EXHIBIT 4.1
SUBSCRIPTION AGREEMENT
Name of Investor:_________________________________________________
(Print)
CEREPLAST, INC.
0000 Xx Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx, President
RE: CEREPLAST, INC. - 25,000,000 SHARES OF COMMON STOCK (THE "SHARES")
Gentlemen:
1. Subscription. The undersigned hereby tenders this subscription and
applies to purchase the number of Shares in Cereplast, Inc. (the "Company")
indicated below, pursuant to the terms of this Subscription Agreement. The
purchase price of each Share is two cents ($0.02). The Company will include the
Shares on the Registration Statement that it plans to file with the Securities
and Exchange Commission. The undersigned further sets forth statements upon
which you may rely to determine the suitability of the undersigned to purchase
the Shares. The undersigned understands that the Shares are being offered
pursuant to the Executive Summary dated March 22, 2005, and, the exhibits to
this Executive Summary and related business information and documents regarding
the Company and its management attached to the Executive Summary as Exhibit A or
available upon request (collectively, the "Memorandum"). In connection with this
subscription, the undersigned represents and warrants that the personal,
business and financial information contained in the Purchaser Questionnaire is
complete and accurate, and presents a true statement of the undersigned's
financial condition.
2. Representations and Understandings. The undersigned hereby makes the
following representations, warranties and agreements and confirms the following
understandings:
(i) The undersigned has received a copy of the Memorandum, has
reviewed it carefully, and has had an opportunity to question representatives of
the Company and obtain such additional information concerning the Company as the
undersigned requested.
(ii) The undersigned has sufficient experience in financial and
business matters to be capable of utilizing such information to evaluate the
merits and risks of the undersigned's investment, and to make an informed
decision relating thereto; or the undersigned has utilized the services of a
purchaser representative and together they have sufficient experience in
financial and business matters that they are capable of utilizing such
information to evaluate the merits and risks of the undersigned's investment,
and to make an informed decision relating thereto.
(iii) The undersigned has evaluated the risks of this investment in
the Company, including those risks particularly described in the Memorandum, and
has determined that the investment is suitable for him. The undersigned has
adequate financial resources for an investment of this character, and at this
time he could bear a complete loss of his investment. The undersigned
understands that any projections which may be made in the Memorandum are mere
estimates and may not reflect the actual results of the Company's operations.
(iv) The undersigned understands that the Shares are not being
registered under the Securities Act of 1933, as amended (the "1933 Act") on the
ground that the issuance thereof is exempt under Section 4(2) of the 1933 Act
and Rule 506 of Regulation D promulgated thereunder, and that reliance on such
exemption is predicated in part on the truth and accuracy of the undersigned's
representations and warranties, and those of the other purchasers of Shares.
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(v) The undersigned understands that the Shares are not being
registered under the securities laws of certain states on the basis that the
issuance thereof is exempt as an offer and sale not involving a public offering
in such state. The undersigned understands that reliance on such exemptions is
predicated in part on the truth and accuracy of the undersigned's
representations and warranties and those of other purchasers of Shares. The
undersigned covenants not to sell, transfer or otherwise dispose of a Share
unless such Share has been registered under the applicable state securities
laws, or an exemption from registration is available.
(vi) The undersigned has (i) a net worth (or joint net worth with
spouse) of at least $1,000,000, or (ii) an annual gross income during the
previous two years, and reasonably expects to have gross income in the current
year, of at least $200,000 (or $300,000 collectively with spouse), or (iii)
otherwise meets the criteria for being an "Accredited Investor" as defined in
Rule 501 of Regulation D promulgated under Section 4(2) of the Securities Act of
1933, as amended (the "1933 Act"), or (iv) is the beneficiary of a fiduciary
account, or, if the fiduciary of the account or other party is the donor of
funds used by the fiduciary account to make this investment, then such donor,
who meets the requirements of either (i), (ii) or (iii) above.
