EXHIBIT 10.8
To: SAFETEK INTERNATIONAL, INC.
00 Xxxxxx Xxxx
Xxx Xxxx 00000 Xxxxxx
SAFETEK INTERNATIONAL, INC.
REGULATION S SUBSCRIPTION AGREEMENT
AND INVESTMENT REPRESENTATION
SECTION 1.
1.1 Subscription.
(a) The undersigned, intending to be legally bound, hereby irrevocably
subscribes for and agrees to purchase ____________ Units (hereafter defined) of
securities of Safetek International, Inc., a Delaware corporation (the
"Company") in an offshore transaction negotiated outside the U.S. and to be
consummated and closed outside the U.S. A "Unit" shall consist of the following:
(1) one share of Common Stock (a "Purchased Share");
(2) one Class A Warrant, in the form attached hereto as
Exhibit A, entitling the undersigned to purchase one share of common stock for
$1.00, exercisable immediately and expiring one (1) year after the date hereof
(a "Class A Warrant"); and
(3) one Class B Warrant, in the form attached hereto as
Exhibit B, entitling the undersigned to purchase one share of common stock for
$1.50, exercisable immediately and expiring two (2) years after the date hereof
(a "Class B Warrant, and together with the Class A Warrant, the "Warrants").
(b) For purposes of this Subscription Agreement:
(1) "Common Stock" means the common stock of the Company.
(2) "Securities" means the Units, the Warrants and the Warrant
Shares (hereafter defined).
(3) "Warrant Shares" means the shares of Common Stock issuable
upon exercise of the Warrants.
As further consideration for the investment in the Units being made by the
undersigned hereunder, the Company agrees that if within the next 12 months it
effectuates a reverse stock split, the Company will issue to the undersigned
additional shares of Common Stock equal to the number of shares of Common Stock
being issued hereunder. In essence, the number of shares of Common Stock issued
to the undersigned hereunder shall not be effected by such split. For example,
if the undersigned is to be issued 25,000 shares of Common Stock hereunder, and
within the next 12 months the Company effectuates a 1:2 reverse stock split, the
investor will be issued an additional 25,000 shares of Common Stock. This
provision shall only apply to the next stock split (if any) to be taken by the
Company subsequent to the date hereof, notwithstanding the number of stock
splits effectuated by the Company within the next 12 months.
1.2 Purchase of Units.
The undersigned understands and acknowledges that the purchase price to
be remitted to the Company in exchange for the Units shall be ____________
dollars ($______) or $0.10 per Unit. The Company shall deliver the Purchased
Shares and the Warrants to the undersigned promptly after the acceptance of this
Subscription Agreement by the Company.
1.3 Acceptance or Rejection.
(a) The undersigned understands and agrees that the Company reserves
the right to reject this subscription for the Units if, in its reasonable
judgment, it deems such action in the best interest of the Company, at any time
prior to the Closing, notwithstanding prior receipt by the undersigned of notice
of acceptance of the undersigned's subscription.
(b) The undersigned understands and agrees that its subscription for
the Units is irrevocable.
(c) In the event the sale of the Units subscribed for by the
undersigned is not consummated by the Company for any reason (in which event
this Subscription Agreement shall be deemed to be rejected), this Subscription
Agreement and any other agreement entered into between the undersigned and the
Company relating to this subscription shall thereafter have no force or effect
and the Company shall promptly return or cause to be returned to the undersigned
the purchase price remitted to the Company by the undersigned, without interest
thereon or deduction therefrom, in exchange for the Units.
SECTION 2.
2.1 Closing. The closing (the "Closing") of the purchase and sale of the Units,
shall occur simultaneously with the acceptance by the Company of the
undersigned's subscription, as evidenced by the Company's execution of this
Subscription Agreement.
SECTION 3.
3.1 Investor Representations and Warranties. The undersigned hereby
acknowledges, represents and warrants to, and agrees with, the Company and its
affiliates as follows:
(a) The undersigned is acquiring the Securities 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
Securities 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 Units for which the undersigned is subscribing or any part of the
Securities.
(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 Units 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 securities generally.
(d) The undersigned understands that, except as set forth herein, the
Company is under no obligation to register the Securities 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 Company 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 Units.
(f) The undersigned acknowledges his understanding that the offering
and sale of the Units and the issuance of the Warrant 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
Company and its affiliates as follows:
(1) 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 Securities 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;
(2) 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 Company; and
(3) 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 Securities. The undersigned also
represents it has not been organized for the purpose of acquiring the
Securities; and
(4) 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 Securities, the Company and all other
information to the extent the Company possesses such information or can acquire
it without unreasonable effort or expense.
