SUBSCRIPTION AGREEMENT
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NAME
OF SUBSCRIBER:
_______________________
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SUBSCRIPTION
AMOUNT: $________________
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To:
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c/o
Brookstreet Securities Corporation
0000
Xxxxxx Xxxxx - 2nd
Floor
Irvine,
California 92612-1464
Attn:
Xx.
Xxxxxx Xxxxxxx, Compliance Department
This
Subscription Agreement (this “Agreement”) is being delivered to you in
connection with your investment in Foldera, Inc. (the “Company”). Brookstreet
Securities Corporation (the “Placement Agent”) shall serve as the placement
agent of the Company in conducting a private placement (the “Offering”) of up to
$45,000,000 in shares of common stock (the “Shares” or the “Common Stock”), at a
purchase price of $2.25 per share and, for every two Shares purchased, a
three-year warrant (the “Warrant” and, together with the Shares, the
“Securities”) to purchase one share of Common Stock at a price equal to 110% of
the average closing bid price of the Common Stock for the five consecutive
trading days prior to the initial closing of the Offering, plus an
over-subscription right for an additional $6,750,000 in Securities. All funds
received in the Offering shall be held by a chartered banking institution (the
“Escrow Agent”) and, upon fulfillment of the conditions precedent set forth
herein, shall be released and delivered to the Company at which time the
Securities subscribed for as further described below shall be delivered, subject
to Section 8 hereof, to you. The Company and the Placement Agent may continue
to
offer and sell the Securities and conduct additional closings (each along with
the initial closing, a “Closing”) for the sale of additional Securities until
the termination of the Offering.
1. Subscription
and Purchase Price
(a) Subscription.
Subject
to the conditions set forth in Section 2 hereof, the undersigned hereby
subscribes for and agrees to purchase the number of Securities indicated on
page
13 hereof on the terms and conditions described herein. The minimum number
of
Securities that may be purchased is 20,000 ($45,000). Subscriptions for lesser
amounts may be accepted at the discretion of the Company and the Placement
Agent.
(b) Purchase
of Securities.
The
undersigned understands and acknowledges that the purchase price to be remitted
to the Placement Agent in exchange for the Securities shall be $2.25 per Share,
for an aggregate purchase price as set forth on page 13 hereof (the “Aggregate
Purchase Price”). The undersigned’s delivery of this Agreement to the Placement
Agent shall be accompanied by payment for the Securities subscribed for
hereunder, payable in United States dollars, by check made payable to the order
of “First
Republic Trust Co., Escrow Agent for Foldera, Inc.,”
or
by
wire transfer of immediately available funds delivered contemporaneously with
the undersigned’s delivery of this Agreement to the Placement Agent. The
undersigned understands and agrees that, subject to Section 2 and applicable
laws, by executing this Agreement, he, she or it is entering into a binding
agreement.
2. Acceptance,
Offering Term and Closing Procedures
(a) Acceptance
or Rejection.
The
obligation of the undersigned to purchase the Securities shall be irrevocable,
and the undersigned shall be legally bound to purchase the Securities subject
to
the terms set forth in this Agreement. The undersigned understands and agrees
that the Company and the Placement Agent reserve the right to reject this
subscription for the Securities in whole or part in any order at any time prior
to the closing (the “Closing”) of the purchase and sale of the Securities if, in
their reasonable judgment, they deem such action to be in the best interest
of
the Company, notwithstanding the undersigned’s prior receipt of notice of
acceptance of the undersigned’s subscription. In the event of rejection of this
subscription by the Company or the Placement Agent in accordance with this
Section 2, or the sale of the Securities is not consummated by the Placement
Agent for any reason, this Agreement and any other agreement entered into
between the undersigned and the Placement Agent relating to this subscription
shall thereafter have no force or effect, and the Placement Agent shall promptly
return or cause to be returned to the undersigned the purchase price remitted
to
the Escrow Agent, without interest thereon or deduction therefrom.
(b) Offering
Term.
The
subscription period for the Offering will begin as of July 11, 2006, and will
terminate upon the occurrence of the earlier of (a) 11:59 p.m., Pacific Standard
Time, on Monday, July 31, 2006, unless extended by the Company and the Placement
Agent for up to two additional one-week periods, or (b) the Company’s acceptance
of subscriptions for $45,000,000 in Securities (or, if the Placement Agent
requests the Company to offer and sell the over-subscription Securities,
$51,750,000 in Securities) offered and the receipt of payment
therefor.
(c) Placement
Agent.
The
Company has retained the Placement Agent to coordinate the Offering as the
Company’s lead placement agent. See the Memorandum for a description of the
compensation payable to the Placement Agent and other terms of the
Offering.
(d) Closing.
