Exhibit 10.18
SUBSCRIPTION AGREEMENT
NOBEL EDUCATION DYNAMICS, INC.
1,000,000 Shares of Common Stock
$.001 Par Value Per Share
Nobel Education Dynamics, Inc.
Rose Tree Corporate Center, II
1400 North Providence Road
Suite 3055
Media, PA 19063
Ladies and Gentlemen:
You have informed the undersigned (individually and collectively, the
"Purchaser") that Nobel Education Dynamics, Inc., a Delaware corporation (the
"Company") is making a private placement of 1,000,000 shares of its Common
Stock, $.001 par value per share (the "Shares"), at $12.00 per share.
You have further advised the undersigned that (i) the Shares are being
offered and sold on a "best efforts" basis through Gilder, Gagnon, Howe & Co.,
1775 Broadway, New York, New York (the "Agent"); (ii) the proceeds of the
offering, after expenses, will be used by the Company as set forth under "Use of
Proceeds" in the Company's Summary Offering Memorandum, dated February 15, 1996
(the "Memorandum"), (iii) the Shares are being offered by the Company subject to
prior subscription, and (iv) none of the Shares will be sold in the Offering
unless all of the Shares are sold in the Offering.
I/we understand that the Purchaser's rights and responsibilities as a
Purchaser will be governed by the terms of this Subscription Agreement. I/we
understand that the Company will rely on the following information to confirm
that the Purchaser is an "accredited investor" as defined in Regulation D
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
SHARES WILL BE OFFERED AND SOLD ONLY TO ACCREDITED INVESTORS.
This Subscription Agreement is one of a number of such subscriptions
for the Shares. By signing this Subscription Agreement, the Purchaser hereby (i)
offers to purchase from the Company the number of Shares set forth on page 7
hereof on the terms specified herein and, (ii) if and to the extent this
Subscription Agreement is accepted by the Company, authorizes the Agent to debit
my account with the Agent, for payment to the Company, at the Closing (as
defined in the Memorandum) for an aggregate cash amount equal to $12.00
multiplied by the number of Shares for which this Subscription Agreement is
accepted by the Company. The Purchaser understands that the Company reserves the
right, in its complete discretion, to reject the offer of the Purchaser made
hereby in whole or in part. If this offer is accepted, in whole or in part, the
Company will execute a copy of this Subscription Agreement and return it to the
Agent.
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1. Accredited Investor. The Purchaser is an Accredited Investor because the
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Purchaser falls within one of the following categories: (please check
the appropriate category)
___ $1,000,000 Net Worth. A natural person whose individual net worth or
joint net worth with that person's spouse, at the time of his
purchase exceeds $1,000,000.
___ $200,000/$300,000 Income. A natural person who had an individual
income in excess of $200,000 in each of the two most recent years or
joint income with such person's spouse in excess of $300,000 in each
of the two most recent years and who reasonably expects to attain
the same individual or joint levels of income in the current year.
___ Corporation. A corporation not formed for the specific purpose of
acquiring the Shares, with total assets in excess of $5,000,000.
___ All Equity Owners In Entity Are Accredited. An entity (i.e.
corporation, partnership, trust, IRA, etc.) in which all of the
equity owners are Accredited Investors as defined herein.
2. Representations and Warranties. The Purchaser represents and warrants to
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the Company that:
(a) I/we (i) have adequate means of providing for my/our current needs
and possible contingencies, and have no need for liquidity of my/our
proposed investment in the Shares, (ii) can bear the economic risk
of losing the entire amount of my/our proposed investment in the
Shares, and (iii) together with my financial advisors, have such
knowledge and experience that I/we am capable of evaluating the
relative risks and merits of this investment.
(b) The Purchaser is a resident of the state set forth on the signature
page hereto and the Purchaser has no present intention of becoming a
resident of any other state or jurisdiction.
(c) The Purchaser has not utilized the services of a "Purchaser
Representative" as defined in Regulation D promulgated under the
Securities Act.
