SENTRA CONSULTING CORP. REGULATION D SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION
REGULATION
D SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION
SECTION
1
1.1 Subscription.
The
undersigned, intending to be legally bound, hereby irrevocably subscribes for
and agrees to purchase ____________ shares of Series A Convertible Preferred
Stock (the “Preferred Stock”) of Sentra Consulting Corp., a Nevada corporation
(the "Company"), in a transaction exempt from the registration requirements
of
the Securities Act of 1933, as amended (the “Securities Act”). The undersigned
understands that the Preferred Stock is being sold in connection with an
offering by the Company of up to 3,000 shares of Preferred Stock at $1,000
per
share (the “Offering”).
The
terms
of the Preferred Stock are set forth in the Certificate of Designation of the
Preferred Stock attached hereto.
1.2 Purchase
of Preferred Stock.
The
undersigned understands and acknowledges that the purchase price to be remitted
to the Company in exchange for the ____________ shares of Preferred Stock (the
“Purchased Shares”) shall be ___________ dollars ($______). The undersigned
further acknowledges that this subscription is irrevocable. The undersigned
understands and acknowledges that for purposes of this Agreement, the term
Purchased Shares shall include the underlying common stock of the Company into
which the Preferred Stock may be converted, subject to the terms and provisions
as set forth herein.
1.3 Acceptance
or Rejection.
(a) Payment
has been made simultaneously herewith by either (i) wire transfer pursuant
to
instructions previously delivered to the undersigned or (ii) by check payable
to
Sentra Consulting Corp. in full payment of the Purchased Shares subscribed
for
(the “Subscription Payment”).
(b)
The
undersigned understands and agrees that the Company reserves the right to reject
this subscription for the Purchased Shares if, in its reasonable judgment,
it
deems such action in the best interest of the Company, at any time prior to
the
Closing (as defined herein), notwithstanding prior receipt by the undersigned
of
notice of acceptance of the undersigned's subscription. If the Company accepts
a
portion of the undersigned’s subscription, the Company will return or cause to
be returned to the undersigned the purchase price remitted to the Company by
the
undersigned for the portion of the subscription rejected, without interest
thereon or deduction therefrom, in exchange for the Purchased
Shares.
(c) The
undersigned acknowledges that the Company may terminate this Offering at any
time.
(d) In
the
event the sale of the Purchased Shares subscribed for by the undersigned is
not
consummated by the Company for any reason (in which event this Subscription
Agreement shall be deemed to be rejected), this Subscription Agreement and
any
other agreement entered into between the undersigned and the Company relating
to
this subscription shall thereafter have no force or effect and the Company
shall
promptly return or cause to be returned to the undersigned the purchase price
remitted to the Company by the undersigned, without interest thereon or
deduction therefrom, in exchange for the Purchased Shares.
SECTION
2
2.1 Closing
The
closing (the "Closing") of the purchase and sale of the Purchased Shares, shall
occur upon the acceptance by the Company of the undersigned's subscription,
as
evidenced by the Company's execution of this Subscription
Agreement.
SECTION
3
3.1 Investor
Representations and Warranties.
The
undersigned hereby acknowledges, represents and warrants to, and agrees with,
the Company and its affiliates as follows:
(a) Investment
Purposes.
The
undersigned is acquiring the Purchased Shares for his own account as principal,
not as a nominee or agent, for investment purposes only, and not with a view
to,
or for, resale, distribution or fractionalization thereof in whole or in part
in
any transactions that would be in violation of the Securities Act or any state
securities or “blue-sky” laws. No other person has a direct or indirect
beneficial interest in, and the undersigned does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or
grant
participations to such person or to any third person, with respect to, the
Purchased Shares or any part of the Purchased Shares for which the undersigned
is subscribing that would be in violation of the Securities Act or any state
securities or “blue-sky” laws.
(b) Authority.
The
undersigned has full power and authority to enter into this Agreement, the
execution and delivery of this Agreement has been duly authorized, if
applicable, and this Agreement constitutes a valid and legally binding
obligation of the undersigned.
(c) No
General Solicitation.
The
undersigned is not subscribing for the Purchased Shares as a result of or
subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, or any solicitation of a subscription by a person
previously not known to the undersigned in connection with investment securities
generally.
