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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No._________)*
Datalink Systems Corporation
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
- -------------------------------------------------------------------------------
(Title of Class of Securities)
23804A 10-7
-----------------------------------------------------------------------
(CUSIP Number)
Edmund H. Shea, Jr., 655 Brea Canyon Road, Walnut, CA 91789
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
November 5, 1997
-----------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
(Continued on the following page(s))
Page 1 of 27 Pages
The Exhibit Index appears on Page 12.
<PAGE>
_______________________________________________________________________________
CUSIP No. 23804 A 107 13D Page 2 of 27 Pages
_______________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John F. Shea Co., Inc.
94-1530032
______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 SOURCE OF FUNDS*
WC
______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
_______________________________________________________________________________
| |
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | |
BENEFICIALLY |_____|________________________________________________________
OWNED BY | |
EACH | 8 | SHARED VOTING POWER
REPORTING | | 2,666,600
PERSON WITH |_____|________________________________________________________
| |
| 9 | SOLE DISPOSITIVE POWER
| |
|_____|________________________________________________________
| |
| 10 | SHARED DISPOSITIVE POWER
| | 2,666,600
_______________|_____|_________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,666,600
______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
______________________________________________________________________________
13 PERCENTAGE OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.7%
______________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
_______________________________________________________________________________
CUSIP No. 23804 A 107 13D Page 3 of 27 Pages
_______________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John Shea
______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 SOURCE OF FUNDS*
OO
______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
_______________________________________________________________________________
| |
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | |
BENEFICIALLY |_____|________________________________________________________
OWNED BY | |
EACH | 8 | SHARED VOTING POWER
REPORTING | | 2,666,600
PERSON WITH |_____|________________________________________________________
| |
| 9 | SOLE DISPOSITIVE POWER
| |
|_____|________________________________________________________
| |
| 10 | SHARED DISPOSITIVE POWER
| | 2,666,600
_______________|_____|_________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,666,600
______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
______________________________________________________________________________
13 PERCENTAGE OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.7%
______________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
_______________________________________________________________________________
CUSIP No. 23804 A 107 13D Page 4 of 27 Pages
_______________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Edmund H. Shea, Jr.
###-##-####
______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 SOURCE OF FUNDS*
OO
______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
_______________________________________________________________________________
| |
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | |
BENEFICIALLY |_____|________________________________________________________
OWNED BY | |
EACH | 8 | SHARED VOTING POWER
REPORTING | | 2,666,600
PERSON WITH |_____|________________________________________________________
| |
| 9 | SOLE DISPOSITIVE POWER
| |
|_____|________________________________________________________
| |
| 10 | SHARED DISPOSITIVE POWER
| | 2,666,600
_______________|_____|_________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,666,600
______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
______________________________________________________________________________
13 PERCENTAGE OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.7%
______________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
_______________________________________________________________________________
CUSIP No. 23804 A 107 13D Page 5 of 27 Pages
_______________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Peter O. Shea
______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 SOURCE OF FUNDS*
OO
______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
_______________________________________________________________________________
| |
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | |
BENEFICIALLY |_____|________________________________________________________
OWNED BY | |
EACH | 8 | SHARED VOTING POWER
REPORTING | | 2,666,600
PERSON WITH |_____|________________________________________________________
| |
| 9 | SOLE DISPOSITIVE POWER
| |
|_____|________________________________________________________
| |
| 10 | SHARED DISPOSITIVE POWER
| | 2,666,600
_______________|_____|_________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,666,600
______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
______________________________________________________________________________
13 PERCENTAGE OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.7%
______________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
_______________________________________________________________________________
CUSIP No. 292007-10-1 13D Page 6 of 27 Pages
_______________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James G. Shontere
______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 SOURCE OF FUNDS*
CO
______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
_______________________________________________________________________________
| |
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | |
BENEFICIALLY |_____|________________________________________________________
OWNED BY | |
EACH | 8 | SHARED VOTING POWER
REPORTING | | 2,666,600
PERSON WITH |_____|________________________________________________________
| |
| 9 | SOLE DISPOSITIVE POWER
| |
|_____|________________________________________________________
| |
| 10 | SHARED DISPOSITIVE POWER
| | 2,666,600
_______________|_____|_________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,666,600
______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
______________________________________________________________________________
13 PERCENTAGE OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.7%
______________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 7 of 27 Pages
--- ----
Item 1. Security and Issuer.
