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FUTURELINK DISTRIBUTION CORP.
SUBSCRIPTION AGREEMENT made as of this __th day of _____, 1999 between
FutureLink Distribution Corp., a corporation organized under the laws of the
State of Colorado with offices at 000, 000-0 Xxxxxx XX, Xxxxxxx, XX Xxxxxx X0X
0X0 (the "Company") and the undersigned (the "Subscriber").
WHEREAS, the Company desires to issue in a private placement (this
"Offering") a minimum of 20 (the "Minimum Offering") and a maximum of 40 (the
"Maximum Offering") units ("Units") in a private placement in accordance with an
exemption provided by Regulation D from the registration provisions of the
Securities Act of 1933 (the "Act"), each Unit consisting of $250,000 principal
amount of 8% senior subordinated convertible promissory notes (the "Notes") in
the form attached as Exhibit (vi) to the Confidential Term Sheet dated July 1,
1999 (the "Term Sheet") and 37,500 two-year common stock purchase warrants (the
"Warrants") in the form attached as Exhibit (vii) to the Term Sheet on the terms
and conditions hereinafter set forth and the Subscriber desires to acquire the
number of Units set forth on the signature page hereof; and
WHEREAS, subsequent to this Offering the Company expects to undertake a
private placement of equity securities;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase from the Company such
number of Units as is set forth upon the signature page hereof at a price equal
to $250,000 per Unit, and the Company agrees to sell such Units to the
Subscriber for said purchase price subject to the Company's right to sell to the
Subscriber such lesser number of Units as the Company may, in its sole
discretion, deem necessary or desirable. The purchase price is payable by
certified or bank check made payable to United States Trust Company of New York,
as Escrow Agent for FutureLink Distribution Corp., or by wire transfer of funds,
contemporaneously with the execution and delivery of this Subscription
Agreement. The Subscriber understands however, that this purchase of Units is
contingent upon the Company having received and accepted subscriptions in the
minimum amount of $5,000,000 prior to the Termination Date as defined in Article
III hereof.
1.2 The Subscriber recognizes that the purchase of Units involves a
high degree of risk in that (i) an investment in the Company is highly
speculative and only investors who can afford the loss of their entire
investment should consider investing in the Company and the Units; (ii) he may
not be able to liquidate his investment; (iii) transferability of the securities
comprising the Units is extremely limited; and (iv) an investor could suffer the
loss of his entire investment, as well as other risk factors as more fully set
forth herein and in the Term Sheet and the exhibits thereto.
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1.3 The Subscriber represents and warrants that he is an "accredited
investor" as such term in defined in Rule 501 of Regulation D promulgated under
the United States Securities Act of 1933, as amended (the "Act"), as indicated
by his responses to the Investor Questionnaire, and that he is able to bear the
economic risk of an investment in the Units. The Subscriber further represents
and warrants that the information furnished in the Investor Questionnaire is
accurate and complete in all material respects.
1.4 The Subscriber acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities and
that he recognizes the highly speculative nature of this investment.
1.5 The Subscriber acknowledges receipt and careful review of the
Term Sheet and all exhibits thereto and other documents furnished in connection
with this transaction (collectively, the "Offering Documents") and hereby
represents that he has been furnished by the Company during the course of this
transaction with all information regarding the Company which he has requested or
desires to know and that he has been afforded the opportunity to ask questions
of and receive answers from duly authorized officers or other representatives of
the Company concerning the terms and conditions of this Offering.
1.6 The Subscriber acknowledges that this Offering may involve tax
consequences (including, but not limited to, the possible need to recognize
interest income relating to the Warrants) and that the contents of the Offering
Documents do not contain tax advice or information. The Subscriber acknowledges
that he must retain his own professional advisors to evaluate the tax and other
consequences of an investment in the Units.
1.7 The Subscriber acknowledges that this Offering has not been
reviewed by the United States Securities and Exchange Commission ("SEC") because
of the Company's representations that this is intended to be a nonpublic
offering pursuant to Sections 4(2) or 3(b) of the Act. The Subscriber represents
that the Notes and Warrants comprising his Units are being purchased for his own
account, for investment and not for distribution or resale to others. The
Subscriber agrees that he will not sell or otherwise transfer the Notes or the
Warrants unless they are registered under the Act or unless an exemption from
such registration is available.
