Exhibit 10.4
SUBSCRIPTION AGREEMENT
To: Easy-Energy Inc. (the "Corporation" or the "Issuer")
Address: 00 Xx'xxxxxxx Xx., Xxxxxxx 00000 Xxxxxx
The undersigned (the "Subscriber") hereby acknowledges that the Corporation is
proceeding with a private placement of units (each, a "Unit"), with each Unit
consisting of (i) ten common stock shares par value $0.00001of the Corporation
(a "Share") and (ii) thirty warrants to purchase Shares ("Warrant"); each full
Warrant will entitle the holder to purchase one additional Share at a price of
$0.27 per Share if exercised on or before the date that is five (5) years after
the date of the issuance of the Warrant. The Subscriber hereby tenders to the
Corporation this subscription offer which, upon acceptance by the Corporation,
will constitute an agreement of the Subscriber to subscribe for, take up,
purchase and pay for and, on the part of the Corporation, to issue and sell to
the Subscriber the number of Units set out below on the terms and subject to the
conditions set out in this Agreement.
Number of Units: ______________
Total Purchase Price at $1.70 per Unit: $_____________
DATED this 28 day of February, 2008.
___________________________________ ___________________________________
(Name of Subscriber - please print) (Subscriber's Address)
by:________________________________ ___________________________________
(Official Capacity or Title - please print)
___________________________________
(Telephone Number)
___________________________________ ___________________________________
Authorized Signature (Facsimile Number)
___________________________________ ___________________________________
(Please print name of individual
whose signature (E-mail Address)
appears above if different than the
name of the Subscriber printed
above).
If Registration or delivery instructions are different from the address listed
above, please advise the Issuer at the time of subscription.
This subscription is accepted by the Corporation this __ day of February, 2008.
Easy-Energy Inc.
Per:
___________________________________
Authorized Signatory
1. INTERPRETATION
1.1. In this Agreement, unless the context otherwise requires:
"1933 ACT" means the United States SECURITIES ACT OF 1933, as amended;
"ACCREDITED INVESTOR" has the meaning set forth in Appendix I hereto;
"CLOSING" means the day on which the transaction hereof is consummated
pursuant to the terms of Section 5 below;
"COMMISSION" means the United States Securities and Exchange Commission;
"EXEMPTION" means the exemptions from the prospectus requirements of the
1933 Act;
"PARTIES" or "PARTY" means the Subscriber, the Corporation or both, as the
context requires;
"PRIVATE PLACEMENT" means the offering of the Units by the Issuer;
"PRICE PER SHARE" means the price per Share paid by the Subscriber at the
time of the Closing;
"REGULATION S" means Regulation S promulgated under the 1933 Act;
"REGULATORY AUTHORITIES" means the Commission and the securities regulatory
authorities in an international jurisdiction;
"SHARES" means shares of common stock par value $0.00001each of the
Corporation;
"SUBSCRIBER" has the meaning ascribed to it on the cover page;
"SUBSCRIBER'S UNITS" means those Units which the Subscriber has agreed to
purchase under this Agreement;
"SUBSCRIPTION PROCEEDS" means the total gross proceeds from the sale of
Units under the Private Placement;
"UNITED STATES" means the United States of America, its territories and
possessions, any state of the United States and the District of Columbia;
"U.S. PERSON" has the meaning ascribed to it in Regulation S. Without
limiting the foregoing, but for greater clarity in this Agreement, a U.S.
Person includes, subject to the exclusions set forth in Regulation S, (i)
any natural person resident in the United States, (ii) any partnership or
corporation organized or incorporated under the laws of the United States,
(iii) any estate or trust of which any executor, administrator or trustee
is a U.S. Person, (iv) any discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States, and (v)
any partnership or corporation organized or incorporated under the laws of
any non-U.S. jurisdiction which is formed by a U.S. Person principally for
the purpose of investing in securities not registered under the 1933 Act,
unless it is organized or incorporated, and owned, by Accredited Investors
who are not natural persons, estates or trusts.
1.2 This Agreement is to be read with all changes in gender or number as
required by the context.
1.3 The headings in this Agreement are for convenience of reference only and do
not affect the interpretation of this Agreement.
1.4 Unless otherwise indicated, all dollar amounts referred to in this
Agreement are in lawful currency of the United States of America.