This statement relates to the common stock, par value $.001 per share
("Common Stock"), of Datalink Systems Corporation, a Nevada
corporation (the "Company"). The address of the Company's principal
executive office is 1735 Technology Drive, Suite 790, San Jose, CA
95110. The shares of Common Stock that are the subject of this
statement are issuable upon conversion of the shares of the Company's
Series A Convertible Preferred stock, par value $.001 per share (the
"Series A Preferred Stock"), initially at a conversion rate of ten
shares of Common Stock for each share of Series A Preferred Stock,
subject to adjustment in certain instances.
Item 2. Identity and Background.
This statement is filed jointly by J.F. Shea Co., Inc., John F. Shea,
Edmund H. Shea, Jr., Peter O. Shea and James G. Shontere (the
"Reporting Persons"). (J.F. Shea Co., Inc. ("J.F. Shea")), a
corporation organized under the laws of Nevada, whose business
address is 655 Brea Canyon Road, Walnut, California 91789. J.F.
Shea's principal business is heavy construction and residential and
commercial construction. During the past five year, J.F. Shea has not
been convicted in a criminal proceeding nor has it been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding, was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
John F. Shea is a Director and President of J.F. Shea, Edmund H.
Shea, Jr. is a Director and Vice President of J.F. Shea., Peter O.
Shea is a Director and Vice President of J.F. Shea and James G.
Shontere is a Director, Treasurer and Secretary of J.F. Shea. The
business address for each of the foregoing Reporting Persons is 655
Brea Canyon Road, Walnut, California 91789. Each of Messrs. John F.
Shea, Edmund H. Shea, Jr., Peter O. Shea and James G. Shontere is a
citizen of the United States. During the past five years, each of
Messrs. John F. Shea, Edmund H. Shea, Jr., Peter O. Shea and James G.
Shontere have not been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors), nor have such Reporting
Persons been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding, was or is subject to a judgement, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
<PAGE>
Page 8 of 27 Pages
--- ----
Item 3. Source and Amount of Funds or Other Consideration.
J.F. Shea acquired the Series A Preferred Stock from the Company for
a purchase price of $999,975 with funds provided from working
capital. In no case were any funds borrowed.
Item 4. Purpose of Transaction.
The Series A Preferred Stock was purchased from the Company in a
private placement the (the "Private Placement') to accredited
investors of Units (the "Units"), each Unit consisting of 40,000
shares of Series A Preferred Stock and 200,000 warrants (the
"Warrants") to purchase the Company's Common Stock. The Warrants are
exercisable at $.50 per share for a period commencing the later of
November 5, 1998 or the date which the Company files an amendment to
its articles of incorporation increasing its authorized shares of
Common Stock to not less than 70,000,000 and expiring on November 5,
2002. The Series A Preferred Stock and Warrants where acquired by
J.F. Shea solely for investment purposes and not for the purpose of
acquiring control of the Company.
The Reporting Persons have no present plans or proposals which relate
to, or could result in, any of the matters referred to in paragraphs
(a) through (j), inclusive, of Item 4 of Schedule 13D except to the
extent described in Item 6 hereof, to which reference is hereby made.
The Reporting Persons may, at any time and from time to time, review
or reconsider their position and formulate plans or proposals with
respect thereto, but have no present intention of doing so.
Item 5. Interest in Securities of the Issuer.
(a) J.F. Shea is the beneficial owner of a total of 2,666,600
shares of Common Stock issuable upon conversion of 266,660
shares of Series A Preferred Stock. Messrs. John F. Shea,
Edmund H. Shea, Jr., Peter O. Shea and James G. Shontere, in
their capacity as directors of J.F. Shea, share voting and
dispositive power with respect to such securities and may be
deemed to be the beneficial owners of such securities.
The percentage of outstanding shares of Common Stock of the
Company set out in the preceding paragraph is computed based
on a total of 20,182,925 shares of Common Stock outstanding as
of November 20, 1997, which does not include 2,740,000 shares
of Series A Preferred Stock outstanding which are convertible
into 27,400,000 shares of Common Stock. Holders of the Series
A Preferred Stock vote together with holders of the Common
Stock on the basis of one vote for each share of Common Stock
into which the Series A Preferred Stock is then convertible
(currently, a ten-for-one basis). If the shares of Common
Stock issuable upon conversion of the Series A Preferred Stock
are included in the number of shares of Common Stock
outstanding, the Reporting Persons would beneficially own
<PAGE>
Page 9 of 27 Pages
--- ----
approximately 5.6% of the issued and outstanding shares of
Common Stock of the Company.
