SUBSCRIPTION AGREEMENT
▇▇▇▇▇▇ HEALTHCARE, INC.
PRIVATE PLACEMENT
OF WARRANTS TO PURCHASE UP TO _____________ SHARES
OF
COMMON STOCK
This Subscription Agreement (this "AGREEMENT") is made between ▇▇▇▇▇▇
Healthcare, Inc., a Texas corporation (the "COMPANY"), and the undersigned
prospective purchaser who is subscribing hereby for three- and/or five-year
warrants (collectively, the "WARRANTS") to purchase shares of common stock, par
value $.01 per share ("COMMON STOCK"), of the Company. The three-year warrants
shall be in the form of EXHIBIT A attached hereto and the five-year Warrants
shall be in the form of EXHIBIT B attached hereto. The Warrants shall have the
following material terms:
THREE-YEAR WARRANTS FIVE-YEAR WARRANTS
___________________ ___________________
PURCHASE PRICE : $ .10 per warrant $ .20 per warrant
EXERCISE PERIOD : Three Years Five Years
REDEMPTION PRICE : $ .10 per warrant $ .20 per warrant
EXERCISE PRICE : $3.00 per share $3.00 per share
The undersigned must subscribe for a minimum of 2,000 three-year
Warrants and/or 2,000 five-year Warrants. The Company may reject any such
subscriptions in whole or in part in its sole discretion. In no event will the
Company accept subscriptions for more than ______________ Warrants in the
aggregate.
Pursuant to the offering of the Warrants to which the undersigned
subscribes, the undersigned has been provided with the following, each of which
the undersigned has reviewed thoroughly:
(1) Risk Factors;
(2) the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1998; and
(3) the Company's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1999.
In consideration of the Company's agreement to sell the Warrants to the
undersigned upon the terms and conditions of this Agreement and the Warrants,
the undersigned agrees and represents as follows:
1. SUBSCRIPTION
(a) The undersigned hereby irrevocably subscribes for and agrees
to purchase the number of Warrants indicated on the signature page
hereto at a purchase price of $.10 per three-year Warrant and $.20 per
five-year Warrant. The undersigned encloses herewith payment in good
funds payable to the Company in the full amount of the purchase price of
the Warrants for which the undersigned is subscribing (the "PAYMENT").
(b) The undersigned understands that the Payment as provided in
paragraph (a) above shall be delivered to the Company at its executive
offices in Houston, Texas. The payment (or, in the case of rejection of
all or a portion of the undersigned's subscription, the part of the
payment relating to such rejected whole or portion) will be returned
promptly, without interest, if the undersigned's subscription is
rejected in whole or in part.
(c) The offering of the Warrants (the "OFFERING") will terminate
on _________________ (the "TERMINATION DATE") unless extended on one or
more occasions at the option of the Company. Upon receipt by the Company
of Payment for all Warrants to be purchased by the subscribers whose
subscriptions are accepted in whole or in part (each, a "PURCHASER" and,
collectively, the "PURCHASERS"), the Warrants so purchased will be
issued in the names of each such Purchaser, and the names and addresses
of each such Purchaser will be entered into a register for the Warrants,
to be maintained by the Company, as the record owners of Warrants. The
Company will issue to each Purchaser a certificate representing the
Warrants purchased in the form of EXHIBIT A, in the case of three-year
Warrants, and in the form of EXHIBIT B, in the case of five-year
Warrants.
2. REPRESENTATIONS AND WARRANTIES OF THE UNDERSIGNED. The undersigned
hereby represents and warrants to, and agrees with the Company as follows:
(a) The undersigned has been furnished with and has carefully
read the Risk Factors and this Agreement, including Exhibits A and B
hereto, and is familiar with and understands the terms of the Offering.
The undersigned has carefully considered and has, to the extent the
undersigned believes such discussion necessary, discussed with the
undersigned's professional legal, tax, accounting and financial
advisors, of the suitability of an investment in the Warrants for the
undersigned's particular tax and financial situation and has determined
that the Warrants being subscribed for by the undersigned are a suitable
investment for the undersigned.
