SUBSCRIPTION AGREEMENT
ACQUISITION CORPORATION II
RE: ACQUISITION CORPORATION II
(the "Company")
Gentlemen:
1. Receipt of Description Statement.
The undersigned ("Undersigned" or "Subscriber") hereby
acknowledges receipt of one copy of the Description Statement for the Company,
dated August 29, 1995 (the "Statement"). All of the terms and provisions of the
Statement are incorporated herein by reference and the Undersigned acknowledges
that the Undersigned has read the same.
2. Acceptance of Subscription.
2.1 Execution of this Agreement by the Undersigned shall
constitute an offer by the Undersigned to subscribe for shares of the Company
("Shares") in the amount and on the terms and conditions specified herein. It
is understood and agreed that the Company, in its sole discretion and for any
reason whatsoever, shall have the right to accept or reject this Subscription,
in whole or in part, and that the same shall be deemed to be accepted by the
Company only when it is signed by the president of the Company.
2.2 Deposit and collection of the check paid simultaneously
herewith shall not be deemed acceptance of the offer by the Undersigned to
subscribe for the Shares. The sole evidence for such acceptance is a
counterpart of this Subscription Agreement duly executed by the Company and
delivered to the Undersigned. The Undersigned acknowledges that until such
execution and delivery, such offer has not been accepted and that no sale to
him of a Unit has occurred.
3. Subscription for Shares: Delivery of the Capital
Contribution; Escrow Thereof.
3.1 The Undersigned hereby subscribes for and agrees to
purchase ____________ Shares and irrevocably tenders this Subscription
Agreement together with a check in the amount of $___________ ($0.10 per Share)
representing payment of the Capital Contribution for said Shares.
3.2 The delivery of the check, payable to Acquisition
Corporation II, and this Agreement, is being made and sent to W. Raymond
Felton, Esq., c/o Greenbaum, Rowe, Smith, Ravin & Davis, P.O. Box 5600,
Woodbridge, New Jersey 07095. In the alternative, the Capital Contribution may
be made by wire transfer pursuant to instructions which may be obtained from
the Company.
4. Representations and Warranties of the Undersigned.
The undersigned hereby represents and warrants to the
Company, the following facts and understandings:
4.1 The Undersigned has received and read and is familiar
with the Statement. The Undersigned is not relying on any offering literature
or prospectus other than the Statement and no oral representations or
warranties have been made to him. The Company assumes no responsibility for the
accuracy or adequacy of the information contained in the Statement.
4.2 The Undersigned is familiar with the activities of the
Company and recognizes that the Company is now being organized for this venture
and has no material history and an investment in the Shares involves a
substantial degree of risk.
4.3 The Undersigned has been advised by the Company to
consult with the Undersigned's own personal tax advisor to determine the effect
of an investment in the Company on the Undersigned's Federal income tax status.
4.4 All documents, records and books pertaining to this
investment have been made available for inspection by the Undersigned or, if
applicable, Undersigned's attorney and/or accountant and/or "Purchaser
Representative" (as set forth in Paragraph 4.15 hereof); and the Undersigned
understands that the books and records of the Company will be available during
reasonable business hours at its principal place of business.
4.5 The Undersigned and/or his attorney and/or accountant
and/or Purchaser Representative has had the opportunity to obtain any
additional information requested necessary to verify the accuracy of the
contents of the Statement, and to confer with the officers of the Company and
to ask questions of, and receive answers from, the Company or a person
authorized to act on its behalf concerning the terms and conditions of the
transaction or the Statement, and any additional information requested was
supplied to the Undersigned and/or such attorney and/or accountant and/or
Purchaser Representative.
4.6 The Undersigned understands that the Offering of Units
and the operation of the Company's proposed business is subject to numerous
conflicts of interest and risks and has carefully read the description of
certain of these conflicts and risks contained in the Statement. The
Undersigned is able to bear the economic risk of the investment (i.e., he can
afford a complete loss of his investment).
4.7 The Undersigned is familiar with the nature of and risks
incident to investment in real estate and securities, and has determined
(either alone or if need be on the basis of consultation with his business and
tax advisors) that the purchase of his Shares is consistent with his investment
objectives and income prospects.