Each
Closing shall take place at the offices of Xxxxxxxxx Xxxxxxx, LLP, counsel
to
the Placement Agent at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000X, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000 or such other place as determined by the Placement Agent.
Each
Closing shall take place on a Business Day promptly following the satisfaction
of the conditions set forth in Section 8 below. Each subsequent Closing shall
take place at such times as determined by the Company (each closing date
referred to as a “Closing Date”), or such other date as is mutually agreed to by
the parties and the undersigned. “Business Day” shall mean from the hours of
9:00 a.m. (P.S.T.) through 5:00 p.m. (P.S.T.) of a day other than a Saturday,
Sunday or other day on which commercial banks in Los Angeles, California or
New
York, New York are authorized or required to be closed. The Securities purchased
by the Subscriber will be delivered by the Company promptly following a
Closing.
3. Investor’s
Representations and Warranties
The
undersigned hereby acknowledges, agrees with and represents and warrants to
the
Company and the Placement Agent and its affiliates, as follows:
(a) The
undersigned has full power and authority to enter into this Agreement, the
execution and delivery of which has been duly authorized, if applicable, and
this Agreement constitutes a valid and legally binding obligation of the
undersigned.
(b) The
undersigned acknowledges his, her or its understanding that the offering and
sale of the Securities is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section
4(2) of the Securities Act and the provisions of Regulation D promulgated
thereunder (“Regulation D”). In furtherance thereof, the undersigned represents
and warrants to the Company and the Placement Agent and its affiliates as
follows:
(i) The
undersigned realizes that the basis for the exemption from registration may
not
be available if, notwithstanding the undersigned’s representations contained
herein, the undersigned is merely acquiring the Securities for a fixed or
determinable period in the future, or for a market rise, or for sale if the
market does not rise. The undersigned does not have any such
intention.
(ii) The
undersigned is acquiring the Securities solely for the undersigned’s own
beneficial account, for investment purposes, and not with view to, or resale
in
connection with, any distribution of the Securities.
(iii) The
undersigned has the financial ability to bear the economic risk of his, her
or
its investment, has adequate means for providing for their current needs and
contingencies, and has no need for liquidity with respect to the investment
in
the Company;
(iv) The
undersigned and the undersigned’s attorney, accountant, purchaser representative
and/or tax advisor, if any (collectively, “Advisors”), have received the
Confidential Private Placement Memorandum, dated July 11, 2006, together with
all appendices thereto (as such documents may be amended or supplemented, the
“Memorandum”), relating to the private placement by the Company of the
Securities, and all other documents requested by the undersigned or Advisors,
if
any, have carefully reviewed them and understand the information contained
therein, prior to the execution of this Agreement; and
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(v) The
undersigned (together with his, her or its Advisors, if any) has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of the prospective investment in the Securities. If other
than an individual, the undersigned also represents it has not been organized
solely for the purpose of acquiring the Securities.
(c) The
information in the Investor Questionnaire completed and executed by the
undersigned (the “Investor Questionnaire”) is true and accurate in all respects,
and the undersigned is an “accredited investor,” as that term is defined in Rule
501(a) of Regulation D.
(d) The
undersigned (and his, her or its Advisors, if any) has been furnished with
a
copy of the Memorandum.
(e) The
undersigned is not relying on the Placement Agent or its affiliates or
sub-agents with respect to economic considerations involved in this investment.
The undersigned has relied on the advice of, or has consulted with, only his,
her or its Advisors. Each Advisor, if any, is capable of evaluating the merits
and risks of an investment in the Securities as such are described in the
Memorandum, and each Advisor, if any, has disclosed to the undersigned in
writing (a copy of which is annexed to this Agreement) the specific details
of
any and all past, present or future relationships, actual or contemplated,
between the Advisor and the Placement Agent or any affiliate or sub-agent
thereof.
(f) The
undersigned represents, warrants and agrees that he, she or it will not sell
or
otherwise transfer the Securities without registration under the Securities
Act
or an exemption therefrom, and fully understands and agrees that the undersigned
must bear the economic risk of his, her or its purchase because, among other
reasons, the Securities have not been registered under the Securities Act or
under the securities laws of any state and, therefore, cannot be resold,
pledged, assigned or otherwise disposed of unless they are subsequently
registered under the Securities Act and under the applicable securities laws
of
such states, or an exemption from such registration is available. In particular,
the undersigned is aware that the Securities are “restricted securities,” as
such term is defined in Rule 144 promulgated under the Securities Act (“Rule
144”), and they may not be sold pursuant to Rule 144 unless all of the
conditions of Rule 144 are met. The undersigned also understands that, except
as
otherwise provided in Section 5 hereof, the Company is under no obligation
to
register the Securities on his, her or its behalf or to assist them in complying
with any exemption from registration under the Securities Act or applicable
state securities laws. The undersigned understands that any sales or transfers
of the Securities are further restricted by state securities laws and the
provisions of this Agreement.
