[FORM OF]
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SUBSCRIPTION AGREEMENT
▇▇▇▇▇ CABARET INTERNATIONAL, INC.
▇▇▇▇▇ Cabaret International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
The undersigned, ________________________ (the "Subscriber") understands
that ▇▇▇▇▇ Cabaret International, Inc., a Texas Corporation (the "Company") is
offering for sale to the undersigned ______________ shares of Common Stock
(Common Stock) at a purchase price of $2.00 per share, for a total aggregate
purchase price of $_____________. The Subscriber acknowledges and understands
that the offering of the Common Stock (the "Offering") is being made without
registration of the Common Stock under the Securities Act of 1933, as amended
(the "Act"), or any securities "blue sky" or other similar laws of any state
("State Securities Laws").
1. SUBSCRIPTION. Subject to the terms and conditions hereof, the Subscriber
hereby subscribes for and agrees to purchase ______________ shares of
Common Stock for the aggregate purchase price of $_____________ upon
acceptance of this Subscription Agreement.
2. PAYMENT FOR THE COMMON STOCK. The undersigned encloses herewith
$____________ required to purchase the Common Stock subscribed for
hereunder. If this subscription is not accepted by the Company for any
reason, all documents will be returned to the Subscriber.
3. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER. The Subscriber hereby
represents and warrants to and covenants with the Company, as well as each
officer, director and agent of the Company as follows:
(a) General
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(i) The Subscriber has all requisite authority to enter into
this Subscription Agreement and to perform all the obligations
required to be performed by the Subscriber hereunder.
(ii) The Subscriber is the sole party in interest and is not
acquiring the Common Stock as an agent or otherwise for any other
person. The Subscriber is a resident of the state set forth opposite
its name on the signature page hereto and (a) if a corporation,
partnership, trust or other form of business organization, it has its
principal office within such state; (b) if an individual, he or she
has his or her principal residence in such state; and (c) if a
corporation, partnership, trust or other form of business organization
which was organized for the specific purpose or acquiring the Common
Stock, all of the beneficial owners are residents of such state.
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(iii) The Subscriber recognizes that the total amount of funds
tendered to purchase the Common Stock is placed at the risk of the
business and may be completely lost. The purchase of the Common Stock
of the Company as an investment involves extreme risk.
(iv) The Subscriber realizes that the Common Stock cannot
readily be sold as the shares of Common Stock are restricted
securities, that it may not be possible to sell or dispose of the
Common Stock and therefore the Common Stock must not be purchased
unless the Subscriber has liquid assets sufficient to assure that such
purchase will cause no undue financial difficulties and the Subscriber
can provide for current needs and personal contingencies.
(v) The Subscriber confirms and represents that he is able (a)
to bear the economic risk of his investment, (b) to hold the
securities for an indefinite period of time, and (c) to afford a
complete loss of his investment. The Subscriber also represents that
he has (x) adequate means of providing for his current needs and
personal contingencies, and (y) has no need for liquidity in this
particular investment.
(vi) The Subscriber has not become aware of the offering of
Common Stock of the Company by any form of general solicitation or
advertising, including, but not limited to advertisements, articles,
notices or other communications published in any newspaper, magazine
or other similar media or broadcast over television or radio or any
seminar or meeting where those individuals that have attended have
been invited by any such or similar means of general solicitation or
advertising.
(b) Information Concerning the Company.
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(i) The Subscriber acknowledges that he has received all current
information about the Company including the Company's (A) Form 10-KSB
for the fiscal year ended September 30, 2004, as amended, (B) Form
10-QSB for the Company's quarters ended December 31, 2004 and March
31, 2005; and (C) Forms 8-K of the Company filed January 24, 2005 and
June 15, 2005 ("Filed Documents").
(ii) The Subscriber or his representative is familiar with the
business and financial condition, properties, operations and prospects
of the Company, and, at a reasonable time prior to the execution of
this Subscription Agreement, that he and his representative have been
afforded the opportunity to ask questions of and receive satisfactory
answers from the Company's officers and directors, or other persons
acting on the Company's behalf, concerning the business and financial
condition, properties, operations and prospects of the Company and
concerning the terms and conditions of the offering of the Common
Stock and has asked such questions as he or his representative desires
to ask and all such questions have been answered to the full
satisfaction of the Subscriber.
(iii) The Subscriber has been furnished, has carefully read, and
has relied solely (except for information obtained pursuant to (iv)
below, on the information contained in the Filed Documents, and
Subscriber has not received any other offering literature or
prospectus, and no verbal or written representations or warranties
have
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been made to Subscriber by the Company, or its employees or agents,
other than the representations of the Company set forth herein and in
the Filed Documents.
