SECURITIES PURCHASE AGREEMENT
EXHIBIT
10.17
SECURITIES
PURCHASE AGREEMENT
(this
“Agreement”),
dated
as of __________, 2006, by and between Tekoil
& Gas Corporation,
a
Delaware corporation, with its principal place of business at 0000 Xx. Xxxxxxxx
Xxxx., Xxxxx 000, Xxxxxxx, XX 00000 (the “Company”),
and
the legal person whose signature and principal residence or principal place
of
business are included on the signature page hereto (the “Buyer”).
PRELIMINARY
STATEMENTS
A. The
Company and Buyer are executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by Rule 506 under Regulation
D (“Regulation
D”)
as
promulgated by the United States Securities and Exchange Commission (the
“SEC”)
under
the Securities Act of 1933, as amended (the “1933
Act”);
B. Buyer
wishes to purchase, in the amounts and upon the terms and conditions stated
in
this Agreement (i) shares of the Company’s Series A Convertible Preferred Stock,
par value $.00000001 per share (the “Preferred
Stock”);
NOW
THEREFORE,
the
Company and Buyer hereby agrees as follows:
1. PURCHASE
AND SALE OF PREFERRED STOCK
a. Purchase
of Preferred Stock.
The
Company shall issue and sell to Buyer and Buyer shall purchase a number of
shares of Preferred Stock (the “Preferred
Shares”)
at a
per share purchase price (the “Purchase
Price”),
each
as indicated on the signature page attached hereto, which Purchase Price shall
be payable in immediately available United States Dollars to the Company on
the
Closing Date. The Company shall promptly deliver stock certificates, duly
executed on behalf of the Company, representing the Preferred Shares (the
“Stock
Certificates”)
to
Buyer.
b. Closing
Date.
The
date of the closing of the sale of the Preferred Shares (as defined below)
shall
be a indicated on the signature page attached hereto (the “Closing
Date”).
2. BUYER’S
REPRESENTATIONS AND WARRANTIES
Buyer
represents and warrants to the Company that:
a. Investment
Purpose.
The
Preferred Shares are being acquired by Buyer in good faith solely for its own
personal account, for investment purposes only, and are not being purchased
for
resale, resyndication, distribution, subdivision or fractionalization thereof;
Buyer has no contract or arrangement with any person to sell, transfer or pledge
to any person the Preferred Shares or any part thereof, any interest therein
or
any rights thereto; Buyer has no present plans to enter into any such contract
or arrangement; and Buyer understands that as a result it must bear the economic
risk of the investment for an indefinite period of time because the Preferred
Shares have not been registered under the 1933 Act, and, therefore, cannot
be
sold unless they are subsequently registered under the 0000 Xxx.
b. Accredited
Investor Status.
Buyer
is an “accredited investor” as that term is defined in Rule 501(a)(3) of
Regulation D, by reason of its qualification in the category thereof listed
on
the signature page hereof.
c. Reliance
on Exemptions.
Buyer
understands that the Preferred Shares are being offered and sold to it
under
the
exemption from the registration requirements of the United States federal and
state securities laws and
that
the Company is relying upon the truth and accuracy of, and Buyer’s compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of Buyer set forth herein in order to determine the availability
of such exemptions and the eligibility of Buyer to acquire the Preferred
Shares.
d. Information.
Buyer
understands
and acknowledges that it is purchasing the Preferred Shares without being
furnished any offering literature, prospectus or other materials, that this
transaction has not been scrutinized by the SEC or by any administrative agency
charged with the administration of the securities laws of any state, that all
documents, records and books, pertaining to the Company, its business, finances
and operations, and this investment have been made available to Buyer, and
his
advisors and representatives, including his attorney, its accountant and/or
his
purchaser representative, and that the books and records of the Company will
be
available upon reasonable notice for inspection by Buyer during reasonable
business hours at the Company’s principal place of business. Buyer
and
his advisors and
representatives, including his attorney, his accountant and/or his purchaser
representative,
if any,
have been afforded the opportunity to ask questions of the Company and have
received complete and satisfactory answers to any such inquiries. Buyer
understands that his investment in the Preferred Shares is speculative and
involves a high degree of risk
high
degree of risk of loss and that Buyer must be prepared to lose his entire
investment in the Company.
