ENCORE BRANDS, INC. SUBSCRIPTION AGREEMENT
The
undersigned (hereinafter “Subscriber”) hereby confirms its subscription for the
purchase of shares of Common Stock, par value $.001 per share, of Encore Brands,
Inc. (“Common Stock”), a Nevada corporation (the “Company”) on the terms
described below.
1. Subscription
Procedure
1.1 Subject
to the terms and conditions hereinafter set forth, the Subscriber hereby
subscribes for and agrees to purchase from the Company such number of Shares as
is set forth upon the signature page hereof at a price of $0.45 per Share (the
“Purchase Price”). The Company agrees to sell such Shares to the Subscriber for
the Purchase Price.
1.2 The
Purchase Price shall be paid over to the Company at the closing of the purchase
of the Shares in the Offering (the “Closing”) to occur on the Closing
Date.
1.3 The
certificates for the Common Stock bearing the name of the Subscriber will be
delivered by the Company no later than fifteen (15) days following the Closing
Date. The Subscriber hereby authorizes and directs the Company to deliver the
securities to be issued to such Subscriber pursuant to this Subscription
Agreement to the residential or business address indicated in the Investor
Questionnaire attached hereto as Exhibit A (the
“Investor Questionnaire”).
The
Purchase Price for the Shares purchased hereunder shall be paid only by (i) certified
check or (ii) by wire transfer to Encore Brands, Inc. as directed by the
Company.
2. Representations and
Covenants of Subscriber
2.1 The
Subscriber recognizes that the purchase of Shares involves a high degree of risk
in that (i) the Company will need additional capital but has no assurance of
obtaining such additional necessary capital; (ii) an investment in the Company
is highly speculative and only investors who can afford the loss of their entire
investment should consider investing in the Company and the Shares; (iii) an
investor may not be able to liquidate his investment; (iv) transferability of
the Shares is extremely limited; and (v) an investor could sustain the loss of
his entire investment.
2.2 The
Subscriber represents that he is an “accredited investor” as such term is
defined in Rule 501 of Regulation D promulgated under the Act, as indicated by
his responses to the Investor Questionnaire, and that he or it is able to bear
the economic risk of an investment in the Shares. The Subscriber must complete
the Investor Questionnaire to enable the Company to assess the Subscriber’s
eligibility for the Offering.
2.3 The
Subscriber acknowledges that he has prior investment experience, including
investment in non-listed and non-registered securities, or he has employed the
services of an investment advisor, attorney or accountant to read all of the
documents furnished or made available by the Company both to him and to all
other prospective investors in the Shares and to evaluate the merits and risks
of such an investment on his behalf, and that he recognizes the highly
speculative nature of this investment.
2.4 The
Subscriber hereby represents that he has been furnished or given access by the
Company during the course of this Offering with or to all information regarding
the Company and its respective financial conditions and results of operations
which he had requested or desired to know; that all documents which could be
reasonably provided have been made available for his inspection and review; that
he has been afforded the opportunity to ask questions of and receive answers
from duly authorized representatives of the Company concerning the terms and
conditions of the Offering, and any additional information which he had
requested.
2.5 The
Subscriber acknowledges that this Offering of Shares may involve tax
consequences. The Subscriber acknowledges that he must retain his own
professional advisors to evaluate the tax and other consequences of an
investment in the Shares.
2.6 The
Subscriber acknowledges that this Offering of Shares has not been reviewed or
approved by the United States Securities and Exchange Commission (“SEC”) because
the Offering is intended to be a nonpublic offering pursuant to Section 4(2) of
the Act. The Subscriber represents that the Shares are being purchased for his
own account, for investment and not for distribution or resale to others. The
Subscriber agrees that he will not sell or otherwise transfer the Shares unless
it is registered under the Act or unless an exemption from such registration is
available and, upon the Company’s request, the Company receives an opinion of
counsel reasonably satisfactory to the Company confirming that an exemption from
such registration is available for such sale or transfer.
2.7 The
Subscriber understands that the Shares have not been registered under the Act by
reason of a claimed exemption under the provisions of the Act which depends, in
part, upon his investment intention. The Subscriber realizes that, in the view
of the SEC, a purchase now with an intent to distribute would represent a
purchase with an intent inconsistent with his representation to the Company, and
the SEC might regard such a distribution as a deferred sale to which such
exemption is not available.
2.8 The
Subscriber consents to the placement of one or more legends on any certificate
or other document evidencing his Shares stating that it has not been registered
under the Act and setting forth or referring to the restrictions on
transferability and sale thereof.
