar with and
understands the same;
(c) SUBSCRIBER RECOGNIZES, UNDERSTANDS AND ACKNOWLEDGES THAT THERE ARE
SUBSTANTIAL RESTRICTIONS OF THE TRANSFERABILITY OF THE SECURITIES,
AND SUBSCRIBER MAY HAVE TO HOLD THE SECURITIES INDEFINITELY, AND MAY
NOT BE ABLE TO LIQUIDATE THE INVESTMENT IN THE COMPANY WHEN
SUBSCRIBER WISHES TO DO SO, IF AT ALL, BECAUSE, AMONG OTHER THINGS,
THERE IS A LIMITED TRADING MARKET FOR ITS COMMON STOCK. IN
ADDITION, PURSUANT TO REGULATION "S" UNDER THE SECURITIES ACT,
SUBSCRIBER GENERALLY IS PROHIBITED FROM OFFERING OR SELLING THE
SECURITIES WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF ANY U.S. PERSONS, FOR AT LEAST ONE YEAR FROM THE CLOSING
OF THIS OFFERING;
(d) The Securities are being acquired solely for Subscriber's own
benefit and account;
(e) Subscriber will not sell or otherwise transfer the Securities (i)
without registration thereof under the Securities Act and applicable
state securities laws or a written opinion of counsel (which counsel
and opinion [in form and substance] shall be reasonably satisfactory
to the Company) to the effect that the proposed sale or transfer is
exempt from the registration requirements of the Act and all
applicable State Securities laws, or (ii) in violation of any law;
(f) Subscriber has full power and authority to execute and deliver this
Subscription Agreement and to perform the obligations hereunder;
this Subscription Agreement is Subscriber's legally binding
obligation in accordance with its terms;
(g) Subscriber has carefully read this Subscription Agreement and, to
the extent Subscriber believed necessary, has discussed with counsel
the representations, warranties and agreements which Subscriber is
making herein and the limitations upon resale of the Securities.
7. Indemnification
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Subscriber acknowledges that Subscriber understands the meaning and legal
consequences of the representations, warranties and acknowledgments made
in Paragraph 6 and elsewhere in this
Page 3 of 5
4 (Ex. 10.5)
Subscription Agreement, and hereby agrees to indemnify and hold harmless the
Company, its officers, agents and representatives, from and against any and
all loss, damage or liability due to or arising out of a breach of any
representation or warranty of Subscriber contained in this Agreement.
8. Revocation
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Subscriber agrees that Subscriber shall not cancel, terminate or revoke
this Agreement or any agreement of Subscriber made herein and that this
Agreement shall survive the dissolution, termination, death or disability
of Subscriber.
9. Miscellaneous
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(a) All notices or other communications given or made hereunder shall be
in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to
Subscriber at the address set forth below and to the Company at the
address set forth at the outset of this Agreement.
(b) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, may be amended
only by a writing executed by all parties and may not be assigned by
Subscriber.
(c) If this Agreement is executed and delivered on behalf of a
partnership, corporation or trust, the signatory hereto represents
and warrants to the Company that he has been duly authorized by
Subscriber to execute and deliver in the name and on behalf of
Subscriber this Agreement and all other instruments executed and
delivered on behalf of such partnership, corporation or trust in
connection with Subscriber's investment in the company, and the
signature of such signatory is binding upon Subscriber.
(d) This Agreement contains the entire agreement of the parties
regarding the subject matter hereof and supersedes all prior
agreements relating thereto. The rights, powers and duties set
forth herein shall be binding upon the Subscriber, its, estate,
legal representatives, successors and assigns, and shall inure to
the benefit of the Company, its successors and assigns.
Page 4 of 5
5 (Ex. 10.5)
IN WITNESS whereof, the subscriber has executed this Agreement on the
date written below.
DATED: December 31, 2001
NUMBER OF SHARES SUBSCRIBED SUBSCRIPTION AMOUNT
FOR: 701,844 $70,184.39
NAMES(S) IN WHICH SECURITIES SHOULD BE REGISTERED (if Securities are to
be held by more than one owner, each tenant or other person involved
must sign this signature page and all other subscription documents
required to be signed by an individual purchaser):
(Please Print) CLAYPORT INVESTMENTS, LIMITED
PARTNERSHIPS, CORPORATIONS, TRUSTS AND OTHER ENTITIES:
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Printed Name of Subscriber
CLAYPORT INVESTMENTS, LIMITED
/SIGNATURE/
By: ___________________________________
Signature of Authorized Representative
Xxxxxxx Xxxxx
SUBSCRIPTION ACCEPTED this 31st day of December, 2001
FUTURE EDUCATIONAL SYSTEMS, INC.
/SIGNATURE/
By:_____________________________
Xxxxxxx Xxxxxx
President
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