(g) No
representations or warranties have been made to the undersigned by the Company
or the Placement Agent, or any of their respective officers, employees, agents,
sub-agents, affiliates or subsidiaries, other than any representations of the
Company or the Placement Agent contained herein and in the Memorandum, and
in
subscribing for the Securities the undersigned is not relying upon any
representations other than those contained herein or in the
Memorandum.
(h) The
undersigned understands and acknowledges that his, her or its purchase of the
Securities is a speculative investment that involves a high degree of risk
and
the potential loss of their entire investment and has carefully read and
considered the matters set forth in the Memorandum and in particular the matters
under the caption “Cautionary Language Regarding Forward-Looking Statements” and
“Risk Factors” therein, and, in particular, acknowledges that the Company has a
limited operating history and is engaged in a highly competitive business.
(i) The
undersigned’s overall commitment to investments that are not readily marketable
is not disproportionate to the undersigned’s net worth, and an investment in the
Securities will not cause such overall commitment to become
excessive.
(j) The
undersigned understands and agrees that the certificates for the Securities
shall bear substantially the following legend until (i) such Securities shall
have been registered under the Securities Act and effectively disposed of in
accordance with a registration statement that has been declared effective or
(ii) in the opinion of counsel for the Company such Securities may be sold
without registration under the Securities Act, as well as any applicable “blue
sky” or state securities laws:
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THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
(k) Neither
the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities
commission has approved the Securities or passed upon or endorsed the merits
of
the Offering or confirmed the accuracy or determined the adequacy of the
Memorandum. The Memorandum has not been reviewed by any federal, state or other
regulatory authority.
(l) The
undersigned and his, her or its Advisors, if any, have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the offering of the Securities and
the business, financial condition, results of operations and prospects of the
Company, and all such questions have been answered to the full satisfaction
of
the undersigned and his, her or its Advisors, if any.
(m) The
undersigned is unaware of, is in no way relying on, and did not become aware
of
the offering of the Securities through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio, or electronic
mail over the Internet, in connection with the offering and sale of the
Securities and is not subscribing for Securities and did not become aware of
the
offering of the Securities through or as a result of any seminar or meeting
to
which the undersigned was invited by, or any solicitation of a subscription
by,
a person not previously known to the undersigned in connection with investments
in securities generally.
(n) The
undersigned has taken no action which would give rise to any claim by any person
for brokerage commissions, finders’ fees or the like relating to this Agreement
or the transactions contemplated hereby (other than commissions to be paid
by
the Company to the Placement Agent, its selected dealers or as otherwise
described in the Memorandum).
(o) The
undersigned is not relying on the Company, the Placement Agent or any of their
respective employees, agents or sub-agents with respect to the legal, tax,
economic and related considerations of an investment in the Securities, and
the
undersigned has relied on the advice of, or has consulted with, only his, her
or
its own Advisors.
(p) The
undersigned acknowledges that any estimates or forward-looking statements or
projections included in the Memorandum were prepared by the future management
of
the Company in good faith, but that the attainment of any such projections,
estimates or forward-looking statements cannot be guaranteed by the Company
or
its management and should not be relied upon.
(q) No
oral
or written representations have been made, or oral or written information
furnished, to the undersigned or his, her or its Advisors, if any, in connection
with the offering of the Securities which are in any way inconsistent with
the
information contained in the Memorandum.
(r) The
undersigned’s substantive relationship with the Placement Agent or selected
dealers through which the undersigned is subscribing for Securities predates
the
Placement Agent’s or such selected dealers’ contact with the undersigned
regarding an investment in the Securities.
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(s) (For
ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that
such fiduciary has been informed of an understands the Company’s investment
objectives, policies and strategies, and that the decision to invest “plan
assets” (as such term is defined in ERISA) in the Company is consistent with the
provisions of ERISA that require diversification of plan assets and impose
other
fiduciary responsibilities. The Subscriber or Plan fiduciary (a) is responsible
for the decision to invest in the Company; (b) is independent of the Company
and
any of its affiliates; (c) is qualified to make such investment decision; and
(d) in making such decision, the Subscriber or Plan fiduciary has not relied
primarily on any advice or recommendation of the Company or any of its
affiliates.
(t) The
foregoing representations, warranties and agreements shall survive the
Closing.
4. The
Company’s Representations and Warranties
The
Company hereby acknowledges, agrees with and represents and warrants to each
of
the undersigned, as follows:
(a) The
Company has the corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement has been
duly
authorized, executed and delivered by the Company and is valid, binding and
enforceable against the Company in accordance with its terms.
