THESE SECURITIES ARE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144
UNDER THE U S. SECURITIES ACT 0F 1933 (THE "ACT"). AS RESTRICTED SECURITIES,
THEY MAY BE RESOLD ONLY IN ACCORDANCE WITH REGULATIONS UNDER THE ACT OR PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION THEREFROM.
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THIS SUBSCRIPTION
AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER
TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE SECURITIES MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED PURSUANT TO REGISTRATION UNDER THE ACT OR EXEMPTION THEREFROM.
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE
NOT REVIEWED, CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SUBSCRIPTION AGREEMENT
As of March ___, 2000
This Subscription Agreement (this "Agreement") is being entered into between the
undersigned (the "Subscriber") and CORE SYSTEMS, INC., a Nevada corporation (the
"Company") in connection with the offer and subscription by the Subscriber for
________ units of the Company's securities at a cost of $0.25 per unit (each
unit consists of one share and one warrant exercisable for a period of two years
to acquire one additional share at a price of $0.25). This Agreement
memorializes the transaction agreed to on March ___, 2000, the date on which the
Subscriber paid the Purchase Price (as defined in Section 1) to thc Company. The
price per unit was fixed and all the representations and warranties were made on
that date. The offer and sale of securities was made in reliance upon the
provisions of Regulation S ("Regulation S") under the United States Securities
Act of 1933, as amended (the "Act"). References to "Shares" include shares
issued as part of units and shares issued on the exercise of the warrants
forming part of the units.
1. Offer to Subscribe; Purchase Price
The Subscriber purchased the securities at a price of U S. Twenty Five Cents
(U.S. $0.25) per unit on March ___, 2000 outside the United States of America
(the "Closing"). Payment was made to the Company's designated account at the
time of the Closing. Thc Company shall deliver a certificate representing the
Shares and Warrants to thc Subscriber within a reasonable time hereafter. The
obligations of each party were subject to the condition that all the
representations and warranties of the other party contained herein were true at
the time of Closing and all covenants of the other party that were to be
performed by the other party on or before the Closing had been performed.
2. Representations and Warranties of Subscriber; Certain Covenants
2.1 Offshore Transaction. Subscriber represents and warrants to the Company that
(i), Subscriber is not a "U.S. person" as that term is defined in Rule 902(c) of
Regulation S; (ii) at the time of execution of this Agreement. Subscriber was
outside the United States and no offer of the Shares was made to the Subscriber
within the United States; (iii) Subscriber purchased the Shares for its own
account and not on behalf of any U.S. person, and the sale of the Shares had not
been prearranged with any buyer in the United States and (iv) Subscriber is not
a distributor as defined in Regulation S. The Subscriber covenants that all
offers and sales of the Shares prior to the expiration of and period commencing
on the Closing and ending one-year thereafter (the "Restricted Period") shall
not be made to U.S. persons or for the account or benefit of U S. persons and
shall otherwise be made in compliance with the provisions of Regulation S
2.2 Independent Investigation. Subscriber, in electing to subscribe for the
Shares hereunder, relied upon an independent investigation made by it and its
representatives, if any, and had been given access to and the opportunity to
examine all books and records of the Company, and all material contracts and
documents of the Company. The Subscriber has such experience in business and
financial matters that it was capable of evaluating the risk of its investment
and determining the suitability of its investment.
2.3 No Government Recommendation or Approval. Subscriber understands that no
United States federal or state agency has passed upon or made any recommendation
or endorsement of the Company, this transaction or the purchase of the Shares.
2.4 No Registration. Subscriber understands that the Shares have not began
registered under the Act and are being offered and sold pursuant to Regulation S
based in part upon the representations of Subscriber contained herein, and that
the Company is relying on the truth and accuracy of the-Subscriber's
representations and warranties herein to determine whether the offer and sale of
flit Shares is exempt from registration under the Act.
2.5 Investment Intent. Subscriber acquired the Shares to be issued and sold
hereunder for its own account (or a trust account if such Subscriber is a
trustee) and not as a nominee. Subscriber understands that the purchase of the
Shares involves a high degree of risk and that Subscriber must bear the economic
risk of this investment indefinitely unless sale of the Shares is registered
pursuant to the Act, or an exemption from registration for sale thereof is
available Subscriber understands that, in the view of the SEC, the statutory
basis for the exemption claimed for this transaction would not be present if the
offering of the Shares, although in technical compliance with Regulation S, is
part of a plan or scheme to evade the registration provisions of the Act.