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(b) The undersigned is an individual "ACCREDITED INVESTOR," as
that term is defined in Rule 501(a) promulgated under the Securities
Act, which is incorporated herein by reference. The undersigned has the
knowledge and experience in financial and business matters necessary for
evaluating the merits and risks of an acquisition of Warrants. THE
UNDERSIGNED HAS CHECKED THE BOX ON THE SIGNATURE PAGE HERETO INDICATING
THE BASIS ON WHICH HE IS REPRESENTING HIS STATUS AS AN "ACCREDITED
INVESTOR."
(c) The undersigned acknowledges that (i) the undersigned has had
the right to request copies of any documents, records, and books
pertaining to this investment and (ii) any such documents, records and
books which the undersigned requested have been made available for
inspection by the undersigned and the undersigned's attorney, accountant
or adviser.
(d) The undersigned or the undersigned's adviser has had a
reasonable opportunity to ask questions of and receive answers from a
person or persons acting on behalf of the Company concerning the
offering and all such questions have been answered to the full
satisfaction of the undersigned.
(e) The undersigned is not subscribing for Warrants as a result
of or after any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or meeting.
(f) If the undersigned is a natural person, the undersigned has
reached the age of majority in the state in which the undersigned
resides, has adequate means of providing for the undersigned's current
financial needs and contingencies, is able to bear the substantial
economic risks of an investment in the Warrants for an indefinite period
of time, has no need for liquidity in such investment and, at the
present time, could afford a complete loss of such investment.
(g) The undersigned or the undersigned's purchaser
representative, as the case may be, has such knowledge and experience in
financial, tax and business matters so as to enable the undersigned to
use the information made available to the undersigned in connection with
the offering to evaluate the merits and risks of an investment in the
Warrants and to make an informed investment decision with respect
thereto.
(h) The undersigned will not sell or otherwise transfer the
Warrants or the shares of Common Stock issuable upon exercise of the
Warrants (the "WARRANT SHARES") without registration under the
Securities Act of 1933, as amended (the "SECURITIES ACT") and applicable
state securities laws or an exemption therefrom. Subject to the terms of
Section 4 below, neither the Warrants nor the Warrant Shares have been
registered under the Securities Act or under the securities laws of any
state. The undersigned represents that the undersigned is purchasing the
Warrants and the Warrant Shares for the undersigned's own account, for
investment and not with a view to resale or
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distribution except in compliance with the Securities Act. The
undersigned has not offered or sold the Warrants being acquired nor does
the undersigned have any present intention of selling, distributing or
otherwise disposing of such Warrants or Warrant Shares either currently
or after the passage of a fixed or determinable period of time or upon
the occurrence or non-occurrence of any predetermined event or
circumstance in violation of the Securities Act. The undersigned is
aware that there is currently no market for the Warrants, the Company
has no obligation to register the Warrants subscribed for hereunder, or
to make available an exemption from the registration requirements
pursuant to Rule 144 or any successor rule for resale of the Warrants.
(i) The undersigned recognizes that investment in the Warrants
involves substantial risks, including loss of the entire amount of such
investment. Further, the undersigned has carefully read and considered
the matters set forth in the Risk Factors and has taken full cognizance
of and understands all of the risks related to the purchase of the
Warrants.
(j) In addition to any other restrictive legends that may be
required by the terms of the Warrants, the undersigned acknowledges that
the certificates representing the Warrants and the Warrant Shares shall
be stamped or otherwise imprinted with a legend substantially in the
following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND SUCH LAWS OR PURSUANT TO AN EXEMPTION
THEREFROM, WHICH, IN THE OPINION OF COUNSEL FOR THE
HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS
AVAILABLE."
