The Offering is being made by the Company and its authorized placement agents and certain NASD registered broker-dealer firms (if any), on a private placement basis to Accredited Investors. Placement agents and participating broker-dealer firms acting as placement agents which are, or represent to the company that they are, NASD members will receive a commission of up to seven (7 %) percent of the gross sales price for each sale affected by them (although it may re-allow a portion of the commission to other parties).
THE NOTES TO BE ISSUED BY THE COMPANY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE BLUE SKY OR SECURITIES LAWS AND ARE OFFERED UNDER AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SUCH LAWS.
THE NOTES CANNOT BE SOLD, TRANSFERRED, ASSIGNED, OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER CONTAINED IN THIS SUBSCRIPTION AGREEMENT AND APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
2. Acceptance by the Company. The Subscriber understands that this subscription is not binding upon the Company until the Company accepts it, which acceptance is at the sole discretion of the Company. This Subscription Agreement is irrevocable (once Subscriber’s 3-day Right of Rescission expires) and may not be assigned by the Subscriber. The Subscriber understands that acceptance will be made by a duly authorized officer of the Company executing and mailing or delivering by electronic transmission or otherwise to the Subscriber at the Subscriber’s address set forth herein, a copy of the Signature Page. If this subscription is rejected (in whole or in part) or it is determined that the offering of the Series A Convertible Notes will not be consummated for any reason, the amounts tendered by the Subscriber which are not accepted will be returned to the Subscriber, without interest or deduction, in accordance with the procedure set forth above.
3. Representations of the Subscriber. In connection with the purchase of the Series A Convertible Notes, the Subscriber, recognizing that the Company will be relying on the information and on the representations set forth herein, hereby represents, warrants and agrees as follows:
(a) The Subscriber is the sole and true party in interest in the Series A Convertible Notes subscribed for hereunder and is not purchasing any of such Series A Convertible Notes for the benefit of any other person, or in a fiduciary capacity for a person who (or for an entity in which such person) is deemed to be a “purchaser” pursuant to Rule 506 of Regulation D promulgated under the Act;
(b) The Subscriber understands that the offer and sale of the Series A Convertible Notes is being made by means of this Subscription Agreement and is aware of the speculative nature and high degree of risk associated with an investment in the Notes and has consulted with my investment and/or legal and/or tax advisors.
(c) Subscriber acknowledges that Subscriber has no need for liquidity in this investment for an indefinite period of time, has adequate means to provide for Subscriber’s personal needs and can bear the economic risk of the purchase of the Series A Convertible Notes, including the total loss of Subscriber’s investment.
(d) The Subscriber understands that the Series A Convertible Notes have not been registered under the Act or qualified under applicable state securities laws and are being offered in reliance upon exemptions therefrom. Subscriber understands that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgements, and understandings of Subscriber set forth herein and the representations in any additional materials Subscriber furnishes in conjunction with the Subscription Agreement, establishing that the Subscriber is an “Accredited Investor” as defined by Rule 501(a) of Regulation D promulgated under the Act, in order to determine the applicability of such exemptions and the suitability of Subscriber to acquire the Series A Convertible Notes. The Subscriber further acknowledges his understanding that the Company’s reliance on such exemptions are, in part, based upon the representations, warranties, and agreements made by the Subscriber and that the statutory basis for such exemptions would not be present if, notwithstanding such representations, warranties and agreements, the Subscriber were acquiring the Series A Convertible Notes for resale on the occurrence or non-occurrence of some pre-determined event.
(e) All information contained in this Subscription Agreement and in any additional materials to be furnished to the Company will be correct and complete. Any material change occurring between the time this Subscription Agreement is entered and prior to acceptance of this subscription shall be promptly reported to the Company.
(f) The address set forth in this Subscription Agreement is his true and correct primary residence, and he has no present intention of becoming a resident of any other state or jurisdiction.
(g) The Subscriber understands that the offering of the Series A Convertible Notes has not been registered under the Act, in reliance on an exemption for private offerings provided pursuant to Section 4(2) of the Act and Regulation D thereunder and that as a result, the Series A Convertible Notes will be “restricted securities” and may not be offered, sold or otherwise disposed of in any manner by the Subscriber unless the Series A Convertible Notes are subsequently registered under the Act and qualified under any other applicable securities law or exemptions from such registration and qualification are available. The Subscriber understands that the Company is under no obligation to register the Series A Convertible Notes under the Act or to register or qualify the Series A Convertible Notes under any other applicable securities law, or to comply with any other exemption under the Act or any other securities law, and that the Subscriber has no right to require such registration. The Subscriber further understands that the offering of the Series A Convertible Notes has not been qualified or registered under any foreign or state securities laws in reliance upon the representations made and information furnished by the Subscriber herein and any other documents delivered by the Subscriber in connection with this subscription; that this offering has not been reviewed by the Securities and Exchange Commission or by any foreign or state securities authorities; that the Subscriber’s rights to transfer the Series A Convertible Notes will be restricted, which includes restrictions against transfers unless the transfer is not in violation of the Act and applicable state securities laws (including investor suitability standards); and that the Company may in its sole discretion require the Subscriber to provide at Subscriber’s own expense an opinion of its counsel to the effect that any proposed transfer is not in violation of the Act or any state securities laws.
(h)The Subscriber acknowledges and is aware that this subscription is voidable by the Subscriber by a signed writing (or verifiable electronic transmission) within three days after the first tender of consideration is made by the Subscriber to the Company, an agent of the Company or an escrow agent. Subsequent to this three-day period, the Subscriber is not entitled to cancel, terminate or revoke this subscription, and any agreements of the Subscriber in connection herewith shall survive the death or disability of the Subscriber.
(i) The Subscriber has been given access to full and fair disclosure of all material information concerning the Company. The Subscriber has also been given the opportunity to ask questions of, and receive answers from, management of the Company regarding the terms and conditions of this Agreement, and the transactions contemplated thereby, as well as the affairs of the Company, its proposed business plan and related matters. The Subscriber may have access to whatever additional information concerning the Company, its financial condition, business, prospects, management, capitalization, and other similar matters, that the Subscriber or his purchaser representative, if any, desires, provided that the Company can acquire such information without unreasonable effort or expense.
(j) Except as set forth in the Memorandum, the Subscriber has not been furnished with any other any oral representation, warranty, materials or sales literature relating to the offer and sale of the Series A Convertible Notes.
(k) the Subscriber acknowledged that the price of the Series A Convertible Notes has been arbitrarily determined and bears no relationship to the assets or book value of the Company, or other customary investment or valuation criteria.