EXHIBIT 4.5
FORM OF
REGULATION D SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE OR OTHER SECURITIES
AUTHORITIES. THEY MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF THOSE SECURITIES LAWS.
THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO PURCHASE, ANY OF THE SECURITIES DESCRIBED
HEREIN BY OR TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. THESE SECURITIES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL, STATE OR FOREIGN SECURITIES AUTHORITIES,
NOR HAVE ANY SUCH AUTHORITIES REVIEWED OR DETERMINED THE ACCURACY OF
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK,
INCLUDING BUT NOT LIMITED TO THOSE RISK FACTORS IDENTIFIED IN THE
COMPANY'S FORM S-3 FILED ON JULY 17, 2000 WITH THE SECURITIES AND
EXCHANGE COMMISSION. INVESTORS MUST RELY ON THEIR OWN ANALYSIS OF THE
INVESTMENT TERMS AND CONDITIONS OF THE PROPOSED INVESTMENT AND THEIR
OWN ASSESSMENT OF THE RISKS INVOLVED.
This Regulation D Subscription Agreement (the "Agreement") is executed
by the undersigned (the "Subscriber") in connection with the offer to the
Subscriber of, and the subscription by the Subscriber for, shares of Common
Stock, $.001 par value per share (the "Common Stock"), of SI DIAMOND TECHNOLOGY,
INC., a Texas corporation (the "Company"). The Company shall sell to the
Subscriber _____________ shares of the Company's Common Stock at a price of
$__________ per share, for an aggregate purchase price of $__________ .
The solicitation of this Subscription by the Company, and if accepted
by the Company, the sale of the shares of Common Stock subscribed for, are being
made on reliance upon the provisions of Regulation D ("Regulation D")
promulgated under the Securities Act of 1933 (the "Securities Act").
The undersigned Subscriber and the Company, upon acceptance of this
Agreement, hereby agree as follows:
<PAGE>
1. Offering
1.1 Offer to Subscribe; Purchase Price and Closing; and
Placement Fees. Subject to satisfaction of the conditions to the closing of a
purchase and sale of Common Stock as to each purchaser of Common Stock (the
"Closing") set forth in Section 1.2 below, the Subscriber hereby offers to
subscribe for and purchase shares of Common Stock, for the aggregate purchase
price set forth in Section 8 of this Agreement, all in accordance with the terms
and conditions of this Agreement. The Closing shall be deemed to occur when this
Agreement has been executed by both the Subscriber and the Company, and full
payment for the shares of Common Stock subscribed for shall have been made by
the Subscriber, by wire transfer in United States Dollars, to the Company as set
forth in Section 7.1(a) in consideration for the Company's delivery of
certificates representing the shares of Common Stock so subscribed for.
1.2 Conditions to Subscriber's Obligations. The
----------------------------------------
Subscriber's obligations hereunder are conditioned upon the occurrence of all of
the following:
(a) other than as described on Schedule 1.2
attached hereto, there have been no material
adverse changes in the Company's business
prospects or financial condition since the
date of the last balance sheet included in
the Disclosure Documents (as defined below
in Section 4.2);
(b) the representations and warranties of the
Company shall be true and correct in all
material respects on the date of Closing, as
if made on such date, and the Company shall
deliver a certificate, signed by an officer
of the Company, to such effect; and
(c) the Subscription Agreement has been accepted
by the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER. The Subscriber
hereby represents and warrants to the Company as follows (which representations
and warranties shall be true as of the date of Closing):
2.1 Accredited Investor. The Subscriber hereby represents and
-------------------
warrants to the Company that it is an "accredited investor," as defined in Rule
501 of Regulation D, and has marked the applicable box set forth in Section 9 of
this Agreement signifying such status.
2.2 Investment Experience; Access to Information;
Independent Investigation.
----------------------------------------------
2.2.1 Access to Information. The Subscriber or its
-----------------------
professional advisor has been granted the opportunity to ask questions of and
receive answers from representatives of the Company, and its officers,
directors, employees and agents concerning the terms and conditions of the
Offering, and the Company and its business and prospects, and to obtain any
additional information which the Subscriber or its professional advisor deems
necessary to verify the accuracy of the information received. The foregoing,
however, does not limit or modify the
2
<PAGE>
Subscriber's right to rely upon representations and warranties of the Company in
Section 4 of this Agreement.
