Re: Subscription Agreement
Date: January
15, 2010
0 Xxxxx
Xxxx Xxxx
Xxxxxxx
Xxxx, Xxxxxxx Province
People’s
Republic of China 226009
Re: Subscription
Agreement
Dear
Sirs:
This agreement sets forth the terms on
which the undersigned (the “Subscriber”) agrees to purchase shares (the
“Shares”) of common stock, par value $0.0001 per share (“Common Stock”) of
Sinobiopharma, Inc., a Nevada corporation, at a purchase price per Share of
$0.10 (the “Purchase Price per Share”).
In consideration of the mutual
covenants and agreements set forth herein, the Company and the Subscriber hereby
agree as follows:
1. The
Subscriber hereby agrees to purchase from the Company, and the Company agrees to
sell to the Subscriber, the number of Shares set forth on the signature page of
this Agreement at the Purchase Price per Share. The total purchase
price (the “Purchase Price”) for the Shares subscribed for by the Subscriber is
set forth on the signature page of this Agreement.
2. Payment
of the Purchase Price shall be made by wire transfer in accordance by wire
transfer in accordance with the instructions from the
Company. The Company will have the Shares issued within 5
business days after its receipt of payment of the Purchase Price.
3. The
Company is offering a maximum of 15,000,000 shares of Common Stock at the
Purchase Price per Share on a best efforts basis, with no minimum number of
Shares being sold. As a result, the Subscriber understands that it is
possible that the Company will not receive any proceeds from the sale of Shares
other than the purchase price of the Shares previously sold by the Company, if
any, and the Purchase Price of the Shares being purchased by the Subscriber. The
Company may offer the Shares during the Subscription Period. The
Subscription Period is the period ending on January 15, 2010, which date may be
extended by the Company on one or more occasions, for a maximum of 30 additional
days.
4. The
Subscriber understands and agrees that, after the Company’s receipt of this
Agreement, the Company will review the Subscriber’s eligibility and will
determine whether to accept or reject this subscription in whole or in
part. The Company may determine to reject this subscription in whole
or in part in its sole and absolute discretion. If this subscription
is accepted in whole, then the Company will issue the Shares subscribed for to
the Subscriber. If this subscription is rejected in whole, this
Agreement and any other subscription materials will be promptly returned to the
Subscriber and the Subscriber’s subscription payment will be refunded to the
Subscriber without interest. In that event, the Subscriber and the
Company will have no further rights or claims against each other by virtue of
this Agreement. If this subscription is accepted in part and rejected
in part, the Company is authorized to amend this Agreement to reflect the number
of Shares for which this subscription is accepted, and the Company will issue
the Shares as to which this subscription is accepted. The Company
reserves the right to terminate this offering at any time.
5. The
Company hereby represents, warrants, covenants and agrees to the Subscriber
that:
(a) Organization and
Qualification. The Company and each of its subsidiaries (each a
“Subsidiary” and collectively, the “Subsidiaries”) is an entity incorporated or
otherwise organized and validly existing under the laws of its jurisdiction of
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.
(b) Authorization;
Enforcement. The Company has the requisite corporate power and authority
to execute and deliver this Agreement, to issue the Shares, and to execute and
deliver any other instrument or document delivered or to be delivered pursuant
to this Agreement (collectively, the “Transaction Documents” and each, a
“Transaction Document”) and to enter into and to consummate the transactions
contemplated by each of the Transaction Documents (including the issuance and
sale of the Shares) and otherwise to carry out its obligations thereunder. The
execution and delivery of each of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company or its stockholders in connection therewith.
The Company has provided to the Subscriber a copy of the action in writing by
the Company’s board of directors approving this sale of the
Shares. Each Transaction Document, including this Agreement, has been
(or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except where enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights or by
the effect of general equitable principles.
(c) Due
Authorization. The Shares, when issued upon payment of the
Purchase Price, and the shares of common stock, par value $0.0001 per share
(“Common Stock”), issuable upon conversion of the Shares, when issued upon such
conversion, will be duly and validly authorized and issued, fully paid and
non-assessable.