(5) The undersigned has carefully reviewed all of the
Company's filings under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(g) The undersigned is not relying on the Company, 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 Company, or any officer, employee, agent, affiliate or subsidiary of the
Company, other than the representations of the Company contained herein, and in
subscribing for Units the undersigned is not relying upon any representations
other than those contained herein.
(i) Compliance with Local Laws. Any resale of the Securities during the
`distribution compliance period' as defined in Rule 902(f) to Regulation S shall
only be made in compliance with exemptions from registration afforded by
Regulation S. Further, any such sale of the Securities in any jurisdiction
outside of the United States will be made in compliance with the securities laws
of such jurisdiction. The Investor will not offer to sell or sell the Securities
in any jurisdiction unless the Investor obtains all required consents, if any.
(j) Regulation S Exemption. The undersigned understands that the Units
are being offered and sold to him in reliance on an exemption from the
registration requirements of United States federal and state securities laws
under Regulation S promulgated under the Securities Act and that the Company is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of the Investor set forth herein
in order to determine the applicability of such exemptions and the suitability
of the Investor to acquire the Units. In this regard, the undersigned
represents, warrants and agrees that:
(1) The undersigned is not a U.S. Person (as defined below)
and is an affiliate (as defined in Rule 501(b) under the Securities Act) of the
Company and is not acquiring the Units for the account or benefit of a U.S.
Person. A U.S. Person means any one of the following:
(A) any natural person resident in the United States
of America;
(B) any partnership or corporation organized or
incorporated under the laws of the United
States of America;
(C) any estate of which any executor or administrator
is a U.S. person;
(D) any trust of which any trustee is a U.S. person;
(E) any agency or branch of a foreign entity located
in the United States of America;
(F) any non-discretionary account or similar account
(other than an estate or trust) held
by a dealer or other fiduciary for the benefit or account of a U.S. person;
(G) any discretionary account or similar account
(other than an estate or trust) held by a or other fiduciary organized,
incorporated or (if an individual) resident in the United States of America; and
(H) any partnership or corporation if:
(i) organized or incorporated under the laws
of any foreign jurisdiction; and
(ii) formed by a U.S. person principally for
the purpose of investing in securities
not registered under the Securities Act, unless it is organized or incorporated,
and owned, by accredited investors (as defined in Rule 501(a) under the
Securities Act) who are not natural persons, estates or trusts.
(2) At the time of the origination of contact concerning this
Agreement and the date of the execution and delivery of this Agreement, the
undersigned was outside of the United States.
(3) The undersigned will not, during the period commencing on
the date of issuance of the Units and ending on the first anniversary of such
date, or such shorter period as may be permitted by Regulation S or other
applicable securities law (the "Restricted Period"), offer, sell, pledge or
otherwise transfer the Units in the United States, or to a U.S. Person for the
account or for the benefit of a U.S. Person, or otherwise in a manner that is
not in compliance with Regulation S.
(4) The undersigned will, after expiration of the Restricted
Period, offer, sell, pledge or otherwise transfer the Units only pursuant to
registration under the Securities Act or an available exemption therefrom and,
in accordance with all applicable state and foreign securities laws.
(5) The undersigned was not in the United States, engaged in,
and prior to the expiration of the Restricted Period will not engage in, any
short selling of or any hedging transaction with respect to the Units, including
without limitation, any put, call or other option transaction, option writing or
equity swap.
(6) Neither the undersigned nor or any person acting on his
behalf has engaged, nor will engage, in any directed selling efforts to a U.S.
Person with respect to the Units and the Investor and any person acting on his
behalf have complied and will comply with the "offering restrictions"
requirements of Regulation S under the Securities Act.
(7) The transactions contemplated by this Agreement have not
been pre-arranged with a buyer located in the United States or with a U.S.
Person, and are not part of a plan or scheme to evade the registration
requirements of the Securities Act.
(8) Neither the undersigned nor any person acting on his
behalf has undertaken or carried out any activity for the purpose of, or that
could reasonably be expected to have the effect of, conditioning the market in
the United States, its territories or possessions, for any of the Units. The
undersigned agrees not to cause any advertisement of the Units to be published
in any newspaper or periodical or posted in any public place and not to issue
any circular relating to the Units, except such advertisements that include the
statements required by Regulation S under the Securities Act, and only offshore
and not in the U.S. or its territories, and only in compliance with any local
applicable securities laws.