Buyer
has sought such accounting, legal and tax advice, as it has considered necessary
to an informed investment decision with respect to his acquisition of the
Preferred Shares. Buyer, or Buyer together
with his purchaser representative, if any, have such knowledge and experience
in
financial and business matters that it and such representative are capable
of
evaluating the merits and risks of an investment in the Preferred Shares and
of
making an informed investment decision.
e. Governmental
Review.
Buyer
understands that no United States federal or state agency or any other
government or governmental agency has approved or disapproved or passed on
or
made any recommendation or endorsement of the Preferred Shares or the fairness
or suitability of the investment in the Preferred Shares, nor have such
authorities passed upon or endorsed the merits of the offering of the Preferred
Shares or the accuracy or adequacy of any of the information provided by the
Company to Buyer regarding the Company, the Preferred Shares or any other
matter, and that
the
Company is relying on the truth and accuracy of the representations,
declarations and warranties herein made by Buyer in offering the Preferred
Shares for sale to it without having first registered the same under the 1933
Act.
f. Transfer
or Resale.
Buyer
understands that (i) the Preferred Shares have not been and are not being
registered under the 1933 Act or any state securities laws, and may not be
transferred unless (a) subsequently registered thereunder, or (b) Buyer shall
have provided the Company with a statement of the circumstances surrounding
the
proposed disposition and shall have delivered to the Company an opinion of
counsel, reasonably satisfactory in form, scope and substance to the Company,
to
the effect (1) that the Preferred Shares to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration and (2) that
appropriate action necessary for compliance with the 1933 Act has been taken;
(ii) any sale of such Preferred Shares made in reliance on Rule 144 promulgated
under the 1933 Act may be made only in accordance with the terms of said Rule
and further, if said Rule is not applicable, any resale of such Preferred Shares
under circumstances in which the seller (or the person through whom the sale
is
made) may be deemed to be an underwriter (as that term is defined in the 0000
Xxx) may require compliance with some other exemption under the 1933 Act or
the
rules and regulations of the SEC thereunder; and (iii) neither the Company
nor
any other person is under any obligation to register such Preferred Shares
under
the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
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g. Legends.
Buyer
understands that the Stock Certificates shall bear a restrictive legend in
substantially the following form (and a stop-transfer order shall be placed
against transfer of such Stock Certificates):
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE REOFFERED, SOLD, TRANSFERRED, PLEDGED, OR ASSIGNED IN THE ABSENCE OF
(A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT AND THE
STATE SECURITIES ACT OR BLUE SKY ACT OF ANY STATE HAVING JURISDICTION THEREOF,
OR (B) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY IN FORM, SCOPE AND
SUBSTANCE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR
THE SECURITIES ACT OR BLUE SKY ACT OF ANY STATE HAVING JURISDICTION WITH RESPECT
THERETO.
h. Authorization;
Enforcement.
This
Agreement has been duly and validly authorized, executed and delivered on behalf
of Buyer and are valid and binding agreements of Buyer enforceable in accordance
with their terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium, and other similar laws affecting
the
enforcement of creditors’ rights generally.
i. High
Risk Investment.
Buyer
acknowledges that the Company is a development stage company with no revenues,
limited resources and no audited financial statements. Buyer understands the
high risk nature of its investment hereunder and is able to afford an entire
loss thereof and is in no current need of liquidity with respect thereto. Buyer
understands that the transfer of the Preferred Stock is restricted and that
no
meaningful current market exists with respect to the Preferred Stock of the
Company and there can be no assurance that one will develop in the future.
Buyer
has been afforded the opportunity to ask questions of the officers of the
Company and have access to the books and records thereof, to the extent deemed
necessary by it to ensure that its investment hereunder is a fully-informed
one.
j. No
Conflicts.
The
execution, delivery and performance of this Agreement by the Buyer and the
consummation by the Buyer of the transactions contemplated hereby will not
(i)
result in an violation of the Certificate of Incorporation , as amended, as
in
effect on the date hereof (“Certificate
of Incorporation”)
and
the Company’s Bylaws, as in effect on the date hereof (the “Bylaws”)
or
(ii) conflict with, or constitute a default (or an event which with notice
or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Buyer or by which any property
or asset of Buyer is bound or affected, or result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Buyer or by which any
property or asset of the Buyer is bound or affected. The business of the Buyer
is not being conducted, and shall not be conducted through the Closing Date,
in
violation of any law, ordinance, regulation of any governmental entity. Except
as required under the 1933 Act and any applicable state securities laws, the
Buyer is not required 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
in
accordance with the terms hereof.