-2-
(d) No
Obligation to Register Shares.
The
undersigned understands that the Company is under no obligation to register
the
Purchased Shares under the Securities Act, or to assist the undersigned in
complying with the Securities Act or the securities laws of any state of the
United States or of any foreign jurisdiction.
(e) Investment
Experience.
The
undersigned, or the undersigned’s professional advisors, has such knowledge and
experience in finance, securities, taxation, investments and other business
matters as to evaluate investments of the kind described in this Agreement.
By
reason of the business and financial experience of the undersigned or his/her
professional advisors (who are not affiliated with or compensated in any way
by
the Company or any of its affiliates or selling agents), can protect his own
interests in connection with the transactions described in this Agreement,
and
is able to afford the entire loss of his investment in the Purchased
Shares.
(f) Exemption
from Registration.
The
undersigned acknowledges his understanding that the offering and sale of the
Purchased Shares is intended to be exempt from registration under the Securities
Act. In furtherance thereof, in addition to the other representations and
warranties of the undersigned made herein, the undersigned further represents
and warrants to and agrees with the Company and its affiliates as
follows:
(i)
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The
undersigned realizes that the basis for the exemption may not be
present
if, notwithstanding such representations, the undersigned has in
mind
merely acquiring the Purchased Shares 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;
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(ii)
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The
undersigned has the financial ability to bear the economic risk of
his
investment, has adequate means for providing for his current needs
and
personal contingencies and has no need for liquidity with respect
to his
investment in the Company; and
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(iii) |
The
undersigned 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 Purchased Shares;
and
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(iv)
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The
undersigned has been provided an opportunity for a reasonable period
of
time prior to the date hereof to obtain additional information concerning
the offering of the Purchased Shares, the Company and all other
information to the extent the Company possesses such information
or can
acquire it without unreasonable effort or
expense.
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(v)
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The
undersigned has carefully reviewed all of the Company’s filings under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
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(g) Economic
Considerations.
The
undersigned is not relying on the Company, or its affiliates or agents with
respect to economic considerations involved in this investment. The undersigned
has relied solely on its own advisors.
(h) No
Other Company Representations.
No
representations or warranties have been made to the undersigned by the Company,
or any officer, employee, agent, affiliate or subsidiary of the Company, other
than the representations of the Company contained herein, and in subscribing
for
Purchased Shares the undersigned is not relying upon any representations other
than those contained herein.
(i)
Resales;
Legend.
Any
resale of the Purchased Shares shall only be made in compliance with exemptions
from registration afforded by the Securities Act and the rules and regulations
promulgated thereunder. The undersigned will not offer to sell or sell the
Purchased Shares in any jurisdiction unless the undersigned obtains all required
consents, if any. Certificates evidencing the Purchased Shares may bear the
following legend, including without limitation, any legend required by the
laws
of the jurisdiction in which the undersigned resides, and any legend required
by
any applicable law, including without limitation, any legend that will be useful
to aid compliance with Regulation D or other regulations adopted by the
Securities and Exchange Commission under the Securities Act:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS TRANSFERRED PURSUANT TO ANY VALID
EXEMPTION FROM REGISTRATION AVAILABLE UNDER SUCH ACT.”
The
undersigned consents to the Company making a notation on its records or giving
instructions to any transfer agent of the Company in order to implement the
restrictions on transfer of the Purchased Shares set forth in this
Section.
(j) Applicability
of Exemption.
The
undersigned understands that the Purchased Shares are being offered and sold
to
him in reliance on an exemption from the registration requirements of United
States federal and state securities laws under Regulation D promulgated under
the Securities Act and that the Company is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understandings of the undersigned set forth herein in order to determine the
applicability of such exemptions and the suitability of the undersigned to
acquire the Purchased Shares.
-4-
(k) Accredited
Investor.
The
undersigned is an “accredited investor” as that term is defined in Rule 501 of
the General Rules and Regulations under the Securities Act by reason of Rule
501(a)(3).
(l) Potential
Loss of Investment.
The
undersigned understands that an investment in the Purchased Shares is a
speculative investment which involves a high degree of risk and the potential
loss of his entire investment.