2.2.2 Ability to Evaluate. The Subscriber has such
-------------------
knowledge and experience in financial and business matters that it is fully
capable of evaluating the merits and risks of an investment in the Company,
including without limitation those set forth in the Disclosure Documents (as
defined below in Section 4.2).
2.2.3 Disclosure Documents. The Subscriber has
-----------------------------
received and reviewed the Disclosure Documents (as defined below in Section
4.2). The foregoing, however, does not limit or modify the Subscriber's right to
rely upon the representations and warranties of the Company in Section 4 of this
Agreement.
2.2.4 Investment Experience; Fend for Self. The
----------------------------------------
Subscriber has substantial experience in investing in securities and has made
investments in securities other than those of the Company. The Subscriber
acknowledges that it is able to fend for itself in the transaction contemplated
by this Agreement and that it has the ability to bear the economic risk of its
investment in the Company. The Subscriber has not been organized for the purpose
of investing in securities of the Company.
2.2.5 Not an Affiliate. The Subscriber is not an
----------------
officer, director or "affiliate" (as that term is defined in Rule 415 of the
Securities Act) of the Company.
2.3 Exempt Offering Under Regulation D
----------------------------------
2.3.1 Investment; No Distribution. The Subscriber is
----------------------------
acquiring the shares of Common Stock subscribed for (the "Common Shares") solely
for investment purposes for the Subscriber's own account (or for beneficiaries'
accounts over which the Subscriber has investment discretion but no
discretionary authority as to voting or disposition) and not with a view to a
distribution of all or any part thereof. The Subscriber is aware that there are
legal and practical limits on its ability to sell or dispose of the Common
Shares and therefore, that the Subscriber must bear the economic risk of its
investment for an indefinite period of time. The Subscriber has adequate means
of providing for its current needs and anticipated contingencies and has no need
for liquidity of this investment. The Subscriber's commitment to illiquid
investments is reasonable in relation to its net worth.
2.3.2 No General Solicitation. The Common Shares were
-----------------------
not offered to the Subscriber through, and the Subscriber is not aware of, any
form of general solicitation or general advertising, including, without
limitation, (i) any advertisement, articles, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, and (ii) any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising.
2.3.3 No Registration of Common Shares. The
---------------------------------------
Subscriber understands that the Common Shares are not registered and therefore
are "restricted securities" under the federal securities laws inasmuch as they
are being acquired from the Company in a transaction not involving a public
offering, and that, under such laws and applicable regulations, such securities
may not be transferred or resold without registration under the
3
<PAGE>
Securities Act or pursuant to an exemption therefrom. In this connection, the
Subscriber represents that it is familiar with Rule 144 under the Securities
Act, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.
2.3.4 Disposition. Without in any way limiting the
-----------
representations set forth above, the Subscriber further agrees not to make any
disposition of all or any portion of the Securities unless and until:
(a) There is then in effect a
registration statement under the
Securities Act covering such
proposed disposition and such
disposition is made in accordance
with such Registration Statement; or
(b) The Subscriber shall have notified
the Company of the proposed
disposition and shall have furnished
the Company with a detailed
statement of the circumstances
surrounding the proposed
disposition, and (ii) if reasonably
requested by the Company, the
Subscriber shall have furnished the
Company with an opinion of counsel,
reasonably satisfactory to the
Company, that such disposition will
not require registration of the
Common Shares under the Securities
Act.
2.4 Due Authorization.
-----------------
2.4.1 Authority. The Subscriber, if executing this
---------
Subscription Agreement in a representative or fiduciary capacity, has full power
and authority to execute and deliver this Subscription Agreement and each other
document referred to herein for which a signature is required in such capacity
and on behalf of the subscribing individual, partnership, trust, estate,
corporation or other entity for whom or which the Subscriber is executing this
Subscription Agreement.