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1.5 This Agreement is governed by, subject to and interpreted in accordance
with the laws prevailing in New York. The competent courts in New York, New
York shall have sole and exclusive jurisdiction on and dispute arising out
or in connection with this Agreement.
2. REPRESENTATIONS, WARRANTIES, COVENANTS AND ACKNOWLEDGEMENTS OF THE
SUBSCRIBER
2.1 The Subscriber acknowledges, represents, warrants and covenants to and with
the Corporation that, as at the date given above and at the Closing:
(a) no prospectus has been filed by the Corporation with any of the
Commissions in connection with the issuance of the Units, such
issuance is exempted from the prospectus requirements of the 1933 Act
and that:
(i) the Subscriber is restricted from using most of the civil
remedies available under the 1933 Act;
(ii) the Subscriber may not receive information that would otherwise
be required to be provided to it under the 1933 Act; and
(iii)the Corporation is relieved from certain obligations that would
otherwise apply under the 1933 Act;
(b) the Subscriber certifies that it is resident in the jurisdiction(s)
set out on the first page of this Agreement;
(c) the Subscriber is purchasing the Subscriber's Units as principal for
its own account and not for the benefit of any other person, and is
purchasing the Subscriber's Units for investment only and not with a
view to the resale or distribution of all or any of the Subscriber's
Units;
(d) the Subscriber acknowledges that:
(i) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Units;
(ii) there is no government or other insurance covering the Units;
(iii) there are risks associated with the purchase of the Units;
(iv) there are restrictions on the Subscriber's ability to resell the
Units and it is the responsibility of the Subscriber to find out
what those restrictions are and to comply with them before
selling the Units; and
(v) the Corporation has advised the Subscriber that the Corporation
is relying on an exemption from the rules and regulations
requiring it to provide the Subscriber with a prospectus and to
sell securities through a person registered to sell securities
under the 1933 Act and, as a consequence of acquiring Units
pursuant to an Exemption, certain protections, rights and
remedies provided by the 1933 Act, including statutory rights of
rescission or damages, will not be available to the Subscriber;
(e) the Subscriber is an Accredited Investor, by virtue of the fact that
the Subscriber falls within one or more of the sub-paragraphs of the
definition of Accredited Investor set out in Appendix I, and the
Subscriber has checked the sub-paragraph(s) applicable to the
Subscriber;
(f) no person has made to the Subscriber any written or oral
representations:
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(i) that any person will resell or repurchase any of the Units;
(ii) that any person will refund the purchase price of any of the
Units; or
(iii) as to the future price or value of any of the Units;
(g) the Subscriber will not become a "control person" by virtue of the
purchase of the Subscriber's Shares, and does not intend to act in
concert with any other person to form a control group of the Issuer;
(h) the Subscriber has no knowledge of a "material fact" or "material
change" in the affairs of the Corporation that has not been generally
disclosed to the public, save knowledge disclosed to it in connection
with this particular transaction;
(i) the offer made by this subscription is irrevocable by the Subscriber
and requires acceptance by the Corporation;
(j) the Corporation will have the right to accept this subscription offer
in whole or in part and the acceptance of this subscription offer will
be conditional upon the sale of the Subscriber's Units to the
Subscriber being exempt from the prospectus and registration
requirements under applicable relevant securities legislation;
(k) the Subscriber has the legal capacity and competence to enter into and
execute this Agreement and to take all actions required pursuant
hereto and, if an individual is of full age of majority, and if the
Subscriber is a corporation it is duly incorporated and validly
subsisting under the laws of its jurisdiction of incorporation, and
all necessary approvals by its directors, shareholders and others have
been given to authorize the execution of this Agreement on behalf of
the Subscriber;
(l) the entering into of this Agreement and the transactions contemplated
hereby will not result in the violation of any of the terms and
provisions of any law applicable to, or the incorporation documents
of, the Subscriber or of any agreement, written or oral, to which the
Subscriber may be a party or by which it is or may be bound;
(m) this Agreement has been duly executed and delivered by the Subscriber
and constitutes a legal, valid and binding obligation of the
Subscriber enforceable against the Subscriber;
(n) the Subscriber has been advised to consult its own legal advisors with
respect to the applicable hold periods imposed in respect of the
Shares by applicable securities legislation and regulatory policies
and confirms that no representations by the Corporation have been made
respecting the hold periods applicable to the Units;
(o) the Subscriber is aware of the risks and other characteristics of the