(d) No Conflicts. The
execution, delivery and performance of the Transaction Documents and the
consummation by the Company of the transactions contemplated thereby do not and
will not (i) conflict with or violate any provision of the Company’s certificate
of incorporation or bylaws; (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound or affected; (iii) to the Company’s knowledge, conflict with, or result in
or constitute any violation of, any award, decision, judgment, decree,
injunction, writ, order, subpoena, ruling, verdict or arbitration award (each an
“Order”)
entered, issued, made or rendered by any federal, state, local or foreign
government or any other Governmental Entity (as defined below), or any Law (as
defined below), applicable to the Company or any of its Subsidiaries, or to any
of their respective properties or assets, or to any shares; (iv) result in the
creation or imposition of (or the obligation to create or impose) any Lien on
any of the properties or assets of the Company or any of the Subsidiaries; or
(v) conflict with, or result in or constitute any violation of, or result in the
termination, suspension or revocation of, any Authorization (as defined below)
applicable to the Company or any of the Subsidiaries, or to any of their
respective properties or assets, or to any of the Shares, or result in any other
impairment of the rights of the holder of any such Authorization; except in the
case of each of clauses (ii), (iii), (iv) and (v), such as would not,
individually or in the aggregate, have or reasonably be expected to result in a
(i) a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business or financial condition of the Company and the
Subsidiaries, taken as a whole, or (iii) adversely impair the Company’s ability
to perform in any material respect on a timely basis its obligations under any
Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”).
2
(e) Filings, Consents and
Approvals. Assuming the accuracy of the representations of the Subscriber
set forth in Section 6 hereof, no registration (including any registration under
the Securities Act) or filing with, or any notification to, or any approval,
permission, consent, ratification, waiver, authorization, order, finding of
suitability, permit, license, franchise, exemption, certification or similar
instrument or document (each, an “Authorization”) of or
from, any U.S. or PRC court, arbitral tribunal, arbitrator, administrative or
regulatory agency or commission or other governmental or regulatory authority,
agency or governing body, domestic or foreign, including without limitation any
Trading Market (each, a “Governmental
Entity”), or any other person, or under any statute, law, ordinance,
rule, regulation or agency requirement of any Governmental Entity, (each, a
“Law”), on the
part of the Company is required in connection with the execution or delivery by
the Company of the Transaction Documents or the performance by the Company of
its obligations under each of the Transaction Documents (including, the offer
and sale of the Shares by the Company to the Subscriber hereunder) except
(i) as would not have a Material Adverse Effect on the Company or its
performance of its obligations under the Transaction Documents,
(ii) Form D and blue sky filings, if required, and (iii) the
filings contemplated by the Transaction Documents.
(f) Exemption from
Registration. The offer, offer for sale, and sale of the Shares has not
been registered with the Commission. The Shares are being offered for
sale and sold in reliance upon the exemptions from the registration provided by
Section 506 or by Regulation S of the Commission under the Securities Act, it
being understood that the Company will be relying upon the representations of
the Subscriber and the other subscribers in claiming such
exemption.
(g) SEC Reports; Financial
Statements. The Company has filed all reports required to be filed by it
under the Securities Act of 1933 (the “Securities Act”) and
the Securities Exchange Act of 1934 (the “Exchange Act”),
including pursuant to Section 13(a) or 15(d) thereof, since January 1, 2009
(the foregoing materials, including the exhibits thereto (together with any
materials filed by the Company under the Exchange Act, whether or not required),
being collectively referred to herein as the “SEC Reports”) on a
timely basis or has timely filed a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension
other than reports that failure to file of which would not affect the ability of
the holder of the Company’s restricted Common Stock to sell such shares pursuant
to Rule 144 of the Securities and Exchange Commission (the “Commission”) under
the Securities Act after satisfying all applicable holding periods. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the Commission promulgated thereunder, and none of
the SEC Reports, when filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.
3
(h) Material Changes.
Since the date of the latest audited financial statements included within the
SEC Reports, except as disclosed in the SEC Reports, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
altered its method of accounting, (iii) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock and (iv) the Company has not issued any equity
securities to any officer, director or affiliate, as defined in Rule 144(a)(1)
of the Commission under the Securities Act (“Affiliate”), except
pursuant to existing Company equity incentive plans, stock option plans, stock
option agreements, restricted stock agreements, stock ownership plans or
dividend reinvestment plans or as otherwise disclosed in the SEC Reports. The
Company does not have pending before the Commission any request for confidential
treatment of information.