(m) Investment
Commitment.
The
undersigned's overall commitment to investments which are not readily marketable
is not disproportionate to the undersigned's net worth, and an investment in
the
Purchased Shares will not cause such overall commitment to become
excessive.
(n) Receipt
of Information.
The
undersigned has received all documents, records, books and other information
pertaining to the undersigned’s investment in the Company that has been
requested by the undersigned.
(o) Review
of SEC Documents.
The undersigned has reviewed or received copies of all reports and other
documents filed by the Company and its officers and directors with the
Securities and Exchange Commission and any other documents or information
requested by the undersigned.
(p) Investor
Questionnaire.
The
undersigned represents and warrants to the Company that all information that
the
undersigned has provided to the Company, including, without limitation, the
information in the Investor Questionnaire attached hereto or previously provided
to the Company (the “Investor Questionnaire”), is correct and complete as of the
date hereof.
(q) No
Reliance.
Other
than as set forth herein, the undersigned is not relying upon any other
information, representation or warranty by the Company or any officer, director,
stockholder, agent or representative of the Company in determining to invest
in
the Purchased Shares. The undersigned has consulted, to the extent deemed
appropriate by the undersigned, with the undersigned’s own advisers as to the
financial, tax, legal and related matters concerning an investment in the
Purchased Shares and on that basis believes that his or its investment in the
Purchased Shares is suitable and appropriate for the undersigned.
(r) No
Governmental Review.
The
undersigned is aware that no federal or state agency has (i) made any finding
or
determination as to the fairness of this investment, (ii) made any
recommendation or endorsement of the Preferred Stock or the Company, or (iii)
guaranteed or insured any investment in the Purchased Shares or any investment
made by the Company.
-5-
(s)
Price
of Preferred Stock.
The
undersigned understands that the price of the Preferred Stock offered hereby
bear no relation to the assets, book value or net worth of the Company and
were
determined arbitrarily by the Company. The undersigned further understands
that
there is a substantial risk of further dilution on the undersigned’s investment
in the Company.
(t)
Confidentiality.The
undersigned expressly acknowledges and agrees that this Agreement and any
related confidential correspondence from the Company, including without
limitation material regarding Karat Platinum, LLC, are to be held in strict
confidence and not disclosed to any party without prior approval of the Company.
The Company, in its sole and absolute discretion, shall determine the form,
timing and contents of announcements and disclosures regarding the proposed
transactions as required by SEC disclosure rules. In the event of a breach
or
threatened breach or intended breach of this Agreement by the undersigned,
the
Company, in addition to any other rights and remedies available to it at law
or
in equity, shall be entitled to preliminary and final injunctions, enjoining
and
restraining such breach or threatened breach or intended breach.
SECTION
4
4.1
Company
Representations and Warranties. The
Company represents and warrants to the undersigned as follows:
(a) Organization
of the Company.
The
Company is a corporation duly organized and validly existing and in good
standing under the laws of the State of Nevada.
(b) Authority.
(i) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and to issue the Preferred Stock;
(ii) the execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby have
been
duly authorized by all necessary corporate action and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required; and (iii) this Agreement has been duly executed and delivered by
the
Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws relating to, or affecting generally the enforcement of, creditors' rights
and remedies or by other equitable principles of general
application.
(c) Exemption
from Registration; Valid Issuances.
The
sale and issuance of the Purchased Shares, in accordance with the terms and
on
the bases of the representations and warranties of the undersigned set forth
herein, may and shall be properly issued by the Company to the undersigned
pursuant to any applicable federal or state law. When issued and paid for as
herein provided, the Purchased Shares shall be duly and validly issued, fully
paid, and nonassessable. Neither the sales of the Purchased Shares pursuant
to,
nor the Company's performance of its obligations under, this Agreement shall
(i)
result in the creation or imposition of any liens, charges, claims or other
encumbrances upon the Purchased Shares or any of the assets of the Company,
or
(ii) entitle the other holders of the Common Stock of the Company to preemptive
or other rights to subscribe to or acquire the Common Stock or other securities
of the Company. The Purchased Shares shall not subject the undersigned to
personal liability by reason of the ownership thereof.