(vii) The undersigned understands that the Shares are not being
registered under the securities laws of any state on the basis that the issuance
thereof is exempt as an offer and sale to purchasers in such state meeting
certain investor suitability standards with respect to income, net worth,
knowledge and sophistication. The undersigned understands that reliance on such
exemptions is predicated in part on the truth and accuracy of the undersigned's
representations and warranties and those of other purchasers of Shares. The
undersigned covenants not to sell, transfer or otherwise dispose of a Share
unless such Share has been registered under the applicable state securities
laws, or an exemption from registration is available.
(viii) The undersigned has no need for any liquidity in his
investment and is able to bear the economic risk of his investment for an
indefinite period of time. The undersigned has been advised and is aware that:
(a) there is no public market for the Shares and it is not likely that any
public market for the Shares will develop; (b) it may not be possible to
liquidate the investment readily; (c) the undersigned must bear the economic
risk of his investment in the Shares for an indefinite period of time because
the Shares have not been registered under the 1933 Act and applicable state law
or an exemption from such registration is available; (d) a legend as to the
restrictions on transferability of the Shares referred to herein will be made on
the document evidencing the Share, and (e) a notation in the appropriate records
of the Company will be made with respect to any restrictions on transfer of
Shares.
(ix) All contacts and contracts between the undersigned and the
Company regarding the offer and sale to him of Shares have been made within the
state indicated below his signature on the signature page of this Subscription
Agreement and the undersigned is a resident of such state.
(x) The undersigned has relied solely upon the Memorandum and
independent investigations made by him or his purchaser representative with
respect to the Shares subscribed for herein, and no oral or written
representations beyond the Memorandum have been made to the undersigned or
relied upon by the undersigned.
(xi) The undersigned agrees not to transfer or assign this
subscription or any interest therein.
(xii) The undersigned hereby acknowledges and agrees that, except as
may be specifically provided herein, the undersigned is not entitled to
withdraw, terminate or revoke this subscription.
(xiii) If the undersigned is a partnership, corporation or trust, it
has been duly formed, is validly existing, has full power and authority to make
this investment, and has not been formed for the specific purpose of investing
in the Shares. This Subscription Agreement and all other documents executed in
connection with this subscription for Shares are valid, binding and enforceable
agreements of the undersigned.
(xiv) The undersigned meets any additional suitability standards
and/or financial requirements which may be required in the jurisdiction in which
he resides, or is purchasing in a fiduciary capacity for a person or account
meeting such suitability standards and/or financial requirements, and he is not
a minor.
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(xv) The undersigned has a pre-existing business relationship with
an officer, director, employee, consultant or other affiliate of the Company,
and was not offered these securities by any form of cold calling, general
solicitation, or advertisement. The offer to sell the Shares was directly
communicated to the undersigned by the Company through the Memorandum in such a
manner that the undersigned was able to ask questions of and receive answers
from the Company, or a person acting on its behalf, concerning the terms and
conditions of this transaction. At no time was the undersigned presented with or
solicited by or through any article, notice or other communication published in
any newspaper or other leaflet, public promotional meeting, television, radio or
other broadcast or transmittal advertisement or any other form of general
advertising.
3. Indemnification. he undersigned hereby agrees to indemnify and hold
harmless the Company and all of its affiliates, attorneys, accountants,
employees, officers, directors, Shareholders and agents from any liability,
claims, costs, damages, losses or expenses incurred or sustained by them as a
result of the undersigned's representations and warranties herein or in the
Purchaser Questionnaire being untrue or inaccurate, or because of a breach of
this agreement by the undersigned. The undersigned hereby further agrees that
the provisions of Section 3 of this Subscription Agreement will survive the
sale, transfer or any attempted sale or transfer of all or any portion of the
Shares. The undersigned hereby grants to the Company the right to setoff against
any amounts payable by the Company to the undersigned, for whatever reason, of
any and all damages, costs, and expenses (including, but not limited to,
reasonable attorneys' fees) which are incurred by the Company or any of its
affiliates as a result of matters for which the Company is indemnified pursuant
to Section 3 of this Subscription Agreement.