(i) Litigation. There are
no actions, suits, inquiries, notices of violation, proceedings or
investigations pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or (ii) would have or
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor, to the Company’s knowledge, any director or
officer thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current director or officer of the
Company or any person who served in such capacity since January 1, 2009. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the
Exchange Act or the Securities Act.
(j) Taxes. Each of the
Company and the Subsidiaries has filed all necessary material federal, state and
foreign income and franchise tax returns and has paid or accrued all material
taxes shown as due thereon, and neither the Company nor any of its Subsidiaries
has knowledge of a tax deficiency which has been or might be asserted or
threatened against it which could reasonably be expected to result in a Material
Adverse Effect.
(k) Compliance. Neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, could result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or
affected (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
to the Company’s knowledge, is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, kickbacks and false claims in healthcare programs, occupational
health and safety, product quality and safety and employment, labor matters,
except in each case as would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. Except as
disclosed in the SEC Reports, the Company is in compliance with the applicable
requirements of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
thereunder promulgated by the Commission, except where such noncompliance would
not have or reasonably be expected to result in a Material Adverse
Effect.
4
(l) Regulatory Permits.
The Company and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the
SEC Reports, except where the failure to possess such permits would not have or
reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.
(m) Certain Fees. No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Subscriber shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement other than such
fees as may result from actions on the part of the Subscriber.
(n) Disclosure. All
disclosure provided to the Subscribers regarding the Company, its business and
the transactions contemplated hereby, taken together, are complete, true and
correct in all material respects and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
6. The
Subscriber hereby represents, warrants, covenants and agrees as
follows:
(a) The
Subscriber understands that the offer and sale of the Shares is being made only
by means of this Agreement. The Subscriber understands that the
Company has not authorized the use of, and the Subscriber confirms that he is
not relying upon, any other information, written or oral, other than material
contained in this Agreement and in material that has been publicly filed by the
Company with the Securities and Exchange Commission (the
“Commission”). The Subscriber is aware that
the purchase of the Shares involves a high degree of risk and that the
Subscriber may sustain, and has the financial ability to sustain, the loss of
his entire investment, understands that no assurance can be given that the
Company will be profitable in the future, that the Company may need additional
financing and that the failure of the Company to raise additional funds when
required may have a material adverse effect upon its business. The
Subscriber understands that he is presently unable to publicly sell the Shares
pursuant to Rule 144 of the Commission pursuant to the Securities Act of 1933,
as amended (the “Securities Act”), and that his ability to sell the Shares in
the public market is limited as provided in said Rule 144. The
Subscriber understands that there is no active market in the Common Stock and
the Company is not giving any assurance that an active market will ever develop
for the Common Stock, as a result of which the Subscriber may have difficulty in
selling the Shares if and when he may sell the Shares pursuant to Rule 144 or
any similar successor rule. Furthermore,
in subscribing for the Shares, the Subscriber acknowledges that he is not
relying upon any projections or any statements of any kind relating to future
revenue, earnings, operations or cash flow or acquisitions in purchasing the
Shares.
(b) The
Subscriber represents to the Company that the Subscriber is an accredited
investor within the meaning of Rule 501 of the Commission under the Securities
Act and she understands the meaning of the term “accredited
investor.” The Subscriber further represents that the Subscriber has
such knowledge and experience in financial and business matters as to enable the
Subscriber to understand the nature and extent of the risks involved in
purchasing the Shares. The Subscriber is fully aware that such
investments can and sometimes do result in the loss of the entire
investment. The Subscriber has engaged his own counsel and
accountants to the extent that he deems it necessary.
5
(c) The
Subscriber is not acquiring the Shares as a result of, and will not itself
engage in, any "directed selling efforts" (as defined in Regulation S) in the
United States in respect of the Shares which would include any activities
undertaken for the purpose of, or that could reasonably be expected to have the
effect of, conditioning the market in the United States for the resale of the
Shares; provided, however, that the Subscriber may sell or otherwise dispose of
the Shares pursuant to registration thereof under the Securities Act and any
applicable state and provincial securities laws or under an exemption from such
registration requirements.
