LETTER OF AGREEMENT
This LETTER OF AGREEMENT ("Letter of Agreement") made effective as of November
28, 2006 ("Effective Date"), by and among ENERGTEK INC., a Nevada corporation
(the "Purchaser") and XXXXX LLC, a New York Corporation (the "Seller").
WHEREAS, the Seller is the assigned owner of the patent application Tank for
Simultaneous Storage of Both Pressure Gas and Liquid Fuel ("the Patent") filed
at the Patent Registrar of the State of Israel; and
WHEREAS, the Purchaser desires to purchase the rights on the Patent ("the Patent
Rights") subject to the terms and conditions set forth hereinbelow; and
WHEREAS, the Seller has agreed to sell the Patent Rights to the Purchaser,
subject to the terms and conditions set forth hereinbelow.
NOW THEREFORE, in consideration of the premises, mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration, the parties
agree as follows:
1. Patent
1.1. The Seller hereby accepts to sell the Patent Rights to the Purchaser
in exchange for 2,000,000 Common Shares par value $0.001 of the
Purchaser, representing a nominal value of $100,000 as per the last
fund-raising of the Purchaser that took place at $0.05 per share.
1.2. The Seller hereby grants to the Purchaser a period until December
31, 2006 (the "Closing Date") to perform its review of the Patent.
The Seller hereby commits to provide all the required information to
patent attorneys nominated by the Purchaser to perform the review.
The Patent Attorneys will provide all the reasonable and usual
commitments regarding full confidentiality before being provided
with the information.
1.3. Should the Purchaser not provide until the Closing Date a
notification that it is not interested in purchasing the Patent
Rights the agreement will be effective and the Purchaser and the
Seller will have the obligation to provide within a reasonable short
time all the documents as described hereinafter
2. Representations and Warranties of the Seller.
The Seller represents and warrants to the Purchaser as follows:
2.1. This Letter of Agreement has been duly authorized and executed by
the Seller and is a valid and binding obligation of the Seller
enforceable in accordance with its terms.
2.2. The Patent Rights shall be free of any third party rights, liens or
any other restrictions.
2.3. The execution and delivery of this Letter of Agreement are not
inconsistent with the Seller's Articles of Association, do not and
will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Seller, and, except for consents
that have already been obtained by the Seller, do not and will not
conflict with or contravene any provision of, or constitute a
default under, any indenture, mortgage, contract or other instrument
of which the Seller is a party or by which it is bound or require
the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by,
any federal, state or local government authority or agency or other
person.
2.4. Appendix A - Seller Representations and Undertakings contains
additional representations of the Seller.
3. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Seller as follows:
3.1. This Letter of Agreement has been duly authorized and executed by
the Purchaser and is a valid and binding obligation of the Purchaser
enforceable in accordance with its terms.
3.2. Upon issuance thereof, the common shares shall be duly authorized,
validly issued, fully paid, nonassessable, and free of any
pre-emptive and any other third party rights, and will have all the
rights, preferences, privileges, and restrictions set forth in the
Purchaser's Articles of Incorporation and any other restrictions
under relevant securities laws and regulations.
3.3. The execution and delivery of this Letter of Agreement are not
inconsistent with the Purchaser's Articles of Association, do not
and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Purchaser, and, except for
consents that have already been obtained by the Purchaser, do not
and will not conflict with or contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or
other instrument of which the Purchaser is a party or by which it is
bound or require the consent or approval of, the giving of notice
to, the registration with or the taking of any action in respect of
or by, any federal, state or local government authority or agency or
other person.
4. Undertakings of the Seller
4.1. Upon being this Letter of Agreement effective the Seller shall
deliver to the Purchaser the following documents:
4.1.1. Assignment of the Patent Rights
4.1.2. Power of attorney from the inventors and the Seller for any
further dealing with the Patent Rights
4.2. The Seller undertakes not to negotiate until the Closing Date with
any third party regarding the Patent Rights
4.3. Appendix A - Seller Representations and Undertakings contains
additional undertakings of the Seller.
