EXHIBIT 4.1
SUBSCRIPTION AGREEMENT
H.E.R.C. Products Incorporated
0000 Xxxx Xxxx Xxxxxx Xxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Subscription. I (sometimes referred to herein as the "Investor") hereby
subscribe for and agree to purchase $___________ of shares of Class A Preferred
Stock , $.01 par value ("Preferred Stock"), of H.E.R.C. Products Incorporated, a
Delaware corporation ("Company"), on the terms and conditions set forth herein.
The per share offering price is $10.00 ("Share Price") and the number of shares
of Preferred Stock being purchased by me will be calculated by dividing the
above dollar amount by the per share offering price. Xxxxxx, Xxxxxx & Xxxxxxxxx
Capital Corp. ("PHD") is acting as the exclusive placement agent for this
offering ("Placement Agent").
Description of Preferred Stock. The rights of each share of
Preferred Stock are as set forth in the Certificate of Designations which is
included as Exhibit A in the Disclosure Package given to you simultaneously with
this Agreement ("Disclosure Package").
Purchase.
I hereby tender (i) the purchase price by wire transfer
to the following account ("Account") maintained by the Company's attorneys,
Xxxxxxxx Mollen & Xxxxxx:
Bankers Trust Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No.: 000000000
Attention: Xxxxxxxx Xxxxxxxxx
For further credit to: Xxxxxxxx Xxxxxx & Xxxxxx
Attorney Trust Account No. 00000000,
and (ii) two executed copies of this Subscription Agreement and one copy of the
Subscriber Questionnaire to the Placement Agent at Xxxxxx, Holden & Xxxxxxxxx
Capital Corp., 00 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xx. Xxxx Xxxxxxxx.
This offering will continue until the earlier of the
Final Closing (as defined in Section 4 hereof) or November 30, 1996, unless such
latter date is extended, without notice to the Investor, by mutual consent of
PHD and the Company to a date not later than December 15, 1996 ("Termination
Date"). Prior to the earlier of the closing, if any, with respect to my
subscription or the Termination Date, my payment for the Preferred Stock will be
held by Xxxxxxxx Mollen & Xxxxxx in the Account subject to the terms and
conditions herein. If subscriptions for at least $1,000,000 of Preferred Stock
are not received and accepted by the Company by the Termination Date, my payment
will be returned to me without interest or deduction. Upon the earlier of a
closing for my subscription or completion of the offering, I will be notified
promptly by the Company as to whether my subscription has been accepted.
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Acceptance or Rejection of Subscription.
The Company and PHD have the right to reject this subscription for
the Preferred Stock, in whole or in part for any reason and at any time prior to
a Closing (as defined in Section 4 hereof), notwithstanding prior receipt by me
of notice of acceptance of my subscription.
In the event of the rejection of this subscription, my subscription
payment will be promptly returned to me without interest or deduction and this
Subscription Agreement shall have no force or effect. In the event my
subscription is accepted and the offering is completed, the funds specified
above shall be released to the Company and the certificates representing the
Preferred Stock will be promptly delivered to me.
Closing. The initial closing of this offering may occur at any
time after the sale by the Company of Preferred Stock aggregating $1,000,000
("Initial Closing"), as determined jointly by the Company and PHD. Thereafter,
closings may occur from time to time, as determined jointly by the Company and
PHD, until Preferred Stock aggregating $1,500,000 have been sold ("Final
Closing" and, with the Initial Closing and any interim closing, a "Closing") or
the Termination Date, whichever occurs sooner. Notwithstanding the foregoing,
PHD, with the Company's consent, will be able to adjourn any Closing until the
Termination Date to enable it to continue to obtain subscriptions for additional
Preferred Stock up to the maximum number of shares of Preferred Stock being
offered by the Company in this offering. The Preferred Stock subscribed for
herein shall not be deemed issued to or owned by me until two copies of this
Subscription Agreement have been executed by me and countersigned by the Company
and a Closing with respect to such Preferred Stock has occurred.