(d) The
Subscriber acknowledges and agrees that none of the Shares have been registered
under the Securities Act, or under any state securities or "blue sky" laws of
any state of the United States, and, unless so registered, may not be offered or
sold in the United States or, directly or indirectly, to U.S. Persons, as that
term is defined in Regulation S, except in accordance with the provisions of
Regulation S, pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and in each case
in accordance with applicable state securities laws.
(e) The
Subscriber acknowledges and agrees that the Issuer will refuse to register any
transfer of the Shares not made in accordance with the provisions of Regulation
S, pursuant to an effective registration statement under the Securities Act or
pursuant to an available exemption from the registration requirements of the
Securities Act and in accordance with applicable state and provincial securities
laws.
(f) The
Subscriber represents and warrants that no broker or finder was involved
directly or indirectly in connection with his or her purchase of the Shares
pursuant to this Agreement. The Subscriber shall indemnify the Issuer and hold
it harmless from and against any manner of loss, liability, damage or expense,
including fees and expenses of counsel, resulting from a breach of the
Subscriber’s warranty contained in this Paragraph 5(f).
(g) The
Subscriber understands that he or she has no registration rights with respect to
the Shares.
(h) The
Subscriber is not a citizen or resident of the United States.
(i) The
Subscriber is acquiring the Shares for his or her own account, for investment
only and not with a view to resale or distribution and, in particular, it has no
intention to distribute either directly or indirectly any of the Shares in the
United States or to U.S. Persons, and no other person has a direct or indirect
beneficial interest in such Shares;
(j) The
Subscriber is not an underwriter of, or dealer in, the common stock of the
Issuer, nor is the Subscriber participating, pursuant to a contractual agreement
or otherwise, in the distribution of the Shares.
(k) The
Subscriber was not induced to invest by any form of general solicitation or
general advertising including, but not limited to, the following: (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over the news or radio; and
(ii) any seminar or meeting whose attendees were invited by any general
solicitation or advertising.
6
(l) No
person has made to the Subscriber any written or oral
representations:
(i) that
any person will resell or repurchase any of the Shares;
(ii) that
any person will refund the purchase price of any of the Shares;
(iii) as
to the future price or value of any of the Shares; or
(iv) that
any of the Shares will be listed and posted for trading on any stock exchange or
automated dealer quotation system or that application has been made to list and
post any of the Shares of the Issuer on any stock exchange or automated dealer
quotation system.
(m) The
Subscriber will not transfer any Shares except in compliance with all applicable
federal and state securities laws and regulations, and, in such connection, the
Company may request an opinion of counsel reasonably acceptable to the Company
as to the availability of any exemption.
(n) The
Subscriber represents and warrants that the address set forth on the signature
page is his true and correct address, and understands that the Company will rely
on this representation.
(o) The
Subscriber is not an associate of a registered broker-dealer.
(p) If
the Subscriber is a corporation, partnership, trust or other entity, the
Subscriber represents and that (i) it is authorized and otherwise duly qualified
to purchase and hold the Shares; (ii) this Subscription Agreement has been duly
and validly authorized, executed and delivered and constitutes the legal,
binding and enforceable obligation of the Subscriber, and (iii) the individual
who executed this Agreement on behalf of the Subscriber is authorized to do
so.
(q) The
Subscriber acknowledges that the Company has made no representation or
warranties except as expressly set forth in this Agreement.
7. The
proceeds from the sale of the Shares will be used for working capital and other
corporate purposes.
8. All
notices provided for in this Agreement shall be in writing signed by the party
giving such notice, and delivered personally or sent by overnight courier or
messenger against receipt thereof or sent by registered or certified mail (air
mail if overseas), return receipt requested or by telecopier if receipt of
transmission is confirmed by the recipient or if transmission is confirmed by
mail as provided in this Section 8. Notices shall be deemed to have
been received on the date of receipt. Notices shall be sent to the
Company at Sinobiopharma, Inc. at the address set forth as the beginning of this
Agreement to the attention of the person executing this Agreement on behalf of
the Company and to the Subscriber at his address and telecopier number set forth
on the records of the Company. A copy of any notice to the Company
shall be sent to Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, 00 Xxxxxxxx, 00xx
xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention Xxxxxxx Xxxxxxxxx, telecopier: (000)
000-0000, e-mail: xxxxxxxxxx@xxxx.xxx. Either
party may change the address or person to whom notice should be by notice given
in the manner set forth in this Section 8.