2.4.2 Due Authorization. The Subscriber, if an
------------------
entity, is duly and validly organized, validly existing and in good standing as
such entity under the laws of the jurisdiction of its organization, with full
power and authority to purchase the Common Shares subscribed for and to execute
and deliver this Agreement.
3. Acknowledgments. The Subscriber is aware of the following:
---------------
3.1 Risks of Investment. The Subscriber recognizes that
---------------------
investment in the Company involves certain risks, including the potential loss
of the Subscriber's investment herein. The Subscriber recognizes that this
Agreement and the exhibits hereto do not purport to
4
<PAGE>
contain all the information which would be contained in a registration statement
under the Securities Act;
3.2 No Government Approval. The Subscriber acknowledges that
----------------------
no federal, state or foreign agency has passed upon or reviewed the terms and
conditions of the Offering or made any finding or determination as to the
fairness of the Offering;
3.3 Restrictions on Transfer. The Subscriber may not sell,
-------------------------
transfer, assign, pledge or otherwise dispose of all or any portion of the
Securities in the absence of either an effective registration statement or an
exemption from the registration requirements of the Securities Act and
applicable state securities law;
3.4 Exempt Transaction. The Common Shares are being offered
-------------------
and sold in reliance on specific exemptions from the registration requirements
of federal and state law and the Subscriber's representations, warranties,
agreements, acknowledgments and applicability of such exemptions and the
suitability of the Subscriber to acquire Common Shares.
3.5 Legends. It is understood that any certificates evidencing
-------
the Common Shares shall bear the following legend:
"The securities represented hereby have not been registered
under the Securities Act of 1933, as amended, or applicable
state securities laws, nor the securities laws of any other
jurisdiction. They may not be sold or transferred in the
absence of an effective registration statement under those
securities laws or an opinion of counsel, REASONABLY
satisfactory to the Company, that the sale or transfer is
pursuant to an exemption to the registration requirements of
those securities laws."
4. Representations and Warranties of the Company. The Company hereby
----------------------------------------------
makes the following representations and warranties to the Subscriber, except as
disclosed in the Disclosure Documents or otherwise disclosed to Subscriber,
which representations and warranties shall be true as of the date of acceptance
of this Agreement by the Company and as of Closing:
4.1 Organization, Good Standing, and Qualification. The
--------------------------------------------------
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and has all requisite corporate power and
authority to carry on its business as now conducted and as currently proposed to
be conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the business or properties of the Company and its
subsidiaries taken as a whole. The Company is not the subject of any pending or,
to its knowledge, threatened or contemplated investigation or administrative or
legal proceeding by the Internal Revenue
5
<PAGE>
Service, the taxing authorities of any state or local jurisdiction, or the
Securities and Exchange Commission, or any state securities commission, or any
other governmental entity, which are required to be disclosed in the Disclosure
Documents and have not been disclosed.
4.2 Corporate Condition. The Company has timely filed all
--------------------
forms, and reports and documents with the Securities and Exchange Commission
required to be filed by it under the Securities Exchange Act 1934, as amended
(the "Exchange Act") through the date hereof (collectively, the "SEC Reports").
Each of the SEC Reports, at the time filed, complied in all material respects
with the requirements of the Exchange Act. The Company has made available to the
Subscriber a copy of the Company's Form 10-KSB for the fiscal year ended
December 31, 1999, and a copy of the Company's Forms 10-QSB, 8-K and S-3 filed
by the Company since January 1, 2000 (the "Most Recent Filings Report"). Other
than as set forth in Schedule 4.2 attached hereto and made a part hereof, there
have been no material adverse changes in the Company's business, prospects,
operations or financial condition since the date of the Most Recent Filings
Report. The SEC Reports, together with Schedule 4.2 and any other documents
listed on Schedule 4.2(a) attached hereto and made a part hereof and furnished
herewith by the Company to the Subscriber are referred to collectively as the
"Disclosure Documents." The financial statements contained in the Disclosure
Documents have been prepared in accordance with generally accepted accounting
principles, consistently applied, and fairly present in all material respects
the consolidated financial condition of the Company as of the dates of the
balance sheets included therein and the consolidated results of its operations
and cash flows for the periods then ended. Without limiting the foregoing, there
are no material liabilities, contingent or actual that are not disclosed in the
Disclosure Documents (other than liabilities incurred by the Company in the
ordinary course of its business, consistent with its past practice, after the
periods covered by the Disclosure Documents). The Company has paid all material
taxes which are due, except for taxes which it reasonably disputes. There is no
material claim, litigation, or administrative proceeding pending, or, to the
best of the Company's knowledge, threatened or contemplated against the Company,
except as disclosed in the Disclosure Documents. This Agreement and the
Disclosure Documents do not contain any untrue statement of material fact and do
not omit to state any material fact required to be stated therein or herein
necessary to make the statements contained therein or herein not misleading in
the light of the circumstances under which they were made.