Units and of the fact that the Subscriber may not be able to resell
the Units purchased by it except in accordance with the applicable
securities legislation and regulatory policies and that the Units may
be subject to resale restrictions and may bear a legend to this
effect;
(p) if required by applicable securities legislation, policy or order or
by any securities commission, stock exchange or other regulatory
authority, the Subscriber will execute, deliver, file and otherwise
assist the Corporation in filing, such reports, undertakings and other
documents with respect to the issue of the Corporation as may be
required;
(q) the Subscriber has not purchased the Units as a result of any form of
general solicitation or general advertising, including advertisements,
articles, notices or other communication published in any newspaper,
magazine or similar media or broadcast over radio, television or
internet or any seminar or meeting whose attendees have been invited
by general solicitation or general advertising;
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(r) the Subscriber has such knowledge in financial and business affairs as
to be capable of evaluating the merits and risks of its investment and
is able to bear the economic risk of loss of its investment;
(s) the Subscriber agrees that the Corporation may be required by law or
otherwise to disclose to regulatory authorities the identity of the
Subscriber and, if applicable, the beneficial purchaser for whom the
Subscriber may be acting; and
(t) the Subscriber agrees that the above representations, warranties,
covenants and acknowledgements in this subsection will be true and
correct both as of the execution of this subscription and as of the
day of Closing.
(u) the Subscriber has: (i) reviewed all of the Corporation's filings
under the 1934 Act; and (ii) been given the chance to ask questions of
the Corporation's officers and directors; and (iii) received answers
to all questions asked
2.2 The foregoing representations, warranties, covenants and acknowledgements
are made by the Subscriber with the intent that they be relied upon by the
Corporation in determining its suitability as a purchaser of Shares, and
the Subscriber hereby agrees to indemnify the Corporation against all
losses, claims, costs, expenses and damages or liabilities which any of
them may suffer or incur as a result of reliance thereon. The Subscriber
undertakes to notify the Corporation immediately of any change in any
representation, warranty or other information relating to the Subscriber
set forth herein which takes place prior to the Closing.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CORPORATION
3.1 The Corporation represents, warrants and covenants that, as of the date
given above and at the Closing:
(a) the Corporation is a valid and subsisting corporation incorporated
under the laws of the State of Nevada;
(b) the Corporation is, where required, duly registered and licensed to
carry on business in the jurisdictions in which it carries on business
or owns property where required under the laws of that jurisdiction,
except where in failure to so register will not have a material
adverse effect on the Corporation;
(c) the Corporation has sufficient non-issued shares in its authorized
share capital to issue the Units, including the Shares that are
issuable upon the proper exercise of the Warrants, and upon their
issuance the Shares comprising the Units will be duly and validly
issued as fully paid and non-assessable, and when issued in accordance
with the proper exercise of the Warrants, including the payment , the
Shares issuable thereunder shall be duly and validly issued as fully
paid and non-assessable;
(d) the Corporation has complied and will comply fully with the
requirements of all applicable corporate and securities laws and
administrative policies and directions in relation to the issue of its
securities and in all matters relating to the Private Placement;
(e) the issue and sale of the Units by the Corporation does not and will
not conflict with, and does not and will not result in a breach of,
any of the terms of the Corporation's incorporating documents or any
agreement or instrument to which the Corporation is a party or by
which it is bound;
(f) except as disclosed in the Corporations filings with the Commission,
the Corporation is not a party to any actions, suits or proceedings
which could materially affect its business or financial condition, and
except for the events already disclosed by the Corporation, to the
best of the Corporation's knowledge no such actions, suits or
proceedings are contemplated or have been threatened;
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(g) this Agreement has been or will be by the Closing, duly authorized by
all necessary corporate action on the part of the Corporation, and the
Issuer has or will have by the Closing full corporate power and
authority to undertake the Private Placement; and
(h) no order ceasing or suspending trading in securities of the
Corporation nor prohibiting the sale of such securities has been
issued to and is outstanding against the Corporation or its directors,
officers or promoters or against any other companies that have common
directors, officers or promoters and no investigations or proceedings
for such purposes are pending or threatened.
