SUBSCRIPTION AGREEMENT
POWERLINX, INC.
Subscription Agreement for the Purchase of Units
The undersigned hereby subscribes for units (the "Units") of Powerlinx,
Inc., a Nevada corporation (the "Company"). The Company is offering up to
625,000 units (the "Units") for sale to accredited investors at a price of $8.00
per Unit (the "Offering") on a "best efforts" basis with a $5,000,000 maximum
offering. The minimum investment amount is $20,000 or 2,500 Units. Each Unit
consists of (i) 8 shares of Series A Convertible Preferred Stock ("Preferred
Shares") (ii) 2 shares of the Company's common stock, $0.01 par value per share
(the "Common Shares"); and (iii) 3 common stock purchase warrants. Each warrant
is exercisable until May 15, 2006, at a price of $0.50 (the "Warrants"). The
Preferred Shares, Common Shares and Warrants are collectively referred to as
"Securities" or "Units".
The Common Stock included in the Units shall be registered for public sale
with the Securities and Exchange Commission (the "Commission"), in accordance
with the terms set forth in the registration rights agreement (the "Registration
Agreement"), entered into between the subscribers of this offering (the
"Subscribers") and the Company of even date.
The undersigned agrees to pay the aggregate subscription price set forth on
page 7 or 8, as applicable, for the Unit(s) being purchased hereunder. The
entire purchase price is due and payable upon the submission of this
Subscription Agreement, and shall be payable by wire transfer or check subject
to collection, to the order of Powerlinx, Inc.
The Company shall have the right to reject this subscription in whole or in
part.
The undersigned acknowledges that the Units being purchased hereunder will
not be registered under the Securities Act of 1933 (the "Act"), or the
securities laws of any state, that absent an exemption from registration
contained in those laws, the Units, Preferred Shares, Common Shares and Warrants
require registration, and that the Company's reliance upon such exemption is
based upon the undersigned's representations, warranties, and agreements
contained in this Subscription Agreement, the Registration Rights Agreement and
the accompanying Confidential Prospective Questionnaire (collectively, the
"Subscription Documents").
1. The undersigned represents, warrants, and agrees as follows:
a. The undersigned agrees that this Subscription Agreement is and shall
be irrevocable.
b. The undersigned has carefully read the Private Placement Memorandum
and Exhibits thereto (the "Memorandum") and this Subscription
Agreement
(collectively, the "Disclosure Materials"), all of which the
undersigned acknowledges have been provided to the undersigned. The
undersigned has been given the opportunity to ask questions of, and
receive answers from, the Company concerning the terms and conditions
of this Offering and the Disclosure Materials and to obtain such
additional information, to the extent the Company possesses such
information or can acquire it without unreasonable effort or expense,
necessary to verify the accuracy of same as the undersigned reasonably
desires in order to evaluate the investment. The undersigned
understands the Disclosure Materials, and the undersigned has had the
opportunity to discuss any questions regarding any of the Disclosure
Materials with his counsel or other advisor. Notwithstanding the
foregoing, the only information upon which the undersigned has relied
is that set forth in the Disclosure Materials. The undersigned has
received no representations or warranties from the Company, its
employees, agents or attorneys in making this investment decision
other than as set forth in the Disclosure Materials. The undersigned
does not desire to receive any further information.
c. The undersigned is aware that the purchase of the Units is a
speculative investment involving a high degree of risk, that there is
no guarantee that the undersigned will realize any gain from this
investment, and that the undersigned could lose the total amount of
this investment. The undersigned has specifically reviewed the section
in the Disclosure Materials entitled "Risk Factors."
d. The undersigned understands that no federal or state agency has made
any finding or determination regarding the fairness of this Private
Placement Offering of the Units for investment, or any recommendation
or endorsement of this Private Placement of the Units.
e. The undersigned is purchasing the Units for the undersigned's own
account, with the intention of holding the Units with no present
intention of dividing or allowing others to participate in this
investment or of reselling or otherwise participating, directly or
indirectly, in a distribution of the Units or the securities
underlying the Units, and shall not make any sale, transfer, or pledge
thereof without registration under the Act and any applicable
securities laws of any state or unless an exemption from registration
is available under those laws.
f. The undersigned represents that if an individual, he has adequate
means of providing for his or her current needs and personal and
family contingencies and has no need for liquidity in this investment
in the Units. The undersigned has no reason to anticipate any material
change in his or her personal financial condition for the foreseeable
future.
g. The undersigned is financially able to bear the economic risk of this
investment, including the ability to hold the Units indefinitely, or
to afford a complete loss of his or her investment in the Units.
h. The undersigned represents that the undersigned's overall commitment
to investments which are not readily marketable is not
disproportionate to the undersigned's net worth, and the undersigned's
investment in the Units will not cause such overall commitment to
become excessive. The undersigned understands that the statutory basis
on which
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the Units are being sold to the undersigned and others would not be
available if the undersigned's present intention were to hold the
Units for a fixed period or until the occurrence of a certain event.
The undersigned realizes that in the view of the Securities and
Exchange Commission (the "Commission"), a purchase now with a present
intent to resell by reason of a foreseeable specific contingency or
any anticipated change in the market value, or in the condition of the
Company, or that of the industry in which the business of the Company
is engaged or in connection with a contemplated liquidation, or
settlement of any loan obtained by the undersigned for the acquisition
of the Units, and for which such Units may be pledged as security or
as donations to religious or charitable institutions for the purpose
of securing a deduction on an income tax return, would, in fact,
represent a purchase with an intent inconsistent with the
undersigned's representations to the Company, and the Commission would
then regard such sale as a sale for which the exemption from
registration is not available. The undersigned will not pledge,
transfer or assign this Subscription Agreement.
i. The undersigned represents that the funds provided for this investment
are either separate property of the undersigned, community property
over which the undersigned has the right of control, or are otherwise
funds as to which the undersigned has the sole right of management.
