SUBSCRIPTION AGREEMENT
PROLOGICA INTERNATIONAL, INC.
The undersigned hereby subscribes for ____ Units ("Units") of Prologica
International, Act. Inc. ("Company"), each Unit consisting of (i) 40,000 shares
of the Company's Common Stock, no par value ("Common Stock"); and (ii) 20,000
warrants to purchase Common Stock exercisable during the five year period
commencing the date of the Closing of the Offering, as defined in the Offering
Memorandum dated September 1, 1997 ("Memorandum") at $3.00 per share. The
undersigned agrees to pay an aggregate of $ ____________ as a subscription for
the Units being purchased hereunder. The entire purchase price is due and
payable upon the execution of this Subscription Agreement, and shall be paid by
check, subject to collection, or by wire transfer, made payable to the order of
Prologica International, Inc. - Escrow Account (wire instructions attached
hereto). The Company shall have the right to reject this subscription in whole
or in part.
The undersigned acknowledges that the Units, as well as any shares of
Common Stock issuable upon conversion of the warrants (collectively, the
"Shares") being purchased hereunder will not be registered under the Securities
Act of 1933, as amended ("Act"), or the securities laws of any State, that
absent an exemption from registration contained in those laws, the issuance and
sale of the securities comprising the Shares would require registration, and
that the Company's reliance upon any such exemption is invariably based upon the
undersigned's representations, warranties, and agreements contained in this
Subscription Agreement and the accompanying Confidential Prospective Purchaser
Questionnaires ("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 unless it has not been accepted by the Company by
October 16, 1997, subject to a 30 day extension at the discretion of the
Company.
(b) The undersigned has carefully read this Subscription
Agreement and the Company's Memorandum dated September 1, 1997 (collectively the
"Disclosure Materials") all of which the undersigned acknowledges have been made
available to him/her/it. The undersigned acknowledges that, except for the
Disclosure Materials, no offering memorandum has been distributed regarding the
Shares and that the undersigned has been given the opportunity to ask questions
of, and receive answers from, the Company concerning the terms and conditions of
this Subscription Agreement and the Disclosure Materials and to obtain such
additional written 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 desires in order to evaluate
the investment. The undersigned further acknowledges that he or she has received
no representations or warranties from the Company, or their respective employees
or agents in making this investment decision other than as set forth in the
Disclosure Materials.
(c) The undersigned is aware that the purchase of the Shares
is a speculative investment involving a high degree of risk and that there is no
guarantee that he or she will realize any gain from this investment, and that
the entire investment could be lost.
(d) The undersigned understands that no federal or state
agency has made any finding or determination regarding the fairness of this
offering of the Shares for investment, or any recommendation or endorsement of
this offering.
(e) The undersigned is purchasing the Shares for his or her
own account, with the intention of holding the Shares 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
Shares, 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 he or she, if an individual,
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
Shares. 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 Shares indefinitely
or to afford a complete loss of his or her investment in the Shares.
(h) The undersigned represents that his or her overall
commitment to investments which are not readily marketable is not
disproportionate to his or her net worth, and the investment in the Shares will
not cause such overall commitment to become excessive. The undersigned
understands that the statutory basis on which the Shares are being sold to him
or her and to others would not be available if the undersigned's present
intention were to hold the Shares 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, 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 Shares, and for which such Shares 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 Securities and Exchange Commission would then regard such
sale as one for which no exemption from registration is 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.
(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 Shares, and (iii) the undersigned has the full
power and authority to execute this Subscription Agreement on behalf of such
entity and 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 a corporation
or other entity.
(1) 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 Shares.
(m) The undersigned acknowledges that the certificates for the
securities comprising the Shares which the undersigned will receive will contain
a legend substantially as follows:
THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. 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,
AS AMENDED, OR AN OPINION OF COUNSEL FOR THE COMPANY IS
RECEIVED THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.
(n) The Questionnaire being delivered by the undersigned to
the Company simultaneously herewith is true, complete and correct in all
material respects.