-6-
(d) No
General Solicitation or Advertising in Regard to this
Transaction.
Neither
the Company nor any of its affiliates nor any person acting on its or their
behalf (i) has conducted or will conduct any general solicitation (as that
term
is used in Rule 502(c) of Regulation D) or general advertising with respect
to
any of the Preferred Stock, or (ii) made any offers or sales of any security
or
solicited any offers to buy any security under any circumstances that would
require registration of the Common Stock under the Securities Act.
(e)
Description
of the Company’s Capital Stock.
At
Closing, the authorized capital stock of the Company consists of: (i)
100,000,000 shares of common stock, $0.001 par value per share, of the Company,
and (ii) 10,000,000 shares of preferred stock, $0.001 par value per share,
of
the Company of which 3,000 shares have been designated as Preferred Stock.
As of
July 31, 2007, on a pro forma basis, assuming the Preferred Stock offered in
this Offering are fully subscribed for, the issued and outstanding capital
stock
of the Company would consist of: (i) 3,125,000 shares of Common Stock, (ii)
96,000 common stock purchase warrants, convertible into 96,000 shares of Common
Stock, and (iii) 3,000 shares of Preferred Stock, convertible into 6,000,000
shares of Common Stock, assuming that the conversion price is
$0.50.
SECTION
5
5.1 Indemnity.
The
undersigned agrees to indemnify and hold harmless the Company, its officers
and
directors, employees and its affiliates and their respective successors and
assigns and each other person, if any, who controls any thereof, 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 or breach or failure by the undersigned to comply
with any covenant or agreement made by the undersigned herein or in any other
document furnished by the undersigned to any of the foregoing in connection
with
this transaction.
5.2 Modification.
Neither
this Agreement nor any provisions hereof shall be modified, discharged or
terminated except by an instrument in writing signed by the party against whom
any waiver, change, discharge or termination is sought.
-7-
5.3 Notices.
Any
notice, demand or other communication which a party hereto may be required,
or
may elect, to give to anyone interested hereunder shall be sufficiently given
if
(a) deposited, postage prepaid, in a United States mail letter box, registered
or certified mail, return receipt requested, addressed to such address as may
be
given herein, or (b) delivered personally at such address.
5.4 Counterparts.
This
Agreement may be executed through the use of separate signature pages or in
any
number of counterparts and by facsimile, and each of such counterparts shall,
for all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.
Signatures may be facsimiles.
5.5 Binding
Effect.
Except
as otherwise provided herein, this Agreement shall be binding upon and inure
to
the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and assigns. If the undersigned is more than
one person, the obligation of the undersigned shall be joint and several and
the
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person and his
heirs, executors, administrators and successors.
5.6 Entire
Agreement.
This
Agreement and the documents referenced herein contain the entire agreement
of
the parties and there are no representations, covenants or other agreements
except as stated or referred to herein and therein.
5.7 Assignability.
This
Agreement is not transferable or assignable by the undersigned, and any such
attempted assignment shall be null and void and of no force or
effect.
5.8 Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without giving effect to conflicts of law
principles.
5.9 Pronouns.
The use
herein of the masculine pronouns "him" or "his" or similar terms shall be deemed
to include the feminine and neuter genders as well and the use herein of the
singular pronoun shall be deemed to include the plural as well.
[Remainder
of this page intentionally left blank; signature pages to
follow]
-8-
IN
WITNESS WHEREOF, the undersigned has executed this Agreement on the
day of
________, 2007.
Amount
of
Investment:
$_____________________
INDIVIDUAL
INVESTOR:
______________________
Name:
PARTNERSHIP,
CORPORATION, TRUST,
CUSTODIAL
ACCOUNT, OTHER INVESTOR
___________________________
(Print
Name of Entity)
By: __________________
Name:
Title:
Address:
Taxpayer
Identification Number:_____________
-9-
ACCEPTANCE
OF SUBSCRIPTION
(to
be
filed out only
by the
Company)
The
undersigned hereby accepts the above application for subscription for Purchased
Shares on behalf of the Company.
Accepted
for
Number
of Shares
SENTRA CONSULTING CORP. | |
Dated: ____________ ___, 2007 | By: ______________________________
Name:
Title:
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-10-
INVESTOR
QUESTIONNAIRE
A.