(b) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote:
---------
(ii) shared power to vote or to direct the vote:
Messrs. John F. Shea, Edmund H. Shea, Jr., Peter O. Shea
and James G. Shontere share the power to vote or to
direct the vote of those shares owned by J.F. Shea.
(iii) sole power to dispose or to direct the disposition of:
---------
(iv) shared power to dispose of or to direct the disposition
of:
Messrs. John F. Shea, Edmund H. Shea, Jr., Peter O. Shea
and James G. Shontere share the power to dispose of or
to direct the disposition of those shares owned by J.F.
Shea.
(c) Inapplicable
(d) Inapplicable
(e) Inapplicable
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
There are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the Reporting Persons and between any of
such Reporting Persons and any other person with respect to any
securities of the Company (including, but not limited to, any
contract, arrangement, understanding or relationship involving the
transfer or voting of any securities, finder's fee, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits,
divisions or loss, or the giving or withholding of proxies).
Under the terms of the subscription agreement between the Company and
the purchasers of Series A Preferred Stock in the Private Placement,
the Company is required to prepare
<PAGE>
Page 10 of 27 Pages
---- ----
and file a registration statement with the Securities and Exchange
Commission (the "SEC") with respect to the Series A Preferred Stock,
the Warrants and the shares of Common Stock underlying the Warrants
and the Series A Preferred Stock.
Item 7. Materials to be Filed as Exhibits.
(1) Joint Statement on Schedule 13D, as required by Rule
13d-1(f)(1) under the Exchange Act.
(2) Certificate of Designation relating to Series A Preferred
Stock, incorporated by reference to Exhibit 99 of the
Company's Current Report on Form 8-K filed with the SEC on
December 5, 1997.
(3) Subscription Agreement regarding purchase of the Company's
Series A Preferred Stock.
<PAGE>
Page 11 of 27 Pages
---- ----
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: February 12, 1998 J. F. Shea Co., Inc.
Walnut, California
By: /s/ Edmund H. Shea, Jr.
---------------------------
Edmund H. Shea, Jr.,
Vice President
Dated: February 12, 1998
Walnut, California /s/ John F. Shea
-------------------------
John F. Shea
Dated: February 12, 1998
Walnut, California /s/ Edmund H. Shea, Jr.
-------------------------
Edmund H. Shea, Jr.
Dated: February 12, 1998
Walnut, California /s/ Peter O. Shea
-------------------------
Peter O. Shea
Dated: February 12, 1998
Walnut, California /s/ James G. Shontere
-------------------------
James G. Shontere
<PAGE>
Page 12 of 27 Pages
---- ----
EXHIBIT INDEX
Exhibit No. Page
- ----------- ----
(1) Joint Statement on Schedule 13D, as required by Rule 13d-1(f)(1) 13
under the Exchange Act.
(2) Certificate of Designation relating to Series A Preferred Stock,
incorporated by reference to Exhibit 99 of the Company's Current
Report on Form 8-K filed with the SEC on December 5, 1997.
(3) Subscription Agreement regarding purchase of the Company's 14
Series A Preferred Stock.
<PAGE>
Page 13 of 27 Pages
---- ----
EXHIBIT 1
AGREEMENT
JOINT FILING OF SCHEDULE 13D
The undersigned hereby agree to jointly prepare and file with
regulatory authorities a Schedule 13D and any future amendments thereto
reporting each of the undersigned's ownership of securities of Datalink Systems,
Inc. and hereby affirm that such Schedule 13D is being filed on behalf of each
of the undersigned.
Dated: February 12, 1998 J. F. Shea Co., Inc.
Walnut, California
By: /s/ Edmund H. Shea, Jr.
---------------------------
Edmund H. Shea, Jr.,
Vice President
Dated: February 12, 1998
Walnut, California /s/ John F. Shea
-------------------------
John F. Shea
Dated: February 12, 1998
Walnut, California /s/ Edmund H. Shea, Jr.
-------------------------
Edmund H. Shea, Jr.