4.8 The Shares for which the Undersigned subscribes will be
acquired for investment and not with a view to the resale or distribution of
such Shares; and such Shares is being acquired by the Undersigned for the
Undersigned's own account and with the
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Undersigned's own funds and no person, other than the Undersigned, has a direct
or indirect beneficial interest in such Shares.
4.9 The Undersigned further understands that holding the
investment for any pre-defined period of time does not constitute holding for
investment or an agreement to hold the Shares for investment and not with a
view to resale or distribution.
4.10 The Undersigned has adequate means of providing for the
Undersigned's current needs and foreseeable personal contingencies, has no need
for liquidity in this investment, and anticipates no need now or in the
foreseeable future to sell the Shares for which the Undersigned hereby
subscribes.
4.11 The Undersigned has a net worth of at least $1,000,000
(exclusive of home, home furnishings and automobile), or has and anticipates
that the Undersigned will continue to have in the next few years, annual
taxable income of at least $200,000.
4.12 The Undersigned understands that the Company will engage
in a highly competitive business and there can be no assurance that it will be
able to operate profitably. This investment involves a high degree of risk and
is not recommended for any investor (a) whose marginal Federal income tax
bracket, after taking into account the losses incurred as a result of this
investment, is not at least 31% for 1994, or (b) who has significant "tax
preference items."
4.13 The Undersigned understands that the Shares have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance on an exemption for private offerings and the fact that the
Undersigned is purchasing Shares in the Company without being furnished any
offering literature or prospectus other than the Statement. Because the Company
has no obligation to effect such registration the Undersigned may have to
continue to bear the economic risk of the Undersigned's investment in such
Shares for an indefinite period; and the Undersigned will not be permitted to
transfer Shares in the absence of an opinion of counsel satisfactory to counsel
for the Company that registration is not required under the Securities Act or
under applicable state securities laws and unless the Members have waived their
right of first refusal pursuant to the provisions of the Statement.
4.14 The Undersigned understands that this Offering of the
Shares in the Company has not been registered with securities agencies of any
State in which they are offered in reliance upon exemptions from registration
as a private placement. The Offering of Shares has not been approved or
disapproved by the local security authorities passed upon the accuracy or
adequacy of the Statement.
4.15 (If applicable). ____________________________ has
acted as the Undersigned's "Purchaser Representative" defined in Rule 501
promulgated under the Securities Act; and
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The Undersigned has relied upon the advice of the
Purchaser Representative as to the merits of an investment in the Company and
the suitability of that investment for the Undersigned.
The Purchaser Representative has confirmed to the
Undersigned, in writing, any past, present or future material relationship,
actual or contemplated, between the Purchaser Representative and the Company
and its affiliates, and any compensation received or to be received as a
result of such relationship.
4.16 (If 4.15 is not applicable). The Undersigned has, by
virtue of the Undersigned's own investment acumen, business experience or
independent financial and tax advice, the capability of evaluating the risks
and merits of investing in the Units; and the decision of the Undersigned to
purchase a Unit in the Company is based upon the Undersigned's independent
analysis of the Statement, the Undersigned's financial objectives and the
advice of the Undersigned's business and tax advisors.
4.17 No assurances are or have been made regarding the tax
advantages which may inure to the benefit of the Unit holders nor has any
assurance been made that existing tax laws and regulations will not be modified
in the future, thus denying to the Unit holders or the Company all or a portion
of the tax benefits which may presently be available under existing tax laws
and regulations and if all or any part of such tax benefits are disallowed by
the Internal Revenue Service, the undersigned may have to pay substantial
additional income taxes.
4.18 The Undersigned has received no representations or
warranties from the Company other than those contained in the Statement.
4.19 The address set forth below is the Undersigned's true
and correct residence, and the Undersigned has no present intention of becoming
a resident of any other state or jurisdiction.
4.20 The Undersigned acknowledges that Greenbaum, Rowe,
Smith, Ravin & Davis has represented the Company in this transaction and has
not acted as counsel to the Undersigned in connection with his investment in
the Company. The Undersigned has been advised of his right to retain
independent counsel in connection with this investment.
4.21 The Undersigned represents, if an individual, that the
undersigned is at least 21 years of age.