2.9 The
Subscriber hereby represents that no representations or warranties have been
made to the Subscriber by the Company or its agents, employees or affiliates and
in entering into this transaction, the Subscriber is not relying on any
information, other than the results of independent investigation by the
Subscriber.
2.10 The
Subscriber understands and acknowledges that (i) the Shares are being
offered and sold to Subscriber without registration under the Act in a private
placement that is exempt from the registration provisions of the Act under
Section 4(2) of the Act and (ii) the availability of such exemption depends
in part on, and that the Company will rely upon the accuracy and truthfulness
of, the foregoing representations, and such Subscriber hereby consents to such
reliance.
2.11 The
Subscriber has all requisite legal and other power and authority to execute and
deliver this Subscription Agreement and to carry out and perform Subscriber’s
obligations under the terms of this Subscription Agreement. This
Subscription Agreement constitutes a valid and legally binding obligation of
Subscriber, enforceable in accordance with its terms, and subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
general principals of equity, whether such enforcement is considered in a
proceeding in equity or law.
2
2.12 There
are no actions, suits, proceedings or investigations pending against Subscriber
or Subscriber’s properties before any court or governmental agency (nor, to
Subscriber’s knowledge, is there any threat thereof) which would impair in any
way Subscriber’s ability to enter into and fully perform Subscriber’s
commitments and obligations under this Subscription Agreement or the
transactions contemplated hereby.
2.13 The
execution, delivery and performance of and compliance with this Subscription
Agreement and the issuance of the Securities will not result in any material
violation of, or conflict with, or constitute a material default under, any of
Subscriber’s articles of incorporation or bylaws, if applicable, or any of
Subscriber’s material agreements nor result in the creation of any mortgage,
pledge, lien, encumbrance or charge against any of the assets or properties of
Subscriber.
3. Representations and
Warranties by the Company
3.1 Organization and
Authority. The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, (ii) has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as
presently conducted, and (iii) has all requisite corporate power and authority
to execute, deliver and perform their obligations under this Subscription
Agreement and any other document being executed and delivered by it in
connection herewith, and to consummate the transactions contemplated hereby and
thereby.
3.2 Qualifications. The
Company is duly qualified to do business as a foreign corporation or other
entity and is in good standing in all jurisdictions where such qualification is
necessary and where failure so to qualify could have a material adverse effect
on the business, properties, operations, condition (financial or other), results
of operations or prospects of the Company, taken as a whole.
3.3 Corporate
Authorization. This Subscription Agreement, assuming due execution and
delivery by the Subscriber, when executed and delivered by the Company, will be,
a valid and binding obligation of the Company enforceable in accordance with its
terms, except as the enforceability hereof and thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors’ rights generally and
general principles of equity, regardless of whether enforcement is considered in
a proceeding in equity or at law.
3.4 Non-Contravention. The
execution and delivery of this Subscription Agreement by the Company and the
issuance of the Shares do not and will not, with or without the giving of notice
or the lapse of time, or both, (i) result in any violation of any provision of
the articles of incorporation or by-laws or similar instruments of the Company
or its subsidiaries, (ii) conflict with or result in a breach by the Company or
its respective subsidiaries of any of the terms or provisions of, or constitute
a default under, or result in the modification of, or result in the creation or
imposition of any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company, or (iii) violate or contravene any
applicable law, rule or regulation or any applicable decree, judgment or order
of any court, United States federal or state regulatory body, administrative
agency or other governmental body having jurisdiction over the
Company.
3
3.5 Information
Provided. The Company hereby represents and warrants to the
Subscriber that any information provided by or on behalf of the Company to the
Subscriber in connection with the transactions contemplated by this Subscription
Agreement, does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not
misleading.
4. Miscellaneous
4.1 Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at:
00000
Xxxxxxxxxx
Xxxxxxx
Xxxxx, XX 00000
Attention:
Chief Executive Officer
and to
the Subscriber at his address indicated on the signature page of this
Subscription Agreement.
Notices
shall be deemed to have been given three (3) business days after the date of
mailing, except notices of change of address, which shall be deemed to have been
given when received.
4.2 This
Subscription Agreement may be amended only through a written instrument signed
by the Subscriber and the Company.
4.3 This
Subscription Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns. This Subscription Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of any and every
nature among them.
4.4 Notwithstanding
the place where this Subscription Agreement may be executed by any of the
parties hereto, the parties expressly agree that all the terms and provisions
hereof shall be construed in accordance with and governed by the laws of the
State of California.