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k. Indemnification.
Buyer
acknowledges that Buyer understands the meaning and legal consequences of the
representations and warranties in this Section 2, and that the Company has
relied upon such representations and warranties, and Buyer hereby agrees to
indemnify and hold harmless the Company and its officers, directors,
shareholders, agents and representatives from and against any and all claims,
demands, losses, damages, expenses or liabilities (including attorneys’ fees)
due to or arising out of, directly or indirectly, a breach of any such
representations or warranties. Notwithstanding the foregoing, however, no
representation, warranty, acknowledgment or agreement made herein by Buyer
shall
in any manner be deemed to constitute a waiver of any rights granted to such
Buyer under federal or state securities laws.
l. Short
Position and Market Purchases.
Buyer
is not purchasing the Preferred Shares for the purpose of covering any short
position in the Preferred Shares.
m. Aggregate
Offering Amount.
Buyer
acknowledges that it must make a minimum purchase of $5,000 in Preferred Stock
hereunder and that the Company shall not be obligated to sell a minimum or
maximum amount of Preferred Stock (other than the Preferred Stock purchased
hereunder by Buyer) to others. Buyer further acknowledges that the Company
may
sell Preferred Stock to others at prices which are higher or lower than the
prices set forth herein and on terms which are different (perhaps more
favorable) than herein provided.
n. Residency. Buyer
is
a resident of the state indicated on the signature page hereof, is legally
competent to execute this Agreement, and:
(1) if
Buyer
is an individual, has his or her principal residence in such state;
(2) if
Buyer
is a corporation, partnership, trust, limited liability company or other form
of
business organization, has its principal office in such state; or
(3) if
Buyer
is a corporation, partnership, trust, limited liability company or other form
of
business organization, Buyer has not been organized for the specific purpose
of
acquiring the Preferred Stock.
o. No
Solicitation.
Buyer
has not been offered the Preferred Stock by any form of general solicitation
or
general advertising, including but not limited to any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
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3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to Buyer that:
a. Organization
and Qualification.
The
Company is a corporation duly organized and existing in good standing under
the
laws of the State of Delaware, and has the requisite corporate power to own
their properties and to carry on their 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
by
it makes such qualification necessary and where the failure so to qualify would
have a material adverse effect on the operations, properties or financial
condition of the Company taken as a whole (a “Material
Adverse Effect”).
b. Authorization;
Enforcement.
(i) The
Company has the requisite corporate power and authority to enter into and
perform this Agreement and to issue the Preferred Shares in accordance with
the
terms hereof and thereof, (ii) the execution and delivery of this Agreement
by
the Company and the consummation by it of the transaction contemplated hereby
have been duly authorized by the Company’s Board of Directors and no further
consent or authorization of the Company, its Board of Directors, or its
stockholders is required, (iii) this Agreement has been duly executed and
delivered by the Company, and (iv) this Agreement constitutes the valid and
binding obligations of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies or by other equitable principles of general application.
c. Capitalization.
As of
___________, the authorized capital stock of the Company consists of (i)
__________ shares of Preferred Stock of which _________ shares were issued
and
outstanding, and (ii) ___________ shares of preferred stock, $.00000001 par
value, of which ________ shares have been designated “Series A Preferred Stock,”
_________ of which were issued and outstanding. All of such outstanding shares
have been validly issued and are fully paid and nonassessable.
d. Issuance
of Preferred Shares.
The
Preferred Shares are duly authorized and, upon issuance in accordance with
the
terms hereof and thereof, shall be validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to
the
issue thereof.
e. No
Conflicts.
The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby will not
(i)
result in a violation of the Certificate of Incorporation or Bylaws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights
of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or result in a
violation of any 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). The business of the Company is not being conducted in violation
of any law, ordinance, regulation of any governmental entity, except for
possible violations which either singly or in the aggregate do not have a
Material Adverse Effect. Except as required under the 1933 Act and any
applicable state securities laws, the Company is not required 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 in accordance with the terms
hereof.
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f. Preferred
Stock.
The
Company has not registered its Preferred Stock pursuant to Section 12(b) or
(g)
of the Securities Exchange Act of 1934, as amended (the “1934
Act’)
and is
not obligated to comply with the reporting requirements of the 1934 Act.
g. Absence
of Litigation.
