1 (EX 1.3)
SUBSCRIPTION AGREEMENT
FUTURE EDUCATIONAL SYSTEMS, INC.
1801 Ave. of the Stars, 0xx Xxxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
1. The Offering
------------
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.
2. General Conditions and Restrictions
-----------------------------------
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
------------
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 to Subscriber
----------------------
-1-
2 (EX 1.3)
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
------------
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;
-2-
3 (EX 1.3)
(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;
(g) 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;
(h) 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
---------------
Subscriber acknowledges that Subscriber understands the meaning and
legal consequences of the representations, warranties and
acknowledgments made in Paragraph 6 and elsewhere in this
-3-
4 (EX 1.3)
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
----------
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
-------------
(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.
-4-
5 (EX 1.3)
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:
------------------------------------------------------
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
-5-