3.2 The representations and warranties contained in this section will survive
the Closing for a period of one year.
3.3 Upon acceptance of this subscription, the Corporation agrees and undertakes
that it shall file a registration statement within 30 days with the
Commission and ensure that such Registration Statements is declared
effective by the Commission within 100 days thereafter, for the
registration for resale of the Shares comprising the Units and the Shares
that may be issued upon the exercise of the Warrants, and shall keep such
registration statement continuously effective under the Securities Act
until all securities covered by such registration statement have been sold,
or may be sold without volume restrictions pursuant to Rule 144(k) of the
SEC. The date the shares be sold under Rule 144(k) shall be called the
"Release Date".
Notwithstanding anything to the contrary, if: (i) a Registration Statement
is not filed on or prior to 30 days form the date herein, (ii) a Registration
Statement filed or required to be filed hereunder is not declared effective by
the Commission within 100 days, (iii) after its date of effectiveness, a
Registration Statement ceases for any reason to remain continuously effective as
to all securities for which it is required to be effective, or the subscribers
are otherwise not permitted to utilize the Prospectus therein to resell such
Shares for more than 30 consecutive calendar days or more than an aggregate of
90 calendar days during any 12-month period (which need not be consecutive
calendar days) (any such failure or breach being referred to as an "Event", and
for purposes of clause (i) or (ii) the date on which such Event occurs, or for
purposes of (iii) the date on which such 20 or 30 calendar day period, as
applicable, is exceeded being referred to as "Event Date"), then in addition to
any other rights the subscribers may have, on each such Event Date and on each
monthly anniversary of each such Event Date (if the applicable Event shall not
have been cured by such date) until the applicable Event is cured, the
subscribers may require the Corporation to pay to each subscriber an amount in
cash, a penalty, equal to 1.5% of the aggregate purchase price paid by the
Subscriber pursuant to this Subscription Agreement for any Shares then held by
such subscriber until the Release Date. If the Corporation fails to pay any such
penalty in full within seven days after the date of notice thereof, the
Corporation will pay interest thereon at a rate of 18% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the
subscriber, accruing daily from the date such partial liquidated damages are due
until such amounts, plus all such interest thereon, are paid in full. The
penalty pursuant to the terms hereof shall apply on a daily pro-rata basis for
any portion of a month prior to the cure of an Event.
4. WITHDRAWL OF SUBSCRIPTION
4.1 The Subscriber waives the right to withdraw this subscription and to
terminate its obligations hereunder at any time before the Closing.
5. CLOSING
5.1 The Closing will take place on such date or dates to be determined by the
Issuer, and if a Closing does not occur on or before 30 days from the date
herein, the subscription proceeds will be returned to the Subscriber
without interest or deduction.
5.2 Upon execution of this Agreement, the Subscriber will deliver to the
Corporation:
(a) this subscription form, duly executed;
(b) at Closing Subscriber will deliver to the Corporation a certified
check, wire transfer or bank draft for the total price of the
Subscriber's Units made payable to the Corporation; and
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(c) the completed applicable Appendices.
5.3 At Closing, the Corporation will deliver (a) a copy of the Corporation's
board of directors resolution certified by an authorized officer of the
Corporation, approving the issuance of the securities in accordance with
the sale of the Units hereunder; (b) irrevocable instructions to the its
transfer agent to issue as soon as is reasonably practicable to the
subscribers share certificates for the Subscriber's Shares and (c) to the
Subscriber the certificate(s) representing the Warrants registered in the
name of the Subscriber or its nominee.
6. RESALE RESTRICTIONS
The Subscriber understands and acknowledges that the Units will be subject to
resale restrictions under United States securities laws, the terms of which may
be endorsed on the certificates representing the Units, and the Subscriber
agrees to comply with such resale restrictions. The Subscriber also acknowledges
that it has been advised to consult with its own independent legal advisor with
respect to the applicable resale restrictions and the Subscriber is solely
responsible for complying with such restrictions and the Corporation is not
responsible for ensuring compliance by the Subscriber with the applicable resale
restrictions.