Issuance of Securities. At each Closing, the Company will
deliver the certificates representing the Preferred Stock to me or my agent for
deposit into my personal securities account at PHD or for delivery to me. The
certificates representing the Preferred Stock and the common stock, $.01 par
value, of the Company ("Common Stock") into which the Preferred Stock is
convertible shall be legended as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT") OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT OR
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SAID ACT AND COMPLIANCE WITHIN ANY APPLICABLE STATE SECURITIES
LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
After the Registration Statement, referenced in Section 6
hereinbelow, is declared effective by the Securities and Exchange Commission,
the Investor may deliver to the Company the certificate representing the Common
Stock of the Company issued to such Investor upon conversion of the Preferred
Stock and the Company will, within three days after receipt by the Company of
the foregoing, issue a new certificate representing and in exchange for the
aforementioned certificate, which new certificate shall be legended as follows:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES MAY BE SOLD PURSUANT TO THE REGISTRATION STATEMENT
PROVIDED THAT (i) THE REGISTRATION STATEMENT IS CURRENT AND
EFFECTIVE, (ii) THE HOLDER COMPLIES WITH THE PROSPECTUS
DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND (iii) THE SALE IS IN COMPLIANCE WITH THE PLAN OF
DISTRIBUTION SET FORTH IN THE PROSPECTUS.
Registration Rights.
The Company agrees with the Investor and PHD to
register under a registration statement ("Registration Statement") filed
pursuant to the Securities Act of 1933, as amended ("Securities Act") and such
state "Blue Sky" laws of those states as are reasonably selected by the
Investor, the shares of Common Stock into which the Preferred Stock may be
converted and the shares of Common Stock underlying the warrants to be issued to
PHD in connection with this sale of securities by the Company (collectively, the
"Registrable Securities"). The Company agrees to file the Registration Statement
on or before the 30-day anniversary of the Initial Closing of the Offering. The
Company agrees to use its best efforts to have the Registration Statement
declared effective by February 14, 1997 and undertakes to have the Registration
Statement declared effective by April 15, 1997. If the Registration Statement is
not declared effective by the close of business on April 15, 1997, as provided
in the Certificate of Designations, the conversion rate will be lowered.
Notwithstanding the foregoing reduction in the conversion rate, the Investor may
pursue all other legal remedies available to it for the failure to file and have
declared effective the Registration Statement as agreed to by the Company in
this Agreement. The Company shall bear all the expenses and pay all the fees it
incurs in connection with the preparation, filing and modification or amendment
of the Registration Statement. The Company shall keep the Registration Statement
effective and current until all the securities registered thereunder are sold or
until all such securities may be sold by the holders thereof under Rule 144
without volume limitations. Notwithstanding the foregoing, during any
consecutive 365-day period, the Company may suspend the availability of the
Registration Statement for no more than two periods of up to 20 consecutive days
and for no more than an aggregate of 40 days during any 365-day period, if the
Company's Board of Directors determines, based upon the opinion of legal
counsel, that there is valid purpose for such suspension.
To the extent permitted by law, the Company will indemnify and
hold harmless each holder of the Registrable Securities ("Holder"), the officers
and directors of each Holder and each person, if any, who controls such Holder
within the meaning of the Securities Act or Securities Exchange Act of 1934, as
amended ("Exchange Act") against any losses, claims, damages, or liabilities to
which they may become subject under the Securities Act, the Exchange Act or any
state securities law or regulation (including all reasonable attorneys' fees and
other expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever incurred by the indemnified party in any action or
proceeding between the indemnitor and indemnified party or between the
indemnified party and any third party or otherwise) to which any of them may
become subject under the Securities Act, the Exchange Act or any other statute
or common law or otherwise under the laws of foreign countries, arising from
such registration statement or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) any preliminary prospectus, the
registration statement or prospectus
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(as from time to time each may be amended and supplemented); (ii) in any
post-effective amendment or amendments or any new registration statement and
prospectus in which it included the Registrable Securities; or (iii) any
application or other document or written communication (collectively called
"application") executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Registrable
Securities under the securities laws thereof or filed with the Securities and
Exchange Commission, any state securities commission or agency, Nasdaq or any
securities exchange; or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, unless
such statement or omission is made in reliance upon, and in strict conformity
with, written information furnished to the Company with respect to such Holder
expressly for use in any preliminary prospectus, such registration statement or
prospectus, or any amendment or supplement thereof, or in any application, as
the case may be. The Company agrees promptly to notify the Holder of the
Registrable Securities of the commencement of any litigation or proceedings
against the Company or any of its officers, directors or controlling persons in
connection with the issue and sale or resale of the Registrable Securities or in
connection with any such registration statement or prospectus.