1.8 The Subscriber understands that Rule 144 (the "Rule")
promulgated under the Act requires, among other conditions, a one year holding
period prior to the resale (in limited amounts) of securities acquired in a
non-public offering without having to satisfy the registration requirements
under the Act. The Subscriber understands that the Company makes no
representation or warranty regarding its fulfillment in the future of any
reporting requirements under the Securities Exchange Act of 1934, as amended, or
its dissemination to the public of any current financial or other information
concerning the Company, as is required by the Rule as one of the conditions of
its availability. The Subscriber understands and hereby acknowledges that the
Company is under no obligation to register the securities comprising the Units
under the Act, with the exception of certain registration rights set forth in
Article IV herein. The Subscriber consents that the Company may, if it desires,
permit the transfer of the Notes, the shares of Common Stock issuable upon
conversion of the Notes (the "Conversion Shares"), the Warrants or the shares of
Common Stock issuable upon exercise of the Warrants (the "Warrant Shares") out
of his name only when his request for transfer is accompanied by an opinion of
counsel reasonably satisfactory to the Company that neither the sale
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nor the proposed transfer results in a violation of the Act or any applicable
state "blue sky" laws (collectively "Securities Laws").
1.9 The Subscriber hereby agrees not to sell, transfer or otherwise
dispose of the Warrant Shares or the Conversion Shares for such period of time
(not to exceed one year) after completion by the Company of a public offering of
its securities as the managing underwriter for such offering may request in
writing and Commonwealth Associates L.P. may agree to; provided that in no event
shall the term of such lock-up exceed that agreed to by the officers, directors
and principal stockholders of the Company.
1.10 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Notes, the Warrants, the Warrant
Shares and the Conversion Shares stating that they have not been registered
under the Act and setting forth or referring to the restrictions on
transferability and sale thereof.
1.11 The Subscriber acknowledges that if he is a Registered
Representative of an NASD member firm, he must give such firm the notice
required by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm on the signature page hereof.
1.12 If the undersigned Subscriber is a partnership, corporation,
trust or other entity, such partnership, corporation, trust or other entity
further represents and warrants that: (i) it was not formed for the purpose of
investing in the Company; (ii) it is authorized and otherwise duly qualified to
purchase and hold the Units; and (iii) that this Subscription Agreement has been
duly and validly authorized, executed and delivered constitutes the legal,
binding and enforceable obligation of the undersigned.
II. REPRESENTATIONS BY THE COMPANY
2.1 The Company represents and warrants to the Subscriber that prior
to the consummation of this Offering and at the Closing Date:
(a) The Company is a corporation duly organized, existing and
in good standing under the laws of the State of Colorado and has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this
Subscription Agreement by the Company will have been duly approved by the Board
of Directors of the Company and all other actions required to authorize and
effect the offer and sale of the Units and the securities contained therein will
have been duly taken and approved.
(c) The Notes and Warrants have been duly and validly
authorized and when issued and paid for in accordance with the terms hereof,
will be duly and validly issued and fully paid and non assessable.
(d) The Company will at all times have authorized and reserved
a sufficient number of Conversion Shares and Warrant Shares to provide for
conversion of the Notes and exercise of the Warrants.
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(e) The Company has obtained, or is in the process of
obtaining, all licenses, permits and other governmental authorizations necessary
to the conduct of its business; such licenses, permits and other governmental
authorizations obtained are in full force and effect; and the Company is in all
material respects complying therewith.
(f) The Company knows of no pending or threatened legal or
governmental proceedings to which the Company is a party which could materially
adversely affect the business, property, financial condition or operations of
the Company.
(g) The Company is not in violation of or default under, nor
will the execution and delivery of this Subscription Agreement, the issuance of
the Notes or the Warrants, and the incurrence of the obligations herein and
therein set forth and the consummation of the transactions herein or therein
contemplated, result in a violation of, or constitute a default under, the
Company's articles of incorporation or by-laws, any material obligations,
agreement, covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness or in any material contract, indenture, mortgage, loan
agreement, lease, joint venture or other agreement or instrument to which the
Company is a party or by which it or any of its properties may be bound or any
material order, rule, regulation, writ, injunction, or decree of any government,
governmental instrumentality or court, domestic or foreign.