4.4. The Xxxxxx undertakes to provide a full Investor questionnaire.
5. Undertakings of the Purchaser
5.1. Upon being this Letter of Agreement effective and receiving from the
Seller the allocation list, the Purchaser shall deliver to the
Seller the following documents:
5.1.1. Share certificates according to the instructions as per
Section Error! Reference source not found.
6. Other Provisions
6.1. Except as required under any applicable law and any securities laws
and regulations, and except as required for the performance of this
Letter of Agreement, neither party shall disclose or reveal to any
other person or entity any information relating to the Patent, the
transaction contemplated hereunder, or the negotiations between the
parties.
6.2. Notwithstanding Section 6.1, the Seller acknowledges that the
Purchaser may need to publish facts related to this agreement in the
reports it is obliged to deliver under SEC requirements.
7. Miscellaneous
7.1. The provisions of this Letter of Agreement shall be subject to all
applicable laws, rules and regulations of the State of New York and
to such approvals by any governmental agencies or national
securities exchanges as may be required. Disputes arising hereunder
or in connection herewith shall be subject to the exclusive
jurisdiction of the applicable courts in New York.
7.2. This Letter of Agreement may not be assigned or transferred by the
Purchaser in any manner without the prior written consent of the
Seller.
7.3. All notices and other communications required or permitted hereunder
shall be in writing and shall be deemed effectively given upon
delivery to the party to be notified in person, by facsimile (upon
confirmation of successful transmission) or by courier service or
four days after deposit by registered or certified mail, postage
prepaid, addressed as follows:
If to the Seller: 000X 00Xx. Xxxxx 0X
Xxx Xxxx, XX 00000
Fax: +1 - (212) - 000-0000
If to Purchaser: 00 X. Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
c/x Xxxxx & Associates
Fax: x0 (000) 000-0000
7.4. Any tax consequences applicable to a party hereto arising from this
Letter of Agreement shall be borne solely by such party.
7.5. This Letter of Agreement constitutes the entire agreement between
the Seller and the Purchaser with respect to the Patent Rights, and
supersedes and replaces all prior agreements, understandings and
arrangements, oral or written, the parties with respect to the
subject matter hereof. Any term of this Letter of Agreement may be
amended and the observance of any term of this Letter of Agreement
may be waived (either generally or in a particular instance and
either retroactively or prospectively) with the written consent of
the Seller and the Purchaser.
IN WITNESS WHEREOF the parties have executed this Letter of Agreement made
effective as of the effective Date indicated in the preamble hereto.
-------------------------- ------------------------
XXXXX LLC ENERGTEK INC.
By: /s/ X. Xxxxx By: /s/ Xxxxx Xxxxx
Title: Title:
-------------------------- ------------------------
APPENDIX A
SELLER REPRESENTATIONS AND UNDERTAKINGS.
Section 1. Shares. The undersigned is hereby receiving shares as stated in
Clause 1 of the Payment Agreement (the "Shares") of the common stock (the
"Common Stock") of Energtek Inc., a Nevada corporation (the "Corporation") in a
transaction exempt from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act"). The Shares are being issued in
consideration for legal services provided by the undersigned to the Corporation.
Section 2. Representations and Warranties of the Undersigned.
The undersigned hereby acknowledges, represents and warrants to, and
agrees with, the Corporation and its affiliates as follows:
(a) The undersigned is acquiring the Shares for his own account as
principal, not as a nominee or agent, for investment purposes only, and not with
a view to, or for, resale, distribution or fractionalization thereof in whole or
in part and no other person has a direct or indirect beneficial interest in such
Shares or any portion thereof. Further, the undersigned does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to the Shares for which the undersigned is subscribing or any part of
the Shares.