4.5 This
Subscription Agreement may be executed in counterparts. Upon the
execution and delivery of this Subscription Agreement by the Subscriber, this
Subscription Agreement shall become a binding obligation of the Subscriber with
respect to the purchase of Shares as herein provided; subject, however, to the
right hereby reserved to the Company to enter into the same agreements with
other subscribers and to add or to delete other persons as
subscribers.
4.6 The
holding of any provision of this Subscription Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Subscription Agreement, which shall remain in full force and
effect.
4
4.7 It
is agreed that a waiver by either party of a breach of any provision of this
Subscription Agreement shall not operate, or be construed, as a waiver of any
subsequent breach by that same party.
4.8 The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Subscription
Agreement.
4.9 The
Company agrees not to disclose the names, addresses or any other information
about the Subscribers.
[SIGNATURE
PAGE FOLLOWS]
5
Signature
Page for Individuals:
IN
WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the
day and year first written above.
______________________________ ____________________________________
Signature
of
Subscriber
Signature of Co-Subscriber
______________________________ ____________________________________
Name of
Subscriber Name of
Co-Subscriber
[please
print] [please print]
______________________________ ____________________________________
Xxxxxx
Xxxxxxx xx
Xxxxxxxxxx Xxxxxx Xxxxxxx of
Co-Subscriber
______________________________ ____________________________________
City,
State and Zip Code of
Subscriber
City, State and Zip Code of Co-Subscriber
______________________________ ____________________________________
Email
address of
Subscriber Email address of
Co-Subscriber
______________________________ ____________________________________
Social
Security or
Taxpayer Social Security or
Taxpayer Identification
Identification
Number of
Subscriber
Number of Co-Subscriber
______________________________
Number of
Shares of Common Stock
Subscribed
For
Subscription
Agreed to and Accepted by
By:___________________________
Xxx
Xxxx
Chief
Executive Officer
Date: _________________________
6
Signature
Page for Partnerships, Corporations or Other Entities:
IN
WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the
day and year first written above.
______________________________
Name of
subscribing Entity
By:
___________________________
Authorized
Signatory
Print
Name: ________________
Title: ______________________
______________________________
Street
Address of Entity
______________________________
City,
State and Zip Code of Entity
______________________________
Email
address of Contact at Entity
______________________________
Taxpayer
Identification Number of Entity
______________________________
Number of
Shares of Common Stock
Subscribed
For
Subscription
Agreed to and Accepted by
By:___________________________
Xxx
Xxxx
Chief
Executive Officer
Date: _________________________
All
subscriptions from partnerships, corporations, trusts or limited liability
companies must be accompanied by resolutions of the appropriate corporate
authority (board of directors, trustee or managing partner or members, as
applicable) and trust documents evidencing the authorization and power to make
the subscription.
7
Exhibit
A
Investor
Questionnaire
Investor
Name: ________________________________________
IMPORTANT:
Please
Complete
INVESTOR
QUESTIONNAIRE
_________________________
__________________________
00000
Xxxxxxxxxx
Xxxxxxx
Xxxxx, XX 00000
The
information furnished by you in this Investor Questionnaire (this
“Questionnaire”) is being furnished in order to determine whether your
subscription to purchase shares of common stock of Encore Brands, Inc., a Nevada
corporation (the “Company”), par value $0.001 per share (the “Shares”), at a
purchase price of $[-] Share may proceed.
One (1)
copy of this Questionnaire should be completed, signed, dated and delivered to
the Company, at 00000 Xxxxxxxxxx, Xxxxxxx Xxxxx, XX 00000. Please contact Xx.
Xxxx at (000) 000-0000 if you have any questions with respect to this
Questionnaire.
ALL
INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned understands, however, that the
Company may present this Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares meets
the requirements of applicable state securities or “blue sky” laws.
IF YOU
ARE PURCHASING SHARES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE SIGNATURE PAGE
(PAGE A-8).
IF YOU
ARE PURCHASING SHARES WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU MUST EACH FILL
OUT A SEPARATE QUESTIONNAIRE. Please make a photocopy of pages A-1
through A-9 and return the completed Questionnaires with the
agreement.