(b) The
Securities to be issued to the undersigned pursuant to this Agreement, when
issued and delivered in accordance with the terms of this Agreement, will be
duly and validly issued and will be fully paid and non-assessable.
(c) The
shares of Common Stock to be issued upon exercise of the Warrants to be issued
to the undersigned pursuant to this Agreement, when issued and delivered in
accordance with this Agreement and the Warrants, will, upon receipt by the
Company of the applicable exercise price therefor, be validly issued and fully
paid and nonassessable.
(d) Neither
the execution and delivery nor the performance of this Agreement by the Company
will conflict with the Company’s Articles of Incorporation or By-laws, as
amended to date, or result in a breach of any terms or provisions of, or
constitute a default under, any material contract, agreement or instrument
to
which the Company is a party or by which the Company is bound.
(e) After
giving effect to the transactions contemplated by this Agreement and immediately
after the Closing, the Company will have the outstanding capital stock as
described in the Memorandum.
(f) The
information contained in the Memorandum is true and correct in all material
respects as of its date.
5. Registration
Rights
(a) The
Company shall prepare and file a registration statement (the “Registration
Statement”) with the SEC covering the resale of the Securities by no later than
45 days after the final Closing Date. The Company shall use its best efforts
to
have the Registration Statement declared effective by the SEC as soon as
possible after the initial filing, and in any event no later than 120 days
after
the final Closing Date, and agrees to use its best efforts to respond to any
SEC
comments or questions regarding the Registration Statement on or prior to the
date which is 20 business days from the date such comments or questions are
received, but in any event not later than 30 business days from the date such
comments or questions are received. The Company will maintain the effectiveness
of the Registration Statement from the date of the effectiveness of the
Registration Statement until 12 months after that date; provided,
however,
that,
if at any time or from time to time after the date of effectiveness of the
Registration Statement, the Company notifies the undersigned in writing of
the
existence of a Potential Material Event (as defined below), the undersigned
shall not offer or sell any of the Securities, or engage in any other
transaction involving or relating to the Securities, from the time of the giving
of notice with respect to a Potential Material Event until the Company notifies
the undersigned that such Potential Material Event either has been disclosed
to
the public or no longer constitutes a Potential Material Event; provided,
further
that,
the Company may not suspend the right of the undersigned pursuant to this
Section 5(a) for more than 60 days in the aggregate. “Potential Material Event”
means the possession by the Company of material information regarding a
potential transaction not ripe for disclosure in a registration statement,
which
shall be evidenced by determinations in good faith by the Board of Directors
of
the Company that disclosure of such information in the registration statement
would be detrimental to the business and affairs of the Company.
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(b) If
the
Company fails to (i) file the Registration Statement with the SEC on or prior
to
45 days after the final Closing Date, (ii) obtain effectiveness of the
Registration Statement by the SEC on or prior to 120 days after the final
Closing Date, or (iii) maintain effectiveness of the Registration Statement
for
12 months after the date of effectiveness, the Company shall be obligated to
issue to the undersigned additional Shares computed as follows: on the first
day
that the Company has failed to file, or to obtain or maintain the effectiveness
of, the Registration Statement, as the case may be (the “First Determination
Date”), the Company shall determine the number of Shares entitled to the benefit
of the registration rights set forth in this Section 5 that are held by the
undersigned (the “Subject Shares”). Within 30 days following the First
Determination Date, the Company shall issue to the undersigned such number
of
Shares equal to 1% of the number of Subject Shares (the “Penalty Shares”).
Penalty Shares shall also be issuable upon the expiration of each week following
the First Determination Date during which the Company has continued to fail to
file, or to obtain or maintain the effectiveness of, the Registration Statement,
as the case may be (the expiration date of each such week being a “Subsequent
Determination Date”). The number of Penalty Shares issuable following each
Subsequent Determination Date shall be determined and issued in accordance
with
this section on the same basis applicable to the First Determination Date;
provided,
however,
that
Penalty Shares previously issued to the undersigned shall be excluded from
the
calculation of Subject Shares. Notwithstanding the foregoing, the Company shall
not be obligated to issue to the undersigned pursuant to this paragraph an
aggregate number of Penalty Shares greater than 10% of the number of Subject
Shares originally subscribed for and held by the undersigned.