(b) The undersigned has full power and authority to enter into this
Agreement, the execution and delivery of this Agreement has been duly
authorized, if applicable, and this Agreement constitutes a valid and legally
binding obligation of the undersigned.
(c) The undersigned is not subscribing for the Shares as a result of or
subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, or presented at any seminar or meeting, or any solicitation
of a subscription by person previously not known to the undersigned in
connection with investment Shares generally.
(d) The undersigned understands that the Corporation is under no
obligation to register the Shares under the Securities Act, or to assist the
undersigned in complying with the Securities Act or the securities laws of any
state of the United States or of any foreign jurisdiction.
(e) The undersigned is (i) experienced in making investments of the kind
described in this Agreement and the related documents, (ii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Corporation or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iii) able to afford the entire loss of its
investment in the Shares. The undersigned further understands that the
Corporation currently has no business or operations and although it is
contemplating entering the field of clean energy technologies, the Corporation
currently has no agreements or arrangements with any persons in connection
therewith.
(f) The undersigned acknowledges his understanding that the offering and
sale of the Shares is intended to be exempt from registration under the
Securities Act. In furtherance thereof, in addition to the other representations
and warranties of the undersigned made herein, the undersigned further
represents and warrants to and agrees with the Corporation and its affiliates as
follows:
(i) The undersigned realizes that the basis for the exemption may not be
present if, notwithstanding such representations, the undersigned
has in mind merely acquiring the Shares for a fixed or determinable
period in the future, or for a market rise, or for sale if the
market does not rise. The undersigned does not have any such
intention;
(ii) The undersigned has the financial ability to bear the economic risk
of his investment, has adequate means for providing for his current
needs and personal contingencies and has no need for liquidity with
respect to his investment in the Corporation;
(iii) The undersigned has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of the prospective investment in the Shares. The undersigned also
represents it has not been organized for the purpose of acquiring
the Shares;
(iv) The undersigned has been provided an opportunity for a reasonable
period of time prior to the date hereof to obtain additional
information concerning the offering of the Shares, the Corporation
and all other information to the extent the Corporation possesses
such information or can acquire it without unreasonable effort or
expense; and
(v) The undersigned has carefully reviewed all of the Corporation's
filings under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(g) The undersigned is not relying on the Corporation, or its affiliates
or agents with respect to economic considerations involved in this investment.
The undersigned has relied solely on its own advisors.
(h) No representations or warranties have been made to the undersigned by
the Corporation, or any officer, employee, agent, affiliate or subsidiary of the
Corporation, other than the representations of the Corporation contained herein,
and in subscribing for Shares the undersigned is not relying upon any
representations other than those contained herein.
(i) The undersigned is an "accredited investor" as that term is defined in
Rule 501 of the General Rules and Regulations under the Securities Act by reason
of Rule 501(a)(3).
(j) The undersigned's overall commitment to investments which are not
readily marketable is not disproportionate to the undersigned's net worth, and
an investment in the Shares will not cause such overall commitment to become
excessive.
(k) The undersigned represents and warrants to the Corporation that all
information that the undersigned has provided to the Corporation, including,
without limitation, the information in the Investor Questionnaire attached
hereto or previously provided to the Corporation (the "Investor Questionnaire"),
is correct and complete as of the date hereof.
Section 3. Indemnity. The undersigned agrees to indemnify and hold
harmless the Corporation, its officers and directors, employees and its
affiliates and their respective successors and assigns and each other person, if
any, who controls any thereof, against any loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever) arising out of
or based upon any false representation or warranty or breach or failure by the
undersigned to comply with any covenant or agreement made by the undersigned
herein or in any other document furnished by the undersigned to any of the
foregoing in connection with this transaction.
IN WITNESS WHEREOF, the undersigned has executed this Agreement on the day
of ___________, 2006.
Xxxxx LLC
By: /s/ X. Xxxxx
1.1. Taxpayer Identification Number:_____________
ENERGTEK INC.
INVESTOR QUESTIONNAIRE
A.