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General
Information
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1.
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Print
Full Name of Investor:
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Individual:
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____________________________________
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First,
Middle, Last
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Partnership,
Corporation, Trust, Custodial Account, Other:
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____________________________________
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Name
of Entity
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2.
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Address
for Notices:
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____________________________________
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____________________________________
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____________________________________
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3.
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Name
of Primary Contact Person:
Title:
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____________________________________
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4.
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Telephone
Number:
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____________________________________
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5.
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E-Mail
Address:
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____________________________________
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6.
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Facsimile
Number:
Permanent
Address:
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____________________________________
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7.
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Permanent
Address:
(if
different from Address for Notices above)
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____________________________________
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8.
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Authorized
Signatory:
Title:
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____________________________________
____________________________________
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Telephone
Number:
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____________________________________
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Facsimile
Number:
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____________________________________
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9.
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U.S.
Investors Only:
U.S.
Taxpayer Identification or
Social
Security
Number:
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____________________________________
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B. Accredited
Investor Status
The
Investor represents and warrants that the Investor is an “accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities Act of
1933,
as amended (the “Securities Act”), and has checked the box or boxes below which
are next to the categories under which the Investor qualifies as an accredited
investor:
FOR
INDIVIDUALS:
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o
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A
natural person with individual net worth (or joint net worth with
spouse)
in excess of $1 million. For purposes of this item, “net worth” means the
excess of total assets at fair market value, including home, home
furnishings and automobiles (and including property owned by a spouse),
over total liabilities.
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o
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A
natural person with individual income (without including any income
of the
Investor’s spouse) in excess of $200,000, or joint income with spouse of
$300,000, in each of the two most recent years and who reasonably
expects
to reach the same income level in the current year.
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FOR
ENTITIES:
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o
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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.
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o
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An
insurance company as defined in Section 2(13) of the Securities
Act.
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-12-
o
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A
broker-dealer registered pursuant to Section 15 of the Securities
Exchange
Act of 1934.
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o
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An
investment company registered under the Investment Company Act of
1940, as
amended (the “Investment Company Act”). If an Investor has checked this
box, please contact Xxxxx Xxxxx, Esq., attorney for the Company,
(000)
000-0000 for additional information that will be required.
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o
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A
business development company as defined in Section 2(a)(48) of the
Investment Company Act.
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o
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A
small business investment company licensed by the Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
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o
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A
private business development company as defined in Section 202(a)(22)
of
the Investment Advisers Act of 1940. If an Investor has checked this
box,
please contact Xxxxx Xxxxx, Esq., attorney for the Company, (000)
000-0000, for additional information that will be
required.
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o
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An
organization described in Section 501(c)(3) of the Internal Revenue
Code,
a corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the Purchased Shares,
with total assets in excess of $5 million.
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o
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A
trust with total assets in excess of $5 million not formed for the
specific purpose of acquiring the Purchased Shares, whose purchase
is
directed by a person with such knowledge and experience in financial
and
business matters as to be capable of evaluating the merits and risks
of an
investment in the Company and the purchase of the Purchased
Shares.
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o
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An
employee benefit plan within the meaning of ERISA if the decision
to
invest in the Purchased Shares is made by a plan fiduciary, as defined
in
Section 3(21) of ERISA, 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 million
or, if
a self-directed plan, with investment decisions made solely by persons
that are accredited investors.
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o
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A
plan established and maintained by a state, its political subdivisions,
or
any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, if the plan has total assets in
excess
of $5 million.
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o
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An
entity, including a grantor trust, in which all of the equity owners
are
accredited investors as determined under any of the foregoing paragraphs
(for this purpose, a beneficiary of a trust is not an equity owner,
but
the grantor of a grantor trust is an equity owner).
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C. Supplemental
Data for Entities
1. If
the
Investor is not a natural person, furnish the following supplemental data
(natural persons may skip this Section C of the Investor
Questionnaire):
Legal
form of entity (trust, corporation, partnership, etc.):
_________________________
Jurisdiction
of organization: ________________________________________________
2.