Subscriber is acquiring die Shares for investment purposes and has no present
intention to sell the Shares in the United States, to a U.S. Person or for the
account or benefit of a U.S. Person. Subscriber covenants that neither
Subscriber nor its affiliates nor
2
any person acting on its or their behalf has the intention of entering or will
enter during the Restricted Period, into any put option, short position or other
similar instrument or position or any other hedging transactions or arrangements
with respect to the Company's common stock, and neither Subscriber nor any of
its affiliates nor any person acting on its or their behalf will use at any time
Shares acquired pursuant to this Agreement to settle any put option, short
position or other similar instrument or position or any other hedging
transaction or arrangement that may have been entered into prior to the
execution of this Agreement or during the Restricted Period
2.6 No Sale in Violation of the Securities Laws. Subscriber covenants that it
will not knowingly make any sale, transfer or other disposition of the Shares in
violation of the Act, the Securities and Exchange Act of 1934, as amended (the
"Exchange Act") or the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated thereunder. All offers and sales of
the Shares will be made pursuant to an effective registration statement under
the Act or an exemption from the registration provisions thereof
2.7 Authority. Subscriber has the full power and authority to execute, deliver
and perform this Agreement. This Agreement, when executed and delivered by
Subscriber, will constitute a legal, valid and binding obligation of Subscriber,
enforceable against the Subscriber in accordance with its terms.
2.8 No Reliance on Tax Advice. Subscriber has reviewed with his, her or its own
tax advisors the foreign U.S. federal, state and local tax consequences of this
investment, where applicable, and the transactions contemplated by this
Agreement. Subscriber is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents with respect
to such tax consequences and understands that Subscriber (and not the Company)
shall be responsible for the Subscriber's own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement
2.9 No Legal Advice from Company. Subscriber acknowledges that it has bad the
opportunity to review this Agreement and the transactions contemplated by this
Agreement with its own legal counsel. Subscriber is relying solely on such
counsel and not on any statements or representations of the Company or any of
its agents for legal advice with respect to this investment or the transactions
contemplated by this Agreement except for the representations, warranties and
covenants set forth herein.
3. Resales
Subscriber acknowledges and agrees that the Shares may only be resold in
compliance with Rules 903 or 904 under Regulation S, pursuant to a Registration
Statement under the Act or pursuant to an exemption from registration under the
Act. The Company shall not register any transfer of Shares that is not in
compliance with this Section 3. Subscriber covenants that all offering materials
and documents (other than press releases) used in connection with offers and
sales of the Shares before the expiration of the Restricted Period shall state
that (i) the Shares have not been registered under the Securities Act and may
not be offered or sold in the United States or to a U.S. person (as that term is
defined in Rule 902 of Regulation S) unless they are
3
registered under the Act or an exemption from the registration requirements of
the Act is available and that (ii) hedging transactions involving the Shares may
not be conducted unless in compliance with the Act. These statements shall
appear on the cover or inside cover page and in the underwriting section of any
prospectus or offering circular and shall appear in any advertisement used in
connection with the offer or sale of the Shares.
4. Legends; Subsequent Transfer of Shares
The certificates representing the Shares shall bear the legend set forth in the
first paragraph on tie first page of this Agreement and any other legend, if
such legend or legends are reasonably required by the Company to comply with
state, federal or foreign law.
5. Representations, Warranties and Covenants of the Company
5.1 Organization and Good Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has all requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted.
5.2 Authorization. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution
and delivery of this Agreement, the performance of all obligations of the
Company hereunder and the authorization, issuance and delivery of the Shares
have been taken, and this Agreement constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
5.3 Valid Issuance of Shares. The Shares, when issued, sold and delivered in
accordance with the terms hereof for the Purchase Price will be duly and validly
issued and outstanding, fully paid and nonassessable, and based in part on the
representations and warranties of Subscriber will be issued in compliance with
all applicable federal, state and other applicable securities laws
6. Governing Laws
This Agreement shall be governed by and construed in accordance with the laws of
the State of Nevada, except for matters arising under the Act or the Securities
Exchange Act of 1934 which matters shall be construed and interpreted in
accordance with such laws.
7. Entire Agreement; Amendment
This Agreement constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof, and no party
shall be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
Except as expressly provided herein, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought.
4
8. Notices
Any notice, deemed or request required or permitted to be given by either the
Company or the Subscriber pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered personally or by facsimile,
with a hard copy to follow by two day courier addressed to the parties at the
addresses of the parties set forth at the end of this Agreement or such other
address as a party may request by notifying the other in writing.
9. Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be enforceable against the parties actually executing such counterparts,
and all of which together shall constitute one instrument.
10. Severability
In the event that any provision of this Agreement becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision,
provided that no such severability shall be effective if it materially changes
the economics benefit of this Agreement to any party.
11. Titles and Subtitles
The tiles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.
WHEREAS the undersigned has caused this Agreement to be executed as of the date
first written above.
▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
[print name]
-----------------------------------------
Authorized Signatory
-----------------------------------------
Address
-----------------------------------------
AGREED TO AND ACCEPTED:
CORE SYSTEMS, INC.
By:
-------------------------------
Authorized Signatory