2. General Information
1. Print Full Name of Investor: Individual:
------------------------------------
First, Middle, Last
Partnership, Corporation, Trust,
Custodial Account, Other:
------------------------------------
Name of Entity
2. Address for Notices:
------------------------------------
------------------------------------
------------------------------------
3. Name of Primary Contact Person:
------------------------------------
Title:
4. Telephone Number:
------------------------------------
5. E-Mail Address:
------------------------------------
6. Facsimile Number:
------------------------------------
7. Permanent Address:
(if different from Address for ------------------------------------
Notices above)
8. Authorized Signatory:
------------------------------------
Title:
------------------------------------
Telephone Number:
------------------------------------
Facsimile Number:
------------------------------------
9. U.S. Investors Only:
U.S. Taxpayer Identification or
Social Security Number: ------------------------------------
B. Accredited Investor Status
The Investor represents and warrants that the Investor is an "accredited
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act of 1933, as amended (the "Securities Act"), and has checked the box or boxes
below which are next to the categories under which the Investor qualifies as an
accredited investor:
FOR INDIVIDUALS:
|_| A natural person with individual net worth (or joint net worth with
spouse) in excess of $1 million. For purposes of this item, "net worth"
means the excess of total assets at fair market value, including home,
home furnishings and automobiles (and including property owned by a
spouse), over total liabilities.
|_| A natural person with individual income (without including any income of
the Investor's spouse) in excess of $200,000, or joint income with spouse
of $300,000, in each of the two most recent years and who reasonably
expects to reach the same income level in the current year.
FOR ENTITIES:
|_| A bank as defined in Section 3(a)(2) of the Securities Act or any savings
and loan association or other institution as defined in Section 3(a)(5)(A)
of the Securities Act, whether acting in its individual or fiduciary
capacity.
|_| An insurance Corporation as defined in Section 2(13) of the Securities
Act.
|_| A broker-dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934.
|_| An investment Corporation registered under the Investment Corporation Act
of 1940, as amended (the "Investment Corporation Act"). If an Investor has
checked this box, please contact _______ for additional information that
will be required.
|_| A business development Corporation as defined in Section 2(a)(48) of the
Investment Corporation Act.
|_| A small business investment Corporation licensed by the Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
|_| A private business development Corporation as defined in Section
202(a)(22) of the Investment Advisers Act of 1940. If an Investor has
checked this box, please contact ______ for additional information that
will be required.
|_| An organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Shares,
with total assets in excess of $5 million.
|_| A trust with total assets in excess of $5 million not formed for the
specific purpose of acquiring the Shares, whose purchase is directed by a
person with such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the Corporation and the purchase of the Shares.
|_| An employee benefit plan within the meaning of ERISA if the decision to
invest in the Shares is made by a plan fiduciary, as defined in Section
3(21) of ERISA, which is either a bank, savings and loan association,
insurance Corporation, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5 million or, if a
self-directed plan, with investment decisions made solely by persons that
are accredited investors.
|_| A plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, if the plan has total assets in excess
of $5 million.
|_| An entity, including a grantor trust, in which all of the equity owners
are accredited investors as determined under any of the foregoing
paragraphs (for this purpose, a beneficiary of a trust is not an equity
owner, but the grantor of a grantor trust is an equity owner).
C. Supplemental Data for Entities
1. If the Investor is not a natural person, furnish the following supplemental
data (natural persons may skip this Section C of the Investor Questionnaire):
Legal form of entity (trust, corporation, partnership, etc.): _________________
Jurisdiction of organization: ________________________________________________
2. Was the Investor organized for the specific purpose of acquiring the Shares?
|_| Yes |_| No
If the answer to the above question is "Yes," please contact _______,
________, at _______ or ________ for additional information that will be
required.