4.3 Authorization. All corporate action on the part of the
-------------
Company by its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder and the authorization, issuance and
delivery of the Common Shares have been taken, and this Agreement constitutes
valid and legally binding obligations of the Company, enforceable in accordance
with their terms; provided, however that enforceability is subject to: (i)
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance, and similar federal and state laws affecting the rights and remedies
of creditors generally, and (ii) general principles of equity limiting the
availability of equitable remedies (including but not limited to the remedy of
specific performance), whether considered in a proceeding at law or in equity.
The Company has obtained all consents and approvals required for it to execute,
deliver and perform this Agreement.
6
<PAGE>
4.4 Valid Issuance of Common Shares. The Common Shares, when
-------------------------------
issued, sold and delivered in accordance with the terms hereof, for the
consideration expressed herein, will be validly issued, fully paid and
nonassessable and, based in part upon the representations of the Subscriber in
this Agreement, will be issued in compliance with all applicable federal and
state securities laws. The Common Shares will be issued free of any preemptive
rights.
4.5 Compliance with Other Instruments. The Company is not in
----------------------------------
violation or default of any provisions of its Restated Articles of Incorporation
or Bylaws as amended and in effect on and as of the date of this Agreement or of
any material provision of any material instrument or contract to which it is a
party or by which it is bound or, to its knowledge, of any provision of any
federal or state judgment, writ, decree, order, statute, rule or governmental
regulation applicable to the Company, which would have a material adverse effect
on the Company's business or prospects, except as described in the Disclosure
Documents. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in any such
violation or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision, instrument
or contract or an event which results in the creation of any lien, charge or
encumbrance upon any assets of the Company.
4.6 Reporting Company. The Company is subject to the reporting
-----------------
requirements of the Exchange Act, and has a class of securities registered under
Section 12 or Section 15 of the Exchange Act. When requested by the Subscriber,
the Company shall furnish copies of reports filed by the Company with the
Securities and Exchange Commission.
4.7 Authorized and Issued Shares. The authorized and issued
------------------------------
shares of the Company preferred stock, Common Stock and warrants, options, and
instruments convertible into Common Stock as of August 31, 2000 are as set forth
on Exhibit A.
4.8 Use of Proceeds. As of the date hereof, the Company
-----------------
expects to use the proceeds from the Offering (less fees and expenses) for the
purposes set forth on Exhibit B hereto. These purposes are estimates and are
subject to change, but represent the Company's good faith best estimate of
anticipated uses.
4.9 Compliance with Laws. As of the date hereof, the conduct
--------------------
of the business of the Company complies in all material respects with all
material statutes, laws, regulations, ordinances, rules, judgments, orders or
decrees applicable thereto. The Company has not received notice of any alleged
violation of any statute, law, regulations, ordinance, rule, judgment, order or
decree from any governmental authority. The Company shall comply with all
applicable securities laws with respect to the Offering.
4.10 No Rights of Participation. No person or entity,
-----------------------------
including, but not limited to, current or former shareholders of the Company,
underwriters, brokers, agents or other third parties, has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the Offering which has not been waived.
7
<PAGE>
4.11 Disclosures. There is no fact known to the Company (other
-----------
than general economic conditions known to the public generally) that has not
been disclosed in the Disclosure Documents that (a) could reasonably be expected
to have a material adverse effect on the business, financial condition or
results of operations of the Company, or which could reasonably be expected to
materially and adversely affect the properties or assets of the Company or (b)
could reasonably be expected to materially and adversely affect the ability of
the Company to perform its obligations pursuant to this Agreement and the
issuance of the Securities.