(d) The Purchaser acknowledges the receipt of, and is familiar with, the
Memorandum, the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, the Company's Quarterly Reports on Form 10-
Q for the quarters ended March 31, 1995, June 30, 1995, and
September 30, 1995, the Company's Reports on Form 8-K, and
amendments thereto, dated February 3, 1995, March 27, 1995, May 11,
1995, August 1, 1995, June 23, 1995, September 11, 1995, November 3,
1995 and November 15, 1995, and the Company's Proxy Statement, dated
August 22, 1995, for its 1995 Annual Meeting of Shareholders.
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(e) The Purchaser understands the risks implicit in the Purchaser's
proposed investment in the Shares and in the Company's business.
(f) Other than as set forth in this Subscription Agreement, the
Memorandum and the attachments thereto, no person or entity has made
any representation or warranty to the Purchaser whatsoever with
respect to any matter or thing concerning the Company and the
Offering.
(g) I/we understand that the Shares have not been registered under the
Securities Act, nor have they been registered pursuant to the
provisions of the securities or other laws of applicable
jurisdictions and may only be resold pursuant to an effective
registration statement or in a transaction which is exempt from
registration.
(h) The Shares which I/we offer to purchase hereby are being acquired
solely for the Purchaser's own account, for investment and are not
being purchased with a view to or for their resale or distribution.
The Company will have no obligation to recognize the ownership,
beneficial or otherwise, of the Shares purchased by the Purchaser by
anyone but the Purchaser.
(i) The Purchaser is aware of the following:
(i) the Shares are a speculative investment which involve a high
degree of risk; and
(ii) The Shares are not readily transferable; it may not be possible
for me to liquidate my investment in the Shares when I/we wish to
do so.
The foregoing representations and warranties are true and accurate as of
the date hereof, shall be true and accurate as of the date of the Closing
and shall survive thereafter. If, in any respect, such representations
and warranties are not true and accurate prior to the date of the
Closing, the Purchaser will give written notice of that fact to the
Company, specifying which representations and warranties are not true and
accurate and the reasons therefor.
3. Transferability. I/we understand that I/we may sell or otherwise
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transfer the Shares purchased hereunder only if the transaction in which
they are to be sold is registered or exempt from registration under the
Securities Act (as set forth in a favorable opinion of counsel to the
Company to the effect that such sale or other transfer may be made in the
absence of registration under the Securities Act). Any certificates or
other documents representing my Shares will contain a restrictive legend
reflecting this restriction, and stop transfer instructions will apply to
my Shares. Section 6 sets forth the Company's obligation to effect a
registration for the sale of the Shares upon the terms and conditions
therein set forth.
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4. Termination of Agreement. If this subscription is rejected, in whole or
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in any part, by the Company, then this Subscription Agreement, or with
respect to those Shares so rejected if rejected in part, shall be null
and void and of no further force and effect, no party shall have any
rights against any other party hereunder (or, if rejected in part, with
respect to the rejected portion), and the Agent's authority to debit my
account with respect to this Subscription, or any portion thereof so
rejected, shall terminate. In the event that this Agreement is accepted,
in whole or in part, by the Company and the Closing is not held by the
date provided for in the Memorandum, this Agreement shall terminate and
have no further force or effect.
5. Revocation. I/we will not cancel, terminate or revoke this Subscription
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Agreement or any agreement made by me hereunder and this Subscription
Agreement will survive my death or disability and be binding upon my
successors, assigns and heirs.
6. Registration of Nobel Shares.
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(a) Registration Statement. Within ninety (90) days following the
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earlier of (i) the completion by the Company of the transaction
described in the Memorandum under "Recent Developments - Possible
Acquisition", and (ii) termination by the Company of negotiations
with respect thereto, the Company shall prepare and file with the
Securities and Exchange Commission (the "SEC") a registration
statement of Form S-3 (the "Registration Statement") under the
Securities Act to permit the offer and sale of the Shares by the
Purchaser from time to time through the facilities of the National
Association of Securities Dealers Automated Quotation System at
market prices current at the time of sale exclusively in "brokers'
transactions" or in transactions directly with a "market maker," as
defined in paragraphs (f) and (g) of Rule 144 under the 1933 Act.