3. Are shareholders, partners or other holders of equity or beneficial interest
in the Investor able to decide individually whether to participate, or the
extent of their participation, in the Investor's investment in the Corporation
(i.e., can shareholders, partners or other holders of equity or beneficial
interest in the Investor determine whether their capital will form part of the
capital invested by the Investor in the Corporation)?
|_| Yes |_| No
If the answer to the above question is "Yes," please contact Xxxxx Xxxxx &
Associates, PLLC (xxxxx@xxxxxxxxxxxxxxxx.xxx or 516-284-1740) for additional
information that will be required.
4(a). Please indicate whether or not the Investor is, or is acting on behalf of,
(i) an employee benefit plan within the meaning of Section 3(3) of ERISA,
whether or not such plan is subject to ERISA, or (ii) an entity which is deemed
to hold the assets of any such employee benefit plan pursuant to 29 C.F.R. ss.
2510.3-101. For example, a plan which is maintained by a foreign corporation,
governmental entity or church, a Xxxxx plan covering no common-law employees and
an individual retirement account are employee benefit plans within the meaning
of Section 3(3) of ERISA but generally are not subject to ERISA (collectively,
"Non-ERISA Plans"). In general, a foreign or US entity which is not an operating
Corporation and which is not publicly traded or registered as an investment
Corporation under the Investment Corporation Act of 1940, as amended, and in
which 25% or more of the value of any class of equity interest is held by
employee pension or welfare plans (including an entity which is deemed to hold
the assets of any such plan), would be deemed to hold the assets of one or more
employee benefit plans pursuant to 29 C.F.R. ss. 2510.3-101. However, if only
Non-ERISA Plans were invested in such an entity, the entity generally would not
be subject to ERISA. For purposes of determining whether this 25% threshold has
been met or exceeded, the value of any equity interest held by a person (other
than such a plan or entity) who has discretionary authority or control with
respect to the assets of the entity, or any person who provides investment
advice for a fee (direct or indirect) with respect to such assets, or any
affiliate of such a person, is disregarded.
|_| Yes |_| No
4(b). If the Investor is, or is acting on behalf of, such an employee benefit
plan, or is an entity deemed to hold the assets of any such plan or plans,
please indicate whether or not the Investor is subject to ERISA.
|_| Yes |_| No
4(c.) If the Investor answered "Yes" to question 4.(b) and the Investor is
investing the assets of an insurance Corporation general account, please
indicate what percentage of the Investor's assets the purchase of the Shares is
subject to ERISA. ___________%.
5. Does the amount of the Investor's subscription for the Shares in the
Corporation exceed 40% of the total assets (on a consolidated basis with its
subsidiaries) of the Investor?
|_| Yes |_| No
If the question above was answered "Yes," please contact Xxxxx Xxxxx &
Associates for additional information that will be required.
6(a). Is the Investor a private investment Corporation which is not registered
under the Investment Corporation Act, in reliance on Section 3(c)(1) or Section
3(c)(7) thereof?
|_| Yes |_| No
6(b). If the question above was answered "Yes," was the Investor formed prior to
April 30, 1996?
|_| Yes |_| No
If the questions set forth in (a) and (b) above were both answered
"Yes," please contact Xxxxx Xxxxx & Associates for additional information that
will be required.
7(a). Is the Investor a grantor trust, a partnership or an S-Corporation for US
federal income tax purposes?
|_| Yes |_| No
7(b). If the question above was answered "Yes," please indicate whether or not:
(i) more than 50 percent of the value of the ownership interest of any
beneficial owner in the Investor is (or may at any time during the term of
the Corporation be) attributable to the Investor's (direct or indirect)
interest in the Corporation; or
|_| Yes |_| No
(ii) it is a principal purpose of the Investor's participation in the
Corporation to permit the Partnership to satisfy the 100 partner limitation
contained in US Treasury Regulation Section 1.7704-1(h)(3).
|_| Yes |_| No
If either question above was answered "Yes," please contact Xxxxx Xxxxx
& Associates for additional information that will be required.