A-1
I. PLEASE
INDICATE DESIRED TYPE OF OWNERSHIP OF COMMON STOCK:
o Individual
o Joint
Tenants (rights of survivorship)
|
|
o
|
Tenants
in Common (no rights of
survivorship)
|
|
|
o
|
Corporation,
Partnership, Limited Liability Company, Trust or Other
Entity
|
II. STATUS
AS AN ACCREDITED INVESTOR
The
undersigned is an “accredited investor” as such term is defined in Regulation D
under the 1933 Act because at the time of the sale of the Shares the undersigned
falls within one or more of the following categories (Please check any of the
statements below that apply):
|
|
o
|
1.
|
a
natural person whose individual net worth* or joint net worth with that
person’s spouse, at the time of such person’s purchase of the Shares,
exceeds $1,000,000.
|
|
|
o
|
2.
|
a
natural person who had an individual income* in
excess of $200,000 in each of the previous two years and reasonably
expects an individual income in excess of $200,000 this
year. NOTE: IF YOU ARE BUYING JOINTLY WITH YOUR
SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN EXCESS OF $200,000 IN
EACH OF THESE YEARS IN ORDER TO CHECK THIS
BOX.
|
|
|
o
|
3.
|
a
natural person who had, with such person’s spouse, a joint income* in
excess of $300,000 in each of the previous two years and reasonably
expects a joint income in excess of $300,000 this
year.
|
|
|
o
|
4.
|
a
director and/or an executive officer of the Company as such terms are
defined in Regulation D promulgated under the 1933
Act.
|
|
|
*
|
For
purposes of this Questionnaire, the term “net worth” means the excess of
total assets over total liabilities. In determining income, an
investor should add to his or her adjusted gross income any amounts
attributable to tax-exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depletion,
contributions to XXX or Xxxxx retirement plans, alimony payments and any
amount by which income from long-term capital gains has been reduced in
arriving at adjusted gross income.
|
A-2
|
|
o
|
5.
|
a
bank as defined in Section 3(a)(2) of the 1933 Act, or 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; a broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act
of 1934; an insurance company as defined in Section 2(13) of the 1933 Act;
an investment company registered under the Investment Company Act of 1940
or a business development company as defined in Section 2(a)(48) of that
act; a 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 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 such plan has
total assets in excess of $5,000,000; an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 if 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 if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with the investment decisions made solely by persons
that are “accredited investors” as such term is defined in Regulation D
under the 0000 Xxx.
|
|
|
o
|
6.
|
a
private business development company as defined in Section 202(a)(22) of
the Investment Advisors Act of
1940.
|
|
|
o
|
7.
|
an
organization described in Section 501(c)(3) of the Internal Revenue Code
of 1986, a corporation, a Massachusetts or similar business trust, or a
partnership, not formed for the specific purpose of acquiring the Shares
offered, with total assets in excess of
$5,000,000.
|
|
|
o
|
8.
|
a
trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D under the 1933 Act.
|
|
|
o
|
9.
|
an
entity in which all of the equity owners are “accredited investors” as
such term is defined in Regulation D under the 1933
Act.
|
|
III.
|
OTHER
CERTIFICATIONS
|
By
signing the Signature Page, the undersigned certifies the following (or, if the
undersigned is purchasing Shares with such person’s spouse as co-owner, each
such person certifies the following):
A-3
(a) that,
if an individual, I am at least 21 years of age;
|
|
(b)
|
that
my purchase of Shares will be solely for my own account and not for the
account of any other person (other than my spouse, if co-owner), and is
not made with a view to or for sale in connection with any distribution of
the Shares;
|
|
|
(c)
|
that
the name, address and social security number or taxpayer identification
number as set forth in this Questionnaire are true, correct and
complete;
|
|
|
(d)
|
that
I have a preexisting personal or business relationship with the Company or
any of its partners, officers, directors or controlling persons, or by
reason of my business or financial experience or the business or financial
experience of my professional advisers who are unaffiliated with and who
are not compensated by the Company or any affiliate or selling agent of
the Company, directly or indirectly, could be reasonably assumed to have
the capacity to protect my own interests in connection with the
transaction;
|
|
|
(e)
|
the
Shares were neither offered nor sold to me through the publication of any
advertisement; and
|
|
|
(f)
|
that
one of the following is true and correct (check
one):
|
|
Owner
|
Spouse
(if applicable)
|
|
|
o
|
o(i)
|
I
am a United States citizen or resident of the United States for United
States federal income tax purposes.
|
|
|
o
|
o(ii)
|
I
am neither a United States citizen nor a resident of the United States for
United States federal income tax
purposes.
|
|
IV.
|
GENERAL
INFORMATION
|
If you
are an entity investor, please complete section (a) below. If you are
an individual investor, please complete section (b), and section (c) if
applicable, below.
|
|
(a)
|
ENTITY
OWNER INFORMATION
|
Name:
________________________________________________________________________
Type of
Entity:
____________________________________
State of
Formation: ______________________ Date
of Formation: ___________________
Tax I.D.