Was
the
Investor organized for the specific purpose of acquiring the Purchased
Shares?
o
Yes
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o
No
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If
the
answer to the above question is “Yes,” please contact Xxxxx Xxxxx, Esq.,
attorney for the Company, (000) 000-0000, for additional information that will
be required.
3.
Are
shareholders, partners or other holders of equity or beneficial interest in
the
Investor able to decide individually whether to participate, or the extent
of
their participation, in the Investor’s investment in the Company (i.e., can
shareholders, partners or other holders of equity or beneficial interest in
the
Investor determine whether their capital will form part of the capital invested
by the Investor in the Company)?
o
Yes
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o
No
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If
the
answer to the above question is “Yes,” please contact Xxxxx Xxxxx, Esq.,
attorney for the Company, (000) 000-0000, for additional information that will
be required.
4(a).
Please
indicate whether or not the Investor is, or is acting on behalf of, (i) an
employee benefit plan within the meaning of Section 3(3) of ERISA, whether
or not such plan is subject to ERISA,
or (ii)
an entity which is deemed to hold the assets of any such employee benefit plan
pursuant to 29 C.F.R. § 2510.3-101. For example, a plan which is maintained by a
foreign corporation, governmental entity or church, a Xxxxx plan covering no
common-law employees and an individual retirement account are employee benefit
plans within the meaning of Section 3(3) of ERISA but generally are not subject
to ERISA (collectively, “Non-ERISA
Plans”).
In
general, a foreign or US entity which is not an operating company and which
is
not publicly traded or registered as an investment company under the Investment
Company Act of 1940, as amended, and in which 25% or more of the value of any
class of equity interest is held by employee pension or welfare plans (including
an entity which is deemed to hold the assets of any such plan), would be deemed
to hold the assets of one or more employee benefit plans pursuant to 29 C.F.R.
§
2510.3-101. However, if only Non-ERISA Plans were invested in such an entity,
the entity generally would not be subject to ERISA. For purposes of determining
whether this 25% threshold has been met or exceeded, the value of any equity
interest held by a person (other than such a plan or entity) who has
discretionary authority or control with respect to the assets of the entity,
or
any person who provides investment advice for a fee (direct or indirect) with
respect to such assets, or any affiliate of such a person, is
disregarded.
o
Yes
|
o
No
|
-14-
4(b). If
the
Investor is, or is acting on behalf of, such an employee benefit plan, or is
an
entity deemed to hold the assets of any such plan or plans, please indicate
whether or not the Investor is subject to ERISA.
o
Yes
|
o
No
|
4(c.) If
the
Investor answered “Yes” to question 4.(b) and the Investor is investing the
assets of an insurance company general account, please indicate what percentage
of the Investor’s assets the purchase of the Purchased Shares is subject to
ERISA. ___________%.
5.
Does
the
amount of the Investor’s subscription for the Purchased Shares in the Company
exceed 40% of the total assets (on a consolidated basis with its subsidiaries)
of the Investor?
o
Yes
|
o
No
|
If
the
question above was answered “Yes,” please contact Xxxxx Xxxxx, Esq., attorney
for the Company, (000) 000-0000, for additional information that will be
required.
6(a). Is
the
Investor a private investment company which is not registered under the
Investment Company Act, in reliance on Section 3(c)(1) or Section 3(c)(7)
thereof?
o
Yes
|
o
No
|
-15-
6(b).
If
the
question above was answered “Yes,” was the Investor formed prior to April 30,
1996?
o
Yes
|
o
No
|
If
the
questions set forth in (a) and (b) above were both answered “Yes,” please
contact Xxxxx Xxxxx, Esq., attorney for the Company, (000) 000-0000, for
additional information that will be required.
7(a). Is
the
Investor a grantor trust, a partnership or an S-Corporation for US federal
income tax purposes?
o
Yes
|
o
No
|
7(b). If
the
question above was answered “Yes,” please indicate whether or not:
(i)
more
than 50 percent of the value of the ownership interest of any beneficial owner
in the Investor is (or may at any time during the term of the Company be)
attributable to the Investor’s (direct or indirect) interest in the Company;
or
o
Yes
|
o
No
|
(ii)
it
is a principal purpose of the Investor’s participation in the Company to permit
the Partnership to satisfy the 100 partner limitation contained in US Treasury
Regulation Section 1.7704-1(h)(3).
o
Yes
|
o
No
|
If
either
question above was answered “Yes,” please contact Xxxxx Xxxxx, Esq., attorney
for the Company, (000) 000-0000, for additional information that will be
required.