8. If the Investor's tax year ends on a date other than December 31, please
indicate such date below:
----------------------------------------
(Date)
D. Related Parties
1. To the best of the Investor's knowledge, does the Investor control, or is the
Investor controlled by or under common control with, any other investor in the
Corporation?
|_| Yes |_| No
If the answer above was answered "Yes", please identify such related
investor(s) below.
Name(s) of related investor(s): _______________________________-
2. Will any other person or persons have a beneficial interest in the Shares to
be acquired hereunder (other than as a shareholder, partner, or other beneficial
owner of equity interest in the Investor)?
|_| Yes |_| No
If either question above was answered "Yes", please contact Xxxxx Xxxxx &
Associates for additional information that will be required.
The Investor understands that the foregoing information will be relied upon by
the Corporation for the purpose of determining the eligibility of the Investor
to purchase the Shares. The Investor agrees to notify the Corporation
immediately if any representation or warranty contained in this Subscription
Agreement, including this Investor Questionnaire, becomes untrue at any time.
The Investor agrees to provide, if requested, any additional information that
may reasonably be required to substantiate the Investor's status as an
accredited investor or to otherwise determine the eligibility of the Investor to
purchase the Shares. The Investor agrees to indemnify and hold harmless the
Corporation and each officer, director, shareholder, agent and representative of
the Corporation and their respective affiliates and successors and assigns from
and against any loss, damage or liability due to or arising out of a breach of
any representation, warranty or agreement of the Investor contained herein.
INDIVIDUAL:
------------------------------------
(Signature)
------------------------------------
(Print Name)
PARTNERSHIP, CORPORATION, TRUST,
CUSTODIAL ACCOUNT, OTHER:
-----------------------------------
(Name of Entity)
By:
--------------------------------
(Signature)
--------------------------------
(Print Name and Title)
2.1.1. Annex 1
(I) DEFINITION OF "INVESTMENTS"
The term "investments" means:
1) Shares, other than securities of an issuer that controls, is controlled
by, or is under common control with, the Investor that owns such
securities, unless the issuer of such securities is:
(i) An investment Corporation or a Corporation that would be an
investment Corporation but for the exclusions or exemptions provided
by the Investment Corporation Act, or a commodity pool; or
(ii) a Public Corporation (as defined below);
(iii) A Corporation with shareholders' equity of not less than $50 million
(determined in accordance with generally accepted accounting
principles) as reflected on the Corporation's most recent financial
statements, provided that such financial statements present the
information as of a date within 16 months preceding the date on
which the Investor acquires Shares;
2) Real estate held for investment purposes;
3) Commodity Shares (as defined below) held for investment purposes;
4) Physical Commodities (as defined below) held for investment purposes;
5) To the extent not securities, Financial Contracts (as defined below)
entered into for investment purposes;
6) In the case of an Investor that is a Corporation that would be an
investment Corporation but for the exclusions provided by Section 3(c)(1)
or 3(c)(7) of the Investment Corporation Act, or a commodity pool, any
amounts payable to such Investor pursuant to a firm agreement or similar
binding commitment pursuant to which a person has agreed to acquire an
interest in, or make capital contributions to, the Investor upon the
demand of the Investor; and
7) Cash and cash equivalents held for investment purposes.
Real Estate that is used by the owner or a Related Person (as defined
below) of the owner for personal purposes, or as a place of business, or
in connection with the conduct of the trade or business of such owner or a
Related Person of the owner, will NOT be considered Real Estate held for
investment purposes, provided that real estate owned by an Investor who is
engaged primarily in the business of investing, trading or developing real
estate in connection with such business may be deemed to be held for
investment purposes. However, residential real estate will not be deemed
to be used for personal purposes if deductions with respect to such real
estate are not disallowed by section 280A of the Internal Revenue Code of
1986, as amended.