4.22 The Undersigned covenants that the foregoing
representations and warrants will be true and accurate as of, and acknowledge
that such representations and warranties shall survive, the date of his
admission as a member.
5. Acknowledgments of the Undersigned.
Subscribers residing in one of the states noted below
acknowledge and/or represent as follows:
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NOTICE TO RESIDENTS OF ALL STATES:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR
OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY
FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE,
THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE
ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE
STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
NOTICE TO RESIDENTS OF NEW YORK ONLY:
THIS PRIVATE OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE
ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
6. Indemnification by the Undersigned.
The Undersigned acknowledges that the Undersigned understands
the meaning and legal consequences of the representation and warranties in
Paragraphs 4 and 5 hereof and the Undersigned hereby agrees to indemnify and
hold harmless the Company and its directors and officers thereof from and
against any and all loss, damage or liability due to or arising out of a breach
of any such representations or warranties. Notwithstanding the foregoing,
however, no representation, warranty, acknowledgment or agreement made herein
by the Undersigned shall in any manner be deemed to constitute a waiver of any
rights granted to him under federal or state securities laws.
7. Share Escrow; Voting.
(a) Subscriber hereby acknowledges and agrees that not later
than the effective date (the "Effective Date") of the registration statement
with respect to the Company's initial public offering (the "Initial Public
Offering"), all Shares purchased by Subscriber pursuant hereto will be placed
in escrow, in accordance with the terms of an escrow agreement, substantially
in the form attached hereto as Exhibit A, until the earlier of (i) the
occurrence of the first merger, exchange of capital stock, asset acquisition or
other similar business
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combination (a "Business Combination"), (ii) 18 months from the Effective Date
or (iii) 24 months from the Effective Date if prior to the expiration of such
18-month period the Company has become a party to a letter of intent or a
definitive agreement to effect a Business Combination, in which case such
period shall be extended by six months.
(b) In connection with any stockholder vote relating to the
approval of a Business Combination, the Subscriber by his signature below
hereby agrees with respect to the Shares and to any other shares of Common
Stock hereafter owned, beneficially or of record, by him, his successors or to
vote such shares of Common Stock in accordance with the vote with respect to
such Business Combination of the majority of the shares beneficially owned by
stockholders other than officers and directors and purchasers of shares from
the Company in offerings preceding the Initial Public Offering made in reliance
on exemptions from the registration requirements of the Act (the
"non-affiliated stockholders").
(c) In connection with any stockholder vote relating to a
liquidation of the Company (a "Liquidation Proposal") or due to the failure of
the Company to effect a Business Combination within 18 months of the Effective
Date or 24 months of the Effective Date, if prior to the expiration of such
18-month period the Company has become a party to a letter of intent or a
definitive agreement to effect a Business Combination, the Subscriber by his
signature below hereby agrees with respect to the Shares and to any other
shares of Common Stock hereafter owned, beneficially or of record, by him, his
successors or assigns to vote all such shares of Common Stock in accordance
with the vote with respect to such Liquidation Proposal of the majority of the
shares beneficially owned by non-affiliated stockholders.
(d) Subscriber hereby waives his right (i) to receive any
distribution with respect to the Shares if a Liquidation Proposal is approved
and (ii) to participate in an offer by the Company to Stockholders to redeem
their Share of Common Stock in connection with a Business Combination.
(e) If, in connection with the Initial Public Offering, the
staff of the SEC, the National Association of Securities Dealers, Inc. or any
other governmental agency or body (collectively, the "Authorities") requires,
as a condition to its approval of the Initial Public Offering or the listing of
the Company's securities on the National Association of Securities Dealers,
Inc. Automated Quotation System, a reduction in the aggregate number of shares
owned by the officers, directors and initial stockholders (the total number of
shares to be purchased thereby being 85,000), the Subscriber hereby agrees (i)
that the number of shares owned by each such person (and including the
Subscriber) shall be reduced pro rata, based upon the number of shares owned by
each such person as a percentage of the shares owned by all of them (or by such
other method as may be required by any of the Authorities) and (ii) the
Subscriber shall return to the Company the number of shares of Common Stock by
which the Shares are so reduced (the determination of the Company in respect
thereto to be final and conclusive, absent manifest error), subject to the
return of the portion of the Subscription Price allocable thereto.