Dated: February 12, 1998
Walnut, California /s/ Peter O. Shea
-------------------------
Peter O. Shea
Dated: February 12, 1998
Walnut, California /s/ James G. Shontere
-------------------------
James G. Shontere
<PAGE>
Page 14 of 27 Pages
---- ----
EXHIBIT 3
DATALINK SYSTEMS CORPORATION
SUBSCRIPTION AGREEMENT made as of this ____ day of ________,
1997 between Datalink Systems Corporation, a Nevada corporation with its
principal offices at 2105 Hamilton Avenue, Suite 240, San Jose, California 95125
(the "Company") and the undersigned (the "Subscriber").
WHEREAS, the Company desires to issue a minimum of 27 and a
maximum of 54 units ("Units") in a private placement, containing a minimum of
1,080,000 shares and a maximum of 2,160,000 shares (the "Shares") of Series A
Convertible Preferred Stock, par value $.001 per share (the "Convertible
Preferred Stock"), each Unit consisting of 40,000 Shares (which Shares are each
convertible into 10 shares of the Company's Common Stock, $.001 par value (the
"Common Stock") as described in the Certificate of the Designations, Powers,
Preferences and Rights of the Series A Convertible Preferred Stock included as
Exhibit A to the Memorandum (defined below)) and 200,000 common stock purchase
warrants (the "Warrants") in the form under the Warrant Agreement attached
hereto as Exhibit B 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;
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 $150,000 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 Datalink Systems Corporation, or by wire transfer of funds,
contemporaneously with the execution and delivery of this Subscription
Agreement. Certificates representing the Shares and Warrants will be delivered
by the Company within ten (10) days following the consummation of this offering
as set forth in Article III hereof. The Subscriber understands however, that
this purchase of Units is contingent upon the Company making sales of a minimum
of 27 Units 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) the Company has generated only
nominal revenues and has incurred substantial losses since its inception (ii) an
investment in the Company is highly speculative and
<PAGE>
Page 15 of 27 Pages
---- ----
only investors who can afford the loss of their entire investment should
consider investing in the Company and the Units; (iii) he may not be able to
liquidate his investment; (iv) transferability of the securities comprising the
Units is extremely limited; and (v) in the event of a disposition, 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 Private Placement Memorandum dated
September 23, 1997 (including all exhibits and other attachments thereto, the
"Memorandum").
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, or he has employed the services of an investment advisor, attorney
or accountant to read all of the documents furnished or made available by the
Company both to him and to all other prospective investors in the Units and to
evaluate the merits and risks of such an investment on his behalf, and that he
recognizes the highly speculative nature of this investment.
1.5 The Subscriber acknowledges receipt and careful review
of the Memorandum and all 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 such information and documents have, in his opinion, afforded the
Subscriber with all of the same information that would be provided him in a
registration statement filed under the Act; 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 the offering, and any additional information which he had
requested.
1.6 The Subscriber acknowledges that this offering of
Units may involve tax consequences 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 of
Units 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 Shares 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 such securities unless they are registered under the Act or unless an
exemption from such registration is available.
<PAGE>
Page 16 of 27 Pages
---- ----
1.8 The Subscriber understands that the Shares and
Warrants comprising the Units have not been registered under Act by reason of a
claimed exemption under the provisions of the Act which depends, in part, upon
his investment intention. In this connection, the Subscriber understands that it
is the position of the SEC that the statutory basis for such exemption would not
be present if his representation merely meant that his present intention was to
hold such securities for a short period, such as the capital gains period of tax
statutes, for a deferred sale, for a market rise, assuming that a market
develops, or for any other fixed period. The Subscriber realizes that, in the
view of the SEC, a purchase now with an intent to resell would represent a
purchase with an intent inconsistent with his representation to the Company, and
the SEC might regard such a sale or disposition as a deferred sale to which such
exemptions are not available.
1.9 The Subscriber understands that there is no public
market for the Shares and Warrants comprising the Units and that only a limited
public market exists for the Common Stock issuable upon conversion of the Shares
and exercise of the Warrants (the "Reserved Shares"). 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 relating to the
Warrants and the Reserved Shares set forth in Article IV herein. The Subscriber
consents that the Company may, if it desires, permit the transfer of the
securities comprising the Units or issuable upon conversion or exercise thereof
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 nor the
proposed transfer results in a violation of the Act or any applicable state
"blue sky" laws (collectively "Securities Laws") and subject to the provisions
of Section 1.10 hereof. The Subscriber agrees to hold the Company and its
directors, officers and controlling persons and their respective heirs,
representatives, successors and assigns harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of any
misrepresentation made by him contained herein or in the Investor Questionnaire
or any sale or distribution by the undersigned Subscriber in violation of any
Securities Laws.