A Commodity Interest or Physical Commodity owned, or a Financial Contract
entered into, by the Investor who is engaged primarily in the business of
investing, reinvesting, or trading in Commodity Shares, Physical
Commodities or Financial Contracts in connection with such business may be
deemed to be held for investment purposes.
"Commodity Shares" means commodity futures contracts, options on commodity
futures contracts, and options on physical commodities traded on or
subject to the rules of:
(i) Any contract market designated for trading such transactions under
the Commodity Exchange Act and the rules thereunder; or
(ii) Any board of trade or exchange outside the United States, as
contemplated in Part 30 of the rules under the Commodity Exchange
Act.
"Public Corporation" means a Corporation that:
(i) files reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended; or
(ii) has a class of securities that are listed on a Designated Offshore
Securities Market, as defined by Regulation S of the Securities Act.
"Financial Contract" means any arrangement that:
(i) takes the form of an individually negotiated contract, agreement, or
option to buy, sell, lend, swap, or repurchase, or other similar
individually negotiated transaction commonly entered into by
participants in the financial markets;
(ii) is in respect of securities, commodities, currencies, interest or
other rates, other measures of value, or any other financial or
economic interest similar in purpose or function to any of the
foregoing; and
(iii) is entered into in response to a request from a counter party for a
quotation, or is otherwise entered into and structured to
accommodate the objectives of the counterparty to such arrangement.
"Physical Commodities" means any physical commodity with respect to which a
Commodity Interest is traded on a market specified in the definition of
Commodity Shares above.
"Related Person" means a person who is related to the Investor as a sibling,
spouse or former spouse, or is a direct lineal descendant or ancestor by birth
or adoption of the Investor, or is a spouse of such descendant or ancestor,
provided that, in the case of a Family Corporation, a Related Person includes
any owner of the Family Corporation and any person who is a Related Person of
such an owner. "Family Corporation" means a Corporation that is owned directly
or indirectly by or for two or more natural persons who are related as siblings
or spouse (including former spouses), or direct lineal descendants by birth or
adoption, spouses of such persons, the estates of such persons, or foundations,
charitable organizations or trusts established for the benefit of such persons.
For purposes of determining the amount of investments owned by a Corporation,
there may be included investments owned by majority-owned subsidiaries of the
Corporation and investments owned by a Corporation ("Parent Corporation") of
which the Corporation is a majority-owned subsidiary, or by a majority-owned
subsidiary of the Corporation and other majority-owned subsidiaries of the
Parent Corporation.
In determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person's investments any investment held jointly
with such person's spouse, or investments in which such person shares with such
person's spouse a community property or similar shared ownership interest. In
determining whether spouses who are making a joint investment in the Partnership
are qualified purchasers, there may be included in the amount of each spouse's
investments any investments owned by the other spouse (whether or not such
investments are held jointly). There shall be deducted from the amount of any
such investments any amounts specified by paragraph 2(a) of Annex 2 incurred by
such spouse.
In determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person's investments any investments held in an
individual retirement account or similar account the investments of which are
directed by and held for the benefit of such person.
Patent Purchase Xxxxx
Annex 2
(II) VALUATIONS OF INVESTMENTS
The general rule for determining the value of investments in order to ascertain
whether a person is a qualified purchaser is that the value of the aggregate
amount of investments owned and invested on a discretionary basis by such person
shall be their fair market value on the most recent practicable date or their
cost. This general rule is subject to the following provisos:
1) In the case of Commodity Shares, the amount of investments shall be the
value of the initial margin or option premium deposited in connection with
such Commodity Shares; and
2) In each case, there shall be deducted from the amount of investments owned
by such person the following amounts:
(i) The amount of any outstanding indebtedness incurred to acquire the
investments owned by such person.
(ii) A Family Corporation, in addition to the amounts specified in
paragraph (a) above, shall have deducted from the value of such
Family Corporation's investments any outstanding indebtedness
incurred by an owner of the Family Corporation to acquire such
investments.