8. If
the
Investor’s tax year ends on a date other than December 31, please indicate such
date below:
(Date)
|
D. Related
Parties
1. To
the
best of the Investor’s knowledge, does the Investor control, or is the Investor
controlled by or under common control with, any other investor in the
Company?
o
Yes
|
o
No
|
If
the
answer above was answered “Yes”, please identify such related investor(s)
below.
-16-
Name(s)
of related investor(s): _______________________________-
2. Will
any
other person or persons have a beneficial interest in the Purchased Shares
to be
acquired hereunder (other than as a shareholder, partner, or other beneficial
owner of equity interest in the Investor)?
o
Yes
|
o
No
|
If
either
question above was answered “Yes”, please contact Xxxxx Xxxxx, Esq., attorney
for the Company, (000) 000-0000, for additional information that will be
required.
The
Investor understands that the foregoing information will be relied upon by
the
Company for the purpose of determining the eligibility of the Investor to
purchase the Purchased Shares. The Investor agrees to notify the Company
immediately if any representation or warranty contained in this Subscription
Agreement, including this Investor Questionnaire, becomes untrue at any time.
The Investor agrees to provide, if requested, any additional information that
may reasonably be required to substantiate the Investor’s status as an
accredited investor or to otherwise determine the eligibility of the Investor
to
purchase the Purchased Shares. The Investor agrees to indemnify and hold
harmless the Company and each officer, director, shareholder, agent and
representative of the Company and their respective affiliates and successors
and
assigns from and against any loss, damage or liability due to or arising out
of
a breach of any representation, warranty or agreement of the Investor contained
herein.
INDIVIDUAL:
|
|
|
|
(Signature)
|
|
|
|
(Print
Name)
|
|
PARTNERSHIP,
CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER:
|
|
|
|
(Name
of Entity)
|
|
By:
|
|
(Signature)
|
|
|
|
(Print
Name and Title)
|
-17-
Annex
1
DEFINITION
OF “INVESTMENTS”
The
term
“investments” means:
1) |
Securities,
other than securities of an issuer that controls, is controlled by,
or is
under common control with, the Investor that owns such securities,
unless
the issuer of such securities is:
|
(i) |
An
investment company or a company that would be an investment company
but
for the exclusions or exemptions provided by the Investment Company
Act,
or a commodity pool; or
|
(ii) |
a
Public Company (as defined below);
|
(iii) |
A
company with shareholders’ equity of not less than $50 million (determined
in accordance with generally accepted accounting principles) as reflected
on the company’s most recent financial statements, provided that such
financial statements present the information as of a date within
16 months
preceding the date on which the Investor acquires Purchased
Shares;
|
2) |
Real
estate held for investment
purposes;
|
3) |
Commodity
Shares (as defined below) held for investment
purposes;
|
4) |
Physical
Commodities (as defined below) held for investment
purposes;
|
5) |
To
the extent not securities, Financial Contracts (as defined below)
entered
into for investment purposes;
|
6) |
In
the case of an Investor that is a company that would be an investment
company but for the exclusions provided by Section 3(c)(1) or 3(c)(7)
of
the Investment Company Act, or a commodity pool, any amounts payable
to
such Investor pursuant to a firm agreement or similar binding commitment
pursuant to which a person has agreed to acquire an interest in,
or make
capital contributions to, the Investor upon the demand of the Investor;
and
|
7) |
Cash
and cash equivalents held for investment
purposes.
|
Real
Estate that is used by the owner or a Related Person (as defined below) of
the
owner for personal purposes, or as a place of business, or in connection with
the conduct of the trade or business of such owner or a Related Person of the
owner, will NOT be considered Real Estate held for investment purposes, provided
that real estate owned by an Investor who is engaged primarily in the business
of investing, trading or developing real estate in connection with such business
may be deemed to be held for investment purposes. However, residential real
estate will not be deemed to be used for personal purposes if deductions with
respect to such real estate are not disallowed by section 280A of the Internal
Revenue Code of 1986, as amended.