1.10 The Subscriber agrees not to sell, transfer, assign,
hypothecate or otherwise dispose of the Shares, the Warrants or the Reserved
Shares for a period of one year from the Initial Closing.
1.11 The Subscriber consents to the placement of a legend
on any certificate or other document evidencing the Shares and Warrants
comprising his Units and the Reserved Shares stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof.
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1.12 The Subscriber understands that the Company will
review this Subscription Agreement and the Investor Questionnaire and otherwise
review the financial standing of the Subscriber; and it is agreed that the
Company reserves the unrestricted right to reject or limit any subscription.
1.13 The Subscriber hereby represents that the address of
Subscriber furnished by him at the end of this Subscription Agreement is the
undersigned's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.
1.14 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.
1.15 The Subscriber hereby represents that, except as set
forth in the Offering Documents, no representations or warranties have been made
to the Subscriber by the Company or any agent, employee or affiliate of the
Company and in entering into this transaction, the Subscriber is not relying on
any information, other than that contained in the Offering Documents and the
results of independent investigation by the Subscriber.
1.16 The Subscriber acknowledges that at such time, if
ever, as his Warrants or Reserved Shares are registered, sales of such
securities will be subject to state securities laws, including those of New
Jersey which require any securities sold in New Jersey to be sold through a
registered broker-dealer or in reliance upon an exemption from registration.
1.17 The Subscriber acknowledges that the maximum number
of Units to be sold pursuant to the Memorandum may be increased, at the
discretion of the Company and the Placement Agent, by up to seven additional
Units.
II. REPRESENTATIONS BY THE COMPANY
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 Nevada and has the corporate
power to conduct the business which it conducts and proposes to conduct and is
qualified to do business in California.
(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.
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(c) The Shares and Warrants comprising the Units 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 Reserved Shares to provide for conversion of the
Shares and exercise of the Warrants.
(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 Shares 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.
(h) The financial information contained in the Memorandum
presents fairly the financial condition of the Company as of the dates and for
the periods indicated.
III. TERMS OF SUBSCRIPTION
3.1 The subscription period will begin as of September 25,
1997 and will terminate at 11:59 PM Eastern time on November 25, 1997, unless
extended by the Company and the Placement Agent for up to an additional 60 days
(the "Termination Date"). Of the Units, 27 will be offered on a "best
efforts-all or none" basis and the remaining 27 Units will be offered on a "best
efforts" basis as more particularly set forth in the Memorandum. The minimum
subscription per subscriber shall be one Unit ($150,000), provided, however,
that smaller investments may be accepted at the discretion of the Placement
Agent and the Company.
3.2 Placement of the Units will be made by Commonwealth
Associates (the "Placement Agent"), which will receive (i) a placement fee in
the amount of 7% of the purchase
<PAGE>
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price of the Units placed; (ii) a non-accountable expense allowance of 2% of the
purchase price of the Units; (iii) a structuring fee in the amount of 3% of the
purchase price of the Units placed; (iv) warrants to purchase up to 7,256,250
shares of Common Stock of the Company exercisable at $.375 per share for
assisting the Company in the placement and (iv) other compensation as summarized
in the Memorandum.
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 27 Units for an aggregate
purchase price of $4,050,000 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 27 Units are sold at or prior to the Termination Date,
then all subscription proceeds shall be paid over to the Company within ten days
thereafter. In such event, placements of additional Units may continue until the
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 Confidential Purchaser Questionnaire or (b)
directly to the Subscriber's account maintained with the Placement Agent, if
any. (If the Subscriber does not desire the securities to be delivered to such
account, the Subscriber should delete Subsection (b) of this Section 3.4.)
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 The Subscriber acknowledges that at such time, if
ever, as any of the Securities are registered, sales of such Securities will be
subject to state securities laws, including those of states which may require
any securities sold therein to be sold through a registered broker-dealer or in
reliance upon an exemption from registration.
3.7 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 or any use of this Agreement, including (i) the
legal requirements within its jurisdiction for the purchase of the Securities,
(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. Such Subscriber's
subscription and payment for, and his or her continued beneficial ownership of
the Securities, will not violate any applicable securities or other laws of the
Subscriber's jurisdiction.
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IV. REGISTRATION RIGHTS
4.1 The Company hereby agrees with the holders of the
Reserved Shares or their transferees (collectively, the "Holders") to use its
best efforts to ensure that the Warrants and the Reserved Shares (collectively,
the "Registrable Securities") shall be registered for resale under the Act,
subject to the lock-up provisions of Section 1.10 hereof, nine months after the
final Closing.