Investor Agreements Representations and Warranties. I acknowledge,
represent and warrant to, and agree with, the Company and the Placement Agent as
follows:
I am aware that my investment in the Company involves a high degree
of risk, and I carefully have read and fully understand the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1995, the Company's
Quarterly Report on Form 10-QSB for the quarter ended September 30, 1996, the
Company's Proxy Statement dated June 11, 1996 and the Company's Prospectus dated
June 12, 1996, which are included as Exhibits B, C, D and E, respectively, in
the Disclosure Package.
I acknowledge and am aware that there is no assurance as to the
future performance of the Company.
I acknowledge that notwithstanding the Company's commitment herein,
there can be no assurance that the Company will file any Registration Statement
for the securities I am purchasing, that such Registration Statement, if filed,
will be declared effective or, if declared effective, that the Company will be
able to keep it effective until I sell the Common Stock registered thereon.
I am purchasing the Preferred Stock for my own account for
investment and not with view to or for sale in connection with the distribution
of the Preferred Stock, nor with any present intention of selling or otherwise
disposing of all or any part of the Preferred Stock. I understand that there may
not be any market for the Preferred Stock. I agree that (1) the purchase of the
Preferred Stock is a long-term investment, (2) I may have to bear the economic
risk of investment for an indefinite period of time because neither the
Preferred Stock nor the Common Stock underlying the Preferred Stock have been
registered under the Securities Act and, notwithstanding the Company's
commitment herein, may not be registered and, cannot be resold, pledged,
assigned, or otherwise disposed of unless they are subsequently registered under
said Securities Act and under applicable securities laws of certain states or an
exemption from such registration is available. I understand that the Company is
under no obligation to register the Preferred Stock and, except as set forth
herein, the Company is under no obligation to register the Common Stock
underlying the Preferred Stock on my behalf or to assist me in
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complying with any exemption from such registration under the Securities Act or
any state securities laws. I hereby authorize the Company to place legends
denoting the restrictions on the Preferred Stock and the Common Stock to be
issued hereunder or conversion of the Preferred Stock, as the case may be.
I recognize that the Preferred Stock, as an investment, involves a
high degree of risk including, but not limited to, the risk of economic losses
from operations of the Company and the total loss of my investment. I believe
that the investment in the Preferred Stock is suitable for me based upon my
investment objectives and financial needs, and I have adequate means for
providing for my current financial needs and contingencies and have no need for
liquidity with respect to my investment in the Company.
I have been given access to full and complete information regarding
the Company and have utilized such access to my satisfaction for the purpose of
obtaining information in addition to, or verifying information included in, the
Disclosure Package, and I have either met with or been given reasonable
opportunity to meet with officers of the Company for the purpose of asking
questions of, and receiving answers from, such officers concerning the terms and
conditions of the offering of the Preferred Stock and the business and
operations of the Company and to obtain any additional information, to the
extent reasonably available. I have received all information and material
regarding the Company that I have requested.
I have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Preferred Stock and have obtained, in my judgment, sufficient information
from the Company to evaluate the merits and risks of an investment in the
Company. I have not utilized any person as my purchaser representative as
defined in Regulation D promulgated by the Securities and Exchange Commission
pursuant to the Securities Act in connection with evaluating such merits and
risks.