(9) Each certificate representing the Securities shall be
endorsed with the following legends, in addition to any other legend required to
be placed thereon by applicable federal or state securities laws:
(A) "THE SECURITIESARE BEING OFFERED TO INVESTORS WHO
ARE NOT U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE SECURITIES
ACT")) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED
UNDER THE SECURITIES ACT."
(B) "TRANSFER OF THESE SECURITIES IS PROHIBITED,
EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT
TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT."
(10) The undersigned consents to the Company making a notation
on its records or giving instructions to any transfer agent of the Company in
order to implement the restrictions on transfer of the Securities set forth in
this Section 2.
(k) 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).
(l) The undersigned understands that an investment in the Securities is
a speculative investment which involves a high degree of risk and the potential
loss of his entire investment.
(m) 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 Units will not cause such overall commitment to become
excessive.
(n) The undersigned has received all documents, records, books and
other information pertaining to the undersigned's investment in the Company that
has been requested by the undersigned. The undersigned has reviewed or received
copies of all reports and other documents filed by the Company with the
Securities and Exchange Commission (the "SEC Documents").
(o) The undersigned represents and warrants to the Company that all
information that the undersigned has provided to the Company, including, without
limitation, the information in the Investor Questionnaire attached hereto or
previously provided to the Company (the "Investor Questionnaire"), is correct
and complete as of the date hereof.
(p) Other than as set forth herein, the undersigned is not relying upon
any other information, representation or warranty by the Company or any officer,
director, stockholder, agent or representative of the Company in determining to
invest in the Units. The undersigned has consulted, to the extent deemed
appropriate by the undersigned, with the undersigned's own advisers as to the
financial, tax, legal and related matters concerning an investment in the Units
and on that basis believes that his or its investment in the Units is suitable
and appropriate for the undersigned.
(q) The undersigned is aware that no federal or state agency has (i)
made any finding or determination as to the fairness of this investment, (ii)
made any recommendation or endorsement of the Securities or the Company, or
(iii) guaranteed or insured any investment in the Securities or any investment
made by the Company.
(r) The undersigned understands that the price of the Securities
offered hereby bear no relation to the assets, book value or net worth of the
Company and were determined arbitrarily by the Company. The undersigned further
understands that there is a substantial risk of further dilution on his or its
investment in the Company.
SECTION 4.
The Company represents and warrants to the undersigned as follows:
4.1 Organization of the Company. The Company is a corporation duly organized and
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, other than those in which the
failure so to qualify would not have a material adverse effect on the business,
operations, properties, prospects or condition (financial or otherwise) of the
Company.
4.2 Authority. (a) The Company has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement and to issue the
Units; (b) the execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required; and (c) this Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws relating to, or affecting generally the enforcement of, creditors' rights
and remedies or by other equitable principles of general application.
4.3 Capitalization. As of the date hereof, the authorized capital stock of the
Company consists of 500,000,000 shares of Common Stock and 1,000,000 shares of
preferred stock, of which as of the date hereof 53,188,923 shares of Common
Stock are issued and outstanding and no shares of preferred stock are issued and
outstanding. All of such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable.
4.4 SEC Documents. To the best of Company's knowledge, the Company has not
provided to the undersigned any information that, according to applicable law,
rule or regulation, should have been disclosed publicly prior to the date hereof
by the Company, but which has not been so disclosed. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be, and other
federal, state and local laws, rules and regulations applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply as to form and
substance in all material respects with applicable accounting requirements and
the published rules and regulations of the Securities and Exchange Commission
(the "SEC") or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (a) as may be otherwise indicated in such financial statements or the
notes thereto or (b) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
4.5 Exemption from Registration; Valid Issuances. The sale and issuance of the
Securities, in accordance with the terms and on the bases of the representations
and warranties of the undersigned set forth herein, may and shall be properly
issued by the Company to the undersigned pursuant to any applicable federal or
state law. When issued and paid for as herein provided, the Securities shall be
duly and validly issued, fully paid, and nonassessable. Neither the sales of the
Units pursuant to, nor the Company's performance of its obligations under, this
Agreement shall (a) result in the creation or imposition of any liens, charges,
claims or other encumbrances upon the Units or any of the assets of the Company,
or (b) entitle the other holders of the Common Stock of the Company to
preemptive or other rights to subscribe to or acquire the Common Stock or other
securities of the Company. The Units shall not subject the undersigned to
personal liability by reason of the ownership thereof.
4.6 No General Solicitation or Advertising in Regard to this Transaction.
Neither the Company nor any of its affiliates nor any person acting on its or
their behalf (a) has conducted or will conduct any general solicitation (as that
term is used in Rule 502(c) of Regulation D) or general advertising with respect
to any of the Units, or (b) made any offers or sales of any security or
solicited any offers to buy any security under any circumstances that would
require registration of the Common Stock under the Securities Act.
