Exhibit 10(f)
INTER(bullet)ACT SYSTEMS, INCORPORATED
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (the "Agreement") by and between
Inter(bullet)Act Systems, Incorporated, a corporation organized and existing
under the laws of the State of North Carolina (the "Company") and Vanguard
Cellular Operating Corp., a Delaware corporation (the "Subscriber");
W I T N E S S E T H
WHEREAS, the Company has offered the Subscriber an opportunity to
purchase shares pursuant to a private offering (the "Offering") of up to
$15,000,000 of the Company's common stock (the "Common Stock"); and
WHEREAS, the Subscriber desires to purchase certain of the shares being
offered on the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Subscriber hereby subscribes and agrees to purchase, subject to
the terms and conditions of this Agreement, up to an aggregate of $8,000,003 of
the Common Stock offered in the Offering, representing up to 1,454,546 shares
(the "Shares"), at a purchase price of $5.50 per share, such purchases to be
made in staged investments contingent on additional shares being sold in the
Offering as follows:
Stage 1 Upon acceptance of this subscription, 181,819 shares of
Common Stock for an aggregate purchase price of $1,000,004.50.
Stage 2 Upon the Company receiving aggregate subscriptions of
$2,000,003.50 from other subscribers in the Offering, 363,637 shares of
Common Stock for an aggregate purchase price of $2,000,003.50.
Stage 3 Upon the Company receiving additional aggregate
subscriptions of $1,999,998.00 of from other subscribers in the
Offering, 363,636 shares of the Common Stock for an aggregate purchase
price of $1,999,998.00.
Stage 4 Upon the Company having first received an aggregate
proceeds in the Offering of $9,000,007.50 ($5,000,006 from the
Subscriber in the first three stages of its investment and $4,000,001.50
from other subscribers in the Offering), up to an additional 545,454
shares, for an aggregate purchase price of up to $2,999,997.00, on a
share-for-share basis, for every additional share of Common Stock sold
in the Offering to other subscribers.
2. The Subscriber's agreement is subject to the Company (i) issuing
the Subscriber warrants
to purchase a number of shares of common stock of the Company equivalent to 10%
of the Shares purchased by the Subscriber pursuant to this Agreement and (ii)
granting the Subscriber demand registration rights with respect to all shares of
common stock of the Company owned by the Subscriber. The Subscriber's commitment
to purchase shares in Stage 3 and Stage 4 is contingent upon the Subscriber's
receipt of approval or appropriate waiver from its lenders under the
Subscriber's $675,000 credit facility. This Agreement, subject to the terms
hereof, shall become a contract for the sale of the Shares upon the acceptance
thereof by the Company.
3. The subscription will not become effective unless and until accepted
by the Company. The Company reserves the unrestricted right to withdraw this
offer and reject the subscription in whole or in part at any time or for any
reason.
4. If the Company accepts this subscription, the Subscriber hereby
specifically accepts, adopts and agrees to execute a Joinder Agreement pursuant
to which the Subscriber becomes a party to each and every provision of that
certain Shareholders' Agreement dated as of April 16, 1993 among the Company and
all of its shareholders, as amended by Amendment No. 1 to Shareholders'
Agreement dated as of June 17, 1994.
5. If the Company accepts this subscription, the Subscriber agrees to
promptly deliver good funds to the Company, either by wire transfer or check, in
accordance with its committment set forth in Section 1 hereof.
6. The Subscriber hereby makes the representations and warranties set
forth below with the express intention that they be relied upon by the Company
in determining the suitability of the Subscriber to purchase shares:
(a) The Subscriber is fully aware that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"), or
under any applicable state securities law. The Subscriber further
understands that the Shares are being sold in reliance on the exemptions
from the registration requirements of the Act provided by Section 4(2)
thereof, and in reliance on exemptions from the registration
requirements of the applicable state law, on the ground that the
Offering involved has been limited to accredited investors described in
the Representation of Accredited Investor of even date herewith.
(b) The Subscriber is acquiring the Shares for the Subscriber's
own account as principal for the Subscriber's investment and not with a
view to resale or distribution.
(c) The Subscriber has been furnished and has carefully reviewed
the Confidential Prospectus concerning the Company and the Offering, and
has been given the opportunity to ask questions of, and receive answers
from, the Company concerning the business of the Company and the terms
and conditions of the Offering and to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or
expense necessary to verify the accuracy of the information contained
therein or information that has been otherwise provided by the Company.
(d) The Subscriber fully understands and agrees that the
Subscriber must bear the economic risk of investment in the Shares for
an indefinite period of time because, among other reasons, the Shares
have not been registered under the Act, or under any applicable state
securities laws and, therefore, cannot be sold, pledged, assigned or
otherwise disposed of unless they are subsequently registered under any
applicable securities laws or an exemption from such registration is
available. The Subscriber further understands and agrees that the
Company will not honor any attempt by the Subscriber to sell, pledge,
transfer or otherwise dispose of any Shares in the absence of an
effective registration statement for such Shares or an opinion of
counsel satisfactory to the Company that an exemption from any
applicable registration requirements is available. The Subscriber
further understands that the Company is under no obligation to register
the Shares or make an exemption from registration available and that the
Company has not represented that it will make any attempt so to register
the Shares or to make such an exemption thereto available.
(e) The Subscriber has sought such accounting, legal and tax
advice as the Subscriber has considered necessary to make an informed
investment decision.
(f) The Subscriber is aware that no federal or state agency has
made any finding or determination as to the fairness of an investment in
the Shares, nor any recommendation or endorsement of any such
investment.
(g) The Subscriber recognizes that investing in the Company is
speculative and involves a high degree of risk, and the Subscriber has
taken full cognizance of and understands all the risk factors related to
the purchase of the Shares. The Subscriber has read and understands the
"Risk Factors" set forth in the Confidential Prospectus and that such
list is not an exclusive list of all risk factors related to the
purchase of the Shares.
(h) The Subscriber has delivered herewith a Representation of
Accredited Investor, and the Subscriber represents that such
Representation contains true and accurate information as of the date
hereof. The Subscriber agrees to advise the Company if any of the
information contained in the Representation materially changes prior to
acceptance of this subscription.
7. The Subscriber fully understands and acknowledges that the Company's
anticipated rollout of kiosks in grocery stores with the funds from various
levels of proceeds from the Offering (assuming no additional debt financing) is
as follows:
Gross Proceeds Stores
$ 5,000,000 90
$ 9,000,000 200
$15,000,000 400
and that the Company anticipates being in a position to complete a rollout of
500 stores with access to asset-based, equipment lease or other financing
possible from the improved financial condition and momentum from a fully
subscribed Offering. The Subscriber fully understands and
acknowledges that the Subscriber's subscription may be accepted by the Company
at a gross proceeds level that is not sufficient to fund the Company's rollout
goals, and that there can be no assurances that the rollout goals described
above can be achieved.
8. The subscription herein shall survive the death or disability of any
individual Subscriber and the dissolution or termination of any subscribing
entity, and this Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of any such Subscriber. All pronouns and
any variations thereof used herein shall be deemed neuter, singular or plural as
the identity of the Subscriber may require.
IN WITNESS WHEREOF, the undersigned has executed or cause to be executed
under seal this Agreement as of the day of October, 1995.
VANGUARD CELLULAR OPERATING CORP.
By:
President
ACCEPTANCE OF SUBSCRIPTION
The foregoing Subscription Agreement is ACCEPTED by the Company on this
_____ day of October, 1995.
INTER(bullet)ACT SYSTEMS, INCORPORATED
By:
President