The obligation of the Company under this Section 4.1 shall
be limited to one registration statement and shall not apply to any Registrable
Securities which at the time are eligible for resale pursuant to Rule 144(k).
The Company shall pay the expenses described in Section 4.3 for the registration
statement 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.
The foregoing notwithstanding, the Company may defer any
such registration pursuant to this Section 4.1 for a period of not more than
ninety (90) days if the Company's Board of Directors determines in good faith
that it would be in the best interest of shareholders to do so.
4.2 Registration Procedures. If and whenever the Company
is required by the provisions of Section 4.1 to effect the registration of
Registrable Securities under the Act, the Company will, until such time as the
Registrable Securities may be sold under Rule 144 without volume limitation:
(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;
(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 statement effective;
(c) furnish to the security 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 twenty (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;
<PAGE>
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(e) notify the security 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 such holders 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 Common Stock
by such holder;
(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, however,
that any securityholders 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
<PAGE>
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qualified (except as provided in 4.3(a) above). Fees and disbursements of
counsel and accountants for the selling securityholders and any other expenses
incurred by the selling securityholders not expressly included above shall be
borne by the selling securityholders.
4.4 Indemnification.
(a) The Company will indemnify and hold harmless each
holder of Registrable Securities 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 such holder, such underwriter or such controlling person in writing
specifically for use in the preparation thereof.
(b) Each holder of Registrable Securities 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, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by or on behalf of such
holder specifically for use in the preparation thereof.
(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
<PAGE>
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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 counsel for the
indemnifying party concludes that a single counsel cannot under applicable legal
and ethical considerations, represent both the indemnifying party and 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. MISCELLANEOUS
5.1 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, 2105 Hamilton Avenue, Suite 240, San Jose, California 95125, Attention:
President 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, which shall be deemed to
have been given when received.
5.2 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.
5.3 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.
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5.4 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.
5.5 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.
5.6 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.
5.7 It is agreed that a waiver by either party of a breach
of any provision of this Subscription Agreement shall not operate, or be
construed, as a waiver of any subsequent breach by that same party.
5.8 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.
5.9 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 Warrants or the
Reserved Shares.
<PAGE>
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VI. BLUE SKY LEGENDS
California
The sale of securities which are the subject of this
agreement has not been qualified with the Commissioner of Corporations of the
State of California and the issuance of such securities or the payment or
receipt of any part of the consideration for such securities prior to such
qualification is unlawful, unless the sale of securities is exempt from
qualification by Section 25100, 25102 or 25105 of the California Corporations
Code. The rights of all parties to this agreement are expressly conditioned upon
such qualification being obtained, unless the sale is so exempt.
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.
Maine
These securities are being sold pursuant to an exemption
from registration with the bank superintendent of the State of Maine under
Section 10502(2)(r) of Title 32 of the Maine revised statutes. These securities
may be deemed restricted securities and as such the holder may not be able to
resell the securities unless pursuant to registration under state or federal
securities laws or unless an exemption under such laws exists.
Missouri
The undersigned acknowledges that the Securities have not
been registered under the Missouri 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 acknowledges that such Securities
may be disposed of only through a licensed broker-dealer. It is a felony to sell
securities in violation of the Missouri Securities Act.
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.
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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 described in the cover pages of the Memorandum.
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.
<TABLE>
<CAPTION>
<S> <C>
- -------------------------------------- --------------------------------------------
Signature of Subscriber Signature of Co-Subscriber
- -------------------------------------- --------------------------------------------
Name of Subscriber Name of Co-Subscriber
[please print]
- -------------------------------------- --------------------------------------------
Address of Subscriber Address of Co-Subscriber
- -------------------------------------- --------------------------------------------
Social Security or Taxpayer Social Security or Taxpayer Identification
Identification Number of Subscriber Number of Co-Subscriber
- --------------------------------------
Subscriber's Account Number
at Commonwealth Associates
- --------------------------------------
Number of Units Subscribed For
*If Subscriber is a Registered Representative
with an NASD member firm, have the following
acknowledgement 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.
DATALINK SYSTEMS CORPORATION
- ------------------------------
Name of NASD Member Firm By: ______________________________
By ______________________________ Date: ____________________
Authorized Officer
</TABLE>
