SUBSCRIPTION AGREEMENT
THIS AGREEMENT is made and entered into this 20th day of
May, 1997, by and between CAMELOT CORPORATION, a Colorado
corporation (hereinafter referred to as "Camelot"), and ADINA,
INC., (hereinafter referred to as "Adina"), a Delaware
Corporation.
Subscription
Adina hereby subscribes for 53,811,780 Preferred Shares, Series
J, par value $0.01, of CAMELOT on the following terms and
conditions:
Consideration
1. The stock shall be paid for by the transfer of
6,029,921 restricted common shares of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Investments
(USA), Inc.("AMI Shares").
2. Closing of this Agreement to take place on May 20, 1997
at Dallas, Texas or such other time and place as the parties may
agree.
CAMELOT Representations
3. CAMELOT hereby warrants and represents the following
facts, the truth and accuracy of which are conditions precedent
to the Closing:
(a) CAMELOT has the proper corporate authority to
execute this subscription and issue the shares as set out below;
(b) There are no liens, pledges, chattel mortgages, or
other encumbrances of any kind against the CAMELOT Shares;
(c) There are no undisclosed interests, present or
future, in the CAMELOT Shares, nor does CAMELOT know of any
assertion of such an interest;
(d) CAMELOT is not required by any provision of
federal, state, or local law to take any further action or to
seek any governmental approval of any nature prior to the
issuance by it of the CAMELOT Shares;
(e) There are no outstanding or existing provisions of
an agreement it is a party to that would prevent, limit, or
condition the issuance of the CAMELOT Shares to Adina;
(f) There are no provisions of any contract,
indenture, or other instrument to which CAMELOT is a party or to
which the CAMELOT Shares are subject which would prevent, limit,
or condition the issuance of the CAMELOT Shares to Adina.
(g) CAMELOT's Certificate of Incorporation, Bylaws or
other agreement or corporate resolution does not require
stockholder approval prior to CAMELOT issuing CAMELOT Shares to
Adina.
(h) The Preferred Shares, Series J has been properly
designated by the Board and will have the following rights and
privileges:
1. Dividends and Distribution.
There shall be no dividends paid to the shareholder of
the Preferred Stock, Series J.
2. Voting Rights. The holders of shares of Preferred
Stock, Series J shall have the following voting rights:
(A) Each share of Preferred Stock, Series J shall
entitle the holder thereof to one vote, voting together with the
common stock on all matters submitted to a vote of the
stockholders of the Corporation,
(B) Except as required by law and by Section 10
hereof, holder of Preferred Stock, Series J shall have no special
voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.
3. Reacquired Shares. Any shares of Preferred Stock,
Series J purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired promptly after the
acquisition thereof. All such shares shall upon the retirement
become authorized but unissued shares of Preferred Stock and may
be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions or the Board of Directors,
subject to any conditions and restrictions on issuance set forth
herein.
4. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation, dissolution or winding up of the Corporation,
voluntary or otherwise, no distribution shall be made of the
holder of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Preferred
Stock, Series J unless, prior thereto, the holder of shares of
Preferred Stock, Series J shall have received an amount per share
(the "Preferred Stock, Series J") equal to $0.10.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Preferred Stock, Series J and the liquidation preferences of all
other classes and series of stock of the Corporation, if any,
that rank on a parity with the Preferred Stock, Series J in
respect thereof, then the assets available for such distribution
shall be distributed ratably to the holder of the Preferred
Stock, Series J and the holder of such parity shares in
proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the
Corporation into or with another corporation nor the merger or
consolidation of any other Corporation into or with the
Corporation shall be deemed to be liquidation, dissolution or
winding up of the Corporation within the meaning of this Section
5.
5. No Redemption. Shares of Preferred Stock, Series J
shall not be subject to redemption by the Company.
6. Ranking. The Preferred Stock, Series J shall rank
junior to all other series of the Preferred Stock as to the
payment of dividends, and as to the distribution of assets upon
liquidation, dissolution or winding up, unless the terms of any
such series shall provide otherwise, and shall rank senior to the
Common Stock as to such matters.
7. Amendment. At any time that any shares of Preferred
Stock, Series J are outstanding, the Restated Certificate of
Incorporation of the Corporation shall not be amended in any
manner which would materially alter or change the powers,
preferences or special rights of the Preferred Stock, Series J so
as to affect them adversely without the affirmative vote of the
holders of two-thirds of the outstanding shares of Preferred
Stock, Series J, voting separately as a class.