The undersigned is purchasing the Units with the funds of the
undersigned and not with the funds of any other person, firm, or
entity and is acquiring the Units for the undersigned's account. No
person other than the undersigned has any beneficial interest in the
Units being purchased hereunder.
j. FOR PARTNERSHIPS, CORPORATIONS, TRUSTS, OR OTHER ENTITIES ONLY: If the
undersigned is a partnership, corporation, trust or other entity, (i)
the undersigned has enclosed with this Subscription Agreement
appropriate evidence of the authority of the individual executing this
Subscription Agreement to act on its behalf (e.g., if a trust, a
certified copy of the trust agreement; if a corporation, a certified
corporate resolution authorizing the signature and a certified copy of
the articles of incorporation; or if a partnership, a certified copy
of the partnership agreement), (ii) the undersigned represents and
warrants that it was not organized or reorganized for the specific
purpose of acquiring the Units, and (iii) the undersigned has the full
power of such entity to make the representations and warranties made
herein on its behalf, and (iv) this investment in the Company has been
affirmatively authorized, if required, by the governing board of such
entity and is not prohibited by the governing documents of the entity.
k. The address shown under the undersigned's signature at the end of this
Subscription Agreement is the undersigned's principal residence if he
or she is an individual, or its principal business address if it is a
corporation or other entity.
l. The undersigned has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of an investment in the Units.
m. The undersigned acknowledges that the certificates for the securities
comprising the Units which the undersigned will receive will contain a
legend substantially as follows:
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THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
TRANSFERRED, MADE SUBJECT TO A SECURITY INTEREST, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AS AMENDED, OR EVIDENCE
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT.
The undersigned further acknowledges that a stop transfer order will be
placed upon the certificates for the securities in accordance with the Act. The
undersigned further acknowledges that the Company is under no obligation to aid
the undersigned in obtaining any exemption from registration requirements.
2. The undersigned expressly acknowledges and agrees that the Company is
relying upon the undersigned's representations contained in the Subscription
Documents.
3. The Company has been duly and validly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Nevada. The Company represents that it has all requisite power and authority,
and all necessary authorizations, approvals and orders required as of the date
hereof to own its properties and conduct its business as described in the
Disclosure Materials and to enter into this Subscription Agreement and to be
bound by the provisions and conditions hereof.
4. Except as otherwise specifically provided for hereunder, no party shall
be deemed to have waived any of his or its rights hereunder or under any other
agreement, instrument or papers signed by any of them with respect to the
subject matter hereof unless such waiver is in writing and signed by the party
waiving said right. Except as otherwise specifically provided for hereunder, no
delay or omission by any party in exercising any right with respect to the
subject matter hereof shall operate as a waiver of such right or of any such
other right. A waiver on any one occasion with respect to the subject matter
hereof shall not be construed as a bar to, or waiver of, any right or remedy on
any future occasion. All rights and remedies with respect to the subject matter
hereof, whether evidenced hereby or by any other agreement, instrument, or
paper, will be cumulative, and may be exercised separately or concurrently.
5. The parties have not made any representations or warranties with respect
to the subject matter hereof not set forth herein, and this Subscription
Agreement, together with any instruments or documents executed simultaneously
herewith in connection with the Private Placement Offering, constitutes the
entire agreement between them with respect to the subject matter hereof. All
understandings and agreements heretofore had between the parties with respect
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to the subject matter hereof are merged in this Subscription Agreement and any
such instruments and documents, which alone fully and completely expresses their
agreement.
6. This Subscription Agreement may not be changed, modified, extended,
terminated or discharged orally, but only by an agreement in writing, which is
signed by all of the parties to this Subscription Agreement.
7. The parties agree to execute any and all such other further instruments
and documents, and to take any and all such further actions reasonably required
to effectuate this Subscription Agreement and the intent and purposes hereof.
8. This Subscription Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the undersigned hereby
consents to the jurisdiction of the courts of the State of New York and the
United States District Courts situated therein.
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ALL SUBSCRIBERS MUST COMPLETE THIS PAGE
1. __ Individual
2. __ Joint Tenants with Right of Survivorship
3. __ Husband and Wife (Tenants by the Entirety)
4. __ Community Property
5. __ Tenants in Common
6. __ Corporation/Partnership
7. __ XXX
8. __ Trust
Date Opened____________
9. __ As a Custodian for_________________
Under the Uniform Gift
to Minors Act of the State
10. __ Married with Separate
Property
11. __ Xxxxx
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EXECUTION BY SUBSCRIBER WHO IS A NATURAL PERSON
Units x $8 = $ ($20,000 minimum)
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Exact Name in Which Title is to be Held
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(Signature)
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Name (Please Print)
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Residence: Number and Street
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City State Zip Code
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Social Security Number
Accepted this day of , 2003, on behalf of Powerlinx, Inc.
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By:
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Xxxxxx X. Xxxxxxxxxx III
Chairman & CEO
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EXECUTION BY SUBSCRIBER WHO IS A CORPORATION,
PARTNERSHIP, TRUST, ETC.
Units x $8 = $ ($20,000 minimum)
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Exact Name in Which Title is to be Held
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(Signature)
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Name (Please Print)
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Residence: Number and Street
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City State Zip Code
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Tax Identification Number
Accepted this day of , 2003, on behalf of Powerlinx, Inc.
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By:
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Xxxxxx X. Xxxxxxxxxx III,
Chairman & CEO
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