(c) If
the
Company fails to respond to the SEC, within 30 days after receipt, to any
questions and comments from the SEC regarding the Registration Statement, the
Company shall be obligated to issue Penalty Shares to the undersigned. The
31st
day that
the Company has failed to respond to the SEC is termed the “Response
Determination Date.” Within 30 days following the Response Determination Date,
the Company shall issue to the undersigned Penalty Shares (which are equal
to 1%
of the number of Subject Shares). Penalty Shares shall also be issuable upon
the
expiration of each week following the Response Determination Date during which
the Company has continued to fail to respond to the SEC (the expiration date
of
each such week being a “Subsequent Response Determination Date”). The number of
Penalty Shares issuable following each Subsequent Response Determination Date
shall be determined and issued in accordance with this section on the same
basis
applicable to the Response Determination Date; provided,
however,
that
Penalty Shares previously issued to the undersigned shall be excluded from
the
calculation of Subject Shares. Notwithstanding the foregoing, the Company shall
not be obligated to issue to the undersigned pursuant to this paragraph an
aggregate number of Penalty Shares greater than 10% of the number of shares
of
Subject Shares originally subscribed for and held by the
undersigned.
(d) The
Company shall notify the undersigned at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to
be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing. At the request of the undersigned,
the
Company shall also prepare, file and furnish to the undersigned a reasonable
number of copies of a supplement to or an amendment of such prospectus as may
be
necessary so that, as thereafter delivered to the purchasers of such shares,
such prospectus shall not include an untrue statement of a material fact or
omit
to state a material fact required to be stated therein or necessary to make
the
statements therein not misleading in light of the circumstances then existing.
The undersigned agrees not to offer or sell any shares covered by the
Registration Statement after receipt of such notification until the receipt
of
such supplement or amendment.
(e) The
Company may request the undersigned to furnish the Company such information
with
respect to the undersigned and the undersigned’s proposed distribution of the
Shares pursuant to the Registration Statement as the Company may from time
to
time reasonably request in writing or as shall be required by law or by the
SEC
in connection therewith, and the undersigned agrees to furnish the Company
with
such information.
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(f) Each
of
the Company and the Subscriber shall indemnify the other party hereto and their
respective officers, directors, employees and agents against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) by the indemnifying party
of a material fact contained in any prospectus or other document (including
any
related registration statement, notification or the like) incident to any
registration of the type described in this Section 5, or any omission (or
alleged omission) by the indemnifying party to state in any such document a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse such indemnified party for any
legal
and any other expenses reasonably incurred in connection with investigating
and
defending any such claim, loss, damage, liability or action; provided
that no
party will be eligible for indemnification hereunder to the extent that any
such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission based upon written information furnished by such
party for use in connection with such registration.
6. Use
of Proceeds
The
net
proceeds of the Offering will be used in a manner consistent with the plan
described in “Use of Proceeds” in the Memorandum.
7. Xxxxxxx
Xxxxxxx Prohibition; Indemnity; Escrow Release
(a) The
undersigned agrees to indemnify and hold harmless the Company, the Placement
Agent, the Escrow Agent and their respective officers and directors, employees,
agents, sub-agents and affiliates and each other person, if any, who controls
any of the foregoing, against any loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation commenced or threatened or any claim whatsoever) arising out of
or
based upon any false representation or warranty by the undersigned, or the
undersigned’s breach of, or failure to comply with, any covenant or agreement
made by the undersigned herein or in any other document furnished by the
undersigned to the Company, the Placement Agent, the Escrow Agent and their
respective officers and directors, employees, agents, sub-agents and affiliates
and each other person, if any, who controls any of the foregoing in connection
with the Offering.
(b) The
Subscriber acknowledges that the Placement Agent may act on behalf of the
Subscribers, solely for the sake of convenience, in connection with confirmation
to the Escrow Agent that the closing has occurred and thereby direct the Escrow
Agent to disburse the Subscribers’ subscription funds held in escrow to the
Company at such time. In doing so, however, the Placement Agent makes no
representation or warranty to the Subscribers as to the satisfaction of all
conditions precedent to the closing or with respect to any due diligence
investigations concerning the Company, all of which shall be and remain the
Subscriber’s own responsibility.
8. Conditions
to Acceptance of Subscription
The
Company’s right to accept the subscription of the undersigned is conditioned
upon satisfaction of the following conditions precedent on or before the date
the Company accepts such subscription (any or all of which may be waived by
the
undersigned in his, her or its sole discretion):
(a) On
the
Closing Date, no legal action, suit or proceeding shall be pending which seeks
to restrain or prohibit the transactions contemplated by this
Agreement.
(b) The
representations and warranties of the Company contained in this Agreement shall
have been true and correct on the date of this Agreement and shall be true
and
correct on the Closing Date as if made on the Closing Date.
9. Notices
to Subscribers
(a) THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES
LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS
FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE
SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR
THE
ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY
IS
UNLAWFUL.
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(b) THE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, AND
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. SUBSCRIBERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.