9. a) This
Agreement constitutes the entire agreement between the parties relating to the
subject matter hereof, superseding any and all prior or contemporaneous oral and
prior written agreements, understandings and letters of intent. This
Agreement may not be modified or amended nor may any right be waived except by a
writing which expressly refers to this Agreement, states that it is a
modification, amendment or waiver and is signed by all parties with respect to a
modification or amendment or the party granting the waiver with respect to a
waiver. No course of conduct or dealing and no trade custom or usage
shall modify any provisions of this Agreement.
7
(b) This
Agreement and the rights of the parties shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State. Each party hereby (i)
consent to the exclusive jurisdiction of the United States District Court for
the Southern District of New York and state courts of the State and County of
New York in any action relating to or arising out of this Agreement, (ii) agrees
that any process in any such action may be served upon it either (x) by
certified or registered mail, return receipt requested, or by hand delivery or
overnight courier service which obtains evidence of delivery, with the same full
force and effect as if personally served upon such party in New York City or (y)
any other manner of service permitted by law, and (iii) waives any claim that
the jurisdiction of any such tribunal is not a convenient forum for any such
action and any defense of lack of in personam jurisdiction with respect thereto.
The parties executing this
Agreement and other Transaction Documents agree to waive trial by jury.
The prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs.
(c) In
the event that any provision of this Agreement or any other Transaction Document
is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative only to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
of any agreement.
(d) This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective successors and permitted assigns.
(e) This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
document.
(f) The
various representations, warranties, and covenants set forth in this Agreement
or in any other writing delivered in connection therewith shall survive the
issuance of the Shares.
Please confirm your agreement with the
foregoing by signing this Agreement where
indicated.
[Signature
on next page]
8
|
Number
of Shares Subscribed for: ______________
Total
Purchase Price: $______________
|
Very
truly yours,
________________________________
[Name
of Subscriber]
By:______________________________
Name:
Title:
|
The
undersigned is an accredited investor pursuant to Item ____ of Exhibit
A.
Address: ______________________________________________________
Telecopier
Number: __________________________
e-mail: ____________________________________
Social
Security or Taxpayer ID
No.: ___________________________
Accepted
this _____ day of January, 2010
By:
______________________________
Name: Xxxxx
Xxxxx
Title: Chief
Executive Officer
This
subscription is accepted for the full amount subscribed for unless a lesser
amount is set forth below.
Amount
Accepted:
$ _____________________
9
Exhibit
A
Accredited
Investors
A
Subscriber who meets any one of the following tests is an accredited
investor:
(a) The
Subscriber is an individual who has a net worth, or joint net worth with the
Subscriber’s spouse, of at least $1,000,000.
(b) The
Subscriber is an individual who had individual income of more than $200,000 (or
$300,000 jointly with the Subscriber’s spouse) for the past two years, and the
Subscriber has a reasonable expectation of having income of at least $200,000
(or $300,000 jointly with the Subscriber’s spouse) for the current
year.
(c) The
Subscriber is an officer or director of the Company.
(d) The
Subscriber is a bank as defined in section 3(a)(2) of the Securities Act or any
savings and loan association or other institution as defined in section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity.
(e) The
Subscriber is a broker or dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934.
(f) The
Subscriber is an insurance company as defined in section 2(13) of the Securities
Act.
(g) The
Subscriber is an investment company registered under the Investment Company Act
of 1940 or a business development company as defined in section 2(a)(48) of that
Act.
(h) The
Subscriber is a small Business Investment Company licensed by the U.S. Small
Business Administration under section 301(c) or (d) of the Small Business
Investment Act of 1958.
(i) The
Subscriber is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors.
(j) The
Subscriber is a private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940.
(k) The
Subscriber is an organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
(l) The
Subscriber is a trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the
Commission under the Securities Act.
(m) The
Subscriber is an entity in which all of the equity owners are accredited
investors (i.e., all of the equity owners meet one of the tests for an
accredited investor).
If an individual investor qualifies as
an accredited investor, such individual may purchase the Shares in the name of
his or her individual retirement account (“XXX”).
10