Number: ____________________________________
A-4
Business
Address: ____________________________________________________________
(Number
and Street)
_____________________________________________________________________________
(City) (State)
(Zip Code)
Business
Telephone
Number: ________________________________________________
(Area
Code) (Number)
Business
Facsimile
Number: ________________________________________________
(Area
Code) (Number)
NASD
Affiliation or Association, if
any: __________________________________________
If none,
check here o
|
|
(b)
|
INDIVIDUAL
OWNER INFORMATION
|
Name: ________________________________________________________________________
Social
Security
Number: ____________________________________
Residence
Address: ____________________________________________________________
(Number
and Street)
______________________________________________________________________________
(City) (State)
(Zip Code)
Residence
Telephone
Number: ________________________________________________
(Area
Code) (Number)
Residence
Facsimile
Number: ________________________________________________
(Area
Code) (Number)
Name of
Business: ____________________________________________________
Business
Address: ____________________________________________________________
(Number
and Street)
_____________________________________________________________________________
(City) (State) (Zip
Code)
Business
Telephone
Number: ________________________________________________
(Area
Code) (Number)
Business
Facsimile
Number: ________________________________________________
(Area
Code) (Number)
A-5
I prefer
to have correspondence sent
to: o Residence o Business
NASD
Affiliation or Association, if
any: __________________________________________
If none,
check here o
|
|
(c)
|
SPOUSE
- CO-OWNER INFORMATION
|
Name: ________________________________________________________________________
Social
Security
Number: ____________________________________
Residence
Address: ____________________________________________________________
(Number
and Street)
______________________________________________________________________________
(City) (State)
(Zip Code)
Residence
Telephone
Number: ________________________________________________
(Area
Code) (Number)
Residence
Facsimile
Number: ________________________________________________
(Area
Code) (Number)
Name of
Business: ____________________________________________________
Business
Address: ____________________________________________________________
(Number
and Street)
_____________________________________________________________________________
(City) (State)
(Zip Code)
Business
Telephone
Number: ________________________________________________
(Area
Code) (Number)
Business
Facsimile
Number: ________________________________________________
(Area
Code) (Number)
I prefer
to have correspondence sent
to: o Residence o Business
NASD
Affiliation or Association, if
any: __________________________________________
If none,
check here o
A-6
|
V.
|
SIGNATURE
|
The
Signature Page to this Questionnaire is contained on either page A-8 (entitled
Individual Signature Page), or page A-9 (entitled Entity Signature
Page).
A-7
INDIVIDUAL
SIGNATURE PAGE
______________________________
______________________________
The undersigned represents that (a) the
information contained in this Questionnaire is complete and accurate, and (b)
he/she will notify the Company in writing immediately if any material change in
any of this information occurs before the acceptance of his/her subscription and
will promptly send Xx. Xxxx confirmation of such change.
______________________________
Date
______________________________
Name (Please Type or
Print)
______________________________
Signature
_______________________________
Name of Spouse if
Co-owner
(Please Type or Print)
_______________________________
Signature of Spouse if
Co-owner
IF YOU
ARE PURCHASING SHARES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THIS SIGNATURE PAGE
(PAGE A-8).
IF YOU
ARE PURCHASING SHARES WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU MUST EACH FILL
OUT A SEPARATE QUESTIONNAIRE. Please make a photocopy of pages A-1 to
A-9 and return the completed Questionnaires to the Company.
A-8
ENTITY
SIGNATURE PAGE
______________________________
ENCORE
BRANDS, INC.
______________________________
The undersigned corporation,
partnership, limited liability company, trust or other entity (“Entity”)
represents that (a) the information contained in this Questionnaire is complete
and accurate, and (b) its authorized representative will notify the Company in
writing immediately if any material change in any of this information occurs
before the acceptance of its subscription.
______________________________
Date
______________________________
Name (Please Type or
Print)
|
|
______________________________
Name of
Signatory (Please Type or Print)
|
|
|
______________________________
Title of Signatory
(Please Type or Print)
|
______________________________
Signature
All
subscriptions from partnerships, corporations, trusts or limited liability
companies must be accompanied by resolutions of the appropriate corporate
authority (board of directors, trustee or managing partner or members, as
applicable) and trust documents evidencing the authorization and power to make
the subscription.
A-9