(f) Subscriber hereby agrees, that (i) Subscriber will not
sell, transfer or convey any shares purchased hereby for a period of two years
from the Effective Date without the prior written consent of the Company (and
if Comprehensive Capital Corporation (the
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"Proposed Underwriter") is the managing or principal underwriter of the Initial
Public Offering, of the Proposed Underwriter); provided that subject to
compliance with applicable securities laws, any such Subscriber may transfer
his or her stock to a member of his or her family (with the consent of the
Proposed Underwriter which will not be unreasonably withheld) or in the event
of death by will or operation of law, provided that any such transferee shall
agree as a condition to such transfer to be bound by the restrictions on
transfer applicable to the Subscriber and the Subscriber continues to be deemed
the beneficial owner of the shares so transferred in accordance with Rule 13d-3
promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, and (ii) if the Proposed
Underwriter is the managing or principal underwriter of the Initial Public
Offering, that (x) for a period of three years commencing two years after the
Effective Date, all public sales of shares of Common Stock purchased pursuant
hereto will be effected through or with the Proposed Underwriter on an
exclusive basis, provided that the Proposed Underwriter's services are
reasonably competitive with those of other brokerage firms as to both price and
execution and (y) for a period of three years commencing two years from the
Effective Date, if Subscriber proposes to sell the shares of Common Stock
purchased pursuant hereto in a private transaction pursuant to a bona fide
third party offer, then the investor will so notify the Proposed Underwriter in
writing, which will have the right, for a five-day period after receipt of such
notice, to purchase (or sell to a suitable purchaser) such shares on the same
terms as contained in such offer; provided, if, thereafter, the terms of the
sale are modified in any material respect, Subscriber will so notify the
Proposed Underwriter which will have the same rights as with respect to the
original proposed sale as set forth above.
8. Responsibility.
The Company and its directors and officers shall not be
liable, responsible or accountable in damages or otherwise to the Undersigned
for any act or omission performed or omitted by them in good faith on behalf of
the Company and in a manner reasonably believed by them to be within the scope
of the authority granted to them by this Agreement and in the best interests of
the Company, provided that the Company and its directors and officers were not
guilty of gross negligence, willful misconduct, fraud or bad faith with respect
to such acts or omissions.
9. Miscellaneous.
9.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
9.2 Entire Agreement. This Agreement, contains the entire
agreement between the parties hereto with respect to the subject matter hereof.
The provisions of this Agreement may not be modified or waived except in
writing and signed by the party to be charged.
9.3 Headings. The headings of this Agreement are for
convenient reference only and they shall not limit or otherwise affect the
interpretation or effect of any term or provision hereof.
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9.4 Heirs and Assigns. This Agreement and the rights, powers
and duties set forth herein, binds and inures to the benefit of the heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto.
9.5 Assignment. The Undersigned may not assign any of his
rights or participation in and under this Agreement without the prior written
consent of the Company and any attempted assignment without such consent shall
be void and without effect.
IN NO EVENT, EXCEPT IN THE EVENT OF FRAUD, GROSS NEGLIGENCE
OR WILLFUL MISREPRESENTATION, WILL THE COMPANY, ITS DIRECTORS AND OFFICERS, ANY
SUBSIDIARIES, AFFILIATES, OFFICERS OR DIRECTORS THEREOF, OR PROFESSIONAL
ADVISORS ENGAGED BY ANY OF THEM BE LIABLE IF FOR ANY REASON IT SHALL BE
DETERMINED THAT THE TAX AND ECONOMIC BENEFITS CONTEMPLATED TO BE AFFORDED TO
THE MEMBERS AS A RESULT OF THE PROPOSED INVESTMENT ARE NOT AVAILABLE IN WHOLE
OR IN PART.
IN WITNESS WHEREOF, the Undersigned has executed this
Subscription Agreement as of the 29th day of August, 1995.
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WITNESS SIGNATURE
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SOCIAL SECURITY NUMBER NAMED TYPED OR PRINTED
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MAILING ADDRESS RESIDENCE ADDRESS
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CITY, STATE AND ZIP CODE CITY, STATE AND ZIP CODE
Accepted and Agreed to:
Acquisition Corporation II
BY:
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Arthur H. Goldberg, Chairman
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