(o) Other than as set forth in the Registration Rights
Agreement between the Company and the undersigned, the Company is under no
obligation to register the Shares, under the Act or any state securities laws,
or to take any action to make any exemption from any such registration
provisions available.
(p) This Subscription Agreement is a legally binding
obligation of the undersigned in accordance with its terms.
(q) The undersigned is an "accredited investor," as such term
is defined in Regulation D of the Rules and Regulations promulgated under the
Act and as set forth in the Questionnaire.
2. The undersigned expressly acknowledges and agrees that the Company
is relying upon the undersigned's representation contained in the Subscription
Documents.
3. The undersigned subscriber acknowledges that he or she understands
the meaning and legal consequences of the representations and warranties which
are contained herein and hereby agrees to indemnify, save and hold the Company,
and their respective officers, directors and counsel harmless from and against
any and all claims or actions arising out of a breach of any representation,
warranty or acknowledgment of the undersigned contained in any Subscription
Document including but not limited to the Questionnaire. Such indemnification
shall be deemed to include not only the specific liabilities or obligation with
respect to which such indemnity is provided, but also all reasonable costs,
expenses, counsel fees and expenses of settlement relating thereto, whether or
not any such liability or obligation shall have been reduced to judgment.
4. 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
Delaware. The Company 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.
5. Except as otherwise specifically provided for hereunder, no party
shall be deemed to have waived any of his or her 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 signed by
the party waiving said 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.
6. 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 executed simultaneously herewith,
constitutes the entire agreement between them with respect to the subject matter
hereof. All understandings and agreements heretofore had between the parties
with respect to the subject matter hereof are merged in this Subscription
Agreement and any such instrument, which alone fully and completely expresses
their agreement.
7. This 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 Agreement.
8. The parties agree to execute any and all such other and 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.
9. 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/or the
United States District Court for the Southern District of New York.
10. The undersigned understands that this subscription is not binding
upon the Company until the Company accepts it, which acceptance is at the sole
discretion of the Company and is to be evidenced by the Company's execution of
this Subscription Agreement where indicated. This Subscription Agreement shall
be null and void if the Company does not accept it as aforesaid.
11. The undersigned understands that the Company may, in its sole
discretion, reject this subscription and, in the event that the offering to
which this Subscription relates is oversubscribed, reduce this subscription in
any amount and to any extent, whether or not pro rata reductions are made of any
other investor's subscription.
12. Neither this Subscription Agreement nor any of the rights of the
undersigned hereunder may be transferred or assigned by the undersigned.
JURISDICTIONAL NOTICES
For Residents of all States:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATES OF THE
UNITED STATES OR ANY OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH
LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS 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 SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IT IS THE RESPONSIBILITY OF ANY SUBSCRIBER WISHING TO PURCHASE THE SHARES TO
SATISFY ITSELF AS TO THE FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY
OUTSIDE THE UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING
OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER
APPLICABLE FORMALITIES.
ALL SUBSCRIBERS MUST COMPLETE THIS PAGE
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement on this ____ day of __________________, 1997.
__________________ (Units Subscribed) x $60,000 per Unit = $___________.
1. |__| Individual
2. |__| Joint Tenants with Right of Survivorship
3. |__| Community Property
4. |__| Tenants in Common
5. |__| Corporation/Partnership
6. |__| XXX of ________________
7. |__| Trust Dated Opened ___________
8. |__| As a Custodian For _____________________________________
Under the Uniform Gift to Minors Act of the State of
-----------------
9. |__| Married with Separate Property
10. |__| Xxxxx of ________________
EXECUTION BY SUBSCRIBER WHO IS A NATURAL PERSON
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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 _______________, 1997, on behalf of
PROLOGICA INTERNATIONAL, INC.
By: ____________________
Name:
Title:
EXECUTION BY SUBSCRIBER WHICH IS A CORPORATION,
PARTNER, TRUST, ETC.
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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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Title of Person Executing Agreement
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Address: Number and Street
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City State Zip Code
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Tax Identification Number
Accepted this ____ day of _____________, 1997, on behalf of
PROLOGICA INTERNATIONAL, INC.
BY:_______________