III. TERMS OF SUBSCRIPTION
3.1 The subscription period will begin as of July 1, 1999 and will
terminate at 11:59 PM Eastern time on July 31, 1999; provided, however, that if
the Minimum Offering is sold by such date, the subscription period will continue
until August 31, 1999, unless extended by the Company and the Placement Agent
for up to an additional 30 days (the "Termination Date"). Such extension may be
effected without notice to the Subscribers. Of the Xxxxx, 00 will be offered on
a "best efforts-all or none" basis and the remaining 20 Units will be offered on
a "best-efforts" basis.
3.2 Placement of the Units will be made by the Placement Agent which
will receive (i) a commission equal to 9% of the gross proceeds from the sale of
the Units; (ii) reimbursement of up to $50,000 of accountable expenses
(exclusive of up to $12,000 for blue sky fees and disbursements and $20,000 of
Placement Agent's counsel fees and disbursements which shall also be
reimbursable by the Company); and (iii) warrants to purchase that number of
shares of Common Stock as equals 10% of the Warrant Shares issuable upon
exercise of the Warrants sold in the Offering (the Agent's Warrants). The
Agent's Warrants will be substantially identical to the Warrants included in the
Units except that they will not be subject to redemption by the Company.
3.3 Pending the sale of the Units, all funds paid hereunder shall be
deposited by the Company in escrow with United States Trust Company of New York.
If the Company shall not have obtained subscriptions (including this
subscription) for purchases of 20 Units for an aggregate purchase price of
$5,000,000 on or before the Termination Date, then this subscription shall be
void and all funds paid hereunder by the Subscriber, without interest, shall be
promptly returned to the Subscriber, subject to paragraph 3.5 hereof. If 20
Units are sold at or prior to the Termination Date, then all subscription
proceeds shall be paid over to the Company within 10 days thereafter at an
initial closing (the "Initial Closing"). In such event, placements of additional
Units may continue until the
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Termination Date, with subsequent releases of funds to be at the mutual consent
of the Company and the Placement Agent.
3.4 The Subscriber hereby authorizes and directs the Company to
deliver certificates representing the securities to be issued to such Subscriber
pursuant to this Subscription Agreement either (a) to the residential or
business address indicated in the Investor Questionnaire or (b) directly to the
Subscriber's account maintained with the Placement Agent, if any.
3.5 The Subscriber hereby authorizes and directs the Company to
return any funds for unaccepted subscriptions to the same account from which the
funds were drawn, including any customer account maintained with the Placement
Agent.
3.6 If the Subscriber is not a United States person, such Subscriber
hereby represents that it has satisfied itself as to the full observance of the
laws of its jurisdiction in connection with any invitation to subscribe for the
securities comprising the Units or any use of this Agreement, including (i) the
legal requirements within its jurisdiction for the purchase of the Units, (ii)
any foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the securities comprising the Units.
Such Subscriber's subscription and payment for, and his or her continued
beneficial ownership of the Units, will not violate any applicable securities or
other laws of the Subscriber's jurisdiction.
IV. REGISTRATION RIGHTS
4.1 Required Registration. The Company hereby agrees with the
holders of the Notes, the Warrants and the Warrant Shares or their transferees
(collectively, the "Holders") to include the Warrant Shares in the registration
statement to be filed with the SEC covering the resale of the securities sold by
the Company in its private placement in May 1999. The Company hereby agrees with
the Holders to file a registration statement with the SEC covering the resale of
the Conversion Shares (if the notes have not been converted) on Form S-1 or such
other form as the Company desires, pursuant to the Act within nine months of the
Initial Closing Date, and to use its best efforts to cause such registration to
become effective as soon as practicable thereafter.
The Company shall pay the expenses described in Section 4.3 for the
registration statements filed pursuant to this Section 4.1, except for
underwriting discounts and commissions and legal fees of the Holders, which
shall be borne by the Holders.