The Company shall use reasonable best efforts to cause the
Registration Statement to be declared effective promptly and,
except as set forth below, to remain effective under the Securities
Act for a period equal to the shorter of (i) twenty-four months,
and (ii) the date on which the Shares first become eligible for
sale under Rule 144 under the Securities Act under circumstances in
which the Purchaser is not required to aggregate his/her/their
sales with other clients of the Agent under paragraph (e)(3)(vi) of
Rule 144 solely by reason of the common utilization of the same
broker-dealer. The Company will prepare and file with the SEC any
amendments or post-effective amendments as may be necessary to keep
the Registration Statement effective under the Securities Act
during the period described in the prior sentence. As used in the
second sentence of this Section 6(a), the term "reasonable best
efforts" does not include the withdrawal of a delaying amendment by
the Company at a time when comments on the registration statement,
if any, made by the Staff of the SEC, remain unresolved to the
satisfaction of the Staff of the SEC. The Company will promptly
notify the
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Purchaser in writing of the date on which the Registration
Statement is declared effective. Notwithstanding the foregoing, the
Company shall not be obligated to keep the Registration Statement
or any prospectus included therein (the "Prospectus") current
during any period (A) of up to 120 days per calendar year if the
Company's chief executive officer advises the Purchaser that he has
determined in good faith that in order to keep the Registration
Statement or Prospectus current the Company would be required to
disclose information which is not otherwise required to be
disclosed and which the Company has a bona fide business purpose
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for keeping confidential or would require the disclosure of
financial information of a business acquired or to be acquired
which is unavailable pending completion of an audit, or (B) when
financial statements do not satisfy the requirements of the last
sentence of paragraph (b) of Rule 3-12 of Regulation S-X (or any
successor rule) to the extent, and only to the extent, that the SEC
interprets such sentence as being applicable to the continued
effectiveness of the Registration Statement, provided the Company
uses reasonable efforts to satisfy such requirements as soon as
possible. For purposes of this Agreement, the "Effectiveness
Period" shall be the period during which the Prospectus is kept
current pursuant to the provisions of this Section 6(a).
(b) Copies of Documents. During the Effectiveness Period, the
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Company shall furnish to the Purchaser such number of copies of the
Registration Statement, the Prospectus (including each preliminary
Prospectus) and any amendments and supplements thereto and any
documents incorporated by reference in the Registration Statement
as the Purchasers shall reasonably request.
(c) Blue Sky Compliance. The Company shall use reasonable efforts to
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register or qualify or cooperate with the Purchasers in connection
with the notification, coordination, registration or qualification
(or use reasonable efforts to obtain exemption from such
registration or qualification) of the Shares under the securities
or blue sky laws of Connecticut, New York and New Jersey, and do
any and all other acts and things which may be reasonably necessary
to enable the Purchaser to consummate the disposition of the Shares
in such jurisdictions during the Effectiveness Period; provided,
that in no event shall the Company be required to qualify to do
business as a foreign corporation in any jurisdiction where it is
not so qualified, to subject itself to taxation in any jurisdiction
where it has not theretofore done so or to take any action which
would subject it to general service of process in any such
jurisdiction where it is not then so subject.
(d) Notification. During the Effectiveness Period, the Company shall
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notify the Purchaser promptly (i) of any request by the SEC for
amendments or supplements to the Registration Statement or a
Prospectus or for additional information relating thereto, (ii)
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of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, (iii) of the receipt by the
Company of any notification with respect to the suspension of the
registration, qualification or exemption from registration or
qualification of any of the Shares covered by the Registration
Statement for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (iv) of the
happening of any event which makes any statement made in the
Registration Statement or in the Prospectus or any document
incorporated therein by reference, or deemed to be incorporated
therein by reference, untrue in any material respect or which
requires the making of any changes in the Registration Statement or
the Prospectus so that such documents will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading, and (v) the effective date of any firm commitment
underwriting by the Company. The Purchaser hereby agrees not to
make sales pursuant to the Registration Statement (A) after any
notice received under clauses (i)-(iv), above, until the Purchaser
has received a notice that such period is no longer in effect, and
(B) during the ninety (90) day period following any notice
contemplated by clause (v), above.
