Exhibit 10.20
ECOLOGY COATINGS, INC.
SUBSCRIPTION AGREEMENT
(For Accredited Investors)
Gentlemen:
The following information is furnished as the undersigned's subscription
for shares of Common Stock, no par value per share, (the "Common Stock") issued
by ECOLOGY COATINGS, INC. (the "Company"), and for you to determine whether I am
qualified to purchase Shares from the Company pursuant to Regulation D
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
and comparable provisions of applicable state securities laws. I, the
undersigned, understand that you will rely upon the following information for
purposes of such determination, and that the Shares will not be registered under
the Securities Act in reliance upon the exemption from registration provided by
Sections 3(b) and 4(2) of the Securities Act, Regulation D thereunder, and
comparable provisions of applicable state securities laws.
I further understand I may be required to supply a balance sheet, prior
years' federal income tax returns or other appropriate documentation to verify
and substantiate my status as an Accredited Investor.
ALL INFORMATION CONTAINED IN THIS SUBSCRIPTION AGREEMENT WILL BE TREATED
CONFIDENTIALLY. However, it is agreed that you may present this document 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 Securities
Act or meets the requirements of applicable state securities laws. I understand
that if I make a false statement, it will constitute a violation of my
representations and warranties under this Subscription Agreement and may also
constitute a violation of law, for which the Company can make a claim for
damages against me. My investment in the Shares will not be accepted until the
Company determines that I satisfy all of the suitability standards set forth in
the Private Placement Memorandum, as amended and restated as of March 21, 2007
(the "Memorandum"). See "Who May Invest."
I, the undersigned Subscriber, hereby supply you with the following
information and representations:
1. FULL NAME:
________________________________________________________________________________
________________________________________________________________________________
2. XXXXXXXXX XXXXXXX (XXX X X.X. XXX XXXXXXX) AND TELEPHONE NUMBER:
________________________________________________________________________________
________________________________________________________________________________
(__________) __________-_______________
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3. BUSINESS ADDRESS AND TELEPHONE NUMBER:
________________________________________________________________________________
________________________________________________________________________________
(__________) __________-_______________
4. STATE IN WHICH THE UNDERSIGNED MAINTAINS PRINCIPAL RESIDENCE:
________________________________________________________________________________
5. STATE IN WHICH THE UNDERSIGNED IS REGISTERED TO VOTE:
________________________________________________________________________________
6. IF THIS INVESTMENT IS TO BE MADE BY AN ENTITY (I.E. COMPANY, CORPORATION,
PENSION PLAN, PROFIT-SHARING PLAN), THE UNDERSIGNED FURTHER REPRESENTS TO
YOU AS FOLLOWS:
(a) Name and Address of Entity Making Purchase (use full legal name):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(b) Name and address of Person Making Investment Decision on behalf of Above
Entity:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(c) Position or Title of Person Making Investment Decision in the Above
Entity:
________________________________________________________________________________
7A. I CERTIFY THAT I AM AN ACCREDITED INVESTOR BECAUSE I QUALIFY UNDER AT
LEAST ONE OF THE FOLLOWING CATEGORIES:
(PLEASE CHECK APPROPRIATE CATEGORY)
A.[ ] $1,000,000 NET WORTH NATURAL PERSON.
A natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of his or her purchase exceeds $1,000,000.
B.[ ] $200,000 INCOME NATURAL PERSON.
A natural person who had "Individual Income" in excess of $200,000 in each
of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation
of reaching the same income level in the current year. (See definition of
"Individual Income" under the caption "Who May Invest" of the Memorandum).
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C.[ ] COMPANY, CORPORATE OR OTHER ENTITY INVESTORS.
The investor is a partnership, corporation or unincorporated association
and all of the equity owners of that entity qualify as Accredited
Investors under subparagraph (a) or (b) above. Investors that check this
subparagraph (c) must furnish a separate copy of this Subscription
Agreement for each equity owner with items 1 through 7B completed and
executed on the Investor Signature Page by such equity owner.
D.[ ] REVOCABLE OR GRANTOR TRUST.
The Investor is a revocable or grantor trust and each Person with the
power to revoke the trust qualifies as an Accredited Investor under (a) or
(b) above. Investors that check this subparagraph (d) must furnish a
separate copy of this Subscription Agreement for each Person with the
power to revoke the trust with items 1 through 7B completed and executed
on the Investor Signature Page by such Person.
E.[ ] INVESTMENT DECISION BY PLAN FIDUCIARY.
The Investor is an employee benefit plan within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, and the investment
decision is made by a Plan fiduciary, as defined in Section 3(21) of such
Act which is a bank, savings and loan association, insurance company or
registered investment advisor.