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10.
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Miscellaneous
Provisions
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(a) Modification.
Neither
this Agreement, nor any provisions hereof, shall be waived, modified, discharged
or terminated except by an instrument in writing signed by the party against
whom any waiver, modification, discharge or termination is sought.
(b) Survival.
The
undersigned’s representations and warranties made in this Subscription Agreement
shall survive the execution and delivery of this Agreement and the delivery
of
the Securities.
(c) Notices.
Any
party may send any notice, request, demand, claim or other communication
hereunder to the undersigned at the address set forth on the signature page
of
this Agreement or to the Company at the address set forth above using any means
(including personal delivery, expedited courier, messenger service, fax,
ordinary mail or electronic mail), but no such notice, request, demand, claim
or
other communication will be deemed to have been duly given unless and until
it
actually is received by the intended recipient. Any party may change the address
to which notices, requests, demands, claims and other communications hereunder
are to be delivered by giving the other parties written notice in the manner
herein set forth.
(d) Binding
Effect.
Except
as otherwise provided herein, this Agreement shall be binding upon, and inure
to
the benefit of, the parties to this Agreement and their heirs, executors,
administrators, successors, legal representatives and assigns. If the
undersigned is more than one person or entity, the obligation of the undersigned
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 or entity and his or its heirs, executors,
administrators, successors, legal representatives and assigns. This Agreement
sets forth the entire agreement and understanding between the parties as to
the
subject matter thereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
(e) Assignability.
This
Agreement is not transferable or assignable by the undersigned. This Agreement
shall be transferable or assignable by the Company to a proposed publicly-traded
successor company.
(f) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California, without giving effect to conflicts of law
principles.
(g) Counterparts.
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
instrument.
8
ANTI-MONEY
LAUNDERING PROVISIONS
|
The
USA PATRIOT Act
|
What
is money laundering?
|
How
big is the problem and why is it important?
|
||
|
The
USA PATRIOT Act is designed to detect, deter, and punish terrorists
in the
United States and abroad. The Act imposes new anti-money laundering
requirements on brokerage firms and financial institutions. Since
April
24, 2002, all brokerage firms have been required to have new,
comprehensive anti-money laundering programs.
To
help you understand theses efforts, we want to provide you with some
information about money laundering and our steps to implement the
USA
PATRIOT Act.
|
Money
laundering is the process of disguising illegally obtained money
so that
the funds appear to come from legitimate sources or activities. Money
laundering occurs in connection with a wide variety of crimes, including
illegal arms sales, drug trafficking, robbery, fraud, racketeering,
and
terrorism.
|
The
use of the U.S. financial system by criminals to facilitate terrorism
or
other crimes could taint our financial markets. According to the
U.S.
State Department, one recent estimate puts the amount of worldwide
money
laundering activity at $1 trillion a
year.
|
|
What
are we required to do to eliminate money
laundering?
|
||
|
Under
new rules required by the USA PATRIOT Act, our anti-money laundering
program must designate a special compliance officer, set up employee
training, conduct independent audits, and establish policies and
procedures to detect and report suspicious transactions and ensure
compliance with the new laws.
|
As
part of our required program, we may ask you to provide various
identification documents or other information. Until you provide
the
information or documents we need, we may not be able to effect any
transactions for you.
|
|
PATRIOT
ACT REQUIREMENTS
The
Patriot Act requires us to obtain the following information from you to detect
and prevent the misuse of the world financial system.
1. In
the
space provided below, please provide details of where
monies were transferred from
to the
Company in relation to your subscription for Securities.
|
COUNTRY
|
NAME
OF BANK/FINANCIAL INSTITUTION
|
CONTACT
NAME/PHONE NUMBER AT BANK/FINANCIAL INSTITUTION
|
NAME
OF ACCOUNTHOLDER
|
ACCOUNT
NUMBER
|
9
If
the
country from which the monies were transferred appears in the Approved Country
List below, please go to number 3. If the country does not appear, please go
to
number 2.
Approved
Country List:
|
Argentina
Australia
Bermuda
Belgium
Brazil
British
Virgin Islands
Canada
Denmark
Finland
France
|
Germany
Gibraltar
Guernsey
Hong
Kong
Iceland
Ireland
Isle
of Man
Italy
Japan
Jersey
|
Liechtenstein
Luxembourg
Mexico
Netherlands
New
Zealand
Norway
Panama
Portugal
Singapore
|
Spain
Switzerland
Turkey
United
Kingdom
United
States
|
2. If
subscription monies were transferred to the Company from any country other
than
on the Approved Country List (see above), please provide the following
documentation to the Company (all copies should be in English and certified
as
being “true and correct copies of the original” by a notary public of the
jurisdiction of which you are resident).