4.12 Representations True and Correct. The foregoing
------------------------------------
representations, warranties and agreements are true, correct and complete in all
material respects, and shall survive the Closing and the issuance of the Common
Shares.
4.13 Termination Date of Offering. In no event shall the
------------------------------
Closing occur later than September 30, 2000, with any extension based upon an
agreement between the Company and the Subscriber.
4.14 Underwriter's Fees and Rights of First Refusal. The
--------------------------------------------------
Company is not obligated to pay any compensation or other fees, costs or related
expenditures in cash or securities to any underwriter, broker, agent or other
representative in connection with the Offering.
5. Covenants of the Company
5.1 Independent Auditors. The Company shall, until at least
---------------------
two (2) years after the date of the Closing, maintain as its independent
auditors an accounting firm authorized to practice before the Securities and
Exchange Commission.
5.2 Corporate Existence and Taxes. The Company shall, until at
-----------------------------
least two (2) years after the date of the Closing, maintain its corporate
existence in good standing (provided, however, that the foregoing covenant shall
not prevent the Company from entering into any merger or corporate
reorganization so long as the surviving entity in such transaction, if not the
Company, assumes all of the Company's obligations with respect to the
Securities) and shall pay all its taxes when due, except for taxes which the
Company disputes.
5.3 Filings with Securities and Exchange Commission. The
----------------------------------------------------
Company shall provide the Subscriber with copies of its annual reports on Form
10-KSB, quarterly reports on Form 10-QSB and current reports on Form 8-K for as
long as the Common Shares remain outstanding.
5.4 Listing. The Company shall use its best efforts to
-------
maintain the listing of its Common Stock on the OTC Bulletin Board or a national
securities exchange or national quotation system.
8
<PAGE>
6. Miscellaneous
6.1 Representations and Warranties Survive the Closing;
--------------------------------------------------------
Severability. The Subscriber's and the Company's representations and warranties
------------
shall survive the Closing of the transaction provided for hereby notwithstanding
any due diligence investigation made by or on behalf of the party seeking to
rely thereon. In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
6.2 Successors and Assigns. The terms and conditions of this
-----------------------
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither party may assign its rights hereunder without the
prior written consent of the other parties.
6.3 Governing Law. This Agreement shall be governed by and
--------------
construed under the laws of the State of Texas without respect to conflict of
laws.
6.4 Execution in Counterparts Permitted. This Agreement may be
-----------------------------------
executed in any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts, and all of which
together shall constitute one (1) instrument.
6.5 Titles and Subtitles; Gender. The titles and subtitles
------------------------------
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement. The use in this
Agreement of a masculine, feminine or neither pronoun shall be deemed to include
a reference to the others.
6.6 Written Notices, Etc. Any notice, demand or request
----------------------
required or permitted to be given by the Company or the Subscriber pursuant to
the terms of this Agreement shall be in writing and shall be deemed given when
delivered personally, or by facsimile (with a hard copy to follow by overnight
or two (2) day courier), addressed to the parties at the addresses and/or
facsimile telephone number of the parties set forth at the end of this Agreement
or such other address as a party may request by notifying the other in writing.
6.7 Expenses. Each of the Company and the Subscriber shall pay
--------
all costs and expenses that it respectively incurs, with respect to the
negotiation, execution, delivery and performance of this Agreement.
6.8 Entire Agreement; Written Amendments Required. This
--------------------------------------------------
Agreement, the Common Stock certificates and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof, and no party
shall be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein. Neither
this
9
<PAGE>
Agreement nor any terms hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge or termination is sought.
7. Subscription and Wiring Instructions; Irrevocability.
7.1 Subscription
------------
(a) WIRE TRANSFER OF SUBSCRIPTION FUNDS.