F.[ ] SELF-DIRECTED PLAN -- INVESTMENT DECISION SOLELY BY ACCREDITED INVESTOR.
The Investor is a qualified profit sharing or defined contribution Plan,
the Plan provides for segregated accounts for each Plan Participant, the
governing documents of the Plan provide that each participant may direct
the trustee to invest his or her funds in the investment vehicles of his
or her choice and the purchase of the Shares is made pursuant to an
exercise by the Plan Participant, who is an Accredited Investor under
subparagraph (a) or (b) above, of such power to direct the investments of
his or her segregated account. This Subscription Agreement must be
completed and executed by such Plan Participant.
G.[ ] INSTITUTIONAL INVESTOR.
Any organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts, or similar business trust or
partnership, not formed for the specific purposes of acquiring the Shares
offered through the Memorandum, with total assets in excess of $5,000,000.
H.[ ] DIRECTOR, EXECUTIVE OFFICER, OR GENERAL PARTNER OF THE ISSUER.
Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer.
7B. I FURTHER REPRESENT TO YOU AS FOLLOWS:
(i) Employer and Position of Person Making Investment Decision:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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(ii) Prior Employment (five years) of Person Making Investment Decision:
Employer (1) ___________________________________________
(2) ___________________________________________
Nature of (1) ___________________________________________
Duties
(2) ___________________________________________
Dates of (1) ___________________________________________
Employment
(2) ___________________________________________
8. REPRESENTATIONS AND WARRANTIES. I, the undersigned, represent and warrant
as follows:
(a) I have received the Memorandum, have carefully reviewed the Memorandum,
and have relied solely on the information contained therein, and
information otherwise provided to me in writing by the Company. I
understand that all documents, records and books pertaining to this
investment have been made available by the Company for inspection by me or
my attorney, accountant and Purchaser Representative. I am familiar with
the Company's business objectives and the financial arrangements in
connection therewith. The Shares I am purchasing are the kind of
securities that I wish to hold for investment and the nature of the Shares
are consistent with my investment program. My advisor(s) and I have had a
reasonable opportunity to ask questions of and receive answers from the
officers and directors of the Company concerning the Company and the
Shares. All such questions have been answered to my full satisfaction. I,
or my representatives, have made such investigation of the facts and
circumstances set forth in the Memorandum and exhibits thereto in
connection with any purchase of the Shares as I have deemed necessary. No
representations have been made or information furnished to me or my
advisor(s) relating to the Company or the Shares that are in any way
inconsistent with the Memorandum.
(b) Subject to the terms and conditions hereof, I hereby irrevocably tender
this Subscription Agreement for the purchase of the Shares indicated in
Paragraph 12 below and shall pay for such Shares in the manner set forth
in such Paragraph. I am aware that the subscription made herein is
irrevocable, but that the Company has the unconditional right to accept or
reject this subscription, in whole or in part, and that the sale of the
Shares pursuant hereto is subject to the approval of certain legal matters
by legal counsel and to other conditions. If my subscription is not
accepted for any reason whatsoever, or, if the offering made through the
Memorandum is terminated, my money will be returned in full, without any
interest that may be earned thereon, and the Company will be relieved of
any responsibility or liability that might be deemed to arise out of my
offer to subscribe for the Shares.
(c) I and, if applicable, my Purchaser Representative have carefully reviewed
the Memorandum. I have, either alone or together with my Purchaser
Representative, such knowledge and experience in business and financial
matters as will enable me to evaluate the merits and risks of the
prospective investment and to make an informed investment decision. I am
also aware that no state or Federal agency has reviewed or endorsed the
Memorandum or the Shares, that the Shares involve a high degree of
economic risk, and that there may be no public market for the Shares.
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(d) I have been advised and am fully aware that investing in the Shares is a
speculative and uncertain undertaking, the advantages and benefits of
which are generally limited to a certain class of investors, and that the
Shares may be sold only to persons who understand the nature of the
proposed operations of the Company and for whom the investment is
suitable. I represent that I meet such suitability requirements.
(e) I have relied on my own tax and legal adviser and my own investment
counselor with respect to the income tax and investment considerations of
being an investor as described in the Memorandum.
(f) I meet the requirements of a purchaser as set forth in the Memorandum
under the caption "Who May Invest."