4.2 Registration Procedures. If and whenever the Company is required by
the provisions of Section 4.1 to effect the registration of Registrable Shares
under the Act, the Company will:
(a) prepare and file with the SEC a registration statement with
respect to such securities, and use its best efforts to cause such registration
statement to become and remain effective until the Registrable Shares are freely
salable without the volume limitations of Rule 144;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration
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statement effective until the Registrable Shares are freely salable without the
volume limitations of Rule 144;
(c) furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as such participating Holders may reasonably request
in writing within 20 days following the original filing of such registration
statement, except that the Company shall not for any purpose be required to
execute a general consent to service of process or to qualify to do business as
a foreign corporation in any jurisdiction wherein it is not so qualified;
(e) notify the Holders participating in such registration, promptly
after it shall receive notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed;
(f) notify the Placement Agent promptly of any request by the SEC
for the amending or supplementing of such registration statement or prospectus
or for additional information;
(g) prepare and file with the SEC, promptly upon the request of any
such Holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such Holders (and concurred in
by counsel for the Company), is required under the Act or the rules and
regulations thereunder in connection with the distribution of the Registrable
Shares by such Holders;
(h) prepare and promptly file with the SEC and promptly notify such
Holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Act, any event shall have occurred as the
result of which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(i) advise such Holders, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued.
4.3 Expenses.
(a) With respect to the registration required pursuant to Section
4.1 hereof, all fees, costs and expenses of and incidental to such registration,
inclusion and public offering (as specified in paragraph (b) below) in
connection therewith shall be borne by the Company, provided,
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however, that Holders participating in such registration shall bear their pro
rata share of the underwriting discount and commissions and transfer taxes.
(b) The fees, costs and expenses of registration to be borne by the
Company as provided in paragraph (a) above shall include, without limitation,
all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in 4.3(a) above). Fees and
disbursements of counsel and accountants for the participating Holders and any
other expenses incurred by the participating Holders not expressly included
above shall be borne by the such Holders.
4.4 Indemnification.
(a) The Company will indemnify and hold harmless each Holder of
Registrable Shares which are included in a registration statement pursuant to
the provisions of Section 4.1 hereof, its directors and officers, and any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or such underwriter within the meaning of the Act, from and
against, and will reimburse such Holder and each such underwriter and
controlling person with respect to, any and all loss, damage, liability, cost
and expense to which such holder or any such underwriter or controlling person
may become subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, damage, liability, cost or expenses
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished
by or on behalf of such Holder, its directors and officers, such underwriter or
such controlling person in writing specifically for use in the preparation
thereof.
(b) Each Holder of Registrable Shares included in a registration
pursuant to the provisions of Section 4.1 hereof will indemnify and hold
harmless the Company, its directors and officers, any controlling person and any
underwriter from and against, and will reimburse the Company, its directors and
officers, any controlling person and any underwriter with respect to, any and
all loss, damage, liability, cost or expense to which the Company or any
controlling person and/or any underwriter may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was so made in conformity with written information furnished by
or on behalf of such Holder specifically for use in the preparation thereof.
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(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this Section 4.4 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party,
provided, however, if the defendants in any action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or in addition to those available
to the indemnified party, or if there is a conflict of interest which would
prevent counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties have the right to select
separate counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the indemnified
party shall have employed counsel in accordance with the provisions of the
preceding sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after the notice of the commencement of the action or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
V. INVESTMENT IN SUBSEQUENT PRIVATE PLACEMENT
5.1 The Subscriber acknowledges and agrees that pursuant to the
terms of the Notes, if the Company completes a private placement of its debt or
equity securities resulting in gross proceeds to the Company of at least
$15,000,000 (exclusive of Note conversions pursuant to this paragrph) and the
terms of such placement are consented to by Commonwealth Associates L.P. and a
committee of Noteholders holding in the aggregate not less than 10% of the
outstanding Principal Amount of the Notes to be designated by Commonwealth (a
"Subsequent Conversion Placement"), the principal amount of the Subscriber's
Notes will be converted into an investment by the Subscriber in the securities
sold in the Subsequent Conversion Placement.
5.2 The Subscriber agrees that its investment in the Subsequent
Conversion Placement will be made without any further action on the part of the
Subscriber; however, the Subscriber agrees to execute and deliver all documents
reasonably requested by the Company to effectuate such investment.
5.3 The Subscriber understands that the Company will rely on the
representations and warranties of the Subscriber contained in this Subscription
Agreement and the Investor Questionnaire in connection with the Subscriber's
investment in the Subsequent Conversion Placement.
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VI. MISCELLANEOUS
6.1 Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the Company, at its registered office, 000,
000-0 Xxxxxx XX, Xxxxxxx, XX Xxxxxx X0X 0X0, Attention: Chief Financial Officer
and to the Subscriber at his address indicated on the last page of this
Subscription Agreement. Notices shall be deemed to have been given on the date
of mailing, except notices of change of address and notices sent from outside
the continental United States, which shall be deemed to have been given when
received.