(a) For
Individuals:
| (i) |
evidence
of name, signature, date of birth and photographic
identification,
|
| (ii) |
evidence
of permanent address, and
|
|
(iii)
|
where
possible, a reference from a bank with whom the individual maintains
a
current relationship and has maintained such relationship for at
least two
years
|
(b) For
Companies:
| (i) |
a
copy of its certificate of incorporation and any change of name
certificate,
|
| (ii) |
a
certificate of good standing,
|
| (iii) |
a
register or other acceptable list of directors and
officers,
|
|
(iv)
|
a
properly authorized mandate of the company to subscribe in the form,
for
example, of a certified resolution which includes naming authorized
signatories,
|
|
(v)
|
a
description of the nature of the business of the
company,
|
|
(vi)
|
identification,
as described above for individuals, for at least two directors and
authorized signatories,
|
|
(vii)
|
a
register of members or list of shareholders holding a controlling
interest, and
|
|
(viii)
|
identification,
as described above, for individuals who are beneficial owners of
corporate
shareholders which hold 10% or more of the capital share of the
company.
|
(c) For
Partnerships and Unincorporated Businesses:
|
(i)
|
a
copy of any certificate of registration and a certificate of good
standing, if registered,
|
|
(ii)
|
identification,
as described above, for individuals and, where relevant, companies
constituting a majority of the partners, owners or managers and authorized
signatories,
|
10
|
(iii)
|
a
copy of the mandate from the partnership or business authorizing
the
subscription in the form, for example, of a certified resolution
which
includes naming authorized signatories,
and
|
|
(iv)
|
a
copy of constitutional documents (formation and partnership
agreements).
|
(d) For
Trustees:
|
(i)
|
identification,
as described above, for individuals or companies (as the case may
be) in
respect of the trustees,
|
|
(ii)
|
identification,
as described above for individuals, of beneficiaries, any person
on whose
instructions or in accordance with whose wishes the trustee/nominee
is
prepared or accustomed to act and the settlor of the trust,
and
|
|
(iii)
|
evidence
of that nature of the duties or capacity of the
trustee.
|
3. The
Company is also required to verify the source of funds. To this end, summarize
the underlying source of the funds remitted to us (for example, where
subscription monies were the profits of business (and if so please specify
type
of business), investment income, savings, etc.).
|
Source
of Funds
|
ANTI-MONEY
LAUNDERING ACT
WIRING
FUNDS: Due
to
the Anti-Money Laundering Act, Brookstreet Compliance must grant
approval prior to funds being wired from any account other than National
Financial Services (NFS) or an IRA Custodial Account.
Thus,
please adhere to the following procedure:
|
A.
|
Complete
Sections 1 through 3 in the Patriot Act Requirements section above,
as
applicable, utilizing the information for the bank from which the
wire
will originate.
|
|
B.
|
Attach
a copy of your “Letter of Instruction” or other wire instructions showing
your name, financial institution name (where wire will originate),
account
number, wire amount, and wire instructions (escrow agent information
such
as ABA routing number, escrow account number etc) - this must be
signed
and dated.
|
|
C.
|
If
monies will be wired from an account not matching the name on this
Subscription Agreement, additional documentation is necessary (please
contact Brookstreet Compliance @ (000) 000-0000 extension 141 for
assistance).
|
|
D.
|
Submit
Subscription Agreement to Compliance for processing and compliance
approval.
|
|
E.
|
Upon
notification of approval from Compliance, wire
funds.
|
|
F.
|
Compliance
will obtain wire confirmation from escrow agent. If wire confirmation
does
NOT show account number of wire origination, additional documentation
will
be required.
|
WIRING
FUNDS IN ADVANCE OF COMPLIANCE APPROVAL IS PROHIBITED
11
PRIVACY
POLICY
It
is the
policy of Brookstreet Securities Corporation (Brookstreet) to respect the
privacy of customers who subscribe to transactions placed by
Brookstreet.
Whether
its own brokers introduce Customers to Brookstreet or the introduction was
made
through selected dealers, (hereinafter referred to as “Subscribers”) non-public
personal information is protected by Brookstreet.
Brookstreet
does not disclose any non-public personal information about Subscribers to
anyone, except as required or permitted by law and to effect, administer or
enforce transactions requested by Subscribers in the ordinary processing,
servicing or maintaining their accounts. Furthermore, Brookstreet does not
reserve the right to disclose Subscriber’s non-public personal information in
the future without first notifying the Subscriber of a change in privacy policy
and providing a convenient opportunity for Subscriber to opt out of information
sharing with non-affiliated third parties.