(g) I understand that the Company has not registered the Shares under the
Securities Act, or the applicable securities laws of any state in reliance
on exemptions from registration. I further understand that such exemptions
depend upon my investment intent at the time I acquire the Shares. I
therefore represent and warrant that I am purchasing the Shares for my own
account for investment and not with a view to distribution, assignment,
resale or other transfer of the Shares. Except as specifically stated
herein, no other person has a direct or indirect beneficial interest in
the Shares. Because the Shares are not registered, I am aware that I must
hold them indefinitely unless they are registered under the Act and any
applicable state securities laws or I must obtain exemptions from such
registration. I acknowledge that the Company is under no duty to register
the Shares or comply with any exemption in connection with my sale,
transfer or other disposition under applicable rules and regulations,
except as described in the Memorandum. I understand that if I desire to
sell, assign, transfer, hypothecate or in any way alienate or encumber the
Shares in the future, the Company can require that I provide, at my own
expense, an opinion of counsel satisfactory to the Company to the effect
that such action will not result in a violation of applicable federal or
state securities laws and regulations or other applicable federal or state
laws and regulations.
(h) The solicitation of an offer to purchase the Shares was directly
communicated to me and any Purchaser Representative that I might have
through the Memorandum to which this Subscription Agreement is attached as
an Exhibit. At no time was I presented with or solicited by or through any
leaflet, public promotional meeting, circular, newspaper or magazine
article, radio or television advertisement or any other form of general
advertising in connection with such communicated offer.
(i) I recognize that my investment in the Shares involves certain risks and I
(and my Purchaser Representative) have taken full cognizance of and
understand all of the risk factors related to the business objectives of
the Company and the purchase of the Shares, including those risk factors
set forth under the caption "RISK FACTORS" in the Memorandum.
(j) All information that I have provided herein, including, without
limitation, information concerning myself, my financial position and my
knowledge of financial and business matters and that of my Purchaser
Representative, is correct and complete as of the date hereof, and if
there should be any material change in such information prior to the
acceptance of this Subscription Agreement, I will immediately provide the
Company with such information.
(k) If the Subscriber is a corporation, partnership, trust, unincorporated
association or other entity, it is authorized and otherwise duly qualified
to purchase and hold the Shares subscribed hereunder, and such entity has
not been formed for the specific purpose of acquiring the Shares. If the
Subscriber is a trustee and is acquiring the Shares for the trust of which
he is a trustee, he has sought the advice of counsel regarding whether the
purchase of the Shares is an authorized trust investment and has been
advised by counsel that after reviewing the applicable state law and the
terms of the trust instrument, such counsel is of the opinion that the
undersigned has the authority to purchase the Shares for the trust.
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(l) If the Subscriber is an individual, he or she is 21 years of age, or if
the Subscriber is an association, all of its members are of such age.
9. RESTRICTIVE LEGEND. I hereby acknowledge and consent to the placement of
the following restrictive legend on the certificate(s) and other
documents(s) representing the Shares:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL,
SATISFACTORY TO THE BOARD OF DIRECTORS, THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND THAT SUCH TRANSFER WILL NOT RESULT IN ANY
VIOLATION OF THE LAW.
10. INDEMNIFICATION. I agree to indemnify and hold harmless the Company, its
officers and directors from and against all damages, losses, costs and
expenses (including reasonable attorney's fees) which they may incur by
reason of my failure to fulfill any of the terms or conditions of this
Subscription Agreement, or by reason of any untrue statement made herein
or any breach of the representations and warranties made herein or in any
document that I have provided to the Company.
11. MISCELLANEOUS.
(a) I agree that I may not cancel, terminate or revoke this Subscription
Agreement or any covenant hereunder and that this Subscription Agreement
shall survive my death or disability and shall be binding upon my heirs,
executors, administrators, successors and assigns.
(b) This Subscription Agreement shall be enforced, governed and construed in
all respects in accordance with the laws of the State of Arizona.
(c) Within five days after receipt of a written request from the Company, I
agree to provide such information and to execute and deliver such
documents as may reasonably be necessary to comply with any and all laws
and ordinances to which the Company is subject.
12. SUBSCRIPTION.
(a) I hereby subscribe for _________ Shares at $2.00 per Share for a total
subscription of $____________ (minimum of 25,000 Shares for $50,000 unless
the Company permits the purchase of a smaller number of Shares).
(b) I hereby tender to the Company a check made payable to "ECOLOGY COATINGS,
INC." in the amount subscribed above under 12(a) above;
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Signature Date
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13. REGISTRATION AND ADDRESS
Mr./Mrs./Ms.____________________________________________________________________
(Please Print Name(s) in which the Shares are to be registered hereunder.)