I have relied solely upon my own investigation in making a decision
to invest in the Company.
I have received no representation or warranty from the Company or
the Placement Agent or any of their respective officers, directors, employees or
agents in respect of my investment in the Company and I have received no
information (written or otherwise) from them relating to the Company or its
business other than as set forth herein and in the Disclosure Package. I am not
participating in the offer as a result of or subsequent to: (I) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
I have had full opportunity to ask questions and to receive
satisfactory answers concerning the offering and other matters pertaining to my
investment and all such questions have been answered to my full satisfaction. In
addition, as required by Section 517.061(11)(a)(3), Florida Statutes and by Rule
3-500.05(a) thereunder, if I am a Florida resident I may have, at the offices of
the Company, at any reasonable hour, after reasonable notice, access to the
materials set forth in the Rule which the Company can obtain without
unreasonable effort or expense.
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I have been provided an opportunity to obtain any additional
information concerning the offering and the Company and all other information to
the extent the Company possesses such information or can acquire it without
unreasonable effort or expense.
I am an "accredited investor" as defined in Section 2(15) of the Act
and in Rule 501 promulgated thereunder.
I understand that (i) the Preferred Stock and the underlying
securities have not been registered under the Securities Act, or the securities
laws of certain states in reliance on specific exemptions from registration,
(ii) no securities administrator of any state or the federal government has
recommended or endorsed this offering or made any finding or determination
relating to the fairness of an investment in the Company and (iii) the Company
is relying on my representations and agreements for the purpose of determining
whether this transaction meets the requirements of the exemptions afforded by
the Securities Act and certain state securities laws.
I have been urged to seek independent advice from my professional
advisors relating to the suitability of an investment in the Company in view of
my overall financial needs and with respect to the legal and tax implications of
such investment.
If the Investor is a corporation, company, trust, employee benefit
plan, individual retirement account, Xxxxx Plan, or other tax-exempt entity, it
is authorized and qualified to become an Investor in the Company and the person
signing this Subscription Agreement on behalf of such entity has been duly
authorized by such entity to do so.
I hereby acknowledge and am aware that except for any rescission
rights that may be provided under applicable laws, I am not entitled to cancel,
terminate or revoke this subscription, and any agreements made in connection
herewith shall survive my death or disability.
I hereby acknowledge that I have been told that (ii) PHD is being
compensated as the Placement Agent and will receive a cash commission equal to
10% of the aggregate purchase price of the Preferred Stock sold in the offering
to all Investors and will be issued a warrant to purchase that number of shares
of Common Stock that equals the number of shares of Preferred Stock sold in the
Offering divided by two, exercisable at $3.00 per share for the five years after
the last Closing and (iii) the Common Stock underlying the warrant issued to PHD
is being registered under the Securities Act on the same registration statement
as the shares of Common Stock which will be issuable on conversion of the
Preferred Stock.
I agree that prior to the conversion of all the Preferred Stock
purchased hereunder, I will not sell the Common Stock "short" on any securities
market on which the Common Stock is traded.
Indemnification. I hereby agree to indemnify and hold harmless
PHD and the Company, each of their respective officers, directors, shareholders,
employees, agents, and attorneys against any and all losses, claims, demands,
liabilities, and expenses (including reasonable legal or other expenses,
including reasonable attorneys' fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever incurred by
the indemnified party in any action or proceeding between the indemnitor and
indemnified party or between the indemnified party and any third party or
otherwise) incurred by
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each such person in connection with defending or investigating any such claims
or liabilities, whether or not resulting in any liability to such person, to
which any such indemnified party may become subject under the Securities Act,
under any other statute, at common law or otherwise, insofar as such losses,
claims, demands, liabilities and expenses (a) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact made by me and
contained in this Subscription Agreement, or (b) arise out of or are based upon
any breach by me of any representation, warranty, or agreement made by me
contained herein. PHD is a third-party beneficiary of this Section, and this
Section may not be modified or amended without the prior written agreement of
PHD.