8. Fractional Shares. Preferred Stock, Series J may be
issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting
rights, participate in distributions and to have the benefit of
all other rights of holders of Preferred Stock, Series J.
ADINA Representations
4. Adina hereby warrants and represents the following
facts, the truth and accuracy of which are conditions precedent
to the Closing:
(a) In executing this Agreement to acquire the CAMELOT
Shares, Adina is acting solely for itself and for no other
person, firm, partnership, corporation, or entity;
(b) Adina's assets and net worth are sufficient to
permit it to purchase the CAMELOT Shares in accordance with the
terms of this Agreement;
(c) Adina has no interest, direct or indirect, that
would conflict with the business of CAMELOT;
(d) Adina is not prevented by any federal, state, or
local law or by any provision of any contract, mortgage,
indenture, or other instrument from purchasing the CAMELOT Shares
as contemplated by this Agreement;
(e) Adina has had access to the extent it deems
necessary to the financial information of CAMELOT sufficient to
permit it to evaluate the business of CAMELOT and thereby
evaluate the merits and risks associated with the purchase of the
CAMELOT shares herein described;
(f) Adina understands that CAMELOT has had a varied
business history and that the CAMELOT Shares that it will be
acquiring must be regarded as speculative and subject to a high
degree of risk. Adina has received no assurance whatsoever as to
the value of the CAMELOT Shares nor has CAMELOT or any other
officer or director of CAMELOT made any representations or
promises to Adina regarding any potential appreciation in value
of the CAMELOT Shares.
CAMELOT Covenants
5. CAMELOT hereby covenants as follows:
(a) At the Closing, CAMELOT shall undertake to deliver
to Adina certificates representing 35,688,560 Preferred Shares,
Series J with the balance, 18,123,220 Preferred Shares to be
issued on one for one basis as new common shares of Camelot are
issued until the balance is fully issued.
(b) From the date hereof, CAMELOT shall take no action
that would encumber or restrict the CAMELOT Shares subject to
this subscription or their exchange or transfer;
(c) CAMELOT will file and assist Adina in filing all
required disclosure documents required by the Federal Securities
Laws upon the execution and consummation of this agreement.
Adina's Covenants
6. Adina hereby covenants as follows:
(a) At the Closing, Adina shall deliver to CAMELOT
certificates for the Adina Shares as set out in paragraph 1.
(b) Adina will file all required disclosure documents
and assist CAMELOT in filing all required disclosure documents
required by the Federal Securities Laws upon the execution and
consummation of this Agreement.
Issuance of Shares and Rights of Shares
7. CAMELOT shall issue said shares in the name of Adina,
Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
8. Adina shall provide a properly executed Stock Power to
transfer the AMI Shares into the name of Camelot, ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
9. Adina understands and agrees that CAMELOT will not
issue any shares until they are fully paid for.
10. Adina agrees that the following or similar restrictive
legend shall be placed on the certificates and that stop transfer
orders shall be entered against said shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT"), AND ARE "RESTRICTED
SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 UNDER THE ACT, THE SHARES MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE ACT, THE AVAILABILITY OF WHICH IS
TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
Miscellaneous
11. It is understood and agreed that Adina and CAMELOT and
their representatives (including counsel and accountants) shall
each keep confidential any information (unless readily
ascertainable from public or published information or trade
sources) obtained from the other, concerning their properties,
operations and business.
12. All covenants, representations and warranties by
CAMELOT and Adina shall be true and correct as of the Closing,
shall survive the Closing, and shall bind Adina and CAMELOT and
their heirs and assigns as to any breach thereof not disclosed in
writing or known to the parties prior to the Closing.
13. No remedy conferred by any of the specific provisions
of this Agreement is intended to be exclusive or any other
remedy, and each remedy shall be cumulative and shall be in
addition to all other remedies given hereunder or now or
hereafter existing at law or in equity or by statute or
otherwise. The election of any one or more remedies by Adina or
CAMELOT shall not constitute a waiver of the right to pursue
other available remedies.
14. In the event that any part of this Agreement is
determined by a court of competent jurisdiction to be
unenforceable, the balance of the Agreement shall remain in full
force and effect.
15. CAMELOT hereby indemnifies Adina and Adina hereby
indemnifies CAMELOT for any breach of any representation,
warranty or covenant herein contained, including all costs
associated with any resulting litigation or investigation
thereof.
14. This Agreement shall be construed according to the laws
of the State of Texas.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the date first written above.
CAMELOT CORPORATION
By:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President and General Counsel
ADINA, INC.
By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Director