________________________________________________________________________________
(Please Print the Social Security or Taxpayer ID Number of each Noteholder)
Communications to be sent to (check one):
Home [ ] Business [ ]
Please check which address you use on your income tax returns:
Home [ ] Business [ ]
FORM OF OWNERSHIP (CHECK ONE)
[ ] (a) Individual Ownership
[ ] (b) Joint tenants with right of survivorship (both or all parties'
signatures required)
[ ] (c) Community Property (one signature required if the Shares are held in
one name; two if held in both names)
[ ] (d) Tenants in Common (all parties' signatures required)
[ ] (e) Company*
[ ] (f) Corporation*
[ ] (g) Partnership*
[ ] (h) Other* (Trust, etc.) (please specify)
* IF (e), (f), (g), or (h) ARE CHECKED, DOCUMENTS, INCLUDING PARTNERSHIP OR
CORPORATE RESOLUTION, AUTHORIZING SUBSCRIBER TO MAKE INVESTMENT MUST
ACCOMPANY SUBSCRIPTION.
MAIL OR DELIVER SUBSCRIPTION FUNDS AND DOCUMENTS TO:
ECOLOGY COATINGS, INC.
00000 Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx, 00000
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SUBSCRIPTION ACCEPTED:
ECOLOGY COATINGS, INC.,
a California corporation
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
Date:
-----------------------------------
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ECOLOGY COATINGS, INC.
PURCHASER REPRESENTATIVE QUESTIONNAIRE
Gentlemen:
The following information is furnished to you so that you may determine whether
the undersigned's client, _______________________________________________ (the
"Purchaser"), together with the undersigned and other purchaser representatives,
if any, have such knowledge and experience in financial and business matters to
be capable of evaluating the merits and risks of an investment in the Shares
being offered by ECOLOGY COATINGS, INC., a California corporation (the
"Company"), as required under Regulation D ("Regulation D") promulgated under
the Securities Act of 1933, as amended (the "Securities Act") and corresponding
provisions of applicable state securities laws. I understand that you will rely
upon the information contained herein for purposes of such determination, and
that the Shares will not be registered under the Securities Act, in reliance
upon the exemption from registration provided by Sections 3(b) and 4(2) of the
Securities Act and Regulation D thereunder and corresponding provisions of
applicable state securities laws.
All information contained herein will be treated confidentially. However, we
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 are exempt from registration under the Securities Act or meets the
requirements of applicable state securities laws.
I am acting as Purchaser Representative for the Purchaser in connection with the
Purchaser's investment in the Shares and, in that connection, I furnish you with
the following representations and information (Please Print):
1. Name: ____________________________________________________________________
2. Age: _____________________________________________________________________
3. Profession (or Business) and Title, if applicable:
__________________________________________________________________________
__________________________________________________________________________
4. (a) Business Address: ____________________________________________________
__________________________________________________________________________
(b) Telephone Number: (_____)_______-_________________________________________
5. Details of any training or experience in financial, business or tax
matters which qualify me to act in the capacity of Purchaser
Representative (include current and prior employment, business or
professional education, professional licenses now held, SEC or state
broker-dealer registrations held, and if applicable, participation in
evaluation of similar investments in the past):
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
6. The undersigned has not, during the past ten (10) years, (a) been
convicted, indicted or investigated in connection with any past or present
criminal proceeding (excluding traffic
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violations and other minor offenses); or (b) been the subject of any
order, judgment or decree of any court of competent jurisdiction
permanently or temporarily enjoining the undersigned from acting as an
investment advisor, underwriter, broker or dealer in securities or as an
affiliated person, director or employee of an investment company, bank,
savings and loan association or insurance company, or from engaging in or
continuing any conduct or practice in connection with any such activity or
in connection with the purchase or sale of any security, or been the
subject of any order of a federal or state authority barring or suspending
for more than sixty days the undersigned's right to be engaged in any such
activity, or to be associated with persons engaged in any such activity,
which order has not been reversed or suspended.
7. I have such knowledge and experience in financial, business and tax
matters as to be capable of evaluating, alone or together with the
Purchaser, the relative merits and risks of an investment in the Shares.
8. There is no material relationship (within the meaning of Regulation D)
between me or my affiliates and the Company, the officers and directors,
or their Affiliates which now exists or is mutually understood to be
contemplated or which has existed as a result of any such relationship.
9. In advising the Investor in connection with Investor's prospective
investment in the Shares, I will be relying in part on the Investor's own
experience in certain areas.
Yes ____ No ____
10. In advising the Investor in connection with the Investor's prospective
investment in the Shares, I will be relying in part on the expertise of an
additional Purchaser Representative or Representatives.
Yes ____ No ____
If "Yes", give the name and address of such additional Representative or
Representatives.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
11. I agree to advise you promptly of any material changes in the foregoing
information, which may occur prior to the termination of the offering.
Signature
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Date
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