7. USE OF PERSONAL INFORMATION
7.1 The Subscriber hereby acknowledges and consents to: (i) the disclosure by
the Subscriber and the Corporation of Personal Information concerning the
Subscriber to a securities commission or other regulatory authority (a
"Securities Commission"), or to a stock exchange and any of its affiliates,
authorized agents, subsidiaries and divisions, (collectively referred to as
"an Exchange"); and (ii) the collection, use and disclosure of Personal
Information by an Exchange for the following purposes (or as otherwise
identified by such Exchange, from time to time):
(a) to conduct background checks;
(b) to verify the Personal Information that has been provided about the
Subscriber;
(c) to consider the suitability of the Subscriber as a holder of
securities of the Corporation;
(d) to consider the eligibility of the Corporation to list on the
Exchange;
(e) to provide disclosure to market participants as the security holdings
of the Corporation's shareholders, and their involvement with any
other reporting issuers, issuers subject to a cease trade order or
bankruptcy, and information respecting penalties, sanctions or
personal bankruptcies, and possible conflicts of interest with the
Issuer;
(f) to detect and prevent fraud;
(g) to conduct enforcement proceedings; and
(h) to perform other investigations as required by and to ensure
compliance with all applicable rules, policies, rulings and
regulations of an Exchange, securities legislation and other legal and
regulatory requirements governing the conduct and protection of the
public markets.
7.2 Herein, "Personal Information" includes any information about the
Subscriber required to be disclosed to a Securities Commission or an
Exchange, whether pursuant to a Securities Commission or Exchange form or a
request made by a Securities Commission or an Exchange.
7.3 The Subscriber acknowledges and consents to: (i) the fact that the
Corporation is collecting his Personal Information for the purpose of
completing this Agreement; (ii) the Issuer retaining such Personal
Information for as long as permitted or required by law or business
practices; (iii) the fact that the Corporation may be required by
securities laws, the rules and policies of any stock exchange to provide
regulatory authorities with any Personal Information provided by the
Subscriber in this Agreement.
8. MISCELLANEOUS
8.1 Subject to Section 8.4 hereof, the Subscriber hereby authorizes the
Corporation to correct any formal errors in, or complete any minor
information missing from this Agreement and any Appendix that has been
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executed by the Subscriber and delivered to the Corporation, but the
Corporation may not correct any errors in substance without the consent of
the subscriber. The Subscriber consents to the filing of such documents and
any other documents as may be required to be filed with any Securities
Commission in connection with the Private Placement.
8.2 This Agreement, which includes any interest granted or right arising under
this Agreement, may not be assigned or transferred.
8.3 Except as expressly provided in this Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Agreement contains the entire agreement between the Parties with respect to
the Units and there are no other terms, conditions, representations or
warranties whether expressed, implied, oral or written, by statute, by
common law, by the Corporation, or by anyone else.
8.4 The Parties may amend this Agreement only in writing.
8.5 This Agreement enures to the benefit of and is binding upon the Parties
and, as the case may be, their respective heirs, executors, administrators
and, successors.
8.6 A Party will give all notices or other written communications to the other
Party concerning this Agreement by hand or by registered mail addressed to
such other Party's respective address which is noted on the cover page of
this Agreement.
8.7 This Agreement may be executed in counterparts, each of which when
delivered will be deemed to be an original and all of which together will
constitute one and the same document and the Corporation will be entitled
to rely on delivery by facsimile machine of an executed copy of this
subscription, and acceptance by the Corporation of such facsimile copy will
be equally effective to create a valid and binding agreement between the
Subscriber and the Issuer as if the Corporation had accepted the
subscription originally executed by the Subscriber.
8.8. Without limiting the generality of the parties' confidentiality obligations
and subject to any duty imposed by any applicable law, it is agreed
immediately subsequent to the Closing the Corporation will announce the
transaction hereof by issuing a press releases and making such other
filings as required by applicable law.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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APPENDIX I
U.S. ACCREDITED INVESTOR QUESTIONNAIRE
The Subscriber understands and agrees that the Units (which for the purposes of
this Questionnaire include the Shares, the Warrants, and the Shares issuable
upon the proper exercise of the Warrants) have not been and will not be
registered under the United States SECURITIES ACT OF 1933, as amended (the "1933
Act"), or applicable state securities laws, and the Units are being offered and
sold by the Issuer to the Subscriber in reliance upon Rule 506 of Regulation D
under the 1933 Act. Terms used but not defined in this Appendix have the
meanings ascribed thereto in the Subscription Agreement of which this Appendix
forms a part.