(k) The undersigned shall indemnify and hold harmless the
Company, and its officers, directors or control persons who are or may
be a party or are or may be threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of or
arising from any actual or alleged misrepresentation or misstatement of
facts or omission to represent or state facts made or alleged to have
been made by the undersigned to the Company, or omitted or alleged to
have been omitted by the undersigned, concerning the undersigned or the
undersigned's authority to invest or financial position in connection
with the offering, against losses, liabilities and expenses for which
the Company, or its officers, directors or control persons have not
otherwise been reimbursed (including attorneys' fees, judgements, fines
and amounts paid in settlement) actually and reasonably incurred by the
Company, or such officers, directors or control persons in connection
with such action, suit or proceeding.
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3. ADDITIONAL AGREEMENTS. The undersigned understands, acknowledges and
agrees with the Company as follows:
(a) This subscription may be rejected, in whole or in part, by
the Company in its sole and absolute discretion at any time. The
acceptance, in whole or in part, by the Company of this subscription
shall be evidenced by the countersignature of a duly authorized
representative of the Company on the page immediately following the
signature page hereto (the "ACCEPTANCE PAGE").
(b) Except as set forth in Section 3(a) above, the undersigned
hereby acknowledges and agrees that the subscription hereunder is
irrevocable by the undersigned, that, except as required by law, the
undersigned is not entitled to cancel, terminate or revoke this
Agreement or any agreements of the undersigned hereunder and that this
Agreement and such other agreements shall survive the death or
disability of the undersigned and shall be binding upon and inure to the
benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and permitted assigns. If the
undersigned is more than one person, the obligations of the undersigned
hereunder shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained shall
be deemed to be made by and be binding upon each such person and his
heirs, executors, administrators, successors, legal representatives and
permitted assigns.
(c) No federal or state agency has made any finding or
determination as to the accuracy or adequacy of the information provided
by the Company to the undersigned in connection with the Offering or as
to the fairness of the terms of the Offering for investment or any
recommendation or endorsement of the Warrants or the Warrant Shares.
(d) The Offering is intended to be exempt from registration under
the Securities Act by virtue of Section 4(2) of the Securities Act and
the provisions of Regulation D thereunder, which is in part dependent
upon the truth, completeness and accuracy of the representations and
warranties of the undersigned herein.
(e) The representations, warranties and agreements of the
undersigned contained herein and in any other writing delivered in
connection with the transactions contemplated hereby shall survive the
execution and delivery of this Agreement and the purchase of the
Warrants.
4. REGISTRATION RIGHTS. The Company covenants and agrees that within one
hundred (100) days following the Termination Date, the Company will cause to be
filed pursuant to Rule 415 of the Securities Act a Shelf Registration Statement
on Form S-3, or such other Form as the Company is then eligible to use, (the
"SHELF REGISTRATION STATEMENT") as to the Warrant Shares issuable upon exercise
of the Warrants sold to the Purchasers in the Offering contemplated herein,
naming the holders of the Warrants as selling shareholders. The
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Company shall use its commercially reasonable best efforts to have such Shelf
Registration Statement declared effective as soon as reasonably practicable
after such filing, and to keep such Shelf Registration Statement continuously
effective until five years following the date on which Shelf Registration
Statement becomes effective under the Securities Act; provided, however, that
the Company may voluntarily suspend the effectiveness of such Shelf Registration
Statement for a limited time, which in no event shall be longer than 120 days,
if the Company has been advised by counsel that the offering of the Warrant
Shares pursuant to the Shelf Registration Statement would adversely affect, or
would be improper in view of (or improper without disclosure in a prospectus), a
proposed financing, reorganization, re-capitalization, merger, consolidation, or
similar transaction involving the Company, in which case the Company shall be
required to keep such Shelf Registration Statement effective for an additional
period of time beyond five years following the date of the effectiveness thereof
equal to the number of days the effectiveness thereof is suspended pursuant to
this proviso. Upon the occurrence of any event that would cause the Shelf
Registration Statement to contain a material misstatement or omission or not to
be effective and usable during the period that such Shelf Registration Statement
is required to be effective and usable, the Company shall promptly file an
amendment to the Shelf Registration Statement and use its best efforts to cause
such amendment to be declared effective as soon as practicable thereafter. The
Company will bear all costs and expenses related to the Shelf Registration
Statement other than the expenses incurred by the Purchasers for underwriters'
commissions and discounts or legal fees incurred by the Purchasers. The
Purchasers shall furnish to the Company such information regarding their
holdings and the proposed manner of distribution thereof as the Company may
reasonably request and it shall be required in connection with the Shelf
Registration Statement.
