The
undersigned hereby offers to subscribe for the number of shares of Common Stock
(the “Shares”) of ______________________________ (the “Company”) set forth on
the signature page of this Subscription Agreement at a price of $__________ per
Share.
By
execution of this Subscription Agreement, the undersigned hereby acknowledges
that the undersigned understands that the Company is relying upon the accuracy
and completeness hereof in complying with its obligations under applicable
federal and state securities laws. The undersigned further acknowledges and
certifies that the undersigned received and read the Private Placement
Memorandum of the Company dated ____________________ and any supplements
thereto (the “Private Placement Memorandum”), and the undersigned is familiar
with the terms and provisions thereof.
The
undersigned agrees and represents as follows:
1.
Representations, Warranties and Agreements.
The
undersigned hereby represents and warrants to, and agrees with, the Company, as
follows:
(a)
That the undersigned is aware of the following:
(1)
The
Shares are speculative investments which involve a substantial degree of risk
of loss by the undersigned of the undersigned's entire investment in the
Company and that the undersigned understands and takes full cognizance of the
risk factors related to the purchase of the Shares, including, but not limited
to those set forth in the Private Placement Memorandum;
(2)
The
Company is newly formed and has been operating at a loss and may do so for the
foreseeable future.
(3)
There
are significant restrictions on the transferability of the Shares; the Shares
will not be, and the investors will have no rights to require that the Shares
be registered under the Securities Act (the “Act”) or any state securities
laws; there is no public market for the Shares and none is expected to develop;
and, accordingly, it may not be possible for the undersigned to liquidate the
undersigned's investment in the Company;
(4)
No
federal or state agency has made any findings as to the fairness of the terms
of the offering; and
(5)
Any
projections or predictions that may have been made available to investors are
based on estimates, assumptions and forecasts which may prove to be incorrect;
and no assurance is given that actual results will correspond with the results
contemplated by the various projections;
(b)
That
at no time has it been explicitly or implicitly represented, guaranteed or
warranted to the undersigned by the Company, the agents and employees of the
Company, any other person: (1) That the undersigned will or will not have to
remain as owner of the Shares an exact or approximate length of time; (2) That
a percentage of profit and/or amount or type of consideration will be realized
as a result of this investment; (3) That any cash dividends from Company
operations or otherwise will be made to shareholders by any specific date or
will be made at all; or (4) That any specific tax benefits will accrue as a
result of an investment in the Company;
(c)
That
the undersigned is financially responsible, able to meet all obligations
hereunder, and acknowledges that this investment will be long-term and is by
nature speculative;
(d)
That
the undersigned has received and carefully read and is familiar with the
Private Placement Memorandum, this Subscription Agreement, and all other
documents in connection therewith, and the undersigned confirms that all
documents, records and books pertaining to the investment in the Company have
been made available to the undersigned and/or to the undersigned's personal
investment, tax and legal advisers, if such advisers were utilized by the
undersigned;
(e)
That
the undersigned has relied only on the information contained in the Private
Placement Memorandum and that no written or oral representation or information
that is in any way inconsistent with the Private Placement Memorandum and has
been made or furnished to the undersigned or to the undersigned's purchaser
representative in connection with the offering of the Shares, and if so made,
has not been relied upon;
(f)
That
the undersigned is capable of bearing the high degree of economic risks and
burdens of this venture including, but not limited to, the possibility of
complete loss of investment and the lack of a public market which may make it
impossible to readily liquidate theinvestment whenever desired;
(g)
That
the undersigned is an “accredited investor” as that term is defined in
Regulation
D under the Act or is otherwise a sophisticated, knowledgeable investor (either
alone or with the aid of a purchaser representative) with adequate net worth
and income for this investment;
(h)
That
the undersigned has knowledge and experience in financial and business matters
(either alone or with the aid of a purchaser representative), is capable of
evaluating the merits and risks of an investment in the Company and its
proposed activities andhas carefully considered the suitability of an
investment in the Company for the undersigned's particular financial situation,
and has determined that the Shares are a suitable investment;
(i)
That
the offer to sell Shares was communicated to the undersigned by the Company in
such a manner that the undersigned was able to ask questions of and receive
answers from the Company concerning the terms and conditions of this
transaction and that at no time was the undersigned presented with or solicited
by any leaflet, public promotional meeting, newspaper or magazine article,
radio or television advertisement or any other form of advertising or general
solicitation;
(j)
That