(e) Obligations of the Purchaser. Prior to the filing of the
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Registration Statement, the Purchaser shall enter into such further
agreements and understandings as the Company shall reasonably
require to assure compliance under the securities laws. The
Purchaser shall cooperate with the Company in the fulfillment by
the Company of its obligations under this Section 6.
(f) Expenses. The Company shall bear all expenses incident to Buyer's
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performance of or compliance with this Section 6, including all
registration and filing fees and expenses of compliance with
securities or blue sky laws, including without limitation
reasonable fees and disbursements of counsel in connection with
blue sky qualifications, rating agency fees, printing expenses,
messenger and delivery expenses, internal expenses, the fees and
expenses incurred in connection with the listing of the securities
to be registered on each securities exchange on which such
securities are required to be listed (if any), fees and
disbursements of counsel for the Company and its independent
certified public accountants (including the expenses of any special
audit conducted at the Company's option or "cold comfort" letters
required by or incident to such performance), securities acts
liability insurance (if the Company elects to obtain such
insurance), and the reasonable fees and expenses of any special
experts retained by the Company. Notwithstanding the foregoing, the
Company shall not be required to bear the expenses of any
underwriting discounts or commissions or brokerage
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commissions attributable to the sale of the Shares or any out-of-
pocket expenses of the Purchaser, including travel costs and the
costs of any counsel or any other advisers engaged by the Purchaser
to represent or advise him, her or them in connection with the
transactions contemplated by this Section 6.
7. Miscellaneous.
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(a) This Subscription Agreement shall be governed by and construed in
accordance with the substantive law of the Commonwealth of
Pennsylvania.
(b) This Subscription Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by all
parties.
(c) All notices, requests, consents and other communications hereunder
shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, sent by
recognized commercial courier or air delivery service (such as
FedEx), or sent by telecopier, addressed as follows: (i) if to the
Company at its address set forth on the first page hereto, (ii) if
to the Purchaser, c/o of Agent at the Agent's principal place of
business in New York, New York, or (iii) in any case, to such other
address or addresses or either the Company or the Purchaser shall
have furnished to the other in accordance with the provisions of
this paragraph.
(d) The Purchaser hereby irrevocably appoints the Agent as its
attorney-in-fact to (i) waive rights of the Purchaser under Section
6 hereof, (ii) consent to actions of the Company, or extensions of
time for the Company, under Section 6 hereof to the extent any such
consent may be required thereunder or otherwise, and (iii) enter
into, on behalf of the Purchaser, amendments to the Company's or
the Purchaser's rights or obligations under Section 6 hereof.
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8. Registration and Ownership. Set forth below is the total number of
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Shares which the Purchaser offers to purchase hereby, the aggregate
purchase price thereof. Please register any Shares sold hereunder in the
name of Gilder, Gagnon, Howe & Co. or such nominee name as they shall
designate.
TOTAL NUMBER OF SHARES OFFERED TO BE PURCHASED:__________________________
RESIDENCE ADDRESS:_______________________________________________________
(Street Address)
_____________________________________________________________________
(City, State and Zip code)
9. Date and Signatures. (each co-owner or joint owner must sign)
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Dated __, 1996
_______________ ________________________________________________________
(Signature) (Printed Name)
_______________ ________________________________________________________
(Signature) (Printed Name)
ACCEPTED:
IN FULL: ________________
AS TO ______________SHARES
NOBEL EDUCATION DYNAMICS, INC.
By: _______________
Its: _______________
Dated: __, 1996
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