Severability. In the event any part of this Subscription
Agreement are found to be void, the remaining provisions of this Subscription
Agreement shall nevertheless be binding with the same effect as though the void
parts were deleted.
Choice of Law and Jurisdiction. This Subscription Agreement will
be deemed to have been made and delivered in New York City and will be governed
as to validity, interpretation, construction, effect and in all other respects
by the internal laws of the State of New York. The Company and the Investor each
hereby (i) agrees that any legal suit, action or proceeding arising out of or
relating to this Subscription Agreement shall be instituted exclusively in New
York State Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York, (ii) waives any objection to the
venue of any such suit, action or proceeding and the right to assert that such
forum is not a convenient forum, proceeding, and (iii) irrevocably consents to
the jurisdiction of the New York State Supreme Court, County of New York, and
the United States District Court for the Southern District of New York in any
such suit, action or proceeding and the Company further agrees to accept and
acknowledge service or any and all process which may be served in any such suit,
action or proceeding in New York State Supreme Court, County of New York or in
the United States District Court for the Southern District of New York and
agrees that service of process upon it mailed by certified mail to its address
shall be deemed in every respect effective service of process upon it in any
suit, action or proceeding.
Counterparts. This Subscription Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Subscription Agreement may be by actual or facsimile signature.
Benefit. This Subscription Agreement shall be binding upon and
inure to the benefit of the parties hereto (and PHD to the extent it is a
third-party beneficiary hereof) and their respective heirs, executors, personal
representatives, successors and assigns. PHD shall be deemed to be a third-party
beneficiary with respect to any sections hereof which so state or which
otherwise indicate that PHD would be entitled to rely on the representations,
warranties or covenants made by me therein.
Notices and Addresses. All notices, offers, acceptance and any
other acts under this Subscription Agreement (except payment) shall be in
writing, and shall be sufficiently given if delivered to the addressees in
person, by Federal Express or similar courier delivery by facsimile delivery or,
if mailed, postage prepaid, by certified mail, return receipt requested, as
follows:
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Investor: At the address designated on the signature page of
this Subscription Agreement.
The Company: H.E.R.C. Products Incorporated
0000 Xxxx Xxxx Xxxxxx Xxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxx 00000
Attention: S. Xxxxxx Xxxx, Chief Executive Officer
Fax: (000) 000-0000
Placement Agent: Xxxxxx, Holden & Xxxxxxxxx Capital Corp.
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Fax: (000) 000-0000
in any case,
with a copy to: Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other address as any of them, by notice to the others may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile deliver.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
Oral Evidence. This Subscription Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior oral and written agreements between the parties hereto
with respect to the subject matter hereof. This Subscription Agreement may not
be changed, waived, discharged, or terminated orally but, rather, only by a
statement in writing signed by the party or parties against which enforcement or
the change, waiver, discharge or termination is sought.
Section Headings. Section headings herein have been inserted for
reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part, any of the terms or
provisions of this Subscription Agreement.
Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained herein shall survive the
delivery of, and the payment for, the Preferred Stock.
Acceptance of Subscription. The Company may accept this
Subscription Agreement at any time for all or any portion of the Preferred Stock
subscribed for by executing a copy hereof as provided and notifying me within a
reasonable time thereafter.
RESIDENTS OF ALL STATES: THE UNITS OFFERED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE UNITS
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ARE SUBJECT TO RESTRICTION ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME. THE UNITS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THIS
CONFIDENTIAL INVESTMENT SUMMARY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
FOR CONNECTICUT RESIDENTS: THE UNITS OFFERED HAVE NOT BEEN REGISTERED
UNDER SECTION 36-485 OF THE CONNECTICUT UNIFORM SECURITIES ACT AND ARE OFFERED
AND SOLD PURSUANT TO AN EXEMPTION RELATING TO TRANSACTIONS NOT INVOLVING A
PUBLIC OFFERING PURSUANT TO SECTION 36- 490(b)(9)(A) THEREOF. THE UNITS CANNOT
BE RESOLD OR TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH ACT OR UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR MARYLAND RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE MARYLAND SECURITIES ACT BY REASON OF AN EXEMPTION RELATING TO THE LIMITED
AVAILABILITY OF THE OFFERING. THESE SECURITIES MAY NOT BE TRANSFERRED OR SOLD
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE MARYLAND SECURITIES ACT OR
PURSUANT TO AN EFFECTIVE REGISTRATION.