6.2 This Subscription Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged, and this
Subscription Agreement may not be discharged except by performance in accordance
with its terms or by a writing signed by the party to be charged.
6.3 This Subscription Agreement shall be binding upon and inure to
the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
6.4 Notwithstanding the place where this Subscription Agreement may
be executed by any of the parties hereto, the parties expressly agree that all
the terms and provisions hereof shall be construed in accordance with and
governed by the laws of the State of New York. The parties hereby agree that any
dispute which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in New York
City and they hereby submit to the exclusive jurisdiction of the courts of the
State of New York located in New York, New York and of the federal courts in the
Southern District of New York with respect to any action or legal proceeding
commenced by any party, and irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action or proceeding brought
in such a court or respecting the fact that such court is an inconvenient forum,
relating to or arising out of this Subscription Agreement or any acts or
omissions relating to the sale of the securities hereunder, and consent to the
service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
below or such other address as the undersigned shall furnish in writing to the
other.
6.5 This Subscription Agreement may be executed in counterparts.
Upon the execution and delivery of this Subscription Agreement by the
Subscriber, this Subscription Agreement shall become a binding obligation of the
Subscriber with respect to the purchase of Units as herein provided; subject,
however, to the right hereby reserved to the Company to enter into the same
agreements with other subscribers and to add and/or to delete other persons as
subscribers.
6.6 The holding of any provision of this Subscription Agreement to
be invalid or unenforceable by a court of competent jurisdiction shall not
affect any other provision of this Subscription Agreement, which shall remain in
full force and effect.
6.7 It is agreed that a waiver by either party of a breach of any
provision of this
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Subscription Agreement shall not operate, or be construed, as a waiver of any
subsequent breach by that same party.
6.8 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
6.9 The Company agrees not to disclose the names, addresses or any
other information about the Subscribers, except as required by law, provided,
that the Company may use information relating to the Subscriber in any
registration statement under the Act with respect to the Warrant Shares.
VI. BLUE SKY LEGENDS
Connecticut The undersigned acknowledges that the Securities have
not been registered under the Connecticut Uniform Securities Act, as amended
(the "Act") and are subject to restrictions on transferability and sale of
securities as set forth herein. The undersigned hereby agrees that such
Securities will not be transferred or sold without registration under the Act or
exemption therefrom.
Pennsylvania The undersigned hereby acknowledges that the Issuer is
relying upon the exemption from registration of securities set forth in Section
203(d) of the Pennsylvania Securities Act of 1972, as amended (the "Pennsylvania
Act") in connection with the sale of the Securities to the undersigned.
In accordance with the requirements of Section 203(d) of the
Pennsylvania Act, the undersigned hereby agrees not to sell his Securities
within twelve (12) months from the date of purchase except pursuant to Section
204.01 of the Blue Sky Regulations of the Pennsylvania Securities Act of 1972.
Additionally, the undersigned is aware of the right of withdrawal under Section
207(m) of the Act.
Texas The undersigned hereby acknowledges that the Securities cannot
be sold unless they are subsequently registered under the Securities Act of
1933, as amended, and the Texas Securities Act, or an exemption from
registration is available. The undersigned further acknowledges that because the
Securities are not readily transferable, he must bear the economic risk of his
investment for an indefinite period of time.
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IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the day and year first written above.
------------------------------------ --------------------------------------
Signature of Subscriber Signature of Co-Subscriber
------------------------------------ --------------------------------------
Name of Subscriber Name of Co-Subscriber
[please print] [please print]
------------------------------------ --------------------------------------
Address of Subscriber Address of Co-Subscriber
------------------------------------ --------------------------------------
Social Security or Taxpayer Social Security or Taxpayer
Identification Number of Subscriber Identification Number of
Co-Subscriber
------------------------------------
Subscriber's Account Number
at Commonwealth Associates
------------------------------------
Dollar Amount of Units Subscribed For
* If Subscriber is a Registered Representative with an NASD member firm, have
the following acknowledgment signed by the appropriate party:
The undersigned NASD member firm
acknowledges receipt of the notice
required by Rule 3050 of the NASD Subscription Accepted:
Conduct Rules.
FUTURELINK DISTRIBUTION CORP.
------------------------------------
Name of NASD Member Firm By:
----------------------------------
Name:
Title:
By
---------------------------------
Authorized Officer