There
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board or body pending against the Company, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which would
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, this Agreement or any of the
documents contemplated herein.
4. COVENANTS
a. Best
Efforts.
The
parties shall use their best efforts timely to satisfy each of the conditions
described in Section 6 and 7 of this Agreement.
b. Form
D.
The
Company agrees to file a Form D with respect to the Preferred Shares as required
under Regulation D and to provide a copy thereof to Buyer promptly after such
filing.
c. Reservation
of Shares.
The
Company shall make reasonable efforts to have authorized, and reserved for
the
purpose of issuance, a sufficient number of shares of common stock of the
Company to provide for the conversion of the Preferred Shares. Should this
not
be the case upon conversion by Buyer, the Company shall take all reasonable
action to make available enough authorized share of common stock to accommodate
such conversion.
5. TRANSFER
AGENT INSTRUCTIONS
Buyer
acknowledges that the Preferred Shares shall be “restricted” securities, that
the Stock Certificates shall bear the restrictive legend specified in Section
2(g) of this Agreement, and that stop-transfer instructions have been given
by
the Company to its transfer agent with respect to the Preferred Shares. If
Buyer
provides the Company with an opinion of counsel, reasonably satisfactory in
form, scope and substance to the Company, that registration of a resale by
Buyer
of any of the Preferred Shares is not required under the 1933 Act or any
applicable state securities or blue sky laws, the Company shall permit the
transfer and promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by
Buyer.
6. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL
The
obligation of the Company hereunder to sell the Preferred Shares is subject
to
the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole
discretion:
a. The
parties shall have executed this Agreement, and delivered the same to each
other.
b. Buyer
shall have delivered the Purchase Price to the Company immediately available
funds pursuant to the wiring instructions provided by the Company.
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c. The
representations and warranties of Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as
of a
specific date), and Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by
this
Agreement to be performed, satisfied or complied with by Buyer at or prior
to
the Closing Date. The Company shall have received a certificate, executed by
an
executive officer of the Buyer, dated as of the Closing Date, to the foregoing
effect and as to such other matters reasonably requested by the
Company
7. CONDITIONS
TO BUYER’S OBLIGATION TO PURCHASE
The
obligation of Buyer hereunder to purchase the Preferred Shares is subject to
the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for Buyer’s sole benefit and may
be waived by Buyer at any time in his sole discretion:
a. The
parties shall have executed this Agreement and delivered the same to each
other.
b. The
representations and warranties of the Company shall be true and correct in
all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as
of a
specific date) and the Company shall have performed, satisfied and complied
in
all material respects with the covenants, agreements and conditions required
by
this Agreement to be performed, satisfied or complied with by the Company at
or
prior to the Closing Date.
c. The
Company shall have delivered the Stock Certificates to the Buyer.
8. GOVERNING
LAW; MISCELLANEOUS
a. Governing
Law.
This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of Florida without regard to the principles of conflict of
laws.
b. Counterparts.
This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
In
the event any signature page is delivered by facsimile transmission, the party
using such means of delivery shall cause three (3) additional original executed
signature pages to be physically delivered to the other party within five (5)
days of the execution and delivery hereof.
c. Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
d. Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
e. Entire
Agreement; Amendments.
This
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor
any
Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters. No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the party to be charged with
enforcement.
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f. Notices.
Any
notices required or permitted to be given under the terms of this Agreement
shall be sent by mail or delivered personally or by courier and shall be
effective five days after being placed in the mail, if mailed, certified or
registered, return receipt requested, or upon receipt, if delivered personally
or by courier, in each case addressed to a party. The addresses for such
communications shall be:
If
to the
Company:
Tekoil
& Gas Corporation
0000
Xx.
Xxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxx,
XX 00000
Telephone:
(000) 000-0000
Telecopy:
(000) 000-0000
Attention:
Mr. Xxxx Xxxxxxx
If
to
Buyer:
At
the
address set forth on the signature page hereto.
Each
party shall provide notice to the other party of any change in
address.
g. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. Neither the Company nor Buyer shall assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other (which consent may be withheld for any reason in the sole
discretion of the party from whom consent is sought).
h. Third
Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
i. Survival.
The
representations and warranties of the Company and Buyer contained in Sections
2
and 3 and the agreements and covenants set forth in Sections 4, 8(g), 8(h),
8(k)
and 8(l), and this subsection shall survive the closing for a period of two
(2)
years thereafter.
k. Publicity.