the Shares for which the undersigned hereby subscribes are being acquired
solely for the undersigned's own account, for investment, and are not being
purchased with a view to or for the resale, distribution, subdivision or
fractionalization thereof; and theundersigned agrees that such Shares will not
be sold without registration under the Act or an exemption therefrom. In furtherance thereof,
the undersigned will not sell, hypothecate or otherwise transfer the
undersigned's Shares unless the Shares are registered under the Act and
qualified under applicable state securities laws or unless, in the opinion of
the Company, an exemption from the registration requirements of the Act and
such laws is available;
(k)
That
the undersigned has had prior personal or business relationships with the
Company or its affiliates, or by reason of the undersigned's business or
financial experience (either alone or with the aid of a purchaser
representative), the undersigned has the capacity to protect the undersigned's
own interest in connection with this transaction;
(l)
That
the undersigned has been advised to consult with the undersigned's own attorney
regarding legal matters concerning an investment in the Company and has done so
to the extent the undersigned considers necessary;
(m) That the undersigned
certifies, under penalty of perjury, (i) that the social security or Tax
Identification Number set forth herein is time, correct and complete, and (ii)
that the undersigned is not subject to backup withholding either because the
undersigned has not been notified that the undersigned is subject to backup
withholding as a result of a failure to report all interest or dividends, or
the Internal Revenue Service has notified the undersigned that the undersigned
is no longer subject to backup withholding; and
(n)
That
the undersigned acknowledges that the Private Placement Memorandum reflects the
Company's current intentions and estimates at the current time, and as with any
developing company, the precise elements of the Company's plans can be expected
to change from time to time.
2.
Indemnification.
The undersigned shall indemnify, defend and hold harmless the Company, and any
officers, employees, shareholders, partners, agents, directors or controlling
persons of the Company (collectively the “Indemnified Parties” and individually
an “Indemnified Party”) who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, against losses,
liabilities and expenses of each Indemnified Party (including attorneys' fees,
judgments, fines and amounts paid in settlement, payable as incurred) incurred
by such person or entity in connection with such action, arbitration, suit or
proceeding, by reason of or arising from (i) any misrepresentation or
misstatement of facts or omission to represent or state facts made by the
undersigned, including, without limitation, the information in this
Subscription Agreement, or (ii) litigation or other proceeding brought by the undersigned
against one or more Indemnified Party wherein the Indemnified Party is the
prevailing party.
3.
Entity
Investors. If the undersigned is an entity, trust, pension fund or IRA account
(an “Entity”), the Entity and the person signing on its behalf represent and
warrant that: (i) such Entity is an existing entity, and has not been organized
or reorganized for the purpose of making this investment (or if not true, such
fact shall be disclosed to the Company in writing along with information
concerning the beneficial owners of the Entity), (ii) the undersigned has the
authority to execute this Subscription Agreement, and any other documents in
connection with an investment in the Shares, on the Entity's behalf, (iii) the
Entity has the power, right and authority to invest in the Shares and enter
into the transactions contemplated thereby, and that the investment is suitable
and appropriate for the Entity and its beneficiaries (given the risks and
illiquid nature of the investment) and (iv) all documents executed by the
entity in connection with the Company are valid and binding documents or
agreements of the Entity enforceable in accordance with their terms.
4.
Revocation.
The undersigned agrees that the undersigned may not cancel, terminate or revoke
the offer to subscribe for shares for a period of 120 days or any agreement
hereunder at any time and that this Agreement shall survive the death or
disability of the undersigned and shall be binding upon the undersigned's
heirs, executors, administrators, beneficiaries, successors and assigns.
5.
Certain
Securities Law Matters.
(a)
The Shares shall not be sold, assigned, transferred or pledged except upon
satisfaction of the conditions specified in this Section 5, which conditions
are intended to ensure compliance with the provisions of the Act. The
undersigned will cause any proposed purchaser, assignee, transferee or pledgee
of the Shares held by the undersigned to agree to take and hold such securities
subject to the provisions and conditions of this Section 5. (b) Each
certificate representing (i) the Shares and (ii) any other securities issued in
respect of the Shares upon any stock split, stock dividend, recapitalization,
merger, consolidation or similar event, shall (unless otherwise permitted by
the provisions of Section 5(c) below) be stamped or otherwise imprinted with a
legend substantially in the following form (in addition to any legend required
under applicable state securities laws):
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY ACCEPTABLE
TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT COVERING
THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION.