-18-
A
Commodity Interest or Physical Commodity owned, or a Financial Contract entered
into, by the Investor who is engaged primarily in the business of investing,
reinvesting, or trading in Commodity Shares, Physical Commodities or Financial
Contracts in connection with such business may be deemed to be held for
investment purposes.
“Commodity
Shares” means commodity futures contracts, options on commodity futures
contracts, and options on physical commodities traded on or subject to the
rules
of:
(i) |
Any
contract market designated for trading such transactions under the
Commodity Exchange Act and the rules thereunder;
or
|
(ii) |
Any
board of trade or exchange outside the United States, as contemplated
in
Part 30 of the rules under the Commodity Exchange
Act.
|
“Public
Company” means a company that:
(i) |
files
reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934, as amended; or
|
(ii) |
has
a class of securities that are listed on a Designated Offshore Securities
Market, as defined by Regulation S of the Securities
Act.
|
“Financial
Contract” means any arrangement that:
(i) |
takes
the form of an individually negotiated contract, agreement, or option
to
buy, sell, lend, swap, or repurchase, or other similar individually
negotiated transaction commonly entered into by participants in the
financial markets;
|
(ii) |
is
in respect of securities, commodities, currencies, interest or other
rates, other measures of value, or any other financial or economic
interest similar in purpose or function to any of the foregoing;
and
|
(iii) |
is
entered into in response to a request from a counter party for a
quotation, or is otherwise entered into and structured to accommodate
the
objectives of the counterparty to such
arrangement.
|
-19-
“Physical
Commodities” means any physical commodity with respect to which a Commodity
Interest is traded on a market specified in the definition of Commodity Shares
above.
“Related
Person” means a person who is related to the Investor as a sibling, spouse or
former spouse, or is a direct lineal descendant or ancestor by birth or adoption
of the Investor, or is a spouse of such descendant or ancestor, provided that,
in the case of a Family Company, a Related Person includes any owner of the
Family Company and any person who is a Related Person of such an owner. “Family
Company” means a company that is owned directly or indirectly by or for two or
more natural persons who are related as siblings or spouse (including former
spouses), or direct lineal descendants by birth or adoption, spouses of such
persons, the estates of such persons, or foundations, charitable organizations
or trusts established for the benefit of such persons.
For
purposes of determining the amount of investments owned by a company, there
may
be included investments owned by majority-owned subsidiaries of the company
and
investments owned by a company (“Parent Company”) of which the company is a
majority-owned subsidiary, or by a majority-owned subsidiary of the company
and
other majority-owned subsidiaries of the Parent Company.
In
determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person’s investments any investment held jointly
with such person’s spouse, or investments in which such person shares with such
person’s spouse a community property or similar shared ownership interest. In
determining whether spouses who are making a joint investment in the Partnership
are qualified purchasers, there may be included in the amount of each spouse’s
investments any investments owned by the other spouse (whether or not such
investments are held jointly). There shall be deducted from the amount of any
such investments any amounts specified by paragraph 2(a) of Annex 2 incurred
by
such spouse.
In
determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person’s investments any investments held in an
individual retirement account or similar account the investments of which are
directed by and held for the benefit of such person.
-20-
Annex
2
VALUATIONS
OF INVESTMENTS
The
general rule for determining the value of investments in order to ascertain
whether a person is a qualified purchaser is that the value of the aggregate
amount of investments owned and invested on a discretionary basis by such person
shall be their fair market value on the most recent practicable date or their
cost. This general rule is subject to the following provisos:
1) |
In
the case of Commodity Shares, the amount of investments shall be
the value
of the initial margin or option premium deposited in connection with
such
Commodity Shares; and
|
2) |
In
each case, there shall be deducted from the amount of investments
owned by
such person the following amounts:
|
(i) |
The
amount of any outstanding indebtedness incurred to acquire the investments
owned by such person.
|
(ii) |
A
Family Company, in addition to the amounts specified in paragraph
(a)
above, shall have deducted from the value of such Family Company’s
investments any outstanding indebtedness incurred by an owner of
the
Family Company to acquire such
investments.
|
-21-