4.7 No Conflicts. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby, including without limitation the issuance of the Units, do not and will
not (a) result in a violation of the Certificate or By-Laws of the Company or
(b) conflict with, or constitute a material default (or an event that with
notice or lapse of time or both would become a material default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture, instrument or any "lock-up" or similar
provision of any underwriting or similar agreement to which the Company is a
party, or (c) result in a violation of any federal, state, local or foreign law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations)applicable to the Company or by which any
property or asset of the Company is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a material
adverse effect on the business, operations, properties, prospects or condition
(financial or otherwise) of the Company) nor is the Company otherwise in
violation of, conflict with or in default under any of the foregoing. The
business of the Company is not being conducted in violation of any law,
ordinance or regulation of any governmental entity, except for possible
violations that either singly or in the aggregate do not and will not have a
material adverse effect on the business, operations, properties, prospects or
condition (financial or otherwise) of the Company. The Company is not required
under federal, state or local law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement or issue and sell the Common Stock in
accordance with the terms hereof (other than any SEC, NASD or state securities
filings that may be required to be made by the Company subsequent to the
Closing, any registration statement that may be filed pursuant hereto, and any
shareholder approval required by the rules applicable to companies whose common
stock trades on the Over The Counter Bulletin Board); provided that, for
purposes of the representation made in this sentence, the Company is assuming
and relying upon the accuracy of the relevant representations and agreements of
the undersigned herein.
4.8 No Undisclosed Liabilities. The Company has no liabilities or obligations
that are material, individually or in the aggregate, and that are not disclosed
in the SEC Documents or otherwise publicly announced, other than those incurred
in the ordinary course of the Company's businesses and which, individually or in
the aggregate, do not or would not have a material adverse effect on the
Company.
4.9 No Undisclosed Events or Circumstances. No event or circumstance has
occurred or exists with respect to the Company or its businesses, properties,
prospects, operations or financial condition, that, under applicable law, rule
or regulation, requires public disclosure or announcement prior to the date
hereof by the Company but which has not been so publicly announced or disclosed
in the SEC Documents.
4.10 No Integrated Offering. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
other than pursuant to this Agreement, under circumstances that would require
registration of the Common Stock under the Securities Act.
4.11 Litigation and Other Proceedings. Except as may be set forth in the SEC
Documents, there are no lawsuits or proceedings pending or to the best knowledge
of the Company threatened, against the Company, nor has the Company received any
written or oral notice of any such action, suit, proceeding or investigation,
which would have a material adverse effect on the business, operations,
properties, prospects or condition (financial or otherwise) of the Company.
Except as set forth in the SEC Documents, no judgment, order, writ, injunction
or decree or award has been issued by or, so far as is known by the Company,
requested of any court, arbitrator or governmental agency which would have a
material adverse effect on the business, operations, properties, prospects or
condition (financial or otherwise) of the Company.
4.12 Certain Transactions. Except as set forth in the SEC Documents filed at
least ten days prior to the date hereof and except for arm's length transactions
pursuant to which the Company makes payments in the ordinary course of business
upon terms no less favorable than the Company could obtain from third parties,
none of the officers, directors, or employees of the Company is presently a
party to any transaction with the Company or any of its subsidiaries (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
4.13 No Misleading or Untrue Communication. The Company, any person representing
the Company, and, to the knowledge of the Company, any other person selling or
offering to sell the Units, if any, in connection with the transactions
contemplated by this Agreement, have not made, at any time, any written or oral
communication in connection with the offer or sale of the same which contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading.
SECTION 5.
5.1 Indemnity. The undersigned agrees to indemnify and hold harmless the
Company, 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.
5.2 Modification. Neither this Agreement nor any provisions hereof shall be
modified, discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought.
5.3 Notices. Any notice, demand or other communication which any party hereto
may be required, or may elect, to give to anyone interested hereunder shall be
sufficiently given if (a) deposited, postage prepaid, in a United States mail
letter box, registered or certified mail, return receipt requested, addressed to
such address as may be given herein, or (b) delivered personally at such
address.
5.4 Counterparts. This Agreement may be executed through the use of separate
signature pages or in any number of counterparts and by facsimile, and each of
such counterparts shall, for all purposes, constitute one agreement binding on
all parties, notwithstanding that all parties are not signatories to the same
counterpart. Signatures may be facsimiles.
5.5 Binding Effect. Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives and assigns. If the
undersigned is more than one person, the obligation of the undersigned shall be
joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his heirs, executors, administrators and successors.