The
undersigned consents to the Company making a notation on its records and giving
instructions to any transfer agent of the Shares in order to implement the
restrictions on transfer established in this Section 5. (c) The undersigned
agrees to comply in all respects with the provisions of this Section 5. Prior
to any proposed sale, assignment, transfer or pledge of any Shares, unless
there is in effect a registration statement under the Act covering the proposed
transfer, the undersigned thereof shall give written notice to the Company of
the undersigned's intention to effect such transfer, sale, assignment or
pledge. Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and shall
be accompanied, at the undersigned's expense evidence satisfactory to the
Company the effect that the proposed transfer of the Shares may be effected
without registration under the Act or applicable state securities law.
6.
Investor Information
The
Company may only accept subscriptions from persons who meet certain suitability
standards. Therefore, certain information is requested below.
(a)
Name:
Age:
Social
Security Number:
(b)
Home
Address:
Home
Telephone Number:
(c)
Firm
Name:
Nature
of Business:
Position/Title:
Length
of Time in Position:
Business
Address:
Zip
Code:
Business
Telephone Number:
(d)
Send
Correspondence to: Home Business
(e)
List
each prior employment position or occupation during the last five years, giving
dates:
(f)
List
any business or professional education, indicating degrees received, if any:
(g)
(1)
My net worth (together with my spouse’s net worth), is in excess of $_________
(2)
In
order for the Company to determine if I qualify as an “accredited investor”
under Regulation D of the Securities Act, the reasonable fair market value of
my personal home, home furnishings, and
automobile is in excess of $__________.
(3)
For
years_____ and ____ my actual and for current year___ my estimated annual gross
income was or is (do not include your spouse’s income): [Year] $_________
[Year] $_________ [Year]___: $_________
(4)
My
spouse’s actual gross income for [year]___ and [year]___ and estimated current
year___ gross income was or is:
[Date]___:
$______ [Date]___: $_______ Current Year___: $________ (h) Previous Investment
Experience in Other Private Offerings of Securities or Other Relevant
Experience:
Name
of Program 1.
Or
Company
2.
3.
Amount
Invested 1.
2.
3.
(i) In which state do you currently (a) Maintain your
primary residence?
(b)
Maintain
your secondary residence?
(c)
Vote?
(d)
File
income tax returns?
(e)
Maintain
a driver’s license?
(j)
List any other information you believe is relevant in showing that you are able
to adequately evaluate the risks and merits of this investment: In furnishing
the above information, I acknowledge that the Company will be relying thereon
in determining, among other things, whether there are reasonable grounds to
believe that I qualify as a purchaser under applicable securities laws for the
purposes of the proposed investment.
7.
Miscellaneous.
(a)
All
notices or other communications given or made hereunder shall be in writing and
shall be delivered or mailed by registered or certified mail, return receipt
requested, postage prepaid, to the Company at the address set forth on the
instructions page hereof and to the undersigned at the address set forth on the
signature page hereof.
(b)
This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without reference to conflict of law principles.
(c)
This
Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes any prior or
contemporaneous understandings, representations, warranties or agreements
(whether oral or written) and may be amended only by a writing executed by all
parties.
(d)
The
undersigned acknowledges that the Company may, in its sole and absolute
discretion, accept or reject this subscription offer in whole or in part.
8.
Certification.
The
undersigned represents to you that (i) the information contained herein is
complete and accurate on the date hereof and may be relied upon by you and (ii)
the undersigned will notify you immediately of any change in any of such
information occurring prior to the acceptance of the subscription and will
promptly send you written confirmation of such change. The undersigned hereby
certifies that he has read and understands the Private Placement Memorandum and
this Subscription Agreement.
IN
WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this
__________ day of _______________.
Number
of Shares Subscribed for
NAME
OF PURCHASER at $__________ per share
Total
Purchase Price Signature
Title
of Authorized Signatory if
Purchaser
Is
a corporation, partnership or other entity
Signature
of Spouse or Co-
owner
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