Subscriber shall send its subscription funds
by wire transfer to the Company as follows:
Bank: Chase Bank Texas Account Name: SI
Diamond Technology, Inc. Account No.:
081-00053751 ABA Routing No.: 113000609
(b) IRREVOCABLE SUBSCRIPTION. The Subscriber
hereby acknowledges and agrees, subject to
the provisions of any applicable laws
providing for the refund of subscription
amounts submitted by the Subscriber, that
this Agreement is irrevocable and that the
Subscriber is not entitled to cancel,
terminate or revoke this Agreement;
provided, however, that if the conditions to
Closing are not satisfied or if the
Disclosure Documents are discovered prior to
Closing to contain statements which are
materially inaccurate, or omit statements of
material facts, the Subscriber may revoke or
cancel this Agreement.
(c) COMPANY'S RIGHT TO REJECT SUBSCRIPTION. This
Agreement shall be accepted by the Company
when the Company countersigns this
Agreement. The Subscriber hereby confirms
that the Company has full right in its sole
discretion to accept or reject the
subscription of the Subscriber, in whole or
in part, provided that, if the Company
decides to reject such subscription, the
Company must do so promptly and in writing.
In the case of rejection, the Company will
promptly return any rejected payments and
(if rejected in whole) copies of all
executed subscription documents (including
without limitation this Agreement) to
Subscriber.
7.2 Acceptance of Subscription. In the case of acceptance of
--------------------------
this subscription, ownership of the number of securities being purchased hereby
will pass to the Subscriber upon the Closing.
7.3 Subscriber to Forward Original Signed Subscription
---------------------------------------------------------
Agreement to Company. The Subscriber agrees to courier to the Company its
----------------------
original inked signed Subscription Agreement within three (3) days after faxing
said signed Agreement to the Company.
10
<PAGE>
8. Number of Shares and Purchase Price. The undersigned Subscriber
-------------------------------------
hereby subscribes for and agrees to purchase ____________- shares of Common
Stock for a total purchase price (to be paid by wire transfer) in the amount of
______________________________ ($________) (the "Purchase Price").
9. Accredited Investor. The Subscriber is (please check applicable
--------------------
box):
(a) [ ] a corporation, business trust, or partnership not
formed for the specific purpose of acquiring the
securities offered, with total assets in excess of
$5,000,000.
(b) [ ] any trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of
acquiring the securities offered, whose purchase is
directed by a sophisticated person who has such
knowledge and experience in financial and business
matters that he is capable of evaluating the merits
and risks of the prospective investment.
(c) [ ] an individual, who
[ ] is a director, executive officer or general partner
of the issuer of the securities being offered or
sold or a director, executive officer or general
partner of a general partner of that issuer.
[ ] has an individual net worth, or joint net worth with
that person's spouse, at the time of the purchase
exceeding $1,000,000.
[ ] had an individual income in excess of $200,000 in
each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in
each of those years and has a reasonable expectation
of reaching the same income level in the current
year.
(d) [ ] an entity, each owner of which is an entity
described in (a) or (b) above or is an individual
described in (c) above.
The undersigned acknowledges that this Agreement and the subscription
represented hereby shall not be effective unless accepted by the Company as
indicated below.
(The remainder of this page is intentionally left blank.)
11
<PAGE>
IN WITNESS WHEREOF, the undersigned Subscriber does hereby execute this
Agreement this _____ day of September, 2000.
Subscriber
-------------------------
Name:
DELIVERY INSTRUCTIONS:
----------------------
Please type or print address where your
security is to be delivered
------------------------------------
------------------------------------
------------------------------------
ACCEPTANCE BY COMPANY:
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY AND THE COMPANY AGREES TO
BE BOUND BY THE TERMS AND CONDITIONS THEREOF THIS ______ DAY OF SEPTEMBER, 2000.
By:________________________________
Name:______________________________
Title:_____________________________
12
<PAGE>
EXHIBIT "A"
CAPITALIZATION
Shares of Common Stock Outstanding: 58,342,004
Series G Preferred Stock Outstanding: 900
Common Stock Options Outstanding: 4,189,493
Common Stock Warrants Outstanding: 10,080,000
13
<PAGE>
EXHIBIT "B"
USE OF PROCEEDS
Working Capital
14