The
Company and Buyer shall have the right to approve before issuance any press
releases or any other public statements with respect to the transactions
contemplated hereby; provided,
however,
that
the Company shall be entitled, without the prior approval of Buyer, to make
any
press release with respect to such transactions as the Company determines is
required by applicable law and regulations.
l. Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
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[SIGNATURE
PAGE TO FOLLOW]
9
IN
WITNESS WHEREOF, Buyer and the Company have caused this Securities Purchase
Agreement to be duly executed as of the date first written above.
| “Company” | ||
| TEKOIL & GAS CORPORATION | ||
| By:_____________________________ | ||
| Name: Xxxx Xxxxxxx | ||
| Title: Chairman and CEO | ||
| “Buyer” | ||
| By:_____________________________ | ||
| Name: __________________________ | ||
| Title: ___________________________ | ||
| Principal Business Address (if an entity) or Principal | ||
| Residence Address (if a natural person): | ||
| Buyer’s Address for Notice Purposes (if different than above): | ||
Preferred
Stock Purchased (at $1.00 per share): _________ Shares
Aggregate
Purchase Price: $________
Closing
Date: ________
RESIDENTS
OF FLORIDA:
THE
SECURITIES REFERRED TO IN THIS MEMORANDUM WILL BE SOLD TO, AND ACQUIRED BY,
THE
HOLDER IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA
SECURITIES AND INVESTOR PROTECTION ACT. THE SECURITIES HAVE NOT BEEN REGISTERED
UNDER SUCH ACT IN THE STATE OF FLORIDA AND THEY MAY NOT BE REOFFERED FOR SALE
OR
RESOLD UNLESS THEY ARE REGISTERED OR UNLESS AN EXEMPTION FROM REGISTRATION
IS
AVAILABLE. IN ADDITION, FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING
THE PURCHASE WITHIN THREE (3) DAYS OF MAKING SUCH PURCHASE. TO ACCOMPLISH THE
FOREGOING, THE SUBSCRIBER NEED ONLY SEND A LETTER OR TELEGRAM TO US INDICATING
THE SUBSCRIBER’S INTENTION TO WITHDRAW. THE LETTER OR TELEGRAM SHOULD BE SENT
AND POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED THIRD DAY. IF THE
SUBSCRIBER SENDS A LETTER, IT IS PRUDENT TO SEND IT BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED TO ENSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME
WHEN IT WAS MAILED. IN THE EVENT A SUBSCRIBER CANCELS A SUBSCRIPTION WITHIN
THE
AFOREMENTIONED TIME PERIOD, SUBSCRIPTION PAYMENTS AND DOCUMENTS TENDERED BY
SUCH
PURCHASER SHALL BE PROMPTLY RETURNED WITHOUT INTEREST OR
DEDUCTION.
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Buyer
represents that it qualifies as an Accredited Investor under the Regulation
D
categories initialed by it below:
1.
________ A
natural
person that has (i) an individual net worth, or joint net worth with his or
her
spouse, of more than $1,000,000; or (ii) individual income in excess of
$200,000, or joint income with his or her spouse in excess of $300,000, in
each
of the two most recent years and has a reasonable expectation of reaching the
same income level in the current year.
2.
________ An
organization described in section 501(c)(3) of the Internal Revenue Code of
1986, as amended, a business trust, or a company, not formed for the specific
purpose of acquiring Preferred Stock, with total assets in excess of
$5,000,000.
3.
________ A
trust,
with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring Preferred Stock and whose purchase is directed by a person who
has
such knowledge and experience in financial and business matters that he or
she
is capable of evaluating the merits and risks of an investment in the Preferred
Stock.
4.
________ A
broker-dealer registered pursuant to section 15 of the Securities Exchange
Act
of 1934, as amended.
5.
________ An
investment company registered under the Investment Company Act of 1940, as
amended.
6.
________ A
business development company (as defined in section 2(a)(48) of the Investment
Company Act).
7.
________ 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.
8.
________ An
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 ("ERISA"), if the investment decision 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 $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons who are
Accredited Investors.
9.
________ A
private
business development company (as defined in section 202(a)(22) of the Investment
Advisers Act of 1940, as amended); (ix) 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 a fiduciary capacity.
10.
_______ An
entity
in which all of the equity owners are Accredited Investors.
11