4. Taxpayer Identification Number/Backup Withholding Certification.
Unless a subscriber indicates to the contrary on the Subscription Agreement, he
will certify that his taxpayer identification number is correct and, if not a
corporation, XXX, Xxxxx, or Qualified Trust (as to which there would be no
withholding), he is not subject to backup withholding on interest or dividends.
If the subscriber does not provide a taxpayer identification number certified to
be correct or does not make the certification that the subscriber is not subject
to backup withholding, then the subscriber may be subject to twenty percent
(20%) withholding on interest or dividends paid to the holder of the Shares.
5. Governing Law. This Subscription Agreement will be governed by and
construed in accordance with the laws of the State of California. The venue for
any legal action under this Agreement will be in the proper forum in the County
of Los Angeles, State of California.
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The undersigned has (have) executed this Subscription Agreement on this
__________ day of - __________________________, 200__.
SUBSCRIBER (1) SUBSCRIBER (2)
___________________________________ ___________________________________
Signature Signature
___________________________________ ___________________________________
(Print Name of Subscriber) (Print Name of Subscriber)
___________________________________ ___________________________________
(Xxxxxx Xxxxxxx) (Xxxxxx Address)
___________________________________ ___________________________________
(City, State and Zip Code) (City, State and Zip Code)
___________________________________ ___________________________________
(Social Security or Tax (Social Security or Tax
Identification Number) Identification Number)
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Number of Shares____________
Dollar Amount of Shares (At $0.02 per Share)____________________________________
PLEASE MAKE CHECKS PAYABLE TO: "CEREPLAST, INC."
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MANNER IN WHICH TITLE IS TO BE HELD:
|_| Community Property* |_| Individual Property
|_| Joint Tenancy With Right of |_| Separate Property
Survivorship*
|_| Corporate or Fund Owners ** |_| Tenants-in-Common*
|_| Pension or Profit Sharing Plan |_| Tenants-in-Entirety*
|_| Trust or Fiduciary Capacity |_| Xxxxx Plan
(trust documents must accompany
this form)
|_| Fiduciary for a Minor |_| Individual Retirement Account
|_| Other (Please indicate)
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* Signature of all parties required
** In the case of a Fund, state names of all partners.
___________________________________
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SUBSCRIPTION ACCEPTED:
CEREPLAST, INC.
By:________________________________ ___________________________________
Xxxxxxxx Xxxxxx, President DATE
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CEREPLAST, INC.
PURCHASER QUESTIONNAIRE
CEREPLAST, INC.
0000 Xx Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx, President
RE: CEREPLAST, INC.
Gentlemen:
The following information is furnished to you in order for you to
determine whether the undersigned is qualified to purchase shares of preferred
stock (the "Shares") in the above referenced Company pursuant to Section 4(2) of
the Securities Act of 1933, as amended (the "Act"), Rule 506 of Regulation D
promulgated thereunder, and appropriate provisions of applicable state
securities laws. I understand that you will rely upon the following information
for purposes of such determination, and that the Shares will not be registered
under the Act in reliance upon the exemption from registration provided by
Section 4(2) of the Act, Rule 506 of Regulation D, and appropriate provisions of
applicable state securities laws.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. However, I agree that you may present this questionnaire to such
parties as you deem appropriate if called upon to establish that the proposed
offer and sale of the Shares is exempt from registration under the Act or meets
the requirements of applicable state securities laws.