The Subscriber represents, warrants and covenants (which representations,
warranties and covenants shall survive the Closing) to the Issuer, (and
acknowledges that the Issuer is relying thereon) that:
(a) it has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits, and risks of the investment
and it is able to bear the economic risk of loss of the investment;
(b) it is purchasing the Units for its own account or for the account of
one or more persons (a "Beneficial Purchaser") for investment purposes
only and not with a view to resale or distribution and, in particular,
neither it nor any Beneficial Purchaser for whose account it is
purchasing the Shares has any intention to distribute either directly
or indirectly any of the Units in the United States; provided,
however, that the Units may be offered, sold or otherwise disposed of
pursuant to registration thereof pursuant to the 1933 Act and any
applicable state securities laws or under an exemption from such
registration requirements;
(c) it, and if applicable, each Beneficial Purchaser for whose account it
is purchasing the Units is a U.S. Accredited Investor that satisfies
one or more of the categories of U.S. Accredited Investor indicated
below (THE SUBSCRIBER MUST INITIAL "SUB" FOR THE SUBSCRIBER, AND "BP"
FOR EACH BENEFICIAL PURCHASER, IF ANY, ON THE APPROPRIATE LINE(S)):
____ Category 1. A bank, as defined in Section 3(a)(2) of the 1933 Act,
whether acting in its individual or fiduciary capacity;
____ Category 2. A savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the 1933 Act, whether
acting in its individual or fiduciary capacity;
____ Category 3. A broker or dealer registered pursuant to Section 15 of
the United States Securities Exchange Act of 1934;
____ Category 4. An insurance company as defined in Section 2(13) of the
1933 Act;
____ Category 5. An investment company registered under the United States
Investment Company Act of 1940;
____ Category 6. A business development company as defined in Section
2(a)(48) of the United States Investment Company Act of
1940;
____ Category 7. A small business investment company licensed by the U.S.
Small Business Administration under Section 301 (c) or
(d) of the United States Small Business Investment Act
of 1958;
____ Category 8. 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, with total assets in excess of
U.S. $5,000,000;
____ Category 9. An employee benefit plan within the meaning of the
United States Employee Retirement Income Security Act of
1974 in which the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association,
insurance company or registered investment adviser, or
an employee benefit plan with total assets in excess of
U.S. $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons who are
accredited investors;
____ Category 10. A private business development company as defined in
Section 202(a)(22) of the United States Investment
Advisers Act of 1940;
____ Category 11. An organization described in Section 501(c)(3) of the
United States Internal Revenue Code, a corporation, a
Massachusetts or similar business trust, or a
partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in
excess of U.S. $5,000,000;
____ Category 12. Any director or executive officer of the Issuer;
____ Category 13. A natural person whose individual net worth, or joint
net worth with that person's spouse, at the date hereof
exceeds U.S. $1,000,000;
____ Category 14. A natural person who had an individual income in excess
of U.S. $200,000 in each of the two most recent years or
joint income with that person's spouse in excess of U.S.
$300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the
current year;
____ Category 15. A trust, with total assets in excess of U.S. $5,000,000,
not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii)
under the 1933 Act; or
____ Category 16. Any entity in which all of the equity owners meet the
requirements of at least one of the above categories;
(d) it has not purchased the Units as a result of any form of general
solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or television, or
any seminar or meeting whose attendees have been invited by general
solicitation or general advertising;
(e) it agrees that if it decides to offer, sell or otherwise transfer the
Units, it will not offer, sell or otherwise transfer any of such Units
directly or indirectly, unless:
(i) the transfer is to the Issuer;
(ii) the transfer is made outside the United States in a transaction
meeting the requirements of Rule 904 of Regulation S under the
1933 Act and in compliance with applicable local laws and
regulations;
(iii)the transfer is made in compliance with the exemption from the
registration requirements under the 1933 Act provided by Rule 144
thereunder, if available, and in accordance with applicable state
securities laws; or
(iv) the Units are transferred in a transaction that does not require
registration under the 1933 Act or any applicable state laws and
regulations governing the offer and sale of securities; and
it has prior to such sale furnished to the Issuer an opinion of
counsel or other evidence of exemption, in either case reasonably
satisfactory to the Issuer;
(f) it understands that upon the issuance thereof, and until such time as
the same is no longer required under the applicable requirements of
the 1933 Act or applicable U.S. state laws and regulations, the
certificates representing the Units will bear a legend in
substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").
THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904
OF REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE
WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER,
IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES
NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY
APPLICABLE STATE LAWS, AND THE HOLDER HAS, PRIOR TO
SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF
COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER
CASE REASONABLY SATISFACTORY TO THE COMPANY. DELIVERY
OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK
EXCHANGES IN CANADA. IF THE SECURITIES ARE BEING SOLD
AT ANY TIME THE COMPANY IS A "FOREIGN ISSUER" AS
DEFINED IN RULE 902 UNDER THE 1933 ACT, A NEW
CERTIFICATE, BEARING NO LEGEND, THE DELIVERY OF WHICH
WILL CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM
THE COMPANY'S TRANSFER AGENT UPON DELIVERY OF THIS
CERTIFICATE AND A DULY EXECUTED DECLARATION, IN FORM
SATISFACTORY TO THE COMPANY AND THE COMPANY'S
TRANSFER AGENT TO THE EFFECT THAT THE SALE OF THE
SECURITIES IS BEING MADE IN COMPLIANCE WITH RULE 904
OF REGULATION S UNDER THE 1933 ACT."
provided, that if Units are being sold under clause (B) above, at a
time when the Issuer is a "foreign issuer" as defined in Rule 902
under the 1933 Act, the legend set forth above may be removed by
providing a declaration in such form as the Issuer may from time to
time prescribe to the Issuer's transfer agent, to the effect that the
sale of the securities is being made in compliance with Rule 904 of
Regulation S under the 1933 Act;
(g) if any of the Units are being sold pursuant to Rule 144 of the 1933
Act, the legend may be removed by delivery to the Issuer's transfer
agent of an opinion satisfactory to the Issuer to the effect that the
legend is no longer required under applicable requirements of the 1933
Act or state securities laws;
(h) it has had the opportunity to ask questions of and receive answers
from the Issuer regarding the investment, and has received all the
information regarding the Issuer that it has requested;
(i) it understands that the Issuer or its registrar and transfer agent may
not record any transfer of Units without first being notified that
such transfer is exempt from or not subject to the registration
requirements of the 1933 Act and applicable state securities laws;
(j) it consents to the Issuer making a notation on its records or giving
instruction to the registrar and transfer agent of the Issuer in order
to implement the restrictions on transfer set forth and described
herein;
(k) it understands and acknowledges that the Issuer may not successfully
file with the United States Securities and Exchange Commission or with
any state securities administrator a registration statement in respect
of the resale of the Shares in the United States;
(l) it understands and agrees that there may be material tax consequences
to the Subscriber of an acquisition, disposition or exercise of any of
the Units; the Issuer gives no opinion and makes no representation
with respect to the tax consequences to the Subscriber under United
States, state, local or foreign tax law of the Subscriber's
acquisition or disposition of such Shares; in particular, no
determination has been made whether the Issuer will be a "passive
foreign investment company" ("PFIC") within the meaning of Section
1291 of the United States Internal Revenue Code;
(m) it acknowledges that the representations, warranties and covenants
contained in this Appendix are made by it with the intent that they
may be relied upon by the Issuer in determining its eligibility or the
eligibility of others on whose behalf it is contracting thereunder to
purchase Units. It agrees that by accepting Units it shall be
representing and warranting that the representations and warranties
above are true as at the Closing with the same force and effect as if
they had been made by it at the Closing and that they shall survive
the purchase by it of Units s and shall continue in full force and
effect notwithstanding any subsequent disposition by it of such
securities.
The Subscriber undertakes to notify the Issuer immediately of any change in any
representation, warranty or other information relating to the Subscriber or any
Beneficial Purchaser set forth herein which takes place prior to the Closing.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the
____ day of _______________________ , 20__.
If a Corporation, Partnership If an Individual:
or Other Entity:
__________________________________ __________________________________
Name of Entity Signature
__________________________________ __________________________________
Type of Entity Print or Type Name
__________________________________
Signature of Person Signing
__________________________________
Print or Type Name and Title of
Person Signing