(iv) The Subscriber has had an unrestricted opportunity to: (i)
obtain additional information concerning the offering of Common Stocks
(the "Offering"), the Common Stock, the Company and any other matters
relating directly or indirectly to Subscriber's purchase of the Common
Stock; and (ii) ask questions of, and receive answers from the Company
concerning the terms and conditions of the Offering and to obtain such
additional information as may have been necessary to verify the
accuracy of the information contained in the Filed Documents.
(v) The Subscriber understands that, unless the Subscriber
notifies the Company in writing to the contrary, all the
representations and warranties contained in this Subscription
Agreement will be deemed to have been reaffirmed and confirmed, taking
into account all information received by the Subscriber.
(vi) The Subscriber understands that the purchase of the Common
Stock involves various risks, including, but not limited to, those
outlined in this Subscription Agreement.
(vii) The Subscriber acknowledges that no representations or
warranties have been made to the Subscriber by the Company as to the
tax consequences of this investment, or as to profits, losses or cash
flow which may be received or sustained as a result of this
investment.
(viii) All documents, records and books pertaining to a proposed
investment in the Common Stock which the Subscriber or his
representative has requested have been made available to the
Subscriber.
(ix) The Subscriber or his representative has been provided
access to all information requested in evaluating his purchase of the
Common Stock.
(c) Status of the Subscriber
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(i) The Subscriber represents that the Subscriber is an
Accredited Investor as that term is defined in the Act as that term is
defined in the Act (check each category of "Accredited Investor" below
which is applicable to the Subscriber):
( ) (A) 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; or
( ) (B) 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
that person'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.
(ii) If not an Accredited Investor, the Subscriber has such
knowledge and experience in financial and business matters that the
Subscriber is capable of evaluating the
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merits and risks of this investment. The Subscriber is able to bear
the economic risk of this investment. The Subscriber has had the
opportunity to consult with the Subscriber's own attorney, accountant
and/or purchaser representative regarding this Subscriber's investment
in the Common Stock and their suitability for purchase by the
Subscriber, and to the extent necessary, the Subscriber has retained,
at Subscriber's own expense, and relied upon, appropriate professional
advice regarding the investment, tax and legal merits, risks and
consequences of this Subscription Agreement and of purchasing and
owning the Common Stock.
(iii) The Subscriber agrees to furnish any additional
information requested to assure compliance with applicable Federal and
State Securities Laws in connection with the purchase and sale of the
Common Stock.
(d) Restrictions on Transfer or Sale of the Common Stock
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(i) The Subscriber is acquiring the Common Stock subscribed solely for
the Subscriber's own beneficial account, for investment purposes, and
not with view to, or for resale in connection with, any distribution
of the Common Stock. The Subscriber understands that the offer and the
sale of the Common Stock has not been registered under the Act or any
State Securities Laws by reason of specific exemptions under the
provisions thereof which depend in part upon the investment intent of
the Subscriber and of the other representations made by the Subscriber
in this Subscription Agreement. The Subscriber understands that the
Company is relying upon the representations, covenants and agreements
contained in this Subscription Agreement (and any supplemental
information) for the purposes of determining whether this transaction
meets the requirements for such exemptions.
(ii) The Subscriber understands that the shares of Common Stock are
"restricted securities" under applicable federal securities laws and
that the Act and the rules of the Securities and Exchange Commission
(the "Commission") provide in substance that the Subscriber may
dispose of the Common Stock only pursuant to an effective registration
statement under the Act or an exemption therefrom. While the Company
has agreed to grant "piggy-back" registration rights to the Holder
hereof, the Subscriber acknowledges that the Company may not file a
Registration Statement with the Commission and that if filed, no
representation is made as to when such Registration Statement would be
declared effective by the Commission. The certificates evidencing the
shares of Common stock offered hereby will bear a legend which clearly
sets forth this restriction. The Subscriber understands that the
Subscriber may not at any time demand the purchase by the Company of
the Subscriber's Common Stock.
(iii) The Subscriber agrees: (A) that the Subscriber will not sell,
assign, pledge, give, transfer or otherwise dispose of the Common
Stock or any interest therein, or make any offer or attempt to do any
of the foregoing, except pursuant to a registration of the Common
Stock under the Act and all applicable State Securities Laws or in a
transaction which is exempt from the registration provisions of the
Act and all applicable State Securities Laws; (B) that the Company and
any transfer agent for the Common Stock shall not be required to give
effect to any purported transfer of any of
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the Common Stock except upon compliance with the foregoing
restrictions; and (C) that a restrictive legend will be placed on the
certificates representing the Common Stock.
(iv) The Subscriber has not offered or sold any portion of the
subscribed for Common Stock and has no present intention of dividing
such Common Stock with others or of reselling or otherwise disposing
of any portion of such Common Stock either currently or after the
passage of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or
circumstance.