I hereby provide you with the following representations and information:
1. Name:_____________________________________________________________________
2. Residence Address & Telephone No:_________________________________________
3. Birthdate:________________________________________________________________
4. Employer and Position:____________________________________________________
5. Business Address & Telephone No:__________________________________________
6. Business or Professional Education & Degree:______________________________
7. Prior Employment (5 years):
EMPLOYER NATURE OF DUTIES DATES OF EMPLOYMENT
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
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8. Prior Investments of Purchaser:
Amount (Cumulative) $_______________ (initial appropriate category below):
__________________________________________________________________________
CAPITAL STOCK: |_| None |_| Up to $50,000 |_| $50,000 to $250,000
|_| Over $250,000
__________________________________________________________________________
BONDS: |_| None |_| Up to $50,000 |_| $50,000 to $250,000
|_| Over $250,000
__________________________________________________________________________
OTHER: |_| None |_| Up to $50,000 |_| $50,000 to $250,000
|_| Over $250,000
__________________________________________________________________________
9. Based on the definition of an "Accredited Investor" which appears below, I
am an Accredited Investor. I understand that the representations contained
in this section are made for the purpose of qualifying me as an accredited
investor as the term is defined by the Securities and Exchange Commission
for the purpose of selling securities to me. I hereby represent that the
statement or statements initialed below are true and correct in all
respects.
I am an Accredited Investor because I fall within one of the following
categories:
(INITIAL APPROPRIATE CATEGORY)
|_| A natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of his purchase exceeds $1,000,000;
|_| A natural person who had an individual income in excess of $200,000 in
each of the two most recent years and who reasonably expects an income in
excess of $200,000 in the current year;
|_| My spouse and I have had joint income for the most two recent years in
excess of $300,000 and we expect our joint income to be in excess of
$300,000 for the current year;
|_| Any organization described in Section 501(c)(3) of the Internal Revenue
Code, or any corporation, Massachusetts Business Trust or Fund not formed
for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
|_| A bank as defined in Section 3(a)(2) of the Securities Act whether acting
in its individual or fiduciary capacity; insurance company as defined in
Section 2(12) of the Securities Act, investment company registered under
the Investment Company Act of 1940 or a business development company as
defined in Section 2(1)(48) of that Act; or Small Business Investment
Company licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958;
|_| A private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940;
|_| An employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, if the investment decision is to
be made by a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000;
|_| An entity in which all of the equity owners are Accredited Investors under
the above paragraph.
10. Financial Information:
(a) My net worth (including home, home furnishings and personal
automobiles) is:
$______________________
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(b) My gross income during the preceding two years was:
$_________________ (2003)
$_________________ (2004)
(c) My anticipated gross income in 2005 is $ _______________.
(d) (1) (initial or check here) I have such knowledge and experience in
financial, tax and business matters that I am capable of utilizing the
information made available to me in connection with the offering of the
Shares to evaluate the merits and risks of an investment in the Shares,
and to make an informed investment decision with respect to the Shares. I
do not desire to utilize a Purchaser Representative in connection with
evaluating such merits and risks. I understand, however, that the Company
may request that I use a Purchaser Representative.
(2) (initial or check here) I intend to use the services of the
following named person(s) as Purchaser Representative(s) in connection
with evaluating the merits and risks of an investment in the Shares and
hereby appoint such person(s) to act as my Purchaser Representative(s) in
connection with my proposed purchase of Shares.
List name(s) of Purchaser Representative(s), if applicable.
__________________________________________________________________________
11. Except as indicated below, any purchases of the Shares will be solely for
my account, and not for the account of any other person or with a view to
any resale or distribution thereof.
__________________________________________________________________________
12. I represent to you that the information contained herein is complete and
accurate and may be relied upon by you. I understand that a false
representation may constitute a violation of law, and that any person who
suffers damage as a result of a false representation may have a claim
against me for damages. I will notify you immediately of any material
change in any of such information occurring prior to the closing of the
purchase of Shares, if any, by me.
Name (Please Print):______________________________________________________
Signature_________________________________________________________________
Telephone Number__________________________________________________________
Social Security or Tax I.D. Number________________________________________
Executed at:____________________________________ on this___________ day of
_________________________________, 20________.
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FOR BROKER-DEALER USE ONLY
Name of Broker-Dealer Firm:_______________________________________________
Name of Registered Representative_____________________ RR Number:_________
Address of Firm:__________________________________________________________
Telephone Number:_________________________________________________________
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