5.6 Entire Agreement. This Agreement and the documents referenced herein contain
the entire agreement of the parties and there are no representations, covenants
or other agreements except as stated or referred to herein and therein.
5.7 Assignability. This Agreement is not transferable or assignable by the
undersigned.
5.8 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of law principles.
5.9 Pronouns. The use herein of the masculine pronouns "him" or "his" or similar
terms shall be deemed to include the feminine and neuter genders as well and the
use herein of the singular pronoun shall be deemed to include the plural as
well.
IN WITNESS WHEREOF, the undersigned has executed this Agreement on the
______ day of ________________, 2005.
Amount of Investment:
$---------------------
INDIVIDUAL INVESTOR:
----------------------
Name:
PARTNERSHIP, CORPORATION, TRUST,
CUSTODIAL ACCOUNT, OTHER INVESTOR
---------------------------
(Print Name of Entity)
By: __________________
Name:
Title:
Address:
Taxpayer Identification Number:_____________
ACCEPTANCE OF SUBSCRIPTION
(to be filed out only by the Company)
The Company hereby accepts the above application for subscription for Units on
behalf of the Company.
SAFETEK INTERNATIONAL, INC. Dated:_________ ___, 2005
By:______________________________
Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer, Chairman, and Secretary
SAFETEK INTERNATIONAL, INC.
INVESTOR QUESTIONNAIRE
A.
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: ____________________________________
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 company 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 company registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"). If an Investor has
checked this box, please contact Xxxxx Xxxxx, Esq. at (000) 000-0000
for additional information that will be required.
|_| A business development company as defined in Section 2(a)(48) of the
Investment Company Act.
|_| A small business investment company licensed by the Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
|_| A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940. If an Investor has
checked this box, please contact Xxxxx Xxxxx, Esq. at (000) 000-0000
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
Units, 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 Units, 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 Company and the purchase of the Units.
|_| An employee benefit plan within the meaning of ERISA if the decision
to invest in the Units is made by a plan fiduciary, as defined in
Section 3(21) of ERISA, 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 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 Units?
|_| Yes |_| No
If the answer to the above question is "Yes," please contact Xxxxx
Xxxxx, Esq. at (000) 000-0000 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 Company
(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 Company)?
|_| Yes |_| No
If the answer to the above question is "Yes," please contact Xxxxx
Xxxxx, Esq. at (000) 000-0000 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
company and which is not publicly traded or registered as an investment company
under the Investment Company 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 company general account, please indicate
what percentage of the Investor's assets the purchase of the Units is subject to
ERISA. __________%.
5. Does the amount of the Investor's subscription for the Units in the Company
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,
Esq. at (000) 000-0000 for additional information that will be required.
6(a). Is the Investor a private investment company which is not registered under
the Investment Company 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 ________ 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 Company be) attributable to the Investor's (direct or indirect)
interest in the Company; or
|_| Yes |_| No
(ii) it is a principal purpose of the Investor's participation in the
Company 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, Esq. at (000) 000-0000 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
Company?
|_| 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 Units 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, Esq. at (000) 000-0000 for additional information that will be required.
The Investor understands that the foregoing information will be relied upon by
the Company for the purpose of determining the eligibility of the Investor to
purchase the Units. The Investor agrees to notify the Company 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 Units. The
Investor agrees to indemnify and hold harmless the Company and each officer,
director, shareholder, agent and representative of the Company 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)
Annex 1
DEFINITION OF "INVESTMENTS"
The term "investments" means:
(1) Securities, 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 company or a company that would be an investment
company but for the exclusions or exemptions provided by the Investment Company
Act, or a commodity pool; or
(ii) a Public Company (as defined below);
(iii) A company with shareholders' equity of not less than $50
million (determined in accordance with generally accepted accounting principles)
as reflected on the company'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 Units;
(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 company that would be an
investment company but for the exclusions provided by Section 3(c)(1) or 3(c)(7)
of the Investment Company 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 Company" means a company 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 Company, a Related Person
includes any owner of the Family Company and any person who is a Related Person
of such an owner. "Family Company" means a company 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 company,
there may be included investments owned by majority-owned subsidiaries of the
company and investments owned by a company ("Parent Company") of which the
company is a majority-owned subsidiary, or by a majority-owned subsidiary of the
company and other majority-owned subsidiaries of the Parent Company.
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.
Annex 2
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 Company, in addition to the amounts specified in
paragraph (a) above, shall have deducted from the value of such Family Company's
investments any outstanding indebtedness incurred by an owner of the Family
Company to acquire such investments.