4. SURVIVAL AND INDEMNIFICATION. All representations, warranties and covenants
contained in this Agreement and the indemnification contained in this
Paragraph 4 shall survive (i) the acceptance of the Subscription Agreement
by the Company and (ii) the death or disability of the Subscriber. The
Subscriber acknowledges the meaning and legal consequences of the
representations, warranties and covenants in Paragraph 3 hereof and that
the Company has relied upon such representations, warranties and covenants
in determining the Subscriber's qualification and suitability to purchase
the Common Stock. The Subscriber hereby agrees to indemnify, defend and
hold harmless the Company, and its officers, directors, employees, agents
and controlling persons, from and against any and all losses, claims,
damages, liabilities, expenses (including attorneys' fees and
disbursements), judgment or amounts paid in settlement of actions arising
out of or resulting from the untruth of any representation herein or the
breach of any warranty or covenant herein. Notwithstanding the foregoing,
however, no representation, warranty, covenant or acknowledgment made
herein by the Subscriber shall in any manner be deemed to constitute a
waiver of any rights granted to it under the Securities or State Securities
laws.
5. NOTICES. All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt
requested, postage prepaid, or overnight air courier guaranteeing next day
delivery:
(a) if to the Company, to it at the following address:
▇▇▇▇▇ CABARET INTERNATIONAL, INC.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇ ▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇ ▇▇▇▇
(b) if to the Subscriber, at the address set forth on the last page hereof
or directly to the Subscriber at the address set forth on the
signature page hereto, or at such other address as either party shall
have specified by notice in writing to the other.
All notice and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; two days after being
deposited in the mail, postage prepaid, if mailed; and the next day after
timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
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If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee
receives it.
6. ASSIGNABILITY. This Subscription Agreement is not assignable by the
Subscriber, and may not be modified, waived or terminated except by an
instrument in writing signed by each of the parties hereto.
7. BINDING EFFECT. Except as otherwise provided herein, this Subscription
Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives
and assigns, and the agreements, representations, warranties and
acknowledgments contained herein shall be deemed to be made by and be
binding upon such heirs, executors, administrators, successors, legal
representatives and assigns. If the Subscriber is more than one person, the
obligation of the Subscriber shall be joint and several and the agreements,
representations, warranties and acknowledgments contained herein shall be
deemed to be made by and be binding upon each such person and his heirs,
executors, administrators and successors.
8. ENTIRE AGREEMENT. This Subscription Agreement constitutes the entire
agreement of the Subscriber and the Company relating to the matters
contained herein, superseding all prior contracts or agreements, whether
oral or written.
9. GOVERNING LAW. This Subscription Agreement shall be governed and controlled
as to the validity, enforcement, interpretations, construction and effect
and in all other aspects by the substantive laws of the State of Texas. In
any action between or among any of the parties, whether arising out of this
Agreement or otherwise, each of the parties irrevocably consents to the
exclusive jurisdiction and venue of the federal and state courts located in
▇▇▇▇▇▇ County, Texas.
10. SEVERABILITY. If any provision of this Subscription Agreement or the
application thereof to any Subscriber or circumstance shall be held invalid
or unenforceable to any extent, the remainder of this Subscription
Agreement and the application of such provision to other subscriptions or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
11. HEADINGS. The headings in this Subscription Agreement are inserted for
convenience and identification only and are not intended to describe,
interpret, define, or limit the scope, extent or intent of this
Subscription Agreement or any provision hereof.
12. AMOUNT OF COMMON STOCK SUBSCRIBED FOR. The Subscriber hereby subscribes to
purchase _____________ shares of Common Stock of the Company at $2.00 per
share for a total consideration of $___________.
13. COUNTERPARTS AND FACSIMILES. This Subscription Agreement may be executed in
multiple counterparts and in any number of counterparts, each of which
shall be deemed an original but all of which taken together shall
constitute and be deemed to be one and the same instrument and each of
which shall be considered and deemed an original for all purposes. This
Agreement shall be effective with the facsimile signature of any of the
parties set forth
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below and the facsimile signature shall be deemed as an original signature
for all purposes and the Agreement shall be deemed as an original for all
purposes.
IN WITNESS WHEREOF, the undersigned Subscriber has executed this
Subscription Agreement this ____ day of _____________, 2005.
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Signature of Investor
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Name (Please type or print)
Signature of Spouse or Co-Owner if funds
are to be invested as joint tenants by the
entirety or community property.
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Name (Please type or print)
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▇▇▇▇ ▇▇▇▇▇ Zip
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ACCEPTED by the Company this the ____ day of _______________, 2005.
▇▇▇▇▇ CABARET INTERNATIONAL, INC.
By: /s/▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇, President
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