Under
the
USA PATRIOT Act of 2001 (Public Law 107-56)(together with all rules and
regulations promulgated hereunder, the “Patriot Act”), Brookstreet and/or your
broker may be required or requested to disclose to one or more regulatory and/or
law enforcement bodies certain information regarding transactions relating
to
your account involving transactions with foreign entitles and individuals,
other
transactions in your account as required in the Patriot Act and other activities
described in the Patriot Act as “suspicious activities.” Neither Brookstreet nor
your broker shall have any obligation to advise you of any such disclosures
or
reports made in compliance with the Patriot Act.
12
ALL
SUBSCRIBERS MUST COMPLETE THIS PAGE
IN
WITNESS WHEREOF, the undersigned has executed this Agreement on the ____ day
of
____________ 2006.
|
________________________
|
x
$2.25 for each Share
|
=
$_____________________.
|
|
Shares
subscribed for
|
Aggregate
Purchase Price
|
|
|
(Checks
should be made payable to:
|
o Initial
Investment
|
|
|
“First
Republic Trust Co., Escrow Agent for Foldera,
Inc.”)
|
o Additional
Investment
|
Manner
in
which Title is to be held (Please Check One):
|
1.
|
o
|
Individual
|
7.
|
o
|
Trust/Estate/Pension
or Profit sharing Plan
Date
Opened:______________
|
|
2.
|
o
|
Joint
Tenants with Right of Survivorship
|
8.
|
o
|
As
a Custodian for
________________________________
Under
the Uniform Gift to Minors Act of the State of
________________________________
|
|
3.
|
o
|
Community
Property
|
9.
|
o
|
Married
with Separate Property
|
|
4.
|
o
|
Tenants
in Common
|
10.
|
x
|
Xxxxx
|
|
5.
|
o
|
Corporation/Partnership/
Limited Liability Company
|
11.
|
o
|
Tenants
by the Entirety
|
|
6.
|
o
|
IRA
|
ALTERNATIVE
DISTRIBUTION INFORMATION
To
direct
distribution to a party other than the registered owner, complete the
information below. YOU MUST COMPLETE THIS SECTION IF THIS IS AN IRA
INVESTMENT.
|
Name
of Firm (Bank, Brokerage, Custodian):
|
|
|
Account
Name:
|
|
|
Account
Number:
|
|
|
Representative
Name:
|
|
|
Representative
Phone Number:
|
|
|
Address:
|
|
|
City,
State, Zip:
|
IF
MORE
THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
INDIVIDUAL
SUBSCRIBERS MUST COMPLETE PAGE 14.
SUBSCRIBERS
WHICH ARE ENTITIES MUST COMPLETE PAGE 15.
13
EXECUTION
BY NATURAL PERSONS
|
_____________________________________________________________________________
Exact
Name in Which Title is to be Held
|
||
|
_________________________________
Name
(Please Print)
|
_________________________________
Name
of Additional Purchaser
|
|
|
_________________________________
Residence:
Number and Street
|
_________________________________
Address
of Additional Purchaser
|
|
|
_________________________________
City,
State and Zip Code
|
_________________________________
City,
State and Zip Code
|
|
|
_________________________________
Social
Security Number
|
_________________________________
Social Security Number
|
|
|
_________________________________
Telephone
Number
|
_________________________________
Telephone
Number
|
|
|
_________________________________
Fax
Number (if available)
|
________________________________
Fax
Number (if available)
|
|
|
_________________________________
E-Mail
(if available)
|
________________________________
E-Mail
(if available)
|
|
|
__________________________________
(Signature)
|
________________________________
(Signature
of Additional Purchaser)
|
|
|
ACCEPTED
this ___ day of _________ 2006, on behalf of the
Company.
|
||
|
By: _________________________________
Name:
Title:
|
||
14
EXECUTION
BY SUBSCRIBER WHICH IS AN ENTITY
(Corporation,
Partnership, LLC, Trust, Etc.)
|
_____________________________________________________________________________
Name
of Entity (Please Print)
|
|
|
Date
of Incorporation or Organization:
|
|
|
State
of Principal Office:
|
|
|
Federal
Taxpayer Identification Number:
____________________________________________
Office
Address
____________________________________________
City,
State and Zip Code
____________________________________________
Telephone
Number
____________________________________________
Fax
Number (if available)
____________________________________________
E-Mail
(if available)
|
|
|
By:
_________________________________
Name:
Title:
|
|
|
By:
_________________________________
Name:
Title:
|
|
|
[seal]
Attest:
_________________________________
(If Entity is a Corporation)
|
_________________________________
_________________________________
Address
|
|
ACCEPTED
this ____ day of __________ 2006, on behalf of the
Company.
|
|
|
By:
_________________________________
Name:
Title:
|
|
15