FOR NEW JERSEY RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE BUREAU OF SECURITIES OF THE STATE OF NEW JERSEY NOR HAS THE
BUREAU PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. THE FILING OF THE
WITHIN OFFERING DOES NOT CONSTITUTE APPROVAL OF THE ISSUE OR THE SALE THEREOF BY
THE BUREAU OF SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THESE ARE SPECULATIVE SECURITIES AND INVOLVE A HIGH DEGREE OF RISK.
THESE SECURITIES ARE OFFERED ONLY TO BONA FIDE ADULT RESIDENTS OF THE
STATE OF NEW JERSEY.
FOR FLORIDA RESIDENTS: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT ("FLORIDA
SECURITIES ACT") , AND THEY THEREFORE HAVE THE STATUS OF SECURITIES ACQUIRED IN
AN EXEMPT TRANSACTION UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT. EACH
OFFEREE WHO IS A FLORIDA RESIDENT SHOULD BE AWARE THAT SECTION 517.061(11)(a)(5)
OF THE FLORIDA SECURITIES ACT PROVIDES THAT WHEN SALES ARE MADE TO FIVE OR MORE
PERSONS IN FLORIDA, ANY SALE MADE IN FLORIDA IS VOIDABLE BY THE PURCHASER WITHIN
THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO
THE COMPANY, AN AGENT OF THE COMPANY OR AN ESCROW AGREEMENT OR WITHIN THREE DAYS
AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER,
WHICH EVER OCCURS LATER.
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THE AVAILABILITY OF THE PRIVILEGE TO VOID SALES PURSUANT TO SECTION
517.061(11)(a)(5) IS HEREBY COMMUNICATED TO EACH FLORIDA OFFEREE.
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Manner in Which Title is to be Held. (check one)
____ Individual Ownership
____ Community Property
____ Joint Tenant with Right of Survivorship (both parties must sign)
____ Partnership
____ Tenants in common
____ Corporation
____ Trust
____ Other (please indicate)
INDIVIDUAL INVESTORS ENTITY INVESTORS
---------------------------------------- -------------------------------
Signature (Individual) Name of Entity, if any
By:
*Signature
Its
----------------------------------------- ----------------------------
Signature (all record holders should sign) Title
----------------------------------------- ----------------------------
Name(s) Typed or Printed Name Typed or Printed
Address to Which Correspondence Address to Which Correspondence
Should be Directed Should be Directed
----------------------------------------- -------------------------------
----------------------------------------- -------------------------------
----------------------------------------- -------------------------------
City, State and Zip Code City, State and Zip Code
----------------------------------------- -------------------------------
Social Security Number Tax Identification
* If Preferred Stock is being subscribed for by any entity, the
Certificate of Signatory on the next page must also be completed.
The foregoing subscription is accepted and the Company hereby agrees to be bound
by its terms.
H.E.R.C. PRODUCTS INCORPORATED
Dated:------------------, 1996 By:
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CERTIFICATE OF SIGNATORY
(To be completed if Preferred Stock is being subscribed for by an entity)
I, _______________________________, the
--------------------------------
(name of signatory) (title)
of ----------------------------------------------------------("Entity"), a
(name of entity)
-----------------------------------------------.
(type of entity)
hereby certify that the above entity is duly empowered and authorized to
purchase the Preferred Stock and that I am duly empowered and authorized by the
entity to execute the Subscription Agreement on its behalf.
IN WITNESS WHEREOF, I have executed this Certificate this ____ day of
_________, 1996.
-----------------------------
(Signature)
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