5. MISCELLANEOUS
(a) This Agreement shall not be waived, modified, changed,
discharged, terminated, revoked or canceled except by an instrument in
writing signed by the party effecting the same against whom any change,
discharge or termination is sought.
(b) Notices required or permitted to be given hereunder shall be
in writing and shall be deemed to be sufficiently given when personally
delivered or sent by registered mail, return receipt requested,
addressed: (i) if to the Company, at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: President, and (ii) if to the undersigned,
to the address for correspondence set forth on the signature page
hereto, or at such other address as may have been specified by written
notice given in accordance with this Paragraph 5(b).
(c) Failure of the Company to exercise any right or remedy under
this Agreement or any other agreement between the Company and the
undersigned, or otherwise, or delay by the Company in exercising such
right or remedy, will not operate as a waiver thereof. No waiver by the
Company will be effective unless and until it is in writing and signed
by the Company.
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(d) This Agreement shall be enforced, governed and construed in
all respects in accordance with the laws of the State of Texas, without
regard to laws governing choice of law, as such laws are applied by
Texas courts to agreements entered into and to be performed in Texas by
and between residents of Texas, and shall be binding upon the
undersigned, the undersigned's heirs, estate, legal representatives,
successors and assigns and shall inure to the benefit of the Company,
its successors and assigns. If any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof that may prove invalid or
unenforceable under any law shall not affect the validity or
enforceability of any other provision hereof.
(e) This Agreement, including the exhibits hereto, 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
both parties hereto.
(f) Each party hereto has had the opportunity to review this
Agreement with its separate legal counsel.
6. SIGNATURE. The signature of this Agreement is contained as part of
the applicable subscription package, entitled "SIGNATURE PAGE."
[SIGNATURE AND ACCEPTANCE PAGES FOLLOW]
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SIGNATURE PAGE
The undersigned hereby subscribes for the number of Warrants set forth below.
1. Dated: ____________________________________
2. Number and Purchase Price of Warrants:
--------------------------------------------------------------------------------
(A) NUMBER OF (B) PURCHASE PRICE (C) TOTAL PURCHASE
TYPE OF WARRANT WARRANTS PER WARRANT PRICE (A X B =C)
--------------------------------------------------------------------------------
Three-Year Warrants $.10 $
--------------------------------------------------------------------------------
Five-Year Warrants $.20 $
--------------------------------------------------------------------------------
3. Aggregate Purchase Price for number of Warrants subscribed for (combine
Total Purchase Price for both types of Warrants): $_____________________
4. Check the box below indicating the basis on which you are representing
your status as an "accredited investor":
[ ] a corporation or partnership, not formed for the specific
purpose of acquiring the Shares, with total assets in excess of
$5,000,000;
[ ] a director or executive officer of the Company;
[ ] a natural person whose individual net worth, or joint net worth
with the undersigned's spouse, at the time of this purchase
exceeds $1,000,000;
[ ] 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 the undersigned'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;
[ ] a trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Shares, whose purchase
is directed by a 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; or
[ ] an entity in which all of the equity holders are "accredited
investors" by virtue of their meeting one or more of the above
standards.
_____________________________________ ________________________________________
Signature of Purchaser Taxpayer Identification or
(and title, if applicable) Social Security Number
_____________________________________ Name and Residence Address
Name of Purchaser (please print as (post office address not acceptable):
name will appear on certificates)
________________________________________
Number and Street
________________________________________
City State Zip Code
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ACCEPTANCE PAGE
The Company hereby accepts the foregoing subscription as indicated below:
1. Dated: _________________________
2. Name of Purchaser: _______________________________________
3. Number of Three-Year Warrants accepted: __________________
4. Number of Five-Year Warrants accepted: ___________________
▇▇▇▇▇▇ HEALTHCARE, INC.
By: ________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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